EXHIBIT 10.2
PURCHASE AND SALE AGREEMENT
Dated as of July 31, 2001
between
VARIOUS ENTITIES LISTED ON SCHEDULE I,
as the Originators
and
ATRIUM FUNDING CORPORATION
TABLE OF CONTENTS
Page
ARTICLE IAGREEMENT TO PURCHASE AND SELL
SECTION 1.1......................Agreement To Purchase and Sell 1
SECTION 1.2.................................Timing of Purchases 2
SECTION 1.3.........................Consideration for Purchases 3
SECTION 1.4..................Purchase and Sale Termination Date 3
SECTION 1.5............................Intention of the Parties 3
ARTICLE IIPURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1.................................... Purchase Report 3
SECTION 2.2.......................Calculation of Purchase Price 4
ARTICLE IIIPAYMENT OF PURCHASE PRICE
SECTION 3.1Contribution of Receivables and Initial Purchase
Price Payment 5
SECTION 3.2..................Subsequent Purchase Price Payments 5
SECTION 3.3..Settlement as to Specific Receivables and Dilution 6
SECTION 3.4.........................Reconveyance of Receivables 7
ARTICLE IVCONDITIONS OF PURCHASES
SECTION 4.1............Conditions Precedent to Initial Purchase 7
SECTION 4.2..Certification as to Representations and Warranties 8
SECTION 4.3..............................Additional Originators 8
ARTICLE VREPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
SECTION 5.1......................Organization and Good Standing 9
SECTION 5.2...................................Due Qualification 9
SECTION 5.3..............Power and Authority; Due Authorization 9
SECTION 5.4.....................Valid Sale; Binding Obligations 9
SECTION 5.5........................................No Violation 9
SECTION 5.6.........................................Proceedings 10
SECTION 5.7.....................................Bulk Sales Acts 10
SECTION 5.8................................Government Approvals 10
SECTION 5.9.................................Financial Condition 10
SECTION 5.10.Licenses, Contingent Liabilities, and Labor
Controversies 11
SECTION 5.11.................................Margin Regulations 11
SECTION 5.12...................................Quality of Title 11
SECTION 5.13............................Accuracy of Information 11
SECTION 5.14............................................Offices 12
SECTION 5.15........................................Trade Names 12
SECTION 5.16..............................................Taxes 12
SECTION 5.17....................Compliance with Applicable Laws 12
SECTION 5.18................Reliance on Separate Legal Identity 12
SECTION 5.19.................................Investment Company 12
ARTICLE VICOVENANTS OF THE ORIGINATORS
SECTION 6.1...............................Affirmative Covenants 13
SECTION 6.2..............................Reporting Requirements 14
SECTION 6.3..................................Negative Covenants 15
SECTION 6.4...........................Substantive Consolidation 16
ARTICLE VIIADDITIONAL RIGHTS AND OBLIGATIONSIN RESPECT OF
RECEIVABLES
SECTION 7.1...............................Rights of the Company 18
SECTION 7.2.................Responsibilities of the Originators 18
SECTION 7.3.................Further Action Evidencing Purchases 19
SECTION 7.4..........................Application of Collections 20
ARTICLE VIIIPURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1................Purchase and Sale Termination Events 20
SECTION 8.2............................................Remedies 21
ARTICLE IXINDEMNIFICATION
SECTION 9.1......................Indemnities by the Originators 21
ARTICLE XMISCELLANEOUS
SECTION 10.1...................................Amendments, etc. 23
SECTION 10.2......................................Notices, etc. 23
SECTION 10.3.....................No Waiver; Cumulative Remedies 24
SECTION 10.4......................Binding Effect; Assignability 24
SECTION 10.5......................................Governing Law 24
SECTION 10.6..........................Costs, Expenses and Taxes 24
SECTION 10.7.........................SUBMISSION TO JURISDICTION 24
SECTION 10.8...............................WAIVER OF JURY TRIAL 25
SECTION 10.9.Captions and Cross References; Incorporation by
Reference 25
SECTION 10.10.........................Execution in Counterparts 25
SECTION 10.11......................Acknowledgment and Agreement 25
SECTION 10.12.....................................No Proceeding 26
SECTION 10.13..................................Limited Recourse 26
SCHEDULES
Schedule I List of Originators
Schedule 5.6 Proceedings
Schedule 5.14A Chief Executive Office of Each Originator
Schedule 5.14B Location of Books and Records of Originators
Schedule 5.15 Trade Names
EXHIBITS
Exhibit A Form of Purchase Report
Exhibit B Form of Company Note
Exhibit C Form of Joinder Agreement
THIS
PURCHASE AND SALE AGREEMENT (this "AGREEMENT"), dated as of July
31, 2001, is entered into between VARIOUS ENTITIES LISTED ON SCHEDULE I (each,
an "ORIGINATOR"; and collectively, "ORIGINATORS"), and ATRIUM FUNDING CORP., a
Delaware corporation (the "COMPANY").
DEFINITIONS
Unless otherwise indicated herein, capitalized terms used and not
otherwise defined in this Agreement are defined in EXHIBIT I to the Receivables
Purchase Agreement of even date herewith (as the same may be amended,
supplemented or otherwise modified from time to time, the "RECEIVABLES PURCHASE
AGREEMENT"), among the Company, as Seller, Atrium Companies, Inc. (individually,
"ATRIUM"), as initial Servicer, Fairway Finance Corporation, as Purchaser, and
BMO Xxxxxxx Xxxxx Corp., as Agent. All references herein to months are to
calendar months unless otherwise expressly indicated.
BACKGROUND:
1. The Company is a special purpose corporation, all of the issued and
outstanding shares of which are owned by Atrium;
2. The Originators generate Receivables in the ordinary course of their
businesses;
3. The Originators, in order to finance their respective businesses, wish
to sell Receivables to the Company, and the Company is willing to purchase
Receivables from the Originators, on the terms and subject to the conditions set
forth herein;
4. The Originators and the Company intend this transaction to be a true
sale of Receivables by each Originator to the Company, providing the Company
with the full benefits of ownership of the Receivables, and the Originators and
the Company do not intend the transactions hereunder to be characterized as a
loan from the Company to any Originator.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 AGREEMENT TO PURCHASE AND SELL. On the terms and subject to
the conditions set forth in this Agreement, each Originator, severally and for
itself, agrees to sell to the Company, and the Company agrees to purchase from
such Originator, from time to time on or after the Closing Date, but before the
Purchase and Sale Termination Date (as defined in SECTION 1.4 hereof), all of
such Originator's right, title and interest in and to:
(1) each Receivable of such Originator that existed and was owing to
such Originator at the closing of such Originator's business on the date of the
initial Payment under the Receivables Purchase Agreement (the "CUT-OFF DATE")
other than Receivables contributed pursuant to SECTION 3.1 (the "CONTRIBUTED
RECEIVABLES");
(2) each Receivable generated by such Originator from and including
the Cut-off Date to and including the Purchase and Sale Termination Date;
(3) all rights to, but not the obligations of, such Originator under
all Related Security;
(4) all monies due or to become due to such Originator with respect
to any of the foregoing;
(5) all books and records of such Originator related to any of the
foregoing, and all Transaction Documents to which such Originator is a party,
together with all rights (but not obligations) of such Originator thereunder;
and
(6) all collections and other proceeds and products of any of the
foregoing (as defined in the UCC) that are or were received by such Originator
on or after the Cut-off Date, including, without limitation, all funds which
either are received by such Originator, the Company or the Servicer from or on
behalf of the Obligors in payment of any amounts owed (including, without
limitation, invoice price, finance charges, interest and all other charges) in
respect of Receivables or are applied to such amounts owed by the Obligors
(including, without limitation, any insurance payments that such Originator, the
Company or the Servicer applies in the ordinary course of its business to
amounts owed in respect of any Receivable, and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligors
in respect of Receivables or any other parties directly or indirectly liable for
payment of such Receivables).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to, and in reliance upon, the representations, warranties
and covenants of the Originators set forth in this Agreement and each other
Transaction Document. No obligation or liability to any Obligor on any
Receivable is intended to be assumed by the Company hereunder, and any such
assumption is expressly disclaimed. The Company's foregoing commitment to
purchase Receivables and the proceeds and rights described in CLAUSES (c)
through (f) (collectively, the "RELATED RIGHTS") is herein called the "PURCHASE
FACILITY."
SECTION 1.2 TIMING OF PURCHASES.
(1) CLOSING DATE PURCHASES. Each Originator's entire right, title
and interest in (i) each Receivable that existed and was owing to such
Originator at the Cut-off Date (other than Contributed Receivables), (ii) all
Receivables created by such Originator from and including the Cut-off Date, to
and including the Closing Date (other than Contributed Receivables), and (iii)
all Related Rights with respect thereto automatically shall be deemed to have
been sold by such Originator to the Company on the Closing Date.
(2) SUBSEQUENT PURCHASES. After the Closing Date, until the Purchase
and Sale Termination Date, each Receivable and the Related Rights generated by
each Originator shall be deemed to have been sold by such Originator to the
Company immediately (and without further action) upon the creation of such
Receivable.
SECTION 1.3 CONSIDERATION FOR PURCHASES. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make Purchase
Price payments to the Originators in accordance with ARTICLE III and to reflect
all contributions in accordance with SECTION 3.1.
SECTION 1.4 PURCHASE AND SALE TERMINATION DATE. The "PURCHASE AND SALE
TERMINATION DATE" shall be the earliest to occur of (a) the date the Purchase
Facility is terminated pursuant to SECTION 8.2 and (b) the Payment Date
immediately following the day on which the Originators shall have given written
notice to the Company at or prior to 10:00 a.m. (
New York City time) that the
Originators desire to terminate this Agreement.
SECTION 1.5 INTENTION OF THE PARTIES. It is the express intent of the
parties hereto that the transfers of the Receivables and Related Rights by the
Originators to the Company, as contemplated by this Agreement be, shall be
treated as sales or contributions, as applicable (without recourse except as
provided herein), of all of the Originators' right, title and interest in, to
and under the Receivables or the Contributed Receivables, as applicable, and
Related Rights, and not as loans secured by the Receivables and Related Rights.
If, however, notwithstanding the intent of the parties, such transactions are
ever finally determined by a court of competent jurisdiction to be loans, each
Originator shall be deemed to have granted and hereby grants to the Company a
first priority security interest in all of such Originator's right, title and
interest in and to: (i) the Receivables and the Related Rights now existing and
hereafter created by such Originator, (ii) the related Company Note, (iii) all
monies due or to become due and all amounts received with respect thereto, (iv)
all books and records of such Originator related to any of the foregoing, and
all Transaction Documents to which such Originator is a party, together with all
rights (but not obligations) of such Originator thereunder, and (v) all proceeds
and products of any of the foregoing to secure all of such Originator's
obligations hereunder.
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
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SECTION 1.6 PURCHASE REPORT. On the Closing Date and on the 10th Business
Day after the last day of each calendar month (each, a "SETTLEMENT DATE"), the
Servicer shall deliver to the Company and each Originator a report in
substantially the form of EXHIBIT A (each such report being herein called a
"PURCHASE REPORT") setting forth, among other things:
(1) Receivables purchased by the Company from each Originator on the
Closing Date (in the case of the Purchase Report to be delivered on the Closing
Date);
(2) Receivables purchased by the Company from each Originator during
the period commencing on the Settlement Date immediately preceding such
Settlement Date to (but not including) such Settlement Date (in the case of each
subsequent Purchase Report); and
(3) the calculations of reductions of the Purchase Price for any
Receivables as provided in SECTION 3.3 (a) and (b).
SECTION 1.7 CALCULATION OF PURCHASE PRICE. The "PURCHASE PRICE" to be paid
to each Originator for the Receivables that are purchased hereunder from such
Originator shall be determined in accordance with the following formula:
PP = OB x FMVD
where:
PP = Purchase Price for each Receivable as calculated on the
relevant Payment Date.
OB = The Outstanding Balance of such Receivable on the
relevant Payment Date.
FMVD = Fair Market Value Discount, as measured on such Payment
Date, which is equal to the quotient (expressed as
percentage) of (a) one divided by (b) the sum of (i)
one, PLUS (ii) the product of (A) the Prime Rate on
such Payment Date, and (B) a fraction, the numerator of
which is the Days' Sales Outstanding (calculated as of
the last Business Day of the calendar month next
preceding such Payment Date) and the denominator of
which is 365.
"PAYMENT DATE" means (i) the Closing Date and (ii) each Business Day
thereafter that Originators are open for business.
"PRIME RATE" means a PER ANNUM rate equal to the "PRIME RATE" as
published in the "MONEY RATES" section of The Wall Street Journal or if such
information ceases to be published
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in The Wall Street Journal, such other publication as determined by
the Agent in its sole discretion.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 1.8 CONTRIBUTION OF RECEIVABLES AND INITIAL PURCHASE PRICE PAYMENT.
(1) On the Closing Date, Atrium shall, and hereby does, contribute
to the capital of the Company Receivables and Related Rights consisting of each
Receivable of Atrium that existed and was owing to Atrium on the Closing Date
beginning with the oldest of such Receivables and continuing chronologically
thereafter such that the aggregate Outstanding Balance of all such Contributed
Receivables shall be equal to $15,000,000.
(2) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to pay to each Originator the Purchase Price for
the purchase to be made from such Originator on the Closing Date partially in
cash (in an amount to be agreed between the Company and such Originator and set
forth in the initial Purchase Report) and partially by issuing a promissory note
in the form of EXHIBIT B to such Originator with an initial principal balance
equal to the remaining Purchase Price (each such promissory note, as it may be
amended, supplemented, endorsed or otherwise modified from time to time,
together with all promissory notes issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, each
being herein called a "COMPANY NOTE").
SECTION 1.9 SUBSEQUENT PURCHASE PRICE PAYMENTS. On each Payment Date
subsequent to the Closing Date, on the terms and subject to the conditions set
forth in this Agreement, the Company shall pay to each Originator the Purchase
Price for the Receivables generated by such Originator on such Payment Date:
(1) FIRST, in cash to the extent the Company has cash available
therefor and such payment is not prohibited under the Receivables Purchase
Agreement; and
(2) SECOND, to the extent any portion of the Purchase Price remains
unpaid, the principal amount outstanding under the applicable Company Note shall
be automatically increased by an amount equal to such remaining Purchase Price.
The Servicer shall make all appropriate record keeping entries with respect to
each of the Company Notes to reflect the foregoing payments and reductions made
pursuant to SECTION 3.3, and the Servicer's books and records shall constitute
rebuttable presumptive evidence of the principal amount of, and accrued interest
on, each of the Company Notes at any time. Furthermore, the Servicer shall hold
the Company Notes for the benefit of the applicable Originator. Each Originator
hereby irrevocably authorizes the Servicer to xxxx the Company
5
Notes "CANCELED" and to return such Company Notes to the Company upon the final
payment thereof after the occurrence of the Purchase and Sale Termination Date.
SECTION 1.10 SETTLEMENT AS TO SPECIFIC RECEIVABLES AND DILUTION.
(1) If, on the day of purchase or contribution of any Receivable
from an Originator hereunder, any of the representations or warranties set forth
in SECTIONS 5.4 and 5.12 are not true with respect to such Receivable or as a
result of any action or inaction of such Originator, on any subsequent day, any
of such representations or warranties set forth in SECTIONS 5.4 and 5.12 is no
longer true with respect to such Receivable, then the Purchase Price (or in the
case of a Contributed Receivable the Outstanding Balance of such Receivable (the
"CONTRIBUTED VALUE")), with respect to such Receivable shall be reduced by an
amount equal to the Outstanding Balance of such Receivable and shall be
accounted to such Originator as provided in CLAUSE (c) below; PROVIDED, that if
the Company thereafter receives payment on account of Collections due with
respect to such Receivable, the Company promptly shall deliver such funds to
such Originator.
(2) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed hereunder is
reduced or adjusted as a result of any defective, rejected, returned goods or
services, or any discount or other adjustment made by any Originator, the
Company or the Servicer or any setoff or dispute between any Originator or the
Servicer and an Obligor as indicated on the books of the Company (or, for
periods prior to the Closing Date, the books of Originator), then the Purchase
Price or Contributed Value, as the case may be, with respect to such Receivable
shall be reduced by the amount of such net reduction and shall be accounted to
Originator as provided in CLAUSE (c) below.
(3) Any reduction in the Purchase Price or Contributed Value of any
Receivable pursuant to CLAUSE (a) or (b) above shall be applied as a credit for
the account of the Company against the Purchase Price of Receivables
subsequently purchased by the Company from such Originator hereunder; PROVIDED,
HOWEVER if there have been no purchases of Receivables from such Originator (or
insufficiently large purchases of Receivables) to create a Purchase Price
sufficient to so apply such credit against, the amount of such credit:
(i) to the extent of any outstanding principal balance under the
Company Note payable to such Originator, shall be deemed to be a payment
under, and shall be deducted from the principal amount outstanding under,
the Company Note payable to such Originator; or
(ii) after making any deduction pursuant to CLAUSE (i) above, shall
be paid in cash to the Company by such Originator in the manner and for
application as described in the following PROVISO;
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PROVIDED, FURTHER, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by such Originator to the Company by deposit in immediately
available funds into the relevant Lock-Box Account for application by the
Servicer to the same extent as if Collections of the applicable Receivable in
such amount had actually been received on such date.
SECTION 1.11 RECONVEYANCE OF RECEIVABLES. In the event that an Originator
has paid to the Company the full Outstanding Balance of any Receivable pursuant
to SECTION 3.3, the Company shall reconvey such Receivable to such Originator,
without representation or warranty, but free and clear of all liens, security
interests, charges, and encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 1.12 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
purchase hereunder is subject to the condition precedent that the Company shall
have received, on or before the Closing Date, the following, each (unless
otherwise indicated) dated the Closing Date, and each in form and substance
satisfactory to the Company:
(1) A copy of the resolutions of the Board of Directors of each
Originator approving the Transaction Documents to be delivered by it and the
transactions contemplated hereby and thereby, certified by the Secretary or
Assistant Secretary of such Originator;
(2) Good standing certificates for each Originator issued as of a
recent date acceptable to the Company by the Secretary of State of the
jurisdiction of such Originator's organization and each jurisdiction where such
Originator is qualified to transact business;
(3) A certificate of the Secretary or Assistant Secretary of each
Originator certifying the names and true signatures of the officers authorized
on such Person's behalf to sign the Transaction Documents to be delivered by it
(on which certificate the Servicer and the Company may conclusively rely until
such time as the Servicer and the Company shall receive from such Person a
revised certificate meeting the requirements of this CLAUSE (c));
(4) The certificate or articles of incorporation or other
organizational document of each Originator duly certified by the Secretary of
State of the jurisdiction of such Originator's organization as of a recent date,
together with a copy of the by-laws of such Originator, each duly certified by
the Secretary or an Assistant Secretary of such Originator;
(5) Originals of the proper financing statements (Form UCC-1) that
have been duly executed and name each Originator as the debtor/seller and the
Company as the secured
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party/purchaser (and the Purchaser, as assignee of the Company) of the
Receivables generated by such Originator as may be necessary or, in the
Company's or the Agent's opinion, desirable under the UCC of all appropriate
jurisdictions to perfect the Company's ownership interest in all Receivables
and such other rights, accounts, instruments and moneys (including, without
limitation, Related Security) in which an ownership or security interest
may be assigned to it hereunder;
(6) A written search report from a Person satisfactory to the
Company listing all effective financing statements that name the Originators as
debtors or sellers and that are filed in the jurisdictions in which filings were
made pursuant to the foregoing CLAUSE (e), together with copies of such
financing statements (none of which, except for those described in the foregoing
CLAUSE (e), shall cover any Receivable or any Related Rights which are to be
sold to the Company hereunder), and tax and judgment lien search reports from a
Person satisfactory to the Company showing no evidence of such liens filed
against any Originator;
(7) A favorable opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP,
counsel to the Originators, in form and substance satisfactory to the Company
and the Agent; and
(8) A Company Note in favor of each Originator, duly executed by the
Company.
SECTION 1.13 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. Each
Originator, by accepting the Purchase Price related to each purchase of
Receivables generated by such Originator, shall be deemed to have certified that
the representations and warranties contained in ARTICLE V are true and correct
on and as of such day, with the same effect as though made on and as of such
day.
SECTION 1.14 ADDITIONAL ORIGINATORS. Additional Persons may be added
as Originators hereunder, with the consent of the Company and the Agent;
PROVIDED that following conditions are satisfied on or before the date of such
addition:
(1) The Servicer shall have given the Agent and the Company at least
thirty days prior written notice of such proposed addition and the identity of
the proposed additional Originator and shall have provided such other
information with respect to such proposed additional Originator as the Agent may
reasonably request;
(2) such proposed additional Originator has executed and delivered
to the Company and the Agent an agreement substantially in the form attached
hereto as EXHIBIT C (a "JOINDER AGREEMENT");
(3) such proposed additional Originator has delivered to the Company
and the Agent each of the documents with respect to such Originator described in
SECTIONS 4.1 and 4.2;
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(4) unless the receivables intended to be sold by such additional
Originator to the Company hereunder are Receivables, the related underlying
goods of which, are and will continue to be generated by an already existing
Originator, the Agent shall have received a written statement from each of
Xxxxx'x and S&P confirming that the addition of such Originator will not result
in a downgrade or withdrawal of the current ratings of the Notes; and
(5) no Purchase and Sale Termination Date shall have occurred and
be continuing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, each Originator hereby makes, with respect to itself, the
representations and warranties set forth in this ARTICLE V.
SECTION 1.15 ORGANIZATION AND GOOD STANDING. Such Originator has been duly
incorporated or formed and is validly existing as a corporation, limited
liability company or partnership, as applicable, in good standing under the laws
of its jurisdiction of incorporation or formation, with power and authority to
own its properties and to conduct its business as such properties are now owned
and such business is now conducted.
SECTION 1.16 DUE QUALIFICATION. Such Originator is located and is
qualified to transact business as a foreign corporation, limited liability
company or partnership, as applicable, in good standing in all jurisdictions in
which the failure to be so licensed or qualified would be reasonably likely to
have a Material Adverse Effect.
SECTION 1.17 POWER AND AUTHORITY; DUE AUTHORIZATION. Such Originator has
(a) all necessary corporate power, authority and legal right (i) to execute and
deliver, and perform its obligations under, each Transaction Document to which
it is a party and (ii) to generate, own, sell, contribute and assign Receivables
on the terms and subject to the conditions herein and therein provided, and (b)
duly authorized such execution and delivery and such sale, contribution and
assignment and the performance of such obligations by all necessary corporate
action on the part of such Originator. This Agreement and the other Transaction
Documents to which such Originator is a party have been duly executed and
delivered by such Originator.
SECTION 1.18 VALID SALE; BINDING OBLIGATIONS. Each sale or contribution,
as the case may be, of Receivables made by such Originator pursuant to this
Agreement shall constitute a valid sale or contribution, as the case may be,
transfer and assignment of Receivables to the Company, enforceable against
creditors of, and purchasers from, such Originator, and this Agreement
constitutes, and each other Transaction Document to be signed by such
Originator,
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when duly executed and delivered, will constitute, a legal, valid,
and binding obligation of such Originator, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
SECTION 1.19 NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents, and the
fulfillment of the terms hereof or thereof, will not (a) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under (i) such Originator's
certificate or articles of incorporation or bylaws, limited partnership
agreements, articles of organization or limited liability company agreements, as
applicable or (ii) any indenture, loan agreement, mortgage, deed of trust, or
other agreement or instrument to which it is a party or by which it is bound,
unless in each case, such event or occurrence could not reasonably be expected
to have a Material Adverse Effect, (b) result in the creation or imposition of
any Adverse Claim upon any of its properties (other than those created in favor
of the Company and/or the Purchaser pursuant to the Transaction Documents), or
(c) violate any law or any order, rule or regulation applicable to it of any
court or of any state or foreign regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over it or any of its
properties, unless such violation could not reasonably be expected to have a
Material Adverse Effect.
SECTION 1.20 PROCEEDINGS. There is no action, suit, proceeding or
investigation pending before any court, regulatory body, arbitrator,
administrative agency, or other tribunal or governmental instrumentality (a)
asserting the invalidity of any Transaction Document, (b) seeking to prevent
such Originator from transferring any Receivable hereunder (or in the case such
transfer does not constitute a sale under any applicable law, from granting or
maintaining the security interest in any Receivable) to the Purchaser or the
consummation of any of the transactions contemplated by any Transaction Document
or (c) except as set forth in SCHEDULE 5.6, seeking any determination or ruling
that is reasonably likely to have a Material Adverse Effect.
SECTION 1.21 BULK SALES ACTS. No transaction contemplated hereby requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.
SECTION 1.22 GOVERNMENT APPROVALS. Except for the filing of the UCC
financing statements referred to in ARTICLE IV, all of which, at the time
required in ARTICLE IV, shall have been duly made and shall be in full force and
effect, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
Originator's due execution, delivery and performance of any Transaction Document
to which it is a party, other than those previously obtained and which are in
full force and effect.
SECTION 1.23 FINANCIAL CONDITION.
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(1) The consolidated balance sheets of Atrium and its consolidated
subsidiaries as of December 31, 2000 and the related statements of income and
shareholders' equity of Atrium and its consolidated subsidiaries for the fiscal
year then ended certified by Atrium's independent accountants, copies of which
have been furnished to the Company, present fairly in all material respects the
consolidated financial position of Atrium and its consolidated subsidiaries for
the period ended on such date, all in accordance with GAAP consistently applied;
and since such date no event has occurred that has had, or could reasonably be
expected to have, a Material Adverse Effect.
(2) On the date hereof, and on the date of each purchase hereunder
(both before and after giving effect to such purchase), such Originator shall be
Solvent.
SECTION 1.24 LICENSES, CONTINGENT LIABILITIES, AND LABOR CONTROVERSIES.
(1) Such Originator has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its properties or to the conduct of its business, which violation or failure to
obtain would be reasonably likely to have a Material Adverse Effect.
(2) There are no labor controversies pending against such Originator
that have had (or are reasonably likely to have) a Material Adverse Effect.
SECTION 1.25 MARGIN REGULATIONS. No use of any funds acquired by any
Originator under this Agreement will conflict with or contravene any of
Regulations, T, U and X promulgated by the Federal Reserve Board from time to
time.
SECTION 1.26 QUALITY OF TITLE.
(1) Each Receivable (together with the Related Rights) which is to
be sold or contributed to the Company hereunder is or shall be owned by such
Originator, free and clear of any Adverse Claim. Whenever the Company makes a
purchase, or accepts a contribution, hereunder, it shall have acquired a valid
and perfected ownership interest (free and clear of any Adverse Claim) in all
Receivables generated by such Originator and all Collections related thereto,
and in such Originator's entire right, title and interest in and to the other
Related Rights with respect thereto.
(2) No effective financing statement or other instrument similar in
effect covering any Receivable generated by such Originator or any right related
to any such Receivable is on file in any recording office except such as may be
filed in favor of the Company or the Originators, as the case may be, in
accordance with this Agreement or in favor of the
11
Purchaser in accordance with the Receivables Purchase Agreement or such as
relate to security interests that will be terminated or released on or prior to
the Closing Date.
(3) Each Receivable purchased or contributed hereunder is on the
date of purchase or contribution an Eligible Receivable.
SECTION 1.27 ACCURACY OF INFORMATION. No factual written information
furnished or to be furnished in writing by such Originator, to the Company, the
Purchaser or the Agent for purposes of or in connection with any Transaction
Document or any transaction contemplated hereby or thereby is, and no other such
factual written information hereafter furnished (and prepared) by such
Originator, to the Company, the Purchaser, or the Agent pursuant to or in
connection with any Transaction Document, will be inaccurate in any material
respect as of the date it was furnished or (except as otherwise disclosed to the
Company, the Purchaser and the Agent at or prior to such time) as of the date as
of which such information is dated or certified.
SECTION 1.28 OFFICES. Such Originator's principal place of business and
chief executive office is located at the address set forth in SCHEDULE 5.14A,
and the offices where such Originator keeps all its books, records and documents
evidencing its Receivables, the related Contracts and all other agreements
related to such Receivables are located at the addresses specified in SCHEDULE
5.14B (or at such other locations, notified to the Servicer and the Agent in
accordance with SECTION 6.1(f), in jurisdictions where all action required by
SECTION 7.3 has been taken and completed).
SECTION 1.29 TRADE NAMES. Such Originator does not use any trade name
other than its actual corporate name and the trade names set forth in SCHEDULE
5.15 and except for trade names first used after the Closing Date and set forth
in a notice delivered to the Servicer and the Agent. From and after the date
that fell five (5) years before the date hereof, except as set forth in SCHEDULE
5.15, such Originator has not been known by any legal name other than its
corporate name as of the date hereof, nor has such Originator been the subject
of any merger or other corporate reorganization.
SECTION 1.30 TAXES. Such Originator has filed or caused to be filed all
U.S. federal income tax returns and all other material returns, statements,
forms and reports for taxes, domestic or foreign, required to be filed by it and
has paid all taxes payable by it which have become due or any assessments made
against it or any of its property and all other material taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority
(other than those which, in the aggregate, are not substantial in amount or
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
generally accepted accounting principles have been provided on the books of such
Originator).
12
SECTION 1.31 COMPLIANCE WITH APPLICABLE LAWS. Such Originator is in
compliance with the requirements of all applicable laws, rules, regulations and
orders of all governmental authorities, a breach of any of which, individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect.
SECTION 1.32 RELIANCE ON SEPARATE LEGAL IDENTITY. Such Originator
acknowledges that the Purchaser and the Agent are entering into the Transaction
Documents to which they are parties in reliance upon the Company's identity as a
legal entity separate from such Originator.
SECTION 1.33 INVESTMENT COMPANY. Such Originator is not an "investment
company," or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940 as amended. In addition, such
Originator is not a "holding company," a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 1.34 On and after the Closing Date, such Originator will not
enter into any long term contracts with any Obligors (other than multi-family
contracts) unless prior written notice thereof is given to each Rating Agency
and the Agent.
ARTICLE VI
COVENANTS OF THE ORIGINATORS
SECTION 1.35 AFFIRMATIVE COVENANTS. From the date hereof until the first
day following the Purchase and Sale Termination Date, each Originator will,
unless the Agent and the Company shall otherwise consent in writing:
(1) COMPLIANCE WITH LAWS, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the
Receivables generated by it and the Contracts and other agreements related
thereto except where the failure to so comply would not materially and adversely
affect the collectibility of such Receivables or the rights of the Company
hereunder.
(2) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
existence as a corporation, partnership or limited liability company, as
applicable, and all rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a foreign
corporation, partnership or limited liability company, as applicable, in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would be reasonably likely to have a
Material Adverse Effect.
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(3) RECEIVABLES REVIEWS. (i) At any time and from time to time (but,
so long as no Termination Event or Unmatured Termination Event has occurred and
is continuing, not more than twice during any calendar year), during regular
business hours, at such Originator's expense, and upon reasonable prior notice,
permit the Company or the Agent, or their respective agents or representatives,
(A) to examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in
possession or under the control of each Originator relating to Receivables,
including, without limitation, the related Contracts and purchase orders and
other agreements related thereto, and (B) to visit the offices and properties of
such Originator for the purpose of examining such materials described in clause
(i)(A) next above and to discuss matters relating to Receivables originated by
it or the performance hereunder with any of the officers or employees of each
Originator having knowledge of such matters, and (ii) without limiting the
foregoing clause (i) above, from time to time on reasonable request of the Agent
(but, so long as no Termination Event or Unmatured Termination Event has
occurred and is continuing, not more than twice during any calendar year),
permit certified public accountants or other auditors acceptable to the Company
and Agent to conduct, at the Company's expense, a review of such Originator's
books and records with respect to such Receivables. (1)
(4) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to re-create records evidencing Receivables it generates in the event of
the destruction of the originals thereof) and keep and maintain all documents,
books, records and other information, in each case, reasonably necessary or
advisable for the collection of such Receivables (including, without limitation,
records adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable).
(5) LOCATION OF RECORDS. Keep its principal place of business and
chief executive office, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) referred to in SCHEDULE 5.14 or, upon
30 days' prior written notice to the Company and the Agent, at such other
locations in jurisdictions where all action required by SECTION 7.3 shall have
been taken and completed.
(6) CREDIT AND COLLECTION POLICIES. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables that it
generates and all Contracts and other agreements related thereto.
(7) POST OFFICE BOXES. On or prior to the date hereof, deliver to
the Servicer (on behalf of the Company) a certificate from an authorized officer
of such Originator to the effect that (i) the name of the renter of all post
office boxes into which Collections may from time to time be mailed have been
changed to the name of the Company (unless such post office boxes are in the
name of the relevant Lock-Box Banks) and (ii) all relevant postmasters have been
notified that each of the Servicer and the Agent are authorized to collect mail
delivered to
14
such post office boxes (unless such post office boxes are in the name of the
relevant Lock-Box Banks).
(8) TRANSACTION DOCUMENTS. Comply in all material respects with the
Transaction Documents to which it is a party.
SECTION 1.36 REPORTING REQUIREMENTS. From the date hereof until the first
day following the Purchase and Sale Termination Date, each Originator will,
unless the Company and the Agent shall otherwise consent in writing, furnish to
the Company and the Agent:
(1) PURCHASE AND SALE TERMINATION EVENTS. As soon as possible after
the Originator has knowledge of, the occurrence of, and in any event within five
Business Days after the Originator has knowledge of the occurrence of each
Purchase and Sale Termination Event or each Unmatured Purchase and Sale
Termination Event in respect of such Originator, the statement of the chief
financial officer or chief accounting officer of such Originator describing such
Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination
Event and the action that such Originator proposes to take with respect thereto,
in each case in reasonable detail;
(2) PROCEEDINGS. As soon as possible and in any event within three
Business Days after Originator otherwise has knowledge thereof, written notice
of (i) litigation, investigation or proceeding of the type described in SECTION
5.6 not previously disclosed to the Company and the Agent which could reasonably
be expected to have a Material Adverse Effect, and (ii) all material adverse
developments that have occurred with respect to any previously disclosed
litigation, proceedings and investigations; and
(3) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of such Originator as the Company, the
Purchaser or the Agent may from time to time reasonably request in order to
protect the interests of the Company, the Purchaser or the Agent under or as
contemplated by the Transaction Documents.
SECTION 1.37 NEGATIVE COVENANTS. From the date hereof until the first date
following the Purchase and Sale Termination Date when no Investment or Discount
with respect to the Participation remains outstanding and all obligations of
such Originator to the Company and its assigns have been satisfied in full, each
Originator agrees that, unless the Company and the Agent shall otherwise consent
in writing, it shall not:
(1) SALES, LIENS, ETC. Except as otherwise provided herein or in any
other Transaction Document, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Receivable or related
15
Contract or Related Security, or any interest therein, or any Collections
thereon, or assign any right to receive income in respect thereof.
(2) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in SECTION 4.2(A) of the Receivables Purchase Agreement and the Credit
and Collection Policy, extend, amend or otherwise modify the terms of any
Receivable in any material respect generated by it, or amend, modify or waive,
in any material respect, any Contract related thereto (which term or condition
relates to payments under, or the enforcement of, such Contract).
(3) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any
material change in the character of its business, or make any change in the
Credit and Collection Policy that would adversely affect the collectibility of
the Receivables or the enforceability of any related Contract or materially
adversely affect the its ability to perform its obligations under any related
Contract or under the Agreement. No Originator shall make any material change in
the Credit and Collection Policy without the prior written consent of the
Company and the Agent.
(4) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES OR CHATTEL
PAPER. Except as otherwise provided in the Receivables Purchase Agreement in
regard to servicing, take any action to cause or permit any Receivable generated
by it to become evidenced by any "instrument" or "chattel paper" (as defined in
the applicable UCC).
(5) MERGERS, ACQUISITIONS, SALES, ETC. (i) Be a party to any merger
or consolidation, except a merger or consolidation where such Originator is
merged or consolidated with another Originator, or (ii) directly or indirectly
sell, transfer, assign, convey or lease (A) whether in one or a series of
transactions, all or substantially all of its assets or (B) any Receivables or
any interest therein (other than pursuant to this Agreement); PROVIDED, HOWEVER,
that Atrium may sell from time to time one or more Originators (but, except as
otherwise agreed to at the time of any such sale, not the Receivables of such
Originators that have been sold to the Company hereunder prior to the date of
such sale) if, prior to the time of such sale the following conditions have been
satisfied:
(1) the Agent shall have given its prior written consent to
such sale;
(2) the Agent shall have received written confirmation from
each Rating Agency that such action will not cause the
downgrade or withdrawal of the then current rating on the
Notes; and
(3) the Agent shall have received from the Servicer such other
certificates, approvals, documents and opinions in respect
of such sale that the Agent may reasonably request in
connection therewith.
16
(6) LOCK-BOX BANKS. Make any changes in its instructions to Obligors
regarding Collections or add or terminate any bank as a Lock-Box Bank unless the
requirements of PARAGRAPH (i) of EXHIBIT IV to the Receivables Purchase
Agreement have been met.
(7) ACCOUNTING FOR PURCHASES. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as sales of the Receivables and Related Rights by such
Originator to the Company.
(8) TRANSACTION DOCUMENTS. Enter into, execute, deliver or otherwise
become bound after the Closing Date by any agreement, instrument, document or
other arrangement that restricts the right of such Originator to amend,
supplement, amend and restate or otherwise modify, or to extend or renew, or to
waive any right under, this Agreement or any other Transaction Document.
SECTION 1.38 SUBSTANTIVE CONSOLIDATION. Each Originator hereby
acknowledges that this Agreement and the other Transaction Documents are being
entered into in reliance upon the Company's identity as a legal entity separate
from such Originator and its Affiliates. Therefore, from and after the date
hereof, each Originator shall take all reasonable steps necessary to make it
apparent to third Persons that the Company is an entity with assets and
liabilities distinct from those of such Originator and any other Person, and is
not a division of such Originator, its Affiliates or any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, such Originator shall take such actions as
shall be required in order that:
(1) such Originator shall not be involved in the day to day
management of the Company;
(2) such Originator shall maintain separate corporate records and
books of account from the Company and otherwise will observe corporate
formalities and have a separate area from the Company for its business;
(3) the financial statements and books and records of such
Originator shall be prepared after the date of creation of the Company to
reflect and shall reflect the separate existence of the Company; PROVIDED, that
the Company's assets and liabilities may be included in a consolidated financial
statement issued by an affiliate of the Company; PROVIDED, HOWEVER, that any
such consolidated financial statement or the notes thereto shall make clear that
the Company's assets are not available to satisfy the obligations of such
affiliate;
(4) except as permitted by the Receivables Purchase Agreement, (i)
such Originator shall maintain its assets separately from the assets of the
Company, (ii) and the Company's assets, and records relating thereto, have not
been, are not, and shall not be, commingled with those of the Company;
17
(5) all of the Company's business correspondence and other
communications shall be conducted in the Company's own name and on its own
stationery;
(6) such Originator shall not act as an agent for the Company, other
than Atrium in its capacity as the Servicer, and in connection therewith, shall
present itself to the public as an agent for the Company and a legal entity
separate from the Company;
(7) such Originator shall not conduct any of the business of the
Company in its own name;
(8) such Originator shall not pay any liabilities of the Company out
of its own funds or assets;
(9) such Originator shall maintain an arm's-length relationship with
the Company;
(10) such Originator shall not assume or guarantee or become
obligated for the debts of the Company or hold out its credit as being available
to satisfy the obligations of the Company;
(11) such Originator shall not acquire obligations of the Company;
(12) such Originator shall allocate fairly and reasonably overhead or
other expenses that are properly shared with the Company, including, without
limitation, shared office space;
(13) such Originator shall identify and hold itself out as a separate
and distinct entity from the Company;
(14) such Originator shall correct any known misunderstanding
respecting its separate identity from the Company;
(15) such Originator shall not enter into, or be a party to, any
transaction with the Company, except in the ordinary course of its business and
on terms which are intrinsically fair and not less favorable to it than would be
obtained in a comparable arm's-length transaction with an unrelated third party;
and
(16) such Originator shall not pay the salaries of the Company's
employees, if any.
ARTICLE VII
18
ADDITIONAL RIGHTS AND OBLIGATIONS
IN RESPECT OF RECEIVABLES
SECTION 1.39 RIGHTS OF THE COMPANY. Each Originator hereby authorizes the
Company, the Servicer or their respective designees to take any and all steps in
such Originator's name necessary or desirable, in their respective
determination, to collect all amounts due under any and all Receivables,
including, without limitation, endorsing the name of such Originator on checks
and other instruments representing Collections and enforcing such Receivables
and the provisions of the related Contracts that concern payment and/or
enforcement of rights to payment.
SECTION 1.40 RESPONSIBILITIES OF THE ORIGINATORS. Anything herein to
the contrary notwithstanding:
(1) COLLECTION PROCEDURES. Each Originator agrees to direct its
respective Obligors to make payments of Receivables directly to a post office
box related to the relevant Lock-Box Account at a Lock-Box Bank. Each Originator
further agrees to transfer any Collections (other than DE MINIMUS amounts, not
to exceed (Five-Hundred Dollars) $500 at any time, with respect to any local
deposit account existing on the Closing Date (other than any Lock-Box Account or
the Collection Account) into which Collections are deposited prior to their
transfer to a Lock-Box Account, and solely to cover returned items relating to
such local deposit account) that it receives directly to the Servicer (for the
Company's account) within one (1) Business Day of receipt thereof (or, in the
case of amounts received by an Originator after 3:00 p.m. on any Business Day,
the second Business Day following such receipt), and agrees that all such
Collections shall be deemed to be received in trust for the Company.
(2) Each Originator shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve such Originator from such obligations.
(3) None of the Company, the Servicer, the Purchaser or the Agent
shall have any obligation or liability to any Obligor or any other third Person
with respect to any Receivables, Contracts related thereto or any other related
agreements, nor shall the Company, the Servicer, the Purchaser or the Agent be
obligated to perform any of the obligations of such Originator thereunder.
(4) Each Originator hereby grants to the Agent an irrevocable power
of attorney, with full power of substitution, coupled with an interest, during
the occurrence and continuation of a Purchase and Sale Termination Event to take
in the name of such Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any kind held or
transmitted by such Originator or transmitted or received by the
19
Company (whether or not from such Originator) in connection with any Receivable
or Related Right.
SECTION 1.41 FURTHER ACTION EVIDENCING PURCHASES. Each Originator agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Company,
the Servicer or the Agent may reasonably request in order to perfect, protect or
more fully evidence the Receivables and Related Rights purchased by or
contributed to the Company hereunder, or to enable the Company to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, upon the request of the
Company (or the Agent), such Originator will:
(1) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(2) on the Closing Date and from time to time, if requested
thereafter, xxxx the master data processing records that evidence or list such
Receivables and related Contracts with the following legend:
"THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD PURSUANT TO A
PURCHASE
AND SALE AGREEMENT, DATED AS OF JULY 31, 2001, AS THE SAME MAY FROM TO
TIME TO TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, BETWEEN
CERTAIN ENTITIES LISTED ON SCHEDULE I THERETO, AS ORIGINATORS, AND
ATRIUM FUNDING CORPORATION, AS PURCHASER, AND AN UNDIVIDED, FRACTIONAL
OWNERSHIP INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN SOLD TO
FAIRWAY FINANCE CORPORATION PURSUANT TO A RECEIVABLES PURCHASE
AGREEMENT, DATED AS OF JULY 31, 2001 AS THE SAME MAY FROM TO TIME TO
TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, AMONG ATRIUM
FUNDING CORP., AS SELLER, ATRIUM COMPANIES, INC., AS SERVICER, FAIRWAY
FINANCE CORPORATION, AND BMO XXXXXXX XXXXX CORP., AS AGENT."
Each Originator hereby authorizes the Company or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, without the signature of such Originator, relative to all
or any of the Receivables and Related Rights now existing or hereafter generated
by Originator. If any Originator fails to perform any of its agreements or
obligations under this Agreement, the Company or its designee may (but shall not
be required to) itself perform, or cause the performance of, such agreement or
obligation, and the expenses of
20
the Company or its designee incurred in connection therewith shall be payable by
such Originator.
SECTION 1.42 APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to any Originator shall, except as
otherwise specified by such Obligor or required by applicable law and unless
otherwise instructed by the Servicer (with the prior written consent of the
Agent) or the Agent, be applied as a Collection of any Receivable or Receivables
of such Obligor to the extent of any amounts then due and payable thereunder
before being applied to any other indebtedness of such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 1.43 PURCHASE AND SALE TERMINATION EVENTS. Each of the following
events or occurrences described in this SECTION 8.1 shall constitute a
"PURCHASE AND SALE TERMINATION EVENT":
(1) The Termination Date (as defined in the Receivables Purchase
Agreement) shall have occurred; or
(2) Any Originator shall fail to make any payment or deposit to be
made by it hereunder when due and such failure continues unremedied for two or
more Business Days; or
(3) Any representation or warranty made or deemed to be made by any
Originator (or any of its officers) under or in connection with this Agreement,
any other Transaction Documents, or any other information or report delivered
pursuant hereto or thereto shall prove to have been false or incorrect in any
material respect when made or deemed made; or
(4) Any Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed or
observed and such failure shall remain unremedied for 30 days.
SECTION 1.44 REMEDIES.
(1) OPTIONAL TERMINATION. Upon the occurrence of a Purchase and Sale
Termination Event, the Company shall have the option, by notice to the
Originators (with a copy to the Agent), to declare the Purchase Facility as
terminated.
(2) REMEDIES CUMULATIVE. Upon any termination of the Purchase
Facility pursuant to SECTION 8.2(A), the Company shall have, in addition to all
other rights and remedies
21
under this Agreement, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE IX
INDEMNIFICATION
SECTION 1.45 INDEMNITIES BY THE ORIGINATORS. Without limiting any other
rights which the Company may have hereunder or under applicable law, each
Originator, severally and for itself alone and Atrium, jointly and severally
with each Originator, hereby agrees to indemnify the Company and each of its
officers, directors, employees and agents (each of the foregoing Persons being
individually called a "PURCHASE AND SALE INDEMNIFIED PARTY"), forthwith on
demand, from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively called "PURCHASE AND
SALE INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising
out of or as a result of the failure of such Originator to perform its
obligations under this Agreement or any other Transaction Document, or arising
out of the claims asserted against a Purchase and Sale Indemnified Party
relating to the transactions contemplated herein or therein or the use of
proceeds thereof or therefrom; EXCLUDING, HOWEVER, (i) Purchase and Sale
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Purchase and Sale Indemnified Party, (ii) any
indemnification which has the effect of recourse for non-payment of the
Receivables due to credit reasons with respect to the relevant Obligor and (iii)
any net income or franchise tax imposed on such Purchase and Sale Indemnified
Party by the jurisdiction under the laws of which such Purchase and Sale
Indemnified Party is organized or is doing business (except to the extent that
it is considered to be doing business solely as a result of the transactions
contemplated by this Agreement and the other Transaction Documents) or any
political subdivision thereof. Without limiting the foregoing, and subject to
the exclusions set forth in the preceding sentence, each Originator, severally
for itself alone and Atrium, jointly and severally with each Originator, shall
indemnify each Purchase and Sale Indemnified Party for Purchase and Sale
Indemnified Amounts relating to or resulting from:
(1) the transfer by such Originator of an interest in any Receivable
to any Person other than the Company;
(2) the breach of any representation or warranty made by such
Originator (or any of its officers) under or in connection with this Agreement
or any other Transaction Document, or any information or report delivered by
Originator pursuant hereto or thereto, which shall have been false or incorrect
when made or deemed made;
(3) the failure by such Originator to comply with any applicable
law, rule or regulation with respect to any Receivable generated by such
Originator or the related Contract, or
22
the nonconformity of any Receivable generated by such Originator or the related
Contract with any such applicable law, rule or regulation;
(4) the failure by such Originator to vest and maintain vested in
the Company an ownership interest in the Receivables generated by such
Originator free and clear of any Adverse Claim, other than an Adverse Claim
arising solely as a result of an act of the Company, the Purchaser or the Agent
whether existing at the time of the purchase or contribution of such Receivables
or at any time thereafter;
(5) the failure to file, or any delay in filing, by such Originator
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables or purported Receivables generated by such Originator, whether at
the time of any purchase or contribution or at any subsequent time to the extent
required hereunder;
(6) any dispute, claim, offset or defense (other than discharge in
bankruptcy or similar insolvency proceeding of an Obligor or other credit
related reasons) of the Obligor to the payment of any Receivable or purported
Receivable generated by such Originator (including, without limitation, a
defense based on such Receivable's or the related Contract's 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 services
related to any such Receivable or the furnishing of or failure to furnish such
services;
(7) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by such Originator;
and
(8) any tax or governmental fee or charge (other than any tax
excluded pursuant to CLAUSE (iii) in the proviso to the preceding sentence), all
interest and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which are required to be paid by reason of the
purchase or ownership of the Receivables generated by such Originator or any
Related Security connected with any such Receivables.
If for any reason the indemnification provided above in this SECTION 9.1 is
unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then each of the Originators,
severally and for itself, shall contribute to the amount paid or payable by such
Purchase and Sale Indemnified Party to the maximum extent permitted under
applicable law.
ARTICLE X
MISCELLANEOUS
23
SECTION 1.46 AMENDMENTS, ETC.
(1) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and executed by the Company and each Originator (with the prior written
consent of the Agent); PROVIDED, HOWEVER, that no material amendment to this
Agreement shall be effective unless the Agent shall have received written
confirmation from each Rating Agency that such action will not cause the
downgrade or withdrawal of the then current rating of the Notes.
(2) No failure or delay on the part of the Company, the Servicer,
any Originator or any third party beneficiary in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Company, the Servicer or any Originator in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by the
Company or the Servicer under this Agreement shall, except as may otherwise be
stated in such waiver or approval, be applicable to subsequent transactions. No
waiver or approval under this Agreement shall require any similar or dissimilar
waiver or approval thereafter to be granted hereunder.
(3) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter thereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter thereof, superseding all prior
oral or written understandings.
SECTION 1.47 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, by facsimile, or by regular or overnight mail,
to the intended party at the mailing address or facsimile number of such party
set forth under its name on the signature pages hereof or at such other address
or facsimile number as shall be designated by such party in a written notice to
the other parties hereto. All such notices and communications shall be effective
(i) if personally delivered, when received, (ii) if sent by certified mail three
(3) Business Days after having been deposited in the mail, postage prepaid, and
(iii) if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.
SECTION 1.48 NO WAIVER; CUMULATIVE REMEDIES. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each Originator hereby authorizes the Company,
at any time and from time to time, to the fullest extent permitted by law, to
set off, against any obligations of such Originator to the Company arising in
connection with the Transaction Documents (including, without limitation,
amounts payable pursuant to SECTION 9.1) that are then due and payable or that
are not then due
24
and payable but have accrued, any and all indebtedness at any time owing by the
Company to or for the credit or the account of such Originator.
SECTION 1.49 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be
binding upon and inure to the benefit of the Company and each Originator and
their respective successors and permitted assigns. No Originator may assign any
of its rights hereunder or any interest herein without the prior written consent
of the Company, except as otherwise herein specifically provided. 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 such
time as the parties hereto shall agree. The rights and remedies with respect to
any breach of any representation and warranty made by any Originator pursuant to
ARTICLE V and the indemnification and payment provisions of ARTICLE IX and
SECTION 10.6 shall be continuing and shall survive any termination of this
Agreement.
SECTION 1.50 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 1.51 COSTS, EXPENSES AND TAXES. In addition to the obligations
of the Originators under ARTICLE IX, each Originator, severally and for itself
alone and Atrium, jointly and severally with each Originator, agrees to pay on
demand:
(1) to the Company (and any successor and permitted assigns thereof)
all reasonable costs and expenses incurred by such Person in connection with the
enforcement of this Agreement and the other Transaction Documents; and
(2) all stamp and other taxes and fees payable in connection with
the execution, delivery, filing and recording of this Agreement or the other
Transaction Documents to be delivered hereunder, and agrees to indemnify each
Purchase and Sale Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omitting to pay such taxes and fees.
SECTION 1.52 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE
STATE OF
NEW YORK OR THE FEDERAL COURT OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF
NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL
COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d)
IRREVOCABLY CONSENTS
25
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 10.2; AND (e) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
SECTION 1.53 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT,
AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
SECTION 1.54 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE.
The various captions (including, without limitation, the table of contents) in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to any underscored Section or Exhibit are to such Section or Exhibit
of this Agreement, as the case may be. The Exhibits hereto are hereby
incorporated by reference into and made a part of this Agreement.
SECTION 1.55 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement.
SECTION 1.56 ACKNOWLEDGMENT AND AGREEMENT. By execution below, each
Originator expressly acknowledges and agrees that all of the Company's rights,
title, and interests in, to, and under this Agreement (but not its obligations),
shall be assigned by the Company pursuant to the Receivables Purchase Agreement,
and each Originator consents to such
26
assignment. Each of the parties hereto acknowledges and agrees that the
Purchaser and the Agent are third party beneficiaries of the rights of the
Company arising hereunder and under the other Transaction Documents to which any
Originator is a party.
SECTION 1.57 NO PROCEEDING. Each Originator hereby agrees that it will not
institute, or join any other Person in instituting, against the Company any
Insolvency Proceeding so long as any of the Company Notes remains outstanding
and for at least one year and one day following the day on which the aggregate
outstanding principal amount of each Company Note is paid in full. Each
Originator further agrees that notwithstanding any provisions contained in this
Agreement to the contrary, the Company shall not, and shall not be obligated to,
pay any amount in respect of any Company Note or otherwise to such Originator
pursuant to this Agreement unless the Company has received funds which may,
subject to Section 1.4 of the Receivables Purchase Agreement, be used to make
such payment. Any amount which the Company does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
Section.101 of the Bankruptcy Code) against or corporate obligation of the
Company by such Originator for any such insufficiency unless and until the
provisions of the foregoing sentence are satisfied. The agreements in this
SECTION 10.12 shall survive any termination of this Agreement.
SECTION 1.58 LIMITED RECOURSE. Except as explicitly set forth herein, the
obligations of the Company under this Agreement or any other Transaction
Documents to which it is a party are solely the obligations of the Company. No
recourse under any Transaction Document shall be had against, and no liability
shall attach to, any officer, employee, director, or beneficiary, whether
directly or indirectly, of the Company. The agreements in this SECTION 10.13
shall survive any termination of this Agreement.
[Signature Pages Follow]
27
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
ATRIUM FUNDING CORP.
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: Atrium Funding Corp.
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1
ORIGINATORS:
ATRIUM COMPANIES, INC.
By:
-----------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ATRIUM DOOR AND WINDOW COMPANY OF THE
NORTHEAST
By:
-----------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-2
ATRIUM DOOR AND WINDOW COMPANY WEST COAST
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ATRIUM DOOR AND WINDOW COMPANY OF
NEW YORK
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-3
ATRIUM DOOR AND WINDOW COMPANY OF ARIZONA
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ATRIUM DOOR AND WINDOW COMPANY OF NEW ENGLAND
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-4
HEAT, INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BEST BUILT, INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-5
CHAMPAGNE INDUSTRIES, INC.
By: /s/
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
H.I.G. VINYL, INC.
By: /s/
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-6
THERMAL INDUSTRIES, INC.
By: /s/
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
VES, INC.
By: /s/
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-7
SCHEDULE 1
LIST OF ORIGINATORS
Atrium Companies, Inc.
Atrium Door and Window Company of the Northeast
Atrium Door and Window Company - West Coast
Atrium Door and Window Company of
New York
Atrium Door and Window Company of Arizona
Atrium Door and Window Company of New England Heat, Inc.
Best Built, Inc.
Champagne Industries, Inc.
H.I.G. Vinyl, Inc.
Thermal Industries, Inc.
VES, Inc,
Schedule I-1
SCHEDULE 5.6
PROCEEDINGS
Schedule 5.6-1
SCHEDULE 5.14A
CHIEF EXECUTIVE OFFICE OF EACH ORIGINATOR
ORIGINATOR CHIEF EXECUTIVE OFFICE
Atrium Companies, Inc. [ ]
Schedule 5.14A-1
SCHEDULE 5.14B
LOCATION OF BOOKS AND RECORDS OF ORIGINATORS
ORIGINATOR LOCATION OF BOOKS AND RECORDS
Atrium Companies, Inc. [ ]
Schedule 5.14B-1
SCHEDULE 5.15
TRADE NAMES
LEGAL NAME TRADE NAMES
Atrium Companies, Inc.
Schedule 5.15-1
EXHIBIT A
FORM OF PURCHASE REPORT
Originator: [Name of Originator]
Purchaser: Atrium Funding Corporation
Payment Date:
1. Outstanding Balance of Receivables Purchased:
2. Fair Market Value Discount:
1/{1 + [(Prime Rate x Days' Sales Outstanding]}
-----------------------
365
Where:
Prime Rate = __________
Days' Sales Outstanding = __________
3. Purchase Price (1 x 2) = $ __________
Exhibit A-1
EXHIBIT B
COMPANY NOTE
Chicago, Illinois
July __, 2001
FOR VALUE RECEIVED, the undersigned, ATRIUM FUNDING CORP., a Delaware
corporation (the "COMPANY"), promises to pay to ATRIUM COMPANIES, INC., a
Delaware corporation ("ORIGINATOR"), on the terms and subject to the conditions
set forth herein and in the
Purchase and Sale Agreement referred to below, the
aggregate unpaid Purchase Price of all Pool Receivables purchased by the Company
from Originator pursuant to such
Purchase and Sale Agreement, as such unpaid
Purchase Price is shown in the records of Servicer.
1.
PURCHASE AND SALE AGREEMENT. This Company Note is one of the Company
Notes described in, and is subject to the terms and conditions set forth in,
that certain
Purchase and Sale Agreement of even date herewith (as the same may
be amended, supplemented, amended and restated or otherwise modified in
accordance with its terms, the "
PURCHASE AND SALE AGREEMENT"), among the
Company, the Originator, and the various entities listed thereto as Originators.
Reference is hereby made to the
Purchase and Sale Agreement for a statement of
certain other rights and obligations of the Company and Originator.
2. DEFINITIONS. Capitalized terms used (but not defined) herein have
the meanings assigned thereto in the
Purchase and Sale Agreement and in EXHIBIT
I to the Receivables Purchase Agreement (as defined in the Purchase and Sale
Agreement). In addition, as used herein, the following terms have the following
meanings:
"BANKRUPTCY PROCEEDINGS" has the meaning set forth in CLAUSE
(b) of PARAGRAPH 9 hereof.
"FINAL MATURITY DATE" means the Payment Date immediately
following the date that falls one hundred twenty one (121) days after
the Facility Termination Date.
"INTEREST PERIOD" means the period from and including a
Payment Date (or, in the case of the first Interest Period, the date
hereof) to but excluding the next Payment Date.
"SENIOR INTERESTS" means, collectively, (i) all accrued
Discount on the Investment, (ii) the fees referred to in SECTION 1.5 of
the Receivables
Exhibit B-1
Purchase Agreement, (iii) all amounts payable pursuant to SECTIONS 1.6,
1.7 or 1.8 of the Receivables Purchase Agreement, (iv) the Investment
and (v) all other obligations of the Company, the Originator and the
Servicer (as long as the Originator is the Servicer) that are due and
payable, to (a) the Purchaser, the Agent and their respective
successors, permitted transferees and assigns arising in connection with
the Transaction Documents and (b) any Indemnified Party arising in
connection with the Receivables Purchase Agreement, in each case,
howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become
due, together with any and all interest and Discount accruing on any
such amount after the commencement of any Bankruptcy Proceedings,
notwithstanding any provision or rule of law that might restrict the
rights of any Senior Interest Holder, as against the Company or anyone
else, to collect such interest.
"SENIOR INTEREST HOLDERS" means, collectively, the Purchaser,
the Agent and the Indemnified Parties.
"SUBORDINATION PROVISIONS" means, collectively, CLAUSES (a)
through (l) of PARAGRAPH 9 hereof.
"TELERATE SCREEN RATE" means, for any Interest Period, the
rate for thirty day commercial paper denominated in Dollars which
appears on Page 1250 of the Dow Xxxxx Telerate Service (or such other
page as may replace that page on that service for the purpose of
displaying Dollar commercial paper rates) at approximately 9:00 a.m.,
New York City time, on the first day of such Interest Period.
3. INTEREST. Subject to the Subordination Provisions set forth
below, the Company promises to pay interest on this Company Note as follows:
(a) Prior to the Final Maturity Date, the aggregate unpaid
Purchase Price from time to time outstanding during any Interest Period
shall bear interest at a rate PER ANNUM equal to the Telerate Screen
Rate for such Interest Period, as determined by Servicer; and
(b) From (and including) the Final Maturity Date to (but
excluding) the date on which the entire aggregate unpaid Purchase Price
is fully paid,the aggregate unpaid Purchase Price from time to time
outstanding shall bear interest at a rate PER ANNUM equal to the rate of
interest publicly announced from time to time by Bank of Montreal, as
its "base rate", "reference rate" or other comparable rate, as
determined by Servicer.
Exhibit B-2
4. INTEREST PAYMENT DATES. Subject to the Subordination
Provisions set forth below, the Company shall pay accrued interest on this
Company Note on each Payment Date, and shall pay accrued interest on the amount
of each principal payment made in cash on a date other than a Payment Date at
the time of such principal payment.
5. BASIS OF COMPUTATION. Interest accrued hereunder that is
computed by reference to the Telerate Screen Rate shall be computed for the
actual number of days elapsed on the basis of a 360-day year, and interest
accrued hereunder that is computed by reference to the rate described in
PARAGRAPH 3(B) of this Company Note shall be computed for the actual number of
days elapsed on the basis of a 365- or 366-day year.
6. PRINCIPAL PAYMENT DATES. Subject to the Subordination
Provisions set forth below, payments of the principal amount of this Company
Note shall be made as follows:
s
(a) The principal amount of this Company Note shall be reduced
by an amount equal to each payment deemed made pursuant to SECTION 3.4
of the Purchase and Sale Agreement; and
(b) The entire remaining unpaid Purchase Price of all Pool
Receivables purchased by the Company from Originator pursuant to the
Purchase and Sale Agreement shall be paid on the Final Maturity Date.
Subject to the Subordination Provisions set forth below, the principal amount of
and accrued interest on this Company Note may be prepaid on any Business Day
without premium or penalty.
7. PAYMENT MECHANICS. All payments of principal and interest
hereunder are to be made in lawful money of the United States of America in the
manner specified in ARTICLE III of the Purchase and Sale Agreement.
8. ENFORCEMENT EXPENSES. In addition to and not in limitation of
the foregoing, but subject to the Subordination Provisions set forth below and
to any limitation imposed by applicable law, the Company agrees to pay all
expenses, including reasonable attorneys' fees and legal expenses, incurred by
Originator in seeking to collect any amounts payable hereunder which are not
paid when due.
9. SUBORDINATION PROVISIONS. The Company covenants and agrees,
and Originator and any other holder of this Company Note (collectively,
Originator and any such other holder are called the "HOLDER"), by its acceptance
of this Company Note, likewise covenants and agrees on behalf of itself and any
holder of this Company Note, that the payment of the principal amount of and
interest on this Company Note is hereby expressly subordinated in right of
payment to the payment and performance of the Senior
Exhibit B-3
Interests to the extent and in the manner set forth in the following clauses of
this PARAGRAPH 9:
(a) No payment or other distribution of the Company's assets
of any kind or character, whether in cash, securities, or other rights
or property, shall be made on account of this Company Note except to
the extent such payment or other distribution is (i) permitted under
CLAUSE (o) of EXHIBIT IV to the Receivables Purchase Agreement or (ii)
made pursuant to CLAUSE (a) or (b) of PARAGRAPH 6 of this Company Note;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the
Company, whether voluntary or involuntary, partial or complete, and
whether in bankruptcy, insolvency or receivership proceedings, or upon
an assignment for the benefit of creditors, or any other marshalling of
the assets and liabilities of the Company or any sale of all or
substantially all of the assets of the Company other than as permitted
by the Purchase and Sale Agreement (such proceedings being herein
collectively called "BANKRUPTCY PROCEEDINGS"), the Senior Interests
shall first be paid and performed in full and in cash before Originator
shall be entitled to receive and to retain any payment or distribution
in respect of this Company Note. In order to implement the foregoing:
(i) all payments and distributions of any kind or character in respect
of this Company Note to which Holder would be entitled except for this
CLAUSE (b) shall be made directly to the Agent (for the benefit of the
Senior Interest Holders); (ii) Holder shall promptly file a claim or
claims, in the form required in any Bankruptcy Proceedings, for the
full outstanding amount of this Company Note, and shall use
commercially reasonable efforts to cause said claim or claims to be
approved and all payments and other distributions in respect thereof to
be made directly to the Agent (for the benefit of the Senior Interest
Holders) until the Senior Interests shall have been paid and performed
in full and in cash; and (iii) Holder hereby irrevocably agrees that
Purchaser (or the Agent acting on Purchaser's behalf), in the name of
Holder or otherwise, demand, xxx for, collect, receive and receipt for
any and all such payments or distributions, and file, prove and vote or
consent in any such Bankruptcy Proceedings with respect to any and all
claims of Holder relating to this Company Note, in each case until the
Senior Interests shall have been paid and performed in full and in
cash;
(c) In the event that Holder receives any payment or other
distribution of any kind or character from the Company or from any
other source whatsoever, in respect of this Company Note, other than as
expressly permitted by the terms of this Company Note, such payment or
other distribution shall be received in trust for the Senior Interest
Holders and shall be turned over by Holder to the Agent (for the
benefit of the Senior Interest Holders) forthwith. Holder will xxxx its
books and
Exhibit B-4
records so as clearly to indicate that this Company Note is subordinated
in accordance with the terms hereof. All payments and distributions
received by the Agent in respect of this Company Note, to the extent
received in or converted into cash, may be applied by the Agent (for the
benefit of the Senior Interest Holders) first to the payment of any and
all expenses (including reasonable attorneys' fees and legal expenses)
paid or incurred by the Senior Interest Holders in enforcing these
Subordination Provisions, or in endeavoring to collect or realize upon
this Company Note, and any balance thereof shall, solely as between
Originator and the Senior Interest Holders, be applied by the Agent (in
the order of application set forth in SECTION 1.4(d) of the Receivables
Purchase Agreement) toward the payment of the Senior Interests; but as
between the Company and its creditors, no such payments or distributions
of any kind or character shall be deemed to be payments or distributions
in respect of the Senior Interests;
(d) Notwithstanding any payments or distributions received by
the Senior Interest Holders in respect of this Company Note, while any
Bankruptcy Proceedings are pending Holder shall not be subrogated to the
then existing rights of the Senior Interest Holders in respect of the
Senior Interests until the Senior Interests have been paid and performed
in full and in cash. If no Bankruptcy Proceedings are pending, Holder
shall only be entitled to exercise any subrogation rights that it may
acquire (by reason of a payment or distribution to the Senior Interest
Holders in respect of this Company Note) to the extent that any payment
arising out of the exercise of such rights would be permitted under
CLAUSE (o) of EXHIBIT IV to the Receivables Purchase Agreement;
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of Holder, on the one hand, and
the Senior Interest Holders on the other hand. Nothing contained in
these Subordination Provisions or elsewhere in this Company Note is
intended to or shall impair, as between the Company, its creditors
(other than the Senior Interest Holders) and Holder, the Company's
obligation, which is unconditional and absolute, to pay Holder the
principal of and interest on this Company Note as and when the same
shall become due and payable in accordance with the terms hereof or to
affect the relative rights of Holder and creditors of the Company
(other than the Senior Interest Holders);
(f) Holder shall not, until the Senior Interests have been
paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or
collect, or subordinate to any obligation of the Company, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, or now or hereafter existing, or due or to become due,
other than the Senior Interests, this Company Note or any rights in
respect hereof or (ii) convert this Company Note into an equity
interest in the Company,
Exhibit B-5
unless Holder shall have received the prior written consent of the Agent
and Purchaser in each case;
(g) Holder shall not, without the advance written consent of
the Agent and Purchaser, commence, or join with any other Person in
commencing, any Bankruptcy Proceedings with respect to the Company
until at least one year and one day shall have passed since the Senior
Interests shall have been paid and performed in full and in cash;
(h) If, at any time, any payment (in whole or in part) of any
Senior Interest is rescinded or must be restored or returned by a
Senior Interest Holder (whether in connection with Bankruptcy
Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as
though such payment had not been made;
(i) Each of the Senior Interest Holders may, from time to
time, at its sole discretion, without notice to Holder, and without
waiving any of its rights under these Subordination Provisions, take
any or all of the following actions: (i) retain or obtain an interest
in any property to secure any of the Senior Interests; (ii) retain or
obtain the primary or secondary obligations of any other obligor or
obligors with respect to any of the Senior Interests; (iii) extend or
renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Interests, or release or
compromise any obligation of any nature with respect to any of the
Senior Interests; (iv) amend, supplement, amend and restate, or
otherwise modify any Transaction Document; and (v) release its security
interest in, or surrender, release or permit any substitution or
exchange for all or any part of any rights or property securing any of
the Senior Interests, or extend or renew for one or more periods
(whether or not longer than the original period), or release,
compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such rights or property;
(j) Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Senior Interest Holders; (ii)
notice of the existence, creation, non-payment or non-performance of
all or any of the Senior Interests; and (iii) all diligence in
enforcement, collection or protection of, or realization upon, the
Senior Interests, or any thereof, or any security therefor;
(k) Each of the Senior Interest Holders may, from time to
time, on the terms and subject to the conditions set forth in the
Transaction Documents to which such Persons are party, but without
notice to Holder, assign or transfer any or all of the Senior
Interests, or any interest therein; and, notwithstanding any such
assignment or transfer or any subsequent assignment or transfer
thereof, such
Exhibit B-6
Senior Interests shall be and remain Senior Interests for the purposes
of these Subordination Provisions, and every immediate and successive
assignee or transferee of any of the Senior Interests or of any interest
of such assignee or transferee in the Senior Interests shall be entitled
to the benefits of these Subordination Provisions to the same extent as
if such assignee or transferee were the assignor or transferor; and
(l) These Subordination Provisions constitute a continuing
offer from the holder of this Company Note to all Persons who become
the holders of, or who continue to hold, Senior Interests; and these
Subordination Provisions are made for the benefit of the Senior
Interest Holders, and the Agent may proceed to enforce such provisions
on behalf of each of such Persons.
10. GENERAL. No failure or delay on the part of Originator in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Company Note shall in any event be effective unless (i) the
same shall be in writing and signed and delivered by the Company and Holder and
(ii) all consents required for such actions under the Transaction Documents
shall have been received by the appropriate Persons.
11. MAXIMUM INTEREST. Notwithstanding anything in this Company
Note to the contrary, the Company shall never be required to pay unearned
interest on any amount outstanding hereunder and shall never be required to pay
interest on the principal amount outstanding hereunder at a rate in excess of
the maximum nonusurious interest rate that may be contracted for, charged or
received under applicable federal or state law (such maximum rate being herein
called the "HIGHEST LAWFUL RATE"). If the effective rate of interest which would
otherwise by payable under this Company Note would exceed the Highest Lawful
Rate, or if the holder of this Company Note shall receive any unearned interest
or shall receive monies that are deemed to constitute interest which would
increase the effective rate of interest payable by the Company under this
Company Note to a rate in excess of the Highest Lawful Rate, then (i) the amount
of interest which would otherwise by payable by the Company under this Company
Note shall be reduced to the amount allowed by applicable law, and (ii) any
unearned interest paid by the Company or any interest paid by the Company in
excess of the Highest Lawful Rate shall be refunded to the Company. Without
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received by Originator under this Company Note that are made for
the purpose of determining whether such rate exceeds the Highest Lawful Rate
applicable to Originator (such Highest Lawful Rate being herein called the
"ORIGINATOR'S MAXIMUM PERMISSIBLE RATE") shall be made, to the extent permitted
by usury laws applicable to Originator (now or hereafter enacted), by
amortizing, prorating and spreading
Exhibit B-7
in equal parts during the actual period during which any amount has been
outstanding hereunder all interest at any time contracted for, charged or
received by Originator in connection herewith. If at any time and from time to
time (i) the amount of interest payable to Originator on any date shall be
computed at Originator's Maximum Permissible Rate pursuant to the provisions of
the foregoing sentence and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to Originator would
be less than the amount of interest payable to Originator computed at
Originator's Maximum Permissible Rate, then the amount of interest payable to
Originator in respect of such subsequent interest computation period shall
continue to be computed at Originator's Maximum Permissible Rate until the total
amount of interest payable to Originator shall equal the total amount of
interest which would have been payable to Originator if the total amount of
interest had been computed without giving effect to the provisions of the
foregoing sentence.
12. NO NEGOTIATION. This Company Note is not negotiable.
13. GOVERNING LAW. THIS COMPANY NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
14. CAPTIONS. Paragraph captions used in this Company Note are
for convenience only and shall not affect the meaning or interpretation of any
provision of this Company Note.
Exhibit B-8
IN WITNESS WHEREOF, Atrium Funding Corporation has caused this Company
Note to be executed as of the date first written above.
ATRIUM FUNDING CORPORATION
a Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Exhibit B-9
EXHIBIT C
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT, dated as of ___________, 200__ (this
"AGREEMENT") is executed by__________, a corporation organized under the laws of
__________ (the "ADDITIONAL SELLER"), with its principal place of business
located at __________.
BACKGROUND:
A. Atrium Funding Corporation (the "PURCHASER") and each entity listed
on Schedule I thereto (collectively, the "SELLERS"), have entered into that
certain Purchase and Sale Agreement, dated as of [July __], 2001 (as amended
through the date hereof, and as it may be further amended from time to time, the
"PURCHASE AND SALE AGREEMENT").
B. The Additional Seller desires to become a Seller pursuant to SECTION
4.3 of the Purchase and Sale Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Additional Seller hereby agrees as follows:
SECTION 11. DEFINITIONS. Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings assigned thereto in the
Purchase and Sale Agreement or in the Receivables Purchase Agreement (as defined
in the Purchase and Sale Agreement).
SECTION 12. TRANSACTION DOCUMENTS. The Additional Seller hereby agrees
that it shall be bound by all of the terms, conditions and provisions of, and
shall be deemed to be a party to (as if it were an original signatory to), the
Purchase and Sale Agreement and each of the other relevant Transaction
Documents. From and after the later of the date hereof and the date that the
Additional Seller has complied with all of the requirements of SECTION 4.3 of
the Purchase and Sale Agreement, the Additional Seller shall be a Seller for all
purposes of the Purchase and Sale Agreement and all other Transaction Documents.
The Additional Seller hereby acknowledges that it has received copies of the
Purchase and Sale Agreement and the other Transaction Documents.
SECTION 13. REPRESENTATIONS AND WARRANTIES. The Additional Seller hereby
makes all of the representations and warranties set forth in ARTICLE V (to the
extent applicable) of the Purchase and Sale Agreement as of the date hereof
(unless such representations or warranties relate to an earlier date, in which
as of such earlier date), as if
Exhibit C-1
such representations and warranties were fully set forth herein. The Additional
Seller hereby represents and warrants that the chief place of business and chief
executive office of the Additional Seller, and the offices where the Additional
Seller keeps all of its Records and Related Security is as follows:
---------------------------------------
---------------------------------------
---------------------------------------
SECTION 14. MISCELLANEOUS. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
New York. This
Agreement is executed by the Additional Seller for the benefit of the Purchaser,
and its assigns, and each of the foregoing parties may rely hereon. This
Agreement shall be binding upon, and shall inure to the benefit of, the
Additional Seller and its successors and permitted assigns.
[Signature Pages Follow]
Exhibit C-2
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed by its duly authorized officer as of the date and year first above
written.
[NAME OF ADDITIONAL SELLER]
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Consented to:
ATRIUM FUNDING CORP.
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Acknowledged by:
BMO XXXXXXX XXXXX CORP.,
as Agent
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Exhibit C-3
EXHIBIT D
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
ORIGINATOR ASSIGNMENT CERTIFICATE
Reference is made to the Purchase and Sale Agreement of even date
herewith (as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time, the "PURCHASE AND SALE AGREEMENT") between
the undersigned, the various entities listed on Schedule I, as Originators, and
Atrium Funding Corporation (the "COMPANY"). Unless otherwise defined herein,
capitalized terms used herein have the meanings provided in the Purchase and
Sale Agreement or in EXHIBIT I to the Receivables Purchase Agreement (as defined
in the Purchase and Sale Agreement), as applicable.
The undersigned hereby sells, assigns and transfers unto the Company
and its successors and assigns all right, title and interest of the undersigned
in and to:
(a) each Receivable of the undersigned that existed and was
owing to the undersigned as of the Cut-off Date other than Receivables
contributed pursuant to SECTION 3.1 of the Purchase and Sale Agreement;
(b) each Receivable generated by the undersigned from and
including the Cut-off Date to and including the Purchase and Sale
Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of
the foregoing;
(e) all books and records of the undersigned related to any
of the foregoing, and all Transaction Documents to which the undersigned is a
party, together with all rights (but not obligations) of the undersigned; and
(f) all collections and other proceeds and products of any of
the foregoing (as defined in the UCC) that are or were received by the
undersigned on or after the Cut-off Date, including, without
limitation, all funds which either are received by the undersigned, the
Company or the Servicer from or on behalf of the Obligors in payment of
any amounts owed (including, without limitation, invoice price, finance
charges, interest and all other charges) in respect of Receivables, or
are applied to such amounts owed by the Obligors (including, without
limitation, insurance payments that the undersigned or the Servicer
applies in the ordinary course of its business to amounts owed in
respect of any Receivable and net
Exhibit D-1
proceeds of sale or other disposition of repossessed goods or other
collateral or property of the Obligors in respect of Receivables or any
other parties directly or indirectly liable for payment of such
Receivables).
This Originator Assignment Certificate is made without recourse but on
the terms and subject to the conditions set forth in the Transaction Documents
to which the undersigned is a party. The undersigned acknowledges and agrees
that the Company and its successors and assigns are accepting this Originator
Assignment Certificate in reliance on the representations, warranties and
covenants of the undersigned contained in the Transaction Documents to which the
undersigned is a party.
THIS ORIGINATOR ASSIGNMENT CERTIFICATE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE PURCHASE AND SALE AGREEMENT AND THE INTERNAL
LAWS OF THE STATE OF
NEW YORK.
Exhibit D-2
IN WITNESS WHEREOF, the undersigned has caused this Originator
Assignment Certificate to be duly executed and delivered by its duly authorized
officer this ___ day of _____________, 200_.
[ORIGINATOR]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
