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Exhibit (10)(c)
RECEIVABLES PURCHASE AGREEMENT
dated as of April 24, 2001
among
LESCO FUNDING, INC.
LESCO, INC.
MARKET STREET FUNDING CORPORATION
and
PNC BANK, NATIONAL ASSOCIATION
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TABLE OF CONTENTS
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility........................................... 1
Section 1.2. Making Purchases............................................ 1
Section 1.3. Purchased Interest Computation.............................. 2
Section 1.4. Settlement Procedures....................................... 3
Section 1.5. Fees........................................................ 6
Section 1.6. Payments and Computations, Etc.............................. 6
Section 1.7. Increased Costs............................................. 6
Section 1.8. Requirements of Law......................................... 7
Section 1.9. Inability to Determine Euro-Rate............................ 8
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants................... 8
Section 2.2. Termination Events.......................................... 9
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller................................... 9
Section 3.2. Indemnities by the Servicer................................. 10
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer................................. 11
Section 4.2. Duties of the Servicer...................................... 12
Section 4.3. Lock-Box Arrangements....................................... 13
Section 4.4. Enforcement Rights.......................................... 13
Section 4.5. Responsibilities of the Seller.............................. 14
Section 4.6. Servicing Fee............................................... 14
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ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc............................................. 15
Section 5.2. Notices, Etc................................................ 15
Section 5.3. Assignability............................................... 15
Section 5.4. Costs, Expenses and Taxes................................... 16
Section 5.5. No Proceedings; Limitation on Payments...................... 16
Section 5.7. GOVERNING LAW AND JURISDICTION.............................. 17
Section 5.8. Execution in Counterparts................................... 17
Section 5.9. Survival of Termination..................................... 17
Section 5.10. WAIVER OF JURY TRIAL....................................... 18
Section 5.11. Entire Agreement........................................... 18
Section 5.12. Headings................................................... 18
Section 5.13. Issuer's Liabilities....................................... 18
EXHIBIT I Definitions
EXHIBIT II Conditions of Purchases
EXHIBIT III Representations and Warranties
EXHIBIT IV Covenants
EXHIBIT V Termination Events
SCHEDULE I Credit and Collection Policy
SCHEDULE II Lock-box Banks and Lock-box Accounts
SCHEDULE III Trade Names
SCHEDULE IV Office Locations
ANNEX A Form of Information Package
ANNEX B Form of Purchase Notice
ANNEX C Form of Paydown Notice
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This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is entered into as of
April 24, 2001, among LESCO FUNDING, INC., a Delaware corporation, as seller
(the "Seller"), LESCO, INC., an Ohio corporation ("Lesco"), as initial servicer
(in such capacity, together with its successors and permitted assigns in such
capacity, the "Servicer"), MARKET STREET FUNDING CORPORATION, a Delaware
corporation (together with its successors and permitted assigns, the "Issuer"),
and PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC"), as
administrator (in such capacity, together with its successors and assigns in
such capacity, the "Administrator").
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Issuer desires to acquire
such undivided variable percentage interest, as such percentage interest shall
be adjusted from time to time based upon, in part, reinvestment payments that
are made by the Issuer.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchase Facility. (a) On the terms and conditions hereinafter
set forth, the Issuer hereby agrees to purchase, and make reinvestments of,
undivided percentage ownership interests with regard to the Purchased Interest
from the Seller from time to time from the date hereof to the Facility
Termination Date. Under no circumstances shall the Issuer make any such purchase
or reinvestment if, after giving effect to such purchase or reinvestment, the
aggregate outstanding Capital of the Purchased Interest would exceed the
Purchase Limit.
(b). The Seller may, upon at least 60 days' written notice to the Administrator,
terminate the purchase facility provided in this Section in whole or, upon at
least 30 days' written notice to the Administrator, from time to time,
irrevocably reduce in part the unused portion of the Purchase Limit; provided,
that each partial reduction shall be in the amount of at least $5,000,000, or an
integral multiple of $1,000,000 in excess thereof, and that, unless terminated
in whole, the Purchase Limit shall in no event be reduced below $20,000,000.
Section 1.2 Making Purchases. (a) Each purchase (but not reinvestment) of
undivided percentage ownership interests with regard to the Purchased Interest
hereunder shall be made upon the Seller's irrevocable written notice in the form
of Annex B (the "Purchase Notice") delivered to the Administrator in accordance
with Section 5.2 (which notice must be received by the Administrator before
11:00 a.m., New York City time) at least two Business Days before the requested
purchase date, which notice shall specify: (A) the
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amount requested to be paid to the Seller (such amount, which shall not be less
than $300,000 and shall be in integral multiples of $100,000, being the Capital
relating to the undivided percentage ownership interest then being purchased),
(B) the date of such purchase (which shall be a Business Day), and (C) the pro
forma calculation of the Purchased Interest after giving effect to the increase
in Capital.
(b) On the date of each purchase (but not reinvestment) of undivided percentage
ownership interests with regard to the Purchased Interest hereunder, the Issuer
shall, upon satisfaction of the applicable conditions set forth in Exhibit II,
make available to the Seller in same day funds, at National City Bank, account
number 0000000, ABA 000000000, an amount equal to the Capital relating to the
undivided percentage ownership interest then being purchased.
(c) Effective on the date of each purchase pursuant to this Section and each
reinvestment pursuant to Section 1.4, the Seller hereby sells and assigns to the
Issuer an undivided percentage ownership interest in: (i) each Pool Receivable
then existing, (ii) all Related Security with respect to such Pool Receivables,
and (iii) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller hereby grants to the Issuer a security
interest in all of the Seller's right, title and interest (including any
undivided interest of the Seller) in, to and under all of the following, whether
now or hereafter owned, existing or arising: (i) all Pool Receivables, (ii) all
Related Security with respect to such Pool Receivables, (iii) all Collections
with respect to such Pool Receivables, (iv) the Lock-Box Accounts and all
amounts on deposit therein, and all certificates and instruments, if any, from
time to time evidencing such Lock-Box Accounts and amounts on deposit therein,
(v) all rights (but none of the obligations) of the Seller under the Sale
Agreement, and (vi) all proceeds of, and all amounts received or receivable
under any or all of, the foregoing (collectively, the "Pool Assets"). The Issuer
shall have, with respect to the Pool Assets, and in addition to all the other
rights and remedies available to the Issuer, all the rights and remedies of a
secured party under any applicable UCC.
Section 1.3. Purchased Interest Computation. The Purchased Interest shall be
initially computed on the date of the initial purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. The Purchased Interest as computed (or deemed
recomputed) as of the day before the Facility Termination Date shall thereafter
remain constant. The Purchased Interest shall become zero when the Capital
thereof and Discount thereon shall have been paid in full, all the amounts owed
by the Seller and the Servicer hereunder to the Issuer, the Administrator and
any other Indemnified Party or Affected Person are paid in full, and the
Servicer shall have received the accrued Servicing Fee thereon.
Section 1.4. Settlement Procedures. (a) The collection of the Pool
Receivables shall be administered by the Servicer in accordance with this
Agreement. The Seller shall provide to the Servicer on a timely basis all
information needed for such administration, including notice of the occurrence
of any Termination Day and current computations of the Purchased Interest.
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(b) The Servicer shall, on each day on which Collections of Pool Receivables are
received (or deemed received) by the Seller or the Servicer:
(i) set aside and hold in trust (and shall, at the request of the Administrator,
segregate in a separate account approved by the Administrator) for the Issuer,
out of the Issuer's Share of such Collections, first, an amount equal to the
Discount accrued through such day for each Portion of Capital and not previously
set aside, second, an amount equal to the fees set forth in the Fee Letter
accrued and unpaid through such day, and third, to the extent funds are
available therefor, an amount equal to the Issuer's Share of the Servicing Fee
accrued through such day and not previously set aside,
(ii) subject to Section 1.4(f), if such day is not a Termination Day, remit to
the Seller, on behalf of the Issuer, the remainder of the Issuer's Share of such
Collections. Such remainder shall be automatically reinvested in Pool
Receivables, and in the Related Security, Collections and other proceeds with
respect thereto; provided, however, that if the Purchased Interest would exceed
100%, then the Servicer shall not reinvest, but shall set aside and hold in
trust for the Issuer (and shall, at the request of the Administrator, segregate
in a separate account approved by the Administrator) a portion of such
Collections that, together with the other Collections set aside pursuant to this
paragraph, shall equal the amount necessary to reduce the Purchased Interest to
100%,
(iii) if such day is a Termination Day, set aside, segregate and hold in trust
(and shall, at the request of the Administrator, segregate in a separate account
approved by the Administrator) for the Issuer the entire remainder of the
Issuer's Share of the Collections; provided, that if amounts are set aside and
held in trust on any Termination Day of the type described in clause (a) of the
definition of "Termination Day" and, thereafter, the conditions set forth in
Section 2 of Exhibit II are satisfied or waived by the Administrator, such
previously set-aside amounts shall be reinvested in accordance with clause (ii)
on the day of such subsequent satisfaction or waiver of conditions, and
(iv) release to the Seller (subject to Section 1.4(f)) for its own account any
Collections in excess of: (x) amounts required to be reinvested in accordance
with clause (ii) or the proviso to clause (iii) plus (y) the amounts that are
required to be set aside pursuant to clause (i), the proviso to clause (ii) and
clause (iii) plus (z) the Seller's Share of the Servicing Fee accrued and unpaid
through such day and all reasonable and appropriate out-of-pocket costs and
expenses of the Servicer for servicing, collecting and administering the Pool
Receivables.
(c) The Servicer shall deposit into the Administration Account (or such other
account designated by the Administrator), on each Settlement Date, Collections
held for the Issuer pursuant to clause (b)(i) or (f) plus the amount of
Collections then held for the Issuer pursuant to clauses (b)(ii) and (iii) of
Section 1.4; provided, that if Lesco or an Affiliate thereof is the Servicer,
such day is not a Termination Day and the Administrator has not notified Lesco
(or such Affiliate) that such right is revoked, Lesco (or such Affiliate) may
retain the portion of the Collections set aside pursuant to clause (b)(i) that
represents the Issuer's Share of the Servicing Fee. On the last day of each
Settlement Period, the Administrator will notify the Servicer by facsimile of
the amount of Discount accrued with respect to each Portion of Capital during
such Settlement Period or portion thereof.
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(d) Upon receipt of funds deposited into the Administration Account pursuant to
clause (c), the Administrator shall cause such funds to be distributed as
follows:
(i) if such distribution occurs on a day that is not a Termination Day and the
Purchased Interest does not exceed 100%, first to the Issuer in payment in full
of all accrued Discount and fees payable pursuant to the Fee Letter (other than
Servicing Fees) with respect to each Portion of Capital, and second, if the
Servicer has set aside amounts in respect of the Servicing Fee pursuant to
clause (b)(i) and has not retained such amounts pursuant to clause (c), to the
Servicer (payable in arrears on each Settlement Date) in payment in full of the
Issuer's Share of accrued Servicing Fees so set aside, and
(ii) if such distribution occurs on a Termination Day or on a day when the
Purchased Interest exceeds 100%, first to the Issuer in payment in full of all
accrued Discount with respect to each Portion of Capital, second to the Issuer
in payment in full of Capital (or, if such day is not a Termination Day, the
amount necessary to reduce the Purchased Interest to 100%), third, to the
Servicer in payment in full of all accrued Servicing Fees, and fourth, if the
Capital and accrued Discount with respect to each Portion of Capital have been
reduced to zero, and all accrued Servicing Fees payable to the Servicer have
been paid in full, to the Issuer, the Administrator and any other Indemnified
Party or Affected Person in payment in full of any other amounts owed thereto by
the Seller hereunder.
After the Capital, Discount, fees payable pursuant to the Fee Letter and
Servicing Fees with respect to the Purchased Interest, and any other amounts
payable by the Seller and the Servicer to the Issuer, the Administrator or any
other Indemnified Party or Affected Person hereunder, have been paid in full,
all additional Collections with respect to the Purchased Interest shall be paid
to the Seller for its own account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool Receivable is reduced or
adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed goods or services, or any revision, cancellation, allowance, rebate,
discount or other adjustment made by the Seller or any Affiliate of the Seller,
or any setoff or dispute between the Seller or any Affiliate of the Seller and
an Obligor, the Seller shall be deemed to have received on such day a Collection
of such Pool Receivable in the amount of such reduction or adjustment;
(ii) if on any day any of the representations or warranties in Section 1(g) or
(n) of Exhibit III is not true with respect to any Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full;
(iii) except as provided in clause (i) or (ii), or as otherwise required by
applicable law or the relevant Contract, all Collections received from an
Obligor of any Receivable shall be applied to the Receivables of such Obligor in
the order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and
(iv) if and to the extent the Administrator or the Issuer shall be required for
any reason to pay over to an Obligor (or any trustee, receiver, custodian or
similar official in any Insolvency Proceeding) any amount received by it
hereunder, such amount shall be deemed not to have been so received by the
Administrator or the Issuer but rather to have
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been retained by the Seller and, accordingly, the Administrator or the Issuer,
as the case may be, shall have a claim against the Seller for such amount,
payable when and to the extent that any distribution from or on behalf of such
Obligor is made in respect thereof.
(f) If at any time the Seller shall wish to cause the reduction of Capital (but
not to commence the liquidation, or reduction to zero, of the entire Capital of
the Purchased Interest), the Seller may do so as follows:
(i) the Seller shall give the Administrator and the Servicer written notice in
the form of Annex C (A) at least two Business Days' prior to the date of such
reduction for any reduction of Capital less than or equal to $10,000,000 and (B)
at least five Business Days' prior to the date of such reduction for any
reduction of Capital greater than $10,000,000;
(ii) On the proposed date of the commencement of such reduction and on each day
thereafter, the Servicer shall cause Collections not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of reduction;
and
(iii) the Servicer shall hold such Collections in trust for the Issuer, for
payment to the Administrator on the next Settlement Date immediately following
the current Settlement Period (or such other date approved by the Administrator
with at least five Business Days prior written notice to the Administrator of
such payment) and Capital shall be deemed reduced in an amount to be paid to the
Administrator only when in fact finally so paid;
provided, that (a) the amount of any such reduction shall be not less than
$300,000 and shall be an integral multiple of $100,000, and the entire Capital
of the Purchased Interest after giving effect to such reduction shall be not
less than $20,000,000 and shall be in an integral multiple of $100,000 and (b)
the Seller shall choose a reduction amount, and the date of commencement
thereof, so that to the extent practicable such reduction shall commence and
conclude in the same Settlement Period.
Section 1.5. Fees. The Seller shall pay to the Administrator certain fees in
the amounts and on the dates set forth in a letter, dated the date hereof, among
Lesco, the Seller and the Administrator (as such letter agreement may be
amended, supplemented or otherwise modified from time to time, the "Fee
Letter").
Section 1.6. Payments and Computations, Etc. (a) All amounts to be paid or
deposited by the Seller or the Servicer hereunder shall be made without
reduction for offset or counterclaim and shall be paid or deposited no later
than noon (New York City time) on the day when due in same day funds to the
Administration Account. All amounts received after noon (New York City time)
will be deemed to have been received on the next Business Day.
(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 2.0% per annum above the Base Rate, payable on demand.
(c) All computations of interest under clause (b) and all computations of
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any
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payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next Business Day and
such extension of time shall be included in the computation of such payment or
deposit.
Section 1.7. Increased Costs. (a) If the Administrator, the Issuer, any
Purchaser, any other Program Support Provider or any of their respective
Affiliates (each an "Affected Person") reasonably determines that the existence
of or compliance with: (i) any law or regulation or any change therein or in
the interpretation or application thereof, in each case adopted, issued or
occurring after the date hereof, or (ii) any request, guideline or directive
from any central bank or other Governmental Authority (whether or not having
the force of law) issued or occurring after the date of this Agreement, affects
or would affect the amount of capital required or expected to be maintained by
such Affected Person, and such Affected Person determines that the amount of
such capital is increased by or based upon the existence of any commitment to
make purchases of (or otherwise to maintain the investment in) Pool Receivables
related to this Agreement or any related liquidity facility, credit enhancement
facility and other commitments of the same type, then, upon demand by such
Affected Person (with a copy to the Administrator), the Seller shall promptly
pay to the Administrator, for the account of such Affected Person, from time to
time as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in capital
to be allocable to the existence of any of such commitments. A certificate as
to such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.
(b) If, due to either: (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to any
Affected Person of agreeing to purchase or purchasing, or maintaining the
ownership of, the Purchased Interest in respect of which Discount is computed by
reference to the Euro-Rate, then, upon demand by such Affected Person, the
Seller shall promptly pay to such Affected Person, from time to time as
specified by such Affected Person, additional amounts sufficient to compensate
such Affected Person for such increased costs. A certificate as to such amounts
submitted to the Seller and the Administrator by such Affected Person shall be
conclusive and binding for all purposes, absent manifest error.
(c) If such increased costs affect the related Affected Person's entire
portfolio of financing transactions (or a portion of such portfolio including
the transactions contemplated by the Transaction Documents), such Affected
Person shall use reasonable averaging and attribution methods to allocate such
increased costs to the transactions contemplated by this Agreement.
Section 1.8. Requirements of Law. If any Affected Person reasonably
determines that the existence of or compliance with: (a) any law or regulation
or any change therein or in the interpretation or application thereof, in each
case adopted, issued or occurring after the date hereof, or (b) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:
(i) does or shall subject such Affected Person to any tax of any kind
whatsoever with respect to this Agreement, any increase in the Purchased
Interest or in the amount of Capital relating thereto, or does or shall change
the basis of taxation of payments to
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such Affected Person on account of Collections, Discount or any other amounts
payable hereunder (excluding taxes imposed on the overall pre-tax net income of
such Affected Person, and franchise taxes imposed on such Affected Person, by
the jurisdiction under the laws of which such Affected Person is organized or a
political subdivision thereof),
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, purchases, advances
or loans by, or other credit extended by, or any other acquisition of funds by,
any office of such Affected Person that are not otherwise included in the
determination of the Euro-Rate or the Base Rate hereunder, or
(iii) does or shall impose on such Affected Person any other condition,
and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Administrator, or of agreeing to purchase or
purchasing or maintaining the ownership of undivided percentage ownership
interests with regard to the Purchased Interest (or interests therein) or any
Portion of Capital, or (B) to reduce any amount receivable hereunder (whether
directly or indirectly), then, in any such case, upon demand by such Affected
Person, the Seller shall promptly pay to such Affected Person additional amounts
necessary to compensate such Affected Person for such additional cost or reduced
amount receivable. All such amounts shall be payable as incurred. A certificate
from such Affected Person to the Seller and the Administrator certifying, in
reasonably specific detail, the basis for, calculation of, and amount of such
additional costs or reduced amount receivable shall be conclusive and binding
for all purposes, absent manifest error; provided, however, that no Affected
Person shall be required to disclose any confidential or tax planning
information in any such certificate.
Section 1.9. Inability to Determine Euro-Rate. (a) If the Administrator
determines before the first day of any Settlement Period (which determination
shall be final and conclusive) that, by reason of circumstances affecting the
interbank eurodollar market generally, deposits in dollars (in the relevant
amounts for such Settlement Period) are not being offered to banks in the
interbank eurodollar market for such Settlement Period, or adequate means do
not exist for ascertaining the Euro-Rate for such Settlement Period, then the
Administrator shall give notice thereof to the Seller. Thereafter, until the
Administrator notifies the Seller that the circumstances giving rise to such
suspension no longer exist, (a) no Portion of Capital shall be funded at the
Alternate Rate determined by reference to the Euro-Rate and (b) the Discount
for any outstanding Portions of Capital then funded at the Alternate Rate
determined by reference to the Euro-Rate shall, on the last day of the then
current Settlement Period, be converted to the Alternate Rate determined by
reference to the Base Rate.
(b) If, on or before the first day of any Settlement Period, the
Administrator shall have been notified by any Purchaser that, such Purchaser has
determined (which determination shall be final and conclusive) that, any
enactment, promulgation or adoption of or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration thereof by
a governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Purchaser with
any guideline, request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency shall make it unlawful or
impossible for such Purchaser to fund or maintain any Portion of Capital at the
Alternate Rate and based upon the Euro-Rate, the Administrator shall notify the
Seller thereof. Upon receipt of such
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notice, until the Administrator notifies the Seller that the circumstances
giving rise to such determination no longer apply, (a) no Portion of Capital
shall be funded at the Alternate Rate determined by reference to the Euro-Rate
and (b) the Discount for any outstanding Portions of Capital then funded at the
Alternate Rate determined by reference to the Euro-Rate shall be converted to
the Alternate Rate determined by reference to the Base Rate either (i) on the
last day of the then current Settlement Period if such Purchaser may lawfully
continue to maintain such Portion of Capital at the Alternate Rate determined by
reference to the Euro-Rate to such day, or (ii) immediately, if such Purchaser
may not lawfully continue to maintain such Portion of Capital at the Alternate
Rate determined by reference to the Euro-Rate to such day.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants. Each of the Seller,
Lesco and the Servicer hereby makes the representations and warranties, and
hereby agrees to perform and observe the covenants, applicable to it set forth
in Exhibits III and IV, respectively.
Section 2.2. Termination Events. If any of the Termination Events set forth
in Exhibit V shall occur, the Administrator may, by notice to the Seller,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); provided, that
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (f) of Exhibit
V, the Facility Termination Date shall occur. Upon any such declaration,
occurrence or deemed occurrence of the Facility Termination Date, the Issuer
and the Administrator shall have, in addition to the rights and remedies that
they may have under this Agreement, all other rights and remedies provided
after default under the New York UCC and under other applicable law, which
rights and remedies shall be cumulative.
ARTICLE III
INDEMNIFICATION
Section 3.1. Indemnities by the Seller. Without limiting any other rights
that the Administrator, the Issuer, any Program Support Provider or any of
their respective Affiliates, employees, officers, directors, agents, counsel,
successors, transferees or assigns (each, an "Indemnified Party") may have
hereunder or under applicable law, the Seller hereby agrees to indemnify each
Indemnified Party from and against any and all claims, realized damages,
expenses, costs, realized losses and realized liabilities (including Attorney
Costs) (all of the foregoing being collectively referred to as "Indemnified
Amounts") arising out of or resulting from this Agreement (whether directly or
indirectly), the use of proceeds of purchases or reinvestments, the ownership
of the Purchased Interest, or any interest therein, or in respect of any
Receivable, Related Security or Contract, excluding, however: (a) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party or its officers, directors, agents or
counsel, (b) recourse (except as otherwise specifically provided in this
Agreement) for Receivables, or (c) any overall net income taxes or franchise
taxes imposed on such Indemnified Party by the jurisdiction under the laws of
which such Indemnified Party is organized or otherwise is considered doing
business (unless the Affected Person would not be considered doing business in
such jurisdiction, but for having entered into, or engaged in the transactions
in connection
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with, this Agreement or any other Transaction Document) or any political
subdivision thereof. Without limiting or being limited by the foregoing, and
subject to the exclusions set forth in the preceding sentence, the Seller shall
pay on demand (which demand shall be accompanied by documentation of the
Indemnified Amounts, in reasonable detail) to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any Receivable included in the calculation of the Net
Receivables Pool Balance as an Eligible Receivable to be an Eligible Receivable,
the failure of any information contained in an Information Package to be true
and correct, or the failure of any other information provided to the Issuer or
the Administrator with respect to Receivables or this Agreement to be true and
correct,
(ii) the failure of any representation, warranty or statement made (or deemed
made under the terms of this Agreement) by the Seller (or any of its officers)
under or in connection with this Agreement to have been true and correct as of
the date made or deemed made in all respects when made,
(iii) the failure by the Seller to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract, or the
failure of any Pool Receivable or the related Contract to conform to any such
applicable law, rule or regulation,
(iv) the failure to vest in the Issuer a valid and enforceable: (A) perfected
undivided percentage ownership interest, to the extent of the Purchased
Interest, in the Receivables in, or purporting to be in, the Receivables Pool
and the other Pool Assets, or (B) first priority perfected security interest in
the Pool Assets, in each case, free and clear of any Adverse Claim,
(v) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the other Pool Assets, whether at
the time of any purchase or reinvestment or at any subsequent time,
(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy
of the Obligor) of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the goods or services
related to such Receivable or the furnishing or failure to furnish such goods
or services or relating to collection activities with respect to such
Receivable (if such collection activities were performed by the Seller or any
of its Affiliates acting as Servicer or by any agent or independent contractor
retained by the Seller or any of its Affiliates),
(vii) any failure of the Seller (or any of its Affiliates acting as the
Servicer) to perform its duties or obligations in accordance with the
provisions hereof or under the Contracts,
(viii) any products liability or other claim, investigation, litigation or
proceeding arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract,
13
(ix) the commingling of Collections at any time with other funds,
(x) the use of proceeds of purchases or reinvestments, or
(xi) any reduction in Capital as a result of the distribution of Collections
pursuant to Section 1.4(d), if all or a portion of such distributions shall
thereafter be rescinded or otherwise must be returned for any reason.
Section 3.2. Indemnities by the Servicer. Without limiting any other rights
that the Administrator, the Issuer or any other Indemnified Party may have
hereunder or under applicable law, the Servicer hereby agrees to indemnify each
Indemnified Party from and against any and all Indemnified Amounts arising out
of or resulting from (whether directly or indirectly): (a) the failure of any
information contained in an Information Package to be true and correct, or the
failure of any other information provided to the Issuer or the Administrator by,
or on behalf of, the Servicer to be true and correct, (b) the failure of any
representation, warranty or statement made (or deemed made under the terms of
this Agreement) by the Servicer (or any of its officers) under or in connection
with this Agreement to have been true and correct as of the date made or deemed
made in all respects when made, (c) the failure by the Servicer to comply with
any applicable law, rule or regulation with respect to any Pool Receivable or
the related Contract, (d) any dispute, claim, offset or defense of the Obligor
to the payment of any Receivable in, or purporting to be in, the Receivables
Pool resulting from or related to the collection activities with respect to such
Receivable, or (e) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions hereof.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as the Servicer in accordance with this Section.
Until the Administrator gives notice to Lesco (in accordance with this Section)
of the designation of a new Servicer, Lesco is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms hereof. Upon the occurrence of a Termination Event, the Administrator may
designate as Servicer any Person (including itself) to succeed Lesco or any
successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in clause (a),
Lesco agrees that it will terminate its activities as Servicer hereunder in a
manner that the Administrator determines will facilitate the transition of the
performance of such activities to the new Servicer, and Lesco shall cooperate
with and assist such new Servicer. Such cooperation shall include access to and
transfer of related records and use by the new Servicer of all licenses,
hardware or software necessary or desirable to collect the Pool Receivables and
the Related Security.
(c) Lesco acknowledges that, in making their decision to execute and deliver
this Agreement, the Administrator and the Issuer have relied on Lesco's
agreement
14
to act as Servicer hereunder. Accordingly, Lesco agrees that it will not
voluntarily resign as Servicer.
(d) The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a "Sub-Servicer"); provided, that, in each such delegation:
(i) such Sub-Servicer shall agree in writing to perform the duties and
obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable for the performance of the duties and obligations
so delegated, (iii) the Seller, the Administrator and the Issuer shall have the
right to look solely to the Servicer for performance, and (iv) the terms of any
agreement with any Sub-Servicer shall provide that the Administrator may
terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer); provided,
however, that if any such delegation is to any Person other than the Originator
or LESCO Services, Inc., the Administrator shall have consented in writing in
advance to such delegation.
Section 4.2. Duties of the Servicer. (a) The Servicer shall take or cause to
be taken all such action as may be necessary or advisable to administer and
collect each Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy. The
Servicer shall set aside, for the accounts of the Seller and the Issuer, the
amount of the Collections to which each is entitled in accordance with Article
I. The Servicer may, in accordance with the applicable Credit and Collection
Policy, extend the maturity of any Pool Receivable and extend the maturity or
adjust the Outstanding Balance of any Defaulted Receivable as the Servicer may
determine to be appropriate to maximize Collections thereof; provided, however,
that: for the purposes of this Agreement, (i) such extension shall not change
the number of days such Pool Receivable has remained unpaid from the date of the
invoice date related to such Pool Receivable, (ii) such extension or adjustment
shall not alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted Receivable or limit the rights of the Issuer or the Administrator
under this Agreement and (iii) if a Termination Event has occurred and Lesco or
an Affiliate thereof is serving as the Servicer, Lesco or such Affiliate may
make such extension or adjustment only upon the prior approval of the
Administrator. The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the Administrator (individually and for
the benefit of the Issuer), in accordance with their respective interests, all
records and documents (including computer tapes or disks) with respect to each
Pool Receivable. Notwithstanding anything to the contrary contained herein, the
Administrator may direct the Servicer (whether the Servicer is Lesco or any
other Person) to commence or settle any legal action to enforce collection of
any Pool Receivable or to foreclose upon or repossess any Related Security.
(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if Lesco or an Affiliate thereof is not the
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering such collections. The
Servicer, if other than Lesco or an Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Seller all records in its possession
that evidence or relate to any indebtedness that is not a Pool Receivable, and
copies of records in its possession that evidence or relate to any indebtedness
that is a Pool Receivable.
(c) The Servicer's obligations hereunder shall terminate on the later of: (i)
the Facility Termination Date and (ii) the date on which all amounts required
to be paid
15
to the Issuer, the Administrator and any other Indemnified Party or Affected
Person hereunder shall have been paid in full.
After such termination, if Lesco or an Affiliate thereof was not the
Servicer on the date of such termination, the Servicer shall promptly deliver to
the Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.
Section 4.3. Lock-Box Arrangements. By the applicable Lock-Box Date, the
Seller shall enter into Lock-Box Agreements with all of the Lock-Box Banks and
deliver original counterparts thereof to the Administrator. Upon the occurrence
of a Termination Event, the Administrator may at any time thereafter give notice
to each Lock-Box Bank that the Administrator is exercising its rights under the
Lock-Box Agreements to do any or all of the following: (a) to have the exclusive
ownership and control of the Lock-Box Accounts transferred to the Administrator
and to exercise exclusive dominion and control over the funds deposited therein,
(b) to have the proceeds that are sent to the respective Lock-Box Accounts
redirected pursuant to the Administrator's instructions rather than deposited in
the applicable Lock-Box Account, and (c) to take any or all other actions
permitted under the applicable Lock-Box Agreement. The Seller hereby agrees that
if the Administrator at any time takes any action set forth in the preceding
sentence, the Administrator shall have exclusive control of the proceeds
(including Collections) of all Pool Receivables and the Seller hereby further
agrees to take any other action that the Administrator may reasonably request to
transfer such control. Any proceeds of Pool Receivables received by the Seller
or the Servicer thereafter shall be sent immediately to the Administrator. The
parties hereto hereby acknowledge that if at any time the Administrator takes
control of any Lock-Box Account, the Administrator shall not have any rights to
the funds therein in excess of the unpaid amounts due to the Administrator, the
Issuer or any other Person hereunder, and the Administrator shall distribute or
cause to be distributed such funds in accordance with Section 4.2(b) and Article
I (in each case as if such funds were held by the Servicer thereunder).
Section 4.4. Enforcement Rights. (a) At any time following the occurrence of
a Termination Event:
(i) the Administrator may direct the Obligors that payment of all amounts
payable under any Pool Receivable is to be made directly to the Administrator
or its designee,
(ii) the Administrator may instruct the Seller or the Servicer to give notice of
the Issuer's interest in Pool Receivables to each Obligor, which notice shall
direct that payments be made directly to the Administrator or its designee, and
the Seller or the Servicer, as the case may be, shall give such notice at the
expense of the Seller or the Servicer, as the case may be; provided, that if the
Seller or the Servicer, as the case may be, fails to so notify each Obligor, the
Administrator (at the Seller's or the Servicer's, as the case may be, expense)
may so notify the Obligors, and
(iii) the Administrator may request the Servicer to, and upon such request the
Servicer shall: (A) assemble all of the records necessary or desirable to
collect the Pool Receivables and the Related Security, and transfer or license
to a successor Servicer the use of all software necessary or desirable to
collect the Pool Receivables and the Related Security, and make the same
available to the Administrator or its designee at a place selected by the
Administrator, and (B) segregate all cash, checks and other instruments received
by it from time
16
to time constituting Collections in a manner acceptable to the Administrator
and, promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrator or
its designee.
(b) The Seller hereby authorizes the Administrator, and irrevocably appoints the
Administrator as its attorney-in-fact with full power of substitution and with
full authority in the place and stead of the Seller, which appointment is
coupled with an interest, to take any and all steps in the name of the Seller
and on behalf of the Seller necessary or desirable, in the determination of the
Administrator, to collect any and all amounts or portions thereof due under any
and all Pool Assets, including endorsing the name of the Seller on checks and
other instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.
Section 4.5. Responsibilities of the Seller. (a) Anything herein to the
contrary notwithstanding, the Seller shall: (i) perform all of its obligations,
if any, under the Contracts related to the Pool Receivables to the same extent
as if interests in such Pool Receivables had not been transferred hereunder, and
the exercise by the Administrator or the Issuer of their respective rights
hereunder shall not relieve the Seller from such obligations, and (ii) pay when
due any taxes, including any sales taxes payable in connection with the Pool
Receivables and their creation and satisfaction. The Administrator and the
Issuer shall not have any obligation or liability with respect to any Pool
Asset, nor shall either of them be obligated to perform any of the obligations
of the Seller, Lesco or the Originator thereunder.
(b) Lesco hereby irrevocably agrees that if at any time it shall cease to be the
Servicer hereunder, it shall act (if the then-current Servicer so requests) as
the data-processing agent of the Servicer and, in such capacity, Lesco shall
conduct the data-processing functions of the administration of the Receivables
and the Collections thereon in substantially the same way that Lesco conducted
such data-processing functions while it acted as the Servicer.
Section 4.6. Servicing Fee. (a) Subject to clause (b), the Servicer shall be
paid a fee equal to 0.50% per annum (the "Servicing Fee Rate") of the daily
average aggregate Outstanding Balance of the Pool Receivables. The Issuer's
Share of such fee shall be paid through the distributions contemplated by
Section 1.4(d), and the Seller's Share of such fee shall be paid by the Seller
on each Monthly Settlement Date.
(b) If the Servicer ceases to be Lesco or an Affiliate thereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
ARTICLE V.
MISCELLANEOUS
17
Section 5.1. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Transaction Document, or consent to any departure by the
Seller or the Servicer therefrom, shall be effective unless in a writing signed
by the Administrator, and, in the case of any amendment, by the other parties
thereto; and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Issuer or the Administrator to exercise, and no delay in
exercising any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
Section 5.2. Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and be sent or delivered to each party hereto at its
address set forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to the other
parties hereto. Notices and communications by facsimile shall be effective when
sent (and shall be followed by hard copy sent by first class mail), and notices
and communications sent by other means shall be effective when received.
Section 5.3. Assignability. (a) This Agreement and the Issuer's rights and
obligations herein (including ownership of the Purchased Interest or an interest
therein) shall be assignable, in whole or in part, by the Issuer and its
successors and assigns with the prior written consent of the Seller; provided,
however, that such consent shall not be unreasonably withheld; and provided
further, that no such consent shall be required if the assignment is made to
PNC, any Affiliate of PNC (other than a director or officer of PNC), any
Purchaser or other Program Support Provider or any Person that is: (i) in the
business of issuing Notes and (ii) associated with or administered by PNC or any
Affiliate of PNC. Each assignor may, in connection with the assignment, disclose
to the applicable assignee (that shall have agreed to be bound by Section 5.6)
any information relating to the Servicer, the Seller or the Pool Receivables
furnished to such assignor by or on behalf of the Servicer, the Seller, the
Issuer or the Administrator. The Administrator shall give prior written notice
of any assignment of the Issuer's rights and obligations (including ownership of
the Purchased Interest to any Person other than a Program Support Provider).
(b) The Issuer may at any time grant to one or more banks or other institutions
(each a "Purchaser") party to the Liquidity Agreement, or to any other Program
Support Provider, participating interests in the Purchased Interest. In the
event of any such grant by the Issuer of a participating interest to a Purchaser
or other Program Support Provider, the Issuer shall remain responsible for the
performance of its obligations hereunder. The Seller agrees that each Purchaser
or other Program Support Provider shall be entitled to the benefits of Sections
1.7 and 1.8; provided that if any Purchaser or other Program Support Provider
shall make a claim under such provisions, the Administrator shall work with the
Seller and Servicer in order to find a replacement for such claimant.
(c) This Agreement and the rights and obligations of the Administrator hereunder
shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; provided, that unless: (i) such assignment is to an
Affiliate of PNC, (ii) it becomes unlawful for PNC to serve as the Administrator
or (iii) a Termination Event exists, the Seller has consented to such
assignment, which consent shall not be unreasonably withheld.
(d) Except as provided in Section 4.1(d), none of the Seller, Lesco or the
Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrator.
18
(e) Without limiting any other rights that may be available under applicable
law, the rights of the Issuer may be enforced through it or by its agents.
Section 5.4. Costs, Expenses and Taxes. (a) In addition to the rights of
indemnification granted under Section 3.1, the Seller agrees to pay on demand
(which demand shall be accompanied by documentation thereof in reasonable
detail) all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic internal audits by
the Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, the Issuer and their respective Affiliates and agents with
respect thereto and with respect to advising the Administrator, the Issuer and
their respective Affiliates and agents as to their rights and remedies under
this Agreement and the other Transaction Documents, and (ii) all reasonable
out-of-pocket costs and expenses (including Attorney Costs), if any, of the
Administrator, the Issuer and their respective Affiliates and agents in
connection with the enforcement of this Agreement and the other Transaction
Documents.
(b) In addition, the Seller shall pay on demand any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and agrees to save each Indemnified Party harmless from and against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
Section 5.5. No Proceedings; Limitation on Payments. Each of the Seller,
Lesco, the Servicer, the Administrator, each assignee of the Purchased Interest
or any interest therein, and each Person that enters into a commitment to
purchase the Purchased Interest or interests therein, hereby covenants and
agrees that it will not institute against, or join any other Person in
instituting against, the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and one day after the latest
maturing Note issued by the Issuer is paid in full. The provision of this
Section 5.5 shall survive any termination of this Agreement.
Section 5.6. Confidentiality. Each of the Seller and the Servicer agrees to
maintain the confidentiality of this Agreement and the other Transaction
Documents (and all drafts thereof) in communications with third parties and
otherwise; provided, that this Agreement may be disclosed to: (a) third parties
to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to the
Administrator, (b) the Seller's legal counsel and auditors if they agree to hold
it confidential, and (c) as otherwise required by applicable law. Unless
otherwise required by applicable law, each of the Administrator and the Issuer
agrees to maintain the confidentiality of non-public financial information
regarding Lesco and its Subsidiaries and Affiliates; provided, that such
information may be disclosed to: (i) third parties to the extent such disclosure
is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to Lesco, (ii) legal counsel and auditors of the Issuer
or the Administrator if they agree to hold it confidential, (iii) the rating
agencies rating the Notes, (iv) any Program Support Provider or potential
Program Support Provider (if they agree to hold it confidential), (v) any
placement agent placing the Notes and (vi) any regulatory authorities having
jurisdiction over PNC, the Issuer, any Program Support Provider or any
Purchaser.
19
Section 5.7. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.
Section 5.8. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which, when so executed, shall be deemed to be
an original, and all of which, when taken together, shall constitute one and the
same agreement.
Section 5.9. Survival of Termination. The provisions of Sections 1.7, 1.8,
3.1, 3.2, 5.4, 5.5, 5.6, 5.7, 5.10 and 5.13 shall survive any termination of
this Agreement.
Section 5.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 5.11. Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof, except for any prior arrangements made with respect to the payment by
the Issuer of (or any indemnification for)
20
any fees, costs or expenses payable to or incurred (or to be incurred) by or on
behalf of the Seller, the Servicer and the Administrator.
Section 5.12. Headings. The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.
Section 5.13. Issuer's Liabilities. The obligations of the Issuer under the
Transaction Documents are solely the corporate obligations of the Issuer. No
recourse shall be had for any obligation or claim arising out of or based upon
any Transaction Document against any stockholder, employee, officer, director or
incorporator of the Issuer; provided, however, that this Section shall not
relieve any such Person of any liability it might otherwise have for its own
gross negligence or willful misconduct.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LESCO FUNDING, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
Address:
LESCO Funding, Inc.
00000 Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LESCO, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
Address:
LESCO, Inc.
00000 Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXXXXX XXXXXX FUNDING CORPORATION
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
Address:
Market Street Funding Corporation
c/o AMACAR Group, LLC
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Lesco Receivables Purchase Agreement
23
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
Address:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
24
Lesco Receivables Purchase Agreement
25
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and
Annexes), the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined). Unless otherwise indicated, all Section, Annex, Exhibit and Schedule
references in this Exhibit are to Sections of and Annexes, Exhibits and
Schedules to the Agreement.
"Administration Account" means the account (account number 1002422076)
of the Administrator maintained at the office of PNC at One PNC Plaza, 000 Xxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or such other account as may be so
designated in writing by the Administrator to the Servicer.
"Administrator" has the meaning set forth in the preamble to the
Agreement.
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of, or assigned to, the Issuer or the Administrator
(for the benefit of the Issuer) shall not constitute an Adverse Claim.
"Affected Person" has the meaning set forth in Section 1.7 of the
Agreement.
"Affiliate" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to the Issuer,
Affiliate shall mean the holder(s) of its capital stock. For purposes of this
definition, control of a Person shall mean the power, direct or indirect: (x) to
vote 25% or more of the securities having ordinary voting power for the election
of directors or managers of such Person, or (y) to direct or cause the direction
of the management and policies of such Person, in either case whether by
ownership of securities, contract, proxy or otherwise.
"Agreement" has the meaning set forth in the preamble to the Agreement.
"Alternate Rate" for any Settlement Period for any Portion of Capital
of the Purchased Interest means an interest rate per annum equal to: (a) 1.50%
per annum above the Euro-Rate for such Settlement Period; provided, however,
that if (x) it shall become unlawful for any Purchaser or Program Support
Provider to obtain funds in the London interbank eurodollar market in order to
make, fund or maintain any Purchased Interest, or if such funds shall not be
reasonably available to any Purchaser or Program Support Provider, or (y) there
shall not be at least two Business Days prior to the commencement of an
applicable Settlement Period to determine a Euro-Rate in accordance with its
terms, then the "Alternate Rate" shall be equal to the Base Rate in effect for
each day during the remainder of such Settlement Period or (b) if requested by
the Seller the Base Rate for such Settlement Period;
26
provided, however, that the "Alternate Rate" for any day while a Termination
Event exists shall be an interest rate equal to 2.00% per annum above the Base
Rate in effect on such day.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978
(11 U.S.C. Section 101, et seq.), as amended from time to time.
"Base Rate" means, for any day, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate shall be at all times equal
to the higher of:
1. the rate of interest in effect for such day as publicly announced from time
to time by PNC in Pittsburgh, Pennsylvania as its "prime rate." Such "prime
rate" is set by PNC based upon various factors, including PNC's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate, and
2. 0.50% per annum above the latest Federal Funds Rate.
"BBA" means the British Bankers' Association.
"Benefit Plan" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, Lesco or any ERISA
Affiliate is, or at any time during the immediately preceding six years was, an
"employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day (other than a Saturday or Sunday) on
which: (a) banks are not authorized or required to close in New York City, New
York or Pittsburgh, Pennsylvania, and (b) if this definition of "Business Day"
is utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.
"Capital" means the amount paid to the Seller in respect of the
Purchased Interest by the Issuer pursuant to the Agreement, or such amount
divided or combined in order to determine the Discount applicable to any Portion
of Capital, in each case reduced from time to time by Collections distributed
and applied on account of such Capital pursuant to Section 1.4(d) of the
Agreement; provided, that if such Capital shall have been reduced by any
distribution, and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution as though it had not been
made.
"Change in Control" means that (a) Lesco, ceases to own, directly or
indirectly, 100% of the capital stock of the Seller free and clear of all
Adverse Claims.
"Closing Date" means April 24, 2001.
"Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by Lesco, the Seller or the Servicer in payment of any amounts
owed in
27
respect of such Receivable (including purchase price, finance charges, interest
and all other charges), or applied to amounts owed in respect of such Receivable
(including insurance payments and net proceeds of the sale or other disposition
of repossessed goods or other collateral or property of the related Obligor or
any other Person directly or indirectly liable for the payment of such Pool
Receivable and available to be applied thereon), (b) all amounts deemed to have
been received pursuant to Section 1.4(e) of the Agreement and (c) all other
proceeds of such Pool Receivable.
"Company Note" has the meaning set forth in Section 3.1 of the Sale
Agreement.
"Concentration Percentage" means: (a) for any Group A Obligor, 20.00%,
(b) for any Group B Obligor, 20.00%, (c) for any Group C Obligor 10.00% and (d)
for any Group D Obligor, 5.00%.
"Contract" means, with respect to any Receivable, any and all
contracts, instruments, agreements, leases, invoices, notes or other writings
pursuant to which such Receivable arises or that evidence such Receivable or
under which an Obligor becomes or is obligated to make payment in respect of
such Receivable.
"CP Rate" for any Settlement Period for any Portion of Capital means a
rate calculated by the Administrator equal to: (a) the rate (or if more than one
rate, the weighted average of the rates) at which Notes of the Issuer on each
day during such period have been outstanding; provided, that if such rate(s) is
a discount rate(s), then the CP Rate shall be the rate (or if more than one
rate, the weighted average of the rates) resulting from converting such discount
rate(s) to an interest-bearing equivalent rate plus (b) the commissions and
charges charged by such placement agent or commercial paper dealer with respect
to such Notes, expressed as a percentage of the face amount of such Notes and
converted to an interest-bearing equivalent rate per annum. Notwithstanding the
foregoing, the "CP Rate" for any day while a Termination Event exists shall be
an interest rate equal to 2% above the Base Rate in effect on such day.
"Credit and Collection Policy" means, as the context may require, those
receivables credit and collection policies and practices of the Originator in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified in compliance with the Agreement.
"Cut-off Date" has the meaning set forth in the Sale Agreement.
"Days' Sales Outstanding" means, at any time, an amount computed as of
the last day of each calendar month equal to: (a) the average of the Outstanding
Balance of all Pool Receivables as of the last day of each of the six most
recent calendar months ended on the last day of such calendar month divided by
(b)(i) the aggregate credit sales made by the Originator during the three
calendar months ended on or before the last day of such calendar month divided
by (ii) 180.
"Debt" means: (a) indebtedness for borrowed money, (b) obligations
evidenced by bonds, debentures, notes or other similar instruments, (c)
obligations to pay the deferred purchase price of property or services, (d)
obligations as lessee under leases that shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (e) obligations under direct or indirect guaranties in respect of,
28
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d).
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for more
than 150 days from the due date for such payment, or
(b) without duplication (i) as to which an Insolvency Proceeding shall
have occurred with respect to the Obligor thereof or any other Person obligated
thereon or owning any Related Security with respect thereto, or (ii) that has
been (or should have been in accordance with the Credit and Collection Policy)
written off the Seller's books as uncollectible.
"Default Event" means Lesco or any Subsidiaries of Lesco shall fail to
pay any principal of or premium or interest on any of its Debt that is
outstanding in a principal amount of at least $1,000,000 in the aggregate when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement, mortgage,
indenture or instrument relating to such Debt (and shall have not been waived);
or (ii) any other event shall occur or condition shall exist under any
agreement, mortgage, indenture or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument (and shall have not been waived), if in either
case the effect of such non-payment, event or condition is to give the
applicable debtholders the right (whether acted upon or not) to accelerate the
maturity of such Debt.
"Default Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that became Defaulted Receivables during such
month, by (b) the aggregate credit sales made by the Originator during the month
that is seven calendar months before such month.
"Delinquency Ratio" means the ratio (expressed as a percentage and
rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed
as of the last day of each calendar month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that were Delinquent Receivables on
such day by (b) the aggregate Outstanding Balance of all Eligible Receivables on
such day.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for more than 90 days from the due date for such
payment.
"Dilution Horizon" means, for any calendar month, the ratio (expressed
as a percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1%
rounded upward) computed as of the last day of such calendar month of: (a) the
sum of (i) the aggregate credit sales made by the Originator during the most
recent calendar month plus (ii) 50% of the aggregate credit sales made by the
Originator during the next most recent calendar
29
month to (b) the aggregate Outstanding Balance of Eligible Receivables at the
last day of the most recent calendar month.
"Dilution Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as
of the last day of each calendar month by dividing: (a) the aggregate amount of
payments required to be made by the Seller pursuant to Section 1.4(e)(i) of the
Agreement during such calendar month by (b) the aggregate credit sales made by
the Originator during the most recent calendar month.
"Dilution Reserve" means, on any date, an amount equal to: (a) the
Capital at the close of business of the Servicer on such date multiplied by (b)
(i) the Dilution Reserve Percentage on such date, divided by (ii) 100% minus the
Dilution Reserve Percentage on such date.
"Dilution Reserve Percentage" means on any date, the greater of (a)
8.00% and (b) product of (i) the Dilution Horizon multiplied by (ii) the sum of
(x) 2 times the average of the Dilution Ratios for the twelve most recent
calendar months and (y) the Spike Factor.
"Discount" means:
(a) for the Portion of Capital for any Settlement Period to the extent
the Issuer will be funding such Portion of Capital during such Settlement Period
through the issuance of Notes:
CPR x C x ED/360
(b) for the Portion of Capital for any Settlement Period to the extent
the Issuer will not be funding such Portion of Capital during such Settlement
Period through the issuance of Notes:
AR x C x ED/Year + TF
where:
AR = the Alternate Rate for the Portion of Capital for
such Settlement Period,
C = the Portion of Capital during such Settlement Period,
CPR = the CP Rate for the Portion of Capital for such
Settlement Period,
ED = the actual number of days during such Settlement
Period,
Year = if such Portion of Capital is funded based upon: (i)
the Euro-Rate, 360 days, and (ii) the Base Rate, 365
or 366 days, as applicable, and
TF = the Termination Fee, if any, for the Portion of
Capital for such Settlement Period;
30
provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for the Portion of Capital shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"Eligible Receivable" means, at any time, a Pool Receivable:
(a) the Obligor of which is (i) a United States resident; provided that
the Obligor need not be a United States resident if (A) the Pool Receivable
arises from goods sold and shipped from the Originator in the United States and
(B) payment for such goods is denominated and payable only in Dollars and is
payable to the Originator only at a Lock-Box Account, (ii) not subject to any
action of the type described in paragraph (f) of Exhibit V to the Agreement and
(iii) not an Affiliate of Lesco; provided, however that the percentage of
otherwise Eligible Receivables the Obligor of which is a government or a
governmental subdivision, affiliate or agency that may be included in the Net
Receivables Pool Balance at any time shall not exceed 2% of the Net Receivables
Pool Balance.
(b) that is denominated and payable only in U.S. dollars in the United
States,
(c) that does not have a due date which is more than 60 days after the
original invoice date of such Receivable; provided, however, that up to 50% of
the aggregate Outstanding Balance of all Receivables may consist of Extended
Term Receivables having a due date not more than 180 days from the original
invoice date of such Receivable,
(d) that arises under a duly authorized Contract for the sale and
delivery of goods and services in the ordinary course of the Originator's
business,
(e) that arises under a duly authorized Contract that is in full force
and effect and that is a legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its terms,
(f) that conforms in all material respects with all applicable laws,
rulings and regulations in effect,
(g) that is not the subject of any asserted dispute, offset, hold back
defense, Adverse Claim or other claim,
(h) that satisfies all applicable requirements of the applicable Credit
and Collection Policy,
(i) that has not been modified, waived or restructured since its
creation, except as permitted pursuant to Section 4.2 of the Agreement,
(j) in which the Seller owns good and marketable title, free and clear
of any Adverse Claims, and that is freely assignable by the Seller (including
without any consent of the related Obligor),
31
(k) for which the Issuer shall have a valid and enforceable undivided
percentage ownership or security interest, to the extent of the Purchased
Interest, and a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in
each case free and clear of any Adverse Claim,
(l) that constitutes an account as defined in the UCC, and that is not
evidenced by instruments or chattel paper,
(m) that is neither a Defaulted Receivable nor a Delinquent Receivable,
(n) for which neither the Originator thereof, the Seller nor the
Servicer has established any offset arrangements with the related Obligor,
(o) for which Receivables of the related Obligor that have aged beyond
120 days do not exceed 25% of the Outstanding Balance of all such Obligor's
Receivables, and
(p) that represents amounts earned and payable by the Obligor that are
not subject to the performance of additional services by the Originator thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means: (a) any corporation that is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Seller or Lesco, (b) a trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with the Seller or Lesco, or (c) a
member of the same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as the Seller, Lesco, any corporation
described in clause (a) or any trade or business described in clause (b).
"Euro-Rate" means with respect to any Settlement Period the interest
rate per annum determined by the Administrator by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Administrator in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
to be the average of the London interbank market offered rates for U.S. dollars
quoted by the British Bankers' Association ("BBA") as set forth on Dow Xxxxx
Markets Service (formerly known as Telerate) (or appropriate successor or, if
BBA or its successor ceases to provide display page 3750 (or such other display
page on the Dow Xxxxx Markets Service system as may replace display page 3750)
at or about 11:00 a.m. (London time) on the Business Day which is two (2)
Business Days prior to the first day of such Settlement Period for an amount
comparable to the Portion of Capital to be funded at the Alternate Rate and
based upon the Euro-Rate during such Settlement Period by (ii) a number equal to
1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed
by the following formula:
Average of London interbank offered rates quoted by BBA
32
as shown on Dow Xxxxx Markets Service display page 3750 or appropriate successor
Euro-Rate = 1.00 - Euro-Rate Reserve Percentage
where "Euro-Rate Reserve Percentage" means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities"). The Euro-Rate shall be adjusted with respect to any
Portion of Capital funded at the Alternate Rate and based upon the Euro-Rate
that is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Administrator shall give prompt notice
to the Seller of the Euro-Rate as determined or adjusted in accordance herewith
(which determination shall be conclusive absent manifest error).
"Excess Concentration" means the sum of the amounts by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage
for such Obligor multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.
"Extended Term Receivable" means a Receivable associated with an
extended term program specifically approved by the Administrator and
incorporated in the Credit and Collection Policy.
"Facility Termination Date" means the earliest to occur of: (a) Xxxxx
00, 0000, (x) the date determined pursuant to Section 2.2 of the Agreement, (c)
the date the Purchase Limit reduces to zero pursuant to Section 1.1(b) of the
Agreement, (d) the date that the commitments of the Purchasers terminate under
the Liquidity Agreement, and (e) the Issuer shall fail to cause the amendment or
modification of any Transaction Document or related opinion as required by
Moody's or Standard and Poor's, and such failure shall continue for 30 days
after such amendment is initially requested.
"Federal Funds Rate" means, for any day, the per annum rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.
33
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"Fee Letter" has the meaning set forth in Section 1.5 of the Agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Group A Obligor" means any Obligor with a short-term rating of at
least: (a) "A-1" by Standard & Poor's, or if such Obligor does not have a
short-term rating from Standard & Poor's, a rating of "A+" or better by Standard
& Poor's on its long-term senior unsecured and uncredit-enhanced debt
securities, and (b) "P-1" by Moody's, or if such Obligor does not have a
short-term rating from Moody's, "A1"or better by Moody's on its long-term senior
unsecured and uncredit-enhanced debt securities.
"Group A Obligor Percentage" means, at any time, for each Group A
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Group A Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
"Group B Obligor" means an Obligor, not a Group A Obligor, with a
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of
"BBB+" to "A" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) "P-2" by Moody's, or if such Obligor
does not have a short-term rating from Moody's, "Baa1" to "A2" by Moody's on its
long-term senior unsecured and uncredit-enhanced debt securities.
"Group B Obligor Percentage" means, at any time, for each Group B
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Group B Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
"Group C Obligor" means an Obligor, not a Group A Obligor or a Group B
Obligor, with a short-term rating of at least: (a) "A-3" by Standard & Poor's,
or if such Obligor does not have a short-term rating from Standard & Poor's, a
rating of "BBB-" to "BBB" by Standard & Poor's on its long-term senior unsecured
and uncredit-enhanced debt securities, and (b) "P-3" by Moody's, or if such
Obligor does not have a short-term rating from Moody's, "Baa3" to "Baa2" by
Moody's on its long-term senior unsecured and uncredit-enhanced debt securities.
"Group C Obligor Percentage" means, at any time, for each Group C
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Group C Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
34
"Group D Obligor" means any Obligor that is not a Group A Obligor,
Group B Obligor or Group C Obligor.
"Group D Obligor Percentage" means, at any time, for each Group D
Obligor: (a) the aggregate Outstanding Balance of the Eligible Receivables of
such Group D Obligor less any Excess Concentrations of such Obligor, divided by
(b) the aggregate Outstanding Balance of all Eligible Receivables at such time.
"Indemnified Amounts" has the meaning set forth in Section 3.1 of the
Agreement.
"Indemnified Party" has the meaning set forth in Section 3.1 of the
Agreement.
"Independent Director" has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.
"Information Package" means a report, in substantially the form of
Annex A to the Agreement, furnished to the Administrator pursuant to the
Agreement.
"Insolvency Proceeding" means: (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of creditors
of a Person, composition, marshaling of assets for creditors of a Person, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each of cases (a) and (b) undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"Issuer" has the meaning set forth in the preamble to the Agreement.
"Issuer's Share" of any amount means such amount multiplied by the
Purchased Interest at the time of determination.
"Lesco" has the meaning set forth in the preamble to the Agreement.
"Liquidity Agent" means PNC in its capacity as the Liquidity Agent
pursuant to the Liquidity Agreement.
"Liquidity Agreement" means the Liquidity Asset Purchase Agreement,
dated as of even date herewith, between the purchasers from time to time party
thereto, the Issuer and PNC, as Administrator and Liquidity Agent, as the same
may be further amended, supplemented or otherwise modified from time to time.
35
"Lock-Box Account" means an account in the name of the Seller and
maintained by the Seller at a bank or other financial institution for the
purpose of receiving Collections.
"Lock-Box Agreement" means an agreement, in form and substance
satisfactory to the Administrator, among the Seller, the Servicer, the Issuer
and a Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
"Lock-Box Date" means; (i) with respect to the Lock-Box Account[s]
maintained with National City Bank, the Closing Date and (ii) with respect to
all other Lock-Box Accounts, 60 days after the Closing Date.
"Loss Reserve" means, on any date, an amount equal to: (a) the Capital
at the close of business of the Servicer on such date multiplied by (b)(i) the
Loss Reserve Percentage on such date divided by (ii) 100% minus the Loss Reserve
Percentage on such date.
"Loss Reserve Percentage" means, on any date, the greater of: (a)
12.00% or (b) the product of (i) 2 times (ii) the highest average of the Default
Ratios for any three consecutive calendar months during the twelve most recent
calendar months and (iii) (A) the aggregate credit sales made by the Originator
during the five most recent calendar months divided by (B) the aggregate
Outstanding Balance of Eligible Receivables as of such date.
"Material Adverse Effect" means, relative to any Person with respect to
any event or circumstance, a material adverse effect on:
(a) the assets, operations, business or financial condition of such
Person,
(b) the ability of any of such Person to perform its obligations under
the Agreement or any other Transaction Document to which it is a party,
(c) the validity or enforceability of any other Transaction Document,
or the validity, enforceability or collectibility of a material portion of the
Pool Receivables, or
(d) the status, perfection, enforceability or priority of the Issuer's
or the Seller's interest in the Pool Assets.
"Monthly Settlement Date" means the twelfth day of each calendar month
(or the next succeeding Business Day if such day is not a Business Day),
beginning May 12, 2001.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Receivables Pool Balance" means, at any time: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus the Excess
Concentration.
36
"Notes" means short-term promissory notes issued, or to be issued, by
the Issuer to fund its investments in accounts receivable or other financial
assets.
"Obligor" means, with respect to any Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.
"Obligor Percentage" means any of the Group A Obligor Percentage, the
Group B Obligor Percentage, the Group C Obligor Percentage or the Group D
Obligor Percentage.
"Originator" has the meaning set forth in the Sale Agreement.
"Originator Assignment Certificate" means the assignment, in
substantially the form of Exhibit C to the Sale Agreement, evidencing Seller's
ownership of the Receivables generated by the Originator, as the same may be
amended, supplemented, amended and restated, or otherwise modified from time to
time in accordance with the Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Payment Date" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"PNC" has the meaning set forth in the preamble to the Agreement.
"Pool Assets" has the meaning set forth in Section 1.2(d) of the
Agreement.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Portion of Capital" means any separate portion of Capital being funded
or maintained by the Issuer (or its successors or permitted assigns) by
reference to a particular interest rate basis. In addition, at any time when the
Capital of the Purchased Interest is not divided into two or more such portions,
"Portion of Capital" means 100% of the Capital.
"Program Support Agreement" means and includes the Liquidity Agreement
and any other agreement entered into by any Program Support Provider providing
for: (a) the issuance of one or more letters of credit for the account of the
Issuer, (b) the issuance of one or more surety bonds for which the Issuer is
obligated to reimburse the applicable Program Support Provider for any drawings
thereunder, (c) the sale by the Issuer to any Program Support Provider of the
Purchased Interest (or portions thereof) and/or (d) the making of loans and/or
other extensions of credit to the Issuer in connection with the Issuer's
Receivables-securitization program contemplated in the Agreement, together with
any letter of
37
credit, surety bond or other instrument issued thereunder (but excluding any
discretionary advance facility provided by the Administrator).
"Program Support Provider" means and includes any Purchaser and any
other Person (other than any customer of the Issuer) now or hereafter extending
credit or having a commitment to extend credit to or for the account of, or to
make purchases from, the Issuer pursuant to any Program Support Agreement.
"Purchase Notice" has the meaning set forth in Section 1.2(a) of the
Agreement.
"Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 9.1 of the Sale Agreement.
"Purchase and Sale Indemnified Party" has the meaning set forth in
Section 9.1 of the Sale Agreement.
"Purchase and Sale Termination Date" has the meaning set forth in
Section 1.4 of the Sale Agreement.
"Purchase and Sale Termination Event" has the meaning set forth in
Section 8.1 of the Sale Agreement.
"Purchase Facility" has the meaning set forth in Section 1.1 of the
Sale Agreement.
"Purchase Limit" means $50,000,000, as such amount may be reduced
pursuant to Section 1.1(b) of the Agreement. References to the unused portion of
the Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Capital.
"Purchase Notice" has the meaning set forth in Section 1.2(a) of the
Agreement.
"Purchase Price" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Purchase Report" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Purchased Interest" means, at any time, the undivided percentage
ownership interest in: (a) each and every Pool Receivable now existing or
hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. Such undivided percentage interest shall
be computed as:
Capital + Total Reserves
----------------------------
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to Section
1.3 of the Agreement.
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"Purchaser" has the meaning set forth in Section 5.3(b) of the
Agreement.
"Receivable" means any indebtedness and other obligations owed to the
Seller (as assignee of the Originator) or the Originator by, or any right of the
Seller or the Originator to payment from or on behalf of, an Obligor, whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods or the rendering of services by the
Originator, and includes the obligation to pay any finance charges, fees and
other charges with respect thereto. Indebtedness and other obligations arising
from any one transaction, including indebtedness and other obligations
represented by an individual invoice or agreement, shall constitute a Receivable
separate from a Receivable consisting of the indebtedness and other obligations
arising from any other transaction.
"Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased by the Seller pursuant to the Sale Agreement prior to the
Facility Termination Date.
"Reference Bank" means PNC.
"Related Rights" has the meaning set forth in Section 1.1 of the Sale
Agreement.
"Related Security" means, with respect to any Receivable:
(a) all of the Seller's and the Originator's interest in any goods
(including returned goods), and documentation of title evidencing the shipment
or storage of any goods (including returned goods), relating to any sale giving
rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
(c) all other security interests or liens and property subject thereto
from time to time purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together with
all UCC financing statements or similar filings relating thereto, and
(d) all of the Seller's and the Originator's rights, interests and
claims under the Contracts and all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise.
"Sale Agreement" means the Purchase and Sale Agreement, dated as of
even date herewith, between the Seller and the Originator as such agreement may
be amended, amended and restated, supplemented or otherwise modified from time
to time.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller's Share" of any amount means the greater of: (a) $0 and (b)
such amount minus the Issuer's Share.
39
"Servicer" has the meaning set forth in the preamble to the Agreement.
"Servicing Fee" shall mean the fee referred to in Section 4.6 of the
Agreement.
"Servicing Fee Rate" shall mean the rate referred to in Section 4.6 of
the Agreement.
"Settlement Date" means with respect to any Portion of Capital for any
Settlement Period, (i) prior to the Facility Termination Date, the Monthly
Settlement Date and (ii) on and after the Facility Termination Date, each day
selected from time to time by the Administrator (it being understood that the
Administrator may select such Settlement Date to occur as frequently as daily),
or, in the absence of such selection, the Monthly Settlement Date.
"Settlement Period" means: (a) before the Facility Termination Date:
(i) initially the period commencing on the date of the initial purchase pursuant
to Section 1.2 of the Agreement (or in the case of any fees payable hereunder,
commencing on the Closing Date) and ending on (but not including) the next
Monthly Settlement Date, and (ii) thereafter, each period commencing on such
Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date, and (b) on and after the Facility Termination Date: such period
(including a period of one day) as shall be selected from time to time by the
Administrator or, in the absence of any such selection, each period of 30 days
from the last day of the preceding Settlement Period.
"Solvent" means, with respect to any Person at any time, a condition
under which:
(i) the fair value and present fair saleable value of such Person's
total assets is, on the date of determination, greater than such Person's total
liabilities (including contingent and unliquidated liabilities) at such time;
(ii) the fair value and present fair saleable value of such Person's
assets is greater than the amount that will be required to pay such Person's
probable liability on its existing debts as they become absolute and matured
("debts," for this purpose, includes all legal liabilities, whether matured or
unmatured, liquidated or unliquidated, absolute, fixed, or contingent);
(iii) such Person is and shall continue to be able to pay all of its
liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with which to
engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated liabilities at
any time shall be that amount which, in light of all the facts and circumstances
then existing, represents the amount which can reasonably be expected to become
an actual or matured liability;
40
(B) the "fair value" of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such
asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount which a
capable and diligent business person could obtain for such asset from an
interested buyer who is willing to Purchase such asset under ordinary selling
conditions; and
(D) the "present fair saleable value" of an asset means the amount
which can be obtained if such asset is sold with reasonable promptness in an
arm's-length transaction in an existing and not theoretical market.
"Spike Factor" means, for any calendar month, (a) the positive
difference, if any, between: (i) the highest Dilution Ratio for any calendar
month during the twelve most recent calendar months and (ii) the arithmetic
average of the Dilution Ratios for such twelve months times (b) (i) the highest
Dilution Ratio for any calendar month during the twelve most recent calendar
months divided by (ii) the arithmetic average of the Dilution Ratios for such
twelve months
"Standard & Poor's" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each class
or other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"Termination Day" means: (a) each day on which the conditions set forth
in Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day
that occurs on or after the Facility Termination Date.
"Termination Event" has the meaning specified in Exhibit V to the
Agreement.
"Termination Fee" means, for any Settlement Period during which a
Termination Day occurs, the amount, if any, by which: (a) the additional
Discount (calculated without taking into account any Termination Fee or any
shortened duration of such Settlement Period pursuant to the definition thereof)
that would have accrued during such Settlement Period on the reductions of
Capital relating to such Settlement Period had such reductions not been made,
exceeds (b) the income, if any, received by the Issuer from investing the
proceeds of such reductions of Capital, as determined by the Administrator,
which determination shall be binding and conclusive for all purposes, absent
manifest error.
"Total Reserves" means, at any time the sum of : (a) the Yield Reserve,
plus (b) the sum of (i) Loss Reserve plus (ii) the Dilution Reserve.
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"Transaction Documents" means the Agreement, the Lock-Box Agreements,
the Fee Letter, the Sale Agreement and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with the Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"Unmatured Purchase and Sale Termination Event" means any event which,
with the giving of notice or lapse of time, or both, would become a Purchase and
Sale Termination Event.
"Unmatured Termination Event" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
"Yield Reserve" means, on any date, an amount equal to: (a) the Capital
at the close of business of the Servicer on such date multiplied by (b)(i) the
Yield Reserve Percentage on such date divided by (ii) 100% minus the Yield
Reserve Percentage on such date.
"Yield Reserve Percentage" means at any time:
(PY + SFR) x 1.5 x DSO
---------
360
where:
PY = the Base Rate computed for the most recent
Settlement Period,
DSO = the Days Sales Outstanding, and
SFR = the Servicing Fee Rate
Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
Unless the context otherwise requires, "or" means "and/or," and "including" (and
with correlative meaning "include" and "includes") means including without
limiting the generality of any description preceding such term.
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EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The Initial Purchase under
this Agreement is subject to the following conditions precedent that the
Administrator shall have received on or before the date of such purchase, each
in form and substance (including the date thereof) satisfactory to the
Administrator:
(a) A counterpart of the Agreement and the other Transaction
Documents executed by the parties thereto; provided that no Lock-Box Agreement
need be delivered before the applicable Lock-Box Date.
(b) Certified copies of: (i) the resolutions of the Board of
Directors of each of the Seller and Lesco authorizing the execution, delivery
and performance by the Seller and Lesco, as the case may be, of the Agreement
and the other Transaction Documents to which it is a party; (ii) all documents
evidencing other necessary corporate or organizational action and governmental
approvals, if any, with respect to the Agreement and the other Transaction
Documents and (iii) the certificate of incorporation and by-laws of the Seller
and Lesco.
(c) A certificate of the Secretary or Assistant Secretary of
the Seller and Lesco certifying the names and true signatures of its officers
who are authorized to sign the Agreement and the other Transaction Documents.
Until the Administrator receives a subsequent incumbency certificate from the
Seller or Lesco, as the case may be, the Administrator shall be entitled to rely
on the last such certificate delivered to it by the Seller or Lesco, as the case
may be.
(d) Acknowledgment copies, or time stamped receipt copies, of
proper financing statements, duly filed on or before the date of such initial
purchase under the UCC of all jurisdictions that the Administrator may deem
necessary or desirable in order to perfect the interests of the Seller, the
Originator and the Issuer contemplated by the Agreement and the Sale Agreement.
(e) Acknowledgment copies, or time-stamped receipt copies, of
proper financing statements, if any, necessary or desirable in the
Administrator's sole discretion to release all security interests and other
rights of any Person in the Receivables, Contracts or Related Security
previously granted by the Originator or the Seller.
(f) Completed UCC search reports, dated on or shortly before
the date of the initial purchase hereunder, listing the financing statements
filed in all applicable jurisdictions referred to in subsection (e) above that
name the Originator or the Seller as debtor, together with copies of such other
financing statements, and similar search reports with respect to judgment liens,
federal tax liens and liens of the Pension Benefit Guaranty Corporation in such
jurisdictions, as the Administrator may request, showing no Adverse Claims on
any Pool Assets (other than Adverse Claims terminated by the financing
statements referred to in subsection (e) above).
43
(g) Favorable opinions, in form and substance reasonably
satisfactory to the Administrator, of: (i) Xxxxx & Xxxxxxxxx LLP, counsel for
the Seller and Lesco, and (ii) Clemente, Xxxxxxx & Xxxxx, P.A., special New York
counsel for the Seller and Lesco.
(h) Satisfactory results of a review and audit (performed by
representatives of the Administrator) of the Servicer's collection, operating
and reporting systems, the Credit and Collection Policy of the Originator,
historical receivables data and accounts, including satisfactory results of a
review of the Servicer's operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
purchase under the Agreement.
(i) A pro forma Information Package representing the
performance of the Receivables Pool for the calendar month before closing.
(j) Evidence of payment by the Seller of all accrued and
unpaid fees (including those contemplated by the Fee Letter), costs and expenses
to the extent then due and payable on the date thereof, including any such
costs, fees and expenses arising under or referenced in Section 5.4 of the
Agreement and the Fee Letter.
(k) The Fee Letter duly executed by the Seller and the
Servicer.
(l) Good standing certificates with respect to each of the
Seller and Lesco issued by the Secretary of State (or similar official) of the
state of each such Person's organization or formation and principal place of
business.
(m) The Liquidity Agreement and all other Transaction
Documents duly executed by the parties thereto.
(n) A computer file containing all information with respect to
the Receivables as the Administrator or the Issuer may reasonably request.
(o) Such other approvals, opinions or documents as the
Administrator or the Issuer may reasonably request.
2. Conditions Precedent to All Purchases and Reinvestments. Each
purchase (except as to clause (a), including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the Administrator on or before such purchase, in form and substance
satisfactory to the Administrator, a completed pro forma Information Package to
reflect the level of Capital and related reserves and the calculation of the
Purchased Interest after such subsequent purchase and a completed Purchase
Notice in the form of Annex B; and
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
44
(i) the representations and warranties contained in
Exhibit III to the Agreement are true and correct in all material respects on
and as of the date of such purchase or reinvestment as though made on and as of
such date;
(ii) no event has occurred and is continuing, or
would result from such purchase or reinvestment, that constitutes a Termination
Event;
(iii) the Capital does not exceed the Purchase Limit;
(iv) solely in the case of any purchase (but not
reinvestment), no Default Event or Unmatured Termination Event shall have
occurred or be continuing.
45
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller. The Seller represents
and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business and is in good standing as a foreign corporation
in every jurisdiction where the nature of its business requires it to be so
qualified, except where the failure to be so qualified would not have a Material
Adverse Effect.
(b) The execution, delivery and performance by the Seller of
the Agreement and the other Transaction Documents to which it is a party,
including its use of the proceeds of purchases and reinvestments: (i) are within
its corporate powers; (ii) have been duly authorized by all necessary corporate
action; (iii) do not contravene or result in a default under or conflict with:
(A) its charter or by-laws, (B) any law, rule or regulation applicable to it,
(C) any indenture, loan agreement, mortgage, deed of trust or other material
agreement or instrument to which it is a party or by which it is bound, or (D)
any order, writ, judgment, award, injunction or decree binding on or affecting
it or any of its property; and (iv) do not result in or require the creation of
any Adverse Claim upon or with respect to any of its properties. The Agreement
and the other Transaction Documents to which it is a party have been duly
executed and delivered by the Seller.
(c) No authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or other Person is required
for its due execution, delivery and performance by the Seller of the Agreement
or any other Transaction Document to which it is a party, other than the Uniform
Commercial Code filings referred to in Exhibit II to the Agreement, all of which
shall have been filed on or before the date of the first purchase hereunder.
(d) Each of the Agreement and the other Transaction Documents
to which the Seller is a party constitutes its legal, valid and binding
obligation enforceable against the Seller in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws from time to time in effect affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e) There is no pending or, to Seller's best knowledge,
threatened action or proceeding affecting Seller or any of its properties before
any Governmental Authority or arbitrator.
(f) No proceeds of any purchase or reinvestment will be used
to acquire any equity security of a class that is registered pursuant to Section
12 of the Securities Exchange Act of 1934.
46
(g) The Seller is the legal and beneficial owner of the Pool
Receivables and Related Security, free and clear of any Adverse Claim. Upon each
purchase or reinvestment, the Issuer shall acquire a valid and enforceable
perfected undivided percentage ownership or security interest, to the extent of
the Purchased Interest, in each Pool Receivable then existing or thereafter
arising and in the Related Security, Collections and other proceeds with respect
thereto, free and clear of any Adverse Claim. The Agreement creates a security
interest in favor of the Issuer in the Pool Assets, and the Issuer has a first
priority perfected security interest in the Pool Assets, free and clear of any
Adverse Claims. No effective financing statement or other instrument similar in
effect covering any Pool Asset is on file in any recording office, except those
filed in favor of the Seller pursuant to the Sale Agreement and the Issuer
relating to the Agreement.
(h) Each Information Package (if prepared by the Seller or one
of its Affiliates, or to the extent that information contained therein is
supplied by the Seller or an Affiliate), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished at any
time by or on behalf of the Seller to the Administrator in connection with the
Agreement or any other Transaction Document to which it is a party is or will be
complete and accurate in all material respects as of its date or (except as
otherwise disclosed to the Administrator at such time) as of the date so
furnished,
(i) The Seller's principal place of business and chief
executive office (as such terms are used in the UCC) and the office where it
keeps its records concerning the Receivables are located at the address referred
to in Sections 1(b) and 2(b) of Exhibit IV to the Agreement.
(j) The names and addresses of all the Lock-Box Banks,
together with the account numbers of the Lock-Box Accounts at such Lock-Box
Banks, are specified in Schedule II to the Agreement (or at such other Lock-Box
Banks and/or with such other Lock-Box Accounts as have been notified to the
Administrator in accordance with the Agreement) and all Lock-Box Accounts are
subject to Lock-Box Agreements on or after the applicable Lock-Box Date.
(k) The Seller is not in violation of any order of any court,
arbitrator or Governmental Authority.
(l) Neither the Seller nor any of its Affiliates has any
direct or indirect ownership or other financial interest in the Issuer.
(m) No proceeds of any purchase or reinvestment will be used
for any purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.
(n) Each Pool Receivable included as an Eligible Receivable in
the calculation of the Net Receivables Pool Balance is an Eligible Receivable at
the time of such calculation.
(o) No event has occurred and is continuing, or would result
from a purchase in respect of, or reinvestment in respect of, the Purchased
Interest or from the application of the proceeds therefrom, that constitutes a
Termination Event or an Unmatured Termination Event.
47
(p) The Seller has accounted for each sale of undivided
percentage ownership interests in Receivables in its books and financial
statements as sales, consistent with generally accepted accounting principles.
(q) The Seller has complied in all material respects with the
Credit and Collection Policies of the Originator with regard to each Receivable
originated by the Originator.
(r) The Seller has complied in all material respects with all
of the terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(s) The Seller's complete corporate name is set forth in the
preamble to the Agreement, and it does not use and has not during the last six
years used any other corporate name, trade name, doing-business name or
fictitious name, except as set forth on Schedule III to the Agreement and except
for names first used after the date of the Agreement and set forth in a notice
delivered to the Administrator pursuant to Section 1(l)(iv) of Exhibit IV to the
Agreement.
(t) The Seller is not an "investment company," or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. In addition, the Seller is not a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
2. Representations and Warranties of Lesco (including in its capacity
as the Servicer). Lesco, individually and in its capacity as the Servicer,
represents and warrants as follows:
(a) Lesco is a corporation duly formed, validly existing and
in good standing under the laws of the State of Ohio, and is duly qualified to
do business and is in good standing as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified would not have a Material Adverse
Effect.
(b) The execution, delivery and performance by Lesco of the
Agreement and the other Transaction Documents to which it is a party, including
the Servicer's use of the proceeds of purchases and reinvestments: (i) are
within its organizational powers; (ii) have been duly authorized by all
necessary organizational action; (iii) do not contravene or result in a default
under or conflict with: (A) its articles of incorporation, code of regulations
or any other organizational document of Lesco, (B) any law, rule or regulation
applicable to it, (C) any indenture, loan agreement, mortgage, deed of trust or
other material agreement or instrument to which it is a party or by which it is
bound, or (D) any order, writ, judgment, award, injunction or decree binding on
or affecting it or any of its property; and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties. The
Agreement and the other Transaction Documents to which Lesco is a party have
been duly executed and delivered by Lesco.
48
(c) No authorization, approval or other action by, and no
notice to or filing with any Governmental Authority or other Person, is required
for the due execution, delivery and performance by Lesco of the Agreement or any
other Transaction Document to which it is a party.
(d) Each of the Agreement and the other Transaction Documents
to which Lesco is a party constitutes the legal, valid and binding obligation of
Lesco enforceable against Lesco in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) The balance sheets of Lesco and its consolidated
Subsidiaries as at December 31, 2000, and the related statements of income and
retained earnings for the fiscal year then ended, copies of which have been
furnished to the Administrator, fairly present the financial condition of Lesco
and its consolidated Subsidiaries in all material respects as at such date and
the results of the operations of Lesco and its Subsidiaries for the period ended
on such date, all in accordance with generally accepted accounting principles
consistently applied, and since December 31, 2000 there has been no event or
circumstances which have had a Material Adverse Effect.
(f) Except as disclosed in the most recent audited financial
statements of Lesco furnished to the Administrator, there is no pending or, to
its best knowledge, threatened action or proceeding affecting it or any of its
Subsidiaries before any Governmental Authority or arbitrator that could have a
Material Adverse Effect of the type described in clauses (b) through (d) of the
definition of Material Adverse Effect or is reasonably likely to have a Material
Adverse Effect of the type described in clause (a) of the definition of Material
Adverse Effect.
(g) No proceeds of any purchase or reinvestment will be used
to acquire any equity security of a class that is registered pursuant to Section
12 of the Securities Exchange Act of 1934.
(h) Each Information Package (if prepared by Lesco or one of
its Affiliates, or to the extent that information contained therein is supplied
by Lesco or an Affiliate), information, exhibit, financial statement, document,
book, record or report furnished or to be furnished at any time by or on behalf
of the Servicer to the Administrator in connection with the Agreement is or will
be complete and accurate in all material respects as of its date or (except as
otherwise disclosed to the Administrator at such time) as of the date so
furnished.
(i) The principal place of business and chief executive office
(as such terms are used in the UCC) of Lesco and the office where it keeps its
records concerning the Receivables are located at the address referred to in
Section 2(b) of Exhibit IV to the Agreement.
(j) Lesco is not in violation of any order of any court,
arbitrator or Governmental Authority, which could have a Material Adverse Effect
of the type described in clauses (b) through (d) of the definition of Material
Adverse Effect or is reasonably likely to have a Material Adverse Effect of the
type described in clause (a) of the definition of Material Adverse Effect.
49
(k) Neither Lesco nor any of its Affiliates has any direct or
indirect ownership or other financial interest in the Issuer.
(l) The Servicer has complied in all material respects with
the Credit and Collection Policy of the Originator with regard to each
Receivable originated by the Originator.
(m) Lesco has complied in all material respects with all of
the terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(n) Lesco is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. In addition, Lesco is not a "holding company,"
a "subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
50
EXHIBIT IV
COVENANTS
1. Covenants of the Seller. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date all other amounts owed by
the Seller under the Agreement to the Issuer, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its corporate existence, rights, franchises,
qualifications and privileges, except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such rights, franchises, qualifications and privileges would not have a
Material Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Seller:
(i) shall keep its principal place of business and chief executive office (as
such terms or similar terms are used in the UCC) and the office where it keeps
its records concerning the Receivables at the address of the Seller set forth on
Schedule IV or, pursuant to clause (l)(iv) below, at any other locations in
jurisdictions where all actions reasonably requested by the Administrator to
protect and perfect the interest of the Issuer in the Receivables and related
items (including the Pool Assets) have been taken and completed and (ii) shall
provide the Administrator with at least 30 days' written notice before making
any change in the Seller's name or making any other change in the Seller's
identity or corporate structure (including a Change in Control) that could
render any UCC financing statement filed in connection with this Agreement
"seriously misleading" as such term (or similar term) is used in the UCC; each
notice to the Administrator pursuant to this sentence shall set forth the
applicable change and the effective date thereof. The Seller also will maintain
and implement (or cause the Servicer to maintain and implement) administrative
and operating procedures (including an ability to recreate records evidencing
Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain (or cause the Servicer to keep and
maintain) all documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of all
Receivables (including records adequate to permit the daily identification of
each Receivable and all Collections of and adjustments to each existing
Receivable). Notwithstanding the above, in no event shall the Seller have or
maintain, or be a partner in any partnership that has or maintains, its
jurisdiction of organization, principal place of business or principal assets in
any of the states of Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming.
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller shall (and shall cause the Servicer to), at its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and timely and fully comply in all material respects
with the applicable Credit and Collection Policies with regard to each
Receivable and the related Contract.
51
(d) Ownership Interest, Etc. The Seller shall (and shall cause
the Servicer to), at its expense, take all action necessary or desirable to
establish and maintain a valid and enforceable undivided percentage ownership or
security interest, to the extent of the Purchased Interest, in the Pool
Receivables, the Related Security and Collections with respect thereto, and a
first priority perfected security interest in the Pool Assets, in each case free
and clear of any Adverse Claim, in favor of the Issuer, including taking such
action to perfect, protect or more fully evidence the interest of the Issuer as
the Issuer, through the Administrator, may reasonably request.
(e) Sales, Liens, Etc. The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any or all of its right, title
or interest in, to or under any Pool Assets (including the Seller's undivided
interest in any Receivable, Related Security or Collections, or upon or with
respect to any account to which any Collections of any Receivables are sent), or
assign any right to receive income in respect of any items contemplated by this
paragraph.
(f) Extension or Amendment of Receivables. Except as provided
in the Agreement, the Seller shall not, and shall not permit the Servicer to,
extend the maturity or adjust the Outstanding Balance or otherwise modify the
terms of any Pool Receivable in any material respect, or amend, modify or waive,
in any material respect, any term or condition of any related Contract (which
term or condition relates to payments under, or the enforcement of, such
Contract).
(g) Change in Business or Credit and Collection Policy. The
Seller shall not make (or permit the Originator to make) any material change in
the character of its business or in any Credit and Collection Policy, or any
change in any Credit and Collection Policy that would have a Material Adverse
Effect with respect to the Receivables. The Seller shall not make (or permit the
Originator to make) any other change in any Credit and Collection Policy without
giving prior written notice thereof to the Administrator.
(h) Audits. The Seller shall (and shall cause Lesco to), from
time to time during regular business hours as reasonably requested in advance
(unless a Termination Event or Unmatured Termination Event exists) by the
Administrator, permit the Administrator, or its agents or representatives: (i)
to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in the possession or under the
control of the Seller (or Lesco) relating to Receivables and the Related
Security, including the related Contracts, (ii) to visit the offices and
properties of the Seller and the Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to
Receivables and the Related Security or the Seller's or Lesco's performance
under the Transaction Documents or under the Contracts with any of the officers,
employees, agents or contractors of the Seller or Lesco having knowledge of such
matters and (iii) without limiting the clauses (i) and (ii) above, to engage
certified public accountants or other auditors acceptable to the Seller and the
Administrator to conduct, at the Seller's expense, an annual (and at other any
time the Administrator has a good faith belief that the Receivables Pool may
have deteriorated) review of the Seller's or Lesco's books and records with
respect to such Receivables.
(i) Change in Lock-Box Banks, Lock-Box Accounts and
Payment Instructions to Obligors. The Seller shall not, and shall not permit the
Servicer or the Originator to, add or terminate any bank as a Lock-Box Bank or
any account as a Lock-Box Account from those listed in Schedule II to the
Agreement, or make any change in its instructions to Obligors
52
regarding payments to be made to the Seller, the Originator, the Servicer or any
Lock-Box Account (or related post office box), unless the Administrator shall
have consented thereto in writing and the Administrator shall have received
copies of all agreements and documents (including Lock-Box Agreements) that it
may request in connection therewith.
(j) Deposits to Lock-Box Accounts. The Seller shall (or shall
cause the Servicer to): (i) instruct all Obligors to make payments of all
Receivables to one or more Lock-Box Accounts or to post office boxes to which
only Lock-Box Banks have access (and shall instruct the Lock-Box Banks to cause
all items and amounts relating to such Receivables received in such post office
boxes to be removed and deposited into a Lock-Box Account on a daily basis)or to
payment centers, and (ii) deposit, or cause to be deposited, any Collections
received by it, the Servicer or the Originator (including Collections received
at payment centers) into Lock-Box Accounts not later than one Business Day after
receipt thereof. Each Lock-Box Account shall at all times on or after the
applicable Lock-Box Date be subject to a Lock-Box Agreement. The Seller will not
(and will not permit the Servicer to) deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account cash or cash
proceeds other than Collections.
(k) Marking of Records. At its expense, the Seller shall: (i)
xxxx (or cause the Servicer to xxxx) its master data processing records relating
to Pool Receivables and related Contracts, including with a legend evidencing
that the undivided percentage ownership interests with regard to the Purchased
Interest related to such Receivables and related Contracts have been sold in
accordance with the Agreement, and (ii) cause the Originator so to xxxx its
master data processing records pursuant to the Sale Agreement.
(l) Reporting Requirements. The Seller will provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as available and in any event within 120
days after the end of each fiscal year of the Seller, a copy of financial
statements for the Seller for such year certified as to accuracy by the chief
financial officer or treasurer of the Seller;
(ii) as soon as possible and in any event within five
days after the occurrence of each Termination Event or Unmatured Termination
Event, a statement of the chief financial officer of the Seller setting forth
details of such Termination Event or Unmatured Termination Event and the action
that the Seller has taken and proposes to take with respect thereto;
(iii) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller or any Affiliate files under
ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Seller or any Affiliate
receives from any of the foregoing or from any multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) to which the Seller or any of its
Affiliates is or was, within the preceding five years, a contributing employer,
in each case in respect of the assessment of withdrawal liability or an event or
condition that could, in the aggregate, result in the imposition of liability on
the Seller and/or any such Affiliate;
(iv) at least thirty days before any change in the
Seller's name or any other change requiring the amendment of UCC financing
statements, a notice setting forth such changes and the effective date thereof;
53
(v) promptly after the Seller obtains knowledge
thereof, notice of any: (A) litigation, investigation or proceeding that may
exist at any time between the Seller and any Person or (B) litigation or
proceeding relating to any Transaction Document;
(vi) promptly after the occurrence thereof, notice of
a material adverse change in the business, operations, property or financial or
other condition of the Seller or Lesco; and
(vii) such other information respecting the
Receivables or the condition or operations, financial or otherwise, of the
Seller or any of its Affiliates as the Administrator may from time to time
reasonably request.
(m) Certain Agreements. Without the prior written consent of
the Administrator, the Seller will not (and will not permit Lesco to) amend,
modify, waive, revoke or terminate any Transaction Document to which it is a
party or any provision of Seller's certificate of incorporation or by-laws.
(n) Restricted Payments. (i) Except pursuant to clause (ii)
below, the Seller will not: (A) purchase or redeem any shares of its capital
stock, (B) declare or pay any dividend or set aside any funds for any such
purpose, (C) prepay, purchase or redeem any Debt, (D) lend or advance any funds
or (E) repay any loans or advances to, for or from any of its Affiliates (the
amounts described in clauses (A) through (E) being referred to as "Restricted
Payments").
(ii) Subject to the limitations set forth in clause
(iii) below, the Seller may make Restricted Payments so long as such Restricted
Payments are made only in one or more of the following ways: (A) the Seller may
make cash payments (including prepayments) on the Company Note in accordance
with its terms, and (B) if no amounts are then outstanding under the Company
Note, the Seller may declare and pay dividends.
(iii) The Seller may make Restricted Payments only
out of the funds it receives pursuant to Sections 1.4(b)(ii) and (iv) of the
Agreement. Furthermore, the Seller shall not pay, make or declare: (A) any
dividend if, after giving effect thereto, the Seller's tangible net worth would
be less than $2,000,000, or (B) any Restricted Payment (including any dividend)
if, after giving effect thereto, any Termination Event or Unmatured Termination
Event shall have occurred and be continuing.
(o) Other Business. The Seller will not: (i) engage in any
business other than the transactions contemplated by the Transaction Documents;
(ii) create, incur or permit to exist any Debt of any kind (or cause or permit
to be issued for its account any letters of credit or bankers' acceptances)
other than pursuant to this Agreement or the Company Note; or (iii) form any
Subsidiary or make any investments in any other Person; provided, however, that
the Seller shall be permitted to incur minimal obligations to the extent
necessary for the day-to-day operations of the Seller (such as expenses for
stationery, audits, maintenance of legal status, etc.).
(p) Use of Seller's Share of Collections. The Seller shall
apply the Seller's Share of Collections to make payments in the following order
of priority: (i) the payment of its expenses (including all obligations payable
to the Issuer and the Administrator
54
under the Agreement and under the Fee Letter); (ii) the payment of accrued and
unpaid interest on the Company Note; and (iii) other legal and valid corporate
purposes.
(q) Tangible Net Worth. The Seller will not permit its
tangible net worth, at any time, to be less than $2,000,000.
2. Covenants of the Servicer and Lesco. Until the latest of the
Facility Termination Date, the date on which no Capital of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to the Issuer, the Administrator
and any other Indemnified Party or Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Servicer and, to the extent
that it ceases to be the Servicer, Lesco shall comply in all material respects
with all applicable laws, rules, regulations and orders, and preserve and
maintain its organizational existence, rights, franchises, qualifications and
privileges, except to the extent that the failure so to comply with such laws,
rules and regulations or the failure so to preserve and maintain such existence,
rights, franchises, qualifications and privileges would not have a Material
Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Servicer
and, to the extent that it ceases to be the Servicer, Lesco, shall keep its
principal place of business and chief executive office (as such terms or similar
terms are used in the applicable UCC) and the office where it keeps its records
concerning the Receivables at the address of the Servicer and, to the extent it
ceases to be the Servicer, Lesco, set forth on Schedule IV or, upon at least 30
days' prior written notice of a proposed change to the Administrator, at any
other locations in jurisdictions where all actions reasonably requested by the
Administrator to protect and perfect the interest of the Issuer in the
Receivables and related items (including the Pool Assets) have been taken and
completed. The Servicer and, to the extent that it ceases to be the Servicer,
Lesco, also will maintain and implement administrative and operating procedures
(including an ability to recreate records evidencing Receivables and related
Contracts in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of all
Receivables (including records adequate to permit the daily identification of
each Receivable and all Collections of and adjustments to each existing
Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Servicer and, to the extent that it ceases to be the
Servicer, Lesco, shall, at its expense, timely and fully perform and comply with
all material provisions, covenants and other promises required to be observed by
it under the Contracts related to the Receivables, and timely and fully comply
in all material respects with the Credit and Collection Policy with regard to
each Receivable and the related Contract.
(d) Extension or Amendment of Receivables. Except as provided
in the Agreement, the Servicer and, to the extent that it ceases to be the
Servicer, Lesco, shall not extend, the maturity or adjust the Outstanding
Balance or otherwise modify the terms of any Pool Receivable in any material
respect, or amend, modify or waive, in any material respect, any term or
condition of any related Contract (which term or condition relates to payments
under, or the enforcement of, such Contract).
55
(e) Change in Business or Credit and Collection Policy. The
Servicer and, to the extent that it ceases to be the Servicer, Lesco, shall not
make any material change in the character of its business or in any Credit and
Collection Policy. The Servicer and, to the extent that it ceases to be the
Servicer, Lesco, shall not make (and shall not permit the Originator to make)
any other change in any Credit and Collection Policy without giving prior
written notice thereof to the Administrator.
(f) Audits. The Servicer and, to the extent that it ceases to
be the Servicer, Lesco, shall (and shall cause the Originator to), from time to
time during regular business hours as reasonably requested in advance (unless a
Termination Event or Unmatured Termination Event exists) by the Administrator,
permit the Administrator, or its agents or representatives: (i) to examine and
make copies of and abstracts from all books, records and documents (including
computer tapes and disks) in its possession or under its control relating to
Receivables and the Related Security, including the related Contracts; (ii) to
visit its offices and properties for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to Receivables
and the Related Security or its performance hereunder or under the Contracts
with any of its officers, employees, agents or contractors having knowledge of
such matters and (iii), without limiting the clauses (i) and (ii) above, to
engage certified public accountants or other auditors acceptable to the Servicer
or Lesco (as appropriate) and the Administrator to conduct, at the Servicer's or
Lesco's (as appropriate) expense, an annual (and at any other time the
Administrator has a good faith belief that the Receivables Pool may have
deteriorated) review of the Servicer's books and records with respect to such
Receivables.
(g) Change in Lock-Box Banks, Lock-Box Accounts and Payment
Instructions to Obligors. The Servicer and, to the extent that it ceases to be
the Servicer, Lesco, shall not add or terminate any bank as a Lock-Box Bank or
any account as a Lock-Box Account from those listed in Schedule II to the
Agreement, or make any change in its instructions to Obligors regarding payments
to be made to the Servicer or any Lock-Box Account (or related post office box),
unless the Administrator shall have consented thereto in writing and the
Administrator shall have received copies of all agreements and documents
(including Lock-Box Agreements) that it may request in connection therewith.
(h) Deposits to Lock-Box Accounts. The Servicer and, to the
extent it ceases to be the Servicer, Lesco, shall: (i) instruct all Obligors to
make payments of all Receivables to one or more Lock-Box Accounts or to post
office boxes to which only Lock-Box Banks have access (and shall instruct the
Lock-Box Banks to cause all items and amounts relating to such Receivables
received in such post office boxes to be removed and deposited into a Lock-Box
Account on a daily basis); or to payment centers and (ii) deposit, or cause to
be deposited, any Collections received by it (including Collections received at
payment centers) into Lock-Box Accounts not later than one Business Day after
receipt thereof. Each Lock-Box Account shall at all times on or after the
applicable Lock-Box Date be subject to a Lock-Box Agreement. The Servicer (and,
to the extent it ceases to be the Servicer, Lesco) will not deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any Lock-Box
Account cash or cash proceeds other than Collections.
(i) Marking of Records. At its expense, the Servicer and, to
the extent it ceases to be the Servicer, Lesco, shall xxxx its master data
processing records relating to Pool Receivables and related Contracts, including
with a legend evidencing that the
56
undivided percentage ownership interests with regard to the Purchased Interest
related to such Receivables and related Contracts have been sold in accordance
with the Agreement.
(j) Reporting Requirements. Lesco shall provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as available and in any event within 60
days after the end of the first three quarters of each fiscal year of Lesco,
balance sheets of Lesco and the consolidated Subsidiaries of Lesco as of the end
of such quarter and statements of income, retained earnings and cash flow of
Lesco and consolidated Subsidiaries of Lesco for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter,
certified by the chief financial officer of Lesco;
(ii) as soon as available and in any event within 120
days after the end of each fiscal year of Lesco, a copy of the annual report for
such year for Lesco and its consolidated Subsidiaries, containing financial
statements for such year audited by independent certified public accountants of
nationally recognized standing;
(iii) as to the Servicer only, as soon as available
and in any event not later than two Business Days prior to the Monthly
Settlement Date, an Information Package as of the most recently completed
calendar month or, if in the opinion of the Administrator reasonable grounds for
insecurity exist with respect to the collectibility of the Pool Receivables or
with respect to the Seller or Servicer's performance or ability to perform its
obligations under the Agreement, within six Business Days of a request by the
Administrator, an Information Package for such periods as the Administrator
shall specify;
(iv) as soon as possible and in any event within five
days after becoming aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the chief financial officer of Lesco
setting forth details of such Termination Event or Unmatured Termination Event
and the action that such Person has taken and proposes to take with respect
thereto;
(v) promptly after the sending or filing thereof,
copies of all reports that Lesco sends to any of its security holders, and
copies of all reports and registration statements that Lesco or any Subsidiary
of Lesco files with the Securities and Exchange Commission or any national
securities exchange; provided, that any filings with the Securities and Exchange
Commission that have been granted "confidential" treatment shall be provided
promptly after such filings have become publicly available;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices that Lesco or any Affiliate of Lesco files
under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that Lesco or any of its
Affiliates receives from any of the foregoing or from any multiemployer plan
(within the meaning of Section 4001(a)(3) of ERISA) to which Lesco or any
Affiliate of Lesco is or was, within the preceding five years, a contributing
employer, in each case in respect of the assessment of withdrawal liability or
an event or condition that could, in the aggregate, result in the imposition of
liability on Lesco and/or any such Affiliate;
57
(vii) at least thirty days before any change in
Lesco's name or any other change requiring the amendment of UCC financing
statements, a notice setting forth such changes and the effective date thereof;
(viii) promptly after Lesco obtains knowledge
thereof, notice of any: (A) litigation, investigation or proceeding that may
exist at any time between Lesco or any of its Subsidiaries and any Governmental
Authority that, if not cured or if adversely determined, as the case may be,
would have a Material Adverse Effect; (B) litigation or proceeding adversely
affecting such Person or any of its Subsidiaries in which the amount involved is
$1,000,000 or more and not covered by insurance or in which injunctive or
similar relief is sought; or (C) litigation or proceeding relating to any
Transaction Document;
(ix) promptly after the occurrence thereof, notice of
a material adverse change in the business, operations, property or financial or
other condition of Lesco or any of its Subsidiaries; and
(x) such other information respecting the Receivables
or the condition or operations, financial or otherwise, of Lesco or any of its
Affiliates as the Administrator may from time to time reasonably request.
3. Separate Existence. Each of the Seller and Lesco hereby acknowledges
that the Purchasers, the Issuer and the Administrator are entering into the
transactions contemplated by this Agreement and the other Transaction Documents
in reliance upon the Seller's identity as a legal entity separate from Lesco and
its Affiliates. Therefore, from and after the date hereof, each of the Seller
and Lesco shall take all steps specifically required by the Agreement or
reasonably required by the Administrator to continue the Seller's identity as a
separate legal entity and to make it apparent to third Persons that the Seller
is an entity with assets and liabilities distinct from those of Lesco and any
other Person, and is not a division of Lesco, its Affiliates or any other
Person. Without limiting the generality of the foregoing and in addition to and
consistent with the other covenants set forth herein, each of the Seller and
Lesco shall take such actions as shall be required in order that:
(a) The Seller will be a limited purpose corporation whose
primary activities are restricted in its certificate of incorporation to: (i)
purchasing, make loans secured by, accepting capital contributions or otherwise
acquiring from the Originator (or its Affiliates), holding, selling,
transferring or pledging or otherwise exercising ownership rights with respect
to Pool Assets (or other receivables originated by the Originator or its
Affiliates, and certain related assets), (ii) entering into agreements for the
selling and servicing of the Receivables Pool (or other receivables pools
originated by the Originator or its Affiliates), and (iii) conducting such other
activities as it deems necessary or appropriate to carry out its primary
activities;
(b) The Seller shall not engage in any business or activity,
or incur any indebtedness or liability, other than as expressly permitted by the
Transaction Documents;
(c) Not less than one member of the Seller's Board of
Directors (the "Independent Director") shall be an individual who is not a
direct, indirect or beneficial stockholder, officer, director, employee,
affiliate, associate or supplier of Lesco or any of its Affiliates. The
certificate of incorporation of the Seller shall provide that: (i) the Seller's
Board
58
of Directors shall not approve, or take any other action to cause the filing of,
a voluntary bankruptcy petition with respect to the Seller unless the
Independent Director shall approve the taking of such action in writing before
the taking of such action, and (ii) such provision cannot be amended without the
prior written consent of the Independent Director;
(d) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Seller, Lesco or any Affiliate thereof;
(e) The Seller will contract with the Servicer to perform for
the Seller all operations required on a daily basis to service the Receivables
Pool. The Seller will pay the Servicer the Servicing Fee pursuant hereto. The
Seller will not incur any material indirect or overhead expenses for items
shared with Lesco (or any other Affiliate thereof) that are not reflected in the
Servicing Fee. To the extent, if any, that the Seller (or any Affiliate thereof)
shares items of expenses not reflected in the Servicing Fee or the manager's
fee, such as legal, auditing and other professional services, such expenses will
be allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered; it being understood that Lesco shall pay all
expenses relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including legal, agency and other fees;
(f) the Seller shall pay or cause to be paid its own
liabilities and expenses, including the salaries of its own employees, only out
of its own funds and assets;
(g) the Seller shall observe or cause to be observed all
applicable corporate formalities, including, without limitation, requiring its
directors and officers, if any, to duly authorize all actions of the Seller to
the extent required by Delaware law;
(h) the Seller shall allocate or cause to be allocated fairly
and reasonably any overhead for any office space shared with any other person
and services performed by any employee of any other person;
(i) the Seller shall use separate stationery, invoices,
business forms, and checks bearing its own name (or a name franchised or
licensed to it by an entity other than an affiliate of the Seller);
(j) the Seller shall maintain or cause to be maintained
correct and complete accounts, books, records, financial statements, accounting
records, and other entity documents separate from any other person and file its
own separate tax returns, except when consolidated tax returns are required by
applicable law;
(k) the Seller shall hold its assets in its own name;
(l) the Seller shall conduct its business, enter into
contracts and transactions and otherwise act in its own name (or in a name
franchised or licensed to it by an entity other than an affiliate of the Seller)
in a manner designed to inform third parties of the identity of the entity with
which they are dealing;
(m) the Seller shall maintain arms' length relationships with
each of its affiliates and enter into transactions with its affiliates only on
commercially reasonable terms;
59
(n) the Seller shall hold itself out and identify itself as a
separate and distinct entity under its own name (or a name franchised or
licensed to it by an entity other than an affiliate of the Seller) and not as a
division or department of any other person;
(o) the Seller shall correct any known misunderstanding
regarding its name or separate identity;
(p) the Seller shall remain solvent and maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations;
(q) the Seller shall maintain separate from any other person
its books, records, resolutions and agreements as official records;
(r) the Seller shall maintain separate financial statements,
showing its assets and liabilities separate and apart from those of any other
person and not have its assets listed on the financial statements of any other
person, except as required by generally accepted accounting principles;
provided, however, that any such consolidated financial statements shall contain
a note indicating that the separate assets and liabilities of the Seller have
been consolidated therein and that the Seller has separate financial statements;
(s) the Seller shall enter into contracts and other
transactions only to the extent that the Seller intends to be responsible or
liable for such contract or other transaction and in a manner designed to inform
the other party or parties thereto of the identity of the entity that is
responsible and liable therefor;
(t) the Seller shall use solely its own name or a name
franchised or licensed to it by an entity other than an affiliate of the Seller
for purposes of obtaining any required governmental registrations, licenses, and
permits necessary to the conduct of its business; and
(u) the Seller shall, except as permitted under this
Agreement, maintain its bank account or bank accounts in its own name, separate
and apart from any bank account or cash concentration account or system of any
other.
(v) the Seller shall not engage in any activity other than
activity authorized by its Certificate of Incorporation;
(w) the Seller shall not amend, modify or otherwise change its
Certificate of Incorporation in a manner that would adversely affect its
existence as a single purpose entity;
(x) the Seller shall not except as permitted by this Agreement
commingle or permit to be commingled its assets with those of any other person;
(y) the Seller shall not identify the stockholders or any of
their affiliates as a division or part of the Seller;
60
(z) the Seller shall not pledge its assets for the benefit of
any other person except in connection with this Agreement;
(aa) the Seller shall not assume, guaranty or become obligated
for the debts of, or hold out its assets or credit as being available to satisfy
the obligations of, any other person except for the liabilities permitted
pursuant to this Agreement;
(bb) the Seller shall not acquire obligations or securities of
any of its affiliates or stockholders, including its directors;
(cc) the Seller shall not, except as permitted by this
Agreement, accept any loans from any other person, make any loans to any other
person or buy or hold evidences of indebtedness issued by any other person
(other than cash or investment grade securities);
(dd) the Seller shall not incur any indebtedness other than
the liabilities incurred in the ordinary course of business or as permitted by
this Agreement;
(ee) the Seller shall not enter into or be a party to any
transaction with its stockholders or affiliates except in the ordinary course of
its business when the transaction has legitimate business purposes for all
parties and is on terms that are commercially reasonable and are no less
favorable to it and to its stockholder or affiliates, as the case may be, than
would be obtained in a comparable arms-length transaction with an unrelated
third party;
(ff) the Seller shall not take any action not authorized by
the directors pursuant to its Certificate of Incorporation;
(gg) the Seller shall not transfer any assets without fair
consideration and proper documentation;
(hh) the Seller shall not transfer any assets with the intent
to hinder, delay or defraud creditors;
(ii) the Seller shall not except to the extent necessary and
appropriate under a business management services agreement, permit any affiliate
of the Seller to have, or to hold itself out as having, any place of business or
operations at the site of any real property owned or leased by the Seller or to
have any employees at such site;
(jj) the Seller shall not except to the extent necessary and
appropriate under any business management services agreement, permit any
affiliate of the Seller (other than solely as an officer, director or
shareholder, as the case may be, thereof) to make decisions with respect to the
ordinary course of the business and affairs of the Seller;
(kk) the Seller shall not hold itself out to third parties in
such a manner as to be confused with any affiliate or any other person in
connection with the Seller's transactions with third parties;
(ll) the Seller shall not except as otherwise permitted by its
Certificate of Incorporation, seek the dissolution or winding up, in whole or in
part, of the Seller;
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(mm) the Seller shall not permit any contract or other
transaction relating to its business to be entered into other than clearly in
the name of the entity that is intended to be responsible and liable for that
contract or transaction in a manner designed to inform the other parties to the
transaction of the identity of the entity that is responsible and liable;
(nn) the Seller shall not incur any debt on the basis of the
assets or creditworthiness of any other person except as permitted pursuant to
the Agreement;
(oo) the Seller shall not require, as a routine matter, the
guaranty of its obligations by any other person to enable it to operate or
transact business; or
(pp) the Seller shall not except as otherwise permitted by its
Certificate of Incorporation, file or consent to the filing of any petition to
take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, or make an assignment for the benefit of creditors.
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EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) the Seller, Lesco or the Servicer (if Lesco or any of
its Affiliates) shall fail to perform or observe any term, covenant or agreement
under the Agreement or any other Transaction Document and, except as otherwise
provided herein, such failure shall continue for five (5) Business Days after
knowledge or notice thereof, (ii) the Seller or the Servicer shall fail to make
when due any payment or deposit to be made by it under the Agreement and such
failure shall continue unremedied for one Business Day or (iii) Lesco shall
resign as Servicer, and no successor Servicer reasonably satisfactory to the
Administrator shall have been appointed;
(b) Lesco (or any Affiliate thereof) shall fail to transfer to
any successor Servicer when required any rights pursuant to the Agreement that
Lesco (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the
Seller or Lesco (or any of their respective officers) under or in connection
with the Agreement or any other Transaction Document, or any information or
report delivered by the Seller, Lesco or the Servicer pursuant to the Agreement
or any other Transaction Document, shall prove to have been incorrect or untrue
in any material respect when made or deemed made or delivered, and shall remain
incorrect or untrue for ten (10) Business Days after notice to the Seller or the
Servicer of such inaccuracy;
(d) the Seller or the Servicer shall fail to deliver the
Information Package pursuant to the Agreement, and such failure shall remain
unremedied for two Business Days;
(e) the Agreement or any purchase or reinvestment pursuant to
the Agreement shall for any reason: (i) cease to create, or the Purchased
Interest shall for any reason cease to be, a valid and enforceable perfected
undivided percentage ownership or security interest to the extent of the
Purchased Interest in each Pool Receivable, the Related Security and Collections
with respect thereto, free and clear of any Adverse Claim, or (ii) cease to
create with respect to the Pool Assets, or the interest of the Issuer with
respect to such Pool Assets shall cease to be, a valid and enforceable first
priority perfected security interest, free and clear of any Adverse Claim;
(f) the Seller or Lesco shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Seller or Lesco seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its
63
property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 60 days, or any of the actions sought in such proceeding
(including the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Seller or Lesco shall take
any corporate action to authorize any of the actions set forth above in this
paragraph;
(g) (i) the (A) Default Ratio shall exceed 5.00% or (B) the
Delinquency Ratio shall exceed 20.00% or (ii) the average for three consecutive
calendar months of: (A) the Default Ratio shall exceed 3.50%, (B) the
Delinquency Ratio shall exceed 18.00% or (C) the Dilution Ratio shall exceed
7.00% or (iii) the Days Sales Outstanding shall exceed 70 days;
(h) a Change in Control shall occur;
(i) at any time (i) the sum of (A) the Capital plus (B) the
Total Reserves, exceeds (ii) the sum of (A) the Net Receivables Pool Balance at
such time plus (B) the Issuer's Share of the amount of Collections then on
deposit in the Lock-Box Accounts (other than amounts set aside therein
representing Discount and fees), and such circumstance shall not have been cured
within two Business Days;
(j) (i) Lesco or any Subsidiaries of Lesco shall fail to pay
any principal of or premium or interest on any of its Debt that is outstanding
in a principal amount of at least $1,000,000 in the aggregate when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage, indenture
or instrument relating to such Debt (and shall have not been waived); or (ii)
any other event shall occur or condition shall exist under any agreement,
mortgage, indenture or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument (and shall have not been waived), if, in
either case: (a) the effect of such non-payment, event or condition is to cause
the acceleration of the maturity of such Debt, or (b) any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased, or an
offer to repay, redeem, purchase or defease such Debt shall be required to be
made, in each case before the stated maturity thereof;
(k) either: (i) a contribution failure shall occur with
respect to any Benefit Plan sufficient to give rise to a lien under Section
302(f) of ERISA, (ii) the Internal Revenue Service shall file a notice of lien
asserting a claim or claims pursuant to the Internal Revenue Code with regard to
any of the assets of Seller or Lesco, or any ERISA Affiliate and such lien shall
have been filed and not released within 10 days, or (iii) the Pension Benefit
Guaranty Corporation shall, or shall indicate its intention in writing to the
Seller or Lesco, or any ERISA Affiliate to, either file a notice of lien
asserting a claim pursuant to ERISA with regard to any assets of the Seller or
Lesco, or any ERISA Affiliate or terminate any Benefit Plan that has unfunded
benefit liabilities, or any steps shall have been taken to terminate any Benefit
Plan subject to Title IV of ERISA so as to result in any liability and such lien
shall have been filed and not released within 10 days; or
(l) At any time during which Lesco is the Servicer, the
tangible net worth of Lesco shall be less than $80,000,000.
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SCHEDULE I
CREDIT AND COLLECTION POLICY
65
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Bank Account
------------- -------
SCHEDULE III
TRADE NAMES
Corporate Name Trade Names / Fictitious Names
-------------- ------------------------------
Lesco Funding, Inc. None
66
ANNEX A
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF INFORMATION PACKAGE
67
ANNEX B
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PURCHASE NOTICE
68
FORM OF PURCHASE NOTICE
________, [20__]
PNC Bank, National Association
One PNC Plaza, 3rd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated
as of April 24, 2001 (as heretofore amended or supplemented, the "Receivables
Purchase Agreement"), among Lesco Funding, Inc., ("Seller"), Lesco, Inc. as
Servicer, Market Street Funding Corporation ("Issuer") and PNC Bank National
Association, (the "Administrator"). Capitalized terms used in this Purchase
Notice and not otherwise defined herein shall have the meanings assigned thereto
in the Receivables Purchase Agreement.
This letter constitutes a Purchase Notice pursuant to Section 1.2(a) of
the Receivables Purchase Agreement. Seller desires to sell an undivided variable
interest in a pool of receivables on ___________, [2001], for a purchase price
of $____________. Subsequent to this Purchase, the aggregate outstanding Capital
will be $___________.
Seller hereby represents and warrants as of the date hereof, and as of
the date of Purchase, as follows:
(i) the representations and warranties contained in Exhibit
III of the Receivables Purchase Agreement are correct on and as of such dates as
though made on and as of such dates and shall be deemed to have been made on
such dates;
(ii) no Termination Event or Unmatured Termination Event has
occurred and is continuing, or would result from such purchase;
(iii) after giving effect to the purchase proposed hereby, the
aggregate outstanding Capital of the Purchased Interest will not exceed 100% and
the Capital will not exceed the Purchase Limit; and
(iv) the Facility Termination Date shall not have occurred.
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IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to
be executed by its duly authorized officer as of the date first above written.
LESCO FUNDING, INC.
By:_______________________________
Name Printed:_____________________
Title:____________________________
70
ANNEX C
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PAYDOWN NOTICE
Annex B-4
71
FORM OF PAYDOWN NOTICE
______________, _____
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Ladies and Gentlemen:
Reference is hereby made to the Receivables
Purchase Agreement, dated as of April 24, 2001 (as amended, supplemented or
otherwise modified, the "Receivables Purchase Agreement"), among Lesco Funding,
Inc., as Seller, Lesco, Inc. as Servicer, Market Street Funding Corporation, as
Issuer and PNC Bank, National Association, as Administrator. Capitalized terms
used in this paydown notice and not otherwise defined herein shall have the
meanings assigned thereto in the Receivables Purchase Agreement.
This letter constitutes a paydown notice pursuant to
Section 1.4(f)(i) of the Receivables Purchase Agreement. The Seller desires to
reduce the Capital on ____________, _____(1) by the application of $___________
in cash to pay Capital and Discount to accrue (until such cash can be used to
pay commercial paper notes) with respect to such Capital, together with all
costs related to such reduction of Capital.
________
(1) Notice must be given at least five Business Days' prior to the requested
paydown date, in the case of reductions in excess of $10,000,000, or at
least two Business Days' prior to the requested paydown date, in the case
of reductions of $10,000,000 or less.
Annex B-5
72
IN WITNESS WHEREOF, the undersigned has caused this
paydown notice to be executed by its duly authorized officer as of the date
first above written.
LESCO FUNDING, INC.
By:_______________________________
Name:
Title:
