EXHIBIT 10.4
EXECUTION COPY
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
DATED AS OF DECEMBER 26, 2002
BY AND AMONG
A.M. CASTLE & CO., TOTAL PLASTICS, INC.,XXXXXX STEEL PLATE CO. AND
KEYSTONE TUBE COMPANY, LLC
EACH AS AN ORIGINATOR,
AND
CASTLE SPFD, LLC,
AS BUYER
A. M. Castle & Co., Total Plastics, Inc.,
Xxxxxx Steel Plate Co, and Keystone Tube Company, LLC
Receivables Sale and Contribution Agreement
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION.......................................... 2
Section 1.01. Definitions......................................................... 2
Section 1.02. Rules of Construction............................................... 2
ARTICLE II SALE OF RECEIVABLES AND THE RELATED SECURITY........................... 2
Section 2.01. Agreement to Sell................................................... 2
Section 2.02. Grant of Security Interest.......................................... 3
ARTICLE III CONDITIONS PRECEDENT.................................................. 4
Section 3.01. Conditions to Initial Transfer...................................... 4
Section 3.02. Conditions to all Transfers......................................... 5
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS.............................. 5
Section 4.01. Representations and Warranties of each of the Originators........... 5
Section 4.02. Affirmative Covenants of each Originator............................ 13
Section 4.03. Reporting Requirements of the Parent................................ 20
Section 4.04. Negative Covenants of each of the Originators....................... 20
Section 4.05. Breach of Representations, Warranties or Covenants.................. 24
ARTICLE V INDEMNIFICATION......................................................... 25
Section 5.01. Indemnification..................................................... 25
ARTICLE VI DISTRIBUTIONS.......................................................... 27
Section 6.01. Distributions....................................................... 27
ARTICLE VII COLLATERAL SECURITY................................................... 27
Section 7.01. Security Interest................................................... 27
Section 7.02. Other Collateral; Rights in Receivables and the Related Security.... 27
Section 7.03. Originators Remain Liable........................................... 28
ARTICLE VIII PERFORMANCE UNDERTAKING.............................................. 28
Section 8.01. Guaranty of Performance of Guaranteed Obligations................... 28
Section 8.02. Parent's Further Agreements to Pay.................................. 29
Section 8.03. Waivers by Parent................................................... 29
Section 8.04. Unenforceability of Guaranteed Obligations Against any Affiliated
Party.............................................................. 30
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Receivables Sale and Contribution Agreement
Section 8.05. Subrogation; Subordination.......................................... 30
Section 8.06. Termination of Performance Undertaking.............................. 31
Section 8.07. Effect of Bankruptcy................................................ 31
Section 8.08. Setoff.............................................................. 31
ARTICLE IX MISCELLANEOUS.......................................................... 32
Section 9.01. Notices............................................................. 32
Section 9.02. No Waiver; Remedies................................................. 33
Section 9.03. Successors and Assigns.............................................. 34
Section 9.04. Termination; Survival of Obligations................................ 34
Section 9.05. Complete Agreement; Modification of Agreement....................... 35
Section 9.06. Amendments and Waivers.............................................. 35
Section 9.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL........ 35
Section 9.08. Counterparts........................................................ 37
Section 9.09. Severability........................................................ 37
Section 9.10. Section Titles...................................................... 37
Section 9.11. No Setoff........................................................... 37
Section 9.12. Press Releases...................................................... 37
Section 9.13. Further Assurances.................................................. 37
Section 9.14. Expenses............................................................ 38
EXHIBIT 2.01(a)................................................................... 41
ANNEX 4.03(a).....................................................................
ANNEX 4.03(b).....................................................................
ANNEX 4.04(l).....................................................................
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INDEX OF APPENDICES
Exhibit 2.01(a) Form of Receivables Assignment
Schedule 4.01(a) Jurisdictions of Incorporation/Organization
Schedule 4.01(b) Executive Offices; Collateral Locations; Legal or Other
Names
Schedule 4.01(c)(v)
Schedule 4.01(d) Litigation
Schedule 4.01(f) Financial Statements
Schedule 4.01(g)(iii)
Schedule 4.01(i) Labor Matters
Schedule 4.01(j) Ventures, Subsidiaries and Affiliates; Outstanding Equity
Interests
Schedule 4.01(k) Taxes
Schedule 4.01(l) Infringement Claims
Schedule 4.01(o) ERISA
Schedule 4.01(v) Deposit and Disbursement Accounts
Schedule 4.02(h) Trade Names
Schedule 4.04(e) Capital Structure
Annex X Definitions
Annex Y Schedule of Documents
Annex 4.03(a) Financial Statements and Projections
Annex 4.03(b) Reporting Requirements of the Parent
Annex 4.04(l) Financial Covenants
A. M. Castle & Co., Total Plastics, Inc.,
Xxxxxx Steel Plate Co, and Keystone Tube Company, LLC
Receivables Sale and Contribution Agreement
THIS RECEIVABLES SALE AND CONTRIBUTION AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to time, this
"Agreement") is entered into as of December 26, 2002, by and among A. M. CASTLE
& CO., a Maryland corporation ("Parent"), TOTAL PLASTICS, INC., a Michigan
corporation, XXXXXX STEEL PLATE CO., a Delaware corporation, and KEYSTONE TUBE
COMPANY, LLC, a Delaware limited liability company (together with Parent, each
an "Originator", and collectively, the "Originators"), and CASTLE SPFD, LLC, a
Delaware limited liability company (the "Buyer").
RECITALS
A. Each of the Originators now owns, and from time to time hereafter
will own, Receivables and the Related Security.
B. Buyer has been formed for the sole purpose of purchasing, or
otherwise acquiring by capital contribution, and reselling to the Administrative
Agent for the benefit of the Purchaser, all Receivables and the Related Security
originated by each Originator.
C. Each of the Originators intends to sell, and Buyer intends to
purchase, such Receivables and the Related Security, from time to time, as
described herein.
D. In addition, each of the Originators may, from time to time,
contribute capital to Buyer in the form of Contributed Receivables or cash.
E. Parent owns, directly or indirectly, one hundred percent (100%)
of the equity interests of each of the other Originators and, as such, will
receive direct and indirect economic benefits from the sales of the Receivables
and the Related Security described in Recital C.
F. Originators and the Independent Member own, directly or
indirectly, one hundred percent (100%) of the Equity Interests of the Buyer and,
as such, will receive direct and indirect economic benefits from the sales of
the Receivables and the Related Security described in Recital C.
G. Pursuant to Article VIII hereto, Parent is willing to guarantee
to Buyer the full and punctual payment and performance by each other Originator
and each other Servicer that is a Subsidiary or an Affiliate of Parent (each of
the foregoing, collectively, an "Affiliated Party") of its respective Guaranteed
Obligations, as defined herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to them in Annex X.
Section 1.02. Rules of Construction. For purposes of this Agreement, the
rules of construction set forth in Annex X shall govern. All Appendices hereto,
or expressly identified to this Agreement, are incorporated herein by reference
and, taken together with this Agreement, shall constitute but a single
agreement.
ARTICLE II
SALE OF RECEIVABLES AND THE RELATED SECURITY
Section 2.01. Agreement to Sell.
(a) Sale of Receivables and the Related Security. Subject to the terms and
conditions hereof, each of the Originators agrees to sell or contribute, without
recourse except to the extent specifically provided herein, to Buyer on the
Closing Date and on each Business Day thereafter including the Facility
Termination Date (the Closing Date and each such Business Day, a "Transfer
Date") all Receivables and the Related Security owned by it on each such
Transfer Date, and Buyer agrees to purchase or acquire as a capital contribution
all such Receivables and the Related Security on each such Transfer Date (each
such sale or contribution a "Transfer"). All such Transfers by the Originators
shall be evidenced by a single certificate of assignment substantially in the
form of Exhibit 2.01(a) (the "Receivables Assignment"), and each of the
Originators and Buyer shall execute and deliver the Receivables Assignment on or
before the Closing Date.
(b) Determination of Sold Receivables. It is understood and agreed that
each Transfer of a Receivable and the Related Security on a Transfer Date
subsequent to the Closing Date shall occur immediately upon creation of such
Receivable. On and as of each Transfer Date, all Receivables and the Related
Security owned by each of the Originators and not previously acquired by Buyer
shall be identified for sale to Buyer such that the Sale Price to be paid by
Buyer therefor does not exceed the amount of cash available to Buyer for the
payment thereof (each such Receivable identified for sale, individually, a "Sold
Receivable" and, collectively, the "Sold Receivables"). The Sold Receivables
will be identified by reference to the General Trial Balance of each of the
Originators.
(c) Payment of Sale Price. In consideration for each Sale of Sold
Receivables hereunder by an Originator, Buyer shall pay to the applicable
Originator on the Transfer Date therefor the Sale Price therefor in Dollars in
immediately available funds. All such payments by
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Buyer under this Section 2.01(c) shall be effected by means of a wire transfer
on the day when due to such account or accounts as the applicable Originator may
designate.
(d) Determination of Contributed Receivables. To the extent that, on and
as of any Transfer Date, Receivables owned by each of the Originators do not
constitute Sold Receivables pursuant to Section 2.01(b), then each of the
Originators shall, unless it has delivered an Election Notice (as defined below)
to Buyer, contribute such Receivables and the Related Security to Buyer as a
capital contribution (each such contributed Receivable, individually, a
"Contributed Receivable," and collectively, the "Contributed Receivables"). If
any Originator elects not to contribute Receivables and the Related Security to
Buyer on any Transfer Date, or if any Receivables and the Related Security
eligible for sale and owned by such Originator are not sold on any Transfer
Date, such Originator shall deliver to Buyer not later than 5:00 p.m. (New York
City time) on such Transfer Date a notice of election thereof (each such notice,
an "Election Notice").
(e) Ownership of Transferred Receivables. On and after each Transfer Date
and after giving effect to the Transfer(s) to be made on each such date, Buyer
shall own the Transferred Receivables and the Related Security and no Originator
shall take any action inconsistent with such ownership, nor shall the
Originators claim any ownership interest in such Transferred Receivables and the
Related Security.
(f) Reconstruction of General Trial Balance. If at any time any Originator
fails to generate its General Trial Balance, Buyer shall have the right to
reconstruct such General Trial Balance so that a determination of the Sold
Receivables and Contributed Receivables can be made pursuant to Section 2.01(b).
Each of the Originators agrees to cooperate with such reconstruction, including
by delivery to Buyer, upon Buyer's request, of copies of all applicable
Contracts and Records.
(g) Servicing of Receivables. So long as no Event of Servicer Termination
shall have occurred and be continuing and no Successor Servicer has assumed the
responsibilities and obligations of the Servicers pursuant to Section 9.02 of
the Purchase Agreement, the Servicers shall (i) conduct the servicing,
administration and collection of the Transferred Receivables and shall take, or
cause to be taken, all such actions as may be necessary or advisable to service,
administer and collect the Transferred Receivables, all in accordance with (A)
the terms of the Purchase Agreement, (B) customary and prudent servicing
procedures for trade receivables of a similar type and (C) all applicable laws,
rules and regulations, and (ii) hold all Contracts and other documents and
incidents relating to the Transferred Receivables in trust for the benefit of
Buyer, as the owner thereof, and for the sole purpose of facilitating the
servicing of the Transferred Receivables in accordance with the terms of the
Purchase Agreement.
Section 2.02. Grant of Security Interest. The parties hereto intend that
each Transfer of Receivables and the Related Security pursuant to this Agreement
shall constitute an absolute sale, transfer and assignment of all of the
applicable Originator's rights, title and interest in and to the Transferred
Receivables and the Related Security to Buyer, and not a loan from Buyer to
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the Originators secured by the Transferred Receivables and the Related Security.
Notwithstanding the foregoing, in addition to and not in derogation of any
rights now or hereafter acquired by Buyer under Section 2.01 hereof, the parties
agree that if for any reason the Transfer of a Receivable and the Related
Security is treated as a loan, the parties hereto intend that this Agreement
shall constitute a security agreement under applicable law and that each of the
Originators does hereby grant, to the Buyer a continuing security interest in
all of such Originator's right, title and interest in, to and under the
Originator Collateral whether now owned or hereafter acquired by such Originator
to secure the obligations of such Originator to the Buyer hereunder (including,
if and to the extent that any Transfer is recharacterized as a transfer for
security, the repayment of a loan deemed to have been made by the Buyer in the
amount of the Sale Price with respect thereto and which secures the Buyer's
right to receive all Collections of the Transferred Receivables as otherwise
contemplated under this Agreement), which security interest shall be prior to
all Adverse Claims thereto.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions to Initial Transfer. The initial Transfer
hereunder shall be subject to satisfaction of each of the following conditions
precedent (any one or more of which may be waived in writing by each of Buyer
and the Administrative Agent, as Buyer's assignee):
(a) Sale Agreement; Other Documents. This Agreement or counterparts hereof
shall have been duly executed by, and delivered to each of the Originators and
Buyer, and Buyer shall have received such documents, instruments, agreements and
legal opinions as Buyer shall request in connection with the transactions
contemplated by this Agreement, and all those identified in the Schedule of
Documents, each in form and substance satisfactory to Buyer.
(b) Governmental Approvals. Buyer shall have received (i) satisfactory
evidence that each of the Originators has obtained all required consents and
approvals of all Persons, including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Related
Documents and the consummation of the transactions contemplated hereby and
thereby or (ii) an Officer's Certificate from each of the Originators in form
and substance satisfactory to Buyer affirming that no such consents or approvals
are required.
(c) Compliance with Laws. Each of the Originators shall be in compliance
with all applicable foreign, federal, state and local laws and regulations,
including those specifically referenced in Section 4.02(g) except to the extent
that the failure to so comply, individually or in the aggregate, could not be
expected to have a Material Adverse Effect.
(d) Payment of Expenses. Each Originator shall have paid all expenses
required to be paid by it on the Closing Date, and shall have reimbursed the
Buyer for its share of all costs and
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expenses of closing the transactions contemplated hereunder including the
Buyer's legal and audit expenses, and other document preparation.
(e) Purchase Agreement Conditions. Each of those conditions precedent set
forth in Sections 3.01 and 3.02 of the Purchase Agreement shall have been
satisfied or waived in writing as provided therein.
Section 3.02. Conditions to all Transfers. Each Transfer hereunder
(including the initial Transfer) shall be subject to satisfaction of the
following further conditions precedent as of the Transfer Date therefor:
(a) the representations and warranties of each of the Originators
contained herein or in any other Related Document shall be true and correct as
of such Transfer Date or in any other Related Document, both before and after
giving effect to such Transfer and to the application of the Sale Price
therefor, except to the extent that any such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted by this Agreement;
(b) no Incipient Termination Event or Termination Event shall have
occurred and be continuing or would result after giving effect to such Transfer
or the application of the Sale Price therefor;
(c) Each of the Originators and each other member of the Parent Group,
shall be in compliance with each of its covenants and other agreements set forth
herein, or in any other Related Document; and
(d) Each of the Originators shall have taken such other action, including
delivery of approvals, consents, opinions, documents and instruments to Buyer as
Buyer may request.
The acceptance by each of the Originators of the Sale Price for any
of its Sold Receivables and the Related Security or the contribution by each
Originator of any Contributed Receivables and the Related Security on any
Transfer Date shall be deemed to constitute, as of any such Transfer Date, a
representation and warranty by such Originator that the conditions in this
Section 3.02 have been satisfied. Upon any such acceptance, title to the
Transferred Receivables and Related Security sold or contributed on such
Transfer Date shall be vested absolutely in Buyer, whether or not such
conditions were in fact so satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.01. Representations and Warranties of each of the Originators.
To induce Buyer to purchase the Sold Receivables and the Related Security and to
acquire the Contributed Receivables and the Related Security, each of the
Originators makes the following representations and warranties to Buyer as to
itself, each and all of which shall survive the execution and delivery of this
Agreement.
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(a) Existence; Compliance with Law. Such Originator (i) is either a
corporation or limited liability company, as the case may be, duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization as set forth on Schedule 4.01(a) attached hereto; (ii) is duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified is not
reasonably likely to result in a Material Adverse Effect; (iii) has the
requisite corporate or limited liability company power and authority and the
legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease, and to conduct its
business, in each case, as now, heretofore and proposed to be conducted; (iv)
has all licenses, permits, consents or approvals from or by, and has made all
filings with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct,
except where the failure to obtain such licenses, permits, consents or approvals
is not reasonably likely to result in a Material Adverse Effect; (v) is in
compliance with its Organic Documents; and (vi) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax laws
and other laws, is in compliance with all applicable provisions of law, except
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(b) Executive Offices; Collateral Locations; Legal or Other Names;
Organizational ID Number. As of the Closing Date, the current location of such
Originator's chief executive office, principal place of business, other offices,
the warehouses and premises within which such Originator Collateral is stored or
located, and the locations of all records of such Originator concerning the
Originator Collateral are set forth in Schedule 4.01(b) and such Originator's
state of organization, chief executive office location or principal place of
business location has not changed within the past 12 months. During the prior
five years, except as set forth in Schedule 4.01(b), such Originator has not
been known as or used any corporate, fictitious or trade name. In addition,
Schedule 4.01(b) lists the organizational identification number issued by such
Originator's state of organization or states that no such number has been issued
and lists the federal employer identification number of such Originator.
(c) Power, Authorization, Enforceable Obligations. The execution, delivery
and performance by such Originator of this Agreement and the execution, delivery
and performance by such Originator of any other Related Documents to which it is
a party and the creation and perfection of all Transfers and Liens provided for
herein and therein: (i) are within such Person's corporate or company power, as
the case may be; (ii) have been duly authorized by all necessary or proper
corporate or company action, as the case may be, and all necessary shareholder
or member action, as applicable; (iii) do not contravene any provision of such
Person's Organic Documents; (iv) do not violate any law or regulation, or any
order or decree of any court or Governmental Authority, except where such
violation could not reasonably be expected to have a Material Adverse Effect;
(v) except as set forth in Schedule 4.01(c)(v), do not conflict with or result
in the breach or termination of, constitute a default under or accelerate or
permit the acceleration of any performance required by, any indenture, mortgage,
deed of trust, lease, agreement or other instrument to which such Person is a
party or by which such Person or any of its property is bound; (vi) do not
result in the creation or imposition of any Adverse Claim upon
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any of the property of such Originator; and (vii) do not require the consent or
approval of any Governmental Authority or any other Person, except those which
will have been duly obtained, made or complied with prior to the Closing Date as
provided Section 3.01(b). The exercise by Buyer of any of its rights and
remedies under any Related Document to which it is a party, do not require the
consent or approval of any Governmental Authority or any other Person (other
than consents or approvals solely relating to or required to be obtained by the
Buyer, and subject to the Bankruptcy Code), except those which will have been
duly obtained, made or complied with prior to the Closing Date as provided in
Section 3.01(b). On or prior to the Closing Date, each of the Related Documents
shall have been duly executed and delivered by such Originator that is a party
thereto and each such Related Document shall then constitute a legal, valid and
binding obligation of such Person enforceable against it in accordance with its
terms.
(d) No Litigation. No Litigation is now pending or, to the knowledge of
such Originator, threatened against such Originator or any member of the Parent
Group, that (i) challenges such Originator's or member of the Parent Group's
right or power to enter into or perform any of its obligations under the Related
Documents to which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to prevent the
Transfer, Purchase, contribution or pledge of any Receivable and the Related
Security or the consummation of any of the transactions contemplated under this
Agreement or the other Related Documents or (iii) has a reasonable risk of being
determined adversely to such Originator or any member of the Parent Group and
that, if so determined, could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 4.01(d), as of the Closing Date there is
no Litigation pending or threatened that seeks damages in excess of $250,000 or
injunctive relief against, or alleges criminal misconduct by, such Originator or
any member of the Parent Group.
(e) Solvency. Both before and after giving effect to (i) the transactions
contemplated by this Agreement and the other Related Documents and (ii) the
payment and accrual of all transaction costs in connection with the foregoing ,
such Originator is and will be Solvent and no insolvency proceedings of any
nature are now pending or threatened against it.
(f) Financial Statements and Projections. The Financial Statements and
Projections referred to in Annex 4.03(a) hereto have been delivered on the date
hereof. All Financial Statements concerning such Originator that are referred to
in Annex 4.03(a) have been prepared in accordance with GAAP with procedures
consistently applied throughout the periods covered (except as disclosed therein
and except, with respect to unaudited Financial Statements, for the absence of
footnotes and normal year-end audit adjustments) and present fairly in all
material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the
periods then ended. The Projections have been prepared by such Originator in
light of the past operations of its business. The Projections are based upon the
same accounting principles as those used in the preparation of the Financial
Statements described above and the estimates and assumptions stated therein, all
of which such Originator believes to be reasonable and fair in light of current
conditions and current facts known to such Originator and, as of the Closing
Date, reflect such Originator's good faith and
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reasonable estimates of the future financial performance of such Originator for
the period set forth therein.
(g) Material Adverse Effect. Between December 31, 2001 and the Closing
Date, (i) no member of the Parent Group has incurred any obligations, contingent
or non-contingent liabilities, liabilities for charges, long-term leases or
unusual forward or long-term commitments that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (ii) no contract,
lease or other agreement or instrument has been entered into by any member of
the Parent Group or has become binding upon any member of the Parent Group's
assets and no law or regulation applicable to any member of the Parent Group has
been adopted that has had or could reasonably be expected to have a Material
Adverse Effect; and (iii) except as set forth on Schedule 4.01(g)(iii), no
member of the Parent Group is in default and no third party is in default under
any material contract, lease or other agreement or instrument to which any
member of the Parent Group is a party that alone or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
(h) Ownership of Receivables and the Related Security; Liens. Except for
any Liens of the Collateral Administrative Agent on the Receivables and the
Related Security which Lien will be automatically released upon Transfer thereof
pursuant to the Intercreditor Agreement: (i) such Originator owns each
Receivable and the Related Security originated by it free and clear of any
Adverse Claim (other than Permitted Originator Encumbrances) and, from and after
each Transfer Date, Buyer will acquire valid and properly perfected title to and
the sole record and beneficial ownership interest in each Transferred Receivable
and the Related Security purchased or otherwise acquired from such Originator on
such date, free and clear of any Adverse Claim or restrictions on
transferability; (ii) as of the Closing Date, none of the other assets and
properties of such Originator are subject to any Adverse Claims other than
Permitted Originator Encumbrances, and there are no facts, circumstances or
conditions known to such Originator that may result in any Adverse Claims other
than Permitted Originator Encumbrances; (iii) such Originator has received all
assignments, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Originator's right, title and interest in and to the Receivables
originated by it and its other properties and assets; (iv) such Originator has
rights in and the power to Transfer each Receivable originated by it and
included in the Originator Collateral, together with all related Related
Security, and upon which it purports to xxxxx x Xxxx hereunder free and clear of
any and all Liens other than Permitted Originator Encumbrances and (v) the Liens
granted by such Originator to Buyer pursuant to Sections 2.02 and 7.01 will at
all times be fully perfected first priority Liens in and to the Originator
Collateral, subject only to Permitted Originator Encumbrances.
(i) Labor Matters. As of the Closing Date (a) no strikes or other material
labor disputes against such Originator are pending or, to such Person's
knowledge, threatened; (b) hours worked by and payment made to employees of such
Originator comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from such Originator for employee health and welfare insurance have been paid or
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accrued as a liability on the books of such Person; (d) [intentionally omitted];
(e) there is no organizing activity involving such Originator pending or, to
such Person's knowledge, threatened by any labor union or group of employees;
and (f) there are no representation proceedings pending or, to such Originator's
knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of such Originator has made a pending demand
for recognition; and (g) except as set forth in Schedule 4.01(i), there are no
material complaints or charges against such Originator pending or, to the
knowledge of such Person, threatened to be filed with any Governmental Authority
or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment of any individual by
such Originator that seek damages in excess of $250,000 in the aggregate or
$100,000 individually.
(j) Ventures, Subsidiaries and Affiliates; Outstanding Equity Interests.
Except as set forth in Schedule 4.01(j), such Originator has no Subsidiaries, is
not engaged in any joint venture or partnership with any other Person, and is
not an Affiliate of any other Person. All of the issued and outstanding Equity
Interests of such Originator other than Parent is owned (directly or indirectly)
by Parent. Except as described on Schedule 4.01(j), there are no outstanding
rights to purchase, options, warrants or similar rights or agreements pursuant
to which such Originator may be required to issue, sell, repurchase or redeem
any of its Equity Interest or other equity securities or any Equity Interest or
other equity securities of its Subsidiaries. All outstanding Equity Interests of
such Originator as of the Closing Date are described in Schedule 4.01(j).
(k) Taxes. All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by such Originator
and each of its Subsidiaries have been filed with the appropriate Governmental
Authority and all charges have been paid prior to the date on which any fine,
penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding
charges or other amounts being contested in accordance with Section 4.02(m)(ii).
Proper and accurate amounts have been withheld by such Originator from its
respective employees for all periods in full and complete compliance with all
applicable federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities. Schedule 4.01(k)
sets forth as of the Closing Date (i) those taxable years for which such
Originator's tax returns are currently being audited by the IRS or any other
applicable Governmental Authority and (ii) any assessments or threatened
assessments in connection with such audit or otherwise currently outstanding. As
of the Closing Date, except as described on Schedule 4.01(k), such Originator
has not executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any charges. As of the Closing Date, no
such Originator or to its knowledge any of its Affiliates has agreed or been
requested to make any adjustment under Code Section 481(a), by reason of a
change in accounting method or otherwise, that would have a Material Adverse
Effect.
(l) Intellectual Property. As of the Closing Date, such Originator owns or
has rights to use all intellectual property necessary to continue to conduct its
business as now or heretofore
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conducted by it or proposed to be conducted by it. To the knowledge of such
Originator after diligent inquiry, such Originator conducts its business and
affairs without infringement of or interference with any intellectual property
of any other Person. Except as set forth in Schedule 4.01(l), such Originator is
not aware of any infringement or claim of infringement by others of any
intellectual property of such Originator.
(m) Full Disclosure. All information contained in this Agreement, any of
the other Related Documents, or any written statement furnished by or on behalf
of such Originator to Buyer, the Purchaser or the Administrative Agent pursuant
to the terms of this Agreement or any of the other Related Documents is true and
accurate in every material respect, and none of this Agreement, any of the other
Related Documents, or any written statement furnished by or on behalf of such
Originator to Buyer, the Purchaser or the Administrative Agent pursuant to the
terms of this Agreement or any of the other Related Documents is misleading as a
result of the failure to include therein a material fact. The Projections are
not a guaranty of future performance, and actual results may materially differ
from the Projections.
(n) Notices to Obligors. Such Originator has directed all Obligors of
Transferred Receivables and the Related Security originated by it to remit all
payments with respect to such Receivables for deposit in a Lockbox or Lockbox
Account.
(o) ERISA.
(i) Schedule 4.01(o) lists all Plans of such Originator and
separately identifies all Pension Plans, including all Title IV Plans,
Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Each Qualified Plan has been determined by the IRS to
qualify under Section 401 of the IRC, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501
of the IRC, and nothing has occurred that would cause the loss of such
qualification or tax-exempt status. Except as otherwise provided in
Schedule 4.01(o), (x) each Plan is in compliance with the applicable
provisions of ERISA and the IRC, including the timely filing of all
reports required under the IRC or ERISA, (y) neither such Originator nor
any ERISA Affiliate has failed to make any contribution or pay any amount
due as required by either Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan and (z) neither such Originator nor any
ERISA Affiliate has engaged in a "prohibited transaction," as defined in
Section 4975 of the IRC, in connection with any Plan that would subject
such Originator to a material tax on prohibited transactions imposed by
Section 4975 of the IRC.
(ii) Except as set forth in Schedule 4.01(o): (A) no Title IV Plan
has any Unfunded Liability; (B) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or
is reasonably expected to occur; (C) there are no pending or, to the
knowledge of such Originator, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted
or instituted against any Plan or any Person as fiduciary or sponsor of
any Plan; (D) neither
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such Originator nor any ERISA Affiliate has incurred or reasonably expects
to incur any liability as a result of a complete or partial withdrawal
from a Multiemployer Plan; (E) within the last five years no Title IV Plan
with Unfunded Liabilities has been transferred outside of the "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA) of such
Originator or any ERISA Affiliate; (F) Equity Interests of such Originator
and its ERISA Affiliates make up, in the aggregate, no more than 10% of
the assets of any Plan, measured on the basis of fair market value as of
the last valuation date of any Plan.
(p) Brokers. No broker or finder acting on behalf of such Originator other
than Xxxxxxx Xxxxx & Company, LLC was employed or utilized in connection with
this Agreement or the other Related Documents or the transactions contemplated
hereby or thereby and such Originator has no obligation to any Person other than
Xxxxxxx Xxxxx & Company, LLC in respect of any finder's or brokerage fees in
connection therewith.
(q) Margin Regulations. Such Originator is not engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being referred
to herein as "Margin Stock"). Such Originator does not own any Margin Stock, and
no portion of the Sale Price for any Sale hereunder will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any Indebtedness that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
portion of such proceeds to be considered a "purpose credit" within the meaning
of Regulations T, U or X of the Federal Reserve Board. Such Originator will not
take or permit to be taken any action that might cause any Related Document to
violate any regulation of the Federal Reserve Board.
(r) Nonapplicability of Bulk Sales Laws. No transaction contemplated by
this Agreement or any of the other Related Documents requires compliance with
any bulk sales act or similar law.
(s) Government Regulation. Such Originator is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
Such Originator is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder or under the other Related Documents. The purchase or
acquisition of Transferred Receivables and the Related Security by Buyer
hereunder, the application of the Sale Price for the foregoing and the
consummation of the transactions contemplated by this Agreement and the other
Related Documents will not violate any provision of any such statute or any
rule, regulation or order issued by the Securities and Exchange Commission.
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(t) Books and Records; Minutes. Such Originator maintains (i) books and
records of account and (ii) minutes of the meetings and other proceedings of its
Equity Holders and board of directors or partners, as applicable, that are
separate from the analogous records and minutes of Buyer.
(u) Deposit and Disbursement Accounts. Schedule 4.01(u) lists all banks
and other financial institutions at which such Originator maintains any deposit
accounts established for the receipt of collections on accounts receivable as of
the Closing Date, including any Lockbox Accounts, and such schedule correctly
identifies the name, address and telephone number of each depository, the name
in which the account is held, a description of the purpose of the account, and
the complete account number therefor, in each case as of the Closing Date.
(v) Representations and Warranties in Other Related Documents. Each of the
representations and warranties of such Originator contained in the Related
Documents (other than this Agreement) is true and correct in all material
respects and such Originator hereby makes each such representation and warranty
to, and for the benefit of, the Purchaser and the Administrative Agent as if the
same were set forth in full herein, and such Originator consents to the
assignment of Buyer's rights to the Administrative Agent for the benefit of the
Purchaser and its successors and assigns as contemplated in Section 4.02(f).
(w) Receivables. With respect to each Transferred Receivable originated by
such Originator designated as an Eligible Receivable in any Investment Base
Certificate:
(i) such Receivable satisfies the criteria for an Eligible
Receivable prior to its Transfer to Buyer;
(ii) upon its Transfer to Buyer, such Receivable and the Related
Security was owned by the applicable Originator free and clear of any
Adverse Claim (other than Permitted Originator Encumbrances), and such
Originator had the full right, power and authority to sell, contribute,
assign, transfer and pledge its interest therein as contemplated under
this Agreement and the other Related Documents and, upon such Transfer,
Buyer will acquire valid and properly perfected title to and the sole
record and beneficial ownership interest in such Receivable and the
Related Security, free and clear of any Adverse Claim and, following such
Transfer, such Receivable and the Related Security will not be subject to
any Adverse Claim as a result of any action or inaction on the part of
such Originator;
(iii) the Transfer of each such Receivable and the Related Security
pursuant to this Agreement and the Receivables Assignment constitutes, as
applicable, a valid sale, contribution, transfer, assignment, setover and
conveyance to Buyer of all right, title and interest of such Originator in
and to such Receivable and the Related Security; and
(iv) such Originator has no knowledge of any fact (including any
defaults by the Obligor thereunder on any other Receivable or the Related
Security) that would cause
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it or should have caused it to expect that any payments on such Receivable
or the Related Security will not be paid in full when due or to expect any
other Material Adverse Effect.
The representations and warranties described in this Section 4.01
shall survive the Transfer of the Transferred Receivables and the Related
Security to Buyer, any subsequent assignment of the Transferred Receivables and
the Related Security by Buyer, and the termination of this Agreement and the
other Related Documents and shall continue until the indefeasible payment in
full of all Transferred Receivables and the Related Security.
Section 4.02. Affirmative Covenants of each Originator. Each Originator
covenants and agrees as to itself that, unless otherwise consented to by Buyer
and the Administrative Agent, from and after the Closing Date and until the
Termination Date:
(a) Offices and Records. Such Originator shall maintain its principal
place of business and chief executive office and the office at which it keeps
its Records at the respective locations specified in Schedule 4.01(b) or, upon
30 days' prior written notice to Buyer and the Administrative Agent, at such
other location in a jurisdiction where all action requested by Buyer, the
Purchaser or the Administrative Agent pursuant to Section 9.13 shall have been
taken with respect to the Transferred Receivables and the Related Security. Such
Originator shall at its own cost and expense, for not less than three years from
the date on which each Transferred Receivable and the Related Security was
originated, or for such longer period as may be required by law, maintain
adequate Records with respect to such Transferred Receivable and the Related
Security, including records of all payments received, credits granted and
merchandise returned with respect thereto. Such Originator will, (A) at all
times from and after the date hereof, clearly and conspicuously xxxx its
computer and master data processing books and records with a legend describing
the Buyer's interest in the Receivables and the Related Security, and (B)
segregate (from all other receivables then owned by such Originator) all
Contracts relating to each Receivable and the Related Security.
(b) Access. Such Originator shall, during normal business hours, from time
to time upon one Business Day's prior notice and as frequently as Buyer, the
Servicers or the Administrative Agent determines to be appropriate: (i) provide
Buyer, the Servicers or the Administrative Agent and any of their respective
officers, employees and agents access to its properties (including properties
utilized in connection with the collection, processing or servicing of the
Transferred Receivables and the Related Security), facilities, advisors and
employees (including officers) and to the Originator Collateral, (ii) permit
Buyer, the Servicers or the Administrative Agent and any of their respective
officers, employees and agents, to inspect, audit and make extracts from its
books and records, including all Records, reasonably related to the general
purposes of such inspection and audit, (iii) permit Buyer, the Servicers or the
Administrative Agent and their respective officers, employees and agents, to
inspect, review and evaluate the Transferred Receivables and the Related
Security and other Originator Collateral, as applicable, and (iv) permit Buyer,
the Servicers or the Administrative Agent and their respective officers,
employees and agents to discuss matters relating to the Transferred Receivables
and the Related Security or such Originator's performance under this Agreement
or the affairs, finances
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and accounts of the Originators with any of their officers, directors,
employees, representatives or agents (in each case, with those Persons having
knowledge of such matters) and with their independent certified public
accountants. If an Incipient Termination Event or a Termination Event shall have
occurred and be continuing, or the Administrative Agent, in good faith in its
reasonable judgment, believes that an Incipient Termination Event or a
Termination Event is imminent or deems the Administrative Agent's rights or
interests (on behalf of the Purchaser) in the Transferred Receivables and the
Related Security or the Originator Collateral insecure, such Originator shall
provide such access at reasonably extended business hours and without advance
notice and shall provide Buyer, the Servicers or the Administrative Agent with
access to its suppliers and customers. Such Originator shall make available to
Buyer, the Servicers or the Administrative Agent and their respective counsel,
as quickly as is possible under the circumstances, originals or copies of all
books and records, including Records, that Buyer, the Servicers or the
Administrative Agent may request. Such Originator shall deliver any document or
instrument necessary for Buyer, the Servicers or the Administrative Agent, as
they may from time to time request, to obtain records from any service bureau or
other Person that maintains records for the Originators, and shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by such Originator.
(c) Supplemental Disclosure. From time to time as may be reasonably
requested by Administrative Agent (which request will not be made more
frequently than once each year absent the occurrence and continuance of a
Termination Event), each Originator shall supplement each Schedule hereto, or
any representation herein or in any other Related Documents, with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedule or as an exception to such representation or that is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to any
Schedule, such Schedule shall be appropriately marked to show the changes made
therein); provided that (a) no such supplement to any such Schedule or
representation shall amend, supplement or otherwise modify any Schedule or
representation, or be or be deemed a waiver of any Termination Event resulting
from the matters disclosed therein, except as consented to by Administrative
Agent in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
(d) Communication with Accountants. Such Originator authorizes Buyer, the
Servicers and the Administrative Agent to communicate directly with its
independent certified public accountants, and authorizes and shall instruct
those accountants and advisors to disclose and make available to Buyer, the
Servicers and the Administrative Agent any and all financial statements and
other completed supporting financial documents, schedules and information
relating to such Originator (including copies of any issued management letters)
with respect to the business, results of operations and financial condition of
such Originator. Such Originator agrees to render to Buyer, the Servicers and
the Administrative Agent at such Originator's own cost and expense, such
clerical and other assistance as may be reasonably requested with regard to the
foregoing. If any Termination Event shall have occurred and be continuing, such
Originator shall, promptly upon request therefor, assist Buyer in delivering to
the Administrative
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Agent Records reflecting activity through the close of business on the Business
Day immediately preceding the date of such request.
(e) Compliance With Credit and Collection Policies. Such Originator shall
comply in all material respects with the Credit and Collection Policies
applicable to each Transferred Receivable and the Related Security therefor, and
with the terms of such Transferred Receivables and the Related Security.
(f) Assignment. Each Originator agrees that, to the extent permitted under
the Purchase Agreement, Buyer may assign all of its right, title and interest
in, to and under the Transferred Receivables and the Related Security and this
Agreement, including its right to exercise the remedies set forth in Section
4.05. Each Originator agrees that, upon any such assignment, the assignee
thereof may enforce directly, without joinder of Buyer, all of the obligations
of such Originator hereunder, including any obligations of such Originator set
forth in Sections 4.02(p), 4.05, 5.01 and 9.14.
(g) Compliance with Agreements and Applicable Laws. Each Originator shall
perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and the Receivables and the Related Security, including those
relating to truth in lending, retail installment sales, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices,
privacy, licensing, taxation, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to so comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(h) Maintenance of Existence and Conduct of Business. Each Originator
shall (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its legal existence and its rights and franchises; (ii)
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder and in accordance with the terms of its Organic Documents;
(iii) at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, including all
licenses, permits, charters and registrations, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and (iv) transact business only in such
corporate and trade names as are set forth in Schedule 4.02(h) or, upon 30 days'
prior written notice to Buyer and the Administrative Agent, in such other
corporate or trade names with respect to which all action requested by Buyer,
the Purchaser or the Administrative Agent pursuant to Section 9.13 shall have
been taken with respect to the Transferred Receivables and the Related Security.
No Originator shall change the type of entity it is, its jurisdiction of
incorporation or organization, or its organization number, if any, issued by its
state of incorporation or organization, except upon 30 days' prior written
notice to Buyer and the Administrative Agent, and with respect to which
jurisdiction all action requested by Buyer, the Purchaser or the Administrative
Agent pursuant to Section 9.13 shall have been taken with respect to the
Transferred Receivables and the Related Security.
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(i) Notice of Material Event. Each Originator shall promptly inform Buyer
in writing of the occurrence of any of the following, in each case setting forth
the details thereof and what action, if any, such Originator proposes to take
with respect thereto:
(i) any Litigation commenced or threatened against such Originator
or with respect to or in connection with all or any portion of the
Transferred Receivables and the Related Security originated by such
Originator that (A) seeks damages or penalties in an uninsured amount in
excess of $250,000 in any one instance or $1,000,000 in the aggregate, (B)
seeks injunctive relief, (C) is asserted or instituted against any Plan,
its fiduciaries or its assets or against such Originator or any ERISA
Affiliate in connection with any Plan, (D) alleges criminal misconduct by
such Originator, (E) alleges the violation of any law regarding, or seeks
remedies in connection with, any Environmental Liability, (F) would, if
determined adversely, have a Material Adverse Effect;
(ii) the commencement of a case or proceeding by or against such
Originator seeking a decree or order in respect of Person (A) under the
Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy or other similar law, (B) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for
such Originator, or for any substantial part of such Person's assets, or
(C) ordering the winding-up or liquidation of the affairs of such
Originator;
(iii) (A) any Adverse Claim made or asserted against any of the
Transferred Receivables originated by such Originator and the Related
Security of which it becomes aware or (B) any determination that a
Transferred Receivable originated by such Originator designated as an
Eligible Receivable in an Investment Base Certificate or otherwise was not
an Eligible Receivable at the time of such designation;
(iv) the receipt of notice that (A) such Originator or any
Subsidiary thereof is being placed under regulatory supervision as a
result of any violation of any law or regulation, (B) any license, permit,
charter, registration or approval necessary for the conduct of such
Originator or any Subsidiary therof business is to be, or may be,
suspended or revoked, (C) such Originator or any Subsidiary thereof has
received any notice relating to ERISA, Environmental Laws or Environmental
Permits or (D) such Originator or any Subsidiary therof is to cease and
desist any practice, procedure or policy employed by such Person in the
conduct of its business if such cessation may have a Material Adverse
Effect;
(v) (A) each infringement or claim of infringement by any other
Person of any intellectual property of such Originator or any Subsidiary
thereof necessary for the servicing and collection of the Receivables and
the Related Security and (B) each item of intellectual property necessary
for the servicing and collection of the Receivables and the Related
Security by such Originator or any Subsidiary therof which it does not own
or have rights to use;
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(vi) the execution or filing with the IRS or any other Governmental
Authority of any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of taxes,
assessments or other charges which if not paid would reasonably be
expected to cause a Material Adverse Effect;
(vii) (A) the occurrence of any "Event of Default" under (and as
defined in the) Permitted Outstanding Debt Documents, (B) the termination
of the Permitted Outstanding Debt Documents or any event that has caused
the Permitted Outstanding Debt Documents to cease to be in full force and
effect (other than as a result of the repayment of the Permitted
Outstanding Debt to the extent such repayment is permitted under Section
4.04(n)), (C) the occurrence of any "Termination Event" under (and as
defined in the) Purchase Agreement, (D) the termination of the Purchase
Agreement or any event that has caused the Purchase Agreement to cease to
be in full force and effect; or
(viii) any other event, circumstance or condition that has had or
could reasonably be expected to have a Material Adverse Effect;
(j) Use of Proceeds. Each Originator shall utilize the proceeds of the
Sale Price obtained by it for each Sale made by it hereunder solely for general
corporate purposes and to pay any related expenses payable by such Originator
under this Agreement and the other Related Documents in connection with the
transactions contemplated hereby and thereby and for no other purpose.
(k) Separate Identity.
(i) Each Originator shall, and shall cause each of its Affiliates
included in the Parent Group to, maintain corporate records and books of
account separate from those of Buyer.
(ii) The financial statements of each Originator shall disclose the
effects of such Originator's transactions in accordance with GAAP and, in
addition, disclose that (A) Buyer's sole business consists of the purchase
or acceptance through capital contribution of the Receivables and the
Related Security from the Originators and the subsequent resale of such
Receivables and the Related Security to the Administrative Agent for the
benefit of the Purchaser, (B) Buyer is a separate legal entity with its
own separate creditors who will be entitled, upon its liquidation, to be
satisfied out of Buyer's assets prior to any value in Buyer becoming
available to Buyer's Equity Holders and (C) the assets of Buyer are not
available to pay creditors of the Originators or any of their Affiliates.
(iii) The resolutions, agreements and other instruments underlying
the transactions described in this Agreement shall be continuously
maintained by such Originator as official records.
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(iv) Parent shall, and shall cause each member of the Parent Group
to, maintain an arm's length relationship with Buyer and shall not hold
itself out as being liable for the Indebtedness of Buyer.
(v) Each Originator shall, and shall cause each member of the Parent
Group to, keep its assets and its liabilities wholly separate from those
of Buyer.
(vi) Each Originator shall, and shall cause each member of the
Parent Group to, conduct its business solely in its own name through its
duly Authorized Officers or agents and in a manner designed not to mislead
third parties as to the separate identity of the Buyer.
(vii) The Originators shall not, and shall not permit any member of
the Parent Group to, mislead third parties by conducting or appearing to
conduct business on behalf of Buyer or expressly or impliedly representing
or suggesting that such Originator or Affiliate thereof is liable or
responsible for the Indebtedness of Buyer or that the assets of such
Originator or any Affiliate are available to pay the creditors of Buyer.
(viii) Each Originator shall cause operating expenses and
liabilities of Buyer to be paid from Buyer's own funds.
(ix) Each Originator shall at all times have stationery and other
business forms and a mailing address and telephone number separate from
those of Buyer.
(x) Each Originator shall, and shall cause each member of the Parent
Group to, at all times limit its transactions with Buyer only to those
expressly permitted hereunder or under any other Related Document.
(xi) Each Originator shall, and shall cause each member of the
Parent Group to, comply with (and cause to be true and correct) each of
the facts and assumptions contained in the opinion of Sidley Xxxxxx Xxxxx
& Wood delivered pursuant to the Schedule of Documents.
(l) ERISA. Each Originator shall give Buyer and the Administrative Agent
prompt written notice of any event that could result in the imposition of a Lien
under Section 412 of the IRC or Section 302 or 4068 of ERISA.
(m) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 4.02(m)(ii), each Originator shall, and shall
cause each member of the Parent Group to, pay, perform and discharge or
cause to be paid, performed and discharged all of its obligations and
liabilities, including all taxes, assessments and governmental charges
upon its income and properties and all lawful claims for labor, materials,
supplies and services, promptly when due.
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(ii) Any Originator and its Affiliates may in good faith contest, by
appropriate proceedings, the validity or amount of any charges or claims
described in Section 4.02(m)(i); provided that (A) adequate reserves with
respect to such contest are maintained on the books of such Person, in
accordance with GAAP, (B) such contest is maintained and prosecuted
continuously and with diligence, (C) none of the Originator Collateral may
become subject to forfeiture or loss as a result of such contest, (D) no
Lien may be imposed to secure payment of such charges or claims other than
inchoate tax liens and (E) Buyer has affirmatively advised such Originator
in writing that Buyer reasonably believes that nonpayment or nondischarge
thereof could not reasonably be expected to have or result in a Material
Adverse Effect.
(n) Deposit of Collections. Each Originator shall request in writing and
otherwise take such reasonable steps to ensure that all Obligors, with respect
to Receivables originated by such Originator, forward payment directly to a
Lockbox Account and shall deposit or cause to be deposited promptly into a
Lockbox Account, and in any event no later than the first Business Day after
receipt thereof, all Collections it may receive in respect of Transferred
Receivables.
(o) [RESERVED]
(p) Adjustments to Sale Price. If on any day the Billed Amount of any
Transferred Receivable originated by an Originator is reduced as a result of any
Dilution Factor relating to such Transferred Receivable, such Originator shall
make a cash payment to Buyer in the amount of such reduction by remitting such
amount to the Collection Account in accordance with the terms of the Purchase
Agreement.
(q) Books and Records. Each Originator shall cause its books and Records
to be marked and to clearly distinguish Excluded Receivables from Transferred
Receivables.
(r) Reports and Records regarding Transferred Receivables and Reconveyed
Receivables. Each Originator hereby agrees that, from and after the Closing Date
until the Termination Date, it shall prepare and deliver all reports, statements
and records required to be delivered by it hereunder or under any other Related
Document so as to clearly distinguish (i) Excluded Receivables from Transferred
Receivables and (ii) Transferred Receivables and the Related Security that are
subsequently reconveyed to the Originator pursuant to Section 4.05 hereof from
Transferred Receivables and the Related Security that are not so reconveyed.
(s) Collections and Proceeds of Transferred Receivables. Each Originator
shall instruct all Obligors of Transferred Receivables and the Related Security
that are reconveyed to it pursuant to Section 4.05 hereof to remit payments of
such Receivables to deposit accounts other than the Lockboxes and the Lockbox
Accounts.
(t) Securities and Exchange Commission Reporting. Each of the Originators
hereby agrees to make public disclosures regarding the Transfers hereunder in
connection with applicable Securities and Exchange Commission reporting
requirements.
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(u) Computer Hardware and Software. Each of the Originators hereby grants
to the Buyer and the Administrative Agent an irrevocable, non-exclusive and
assignable license (exercisable without payment or royalty or other compensation
to such Originator) to use such Originator's computer hardware and software for
the purpose of obtaining information about and servicing the Transferred
Receivables.
Section 4.03. Reporting Requirements of the Parent. The Parent hereby
agrees that, from and after the Closing Date and until the Termination Date, it
shall deliver or cause to be delivered to the Buyer and to Buyer's assignee, the
Administrative Agent, for distribution to the Purchaser, the financial
statements, notices and other information at the times, to the Persons and in
the manner set forth in Annex 4.03(b).
Section 4.04. Negative Covenants of each of the Originators. Each
Originator covenants and agrees as to itself that, without the prior written
consent of Buyer and the Administrative Agent, from and after the Closing Date
and until the Termination Date:
(a) Sale of Equity Interests and Assets. Such Originator shall not, nor
shall it permit any of its Subsidiaries to, sell, transfer, convey, assign (by
operation of law or otherwise) or otherwise dispose of, or assign any right to
receive income in respect of any Transferred Receivable originated by it or the
Related Security therefor, or any of its rights with respect to any Lockbox or
Lockbox Account, other than to the Buyer.
(b) Liens. Such Originator shall not, nor shall it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Adverse Claim on
or with respect to its Receivables or any of its other Originator Collateral
(whether now owned or hereafter acquired) except for Permitted Originator
Encumbrances; it being understood and agreed, for the avoidance of doubt, that
any grant of Liens securing the Permitted Outstanding Debt that does not comply
with clause (m) of the definition of the term "Permitted Originator
Encumbrances" shall be null and void ab initio.
(c) Modifications of Receivables or the Related Security. Such Originator
shall not, nor shall it permit any of its Subsidiaries to, extend, amend,
forgive, discharge, compromise, cancel or otherwise modify the terms of any
Transferred Receivable, or amend, modify or waive any term or condition of the
Related Security therefore.
(d) Sale Characterization. Such Originator shall not, nor shall it permit
any of its Subsidiaries to, make statements or disclosures or prepare any
financial statements for any purpose, including for federal income tax,
reporting or accounting purposes, that shall account for the transactions
contemplated by this Agreement in any manner other than (i) with respect to the
Sale of each Sold Receivable and the Related Security originated by it, as a
true sale or absolute assignment of its full right, title and ownership interest
in such Receivable and the Related Security and (ii) with respect to the
Transfer of each of its Contributed Receivables and the Related Security under
this Agreement, as a contribution to the capital of Buyer.
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(e) Capital Structure and Business. Such Originator shall not, nor shall
it permit any of its Subsidiaries to, (i) make any changes in any of its
business objectives, purposes or operations that could reasonably be expected to
have or result in a Material Adverse Effect or (ii) make any change in its
capital structure as described on Schedule 4.04(e), including the issuance of
any Equity Interest, warrants or other securities convertible into Equity
Interests or any revision of the terms of its outstanding Equity Interests,
except as permitted under sub-sections (n) and (o) hereto, or (iii) amend,
supplement or otherwise modify its Organic Documents, in a manner that could
have or result in a Material Adverse Effect. Notwithstanding clause (ii) of this
Section 4.04(e), the Parent may issue common Equity Interests or preferred
Equity Interests as long as (A) such preferred Equity Interest does not (by its
terms or by the terms of any security which is convertible into it or
exchangeable for it or upon happening of an event) mature or is mandatorily
redeemable in whole or in part pursuant to any sinking fund obligation or
otherwise or is redeemable at the option of its holder, in whole or in part, and
does not entitle its holder to a dividend more frequently or in the amounts
greater than as set forth in Section 2 of that certain Articles Supplementary
with respect to Series A Cumulative Convertible Preferred Stock of the Parent as
in effect on the Closing Date and (B) no Change of Control results after giving
effect to issuance or series of related issuances of such common or preferred
Equity Interests. Such Originator shall not change its jurisdiction of
organization except as permitted by Section 4.02(h). Such Originator shall not
engage in any business other than the businesses currently engaged in by it or
any substantially related business.
(f) Actions Affecting Rights. Such Originator shall not, nor shall it
permit any of its Subsidiaries to, (i) take any action, or fail to take any
action, if such action or failure to take action may interfere with the
enforcement of any rights hereunder or under the other Related Documents,
including rights with respect to the Transferred Receivables; (ii) waive or
alter any rights with respect to the Transferred Receivables (or any agreement
or instrument relating thereto); or (iii) fail to pay any tax, assessment,
charge, fee or other obligation of such Originator with respect to the
Transferred Receivables originated by it, or fail to defend any action, if such
failure to pay or defend may adversely affect the priority or enforceability of
the perfected title of Buyer to and the sole record and beneficial ownership
interest of Buyer in such Transferred Receivables and the Related Security or,
prior to their Sale hereunder, such Originator's right, title or interest
therein.
(g) ERISA. Such Originator shall not, nor shall it permit any ERISA
Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to cause an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
(h) Change to Credit and Collection Policies. Such Originator shall comply
with the Credit and Collection Policies, and no change shall be made to, the
Credit and Collection Policies without the prior written consent of Buyer and
the Administrative Agent, which such consent shall not be unreasonably withheld.
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(i) Adverse Tax Consequences. Such Originator shall not, nor shall it
permit any of its Subsidiaries to, take or permit to be taken any action (other
than with respect to actions taken or to be taken solely by a Governmental
Authority), or fail or neglect to perform, keep or observe any of its
obligations hereunder or under the other Related Documents, that would have the
effect directly or indirectly of subjecting any payment to Buyer, the Purchaser
or the Administrative Agent to withholding taxation.
(j) No Proceedings. From and after the Closing Date and until the date one
year plus one day following the date on which all Seller Secured Obligations are
paid in full in cash, such Originator shall not, nor shall it permit any of its
Subsidiaries to, directly or indirectly, institute or cause to be instituted
against Buyer any proceeding of the type referred to in Sections 9.01(c) and
9.01(d) of the Purchase Agreement.
(k) Commingling. Such Originator shall not, nor shall it permit any of its
Subsidiaries to, deposit or permit the deposit of any funds that do not
constitute Collections of Transferred Receivables originated by it into any
Lockbox Account. If such funds are nonetheless deposited into a Lockbox Account
and such Originator so notifies the Buyer and the Administrative Agent (as
Buyer's assignee), the Administrative Agent shall promptly remit any such
amounts as directed by such Originator.
(l) Financial Covenants. The Originators shall not permit the Parent and
its Subsidiaries, on a consolidated basis, to breach or fail to comply with any
of the financial covenants set forth in Annex 4.04(l) hereto.
(m) Cancellation of Indebtedness. Such Originator shall not, nor shall it
permit any of its Subsidiaries to, cancel any claim or Indebtedness owing to it,
except for reasonable consideration negotiated on an arm's-length basis and in
the ordinary course of its business consistent with past practices which may
include conversion of such Indebtedness to an Equity Interest.
(n) Restricted Payments. Such Originator shall not, nor shall it permit
any of its Subsidiaries to, at any time (a) declare or pay any dividend or incur
any liability to make any other payment or distribution of cash or other
property or assets in respect of such Originator's Equity Interests; (b) make or
permit any payment on account of the purchase, redemption, defeasance, sinking
fund or other retirement of such Originator's Equity Interests or any other
payment or distribution made in respect thereof, either directly or indirectly;
(c) make or permit any payment or prepayment of principal of, premium, if any,
or interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Permitted Outstanding Debt; (d) make or
permit any payment made to redeem, purchase, repurchase or retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
Equity Interests of such Originator now or hereafter outstanding except that the
Parent may repurchase its common Equity Interests from the holders thereof in
the amount not to exceed $20,000 in the aggregate; (e) make or permit any
payment of a claim for the rescission of the purchase or sale of, or for
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material damages arising from the purchase or sale of, any shares of such
Originator's Equity Interests or of a claim for reimbursement, indemnification
or contribution arising out of or related to any such claim for damages or
rescission; (f) make or permit any payment, loan, contribution, or other
transfer of funds or other property to any Equity Holder of such Originator
other than payment of compensation in the ordinary course of business to Equity
Holders who are employees of such Originator; and (g) any payment of management
fees (or other fees of a similar nature) by such Person to any Equity Holder of
such Originator or its Affiliates; except (i) Parent may pay cash dividends and
other distributions to its common Equity Holders as long as (A) the Capital
Investment Available, measured both as of the day immediately prior to the
proposed dividend and as an average for the 60-day period then ended (in each
case after giving effect to the proposed dividend or distribution) exceeds ten
million dollars ($10,000,000) and (B) the Fixed Charge Coverage Ratio for the
Parent and its Subsidiaries on a consolidated basis at the end of a Settlement
Period for the 12-month period then ended (calculated as if the proposed
dividend or distribution had been made on the first day of such period) is equal
to or greater than 1.25 to 1.00; (ii) Parent may pay cash dividends and other
distributions to its preferred Equity Holders at such times and in such amounts
as set forth in Section 2 of that certain Articles Supplementary with respect to
Series A Cumulative Convertible Preferred Stock of the Parent as in effect on
the Closing Date, (iii) payments of regularly scheduled principal and interest
scheduled as of the Closing Date with respect to the Permitted Outstanding Debt
Documents or any refinancing thereof that is permitted under the Purchase
Agreements, or (iv) payments of principal with respect to the Permitted
Outstanding Debt Documents or any refinancing thereof that is permitted under
the Purchase Agreements that is not scheduled as of the Closing Date or payments
with respect to any Debt incurred after the Closing Date as long as in each case
the Capital Investment Available, measured both on the day immediately prior to
the proposed payment and as an average for the 60-day period then ended (in each
case after giving effect to the proposed payment) exceeds ten million dollars
($10,000,000); provided that no Termination Event or Incipient Termination has
occurred and is continuing or would result after giving effect to any payments
or other distributions under clauses (i), (ii), (iii) or (iv) above.
(o) Mergers, Subsidiaries, Etc. Such Originator shall not, nor shall it
permit any of its Subsidiaries to, directly or indirectly, by operation of law
or otherwise, (a) form or acquire any Subsidiary except that Parent may form a
wholly-owned Subsidiary for the sole purpose of completing an acquisition
permitted under this Section 4.04(o), or (b) merge with, consolidate with,
acquire all or substantially all of the assets or Equity Interests of, or
otherwise combine with or acquire, any Person, except that (i) such Originator
may merge with another Originator, and (ii) as the Administrative Agent may
otherwise consent (which consent shall not be unreasonably withheld), in each
case described in the foregoing clauses (i) and (ii) and Section 4.4(o)(a)
above, as long as (A) no Termination Event or Incipient Termination Event has
occurred or will result from such merger, formation, combination or acquisition,
(B) the Administrative Agent shall have received at least 30 days' prior written
notice of such merger, formation, combination or acquisition, which notice shall
include a reasonably detailed description of the transaction, and (C) all
actions will have been taken to continue the first priority security or
ownership interest of the Administrative Agent in the Transferred Receivables or
the Related Security or the Seller Collateral; it being understood and agreed
that the Administrative Agent reserves the right to make any adjustments to
account for the effect
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that any of the acquisitions, merger, consolidation or other combination
permitted hereunder may have, in the Administrative Agent's reasonable credit
judgment, on the Receivables and the Related Security, including, without
limitation, adjustments to the criteria of eligibility of Receivables and levels
of Ratios.
(p) No Impairment of Intercompany Transfers. Except as may be permitted by
the Credit Agreement, such Originator shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than this Agreement
and the other Related Documents) that could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to the payment of
dividends or distributions or the making or repayment of intercompany loans by a
member of the Parent Group to another member.
(q) Computer Hardware and Software. Each Originator hereby agrees that it
shall not create, incur, assume or suffer to exist any Lien on its computer
hardware or software that would impede or in any way interfere with the Buyer's
or the Administrative Agent's use or right to use such computer hardware or
software for the purpose of obtaining information about and servicing the
Transferred Receivables, including the Buyer's and the Administrative Agent's
license to use such computer hardware and software granted in Section 4.02(u),
unless an intercreditor agreement satisfactory to the Administrative Agent has
been entered into by the Administrative Agent with the holders of the Permitted
Outstanding Debt that such Lien secures or with an agent authorized to act on
their behalf.
Section 4.05. Breach of Representations, Warranties or Covenants. If any
representation or warranty with respect to any Transferred Receivable or Related
Security described in Sections 4.01(a)(h)(m)(v) or (w) (other than a
representation or warranty relating to the absence of Dilution Factors), shall
not have been true on the related Transfer Date with respect to such Transferred
Receivable or Related Security and such failure is reasonably likely to have a
Material Adverse Effect on the value of such Transferred Receivable or Related
Security or the interests of Buyer therein, the party discovering the same shall
give prompt written notice thereof to the other parties hereto. The applicable
Originator may, at any time on any Business Day, or shall, if requested by
notice from Buyer, on the first Business Day following receipt of such notice,
either (a) repurchase such Transferred Receivable and the Related Security from
Buyer for cash, or (b) make a capital contribution in cash to Buyer by remitting
the amount (the "Rejected Amount") of such capital contribution to the
Collection Account in accordance with the terms of the Purchase Agreement, in
each case in an amount equal to the Billed Amount of such Transferred Receivable
minus the sum of (A) Collections received in respect thereof and (B) the amount
of any Dilution Factor taken into account in the calculation of the Sale Price
therefor. Notwithstanding the foregoing, if any Receivable is not paid in full
on account of any Dilution Factor, the applicable Originator's repurchase
obligations under this Section 4.05 with respect to such Receivable shall be
reduced by the amount of any such Dilution Factors taken into account in the
calculation of the Sale Price therefor. The applicable Originator shall ensure
that no Collections or other proceeds with respect to a Transferred Receivable
and the Related Security so reconveyed to it are paid or deposited into any
Lockbox Account.
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ARTICLE V
INDEMNIFICATION
Section 5.01. Indemnification. Without limiting any other rights that
Buyer or any of its officers, directors, employees, attorneys, agents or
representatives (each, a "Buyer Indemnified Person") may have hereunder or under
applicable law, each Originator hereby agrees to indemnify and hold harmless
each Buyer Indemnified Person from and against any and all Indemnified Amounts
that may be claimed or asserted against or incurred by any such Buyer
Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document, any
actions or failures to act in connection therewith, including any and all legal
costs and expenses arising out of or incurred in connection with disputes
between or among any parties to any of the Related Documents, or in respect of
any Transferred Receivable or the Related Security therefor or the use by such
Originator of the Sale Price therefor; provided that no Originator shall be
liable for any indemnification to a Buyer Indemnified Person to the extent that
any such Indemnified Amounts result solely from (a) such Buyer Indemnified
Person's gross negligence or willful misconduct, as finally determined by a
court of competent jurisdiction, (b) recourse for uncollectible or uncollected
Transferred Receivables due to the lack of creditworthiness of the Obligor or
the occurrence of any event of bankruptcy with respect to such Obligor, or (c)
any income tax or franchise tax incurred by any Buyer Indemnified Person, except
to the extent that the incurrence of any such tax results from a breach of or
default under this Agreement or any other Related Document. Subject to the
exceptions set forth in clauses (a), (b) and (c) of the immediately preceding
sentence but otherwise without limiting the generality of the foregoing, each
Originator shall pay on demand to each Buyer Indemnified Person any and all
Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed made
by such Originator (or any of its officers) under or in connection with
this Agreement or any other Related Document or on any other information
delivered by such Originator pursuant hereto or thereto that shall have
been incorrect in any material respect when made or deemed made or
delivered;
(ii) the failure by such Originator to comply with any term,
provision or covenant contained in this Agreement, any other Related
Document or any agreement executed in connection herewith or therewith,
any applicable law, rule or regulation with respect to any Transferred
Receivable or the Related Security therefor, or the nonconformity of any
Transferred Receivable or the Related Security therefor with any such
applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in Buyer, or to
Transfer to Buyer, valid and properly perfected title to and sole record
and beneficial ownership of the Receivables and the Related Security that
constitute Transferred Receivables originated or acquired by such
Originator and the Related Security, together with all Collections in
respect thereof, free and clear of any Adverse Claim;
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(iv) any dispute, claim, offset or defense of any Obligor (other
than its discharge in bankruptcy) to the payment of any Receivable
originated or acquired by such Originator and the Related Security that is
the subject of a Transfer hereunder (including a defense based on such
Receivable or the Related Security therefor not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of the
merchandise or services giving rise to such Receivable or the Related
Security or the furnishing or failure to furnish such merchandise or
services or relating to collection activities with respect to such
Receivable or the Related Security (if such collection activities were
performed by such Originator or any Affiliate acting as a Servicer or a
Sub-Servicer), except to the extent that such dispute, claim, offset or
defense results solely from any action or inaction on the part of Buyer;
(v) any products liability claim or other claim arising out of or in
connection with merchandise, insurance or services that is the subject of
any Contract of such Originator;
(vi) the commingling of Collections with respect to Transferred
Receivables and the Related Security by such Originator at any time with
its other funds or the funds of any other Person;
(vii) any failure by such Originator to cause the filing of, or any
delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or any other
applicable laws with respect to any Receivable and the Related Security
that is the subject of a Sale hereunder, whether at the time of any such
Sale or at any subsequent time;
(viii) any failure by such Originator to perform, keep or observe
any of its duties or obligations hereunder, under any other Related
Document or under any Related Security related to a Transferred Receivable
originated or acquired by such Originator;
(ix) any investigation, Litigation or proceeding related to this
Agreement or the use of the Sale Price obtained in connection with any
Sale or the ownership of Receivables or the Related Security with respect
thereto or in respect of any Receivable originated or acquired by such
Originator or the Related Security; or
(x) any claim brought by any Person other than a Buyer Indemnified
Person arising from any activity by such Originator in servicing,
administering or collecting any Transferred Receivables.
NO BUYER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE
OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
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EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY
TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
ARTICLE VI
DISTRIBUTIONS
Section 6.01. Distributions. The Buyer may declare or pay distributions to
its members at any time that, after giving effect to such distributions, the
book value of the assets of the Buyer, minus reserves applicable thereto and
minus all of the Buyer's liabilities (including accrued and deferred income
taxes), all as determined in accordance with GAAP, shall be equal to or greater
than five percent (5.0%) of the Outstanding Balance of all Transferred
Receivables .
ARTICLE VII
COLLATERAL SECURITY
Section 7.01. Security Interest. To secure the prompt and complete
payment, performance and observance of any and all recourse and indemnity
obligations of each of the Originators to Buyer, including those set forth in
Sections 4.02(p), 4.05, 5.01 and 9.14, and to induce Buyer to enter into this
Agreement in accordance with the terms and conditions hereof, each Originator
hereby grants, assigns, conveys, pledges, hypothecates and transfers to Buyer a
Lien upon all of such Originator's right, title and interest in, to and under
the following property, whether now owned by or owing to, or hereafter acquired
by or arising in favor of, such Originator (including under any trade names,
styles or derivations of such Originator), and whether owned by or consigned by
or to, or leased from or to, such Originator, and regardless of where located
(all of which being hereinafter collectively referred to as the "Originator
Collateral"):
(a) all Transferred Receivables and the Related Security;
(b) to the extent not otherwise included, customer lists, credit files and
other related property and rights pertaining to the foregoing;
(c) to the extent not otherwise included, all proceeds of the foregoing
and all substitutions and replacements for, each of the foregoing.
Section 7.02. Other Collateral; Rights in Receivables and the Related
Security . Nothing contained in this Article VII shall limit the rights of Buyer
in and to any other collateral that may have been or may hereafter be granted to
Buyer by any of the Originators or any third party pursuant to any other
agreement or the rights of Buyer under any of the Transferred Receivables or the
Related Security.
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Section 7.03. Originators Remain Liable. It is expressly agreed by each of
the Originators that, anything herein to the contrary notwithstanding, such
Originator shall remain liable under any and all of the Receivables originated
by it, the Related Security therefor and all other Originator Collateral to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder. The Buyer shall not have any obligation or liability
under any such Receivables, the Related Security, or Originator Collateral by
reason of or arising out of this Agreement or the granting herein of a Lien
thereon or the receipt by the Buyer of any payment relating thereto pursuant
hereto. The exercise by the Buyer of any of its respective rights under this
Agreement shall not release any of the Originators from any of its respective
duties or obligations under any such Receivables, the Related Security, or
Originator Collateral. The Buyer shall not be required or obligated in any
manner to perform or fulfill any of the obligations of any of the Originators
under or pursuant to any such Receivable, the Related Security, or Originator
Collateral, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any such Receivable, the Related Security, or
Originator Collateral, or to present or file any claims, or to take any action
to collect or enforce any performance or the payment of any amounts that may
have been assigned to it or to which it may be entitled at any time or times.
ARTICLE VIII
PERFORMANCE UNDERTAKING
Section 8.01. Guaranty of Performance of Guaranteed Obligations. Parent
hereby guarantees to Buyer, the full and punctual payment and performance by
each Affiliated Party of its respective Guaranteed Obligations. The undertaking
embodied in this Article VIII (this "Undertaking") is an absolute, unconditional
and continuing guaranty of the full and punctual performance of all Guaranteed
Obligations under this Agreement or the Purchase Agreement, as applicable, and
each other document executed and delivered by any Affiliated Party pursuant to
such agreements, as applicable, and is in no way conditioned upon any
requirement that Buyer first attempt to collect any amounts owing by any
Affiliated Party to Buyer, the Administrative Agent or the Purchaser from any
other Person or resort to any collateral security, any balance of any deposit
account or credit on the books of Buyer, the Administrative Agent or the
Purchaser in favor of any Affiliated Party or any other Person or other means of
obtaining payment. Should any Affiliated Party default in the payment or
performance of any of its Guaranteed Obligations, Buyer (or its assigns) may
cause the immediate performance by Parent of such Guaranteed Obligations and
cause any payment of Guaranteed Obligations to become forthwith due and payable
to Buyer (or its assigns) by Parent, without demand or notice of any nature
(other than as expressly provided herein), all of which are hereby expressly
waived by Parent. Notwithstanding the foregoing, this Undertaking is not a
guarantee of the collection of any of the Receivables and Parent shall not be
responsible for any Guaranteed Obligations to the extent the failure to perform
such Guaranteed Obligations by any Affiliated Party results from Receivables
being uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; provided that nothing herein shall
relieve any Affiliated Party from performing
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in full its Guaranteed Obligations under the Related Documents to which it is a
party or Parent of its Undertaking hereunder with respect to the full
performance of such duties.
Section 8.02. Parent's Further Agreements to Pay. Parent further agrees,
as the principal obligor and not as a guarantor only, to pay to Buyer (and its
assigns), forthwith upon demand in funds immediately available to Buyer, all
reasonable costs and expenses (including court costs and reasonable legal
expenses) incurred or expended by Buyer in connection with the Guaranteed
Obligations, this Undertaking and the enforcement thereof, together with
interest on amounts recoverable under this Undertaking from the time when such
amounts become due until payment, at a rate of interest (computed for the actual
number of days elapsed based on a 360-day year) equal to the sum of the Index
Rate plus the Daily Margin plus the Daily Default Margin per annum, such rate of
interest changing when and as the Index Rate changes.
Section 8.03. Waivers by Parent. Parent waives notice of acceptance of
this Undertaking, notice of any action taken or omitted by Buyer (or its
assigns) in reliance on this undertaking, and any requirement that Buyer (or its
assigns) be diligent or prompt in making demands under this undertaking, giving
notice of any Termination Event, Event of Servicer Termination, other default or
omission by any Affiliated Party or asserting any other rights of Buyer under
this Undertaking. Parent warrants that it has adequate means to obtain from each
Affiliated Party, on a continuing basis, information concerning their financial
condition, and that it is not relying on Buyer to provide such information, now
or in the future. Parent also irrevocably waives all defenses (i) that at any
time may be available in respect of the Guaranteed Obligations by virtue of any
statute of limitations, valuation, stay, moratorium law or other similar law now
or hereafter in effect or (ii) that arise under the law of suretyship, including
impairment of collateral. Buyer (and its assigns) shall be at liberty, without
giving notice to or obtaining the assent of Parent and without relieving Parent
of any liability under this Undertaking, to deal with each Affiliated Party and
with each other party who now is or after the date hereof becomes liable in any
manner for any of the Guaranteed Obligations, in such manner as Buyer in its
sole discretion deems fit, and to this end Parent agrees that the validity and
enforceability of this Undertaking, shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral securing
the Guaranteed Obligations or any part thereof; (c) any waiver of any right,
power or remedy or of any Termination Event, Event of Servicer Termination, or
default with respect to the Guaranteed Obligations or any part thereof or any
agreement relating thereto; (d) any release, surrender, compromise, settlement,
waiver, subordination or modification, with or without consideration, of any
other obligation of any Person or entity with respect to the Guaranteed
Obligations or any part thereof; (e) the enforceability or validity of the
Guaranteed Obligations or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to the Guaranteed
Obligations or any part thereof; (f) the application of payments received from
any source to the payment of any payment obligations of any Affiliated Party or
any part thereof
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or amounts which are not covered by this Undertaking even though Buyer (or its
assigns) might lawfully have elected to apply such payments to any part or all
of the payment obligations of such Affiliated Party or to amounts which are not
covered by this Undertaking; (g) the existence of any claim, setoff or other
rights which Parent may have at any time against any Affiliated Party in
connection herewith or any unrelated transaction; (h) any assignment or transfer
of the Guaranteed Obligations or any part thereof; or (i) any failure on the
part of any Affiliated Party to perform or comply with any term of the Related
Documents or any other document executed in connection therewith or delivered
thereunder, all whether or not Parent shall have had notice or knowledge of any
act or omission referred to in the foregoing clauses (a) through (i) of this
Section 8.03.
Section 8.04. Unenforceability of Guaranteed Obligations Against any
Affiliated Party. Notwithstanding (a) any change of ownership of Parent or any
Affiliated Party or the insolvency, bankruptcy or any other change in the legal
status of Parent or any Affiliated Party; (b) any change in or the imposition of
any law, decree, regulation or other governmental act which does or might
impair, delay or in any way affect the validity, enforceability or the payment
when due of the Guaranteed Obligations; (c) the failure of any Affiliated Party
or Parent to maintain in full force, validity or effect or to obtain or renew
when required all governmental and other approvals, licenses or consents
required in connection with the Guaranteed Obligations or this Undertaking, or
to take any other action required in connection with the performance of all
obligations pursuant to the Guaranteed Obligations or this Undertaking; or (d)
if any of the moneys included in the Guaranteed Obligations have become
irrecoverable from any Affiliated Party for any other reason other than final
payment in full of the payment Guaranteed Obligations in accordance with their
terms, this Undertaking shall nevertheless be binding on Parent. This
Undertaking shall be in addition to any other guaranty or other security for the
Guaranteed Obligations, and it shall not be rendered unenforceable by the
invalidity of any such other guaranty or security. In the event that
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Affiliated Party
or for any other reason with respect to any Affiliated Party, all such amounts
then due and owing with respect to the Guaranteed Obligations under the terms of
the Related Documents, or any other agreement evidencing, securing or otherwise
executed in connection with the Guaranteed Obligations, shall be immediately due
and payable by Parent.
Section 8.05. Subrogation; Subordination. Notwithstanding anything to the
contrary contained herein, until the Guaranteed Obligations are paid in full,
Parent: (a) will not enforce or otherwise exercise any right of subrogation to
any of the rights of Buyer, the Administrative Agent or the Purchaser against
any Affiliated Party, (b) hereby waives all rights of subrogation (whether
contractual, under Section 509 of the United States Bankruptcy Code, at law or
in equity or otherwise) to the claims of Buyer, the Administrative Agent and the
Purchaser against any Affiliated Party and all contractual, statutory or legal
or equitable rights of contribution, reimbursement, indemnification and similar
rights and "claims" (as such term is defined in the United States Bankruptcy
Code) which Parent might now have or hereafter acquire against any Affiliated
Party that arise from the existence or performance of Parent's obligations
hereunder,
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(c) will not claim any setoff, recoupment or counterclaim against any Affiliated
Party in respect of any liability of Parent to any Affiliated Party and (d)
waives any benefit of and any right to participate in any collateral security
which may be held by the Administrative Agent or any Purchaser. The payment of
any amounts due with respect to any Indebtedness of any Affiliated Party now or
hereafter owed to Parent is hereby subordinated to the prior payment in full of
all of the Guaranteed Obligations. Parent agrees that, after the occurrence of
any default in the payment or performance of any of the Guaranteed Obligations,
Parent will not demand, xxx for or otherwise attempt to collect any such
Indebtedness of any Affiliated Party to Parent until all of the Guaranteed
Obligations shall have been paid and performed in full. If, notwithstanding the
foregoing sentence, Parent shall collect, enforce or receive any amounts in
respect of such Indebtedness while any Guaranteed Obligations are still
unperformed or outstanding, such amounts shall be collected, enforced and
received by Parent as trustee for Buyer (and its assigns) and be paid over to
Buyer (or its assigns) on account of the Guaranteed Obligations without
affecting in any manner the liability of Parent under the other provisions of
this Undertaking. The provisions of this Section shall be supplemental to and
not in derogation of any rights and remedies of Buyer under any separate
subordination agreement which Buyer may at any time and from time to time enter
into with Parent.
Section 8.06. Termination of Performance Undertaking. Parent's obligations
hereunder shall continue in full force and effect until all Seller Secured
Obligations are finally paid and satisfied in full and the Purchase Agreement is
terminated, provided that this Undertaking shall continue to be effective or
shall be reinstated, as the case may be, if at any time payment or other
satisfaction of any of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned upon the bankruptcy, insolvency, or reorganization of
any Affiliated Party or otherwise, as though such payment had not been made or
other satisfaction occurred, whether or not Buyer (or its assigns) is in
possession of this Undertaking. No invalidity, irregularity or unenforceability
by reason of the federal bankruptcy code or any insolvency or other similar law,
or any law or order of any government or agency thereof purporting to reduce,
amend or otherwise affect the Guaranteed Obligations shall impair, affect, be a
defense to or claim against the obligations of Parent under this Undertaking.
Section 8.07. Effect of Bankruptcy. This Performance Undertaking shall
survive the insolvency of any Affiliated Party and the commencement of any case
or proceeding by or against any Affiliated Party under the federal bankruptcy
code or other federal, state or other applicable bankruptcy, insolvency or
reorganization statutes. No automatic stay under the federal bankruptcy code
with respect to any Affiliated Party or other federal, state or other applicable
bankruptcy, insolvency or reorganization statutes to which any Affiliated Party
is subject shall postpone the obligations of Parent under this Undertaking.
Section 8.08. Setoff. Regardless of the other means of obtaining payment
of any of the Guaranteed Obligations, Buyer (and its assigns) is hereby
authorized at any time and from time to time, without notice to Parent (any such
notice being expressly waived by Parent) and to the fullest extent permitted by
law, to set off and apply any deposits and other sums against the
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obligations of Parent under this Undertaking, whether or not Buyer (or any such
assign) shall have made any demand under this Undertaking and although such
obligations may be contingent or unmatured.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
9.01), (c) one Business Day after deposit with a reputable overnight courier
with all charges prepaid or (d) when delivered, if hand-delivered by messenger,
all of which shall be addressed to the party to be notified and sent to the
address or facsimile number set forth below in this Section 9.01 or to such
other address (or facsimile number) as may be substituted by notice given as
herein provided:
If to any of the Originators:
A.M. Castle & Co.
0000 X. Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxx, Corporate Counsel
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With a copy to:
Sidley Xxxxxx Xxxxx & Xxxx
Bank Xxx Xxxxx
00 X. Xxxxxxxx
Xxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxxxxxxx
If to Buyer:
Castle SPFD, LLC
c/o A.M. Castle & Co.
0000 X. Xxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxx
provided that each such declaration or other communication shall be deemed to
have been validly delivered to the Administrative Agent under this Agreement
upon delivery to the Administrative Agent in accordance with the terms of the
Purchase Agreement. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to any Person (other than Buyer) designated in any
written communication provided hereunder to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Notwithstanding the foregoing,
whenever it is provided herein that a notice is to be given to any other party
hereto by a specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is received after
such time or on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
Section 9.02. No Waiver; Remedies. Buyer's failure, at any time or times,
to require strict performance by any Originators of any provision of this
Agreement or the Receivables Assignment shall not waive, affect or diminish any
right of Buyer thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of any breach or default hereunder shall
not suspend, waive or affect any other breach or default whether the same is
prior or subsequent thereto and whether the same or of a different type. None of
the undertakings, agreements, warranties, covenants and representations of the
Originators contained in this Agreement or the Receivables Assignment, and no
breach or default by any Originator hereunder or thereunder, shall be deemed to
have been suspended or waived by Buyer unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly
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authorized signatory of Buyer and directed to such Originator, as applicable,
specifying such suspension or waiver. Buyer's rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Buyer may have under any other agreement, including the other Related
Documents, by operation of law or otherwise. Recourse to the Originator
Collateral shall not be required.
Section 9.03. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of Originators and Buyer and their respective
successors and permitted assigns, except as otherwise provided herein. No
Originator may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder without the prior express written
consent of Buyer, the Purchaser and the Administrative Agent. Any such purported
assignment, transfer, hypothecation or other conveyance by any Originator
without the prior express written consent of Buyer, the Purchaser and the
Administrative Agent shall be void. Each Originator acknowledges that, to the
extent permitted under the Purchase Agreement, Buyer may assign its rights
granted hereunder, including the benefit of any indemnities under Article V and
any of its rights in the Originator Collateral granted under Article VII, and
upon such assignment, such assignee shall have, to the extent of such
assignment, all rights of Buyer hereunder and, to the extent permitted under the
Purchase Agreement, may in turn assign such rights. Each Originator agrees that,
upon any such assignment, such assignee may enforce directly, without joinder of
Buyer, the rights set forth in this Agreement. All such assignees, including
parties to the Purchase Agreement in the case of any assignment to such parties,
shall be third party beneficiaries of, and shall be entitled to enforce Buyer's
rights and remedies under, this Agreement to the same extent as if they were
parties hereto. Without limiting the generality of the foregoing, all notices to
be provided to the Buyer hereunder shall be delivered to both the Buyer and the
Administrative Agent under the Purchase Agreement, and shall be effective only
upon such delivery to the Administrative Agent. The terms and provisions of this
Agreement are for the purpose of defining the relative rights and obligations of
each Originator and Buyer with respect to the transactions contemplated hereby
and, except for the Purchaser and the Administrative Agent, no Person shall be a
third party beneficiary of any of the terms and provisions of this Agreement.
Section 9.04. Termination; Survival of Obligations.
(a) This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until the Termination Date.
(b) Except as otherwise expressly provided herein or in any other Related
Document, no termination or cancellation (regardless of cause or procedure) of
any commitment made by Buyer under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of any Originator or the rights
of Buyer relating to any unpaid portion of any and all recourse and indemnity
obligations of any Originator to Buyer, including those set forth in Sections
4.02(p), 4.05, 5.01 and 9.14, due or not due, liquidated, contingent or
unliquidated or
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any transaction or event occurring prior to such termination, or any transaction
or event, the performance of which is required after the Facility Termination
Date. Except as otherwise expressly provided herein or in any other Related
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon Originators, and all rights of Buyer
hereunder, all as contained in the Related Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided that the
rights and remedies pursuant to Sections 4.02(p), 4.05, the indemnification and
payment provisions of Article V, and the provisions of Sections 4.04(j), 9.03,
9.12 and 9.14 shall be continuing and shall survive any termination of this
Agreement. Section 9.05. Complete Agreement; Modification of Agreement. This
Agreement and the other Related Documents constitute the complete agreement
between the parties with respect to the subject matter hereof and thereof,
supersede all prior agreements and understandings relating to the subject matter
hereof and thereof, and may not be modified, altered or amended except as set
forth in Section 9.06.
Section 9.06. Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or any of the other
Related Documents, or any consent to any departure by any Originator therefrom,
shall in any event be effective unless the same shall be in writing and signed
by each of the parties hereto and the Purchaser and the Administrative Agent. No
consent or demand in any case shall, in itself, entitle any party to any other
consent or further notice or demand in similar or other circumstances.
Section 9.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
(a) THIS AGREEMENT AND EACH RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT
ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT
OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE BUYER IN THE RECEIVABLES OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE BOROUGH OF
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MANHATTAN IN NEW YORK CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT;
PROVIDED THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN
NEW YORK CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED
OR OPERATE TO PRECLUDE BUYER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON THE ORIGINATOR COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS OF ORIGINATORS ARISING HEREUNDER, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF BUYER. EACH PARTY HERETO SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET
FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE
SHALL BE DEEMED COMPLETED UPON THE ACTUAL RECEIPT THEREOF. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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Section 9.08. Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 9.09. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
Section 9.10. Section Titles. The section titles and table of contents
contained in this Agreement are provided for ease of reference only and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.
Section 9.11. No Setoff. No Originator's obligations under this Agreement
shall be affected by any right of setoff, counterclaim, recoupment, defense or
other right such Originator might have against Buyer, the Purchaser or the
Administrative Agent, all of which rights are hereby expressly waived by the
Originators.
Section 9.12. Press Releases. Each Originator agrees that it shall not
(and shall not permit any of its Subsidiaries to) issue any news release or make
any public announcement pertaining to the transactions contemplated by this
Agreement and the Related Documents without the prior written consent of Buyer
and the Administrative Agent (which consent shall not be unreasonably withheld)
unless such news release or public announcement is required by law, in which
case such Originator, as the case may be, shall consult with Buyer and the
Purchaser prior to the issuance of such news release or public announcement that
mentions GE Capital or any of its Affiliates by name or attaches any press
release that mentions them by name and has not been previously approved by GE
Capital; it being acknowledged and agreed that this Agreement and the Purchase
Agreement may be filed with the Parent's filings with the Securities Exchange
Commission under the Securities Exchange Act of 1934. Each Originator may,
however, disclose the general terms of the transactions contemplated by this
Agreement and the Related Documents to trade creditors, suppliers and other
similarly-situated Persons so long as such disclosure is not in the form of a
news release or public announcement.
Section 9.13. Further Assurances.
(a) Each Originator agrees to, and each Originator shall, at its sole cost
and expense, upon request of Buyer, the Purchaser or the Administrative Agent,
promptly and duly execute and deliver any and all further instruments and
documents and take such further actions that may be necessary or desirable or
that Buyer, the Purchaser or the Administrative Agent may request to carry out
more effectively the provisions and purposes of this Agreement or any other
Related Document or to obtain the full benefits of this Agreement and of the
rights and powers herein
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granted, including (i) using its best efforts to secure all consents and
approvals necessary or appropriate for the assignment to or for the benefit of
Buyer of any Transferred Receivable, Related Security, or Originator Collateral
held by such Originator or in which such Originator has any rights not
heretofore assigned, (ii) filing any financing or continuation statements under
the UCC with respect to the ownership interests or Liens granted hereunder or
under any other Related Document, (iii) transferring Originator Collateral to
Buyer's possession if such collateral consists of chattel paper or instruments
or if a Lien upon such collateral can be perfected only by possession, or if
otherwise requested by Buyer; and (iv) entering into "control agreements" (as
defined in the UCC with respect to such Originator Collateral to the extent that
a first priority Lien upon such Originator Collateral can be perfected only by
control. Each of the Originators hereby authorizes Buyer, the Purchaser and the
Administrative Agent to file any such financing or continuation statements
without the signature of such Originator to the extent permitted by applicable
law. A carbon, photographic or other reproduction of this Agreement or of any
notice or financing statement covering the Transferred Receivables and the
Related Security, the Originator Collateral or any part thereof shall be
sufficient as a notice or financing statement where permitted by law. If any
amount payable under or in connection with any of the Originator Collateral is
or shall become evidenced by any instrument, such instrument, other than checks
and notes received in the ordinary course of business, shall be duly endorsed in
a manner satisfactory to Buyer immediately upon the applicable Originator's
receipt thereof and promptly delivered to Buyer.
(b) If such Originator fails to perform any agreement or obligation under
this Section 9.13, Buyer, the Purchaser or the Administrative Agent may (but
shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of Buyer, the Purchaser or
the Administrative Agent incurred in connection therewith shall be payable by
such Originator upon demand of Buyer or the Administrative Agent.
Section 9.14. Expenses. In addition to its indemnification obligations
pursuant to Article V, each Originator agrees, jointly and severally, to pay on
demand all costs and expenses incurred by Buyer in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Related Documents, including the out-of-pocket expenses of Buyer's counsel,
advisors, consultants and auditors retained in connection with the transactions
contemplated thereby and advice in connection therewith, and each Originator
agrees, jointly and severally, to pay all costs and expenses, if any (including
attorneys' fees and expenses but excluding any costs of enforcement or
collection of the Transferred Receivables), in connection with the enforcement
of this Agreement and the other Related Documents.
[SIGNATURE PAGE FOLLOWS]
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38
IN WITNESS WHEREOF, the parties have caused this Receivables Sale
Agreement to be executed by their respective duly authorized representatives, as
of the date first above written.
ORIGINATORS:
A. M. CASTLE & CO.
By:__________________________
Name:________________________
Title: ______________________
TOTAL PLASTICS, INC.
By:__________________________
Name:________________________
Title:_______________________
XXXXXX STEEL PLATE CO.
By:__________________________
Name:________________________
Title:_______________________
KEYSTONE TUBE COMPANY, LLC
By:__________________________
Name:________________________
Title:_______________________
BUYER:
CASTLE SPFD, LLC
By __________________________
Name:________________________
Title:_______________________
[Signature Page to Receivables Sale and Contribution Agreement]
EXHIBIT 2.01(a)
Form of
RECEIVABLES ASSIGNMENT
THIS RECEIVABLES ASSIGNMENT (the "Receivables Assignment") is
entered into as of December 26, 2002, by and among A. M. CASTLE & CO., a
Maryland corporation (the "Parent"), TOTAL PLASTICS, INC., a Michigan
corporation, XXXXXX STEEL PLATE CO., a Delaware corporation, and KEYSTONE TUBE
COMPANY, LLC, a Delaware limited liability company (together with Parent, the
"Originators"), and CASTLE SPFD, LLC, a Delaware limited liability company (the
"Buyer").
1. We refer to that certain Receivables Sale and Contribution
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the "Sale Agreement") of even date herewith among the Originators and
Buyer. All of the terms, covenants and conditions of the Sale Agreement are
hereby made a part of this Receivables Assignment and are deemed incorporated
herein in full. Unless otherwise defined herein, capitalized terms or matters of
construction defined or established in the Sale Agreement shall be applied
herein as defined or established therein.
2. For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Originator hereby sells, or sells and
contributes, to Buyer, without recourse, except as provided in Sections 4.02(p),
4.05, and 5.01 of the Sale Agreement, all of such Originator's right, title and
interest in, to and under all of its Receivables and the Related Security
thereto existing as of the Closing Date and thereafter created or arising at any
time until the Facility Termination Date.
3. Subject to the terms and conditions of the Sale Agreement, each
Originator hereby covenants and agrees to sign, sell or contribute, as
applicable, execute and deliver, or cause to be signed, sold or contributed,
executed and delivered, and to do or make, or cause to be done or made, upon
request of Buyer and at such Originator's expense, any and all agreements,
instruments, papers, deeds, acts or things, supplemental, confirmatory or
otherwise, as may be reasonably required by Buyer for the purpose of or in
connection with acquiring or more effectively vesting in Buyer or evidencing the
vesting in Buyer of the property, rights, title and interests of such Originator
sold or contributed hereunder or intended to be sold or contributed hereunder.
4. Wherever possible, each provision of this Receivables Assignment
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Receivables Assignment shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Receivables Assignment.
A. M. Castle & Co., Total Plastics, Inc.,
Xxxxxx Steel Plate Co., and Keystone Tube Company, LLC
Receivables Sale and Contribution Agreement
41
5. THIS RECEIVABLES ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
A. M. Castle & Co., Total Plastics, Inc.,
Xxxxxx Steel Plate Co., and Keystone Tube Company, LLC
Receivables Sale and Contribution Agreement
IN WITNESS WHEREOF, the parties have caused this Receivables
Assignment to be executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
ORIGINATORS:
A. M. CASTLE & CO.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and CFO
TOTAL PLASTICS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX STEEL PLATE CO.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
KEYSTONE TUBE COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
BUYER:
CASTLE SPFD, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
ANNEX X
DEFINITIONS
A. M. Castle & Co., Total Plastics, Inc.,
Xxxxxx Steel Plate Co., and Keystone Tube Company, LLC
Receivables Sale and Contribution Agreement
44
EXECUTION COPY
ANNEX X
to
RECEIVABLES SALE AND CONTRIBUTION AGREEMENT
and
RECEIVABLES PURCHASE AND SERVICING AGREEMENT,
each dated as of December 26, 2002,
Definitions and Interpretation
A.M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
SECTION 1. Definitions and Conventions. Capitalized terms used in
the Sale Agreement and the Purchase Agreement shall have (unless otherwise
provided elsewhere therein) the following respective meanings:
"ACCOUNTING CHANGES" shall mean, with respect to any Person, (a)
changes in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion of the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants (or any successor
thereto or any agency with similar functions); (b) changes in accounting
principles concurred in by such Person's certified public accountants; (c)
purchase accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the
application of the accounting principles set forth in FASB 109, including the
establishment of reserves pursuant thereto and any subsequent reversal (in whole
or in part) of such reserves; and (d) the reversal of any reserves established
as a result of purchase accounting adjustments.
"ACCOUNTS" shall mean the Collection Account, the Concentration
Account and the Lockbox Accounts, collectively.
"ACCOUNT COLLATERAL" shall have the meaning assigned to it in clause
(f) of the definition of the term "Related Security".
"ACCRUED SERVICING FEE" shall mean, as of any date of determination
within a Settlement Period, the sum of the Servicing Fees calculated for each
day from and including the first day of the Settlement Period through and
including such date.
"ACCRUED UNUSED FACILITY FEE" shall mean, as of any date of
determination within a Settlement Period, the sum of the Unused Facility Fees
calculated for each day from and including the first day of the Settlement
Period through and including such date.
"ACCUMULATED FUNDING DEFICIENCY" shall mean an "accumulated funding
deficiency" as defined in Section 412 of the IRC and Section 302 of ERISA,
whether or not waived.
"ADDITIONAL AMOUNTS" shall mean any amounts payable to any Affected
Party under Sections 2.09 or 2.10 of the Purchase Agreement.
"ADDITIONAL COSTS" shall have the meaning assigned to it in Section
2.09(b) of the Purchase Agreement.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Preamble of the Purchase Agreement.
"ADVERSE CLAIM" shall mean any claim of ownership or any Lien, other
than any ownership interest or Lien created under the Sale Agreement or the
Purchase Agreement.
"AFFECTED PARTY" shall mean each of the following Persons: the
Purchaser, the Administrative Agent, the Depositary and each Affiliate of the
foregoing Persons.
A. M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
2
"AFFILIATE" shall mean, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, five percent (5%) or more of the Equity
Interests having ordinary voting power in the election of directors of such
Person, (b) each Person that controls, is controlled by or is under common
control with such Person, or (c) each of such Person's officers, directors,
joint venturers and partners. For the purposes of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"AFFILIATED PARTY" shall have the meaning assigned to it in Recital
G of the Sale Agreement.
"ANCILLARY SERVICES AND LEASE AGREEMENT" shall mean that certain
Ancillary Services and Lease Agreement dated as of December 26, 2002 between the
Parent and the Seller.
"APPENDICES" shall mean, with respect to any Related Document, all
exhibits, schedules, annexes and other attachments thereto, or expressly
identified thereto.
"APPLICABLE SERVICING FEE" shall mean, as of any Settlement Date,
with respect to each Servicer other than the Master Servicer, an amount equal to
(a) the Servicing Fee received by the Master Servicer or its Successor Servicer
on such Settlement Date pursuant to Section 2.07(b) of the Purchase Agreement
less the Master Servicer's portion of such Servicing Fee, multiplied by (b) a
percentage equal to (i) the Outstanding Balance of Transferred Receivables, as
of the last day of the related Settlement Period, sold by such Servicer in its
capacity as an Originator under the Sale Agreement divided by (ii) the
Outstanding Balance of all Transferred Receivables as of the last day of the
related Settlement Period.
"ASSIGNMENT AGREEMENT" shall have the meaning assigned to it in
Section 14.02(c) of the Purchase Agreement.
"AUTHORIZED OFFICER" shall mean, with respect to any corporation or
limited liability company, as the case may be, the Chief Executive Officer,
Chief Financial Officer, Treasurer, Chairman or Vice-Chairman of the Board, the
President, any Vice President, the Secretary, the Treasurer, any Assistant
Secretary, any Assistant Treasurer and each other officer of such corporation or
limited liability company specifically authorized in resolutions of the Board of
Directors or Board of Managers of such corporation or limited liability company,
as the case may be, to sign agreements, instruments or other documents on behalf
of such corporation in connection with the transactions contemplated by the Sale
Agreement, the Purchase Agreement and the other Related Documents.
"AVAILABILITY" shall mean, as of any date of determination, the
amount equal to the lesser of: (a) the Available Accounts Receivables minus (ii)
the Discount Reserve and minus (iii) the Availability Reserve and (b) the
Maximum Purchase Limit.
A. M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
3
"AVAILABILITY RESERVE" shall mean, as of any date of determination,
(i) $10,000,000, if the Fixed Charge Coverage Ratio for the Parent and its
Subsidiaries on a consolidated basis at the end of a Settlement Period for the
12-month period then ended is less than 1.1 to 1.0, or (ii) zero, if the Fixed
Charge Coverage Ratio for the Parent and its Subsidiaries on a consolidated
basis at the end of any Settlement Period in the 12-month period then most
recently ended is equal to or greater than 1.1 to 1.0.
"AVAILABLE ACCOUNTS RECEIVABLES" shall mean the Investment Base
multiplied by the Dynamic Purchase Discount Rate.
"BANKRUPTCY CODE" shall mean the provisions of title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq.
"BILLED AMOUNT" shall mean, with respect to any Receivable, the
amount billed on the Billing Date to the Obligor thereunder.
"BILLING DATE" shall mean, with respect to any Receivable, the date
on which the invoice with respect thereto was generated and billed to the
Obligor.
"BREAKAGE COSTS" shall have the meaning assigned to it in Section
2.10 of the Purchase Agreement.
"BRINGDOWN CERTIFICATE" shall have the meaning assigned to it in
Section 5.02 of the Purchase Agreement.
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in any of the
States of Illinois or New York.
"BUYER" shall mean the Seller in its capacity as the purchaser under
the Sale Agreement.
"BUYER INDEMNIFIED PERSON" shall have the meaning assigned to it in
Section 5.01 of the Sale Agreement.
"CAPITAL EXPENDITURES" shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Debt) by such
Person during any measuring period for any fixed assets or improvements or for
replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.
"CAPITAL INVESTMENT" shall mean, as of any date of determination,
the amount equal to (a) the aggregate deposits made by the Purchaser to the
Collection Account pursuant to Section 2.04(b)(i) of the Purchase Agreement on
or before such date, minus (b) the aggregate amounts disbursed to the Purchaser
in reduction of Capital Investment pursuant to the Purchase Agreement on or
before such date.
A. M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
4
"CAPITAL INVESTMENT AVAILABLE" shall mean, as of any date of
determination, the amount, if any, by which Availability exceeds Capital
Investment, in each case as of the end of the immediately preceding day.
"CAPITAL LEASE" shall mean, with respect to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"CAPITAL PURCHASE" shall have the meaning assigned to it in Section
2.01 of the Purchase Agreement.
"CAPITAL PURCHASE REQUEST" shall have the meaning assigned to it in
Section 2.03(b) of the Purchase Agreement.
"CHANGE OF CONTROL" shall mean any event, transaction or occurrence
as a result of which (a) any person or group of persons (within the meaning of
the Securities Exchange Act of 1934, as amended) (other than any Person or group
of Persons that owns of record or beneficially, in the aggregate, on the Closing
Date, 15% or more of the issued and outstanding shares of capital stock of the
Parent) shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 20% or more of the issued and outstanding
shares of capital stock of the Parent having the right to vote for the election
of directors of the respective entity under ordinary circumstances; (b) during
any twelve (12) consecutive calendar months ending after the Closing Date,
individuals who at the beginning of such twelve-month period constituted the
board of directors of the Parent (together with any new directors whose election
by such board or whose nomination for election by the shareholders of the Parent
was approved by a vote of a majority of the directors still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) shall cease for any reason to
constitute a majority of the board of directors of the Parent then in office;
(c) the Parent shall cease to own and control, directly or indirectly, all of
the economic and voting rights associated with all of the outstanding Equity
Interests of the other Originators, of the Independent Member or of the Seller;
or (d) the Parent has sold, transferred, conveyed, assigned or otherwise
disposed of all or substantially all of the assets of the Parent.
"CLOSING DATE" shall mean December 26, 2002.
"COLLECTIONS" shall mean, with respect to any Receivable, all cash
collections and other proceeds of such Receivable, including, without
limitation, all late charges, fees and interest arising thereon, all recoveries
with respect to any such Receivable that has been written off as uncollectible,
and any payments (whether by a scrap mill, an Originator or any other
A. M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
5
Person) with respect to Returned Goods or Scrapped Goods, BUT EXCLUDING,
HOWEVER, any purchase price paid to the Originators by the Buyer with respect to
and as consideration for the sale of the Transferred Receivables by any of the
Originators to the Buyer.
"COLLECTION ACCOUNT" shall mean Deutsche Bank Trust Company
Americas, New York, New York, ABA No. 021 001 033, Account No. 502 328 54,
Account Name: GE Capital/CAF Depository, Reference: A. M. Castle CFN 4963,
established by the Administrative Agent pursuant to the requirements set forth
in Section 6.01(b) of the Purchase Agreement.
"COMMITMENT" shall mean, with respect to the Purchaser, its
commitment to purchase the Purchaser Interest under the Purchase Agreement in
the amount set forth opposite its name on the signature pages of the Purchase
Agreement or any Assignment Agreement executed pursuant thereto.
"COMMITMENT REDUCTION NOTICE" shall have the meaning assigned to it
in Section 2.02(a) of the Purchase Agreement.
"COMMITMENT TERMINATION NOTICE" shall have the meaning assigned to
it in Section 2.02(b) of the Purchase Agreement.
"COMPLIANCE CERTIFICATE" means a certificate in the form of Schedule
CC to this Annex X delivered to the Administrative Agent and the Purchaser by
the Parent pursuant to the provisions of the Sale Agreement and covering, among
other things, its compliance with the financial covenants contained in Annex
4.04(l) to the Sale Agreement.
"CONCENTRATION ACCOUNT" shall mean that certain concentration
account listed on Schedule 4.01(r) to the Purchase Agreement established in the
name of the Seller and held at the Concentration Account Bank.
"CONCENTRATION ACCOUNT BANK" shall mean any bank or other financial
institution at which the Concentration Account is maintained.
"CONCENTRATION DISCOUNT AMOUNT" shall mean, with respect to any
Obligor, and as of any date of determination after giving effect to all Eligible
Receivables to be transferred on such date, the amount by which the Outstanding
Balance of Eligible Receivables owing by such Obligor exceeds the product of (a)
the percentage set forth in the table below based upon the short-term unsecured
debt rating assigned to such Obligor's short-term debt at such time by S&P and
Xxxxx'x (and, if such Obligor is rated by both agencies and has a split rating
(except for an A-1+/P-1 rating), the applicable rating will be the lower of the
two) and (b) the Outstanding Balance of all Eligible Receivables on such date.
A. M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
6
ALLOWABLE % OF
ELIGIBLE
S&P RATING XXXXX'X RATING RECEIVABLES
------------------------ ------------------------- --------------
A-1+ P-1 5%
A-1 P-1 5%
A-2 P-2 5%
A-3 P-3 3%
Below A-3 or Not Rated Below P-3 or Not Rated by 3%
by either S&P or Xxxxx'x either S&P or Xxxxx'x
"CONSOLIDATED EBITDA" shall mean, for any period, on a consolidated
basis for the Parent and its Subsidiaries, the sum of the amounts for such
period, without duplication of
(a) consolidated net income of the Parent and Subsidiaries for such
period, minus
(b) the sum, without duplication, of (i) income tax credits, (ii)
interest income, (iii) gain from extraordinary items for such period, (iv) any
aggregate net gain (but not any aggregate net loss) during such period arising
from the sale, exchange or other disposition of capital assets (including any
fixed assets, whether tangible or intangible, all inventory sold in conjunction
with the disposition of fixed assets and all securities) by the Parent or its
Subsidiaries, and (v) any other non-cash gains which have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of the Servicers for such period in
accordance with GAAP, plus
(c) the sum, without duplication, of (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from extraordinary items for such
period, (iv) any aggregate net loss during such period arising from the sale,
exchange or other disposition of capital assets (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities) by the Parent or its
Subsidiaries, (v) the amount of non-cash charges (including depreciation and
amortization) for such period, (vi) amortized debt discount for such period and
(vii) any cash income or losses occurred in respect to any joint venture or
business partnership, in each case to the extent included in the calculation of
consolidated net income of the Servicers for such period in accordance with
GAAP.
"CONTAMINANT" shall mean any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste,
A. M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
7
asbestos, polychlorinated biphenyls ("PCBS"), or any constituent of any such
substance or waste, and includes but is not limited to these terms as defined in
Environmental Laws.
"CONTRACT" shall mean any agreement (including any invoice, draft or
promissory note) pursuant to, or under which, an Obligor shall be obligated to
make payments with respect to any Receivable.
"CONTRIBUTED RECEIVABLES" shall have the meaning assigned to it in
Section 2.01(d) of the Sale Agreement.
"CREDIT AND COLLECTION POLICIES" shall mean the credit, collection,
customer relations and service policies of the Originators in effect on the
Closing Date and as set forth on Exhibit A to the Purchase Agreement, as the
same may from time to time be amended, restated, supplemented or otherwise
modified with the written consent of the Administrative Agent.
"CREDIT MEMO LAG" shall mean the weighted average number of days, as
determined by the Administrative Agent pursuant to the results of the most
recent field examination, between the date a credit is applied to the aged trial
balance and the applicable original invoice date.
"CREDIT MEMO RESERVE" shall mean, the product of (i) the aggregate
Dilution Factors during the twelve (12) Settlement Periods most recently ended
on or prior to the date of determination, divided by (ii) three hundred and
sixty (360) days, multiplied by (iii) the Credit Memo Lag less thirty (30) days.
For the purposes of Availability on the Closing Date, the Credit Memo Reserve
shall equal the amount calculated as set forth in the Monthly Report.
"DAILY DEFAULT MARGIN" shall mean, for any day on which a
Termination Event has occurred and is continuing, two percent (2.0%) divided by
360.
"DAILY MARGIN" shall mean, for any day, the Per Annum Daily Margin
on such day divided by 360.
"DAILY YIELD" shall mean, for any day, the aggregate of the
following for each portion of the Capital Investment: the product of (a) the
portion of the Capital Investment outstanding on such day at a given Daily Yield
Rate, multiplied by (b) the sum of (i) such Daily Yield Rate, plus (ii) the
applicable Daily Margin on such day for such Daily Yield Rate, plus (iii) if a
Termination Event has occurred and is continuing, the Daily Default Margin.
"DAILY YIELD RATE" shall mean, for any day during a Settlement
Period, (a) the LIBOR Rate or Index Rate, as applicable, on such day, divided by
(b) 360.
"DEBT" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services payment for which is deferred 90 days or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than 90 days unless being contested in
A. M. Castle & Co. et al. and
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Annex X
8
good faith, (b) all reimbursement and other obligations with respect to letters
of credit, bankers' acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured (g) all obligations of such Person under
any foreign exchange contract, currency swap agreement, interest rate swap, cap
or collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, (h) all liabilities
of such Person under Title IV of ERISA, (i) all Guaranteed Indebtedness of such
Person, (j) all indebtedness referred to in clauses (a) through (i) above
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property or other
assets (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness, (k) all obligations, indebtedness and liabilities constituting the
Permitted Outstanding Debt or arising pursuant thereto, and (k) the Seller
Secured Obligations.
"DEFAULTED RECEIVABLE" shall mean (a) with respect to any Receivable
that is not an Extended Term Receivable, a Receivable: (i) with respect to which
any payment, or part thereof, remains unpaid for more than 60 days from its
Maturity Date, (ii) with respect to which the Obligor thereunder has taken any
action, or suffered any event to occur, of the type described in Sections
9.01(c) or 9.01(d) of the Purchase Agreement or (iii) that otherwise is or
should be determined to be uncollectible and is or should be written off in
accordance with the Credit and Collection Policies and (b) with respect to any
Receivable that is an Extended Term Receivable, a Receivable that (i) remains
unpaid for more than four (4) Business Days after its Extended Maturity Date,
(ii) with respect to which the Obligor thereunder has taken any action, or
suffered any event to occur, of the type described in Sections 9.01(c) or
9.01(d) of the Purchase Agreement or (iii) that otherwise is or should be
determined to be uncollectible and is or should be written off in accordance
with the Credit and Collection Policies.
"DEFAULT RATIO" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) (i) the average of the respective Outstanding Balances of all
Transferred Receivables which constituted Defaulted Receivables as of the last
day of the three Settlement Periods immediately preceding such date, plus (ii)
the average Outstanding Balance of Transferred Receivables that were written off
as uncollectible during such three Settlement Periods.
to
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Annex X
9
(b) the average of the respective Outstanding Balances of all
Transferred Receivables as of the last day of the three Settlement Periods
immediately preceding such date.
"DELINQUENCY RATIO" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) the average of the respective Outstanding Balances of all
Transferred Receivables which remain unpaid for more than 30 days but less than
61 days from their respective Maturity Date as of the last day of the three
Settlement Periods immediately preceding such date
to
(b) the average of the Outstanding Balances of all Transferred
Receivables as of the last day of the three Settlement Periods immediately
preceding such date.
"DEPOSIT INVESTMENTS" shall mean, with respect to any Account
Collateral, the certificates, instruments, investment property or other
investments in which amounts constituting such collateral are invested from time
to time.
"DEPOSITARY" shall mean Deutsche Bank Trust Company Americas, in its
capacity as the depositary for GE Capital.
"DILUTION FACTORS" shall mean, with respect to any Receivable, any
credits, rebates, freight charges, cash discounts, volume discounts, cooperative
advertising expenses, royalty payments, warranties, cost of parts required to be
maintained by agreement (whether express or implied), warehouse and other
allowances, disputes, setoffs, chargebacks, credits issued on account of
returned defective goods or other returned or repossessed goods or scrapped
goods, inventory transfers, allowances for early payments and other similar
allowances that are reflected on the books of each Originator and made or
coordinated with the usual practices of the Originator thereof; PROVIDED THAT
any allowances or adjustments in accordance with the Credit and Collection
Policies made on account of the insolvency of the Obligor thereunder or such
Obligor's inability to pay shall not constitute a Dilution Factor.
"DILUTION RATIO" shall mean, as of any date of determination, the
ratio (expressed as a percentage) of:
(a) the sum of (i) the aggregate Dilution Factors during the three
(3) consecutive Settlement Periods most recently ended on or prior to the date
of determination, plus, without duplication (ii) gross write-offs in connection
with Credit and Collection Policies (without deduction of any debit memos or
recoveries) during such three (3) consecutive Settlement Periods,
to
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Annex X
10
(b) the aggregate gross Billed Amount of all Transferred Receivables
originated during the third, fourth and fifth Settlement Periods preceding the
Settlement Period then most recently ended.
"DILUTION RESERVE RATIO" shall mean, as of any date of
determination, the sum of (a) the product of (i) two multiplied by (ii) the
Dilution Ratio for the Settlement Period most recently ended plus (b) 5%.
Notwithstanding the foregoing, the Dilution Reserve Ratio may be changed at any
time at the sole discretion of the Administrative Agent, exercised in good
faith.
"DOL" shall mean the United States Department of Labor and any
Person succeeding to the functions thereof.
"DISCOUNT RESERVE" shall mean, at any time, the product of (a) 1.5,
(b) the Index Rate, (c) Capital Investment and (d) a fraction, the numerator of
which is the higher of (i) 30 and (ii) the most recently reported Receivables
Collection Turnover, and the denominator of which is 360; PROVIDED THAT, the
Discount Reserve may be changed at any time at the sole discretion of the
Administrative Agent, exercised in good faith.
"DISTRICT" shall mean the geographic location of the office of the
Originator which generates the Contract with respect to any Receivable.
"DOLLARS" or "$" shall mean lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY" shall mean a Subsidiary organized under the
laws of a jurisdiction located in the United States of America.
"DYNAMIC PURCHASE DISCOUNT RATE" shall mean, as of any date of
determination, the rate equal to the lesser of (i) Purchase Discount Rate Cap
and (ii) 100% minus the Dilution Reserve Ratio.
"EARLY TERMINATION FEE" shall mean the First Year Early Termination
Fee and the Second Year Early Termination Fee.
"ELECTION NOTICE" shall have the meaning assigned to it in Section
2.01(d) of the Sale Agreement.
"ELIGIBLE EXTENDED TERM RECEIVABLE" shall mean, as of any date of
determination, an Extended Term Receivable (i) that is evidenced by an Extended
Term Instrument, the original of which, together with all requisite
endorsements, is delivered to the Administrative Agent pursuant to Section 8.04
of the Purchase Agreement, (ii) that is not a Defaulted Receivable or an
Unapproved Receivable, (iii) that satisfies all criteria of eligibility of a
Transferred Receivable other than clause (n) of the definition of "Eligible
Receivable" and (iv) that is a liability of an Extended Term Receivable Obligor;
PROVIDED THAT the aggregate Outstanding Balance of the Extended Term Receivables
that exceeds 5% of the aggregate Outstanding Balance of all Eligible Receivables
shall be ineligible; and PROVIDED, FURTHER, THAT if
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any of the Extended Term Receivables of an Obligor is a Defaulted Receivable (i)
all Eligible Extended Term Receivables, if any, of such Obligor shall be
ineligible and (ii) such Obligor shall no longer be an Extended Term Receivable
Obligor and Schedule 3 to this Annex X shall be deemed amended by deleting such
Obligor therefrom without any further action of the parties; it being understood
that no Extended Term Receivable of such Obligor shall be eligible.
"ELIGIBLE RECEIVABLE" shall mean, as of any date of determination,
(i) an Eligible Extended Term Receivable and (ii) a Transferred Receivable:
(a) that is not a liability of an Obligor (i) organized under the
laws of any jurisdiction outside of the United States of America (including the
District of Columbia but otherwise excluding its territories and possessions),
(ii) having its principal place of business outside of the United States of
America (including the District of Columbia but otherwise excluding its
territories and possessions), (iii) that is an Affiliate of the Seller or the
applicable Originator, (iv) that is the United States government or a political
subdivision thereof, or any state, county or municipality or department, agency
or instrumentality thereof unless the applicable Originator, if necessary or
desirable, has complied with respect to that obligation with the Federal
Assignment of Claims Act of 1940, or any applicable state, county or municipal
law restricting the assignment or enforcement thereof, or (v) that is a natural
person; PROVIDED THAT, Transferred Receivables owing from an Obligor organized
under the laws of Canada or any province thereof which has its principal place
of business in Canada may be eligible as long as the other criteria of
eligibility hereunder with respect to such Transferred Receivables are
satisfied, and PROVIDED FURTHER that the aggregate Outstanding Balance of such
Transferred Receivables that are eligible shall not exceed five percent (5%) of
the aggregate Outstanding Balance of all Eligible Receivables;
(b) that is only denominated and payable in Dollars in the United
States of America;
(c) that is not and will not be subject to any deposit or right of
rescission, set-off, recoupment, counterclaim, dispute or defense, whether
arising out of transactions concerning the Contract therefor or otherwise or is
subject to a claim by the Obligor thereunder for consequential damages;
(d) that is not a Defaulted Receivable or an Unapproved Receivable;
(e) which is not the liability of an Obligor as to which more than
25% of the aggregate Outstanding Balance of all Receivables owing from such
Obligor are Defaulted Receivables;
(f) that, does not represent "billed but not yet shipped," "xxxx and
hold" or "progress-billed" goods or merchandise, unperformed services, consigned
goods or "sale or return" goods and does not arise from a transaction for which
any additional performance by the Originator thereof, or acceptance by or other
act of the Obligor thereunder, remains to be performed as a condition to any
payments on such Receivable;
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(g) as to which the representations and warranties of Sections
4.01(x)(ii)-(iv) of the Sale Agreement are true and correct in all respects as
of the Transfer Date therefor and has been transferred to the Seller pursuant to
the Sale Agreement in a transaction constituting a true sale or other outright
conveyance and contribution;
(h) that is not the liability of an Obligor that has any claim of a
material nature against or affecting any Originator or the property of any
Originator;
(i) that is a true and correct statement of a bona fide indebtedness
incurred in the amount of the Billed Amount of such Receivable for merchandise
or goods sold to or services rendered and accepted by the Obligor thereunder;
(j) that was originated by an Originator in accordance with and
satisfies all applicable requirements of the Credit and Collection Policies,
except to the extent that the failure to satisfy such requirements could not
reasonably be expected to have a material adverse effect on the collectibility
or enforceability of such Receivable;
(k) that represents the genuine, legal, valid and binding obligation
of the Obligor thereunder enforceable by the holder thereof in accordance with
its terms;
(l) that is entitled to be paid pursuant to the terms of the
Contract therefor, has not been paid in full or been compromised, adjusted,
extended, satisfied, subordinated, rescinded or modified, and is not subject to
compromise, adjustment, extension, satisfaction, subordination, rescission, or
modification by the Originator thereof (except for adjustments to the
Outstanding Balance thereof to reflect Dilution Factors made in accordance with
the Credit and Collection Policy);
(m) with respect to which the Originator thereof has submitted all
necessary documentation for payment to the Obligor thereunder and such
Originator has fulfilled all of its other obligations in respect thereof;
(n) the stated term of which, if any, is not greater than 30 days
after its Billing Date (other than with respect to Extended Term Receivables);
(o) that was created in compliance with and otherwise does not
contravene any laws, rules or regulations applicable thereto (including laws,
rules and regulations relating to usury, consumer protection, truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party to the
Contract therefor is in violation of any such law, rule or regulation, in each
case except to the extent that such noncompliance or contravention could not
reasonably be expected to have a material adverse effect on the collectibility,
enforceability, value or payment terms of such Receivable;
(p) with respect to which no proceedings or investigations are
pending or threatened before any Governmental Authority (i) asserting the
invalidity of such Receivable or
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the Contract therefor, (ii) asserting the bankruptcy or insolvency of the
Obligor thereunder, (iii) seeking payment of such Receivable or payment and
performance of such Contract or (iv) seeking any determination or ruling that
might materially and adversely affect the validity or enforceability of such
Receivable or such Contract;
(q) with respect to which the Obligor thereunder is not: (i)
bankrupt or insolvent, (ii) unable to make payment of its obligations when due,
(iii) a debtor in a voluntary or involuntary bankruptcy proceeding, or (iv) the
subject of a comparable receivership or insolvency proceeding;
(r) that (other than in the case of Eligible Extended Term
Receivables) is an "account" (and is not evidenced by a draft, promissory note
or other instrument and does not constitute chattel paper) within the meaning of
the UCC of the jurisdictions in which each of the Originators, the Parent and
the Seller are organized;
(s) that is payable solely and directly to an Originator and not to
any other Person (including any shipper of the merchandise or goods that gave
rise to such Receivable), except to the extent that payment thereof may be made
to the Collection Account or otherwise as directed pursuant to Article VI of the
Purchase Agreement;
(t) with respect to which all material consents, licenses, approvals
or authorizations of, or registrations with, any Governmental Authority required
to be obtained, effected or given in connection with the creation of such
Receivable or the Contract therefor have been duly obtained, effected or given
and are in full force and effect;
(u) that is created through the provision of merchandise, goods or
services by the Originator thereof in the ordinary course of its business in a
current transaction;
(v) that complies with such other criteria and requirements as the
Administrative Agent may from time to time, in its reasonable credit judgment,
specify to the Seller or the Originator thereof upon not less than three (3)
Business Days' prior written notice;
(w) that is not the liability of an Obligor that is receiving or,
under the terms of the Credit and Collection Policies, should receive
merchandise, goods or services on a "cash on delivery" basis;
(x) that does not constitute a rebilled amount arising from a
deduction taken by an Obligor with respect to a previously arising Receivable or
the balance owed on a Receivable with respect to which one or more partial
payments have been made;
(y) with respect to which no check, draft or other item of payment
has previously been received which was returned unpaid or otherwise dishonored;
(z) no portion of which constitutes sales tax, excise tax or
commission, late fees, service charges or similar charges;
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(aa) that is not subject to any Lien, right, claim, security
interest or other interest of any other Person, other than Liens in favor of the
Administrative Agent and the Purchaser; and
(bb) which is not an indebtedness or a liability of a scrap mill
(whether or not a supplier) or any other Person with respect to Scrapped Goods.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state, local
and foreign laws, statutes, ordinances, codes, rules, standards and regulations,
now or hereafter in effect, and in each case as amended or supplemented from
time to time, and any applicable judicial or administrative interpretation
thereof, including any applicable judicial or administrative order, consent
decree, order or judgment, imposing liability or standards of conduct for or
relating to the regulation and protection of human health, safety, the
environment and natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42
U.S.C. Sections 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 et seq.); the Occupational Safety and Health Act (29
U.S.C. Sections 651 et seq.); the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.); and the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Sections 6901 et seq., each as from time to time amended, and any and all
regulations promulgated thereunder, and all analogous state, local and foreign
counterparts or equivalents and any transfer of ownership notification or
approval statutes.
"ENVIRONMENTAL LIEN" shall mean a lien in favor of any Governmental
Authority for (a) any liability under Environmental Law, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to a release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment,
including the movement of Contaminants through or in the air, soil, surface
water or groundwater (a "RELEASE") or threatened Release of a Contaminant into
the environment.
"ENVIRONMENTAL PERMITS" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other written
documents required by any Governmental Authority under any Environmental Laws.
"EQUITY INTEREST" shall mean all shares, options, warrants, member
interests, general or limited partnership interests or other equivalents
(regardless of how designated) of or in a corporation, limited liability
company, partnership or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act).
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"EQUITY HOLDERS" shall mean, with respect to any Person, each holder
of Equity Interests of such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 and any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to any Originator, any
trade or business (whether or not incorporated) that, together with such
Originator, are treated as a single employer within the meaning of Sections
414(b), (c), (m) or (o) of the IRC.
"ERISA EVENT" shall mean, with respect to any Originator or any
ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with
respect to a Title IV Plan; (b) the withdrawal of any Originator or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a "substantial employer," as defined in Section 4001(a)(2)
of ERISA; (c) the complete or partial withdrawal of any Originator or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any
Originator or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; (i) the loss of a Qualified Plan's qualification or tax exempt status; or
(j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"EVENT OF SERVICER TERMINATION" shall have the meaning assigned to
it in Section 9.02 of the Purchase Agreement.
"EXCLUDED RECEIVABLE" shall mean any indebtedness of Obligors
(whether constituting an account, general intangible, instrument or otherwise)
arising from the sale of merchandise, goods or services by any District of any
Originator to its Obligors (including the right to payment of any interest or
finance charges and other obligations of such Obligors with respect thereto)
designated in writing by the Administrative Agent to the Originators at any time
that the aggregate principal amount of Transferred Receivables at any one time
outstanding exceeds $75,000,000 and arising after the date of such written
designation.
"EXTENDED MATURITY DATE" shall mean, with respect to any Receivable,
the due date for payment thereof which is extended by an agreement between an
Originator and an
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Obligor beyond the original Maturity Date, which is not, in any event, later
than 124 days after its original Billing Date.
"EXTENDED TERM INSTRUMENT" shall mean a draft executed by an Obligor
in favor of an Originator evidencing the Extended Term Receivable substantially
in the form attached as Exhibit B to the Purchase Agreement.
"EXTENDED TERM INSTRUMENT REPORT" shall have the meaning set forth
in Annex 5.02(a) to the Purchase Agreement.
"EXTENDED TERM RECEIVABLE" shall mean a Receivable that has an
Extended Maturity Date and is a liability of those Obligors that are listed on
Schedule 3 attached to this Annex X (each, an "EXTENDED TERM RECEIVABLE OBLIGOR"
and collectively, the "EXTENDED TERM RECEIVABLE OBLIGORS"), as Schedule 3 may be
amended from time to time by deletion of such Obligors pursuant to the
definition of "Eligible Extended Term Receivables".
"FACILITY TERMINATION DATE" shall mean the earliest of (a) the date
so designated pursuant to Section 9.01 of the Purchase Agreement, (b) the Final
Purchase Date, and (c) the date of termination of the Maximum Purchase Limit
specified in a notice from Seller to the Purchaser delivered pursuant to and in
accordance with Section 2.02(b) of the Purchase Agreement.
"FAIR LABOR STANDARDS ACT" shall mean the provisions of the Fair
Labor Standards Act, 29 U.S.C. Sections 201 et seq.
"FEDERAL FUNDS RATE" shall mean, for any day, a floating rate equal
to the weighted average of the rates on overnight federal funds transactions
among members of the Federal Reserve System, as determined by the Administrative
Agent.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
Federal Reserve System.
"FEE LETTER" shall mean that certain letter agreement dated December
26, 2002, between the Seller and the Administrative Agent.
"FINAL PURCHASE DATE" shall mean December 26, 2005.
"FINANCIAL STATEMENTS" shall mean, consolidated and consolidating
income statements, statements of cash flows and balance sheets of the Parent
delivered in accordance with Section 4.01(f) of the Sale Agreement, Annex
4.03(a) and Annex 4.03(b) to the Sale Agreement and separate income statements,
statements of cash flows and balance sheets of the Seller delivered in
accordance with Section 5.02 of the Purchase Agreement.
"FIRST YEAR EARLY TERMINATION FEE" shall have the meaning assigned
to it in the Fee Letter.
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"FIXED CHARGES" shall mean, with respect to the Parent and its
Subsidiaries, on a consolidated basis, for any fiscal period, (a) the aggregate
of all Interest Expense payable in cash during such period, plus (b) scheduled
payments of principal payable in cash with respect to Debt during such period.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to the Parent
and its Subsidiaries, on a consolidated basis, for any fiscal period, the ratio
of (a) the Consolidated EBITDA, minus Capital Expenditures (other than that
portion of such Capital Expenditures that are financed) during such period and
minus, to the extent not already deducted in the calculation of the Consolidated
EBITDA, income taxes payable in cash with respect to such period (without adding
back any tax credit received) and minus the aggregate of all redemptions,
purchases, retirements, defeasances, or similar payments or acquisitions for
value with respect to Debt (other than refinancing of any Permitted Outstanding
Debt expressly permitted under the Purchase Agreement) and minus dividends paid
in cash to (b) Fixed Charges.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary which is not a Domestic
Subsidiary.
"GAAP" shall mean (i) generally accepted accounting principles in
the United States of America as in effect on the Closing Date for the purpose of
calculating the Fixed Charge Coverage Ratio and (ii) generally accepted
accounting principles in the United States of America as in effect from time to
time for all other purposes.
"GE CAPITAL" shall mean General Electric Capital Corporation, a
Delaware corporation, and its successors and assigns.
"GENERAL TRIAL BALANCE" shall mean, with respect to any Originator
and as of any date of determination, such Originator's accounts receivable trial
balance (whether in the form of a computer printout, magnetic tape or diskette)
as of such date, listing Obligors and the Receivables owing by such Obligors as
of such date together with the aged Outstanding Balances of such Receivables, in
form and substance satisfactory to the Seller and the Purchaser.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
to (a) purchase or repurchase any such primary obligation, (b) advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the
purpose of assuring the owner of any such
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primary obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) indemnify the owner of such primary obligation
against loss in respect thereof. The amount of any Guaranteed Indebtedness at
any time shall be deemed to be the amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of
which such Guaranteed Indebtedness is incurred and (y) the maximum amount for
which such Person may be liable pursuant to the terms of the instrument
embodying such Guaranteed Indebtedness; or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.
"GUARANTEED OBLIGATIONS" shall mean, collectively: (a) all
covenants, agreements, terms, conditions and indemnities to be performed and
observed by each of the Affiliated Party under and pursuant to the Sale
Agreement and each other document executed and delivered by each of the
Affiliated Party pursuant to the Sale Agreement, including, without limitation,
the due and punctual payment of all sums which are or may become due and owing
by any of the Affiliated Parties under the Sale Agreement, whether for fees,
expenses (including counsel fees), indemnified amounts or otherwise, whether
upon any termination or for any other reason and (b) all obligations of
Affiliated Parties under the Purchase Agreement, or which arise pursuant to the
Purchase Agreement as a result of their termination as Servicers.
"INCIPIENT SERVICER TERMINATION EVENT" shall mean any event that,
with the passage of time or notice or both, would, unless cured or waived,
become an Event of Servicer Termination.
"INCIPIENT TERMINATION EVENT" shall mean any event that, with the
passage of time or notice or both, would, unless cured or waived, become a
Termination Event.
"INDEMNIFIED AMOUNTS" shall mean, with respect to any Person, any
and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including attorneys' fees and disbursements and other costs of
investigation or defense, including those incurred upon any appeal).
"INDEMNIFIED PERSON" shall have the meaning assigned to it in
Section 12.01(a) of the Purchase Agreement.
"INDEMNIFIED TAXES" shall have the meaning assigned to it in Section
2.08(b) of the Purchase Agreement.
"INDEPENDENT MEMBER" shall mean Castle IND MGR, Inc., a Delaware
corporation.
"INDEX RATE" shall mean, for any day, a floating rate equal to the
higher of (i) the rate publicly quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans at large U.S. money center
commercial banks" (or, if The Wall Street Journal ceases quoting a base rate of
the type described, the highest per annum rate of interest published by the
Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected
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Interest Rates" as the Bank prime loan rate or its equivalent), and (ii) the
Federal Funds Rate plus fifty (50) basis points per annum. Each change in any
interest rate provided for in the Purchase Agreement based upon the Index Rate
shall take effect at the time of such change in the Index Rate.
"INTENDED CHARACTERIZATION" shall mean, for income tax purposes, the
characterization of the acquisition by the Purchaser of Purchaser Interests
under the Purchase Agreement as a loan or loans by the Purchaser to the Seller
secured by the Receivables and the Related Security.
"INTEREST EXPENSE" shall mean, with respect to the Parent and its
Subsidiaries and any period, the interest expense of such Person, determined on
a consolidated basis for such period, including in any event the interest
portion or payments under Capital Lease Obligations and interest expense for the
relevant period that has been capitalized on the balance sheet of such Person
and yield or other amounts due and payable (other than upfront fees) under any
accounts receivable securitization facility to which any such Person is a party
as seller or issuer.
"INVESTMENT BASE" shall mean, as of any date of determination, the
amount equal to the aggregate Outstanding Balance of all Eligible Receivables
minus the Reserves with respect thereto, in each case as disclosed in the most
recently submitted Investment Base Certificate or as otherwise determined by the
Purchaser or the Administrative Agent based on Seller Collateral information
available to any of them, including any information obtained from any audit or
from any other reports with respect to the Seller Collateral, which
determination shall be final, binding and conclusive on all parties to the
Purchase Agreement (absent manifest error).
"INVESTMENT BASE CERTIFICATE" shall have the meaning assigned to it
in Section 2.03(a)(i) of the Purchase Agreement.
"INVESTMENT COMPANY ACT" shall mean the provisions of the Investment
Company Act of 1940, 15 U.S.C. Sections 80a et seq., and any regulations
promulgated thereunder.
"INVESTMENT REPORTS" shall mean, collectively, the Investment Base
Certificates, the Monthly Reports and each of the reports with respect to the
Transferred Receivables, the Related Security and the Seller Collateral referred
to in Annex 7.02 of the Purchase Agreement.
"IRC" shall mean the Internal Revenue Code of 1986 and any
regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"LENDERS" shall mean the lenders from time to time party to
Permitted Outstanding Debt Documents.
"LIBOR BUSINESS DAY" shall mean a Business Day on which banks in the
City of London are generally open for interbank or foreign exchange
transactions.
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"LIBOR PERIOD" shall mean, with respect to any LIBOR Tranche, each
period commencing on a LIBOR Business Day selected by Seller pursuant to the
Purchase Agreement and ending one, two or three months thereafter, as selected
by Seller's irrevocable notice to Administrative Agent as set forth in the
Purchase Agreement; PROVIDED THAT the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Facility
Termination Date shall end 2 LIBOR Business Days prior to such date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Seller shall select LIBOR Periods so as not to require a payment
or prepayment of any LIBOR Tranche during a LIBOR Period for such LIBOR
Tranche; and
(e) Seller shall select LIBOR Periods so that there shall be no more
than 5 separate LIBOR Tranches in existence at any one time.
"LIBOR RATE" shall mean for each LIBOR Period, a rate of interest
determined by the Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full LIBOR Business Day next preceding
the first day of such LIBOR Period (unless such date is not a Business
Day, in which event the next succeeding Business Day will be used);
divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal
Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation
D of the Federal Reserve Board that are required to be maintained by a
member bank of the Federal Reserve System.
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If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable to
Administrative Agent and Seller.
"LIBOR TRANCHE" shall mean each portion of the Capital Investment
(if any) that is accruing Daily Yield at a LIBOR Rate for a LIBOR Period.
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the UCC or comparable law of any jurisdiction).
"LITIGATION" shall mean, with respect to any Person, any action,
claim, lawsuit, demand, investigation or proceeding pending or threatened
against such Person before any court, board, commission, agency or
instrumentality of any federal, state, local or foreign government or of any
agency or subdivision thereof or before any arbitrator or panel of arbitrators.
"LOCKBOX" shall have the meaning assigned to it in Section
6.01(a)(ii) of the Purchase Agreement.
"LOCKBOX ACCOUNT" shall mean each lockbox account or blocked account
listed on Schedule 4.01(r) to the Purchase Agreement as amended from time to
time established in the name of the Seller and held at a Lockbox Account Bank,
together with any other segregated deposit account established by the Seller for
the deposit of Collections pursuant to and in accordance with Section 6.01(a) of
the Purchase Agreement.
"LOCKBOX ACCOUNT AGREEMENT" shall mean any agreement among any one
or more Originators, the Seller, the Administrative Agent, a Lockbox Account
Bank and/or Concentration Account Bank with respect to a Lockbox, Lockbox
Account and/or Concentration Account that provides, among other things, that (a)
all items of payment deposited in such Lockbox, Lockbox Account or Concentration
Account are held by such Lockbox Account Bank or such Concentration Account
Bank, as the case may be, as custodian for GE Capital, as Administrative Agent,
(b) neither the Lockbox Account Bank nor the Concentration Account Bank, as
applicable, has any rights of setoff or recoupment or any other claim against
such Lockbox Account or Concentration Account, as the case may be, other than
for payment of its service fees and other charges directly related to the
administration of such Account and for returned checks or other items of payment
and (c) such Lockbox Account Bank agrees to forward all Collections received in
such Lockbox Account to the Concentration Account within one Business Day of
receipt of available funds, and such Concentration Account Bank agrees to
forward all Collections received in the Concentration Account to the Collection
Account within one Business Day of receipt of available funds, and is otherwise
in form and substance acceptable to the Administrative Agent.
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"LOCKBOX ACCOUNT BANK" shall mean any bank or other financial
institution at which one or more Lockbox Accounts are maintained.
"MARGIN STOCK" shall have the meaning set forth in Regulation U
promulgated by the Board of Governors of the Federal Reserve System, as from
time to time in effect.
"MASTER SERVICER" shall mean the Parent in its capacity as Master
Servicer under the Purchase agreement, or any other Person designated as a
Successor Servicer to the Master Servicer.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the business, assets, liabilities, operations, prospects or financial or
other condition of (i) any Originator or the Originators considered as a whole,
(ii) the Seller or (iii) the Master Servicer and its Subsidiaries considered as
a whole, (b) the ability of any Originator, the Seller or any Servicer to
perform any of its obligations under the Related Documents in accordance with
the terms thereof, (c) the validity or enforceability of any Related Document or
the rights and remedies of the Seller, the Purchaser or the Administrative Agent
under any Related Document, (d) the federal income tax attributes of the sale,
contribution or pledge of the Transferred Receivables and the Related Security
pursuant to any Related Document or (e) the Transferred Receivables, the Related
Security, the Originator Collateral, the Seller Collateral or the ownership
interests or Liens of the Seller or the Purchaser or the Administrative Agent
thereon or the priority of such interests or Liens.
"MATERIAL DEBT" shall have the meaning assigned to it in Section
9.01(b) of the Purchase Agreement.
"MATURITY DATE" shall mean, with respect to any Receivable, the due
date for payment therefor specified in the Contract therefor, or, if no date is
so specified, 30 days from the Billing Date.
"MAXIMUM PURCHASE LIMIT" shall mean $60,000,000 as such amount may
be reduced in accordance with Section 2.02(a) of the Purchase Agreement.
"MONTHLY REPORT" shall mean a report in substantially the form of
Exhibit 2.03(a)(ii) to the Purchase Agreement.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. or any
successor thereto.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which any Originator or ERISA
Affiliate is making, is obligated to make, or has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"NET WORTH PERCENTAGE" shall mean a fraction (expressed as a
percentage) (a) the numerator of which equals the excess of assets over
liabilities, in each case determined in
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accordance with GAAP consistently applied and (b) the denominator of which
equals the Outstanding Balance of Transferred Receivables.
"NOTE AGREEMENTS" shall mean (i) that certain Note Agreement, dated
as of May 15, 1997, as amended and in effect on the Closing Date, among the
Parent and the holder of the Parent's Reset Rate Senior Secured Notes due 2009,
(ii) that certain Note Agreement, dated as of March 1, 1998, as amended and in
effect on the Closing Date, among the Parent, the holders of the Parent's Reset
Rate Series A Senior Secured Notes due 2008, the holders of the Parent's Reset
Rate Series B Senior Secured Notes due 2010, and the holders of the Parent's
Reset Rate Series C Senior Secured Notes due 2012, and (iii) that certain Note
Agreement, dated as of April 1, 1996, as amended and in effect on the Closing
Date, among the Parent and the holders of the Parent's Reset Rate Senior Secured
Notes due 2008.
"NOTE DOCUMENTS" shall mean, the Note Agreements, the Senior Notes
and all notes, security agreements, guaranties, pledge agreements, mortgages and
related collateral documents executed pursuant to any of the foregoing.
"NOTEHOLDER" shall mean each holder of a Senior Note pursuant to a
Note Agreement, and its successors and assigns.
"OBLIGOR" shall mean, with respect to any Receivable, the Person
primarily obligated to make payments in respect thereof.
"OFFICER'S CERTIFICATE" shall mean, with respect to any Person, a
certificate signed by an Authorized Officer of such Person.
"ORGANIC DOCUMENTS" shall mean, relative to any Person, its
certificate of incorporation, its by-laws, its partnership agreement, its
memorandum and articles of association, its certificate of formation or articles
of organization and limited liability company agreement and/or operating
agreement, share designations or similar organization documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its authorized Equity Interest.
"ORIGINATOR" shall mean each of A. M. Castle & Co., a Maryland
corporation, Xxxxxx Steel Plate Co., a Delaware corporation, Keystone Tube
Company, llc, a Delaware limited liability company, and Total Plastics, Inc., a
Michigan corporation.
"ORIGINATOR COLLATERAL" shall have the meaning assigned to it in
Section 7.01 of the Sale Agreement.
"OUTSTANDING BALANCE" shall mean, with respect to any Receivable and
as of any date of determination, the amount (which amount shall not be less than
zero) equal to (a) the Billed Amount thereof, minus (b) all Collections received
from the Obligor thereunder, minus (c) all discounts to or any other
modifications that reduce such Billed Amount; PROVIDED THAT if the
Administrative Agent or the Master Servicer makes a determination that all
payments by such
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Obligor with respect to such Billed Amount have been made, the Outstanding
Balance shall be zero.
"PARENT" shall mean A. M. Castle & Co., a Maryland corporation.
"PARENT GROUP" shall mean the Parent and each of its Affiliates
(other than the Seller and the Independent Member).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PENSION PLAN" shall mean a Plan described in Section 3(2) of ERISA.
"PER ANNUM DAILY MARGIN" shall have the meaning assigned to it in
the Fee Letter:
"PERFORMANCE UNDERTAKING" shall mean the provisions of Article VIII
of the Sale Agreement.
"PERMITTED INDEPENDENT MEMBER ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
deposits securing statutory obligations of the Independent Member; and (c)
presently existing or hereinafter created Liens in favor of the Collateral
Administrative Agent on the Independent Member's Equity Interest in the Seller.
"PERMITTED INVESTMENTS" shall mean any of the following:
(a) obligations of, or guaranteed as to the full and timely payment
of principal and interest by, the federal government of the United States or
obligations of any agency or instrumentality thereof if such obligations are
backed by the full faith and credit of the federal government of the United
States, in each case with maturities of not more than 90 days from the date
acquired;
(b) repurchase agreements on obligations of the type specified in
clause (a) of this definition; provided, that the short-term debt obligations of
the party agreeing to repurchase are rated at least A-1 or the equivalent by S&P
and P-1 or the equivalent by Moody's;
(c) federal funds, certificates of deposit, time deposits and
bankers' acceptances of any depository institution or trust company incorporated
under the federal laws of the United States or any state, in each case with
original maturities of not more than 90 days or, in the case of bankers'
acceptances, original maturities of not more than 365 days; provided, that the
short-term obligations of such depository institution or trust company are rated
at least A-1 or the equivalent by S&P and P-1 or the equivalent by Moody's;
(d) commercial paper of any corporation incorporated under the laws
of the United States of America or any state thereof with original maturities of
not more than 30 days
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that on the date of acquisition are rated at least A-1 or the equivalent by S&P
and P-1 or the equivalent by Moody's; and
(e) securities of money market funds rated at least Aam or the
equivalent by S&P and P-1 or the equivalent by Moody's.
"PERMITTED ORIGINATOR ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
pledges or deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits securing
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which any Originator, the Seller or any Servicer is a party as lessee
made in the ordinary course of business; (d) deposits securing statutory
obligations of any Originator, the Seller or any Servicer; (e) inchoate and
unperfected workers', mechanics', suppliers' or similar Liens arising in the
ordinary course of business; (f) carriers', warehousemen's or other similar
possessory Liens arising in the ordinary course of business and securing
liabilities in an outstanding aggregate amount not in excess of $500,000 at any
one time; (g) deposits securing, or in lieu of, surety, appeal or customs bonds
in proceedings to which any Originator, the Seller or any Servicer is a party;
(h) any attachment or judgment Lien not constituting a Termination Event under
Section 9.01(f) of the Purchase Agreement; (i) Liens existing on the Closing
Date and listed on Schedule 4.04(b) of the Sale Agreement; (j) [reserved]; (k)
[reserved]; (l) Liens securing Debt which is incurred to extend, refinance,
renew, replace, defease or refund Debt which has been secured by a Lien
permitted under the Sale Agreement and is permitted to be extended, refinanced,
renewed, replaced, defeased or refunded under the Sale Agreement but only to the
extent that such Lien is limited to the same collateral as that covered by the
prior Lien; (m) Liens securing the Permitted Outstanding Debt so long as such
Liens (A) do not encumber Originator Collateral or Seller Collateral, (B) are
granted to one or more holders of the Permitted Outstanding Debt pursuant to
agreements, instruments or documents which have been reviewed by the
Administrative Agent and which are reasonably satisfactory to the Administrative
Agent, and (C) an intercreditor agreement satisfactory to the Administrative
Agent has been entered into between the Administrative Agent and such holders of
the Permitted Outstanding Debt or an agent authorized to act on their behalf;
and (n) presently existing or hereinafter created Liens in favor of the Buyer,
the Seller, the Purchaser or the Administrative Agent.
"PERMITTED OUTSTANDING DEBT" shall mean existing Debt described in
Schedule 2 to this Annex X with the holders of such Debt as described in that
Schedule (or with any other future holder of such Debt reasonably satisfactory
to the Administrative Agent) and refinancings thereof or amendments or
modifications thereof that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same and other than as expressly permitted in the Purchase Agreement) and that
are otherwise on terms and conditions no less favorable to any Seller Party or
the Administrative Agent, as determined by the Administrative Agent, than the
terms of the Debt being refinanced, amended or modified.
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"PERMITTED OUTSTANDING DEBT DOCUMENTS" shall mean the agreements,
indentures, and related documents and instruments evidencing the Permitted
Outstanding Debt, each in effect as of the Closing Date.
"PERMITTED SELLER ENCUMBRANCES" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental charges
not yet due and payable (other than with respect to environmental matters); (b)
deposits securing statutory obligations of the Seller; and (c) presently
existing or hereinafter created Liens in favor of the Purchaser or the
Administrative Agent.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, unincorporated organization, trust, association,
corporation (including a business trust), limited liability company,
institution, public benefit corporation, joint stock company, Governmental
Authority or any other entity of whatever nature.
"PLAN" shall mean, at any time, an "employee benefit plan," as
defined in Section 3(3) of ERISA, that any Originator or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any Originator or ERISA Affiliate.
"PROJECTIONS" shall mean Parent Group's forecasted consolidated and
consolidating: (a) balance sheets; (b) income statements; and (c) cash flow
statements, all prepared on a Subsidiary-by-Subsidiary or division-by-division
basis, if applicable, and otherwise consistent with the historical Financial
Statements of Parent, together with appropriate supporting details and a
statement of underlying assumptions.
"PURCHASE" shall have the meaning assigned to it in Section 2.01 of
the Purchase Agreement.
"PURCHASE AGREEMENT" shall mean that certain Receivables Purchase
and Servicing Agreement dated as of December 26, 2002, among the Seller, the
Independent Member, the Purchaser, the Servicers and the Administrative Agent.
"PURCHASE ASSIGNMENT" shall mean that certain Purchase Assignment,
dated as of December 26, 2002, by and between the Seller and the Purchaser in
the form attached as Exhibit 2.04(a) to the Purchase Agreement.
"PURCHASE DATE" shall mean each day on which a Purchase is made.
"PURCHASE DISCOUNT RATE CAP" shall mean a rate equal to eighty-five
percent (85%); PROVIDED THAT the Purchase Discount Rate Cap may be changed at
any time as determined by the Administrative Agent in its reasonable credit
judgment exercised in good faith.
"PURCHASE EXCESS" shall mean, as of any date of determination, the
extent to which the Capital Investment exceeds the Availability, in each case as
disclosed in the most
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recently submitted Investment Base Certificate or as otherwise determined by the
Purchaser or the Administrative Agent based on Seller Collateral information
available to any of them, including any information obtained from any audit or
from any other reports with respect to the Seller Collateral, which
determination shall be final, binding and conclusive on all parties to the
Purchase Agreement (absent manifest error).
"PURCHASE REQUEST" shall have the meaning assigned to it in Section
2.03(b) of the Purchase Agreement.
"PURCHASER" shall mean GE Capital, its successors and assigns.
"PURCHASER INTEREST" shall mean the undivided percentage ownership
interest of the Purchaser in the Transferred Receivables and the Related
Security which are purchased under the Purchase Agreement. The Purchaser
Interest of the Purchaser shall be expressed as a fraction of the total
Transferred Receivables computed as follows:
PI = C + DR/IB x DPR
where:
PI = the Purchaser Interest at the time of determination;
C = the aggregate Capital Investment at such time;
DR = the Discount Reserve plus the Availability Reserve;
IB = the Investment Base at such time; and
DPR = the Dynamic Purchase Discount Rate at such time.
The Purchaser Interest shall be calculated (or deemed to be calculated) on each
Business Day from the Closing Date through the Facility Termination Date; from
and after the Facility Termination Date, the Purchaser Interest of the Purchaser
shall be the Purchaser Interest of such Purchaser as calculated on the Business
Day immediately preceding the Facility Termination Date until the Termination
Date, at which time the Purchaser Interest shall equal zero.
"QUALIFIED PLAN" shall mean a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"RATIOS" shall mean, collectively, the Dilution Ratio, the Default
Ratio, the Delinquency Ratio, the Receivables Collection Turnover and Net Worth
Percentage.
"RECEIVABLE" shall mean, with respect to any Obligor, indebtedness
of such Obligor (whether constituting an account, a payment intangible, an
instrument or otherwise)
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arising from the sale of merchandise, goods or services by an Originator to such
Obligor, including the right to payment of any interest or finance charges and
other obligations of such Obligor with respect thereto; PROVIDED THAT the
definition of "Receivable" shall exclude the Excluded Receivables.
"RECEIVABLES COLLECTION TURNOVER" shall mean, as of any date of
determination, the amount (expressed in days) equal to:
(a) a fraction, (i) the numerator of which is equal to the average
of the Outstanding Balances of Transferred Receivables on the first day of the
three (3) Settlement Periods immediately preceding such date and (ii) the
denominator of which is equal to aggregate Collections received during such
three (3) Settlement Periods with respect to all Transferred Receivables,
multiplied by
(b) the number of days contained in such three (3) Settlement
Periods.
"RECORDS" shall mean all Contracts and other documents, books,
records and other information (including computer programs, tapes, disks, data
processing software and related property and rights) prepared and maintained by
any Originator, any Servicer, any Sub-Servicer or the Seller with respect to the
Receivables and the Obligors thereunder, the Originator Collateral and the
Seller Collateral.
"REGULATORY CHANGE" shall mean any change after the Closing Date in
any federal, state or foreign law or regulation (including Regulation D of the
Federal Reserve Board) or the adoption or making after such date of any
interpretation, directive or request under any federal, state or foreign law or
regulation (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof that, in
each case, is applicable to any Affected Party.
"REINVESTMENT PURCHASE" shall have the meaning assigned to it in
Section 2.01 of the Purchase Agreement.
"REJECTED AMOUNT" shall have the meaning assigned to it in Section
4.05 of the Sale Agreement.
"RELATED DOCUMENTS" shall mean each Lockbox Account Agreement, the
Sale Agreement (including, without limitation, the Performance Undertaking
contained therein), the Purchase Agreement, the Purchase Assignment, the Fee
Letter and all other agreements, instruments, documents and certificates
identified in the Schedule of Documents and including all other pledges, powers
of attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Person, or any employee of any Person, and delivered in connection with either
Sale Agreement, the Purchase Agreement or the transactions contemplated thereby.
Any reference in either Sale
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Agreement, the Purchase Agreement or any other Related Document to a Related
Document shall include all Appendices thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such Related
Document as the same may be in effect at any and all times such reference
becomes operative.
"RELATED SECURITY" shall mean with respect to any Receivable:
(a) all supporting obligations (as defined in Article 9 of the UCC),
security interests or Liens and property subject thereto from time to time
securing or purporting to secure the payment of such Receivable by the Person
obligated thereon;
(b) all guaranties, indemnities and warranties, insurance policies,
financing statements and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Receivable;
(c) all right, title and interest of the Parent or any Subsidiary in
and to any goods (including Returned Goods) the sale of which gave rise to such
Receivable and all right, title and interest of the Parent or any Subsidiary in
and to payments made on account of Scrapped Goods; provided that Related
Security will not include Returned Goods from and after the time, if any, when
the Seller shall have received full cash payment required to be made under the
Sale Agreement on account of the reduction of the Outstanding Balance of the
Receivable related to such Returned Good);
(d) all Collections;
(e) all Records;
(f) all of the following (collectively, the "ACCOUNT COLLATERAL")
(A) in the case of any Originator, all deposit accounts and/or lockboxes
established for collection of Receivables and all funds on deposit therein and
all certificates and instruments, if any, at any time or evidencing such
accounts, lockboxes or such funds and (B) in the case of Seller:
(1) all deposit accounts, including the Lockbox
Accounts, the Lockboxes, and all funds on deposit
therein and all certificates and instruments, if any,
from time to time representing or evidencing any deposit
account, the Lockbox Accounts, the Lockboxes or such
funds,
(2) the Collection Account, the Concentration Account
and all funds on deposit therein and all certificates
and instruments, if any, from time to time representing
or evidencing the Collection Account, the Concentration
Account or such funds,
(3) all Deposit Investments from time to time of amounts
in the Collection Account, and all certificates,
instruments and
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investment property, if any, from time to time
representing or evidencing such Deposit Investments,
(4) all notes, certificates of deposit and other
instruments in substitution for or relating to any of
the then existing Account Collateral, and
(5) all interest, dividends, cash, instruments,
investment property and other property from time to time
received, receivable or otherwise distributed with
respect to or in exchange for any and all of the then
existing Account Collateral; and
(g) all proceeds of such Receivable and with respect to any of the
foregoing.
"REPAYMENT NOTICE" shall have the meaning assigned to it in Section
2.03(c) of the Purchase Agreement.
"RESERVES" shall mean the aggregate Concentration Discount Amount
for all Obligors of Transferred Receivables plus the Credit Memo Reserve and any
other reserves as the Administrative Agent may establish from time to time in
its credit judgment exercised in good faith.
"RETIREE WELFARE PLAN" shall mean, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"RETURNED GOODS" shall mean goods, the sale of which gave rise to a
Receivable, that are returned to an Originator by an Obligor for any reason.
"REVOLVING PERIOD" shall mean the period from and including the
Closing Date through and including the day immediately preceding the Facility
Termination Date.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"SALE" shall mean with respect to a sale of Receivables under the
Sale Agreement, a sale of Receivables by an Originator to the Seller in
accordance with the terms of the Sale Agreement.
"SALE AGREEMENT" shall mean that certain Receivables Sale and
Contribution Agreement dated as of December 26, 2002, among the Originators, as
sellers, the Parent, and the Seller, as buyer thereunder.
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"SALE PRICE" shall mean, with respect to any Sale of Sold
Receivables, the price calculated by the Seller and approved from time to time
by the Administrative Agent equal to:
(a) the Outstanding Balance of such Sold Receivable, minus
(b) the expected costs to be incurred by the Seller in financing the
purchase of such Sold Receivables until the Outstanding Balance of such Sold
Receivables is paid in full, minus
(c) the portion of such Sold Receivables that are reasonably
expected by such Originator to become Defaulted Receivables, minus
(d) the portion of such Sold Receivables that are reasonably
expected by such Originator to be reduced by means other than the receipt of
Collections thereon or pursuant to clause (c) above, minus
(e) amounts expected to be paid to the Servicers with respect to the
servicing, administration and collection of such Sold Receivables;
PROVIDED THAT such calculations shall be determined based on the historical
experience of (y) such Originator, with respect to the calculations required in
each of clauses (c) and (d) above, and (z) the Seller, with respect to the
calculations required in clauses (b) and (e) above.
"SCHEDULE OF DOCUMENTS" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Sale Agreement, the Purchase
Agreement and the other Related Documents and the transactions contemplated
thereunder, substantially in the form attached as Annex Y to the Purchase
Agreement and the Sale Agreement.
"SCRAPPED GOODS" shall mean goods, the sale of which gave rise to a
Receivable, which are rejected by the applicable Obligor for any reason but
which are scrapped rather than being returned to the applicable Originator or
any of its Affiliates.
"SECOND YEAR EARLY TERMINATION FEE" shall have the meaning assigned
to it in the Fee Letter.
"SECURITIES ACT" shall mean the provisions of the Securities Act of
1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated
thereunder.
"SECURITIES EXCHANGE ACT" shall mean the provisions of the
Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any
regulations promulgated thereunder.
"SELLER" shall mean Castle SPFD, LLC, a Delaware limited liability
company, in its capacity as seller under the Purchase Agreement.
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"SELLER ACCOUNT" shall mean a deposit account maintained in the name
of the Seller at a commercial bank in the United States of America, as
designated by the Seller from time to time.
"SELLER ASSIGNED AGREEMENTS" shall have the meaning assigned to it
in Section 8.01(b) of the Purchase Agreement.
"SELLER COLLATERAL" shall have the meaning assigned to it in Section
8.01 of the Purchase Agreement.
"SELLER PARTIES" shall have the meaning assigned to it in the
recitals of the Purchase Agreement.
"SELLER SECURED OBLIGATIONS" shall mean all loans, advances, debts,
liabilities, indemnities and obligations for the performance of covenants, tasks
or duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or such amounts are liquidated or determinable)
owing by the Seller to any Affected Party under the Purchase Agreement and any
document or instrument delivered pursuant thereto, and all amendments,
extensions or renewals thereof, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising thereunder, including Capital
Investment, Daily Yield, Unused Facility Fees, amounts in reduction of Purchase
Excess, Successor Servicing Fees and Expenses, Additional Amounts and
Indemnified Amounts. This term includes all principal, interest (including all
interest that accrues after the commencement of any case or proceeding by or
against the Seller in bankruptcy, whether or not allowed in such case or
proceeding), fees, charges, expenses, attorneys' fees and any other sum
chargeable to the Seller thereunder, whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations that are paid to the extent
all or any portion of such payment is avoided or recovered directly or
indirectly from any Purchaser or the Administrative Agent or any transferee of
the Purchaser or the Administrative Agent as a preference, fraudulent transfer
or otherwise.
"SENIOR NOTE" shall mean any of the Parent's Reset Rate Senior
Secured Notes, due May 30, 2009, Reset Rate Series A Senior Secured Notes, due
March 1, 2008, Reset Rate Series B Senior Secured Notes, due March 1, 2010,
Reset Rate Series C Senior Secured Notes, due March 1, 2012, or Reset Rate
Senior Secured Notes, due April 15, 2008.
"SERVICER" shall mean each of the Master Servicer, Xxxxxx Steel
Plate Co., a Delaware corporation and Total Plastics, Inc., a Michigan
corporation, each in its capacity as a Servicer under the Purchase Agreement, or
any other Person designated as a Successor Servicer.
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"SERVICER TERMINATION NOTICE" shall mean any notice by the
Administrative Agent to any Servicer that (a) an Event of Servicer Termination
has occurred and (b) the Servicers' appointment under the Purchase Agreement has
been terminated.
"SERVICING FEE" shall mean, for any day within a Settlement Period,
the amount equal to (a)(i) the Servicing Fee Rate divided by (ii) 360,
multiplied by (b) the Transferred Receivables on such day.
"SERVICING FEE RATE" shall mean 1.00%.
"SERVICING RECORDS" shall mean all documents, books, Records and
other information (including computer programs, tapes, disks, data processing
software and related property and rights) prepared and maintained by the Master
Servicer with respect to the Transferred Receivables and the Related Security
and the Obligors thereunder.
"SERVICING SOFTWARE" shall mean the data processing software used by
the Originators, Master Servicer and/or Seller for the purpose of servicing,
monitoring, and retaining data regarding the Transferred Receivables and the
Related Security and the Obligors thereunder.
"SETTLEMENT DATE" shall mean the tenth Business Day following the
end of each Settlement Period.
"SETTLEMENT PERIOD" shall mean (a) solely for purposes of
determining the Ratios, (i) with respect to all Settlement Periods other than
the final Settlement Period, each calendar month, whether occurring before or
after the Closing Date, and (ii) with respect to the final Settlement Period,
the period ending on the Termination Date and beginning with the first day of
the calendar month in which the Termination Date occurs, and (b) for all other
purposes, (i) with respect to the initial Settlement Period, the period from and
including the Closing Date through and including the last day of the calendar
month in which the Closing Date occurs, (ii) with respect to the final
Settlement Period, the period ending on the Termination Date and beginning with
the first day of the calendar month in which the Termination Date occurs, and
(iii) with respect to all other Settlement Periods, each calendar month.
"SOLD RECEIVABLE" shall have the meaning assigned to it in Section
2.01(b) of the Sale Agreement.
"SOLVENT" shall mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person; (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its Indebtedness as they become absolute and matured; (c) such
Person does not intend to, and does not believe that it will, incur Indebtedness
or liabilities beyond such Person's ability to pay as such Indebtedness and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent
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liabilities (such as Litigation, guaranties and pension plan liabilities) at any
time shall be computed as the amount that, in light of all the facts and
circumstances existing at the time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"SUB-SERVICER" shall mean any Person with whom any Servicer enters
into a Sub-Servicing Agreement.
"SUB-SERVICING AGREEMENT" shall mean any written contract entered
into between any Servicer and any Sub-Servicer pursuant to and in accordance
with Section 7.01 of the Purchase Agreement relating to the servicing,
administration or collection of the Transferred Receivables.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation
or other entity (a) of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by such Person or (b) that is directly or indirectly controlled by such
Person within the meaning of control under Section 15 of the Securities Act.
"SUCCESSOR SERVICER" shall have the meaning assigned to it in
Section 11.02 of the Purchase Agreement.
"SUCCESSOR SERVICING FEES AND EXPENSES" shall mean the fees and
expenses payable to the Successor Servicer as agreed to by the Seller, the
Purchaser and the Administrative Agent.
"TERMINATION DATE" shall mean the date on which (a) Capital
Investment has been permanently reduced to zero, (b) all other Seller Secured
Obligations under the Purchase Agreement and the other Related Documents have
been indefeasibly repaid in full and completely discharged and (c) the Maximum
Purchase Limit has been irrevocably terminated in accordance with the provisions
of Section 2.02(b) of the Purchase Agreement.
"TERMINATION EVENT" shall have the meaning assigned to it in Section
9.01 of the Purchase Agreement.
"TITLE IV PLAN" shall mean a Pension Plan (other than a
Multiemployer Plan) that is covered by Title IV of ERISA and that any Originator
or ERISA Affiliate maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them.
"TRANSFER" shall mean any Sale or capital contribution of
Transferred Receivables and the Related Security to the Seller pursuant to the
terms of the Sale Agreement.
"TRANSFER DATE" shall have the meaning assigned to it in Section
2.01(a) of the Sale Agreement.
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"TRANSFERRED RECEIVABLE" shall mean any Sold Receivable or
Contributed Receivable; PROVIDED THAT any Receivable repurchased by an
Originator thereof pursuant to Section 4.05 of the Sale Agreement shall not be
deemed to be a Transferred Receivable from and after the date of such repurchase
unless such Receivable has subsequently been repurchased by or contributed to
the Seller.
"UCC" shall mean, with respect to any jurisdiction, the Uniform
Commercial Code as the same may, from time to time, be enacted and in effect in
such jurisdiction.
"UNAPPROVED RECEIVABLE" shall mean any Receivable (a) with respect
to which the Obligor thereunder is not an Obligor on any Transferred Receivable
and whose customer relationship with an Originator arises as a result of the
acquisition by such Originator of another Person, (b) that was originated in
accordance with standards established by another Person acquired by an
Originator, in each case, solely with respect to any such acquisitions that have
not been approved in writing by the Administrative Agent and then only for the
period prior to any such approval, or (c) with respect to which the Obligor
thereunder is not creditworthy, as determined by the Administrative Agent in its
reasonable credit judgment.
"UNDERFUNDED PLAN" shall mean any Plan that has an Underfunding.
"UNDERFUNDING" shall mean, with respect to any Plan, the excess, if
any, of (a) the present value of all benefits under the Plan (based on the
assumptions used to fund the Plan pursuant to Section 412 of the IRC) as of the
most recent valuation date over (b) the fair market value of the assets of such
Plan as of such valuation date.
"UNFUNDED LIABILITY" shall mean, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of five years following a transaction
that might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Originator or
any ERISA Affiliate as a result of such transaction.
"UNITED STATES" shall mean the United States of America (including
the District of Columbia but otherwise excluding its territories and
possessions).
"UNUSED FACILITY FEE" shall mean, as of any date of determination, a
fee equal to the product of (a) the applicable Per Annum Daily Margin for Unused
Facility Fees multiplied by (b) the excess (if any) of the Maximum Purchase
Limit over the aggregate Capital Investment.
"WELFARE PLAN" shall mean a Plan described in Section 3(1) of ERISA.
SECTION 2. Other Terms and Rules of Construction.
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(a) Accounting Terms. Rules of construction with respect to
accounting terms used in any Related Document shall be as set forth in Annex
4.04(l) to the Sale Agreement. Unless otherwise specifically provided therein,
any accounting term used in any Related Document shall have the meaning
customarily given such term in accordance with GAAP, and all financial
computations thereunder shall be computed in accordance with GAAP consistently
applied. That certain items or computations are explicitly modified by the
phrase "in accordance with GAAP" shall in no way be construed to limit the
foregoing.
(b) Other Terms. All other undefined terms contained in any of the
Related Documents shall, unless the context indicates otherwise, have the
meanings provided for by the UCC as in effect in the State of New York from time
to time to the extent the same are used or defined therein.
(c) Rules of Construction. Unless otherwise specified, references in
any Related Document or any of the Appendices thereto to a Section, subsection
or clause refer to such Section, subsection or clause as contained in such
Related Document. The words "herein," "hereof" and "hereunder" and other words
of similar import used in any Related Document refer to such Related Document as
a whole, including all annexes, exhibits and schedules, as the same may from
time to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in such Related Document or
any such annex, exhibit or schedule. Any reference to or definition of any
document, instrument or agreement shall, unless expressly noted otherwise,
include the same as amended, restated, supplemented or otherwise modified from
time to time. Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Related Documents) or, in the case of Governmental Authorities, Persons
succeeding to the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations.
(d) Rules of Construction for Determination of Ratios. The Ratios as
of the last day of the Settlement Period immediately preceding the Closing Date
shall be established by the Administrative Agent on or prior to the Closing Date
and the underlying calculations for periods immediately preceding the Closing
Date to be used in future calculations of the Ratios shall be established by the
Administrative Agent on or prior to the Closing Date in accordance with Schedule
1 attached to this Annex X. For purposes of calculating the Ratios, (i) averages
shall be computed by rounding to the third decimal place and (ii) the Settlement
Period in which the date of determination thereof occurs shall not be included
in the computation thereof and the first Settlement Period immediately preceding
such date of determination shall be deemed to be the Settlement Period
immediately preceding the Settlement Period in which such date of determination
occurs.
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SCHEDULE 1
RULES OF CONSTRUCTION FOR RATIOS
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Annex X
SCHEDULE 2
PERMITTED OUTSTANDING DEBT
(a) Four Letters of Credit issued by Bank of America, N.A. for the
account of Parent pursuant to that certain Reimbursement Agreement, dated as of
June 1, 1994 by the Parent in favor of NBD Bank, N.A., as assigned and amended
pursuant to the terms of an Assignment and Amendment of Reimbursement Agreement,
dated as of June 12, 2001, by and among the Parent, Bank One, NA (successor to
NBD Bank, N.A.) and the Bank of America, N.A., as further amended from time to
time, and Parent's obligations pursuant to such Reimbursement Agreement;
(b) Obligations of Parent under that certain Loan Agreement, dated
June 1, 0000, xxxxxxx Xxxxxxx xx Xxxxxxxx, Xxxxxxxx and A. M. Castle & Co.;
(c) Obligations of Parent under that certain Loan Agreement, dated
June 1, 0000, xxxxxxx Xxxxxxx xx Xxxxxxxx Xxxx, Xxxxxxxx and A. M. Castle & Co.;
(d) Obligations of Parent under that certain Loan Agreement, dated
June 1, 1994, between Director of Ohio Department of Development and A. M.
Castle & Co.;
(e) Obligations of Parent under that certain Loan Agreement, dated
June 1, 1994, between The City of Kansas City, Missouri and A. M. Castle & Co.;
(f) A Letter of Credit issued by Bank of America, N.A. for the
account of Parent pursuant to that certain Reimbursement Agreement, dated as of
November 1, 1994 by the Parent in favor of NBD Bank, N.A., as assigned and
amended pursuant to the terms of an Assignment and Amendment of Reimbursement
Agreement, dated as of November 1, 2001, by and among the Parent, Bank One, NA
(successor to NBD Bank, N.A.) and the Bank of America, N.A., as further amended
from time to time, and Parent's obligations pursuant to such Reimbursement
Agreement;
(g) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
the Bank of America, N.A., pursuant to which they guarantee certain payments
with respect of the Reimbursement Agreements described in items (a) and (f)
above;
(h) Obligations of Parent under that certain Loan Agreement, dated
November 1, 0000, xxxxxxx Xxxx xx Xxxxxxx, Xxxxxxx and A. M. Castle & Co.
(i) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by the Parent in favor of the Bank of America, N.A.,
pursuant to which the Parent guarantees certain payments in respect of the
Economic Development Revenue Bonds, Series 1998 (Keystone Service, Inc. Project)
issued by the City of La Porte, Indiana;
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Annex X
(j) Obligations of Keystone Service, Inc. under that certain Loan
Agreement, dated April 1, 1998, between the City of XxXxxxx, Indiana and
Keystone Service, Inc.;
(k) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by the Parent in favor of the Bank of America, N.A.,
pursuant to which the Parent guarantees certain payments in respect of the
Tax-Exempt Industrial Revenue Bonds (A. M. Castle & Co. Project Series 1996)
issued by the Mecklenburg County Industrial Facilities and Pollution Control
Financing Authority;
(l) Obligations of Parent under that certain Loan Agreement, dated
July 1, 1996, between The Mecklenburg County Industrial Facilities and Pollution
Control Financing Authority and A. M. Castle & Co.;
(m) Obligations pursuant to that certain Irrevocable Documentary
Credit No. 7273987 in the stated amount of $1,800,000 issued by the Bank of
America, N.A. for the account of Parent, as amended from time to time;
(n) Obligations pursuant to that certain Irrevocable Standby Letter
of Credit No. 7409195 in the stated amount of $5,000,000 issued by the Bank of
America, N.A. for the account of Parent pursuant to that certain Application and
Agreement for Standby Letter of Credit, dated March 15, 2002, as amended from
time to time;
(o) Obligations pursuant to that certain Amended and Restated
Limited Guaranty, dated as of March 8, 2002, by the Parent in favor of the Bank
of America, N.A., as agent on behalf of certain Lenders from time to time party
to the Xxxxxx Credit Agreement (as defined below), pursuant to which the Parent
guarantees certain Obligations (as defined in the Xxxxxx Credit Agreement) under
that certain Amended and Restated Credit Agreement, dated as of March 8, 2002
(as the same may be amended, restated, supplemented or otherwise modified and in
effect from time to time, the "Xxxxxx Credit Agreement"), among Bank of America,
N.A., Lenders and Xxxxxx Steel Company, LLC;
(p) Senior Notes issued by the Parent pursuant to that certain Note
Agreement, dated as of March 1, 1998, among the Parent, Allstate Life Insurance
Company, The Northwestern Mutual Life Insurance Company, Massachusetts Mutual
Life Insurance Company, Mutual of Omaha Insurance Company and United of Omaha
Life Insurance Company, as amended by the First Amendment and Waiver to Note
Agreement, dated as of December 1, 1998, the Second Amendment to Note Agreement
dated November 22, 2002 and the Third Amendment to Note Agreement dated as of
December 26, 2002;
(q) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
Allstate Insurance Company, The Northwestern Life Insurance Company,
Massachusetts Mutual Life Insurance Company, Mutual of Omaha Insurance Company
and United of Omaha Life Insurance Company and any future noteholders pursuant
to which they guarantee certain payments in respect of the Note Agreement
described in item (p) above;
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(r) Senior Notes issued by the Parent pursuant to that certain Note
Agreement dated as of April 1, 1996 between the Parent and Nationwide Life
Insurance Company, as amended by the First Amendment and Waiver to Note
Agreement, dated as of December 1, 1998, the Second Amendment to Note Agreement
dated November 22, 2002 and the Third Amendment to Note Agreement dated as of
December 26, 2002;
(s) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
Nationwide Life Insurance Company and any future noteholders pursuant to which
they guarantee certain payments in respect of the Note Agreement described in
item (r) above;
(t) Senior Notes issued by the Parent pursuant to that certain Note
Agreement dated as of May 15, 1997 among the Parent, Massachusetts Mutual Life
Insurance Company and United of Omaha Life Insurance Company, as amended by the
First Amendment and Waiver to Note Agreement, dated as of December 1, 1998, the
Second Amendment to Note Agreement dated November 22, 2002 and the Third
Amendment to Note Agreement dated as of December 26, 2002;
(u) Obligations pursuant to that certain Guarantee Agreement, dated
as of November 22, 2002, by Parent and certain of its subsidiaries in favor of
Massachusetts Mutual Life Insurance Company and United of Omaha Life Insurance
Company and any future noteholders pursuant to which they guarantee certain
payments in respect of the Note Agreement described in item (t) above;
(v) Obligations pursuant to that certain Trade Acceptance Purchase
Agreement dated as of August 13, 2001 between the Parent and The Northern Trust
Company, as amended by the First Amendment thereto dated as of April 29, 2002,
the Second Amendment thereto dated as of June 30, 2002, the Third Amendment
thereto dated as of November 22, 2002 and the Fourth Amendment thereto dated
December 26, 2002, in an aggregate amount not in excess of $8,000,000;
(w) Credit facilities in the aggregate amount not to exceed CDN
$30,000,000 pursuant to that certain Letter Agreement, dated November 20, 2002,
between The Bank of Nova Scotia and Parent and the Terms and Conditions attached
thereto; and
(x) Obligations of A. M. Castle & Co. (Canada), Inc. to the Manitoba
Development Corporation pursuant to that certain commitment letter dated
September 15, 1998 and the related Demand Debenture dated January 7, 1999.
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SCHEDULE 3
EXTENDED TERM RECEIVABLE OBLIGORS
B & G Manufacturing Co.
X. Xxxx Machining Inc.
C E S Machine Products Inc.
Conn Tool Mfg. Co. Inc.
Crown Equipment Corp.
Dri-Honing Corp.
Dynaquip Controls Corp.
E B C Industries
Xxxxxxxx Metals Inc.
Forest Engineering Inc.
Hall Industries Inc.
Xxxxxxxxx Boiler & Eng. Co.
Hanover Gear Manufacturing Co.
Harbor Steel & Supply Corp.
Xxxxxx'x Machine Works Inc.
Holgate Products Inc.
Hyspan Prec. Products Inc.
J P Products Inc.
Lake Engineering Inc.
Loudon Industries Inc.
XxXxxxxxxx Forge Co. Inc.
Metal Mart LLC
Xxxxx Machine & Tool Co. Inc.
Niles Machine & Tool Works Inc.
Northland Screw Prdts. Inc.
P B M Incorporated
Pace Engineering Inc.
Paughco Inc.
Xxxxxxx Corp.
Senior Aerospace - Jet Products
Southern Manufacturing Tech.
Standard - Hall Group
Xxxxxxx Xxxx. & Tool Corp.
Xxxxxxx Machine Co.
Texas Pneumatic Tools Inc.
TOG Machining Co. Inc.
Trinity Forge Inc.
Western Cutterheads Inc.
A.M. Castle & Co. et al. and
Castle SPFD, LLC
Annex X
Xxxxxxxx & Sons Mfg. Co. Inc.
Zak Inc.
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Annex X
43
SCHEDULE CC
FORM OF COMPLIANCE CERTIFICATE
[To be Attached]
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Annex X
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