AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT

Exhibit 99.2

EXECUTION COPY

 

AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT

 

Dated as of July 8, 2005,

 

by and among

 

MRFC, INC. ,

 

METALDYNE CORPORATION ,

 

as Master Servicer,

 

GENERAL ELECTRIC CAPITAL CORPORATION ,

as a Purchaser and as Administrative Agent,

 

BANK OF AMERICA, N.A. AND WELLS FARGO FOOTHILL, LLC ,

as Co-Syndication Agents,

 

U.S. BANK NATIONAL ASSOCIATION AND UBS SECURITIES LLC ,

as Co-Documentation Agents,

 

and

 

THE OTHER FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO , as Purchasers

 

 

GECC CAPITAL MARKETS GROUP, INC.

AS THE LEAD ARRANGER AND LEAD BOOKRUNNER

 

 

 

 

TABLE OF CONTENTS

ARTICLE I.

 

DEFINITIONS AND INTERPRETATION

Section 1.01.	Definitions	1
Section 1.02.	Rules of Construction	1

ARTICLE II.

 

AMOUNTS AND TERMS OF PURCHASES

Section 2.01.	Purchases		2
Section 2.02.	Optional Changes in Maximum Purchase Limit		2
Section 2.03.	Notices Relating to Purchases and Reductions in Capital Investment		4
Section 2.04.	Conveyance of Receivables		5
Section 2.05.	Facility Termination Date		6
Section 2.06.	Daily Yield		6
Section 2.07.	Fees		6
Section 2.08.	Time and Method of Payments		7
Section 2.09.	Capital Requirements; Additional Costs		9
Section 2.10.	Breakage Costs	10
Section 2.11.	Purchase Excess	11
Section 2.12.	Mitigation and Replacement of Purchasers	11

ARTICLE III.

 

CONDITIONS PRECEDENT

Section 3.01.	Conditions to Effectiveness of Agreement	12
Section 3.02.	Conditions Precedent to All Purchases	13

ARTICLE IV.

 

REPRESENTATIONS AND WARRANTIES

Section 4.01.	Representations and Warranties of MRFC	14
Section 4.02.	Reaffirmation of Representations and Warranties by MRFC	20

ARTICLE V.

 

GENERAL COVENANTS OF MRFC

Section 5.01.	Affirmative Covenants of MRFC	21
Section 5.02.	Negative Covenants of MRFC	32

 

 

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ARTICLE VI.

 

COLLECTIONS AND DISBURSEMENTS

Section 6.01.	Establishment of Accounts	35
Section 6.02.	Funding of Collection Account	38
Section 6.03.	Daily Disbursements From the Collection Account; Revolving Period	39
Section 6.04.	Liquidation Settlement Procedures	40
Section 6.05.	Termination Procedures	40

ARTICLE VII.

 

MASTER SERVICER PROVISIONS

Section 7.01.	Appointment of the Master Servicer	41
Section 7.02.	Duties and Responsibilities of the Master Servicer	41
Section 7.03.	Collections on Receivables	42
Section 7.04.	Authorization of the Master Servicer	42
Section 7.05.	Servicing Fees	43
Section 7.06.	Master Servicer Representations and Warranties	43
Section 7.07.	Covenants of the Master Servicer	46
Section 7.08.	Reporting Requirements of the Master Servicer	48
Section 7.09.	Negative Covenants of the Master Servicer	49

ARTICLE VIII.

 

GRANT OF SECURITY INTERESTS

Section 8.01.	MRFC’s Grant of Security Interest	49
Section 8.02.	MRFC’s Certification	51
Section 8.03.	Delivery of Collateral	51
Section 8.04.	MRFC Remains Liable	51
Section 8.05.	Collection of Transferred Receivables	52
Section 8.06.	License for Use of Software and Other Intellectual Property	52

ARTICLE IX.

 

TERMINATION EVENTS

Section 9.01.	Termination Events	53
Section 9.02.	Events of Servicer Termination	56

ARTICLE X.

 

REMEDIES

 

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Section 10.01.	Actions Upon Termination Event	59
Section 10.02.	Exercise of Remedies	60
Section 10.03.	Power of Attorney	60
Section 10.04.	Continuing Security Interest	61

ARTICLE XI.

 

SUCCESSOR SERVICER PROVISIONS

Section 11.01.	Servicers Not to Resign	61
Section 11.02.	Appointment of the Successor Servicer	61
Section 11.03.	Duties of the Master Servicer	61
Section 11.04.	Effect of Termination or Resignation	62

ARTICLE XII.

 

INDEMNIFICATION

Section 12.01.	Indemnities by MRFC	62
Section 12.02.	Indemnities by the Master Servicer	64
Section 12.03.	Limitation of Damages; Indemnified Persons	64

ARTICLE XIII.

 

AGENTS

Section 13.01.	Authorization and Action	65
Section 13.02.	Reliance	65
Section 13.03.	Notice of Termination Events	66
Section 13.04.	Nonreliance on Administrative Agent, Other Purchasers	66
Section 13.05.	Indemnification	66
Section 13.06.	Successor Administrative Agents	67
Section 13.07.	GE Capital and Affiliates	67
Section 13.08.	Co-Documentation Agents and Co-Syndication Agents	67

ARTICLE XIV.

 

MISCELLANEOUS

Section 14.01.	Notices		68
Section 14.02.	Binding Effect; Assignability		68
Section 14.03.	Termination; Survival of MRFC Secured Obligations Upon
	Facility Termination Date		70
Section 14.04.	Costs, Expenses and Taxes		70
Section 14.05.	Confidentiality		71
Section 14.06.	Complete Agreement; Modification of Agreement		72

 

 

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Section 14.07.	No Waiver; Remedies		74
Section 14.08.	GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
	OF JURY TRIAL		74
Section 14.09.	Counterparts		76
Section 14.10.	Severability		76
Section 14.11.	Section Titles		76
Section 14.12.	Limited Recourse		76
Section 14.13.	Further Assurances		76

 

EXHIBITS, SCHEDULES AND ANNEXES

Exhibit 2.02(a)               Form of Commitment Reduction Notice

Exhibit 2.02(b)               Form of Commitment Termination Notice

Exhibit 2.02(d)-1           Form of Accordion Option Notice

Exhibit 2.02(d)-2           Form of Accordion Acceptance Notice

Exhibit 2.03(a)               Form of Purchase Request

Exhibit 2.03(c)               Form of Repayment Notice

Exhibit 2.04(a)               Form of Purchase Assignment

Exhibit 3.01(a)(i)          Form of Solvency Certificate

Exhibit 3.01(a)(ii)(B)    Form of Bringdown Certificate (MRFC and Servicer)

Exhibit 3.01(a)(iii)       Form of Servicer’s Certificate

Exhibit 5.01(a)(iv)(A) Form of Daily Report

Exhibit 5.01(a)(iv)(B) Form of Weekly Report

Exhibit 5.01(a)(iv)(C) Form of Monthly Report

Exhibit 5.01(a)(iv)(D) Form of Investment Base Certificate

Exhibit 5.01(p)               Form of Required Currency Hedge Assignment

Exhibit 5.01(q)               Form of Required Credit Default Swap Assignment

Exhibit 10.03               Form of Power of Attorney

Exhibit 14.02(b)            Form of Assignment

Exhibit 14.06(c)             Form of Additional Purchaser Supplement

Schedule 2.01  Purchasers

Schedule 4.01(i)            Offices and Entity Matters

Schedule 4.01(s)            Deposit and Securities Accounts

Schedule 5.01(b)           Tradenames

Annex X                Definitions

Annex Y            Schedule of Documents

 

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THIS AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT (as amended, restated, supplemented or otherwise modified and in effect from time to time, this “ Transfer Agreement ”) is entered into as of July 8, 2005, by and among MRFC, INC., a Delaware Corporation (“ MRFC ”), METALDYNE CORPORATION, a Delaware corporation, in its capacity as master servicer (“ Master Servicer ”), the financial institutions from time to time party hereto as “Purchasers” (as defined herein), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as a Purchaser and as administrative agent for the Purchasers hereunder (in such capacity, the “ Administrative Agent ”), BANK OF AMERICA, N.A. and WELLS FARGO FOOTHILL, LLC, each as a Purchaser and as a co-syndication agent for the Purchasers (collectively, the “ Co-Syndication Agents ”), and UBS SECURITIES LLC and U.S. BANK NATIONAL ASSOCIATION, each as a Purchaser and as a co-documentation agent for the Purchasers (collectively, the “ Co-Documentation Agents ”).

RECITALS

A.         MRFC, the Master Servicer, the purchasers party thereto and the Administrative Agent are parties to that certain Receivables Transfer Agreement, dated as of April 25, 2005, as amended by that certain First Amendment of Receivables Transfer Agreement, dated as of May 11, 2005 (collectively, the “ Existing Transfer Agreement ”).

B.         MRFC, the Master Servicer, the Purchasers and the Administrative Agent desire to amend and restate the Existing Transfer Agreement in accordance with the terms and conditions of this Transfer Agreement and are entering into this Transfer Agreement for such purpose.

AMENDMENT AND RESTATEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Existing Transfer Agreement as follows:

ARTICLE I.

 

DEFINITIONS AND INTERPRETATION

Section 1.01.     Definitions . Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Annex X .

Section 1.02.     Rules of Construction . For purposes of this Transfer Agreement, the rules of construction set forth in Annex X shall govern. All Appendices hereto, or expressly identified to this Transfer Agreement, are incorporated herein by reference and, taken together with this Transfer Agreement, shall constitute but a single agreement.

 

 

 

 

 

ARTICLE II.

 

AMOUNTS AND TERMS OF PURCHASES

Section 2.01.

Purchases .

(a)        From and after the Closing Date and until the Facility Termination Date and subject to the terms and conditions hereof, MRFC may, at its option, sell a Purchaser Interest and each Purchaser severally agrees to purchase its Pro Rata Share of such Purchaser Interest (each such purchase hereunder, a “ Purchase ”) from MRFC from time to time. Each Purchaser agrees that if a Purchase is requested of it, such Purchaser shall make available in accordance with Section 2.04(b) hereof, an amount equal to such Purchaser’s Pro Rata Share of such Purchase.

(b)        Each Purchaser’s obligation hereunder shall be several, such that the failure of any Purchaser to make a payment in connection with any Purchase hereunder shall not relieve any other Purchaser of its obligation hereunder to make payment for such Purchase.

(c)        Notwithstanding the foregoing, under no circumstances shall a Purchaser be obligated to make any Purchase if, after giving effect thereto, a Purchase Excess would exist.

Section 2.02.

Optional Changes in Maximum Purchase Limit .

(a)        So long as no Potential Termination Event or Termination Event shall have occurred and be continuing, MRFC may reduce the Maximum Purchase Limit permanently; provided that (i) MRFC shall give two Business Days’ prior written notice of any such reduction to the Administrative Agent substantially in the form of Exhibit 2.02(a) (each such notice, a “ Commitment Reduction Notice ”) and (ii) any partial reduction of the Maximum Purchase Limit shall be in a minimum amount of $5,000,000 and shall be in integral multiples of $500,000.

(b)        MRFC may at any time on at least 30 days’ prior written notice by MRFC to the Administrative Agent irrevocably terminate the Maximum Purchase Limit; provided that (i) such notice of termination shall be substantially in the form of Exhibit 2.02(b) (the “ Commitment Termination Notice ”), and (ii) MRFC shall reduce the Capital Investment to zero and make all payments required by Section 2.03(c) at the time and in the manner specified therein. Upon such termination, MRFC’s right to request that any Purchaser make Purchases hereunder shall simultaneously terminate and the Facility Termination Date shall automatically occur.

(c)        Each written notice required to be delivered pursuant to Sections 2.02(a) and (b) shall be irrevocable and shall be effective (i) on the day of receipt if received by the Administrative Agent not later than 4:00 p.m. (New York time) on any Business Day and (ii) on the immediately succeeding Business Day if received by the Administrative Agent after such time on such Business Day or if any such notice is received on a day other than a Business Day (regardless of the time of day such notice is received). Each such notice of termination or reduction shall specify, respectively, the amount of, or the amount of the proposed reduction in, the Maximum Purchase Limit.

 

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(d)        Prior to the Facility Termination Date, MRFC may request up to two times, each by notice to the Administrative Agent and the Purchasers in the form of the Accordion Option Notice attached hereto as Exhibit 2.02(d)-1 (each, an “ Accordion Option Notice ”), that one or more of the Persons who are Purchasers at such time (each, an “ Existing Purchaser ”) increase their Commitments by an aggregate amount of not less than $25,000,000 per request or in integral multiples of $1,000,000 above such sum (to result in a Maximum Purchase Limit of no more than $225,000,000 after giving effect to either or both requests). Upon receipt of an Accordion Option Notice, each Existing Purchaser shall have the option, but not the obligation, subject to the terms and conditions set forth in this Section 2.02(d) , to increase its Commitment pursuant to this Section 2.02(d) in an aggregate amount for all Purchasers so opting to increase their Commitments by a total amount equal to the requested increase to the Maximum Purchase Limit set forth in such Accordion Option Notice (each such increase, if any, the “ Accordion Activation ”). Notwithstanding any provision of this Transfer Agreement to the contrary, no Existing Purchaser shall be obligated to increase its Commitment pursuant to this Section 2.02(d) in response to any Accordion Option Notice, and any decision to increase its Commitment pursuant to this Section 2.02(d) shall be made by each Existing Purchaser in its sole discretion. If Existing Purchasers do not elect to increase their aggregate Commitments by the amount of the requested Accordion Activation, MRFC may offer to Persons who are not Existing Purchasers (but who are otherwise acceptable to MRFC and the Administrative Agent) to become Additional Purchasers with Commitments totaling the balance of the requested Accordion Activation. Each Accordion Activation shall be effective and the Maximum Limit shall be increased by the amount of such Accordion Activation (but not to result in a Maximum Limit of more than $225,000,000 in any event) upon the satisfaction of each and every of the following conditions: (a) no Termination Event or Potential Termination Event shall have occurred and be continuing prior to the effectiveness of such Accordion Activation or would occur as a result of the effectiveness of such Accordion Activation; (b) sufficient Existing Purchasers shall have elected to increase their Commitments pursuant to this Section 2.02(d) and sufficient Additional Purchasers shall have elected to become Purchasers pursuant to this Section 2.02(d) and Section 14.06(c) so that the sum of the aggregate increase in such Existing Purchasers’ Commitments plus the aggregate Commitments of such Additional Purchasers equals the amount of such Accordion Activation; (c) each of the Existing Purchasers opting to increase its Commitment pursuant to this Section 2.02(d) shall have given written notice to that effect with MRFC and the Administrative Agent in the form of the Accordion Acceptance Notice attached hereto as Exhibit 2.02(d)-2 (each, an “ Accordion Acceptance Notice ”); (d) each Additional Purchaser opting to accept MRFC’s offer to become a Purchaser hereunder shall have entered into an Additional Purchaser Supplement; (e) the Administrative Agent shall have amended and restated Schedule 2.01 hereto to reflect the increases to the Maximum Purchase Limit and to the Commitments of the Existing Purchasers opting to increase their Commitments pursuant to this Section 2.02(d) and the addition of the Commitments of the Additional Purchasers pursuant to this Section 2.02(d) ; (f) Borrower shall have paid to Administrative Agent, for the pro rata accounts of such Existing Purchasers and Additional Purchasers, such fees as may be agreed to writing by Borrower and such Existing Purchasers and Additional Purchasers with respect to such Accordion Activation, and (g) the Borrower shall have provided the Administrative Agent with written evidence reasonably satisfactory to the Administrative Agent that Metaldyne and its Subsidiaries have obtained any and all consents or amendments as may be necessary under the Credit Agreement or any other

 

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agreement, indenture or other instrument binding upon Metaldyne or any of its Subsidiaries (other than the Related Documents) so that the consummation of such Accordion Activation does not result in a violation of such agreement, indenture or other instrument. Upon the effectiveness of an Accordion Activation, the Purchasers shall make such payments to and receive such payments from the Administrative Agent (as the case may be) as may be necessary so that, after giving effect to all such payments, each Purchaser will hold its Pro Rata Share of the then outstanding Capital Investment, and such payments shall be deemed to be reductions of the recipient Purchasers’ respective Pro Rata Shares of the Purchaser Interest and Purchases of Pro Rata Shares of the Purchaser Interest by the paying Purchasers.

Section 2.03.     Notices Relating to Purchases and Reductions in Capital Investment .

(a)        Each Purchase shall be made upon the provision of notice (a “ Purchase Request ”) by MRFC to the Administrative Agent and the Purchasers and shall (i) be given in writing in substantially the form of Exhibit 2.03(a) , (ii) be irrevocable, (iii) specify the amount of the requested increase in Capital Investment, (iv) be given so that it is received no later than 12:00 noon (New York time) on the Business Day that is the proposed date of purchase, (v) attach a Daily Report and an Investment Base Certificate, each based on information through the Business Day immediately prior to the proposed date of Purchase, and (vi) include such other information as may be reasonably required by the Administrative Agent.

(b)        Capital Investment Available shall be calculated by the Administrative Agent based on information related to the MRFC Collateral available to it, including (i) any information obtained in connection with any audit or reflected in the most recent Investment Base Certificate, Daily Report, Weekly Report or any other Monthly Report delivered to the Administrative Agent or (ii) any other information that may be available to the Purchasers and the Administrative Agent.

(c)        On each Business Day, MRFC shall reduce the Capital Investment out of Collections on deposit in the Collection Account in the amount and sequence set forth in Section 6.03 or Section 6.04 , as applicable. MRFC may also at any time reduce the Capital Investment out of other funds; provided that (i) MRFC shall give prior written notice of any such reduction to the Administrative Agent substantially in the form of Exhibit 2.03(c) (each such notice, a “ Repayment Notice ”), (ii) such notice must have been received by the Administrative Agent no later than 4:00 p.m. (New York time) on the Business Day immediately preceding the date of the proposed reduction, (iii) each such notice shall be irrevocable, (iv) each such notice shall specify the amount of the requested reduction in the Capital Investment and the proposed date of such reduction (which shall be a Business Day) and (v) no later than 3:00 p.m. (New York time) on the date of the proposed reduction, in accordance with Section 6.02(d) , MRFC shall pay to the Collection Account (A) the amount of Capital Investment to be reduced, (B) all Daily Yield accrued and unpaid on the Capital Investment being reduced through but excluding the date of such reduction and (C) the costs, if any, required by Section 2.10 .

(d)        Administrative Agent hereby confirms to MRFC that, as of the Closing Date, Administrative Agent has not established any Reserves. Administrative Agent will en

 

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deavor to give MRFC prior written notice of the establishment of any Reserve but neither the Administrative Agent nor any Purchaser shall have any liability to MRFC or any other Person if the Administrative Agent fails to give such notice and any such failure shall not give rise to any claim, counterclaim or defense on the part of MRFC or any other Person; provided that, notwithstanding anything to the contrary in this Agreement, it shall not be a Potential Termination Event or Termination Event under Section 9.01(h) hereof or a Potential Servicer Termination Event or an Event of Servicer Termination under Section 9.02(g) hereof if any Investment Base Certificate, Daily Report, Weekly Report or any other Monthly Report delivered by MRFC or the Master Servicer to the Administrative Agent hereunder is inaccurate solely because MRFC or the Master Servicer were not aware at the time of the delivery of such certificate or report of (and therefore did not reflect therein the effect of) the establishment of a Reserve by the Administrative Agent.

Section 2.04.

Conveyance of Receivables .

(a)         Purchase Assignment . On or prior to the Closing Date, MRFC shall complete, execute and deliver to the Administrative Agent, for the benefit of the Purchasers, an assignment substantially in the form of Exhibit 2.04(a) (the “ Purchase Assignment ”) in order to evidence the Purchases.

(b)	Funding of Collection Account; Increases in Capital Investment .

(i)      Funding of Collection Account by Purchaser . Following receipt of any Purchase Request, and subject to satisfaction of the conditions set forth in Section 3.02 , each Purchaser shall make available to or on behalf of MRFC on the Purchase Date specified therein such Purchaser’s Pro Rata Share of the lesser of (A) the requested increase in Capital Investment specified in such Purchase Request and (B) Capital Investment Available by depositing such amount in same day funds into the Collection Account no later than 3:00 p.m. (New York time) .

(ii)     Payment of Purchase Price . The Purchasers shall, or shall cause the Administrative Agent to, deposit into the MRFC Account on each Business Day during the Revolving Period, in same day funds, all amounts on deposit in the Collection Account that are to be disbursed to or on behalf of MRFC pursuant to Section 6.03(d) as payment for the Purchaser Interests.

(c)	Vesting of Ownership .

(i)     Effective on and as of each Purchase Date, the Purchasers shall own the Purchaser Interests sold by MRFC hereunder on such Purchase Date. MRFC shall not take any action inconsistent with such ownership and shall not claim any ownership interest in such Purchaser Interests.

(ii)    MRFC shall indicate in its Records that interests in the Transferred Receivables have been sold hereunder and that ownership of such interests is vested in the Administrative Agent on behalf of the Purchasers. In addition, MRFC shall respond to any inquiries with respect to the ownership of any Transferred Receivable (to the extent that it is obligated to respond) by stating that interests therein have been sold hereunder and that ownership of such

 

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interests is vested in the Purchasers. MRFC and the Master Servicer shall hold all Contracts and other documents relating to such Transferred Receivables in trust for the benefit of the Administrative Agent on behalf of the Purchasers, as the owner thereof, and for the sole purpose of facilitating the servicing of such Transferred Receivables. MRFC and the Master Servicer each hereby acknowledge that its retention and possession of such Contracts and documents shall at all times be at the sole discretion of the Administrative Agent and in a custodial capacity for the Administrative Agent’s (on behalf of the Purchasers) benefit only.

(d)	[Intentionally Omitted]

(e)         Receivables Situated in the Province of Quebec . Notwithstanding anything herein to the contrary, the following provisions of this Section 2.04(e) shall apply only from and after the Canadian Originator Addition Date: In order to facilitate the registration in the Register of Personal and Movable Real Rights (Quebec) of the transfer and assignment of the undivided percentage ownership interests in any Transferred Receivables payable in Canadian Dollars contemplated by this Transfer Agreement, MRFC hereby sells, assigns, transfers and conveys to the Administrative Agent on behalf of the Purchasers, an undivided percentage ownership interest in the Receivables payable in Canadian Dollars situated in the Province of Quebec; title to any Purchaser Interest shall pass to the Administrative Agent on behalf of the Purchasers upon each Purchase, as contemplated in this Transfer Agreement.

Section 2.05.     Facility Termination Date . Notwithstanding anything to the contrary set forth herein, no Purchaser shall have any obligation to purchase any additional Purchaser Interests from and after the Facility Termination Date.

Section 2.06.

Daily Yield .

(a)        MRFC shall pay Daily Yield to the Administrative Agent, for the account of the Purchasers, for each day on which any Capital Investment is outstanding, in arrears on each Settlement Date and in the manner specified in Section 6.02 , 6.03 or 6.04 , as applicable.

(b)        Notwithstanding the foregoing, MRFC shall pay yield at the applicable Daily Yield Rate (together with Daily Margin plus Daily Default Margin, if any) on unpaid Daily Yield and on any other amount payable by MRFC hereunder (to the extent permitted by law) that, in each case, shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise) for the period commencing on the due date thereof to (but excluding) the date the same is indefeasibly paid in full, and such yield shall be immediately due and payable.

Section 2.07.

Fees .

(a)        On or prior to the Closing Date, MRFC shall pay to the Administrative Agent, for the account of itself and the Purchasers, the fees set forth in the Fee Letter that are payable on the Closing Date.

(b)        MRFC shall pay to the Master Servicer or to the Successor Servicer, as applicable, the Servicing Fee in the amounts and at the times set forth in Section 7.05 .

 

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(c)        An unused commitment fee (the “ Unused Commitment Fee ”) shall be payable to the Purchasers on each Settlement Date for the Settlement Period most recently ending in an amount equal to the product of (i) 50 basis points (0.50%) per annum times (ii) the excess of the average Maximum Purchase Limit for such Settlement Period over the average aggregate daily Capital Investment for the Purchasers for such Settlement Period, which fee shall be calculated on the basis of actual days elapsed for the applicable period and a year of 360 days, shall be fully earned when payable and nonrefundable and shall be payable as provided in Section 6.03 or 6.04 hereof (as applicable).

Section 2.08.

Time and Method of Payments .

(a)        Subject to the provisions of Sections 6.02 , 6.03 , and 6.04 , as applicable, all payments in reduction of Capital Investment and all payments of yield, fees and other amounts payable by MRFC hereunder shall be made in Dollars, in immediately available funds, to the Administrative Agent (for its account or the account of the applicable Purchasers, Affected Parties or Indemnified Persons) not later than 12:00 noon (New York time) on the due date therefor. Any such payment made on such date but after such time shall be deemed to have been made on, and Daily Yield shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any such payment becomes due on a day other than a Business Day, the maturity thereof will be extended to the next succeeding Business Day and Daily Yield thereon shall be payable during such extension.

(b)        Any and all payments by MRFC hereunder shall be made in accordance with this Section 2.08 without setoff or counterclaim and free and clear of, and without deduction for, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, excluding franchise taxes and any and all present or future taxes, levies, imposts, deductions, charges or withholdings imposed on or measured by the net income, capital or net worth of any Affected Party by or any and all present or future taxes, levies, imposts, duties, charges, fees, deductions and withholdings on doing business in the jurisdictions under the laws of which such Affected Party is organized or by any political subdivisions thereof (such non-excluded taxes, levies, imposts, deductions, charges and withholdings being “ Indemnified Taxes ”). If MRFC shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable hereunder, (i) the sum payable shall be increased solely to the extent necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.08 ) the Affected Party entitled to receive any such payment receives an amount equal to the sum it would have been entitled to receive hereunder had no such deductions been made, (ii) MRFC shall make such deductions, and (iii) MRFC shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law. Within 30 days after the date of any payment of Indemnified Taxes (or, if not then available, immediately upon its becoming available), MRFC shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof. MRFC shall indemnify any Affected Party from and against, and, within ten Business Days of written demand therefor, which demand shall set forth in reasonable detail the amount so paid and the computations made to determine such amount, pay any Affected Party for, the full amount of Indemnified Taxes (together with any taxes imposed by any jurisdiction on amounts payable under this Section 2.08 ) paid by such Affected Party and any liability (including penalties, interest and expenses) arising therefrom or

 

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with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted; provided , however , that MRFC shall be entitled to a prompt refund in the amount of any Indemnified Taxes that are subsequently refunded to such Affected Party; and provided further , however , that an Affected Party shall use commercially reasonable efforts to seek or apply for any such refund of Indemnified Taxes at MRFC’s sole expense to the extent MRFC requests that such Affected Party seek or apply for such refund.

(c)        Each Affected Party that is not a United States person (within the meaning of Section 7701(a)(30) of the IRC) (a “ United States Person ”) shall:

(i)     at the time such Affected Party becomes a party to this Transfer Agreement, deliver to MRFC and the Administrative Agent a properly completed and executed IRS Form W 8ECI or Form W 8BEN;

(ii)    deliver to MRFC and the Administrative Agent two (2) further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to MRFC or the Administrative Agent; and

(iii)   obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by MRFC or the Administrative Agent;

unless, in the case of (ii) and (iii) above, any change in treaty, law regulation, governmental rule, guideline order, or official application or official interpretation thereof has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Affected Party from duly completing and delivering any such form with respect to it, and such Affected Party so advises MRFC and the Administrative Agent. Each such Affected Party that is not a United States person (A) shall certify that it is entitled to an exemption from United States backup withholding tax and (B) shall agree to provide any other certification and documentation as required by the applicable law that is reasonably requested by MRFC, the Originators or the Master Servicer. Each Person that is a Purchaser hereunder, or which otherwise becomes a party to this Transfer Agreement as a Purchaser, shall, prior to the effectiveness of such assignment, participation or addition, as applicable, be required to provide all of the forms and statements required pursuant to this Section 2.08(c).

(d)        Any Purchaser exercising a right of setoff or otherwise receiving any payment on account of the MRFC Secured Obligations in excess of its Pro Rata Share thereof shall purchase for cash (and the other Purchasers or holders shall sell) such participations in each such other Purchaser’s or holder’s Pro Rata Share of the MRFC Secured Obligations as would be necessary to cause such Purchaser to share the amount so offset or otherwise received with each other Purchaser or holder in accordance with their respective Pro Rata Shares (other than offset rights exercised by any Purchaser with respect to this Section 2.08 or Section 2.09 ).

(e)        MRFC represents and warrants to the Administrative Agent and each Purchaser that it has not assumed in any manner whatsoever any obligation of the Originators under the Purchase Agreement (i) to make collections and remittances in respect of any Canadian

 

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goods and services tax, any Canadian provincial sales tax or any other similar Canadian tax or (ii) to file any returns in respect of such taxes with Canadian tax authorities and that it was not contemplated by either any Originator under the Purchase Agreement or MRFC that such obligation was to be assumed by MRFC. The parties hereto agree that none of the Administrative Agent or the Purchasers are assuming in any manner whatsoever any obligation of the Originators under the Purchase Agreement to collect such taxes, make such remittances and file such returns, and that it is not contemplated by the parties hereto that any such obligation is hereby assumed by the Purchasers or the Administrative Agent. MRFC hereby indemnifies the Administrative Agent and each Purchaser and holds them harmless from and against any assessments, withholding taxes, claims, or other demands for payment of such taxes by Canadian tax authorities, as well as interest and penalties; provided that any payments made by MRFC pursuant to this subsection shall be made solely from funds available to MRFC which are not otherwise required to be applied to the payment of any amounts pursuant to this Transfer Agreement (other than to MRFC), shall be non-recourse other than with respect to such funds, and shall not constitute a claim against MRFC to the extent that insufficient funds exist to make such payment. It is understood that all of the invoices in respect of the Receivables with Canadian Obligors of the Originators under the Purchase Agreement will bear the GST registration number of such Originator.

Section 2.09.

Capital Requirements; Additional Costs .

(a)        If the Administrative Agent, on behalf of any Affected Party, shall have determined that the adoption after the date hereof of any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve requirements or similar requirements or compliance by such Affected Party with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law) from any central bank or other Governmental Authority increases or would have (without giving effect to this Section 2.09 ) the effect of increasing the amount of capital, reserves or other funds required to be maintained by such Affected Party against commitments made by it under this Transfer Agreement or any other Related Document and thereby reducing the rate of return on such Affected Party’s capital as a consequence of its commitments hereunder or thereunder, then MRFC shall from time to time within 10 Business Days after written demand by the Administrative Agent pay to the Administrative Agent on behalf of any such Affected Party additional amounts sufficient to compensate such Affected Party for such reduction together with interest thereon from the date of any such demand until payment in full at the applicable Daily Yield Rate; provided that no such amount shall be payable with respect to any period commencing more than 270 days prior to the date the Administrative Agent first notifies MRFC in writing of its intention to demand compensation with respect to any such change in law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order; provided further that if such change in law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order giving rise to such reduction of rate of return is retroactive, then such 270 day period shall be extended to include the period of retroactive effect thereof. A certificate as to the amount of that reduction and showing in reasonable detail the basis of the computation thereof submitted by the Administrative Agent to MRFC shall be final, binding and conclusive on the parties hereto (absent manifest error) for all purposes. Such Affected Party agrees that, as promptly as practicable after it becomes aware of any circumstance referred to above, it shall, to

 

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the extent not inconsistent with its internal policies of general application, use commercially reasonable efforts to minimize costs and expenses incurred by it and payable to it by MRFC pursuant to this Section 2.09(a) . The parties hereto acknowledge and agree that the provisions of this Section 2.09(a) are not intended to and shall not impose any duplicative obligations to the extent already addressed by the provisions of Section 2.08(b) .

(b)        If, due to any Regulatory Change other than those related to taxes, levies, imposts, deductions, charges or withholdings related to income or franchise taxes, there shall be any increase in the cost to any Affected Party of agreeing to make or making, funding or maintaining any commitment hereunder or under any other Related Document, including with respect to any Purchases or Capital Investment, or any reduction in any amount receivable by such Affected Party hereunder or thereunder, including with respect to any Purchases or Capital Investment (any such increase in cost or reduction in amounts receivable are hereinafter referred to as “ Additional Costs ”), then MRFC shall, from time to time within ten Business Days after written demand by the Administrative Agent, pay to the Administrative Agent on behalf of such Affected Party additional amounts sufficient to compensate such Affected Party for such Additional Costs together with interest thereon from the date demanded until payment in full thereof at the applicable Daily Yield Rate; provided that no such amount shall be payable with respect to any period commencing more than 270 days prior to the date the Administrative Agent first notifies MRFC in writing of its intention to demand compensation with respect to any such Regulatory Change; provided further that if such Regulatory Change giving rise to such reduction of rate of return is retroactive, then such 270 day period shall be extended to include the period of retroactive effect thereof. Such Affected Party agrees that, as promptly as practicable after it becomes aware of any circumstance referred to above that would result in any such Additional Costs, it shall, to the extent not inconsistent with its internal policies of general application, use commercially reasonable efforts to minimize costs and expenses incurred by it and payable to it by MRFC pursuant to this Section 2.09(b) .

(c)        Determinations by any Affected Party for purposes of this Section 2.09 of the effect of any Regulatory Change on its costs of making, funding or maintaining any commitments hereunder or under any other Related Document or on amounts receivable by it hereunder or thereunder or of the additional amounts required to compensate such Affected Party in respect of any Additional Costs shall be set forth in a written notice to MRFC in reasonable detail and shall be final, binding and conclusive on MRFC (absent manifest error) for all purposes, and a copy of which shall be sent to the Originators by MRFC.

Section 2.10.     Breakage Costs . MRFC shall pay to the Administrative Agent for the account of the applicable Purchaser, upon request of such Purchaser as provided below, such amount or amounts as shall compensate such Purchaser for any loss, cost or expense incurred by such Purchaser (as determined by such Purchaser in good faith) as a result of any reduction by MRFC in Capital Investment (and accompanying loss of Daily Yield thereon) other than on the maturity date of the financing source used to fund such Capital Investment as provided herein, which compensation shall include an amount equal to any loss or expense incurred by such Purchaser during the period from the date of such reduction to (but excluding) such maturity date if the rate of interest obtainable by such Purchaser upon the redeployment of funds at the interest rate that such Purchaser would bid were it to bid, at the commencement of such period, for U.S.

 

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Dollar deposits in an amount equal to such reduction and for such period from banks in the interbank LIBOR market if such rate of interest is less than the interest rate applicable to such financing source (any such loss, cost or expense, “ Breakage Costs ”). The determination by such Purchaser of the amount of any such loss or expense shall be set forth in a written notice to MRFC in reasonable detail and shall be final, binding and conclusive on MRFC (absent manifest error) for all purposes. For the purpose of calculating amounts payable under this Section 2.10 , each Purchaser shall be deemed to have actually funded its Capital Investment through the purchase of a deposit bearing interest at the applicable Daily Yield Rate with respect to its Capital Investment; provided that each Purchaser may fund its Capital Investment in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section 2.10 . MRFC shall pay each such Purchaser the amount shown as due on any such notice within 10 Business Days after receipt thereof.

Section 2.11.     Purchase Excess . On each Business Day during the Revolving Period and after completion of the disbursements specified in Section 6.03 , the Administrative Agent shall notify MRFC and the Master Servicer or Successor Servicer, as applicable, of any Purchase Excess on such day, and MRFC shall deposit the amount of such Purchase Excess in the Collection Account by 3:00 p.m. (New York time) on the following Business Day.

Section 2.12.

Mitigation and Replacement of Purchasers .

(a)        If any Purchaser requests compensation under Section 2.09 , or requires MRFC to pay any additional amount to any Purchaser or any Governmental Authority for the account of any Purchaser pursuant to Section 2.08(b) , then such Purchaser shall use commercially reasonable efforts to designate a different office for funding or booking its Purchases hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, or file any certificate or document with a Government Authority to the extent reasonably requested by MRFC and not materially adverse to such Purchaser if, in the good faith judgment of such Purchaser, such designation, assignment or filing (i) would eliminate or reduce amounts payable pursuant to Section 2.08(b) or 2.09 , as the case may be, in the future and (ii) would not subject such Purchaser to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Purchaser. MRFC hereby agrees to pay all reasonable costs and expenses incurred by any Purchaser in connection with any such designation or assignment. A certificate setting forth such costs and expenses shall be submitted by such Purchaser to MRFC and shall be conclusive absent manifest error.

(b)        Anything contained herein to the contrary notwithstanding, in the event that any Purchaser (“ Defaulting Purchaser ”) defaults (a “ Funding Default ”) in its obligation to make a Purchase (a “ Defaulted Purchase ”) in accordance with Section 2.01 , then (i) after the occurrence and during the continuation of any Funding Default (a “ Default Period ”) with respect to such Defaulting Purchaser, such Defaulting Purchaser shall be deemed not to be a “Purchaser” for purposes of voting on any matters (including the granting of any consents or waivers) or be included in the calculation of Requisite Purchasers with respect to any of the Related Documents and (ii) to the extent permitted by applicable law during the Default Period (A) any voluntary reduction of Capital Investments pursuant to Section 2.03(c) shall, if MRFC so requests at the time of making such voluntary reduction and if the Administrative Agent, in its sole discretion,

 

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consents thereto, be applied to the Pro Rata Shares of the Capital Investments of the other Purchasers as if such Defaulting Purchaser had no Capital Investments outstanding and the Pro Rata Share of such Defaulting Purchaser were zero, and if the Administrative Agent does not so elect, the portion attributable to the Defaulting Purchaser shall be held by the Administrative Agent for the benefit of the Defaulting Purchaser, and as security (along with earnings, if any) for its obligations (y) under this agreement to the Administrative Agent and the other Purchasers and (z) when all such obligations (contingent and otherwise) have been satisfied, paid to MRFC, and (B) any mandatory reduction of Capital Investments pursuant to Section 2.11 shall, if MRFC so requests at the time of making such mandatory reduction and if the Administrative Agent, in its sole discretion, consents thereto, be applied to the Capital Investment of other Purchasers (but not to the Capital Investment of such Defaulting Purchaser) as if such Defaulting Purchaser had funded all Defaulted Purchases of such Defaulting Purchaser, it being understood and agreed that the portion attributable to the Defaulting Purchaser shall be held by the Administrative Agent for the benefit of the Defaulting Purchaser, and as security (along with earnings, if any) for its obligations (y) under this Transfer Agreement to the Administrative Agent and the Purchasers and (z) when all such obligations (contingent and otherwise) have been satisfied, paid to MRFC, (iii) upon the Administrative Agent providing prior written consent such Defaulting Purchaser’s Commitment and outstanding Capital Investment shall be excluded for purposes of calculating the Unused Commitment Fee in respect of any day during any Default Period with respect to such Defaulting Purchaser, and upon the Administrative Agent providing prior written consent, such Defaulting Purchaser shall not be entitled to receive any Unused Commitment Fee with respect to such Defaulting Purchaser’s Commitment in respect of any Defaulted Purchase with respect to such Defaulting Purchaser and (iv) any portion of the Unused Commitment Fee allocated to the Defaulting Purchaser shall be held by Administrative Agent for the benefit of the Defaulting Purchaser and as security (along with earnings, if any) for its obligations owed (y) under this Transfer Agreement to the Administrative Agent and the Purchasers and (z) when all such obligations (contingent and otherwise) have been satisfied, paid to MRFC.

ARTICLE III.

 

CONDITIONS PRECEDENT

Section 3.01.     Conditions to Effectiveness of Agreement . No Purchaser shall be obligated to purchase Purchaser Interests hereunder on the occasion of the initial Purchase, nor shall any Purchaser or the Administrative Agent be obligated to take, fulfill or perform any other action hereunder, until the following conditions have been satisfied, in the sole discretion of, or waived in writing by, the Purchasers and the Administrative Agent:

(a)         Transfer Agreement; Other Related Documents . This Transfer Agreement shall have been duly executed by, and delivered to, the parties hereto and the Purchasers and the Administrative Agent shall have received such other documents, instruments, agreements and legal opinions as each Purchaser and the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Transfer

 

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Agreement, including all those listed in the Schedule of Documents, each in form and substance reasonably satisfactory to each Purchaser and the Administrative Agent.

(b)         Governmental Approvals . The Purchasers and the Administrative Agent shall have received (i) satisfactory evidence that MRFC and the Servicers have obtained all required consents and approvals of all Persons, including all requisite Governmental Authorities, to the execution, delivery and performance of this Transfer Agreement and the other Related Documents and the consummation of the transactions contemplated hereby or thereby or (ii) an Officer’s Certificate from each of MRFC and the Servicers in form and substance satisfactory to the Purchasers and the Administrative Agent affirming that no such consents or approvals are required.

(c)         Payment of Fees . MRFC shall have paid all fees required to be paid by it on the Closing Date, including all fees required hereunder and under the Fee Letter, and shall have reimbursed each Purchaser for all fees, costs and expenses of closing the transactions contemplated hereunder and under the other Related Documents, including the Administrative Agent’s reasonable outside legal and audit expenses, and other document preparation costs.

(d)         Representations and Warranties . Each representation and warranty by MRFC and Master Servicer contained herein and in each other Related Document to which it is a party, and each representation and warranty by each Originator contained in each Related Document to which it is a party, shall be true and correct as of the Closing Date, except to the extent that such representation or warranty expressly relates solely to an earlier date.

(e)         No Termination Event . No Potential Termination Event hereunder, Termination Event hereunder, or “event of default” under (and as defined in) the Credit Agreement or any other instrument or agreement evidencing any Debt of any Originator with an aggregate outstanding principal amount in excess of $15,000,000 shall have occurred and be continuing or would result after giving effect to any of the transactions contemplated on the Closing Date.

(f)          Cash Management . The Administrative Agent shall have received satisfactory evidence that the Concentration Accounts, Lockbox Accounts and the MRFC Account have been established in accordance with Section 6.01 and on terms reasonably satisfactory to the Administrative Agent and that Account Control Agreements have been executed and delivered with respect to each Lockbox Account, each Concentration Account and the MRFC Account.

Section 3.02.     Conditions Precedent to All Purchases . No Purchaser shall be obligated to purchase Purchaser Interests hereunder on any Purchase Date if, as of the date thereof:

(a)        any representation or warranty of MRFC or any Servicer contained herein or in any of the other Related Documents shall be untrue or incorrect in any material respect as of such date, either before or after giving effect to the Purchase of Purchaser In

 

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terests on such date and to the application of the proceeds therefrom (and, in the case of any such representation or warranty in a Related Document other than this Agreement or the Purchase Agreement, after giving effect to any applicable grace period that may be expressly provided with respect to such representation or warranty in such other Related Document), except to the extent that such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted by this Transfer Agreement;

(b)        any event shall have occurred, or would result from the Purchase of Purchaser Interests on such Purchase Date or from the application of the proceeds therefrom, that constitutes a Potential Termination Event, a Termination Event, a Potential Servicer Termination Event or an Event of Servicer Termination;

(c)	the Facility Termination Date shall have occurred;

(d)        either before or after giving effect to such Purchase and to the application of the proceeds therefrom, a Purchase Excess would exist;

(e)        the Purchaser Interests sold hereunder would, after giving effect to such purchase, exceed 100%;

(f)         with respect to a Purchase Date, MRFC shall not have delivered a Purchase Request or an Investment Base Certificate with respect to such Purchase Date in accordance with Section 2.03(a) .

The delivery by MRFC of a Purchase Request with respect to an increase in Capital Investment and the acceptance by MRFC of the funds from such Purchase on any Purchase Date shall be deemed to constitute, as of any such Purchase Date, a representation and warranty by MRFC that the conditions in this Section 3.02 have been satisfied.

ARTICLE IV.

 

REPRESENTATIONS AND WARRANTIES

Section 4.01.     Representations and Warranties of MRFC . To induce the Purchasers to purchase the Purchaser Interests and the Administrative Agent to take any action hereunder, MRFC hereby represents and warrants to the Administrative Agent and the Purchasers that on the Closing Date and, except to the extent provided below, as of each Purchase Date:

(a)         Existence; Compliance with Law . MRFC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, is a “registered organization” (as defined in the UCC) of the State of Delaware and is not organized under the laws of any other jurisdiction, and has the requisite power, authority, legal right and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business in each jurisdiction in which its business is

 

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now conducted. MRFC is duly qualified to do business in, and is in good standing in, every other jurisdiction in which the nature of its business requires it to be so qualified, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. Subject to specific representations set forth herein regarding ERISA, tax and other laws, MRFC is in compliance with all applicable provisions of law, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. MRFC is in compliance with its Charter Documents.

(b)         Corporate and Governmental Authorization; Contravention . The execution, delivery and performance (including duties, rights and remedies) by MRFC of this Transfer Agreement and the other Related Documents to which MRFC is a party, and the creation and perfection of all Liens and ownership interests provided for herein and therein are within MRFC’s corporate powers, have been duly authorized by all necessary or proper actions, require no action by or in respect of, or filing with, any Governmental Authority or official thereof (other than as has been taken or filed) or any other Person, and do not contravene any provision of applicable law, rule or regulation or any order or decree of any court or Governmental Authority or of the Charter Documents of MRFC or constitute a default under or otherwise contravene, accelerate or permit the accelerating of any performance required by any agreement or any judgment, injunction, order, writ, decree or other instrument binding upon MRFC or result in the creation or imposition of any Lien on the assets of MRFC or any Originator (except as contemplated by Article VIII hereof).

(c)         Binding Effect . Each of this Transfer Agreement and the other Related Documents to which MRFC is a party constitutes the legal, valid and binding obligation of MRFC, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting the rights of creditors generally and general equitable principles (whether considered in a proceeding at law or in equity). On or prior to the Closing Date, each of the Related Documents to which MRFC is a party have been duly executed and delivered by MRFC.

(d)         Perfection . Immediately preceding each Purchase hereunder, MRFC shall be the owner of all of the Transferred Receivables and MRFC Collateral, free and clear of all Liens Claims (other than Permitted MRFC Encumbrances). On or prior to each Purchase and each recomputation of the Purchaser Interest, all financing statements and other documents required to be recorded or filed in order to perfect and protect the Purchaser Interest against all creditors of, and purchasers from, MRFC and the Originators will have been duly filed in each filing office necessary for such purpose, and all filing fees and taxes, if any, payable in connection with such filings shall have been paid in full. MRFC has received all assignments, bills of sale and other documents, and has duly effected all recordings, filings and other actions necessary to establish, protect and perfect MRFC’s right, title and interest in and to the Transferred Receivables and its other properties and assets.

 

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(e)         Accuracy of Information . All information heretofore furnished by or on behalf of MRFC or any Servicer on its behalf (including, without limitation, the Investment Base Certificates, the Monthly Reports, the Weekly Reports, the Daily Reports, any other reports delivered pursuant to the terms of this Transfer Agreement and MRFC’s financial statements) to any Purchaser or the Administrative Agent for purposes of, or in connection with, this Transfer Agreement and the other Related Documents are, and all such information hereafter furnished by or on behalf of MRFC to any Purchaser, or the Administrative Agent will be, true and accurate in every material respect, on the date such information is stated or certified, and have been prepared in good faith by the management of MRFC with the exercise of reasonable diligence.

(f)          Tax Status . MRFC has timely filed or caused to be filed all tax returns and reports required to have been filed and has paid or caused to be paid all taxes and charges required to have been paid by it, except (i) charges or other amounts being contested in accordance with Section 5.01(t) or (ii) to the extent hat the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

(g)         Actions, Suits . There is no Litigation pending or, to the knowledge of MRFC threatened, against or affecting MRFC or its properties, in or before any court, arbitrator or other Governmental Authority, which could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect on the performance by MRFC of its obligations under the Agreement or the validity and enforceability of this Transfer Agreement, the Transferred Receivables, the Contracts or any other Related Document. As of the Closing Date there is no Litigation pending or threatened that seeks damages or injunctive relief against, or alleges criminal misconduct by, MRFC.

(h)         Use of Proceeds . No proceeds of any Purchase will be used to acquire any security in any transaction that is subject to Sections 13 or 14 of the Securities Exchange Act of 1934 (unless such transaction shall have been approved by the board of directors (or comparable governing body) of the issuer of such Security) or used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the Regulations of the Federal Reserve Board, including Regulations U or X thereof. The making of the Purchases by the Purchasers hereunder, the applications of the proceeds thereof and the consummation of the transactions contemplated by this Transfer Agreement and the other Related Documents will not violate any provision of any statute or any rule, regulation or order issued by the Securities and Exchange Commission.

(i)          Place of Business . The principal place of business and chief executive office of MRFC are located at the address of MRFC indicated in Schedule 4.01(i) attached hereto, and the offices where MRFC keeps all its Records or otherwise keeps any tangible MRFC Collateral are located at the address(es) described on Schedule 4.01(i) attached hereto or such other locations notified to the Administrative Agent in accordance with Section 5.02(f) hereof in jurisdictions where all action required by Section 5.02(f) hereof has been taken and completed. None of such locations have changed within the past 12 months (or such shorter time as MRFC has been in existence). The organiza

 

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tional identification number and federal employer identification number of MRFC are set forth on Schedule 4.01(i) attached hereto.

(j)          Good Title . Upon each Purchase, the Administrative Agent, on behalf of the Purchasers, shall acquire (A) a valid and perfected first priority undivided percentage ownership interest to the extent of the Purchaser Interest or (B) a first priority perfected security interest in each Transferred Receivable (other than the portion thereof consisting of deposit accounts not subject to Account Control Agreements) that exists on the date of such Purchase and in the MRFC Collateral, in either case free and clear of any Lien (other than Permitted MRFC Encumbrances). There are no facts, circumstances or conditions known to MRFC that could reasonably be expected to result in any Liens on any MRFC Collateral.

(k)         Trade Names, etc . (i) MRFC has no subsidiaries or divisions and is not engaged in any joint venture or partnership with any other Person, and MRFC has operated under its own name within the last five (5) years, (ii) within the last five (5) years, MRFC has not changed its name, merged with or into or consolidated with any other corporation or been the subject of any proceeding under Title 11, United States Code (Bankruptcy), (iii) the exact legal name of MRFC is MRFC, Inc., and (iv) Metaldyne Company LLC is the only shareholder of MRFC and there are no outstanding rights to purchase or options, warrants or similar rights or agreements pursuant to which MRFC may be obligated to issue, sell, repurchase or redeem some or all of its Stock.

(l)	Nature of Receivables .

(i)      Eligibility . Each Transferred Receivable designated as an Eligible Receivable in each Investment Base Certificate, Monthly Report, Weekly Report or Daily Report or otherwise included in the Investment Base, as the case may be, constitutes an Eligible Receivable as of the date specified in such Investment Base Certificate, Monthly Report, Weekly Report or Daily Report or as otherwise set forth as being included in the Investment Base, as applicable.

(ii)     No Material Adverse Effect . MRFC has no knowledge of any fact (including any defaults by the Obligor thereunder on any other Receivable) that would cause it or should have caused it to expect that any payments on any specific Transferred Receivable designated as an Eligible Receivable in any Investment Base Certificate will not be paid in full when due (other than any unexpired and unexercised volume or pricing discounts or rebates to which the Obligor thereon may be entitled) or to expect any other Material Adverse Effect.

(iii)    Non-Avoidability of Transfers . MRFC shall have received each Contributed Receivable as a contribution to the capital of MRFC by an Originator and have purchased each Sold Receivable from an Originator for cash consideration, in each case in an amount that constitutes fair consideration and reasonably equivalent value therefor.

(m)	Coverage Requirement . No Purchase Excess exists.

 

 

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(n)         Credit and Collection Policies . Since March 14, 2003, there have been no material changes in the Credit and Collection Policies, other than as permitted hereunder. Since such date, no material adverse change has occurred in the overall rate of collection of the Transferred Receivables.

(o)         Collections and Servicing . Since January 2, 2005, there has been no material adverse change in the ability of any Servicer, the Originators, MRFC or any Subsidiary or Affiliate of any of the foregoing to service and collect the Receivables.

(p)         No Termination Event . No event has occurred and is continuing and no condition exists which constitutes a Termination Event or a Potential Termination Event.

(q)         Not an Investment Company . MRFC is not, and is not controlled by, an “investment company” within the meaning of the Investment Company Act or is exempt from all provisions of the Investment Company Act.

(r)          ERISA . To the extent applicable, MRFC is in compliance in all material respects with ERISA and the provisions of the IRC that are applicable to ERISA, and no lien exists in favor of the PBGC on any of the Transferred Receivables except to the extent such non-compliance could not reasonably be expected to have a Material Adverse Effect. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to have a Material Adverse Effect.

(s)          Deposit Accounts and Securities Accounts . Schedule 4.01(s) lists all banks and other financial institutions at which MRFC maintains deposit accounts (within the meaning of the UCC) as of the Closing Date, including any Lockbox Accounts, the MRFC Account and the Concentration Accounts, and such schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor. All Obligors have been instructed to make payment to a Lockbox Account and only Collections are deposited into the Lockbox Accounts. MRFC maintains no securities accounts (within the meaning of the UCC). MRFC has delivered to the Administrative Agent one or more fully executed agreements pursuant to which each Lockbox Account Bank, MRFC Account Bank and Concentration Account Bank has agreed to comply with all instructions originated by the Administrative Agent directing the disposition of funds in the Lockbox Accounts, MRFC Account and Concentration Accounts, respectively, without further consent by any other Person. None of the Accounts is in the name of any Person other than MRFC or the Administrative Agent, and MRFC has not consented to any Bank following the instructions of any Person other than the Administrative Agent. Accordingly, the Administrative Agent has a first priority perfected security interest in each Account and all funds on deposit therein.

(t)          Bulk Sales . No transaction contemplated hereby or by any of the Related Documents requires compliance with any “bulk sales” act or similar law.

 

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(u)         Transfers Under Purchase Agreement . Each Transferred Receivable was purchased by or contributed to MRFC pursuant to, and in accordance with, the terms of the Purchase Agreement on the relevant Transfer Date.

(v)         Preference; Voidability . MRFC shall have given reasonably equivalent value to each Originator in consideration for the transfer to MRFC of the Transferred Receivables with respect thereto from such Originator, and each such transfer shall not have been made for or on account of an antecedent debt owed by any Originator to MRFC, and no such transfer is or may be voidable under any section of the Bankruptcy Code.

(w)        Material Adverse Effect . Since the date of its incorporation (i) MRFC has not incurred any obligations, contingent or non-contingent liabilities, liabilities for charges, long-term leases or unusual forward or long-term commitments other than in connection with the Related Documents and that, alone or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (ii) no contract, lease or other agreement or instrument has been entered into by MRFC or has become binding upon MRFC’s assets other than in connection with the Related Documents and no law or regulation applicable to MRFC has been adopted, in each case that has had or could reasonably be expected to have a Material Adverse Effect, and (iii) MRFC has not, other than in connection with the Related Documents, entered into, and is not in default, and no third party is in default under any material contract, lease or other agreement or instrument to which MRFC is a party that alone or in the aggregate could reasonably be expected to have a Material Adverse Effect. Since the date of the incorporation of MRFC, no event has occurred that alone or together with other events could reasonably be expected to have a Material Adverse Effect.

(x)         Solvency . Both before and after giving effect to (i) the transactions contemplated by this Transfer Agreement and the other Related Documents and (ii) the payment and accrual of all transaction costs in connection with the foregoing, MRFC is and will be Solvent. After giving effect to each Purchase to be made hereunder, MRFC is and will be Solvent.

(y)         Separate Corporate Existence . MRFC has, at all times since its incorporation, complied with the covenants set forth in Section 5.01(n) . MRFC has no Debt except in connection with the Related Documents. MRFC is operated in such a manner that the separate company existence of MRFC, on the one hand, and any Metaldyne Group Member, on the other hand, would not be disregarded in the event of the bankruptcy or insolvency of any member of the Metaldyne Group and, without limiting the generality of the foregoing:

(i)     MRFC is a limited purpose entity whose activities are restricted in its Charter Documents to those activities expressly permitted hereunder and under the other Related Documents and MRFC has not engaged, nor does it presently engage, in any activity other than those activities expressly permitted hereunder and under the other Related Documents, nor has MRFC entered into any agreement other than this Transfer Agreement, the other Related Documents to which it

 

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is a party and, with the prior written consent of the Requisite Purchasers and the Administrative Agent, any other agreement necessary to carry out more effectively the provisions and purposes hereof or thereof;

(ii)    MRFC has duly appointed a board of directors and its business is managed solely by its own officers and directors, each of whom when acting for MRFC shall be acting solely in his or her capacity as an officer or director of MRFC and not as an officer, director, employee or agent of any Metaldyne Group Member;

(iii)   MRFC pays its own incidental administrative costs and expenses, and except as otherwise expressly permitted hereunder, under the other Related Documents and MRFC’s Charter Documents, no Metaldyne Group Member pays MRFC’s expenses, guarantees MRFC’s obligations or advances funds to MRFC for the payment of expenses or otherwise;

(iv)   the separate creditors of MRFC will be entitled, on the winding-up of MRFC, to be satisfied out of MRFC’s assets prior to any value in MRFC becoming available to the holders of MRFC’s Stock in their capacities as such stockholders;

(v)    all business correspondence and other communications of MRFC are conducted in MRFC’s own name, on its own stationery and through a separately-listed telephone number; and

(vi)   MRFC does not act as agent for any Metaldyne Group Member but instead presents itself to the public as a legal entity separate from each such member and independently engaged in the business of purchasing and financing Transferred Receivables.

(z)          Brokers . No broker or finder acting on behalf of MRFC was employed or utilized in connection with this Transfer Agreement or the other Related Documents or the transactions contemplated hereby or thereby and MRFC has no obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

(aa)        Servicing Software . MRFC has all necessary licenses and rights to use the Servicing Software.

Section 4.02.     Reaffirmation of Representations and Warranties by MRFC . On each day that a Purchase is made hereunder, MRFC, by accepting the proceeds of such Purchase, shall be deemed to have certified that all representations and warranties described in Section 4.01 hereof are true and correct on and as of such day as though made on and as of such day. Each of the representations and warranties herein shall survive the execution and delivery of this Transfer Agreement.

 

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ARTICLE V.

 

GENERAL COVENANTS OF MRFC

Section 5.01.     Affirmative Covenants of MRFC . At all times from the date hereof to the Termination Date, unless the Administrative Agent shall otherwise consent in writing:

(a)         Financial Reporting . MRFC will maintain a system of accounting established and administered in accordance with GAAP, and furnish to the Administrative Agent and each Purchaser:

(i)      Annual Reporting . Within ninety-five (95) days after the close of each Fiscal Year, (x) audited financial statements of Metaldyne, prepared in accordance with GAAP on a consolidated and consolidating basis (consolidating statements need not be audited by such accountants) for Metaldyne and its Subsidiaries, including balance sheets as of the end of such period, related statements of operations, shareholder’s equity and cash flows, accompanied by an unqualified audit report certified by independent certified public accountants, reasonably acceptable to the Administrative Agent, prepared in accordance with GAAP and any management letter prepared by such accountants and (y) unaudited financial statements for MRFC, including balance sheets as of the end of such period, related statements of income and shareholder’s equity, certified by its senior financial officer.

(ii)     Quarterly Reporting . Within fifty (50) days after the close of the first three (3) quarterly periods of each Fiscal Year, for (x) MRFC and (y) for Metaldyne and its Subsidiaries, in each case, consolidated and consolidating unaudited balance sheets as at the close of each such period and consolidated and consolidating related statements of operations, shareholder’s equity and cash flows for the period from the beginning of such fiscal year to the end of such quarter, together with such other financial or other information as the Administrative Agent or any Purchaser may reasonably request, in each case certified by its respective senior financial officer.

(iii)    Compliance Certificate . Together with the financial statements required hereunder, a compliance certificate signed by MRFC’s chief financial officer stating that (x) the attached financial statements have been prepared in accordance with GAAP consistently applied and accurately reflect the financial condition of MRFC or Metaldyne, as applicable, and any other information presented is true, correct and complete in all material respects, and (y) to the best of such Person’s knowledge, no Termination Event or Potential Termination Event exists, or if any Termination Event or Potential Termination Event exists, stating the nature and status thereof.

 

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(iv)	Monthly, Weekly and Daily Reports; Investment Base Certificates .

(A)       No later than 12:00 noon (New York Time) on each day on which MRFC proposes to make a Purchase, the Master Servicer will deliver to the Administrative Agent a report in the form of Exhibit 5.01(a)(iv)(A) (each a “ Daily Report ”) summarizing the Receivables activity since the immediately preceding Daily Report, which report shall include a computation of the Dynamic Advance Rate based on the Reserve levels determined as of the prior Monthly Report. The Daily Report will use ineligible Receivables and Reserves calculated on the most recent Weekly Report.

(B)        No later than 12:00 noon (New York Time) on the third Business Day of each week the Master Servicer will deliver to the Administrative Agent a report in the form of Exhibit 5.01(a)(iv)(B) summarizing the Receivables activity (including agings, roll-forwards, ineligibles and reserve levels) for the preceding weekly period as of the end of the prior week (the “ Weekly Report ”); provided , however , that the Master Servicer will be required to deliver the Weekly Report only on the third Business Day after each of the second and last Friday of each calendar month (in which case such report shall summarize Receivables activity (including agings, roll-forwards, ineligibles and reserve levels) for the two or three weekly periods ending with such Friday, as the case may be) if and for so long as the Master Servicer concurrently provides a report demonstrating to the satisfaction of the Administrative Agent that Metaldyne and its Subsidiaries had a Global Availability of not less than $30,000,000 as of such Friday.

(C)       The Master Servicer will deliver to the Administrative Agent a monthly report in form and substance satisfactory to the Administrative Agent a report in the form of Exhibit 5.01(a)(iv)(C) (the “ Monthly Report ”) summarizing the Receivables portfolio activity (including agings, roll-forwards, ineligible Receivables and computations of the Dynamic Advance Rate and reserve levels) for the preceding month as of the end of each month no later than the 15th day (or if the 15th day is not a Business Day, on the first Business Day prior to such 15th day) of the month following such month end. Each such report shall be accompanied by a letter, in form and substance satisfactory to the Administrative Agent, from the Master Servicer to the Administrative Agent confirming that the Master Servicer has received payment of the Servicing Fee for the preceding month.

(D)       At the same time each Monthly Report and Daily Report, as applicable, is required to be delivered, MRFC shall deliver to the Administrative Agent a completed certificate in the form attached hereto as Exhibit 5.01(a)(iv)(D) (each, an “ Investment Base Certificate ”), and each such Investment Base Certificate shall be prepared by MRFC or the Master Servicer as of the last day of the previous month, or with respect to each Investment Base Certificate prepared on a daily basis, as of the close of business on the previous Business Day.

 

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(v)     Notice of Termination Events or Potential Termination Events . As soon as possible and in any event within two Business Days after the actual knowledge of a Responsible Officer of MRFC of the occurrence of each Termination Event or each Potential Termination Event, a statement of the chief financial officer or chief accounting officer of MRFC setting forth details of such Termination Event or Potential Termination Event and the action which MRFC has taken or proposes to take with respect thereto.

(vi)    Change in Credit and Collection Policies . Within ten (10) Business Days after the date any material change in or amendment to the Credit and Collection Policies is made, a copy of the Credit and Collection Policies then in effect indicating such change or amendment.

(vii)   Credit and Collection Policies . Within ninety (90) days after the close of each Fiscal Years, a complete copy of the Credit and Collection Policies then in effect if any changes were made during such preceding fiscal year.

(viii)  ERISA . Promptly after the filing or receiving thereof, copies of all reports and notices with respect to any reportable event (as defined in Title IV of ERISA) which MRFC, Metaldyne, any of the Originators or any ERISA Affiliate of MRFC, Metaldyne or any of the Originators files under ERISA with the Internal Revenue Service, the PBGC or the U.S. Department of Labor or which MRFC, Metaldyne, any of the Originators or any ERISA Affiliates of MRFC, Metaldyne or the Originators receives from the Internal Revenue Service, the PBGC or the U.S. Department of Labor. MRFC shall give the Administrative Agent prompt written notice of any event that (A) could reasonably be expected to result in the imposition of a Lien on any MRFC Collateral under Section 412 of the IRC or Section 302 or 4068 of ERISA, or (B) could reasonably be expected to result in the incurrence by MRFC of any liabilities under Title IV of ERISA (other than premium payments arising in the ordinary course of business) that could reasonably be expected to result in a Material Adverse Effect.

(ix)    Shareholders Statements and Reports; Public Filings . Promptly upon the furnishing thereof to the shareholders of Metaldyne, copies of all financial statements, reports and proxy statements so furnished. Promptly upon their becoming publicly available, all 10-Q, 10-K and all material 8-K filings with the Securities and Exchange Commission. Promptly upon their becoming publicly available, notification of the filing of each of the following: (A) all financial statements, reports, notices and proxy statements made publicly available by MRFC or any Originator to its security holders; (B) all regular and periodic reports and all registration statements and prospectuses, if any, filed by MRFC or any Originator with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority; and (C) all press releases and other statements made available by MRFC or any Originator to the public concerning material adverse changes or developments in the business of any such Person.

 

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(x)     Operating Plan . As soon as available, but not later than the last day of each fiscal year, an annual operating plan for Metaldyne and its Subsidiaries, approved by the board of directors of Metaldyne, for the following year prepared on the same basis and in similar detail as that on which operating results are reported.

(xi)    Management Letters . Within five Business Days after receipt thereof by MRFC, copies of all management letters, exception reports or similar letters or reports received by MRFC from its independent certified public accountants.

(xii)   Other Notices . As soon as practicable, and in any event within five Business Days after an Authorized Officer of MRFC has actual knowledge of the existence thereof, telephonic or telecopied notice of any of the following events, in each case specifying the nature and anticipated effect thereof and what action, if any, MRFC proposes to take with respect thereto, which notice, if given telephonically, shall be promptly confirmed in writing on the next Business Day:

(A)       any Lien made or asserted against any of the MRFC Collateral (other than a Permitted MRFC Encumbrance) of which it becomes aware;

(B)        the occurrence of any event that could reasonably be expected to have a Material Adverse Effect on the aggregate value of the MRFC Collateral or on the assignments and Liens granted by MRFC pursuant to this Transfer Agreement;

(C)       the occurrence of any event of the type described in Sections 4.02(t)(i), (ii) or (iii) of the Purchase Agreement involving any Obligor obligated under Transferred Receivables with an aggregate Outstanding Balance at such time of $1,000,000 or more; or

(D)       the commencement of a case or proceeding by or against MRFC seeking a decree or order in respect of MRFC (A) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (B) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for MRFC or for any substantial part of its assets, or (C) ordering the winding-up or liquidation of the affairs of MRFC; and

(E)        any other event, circumstance or condition that has had or could reasonably be expected to have a Material Adverse Effect.

(xiii)  Litigation . Promptly upon learning thereof, written notice of any Litigation affecting MRFC, the Transferred Receivables or the MRFC Collateral, whether or not fully covered by insurance, and regardless of the subject matter thereof that (A) seeks damages in excess of $15,000,000, (B) seeks injunc

 

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tive relief, (C) is asserted or instituted against any Plan, its fiduciaries or its assets or against MRFC or any ERISA Affiliate of MRFC in connection with any Plan, (D) alleges criminal misconduct MRFC, (E) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Liabilities, or (F) if determined adversely, could reasonably be expected to have a Material Adverse Effect.

(xiv)  Bringdown Certifications . As soon as available, and in any event within 90 days after the end of each fiscal year, a Bringdown Certificate.

(xv)   Transfer Agreement Notices . Promptly after receipt thereof, MRFC shall forward to the Administrative Agent a copy of each notice that MRFC receives from Metaldyne or any Originator under the Transfer Agreement.

(xvi)  Other Information . Such other information (including non-financial information) as the Administrative Agent may from time to time reasonably request with respect to the Investment Base, MRFC Collateral, Transferred Receivables, the Contracts therefor or the Originators, MRFC, Metaldyne or any Subsidiary of any of the foregoing.

(b)         Conduct of Business . MRFC will (i) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted, and in accordance with the terms of its bylaws, and Section 4.01(y) , (ii) do all things necessary to remain duly organized, validly existing and in good standing as a domestic corporation in its jurisdiction of corporation, (iii) maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except any jurisdictions where the failure to maintain such authority could not reasonably be expected to have a Material Adverse Effect, (iv) transact business only in the name of MRFC, Inc. or such other names as are set forth in Schedule 5.01(b) , and (v) maintain its principal place of business and chief executive office and the office at which it stores its Records at the respective locations specified in Schedule 4.01(i) or, upon 10 Business Days’ prior written notice to the Administrative Agent, at such other location in a jurisdiction where all action requested by the Administrative Agent pursuant to Section 14.13 shall have been taken with respect to the MRFC Collateral.

(c)         Compliance with Agreements and Laws . MRFC shall perform each of its obligations under this Transfer Agreement and the other Related Documents. MRFC will, and will cause each of MRFC’s Affiliates to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it or its respective properties may be subject, except to the extent that the failure to so comply with such laws, rules, regulations, writs, judgments, injunctions, decrees or awards would not materially adversely affect the ability of MRFC to perform its obligations under this Transfer Agreement.

(d)         Furnishing of Information and Inspection of Records . MRFC will furnish to the Administrative Agent from time to time such information with respect to the Trans

 

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ferred Receivables and MRFC Collateral as the Administrative Agent may reasonably request, including, without limitation, listings identifying the Obligor and the Outstanding Balance for each Transferred Receivable, together with an aging of Transferred Receivables. MRFC will at any time and from time to time during regular business hours (and taking into account normal vacation and holiday shutdown practices in the automotive manufacturing industry) and upon three Business Days’ prior notice permit the Administrative Agent and the Purchasers or their agents or representatives, as frequently as the Administrative Agent deems appropriate, (i) to examine, audit and make copies of and abstracts from all Records and (ii) to visit the offices and properties of MRFC for the purpose of examining such books and records and Records and inspecting, reviewing and evaluating the Transferred Receivables and MRFC Collateral, and to discuss matters relating to Transferred Receivables, MRFC Collateral or MRFC’s and the Originators’ performance hereunder and under the other Related Documents to which such Person is a party with any of the officers, directors, or employees of MRFC, Master Servicer and the Originators having knowledge of such matters. If (A) the Administrative Agent in good faith deems any Purchaser’s rights or interests in the Transferred Receivables or any MRFC Collateral insecure or the Administrative Agent in good faith believes that an Potential Termination Event or a Termination Event is imminent or (B) an Potential Termination Event or a Termination Event shall have occurred and be continuing, then MRFC shall, at its own expense, provide the access required in this Section 5.01(d) at all times without prior notice from the Administrative Agent and provide the Administrative Agent with access to the suppliers and customers of MRFC.

(e)         Keeping of Records and Books of Account . MRFC will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Transferred Receivables in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, records and other information reasonably necessary or advisable for the collection of all Transferred Receivables (including, without limitation, records adequate to permit the daily identification of each new Transferred Receivable, all Collections of and adjustments to each existing Transferred Receivable and returned merchandise and other dealings therewith), including adequate and complete records of the Transferred Receivables and MRFC Collateral. MRFC will give the Administrative Agent and each Purchaser prompt notice of any change in the administrative and operating procedures of MRFC or any Originator to the extent such change may have a Material Adverse Effect.

(f)          Performance and Compliance with Contracts . MRFC, at its expense, will, and will instruct each Originator to, timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by MRFC or such Originator under the Contracts related to the Transferred Receivables.

(g)         Credit and Collection Policies . MRFC will, and will cause each Originator to, comply in all material respects with the Credit and Collection Policies in regard to each Transferred Receivable and the related Contract.

 

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(h)         Collections . MRFC shall, and shall cause each Originator to, instruct all Obligors to cause all Collections to be remitted to a Lockbox or deposited directly to a Lockbox Account. MRFC shall not have any deposit accounts other than the Lockbox Accounts, the Concentration Account and the MRFC Account.

(i)          Collections Received . MRFC shall, and shall cause each Originator to, hold in trust, and deposit immediately (but in any event no later than one (1) Business Day following receipt thereof) to a Lockbox Account or Concentration Account all Collections received from time to time by MRFC or any Originators, as the case may be.

(j)          Sale Treatment . MRFC (i) will not, and will not permit any Originator to, account for (including for accounting purposes), or otherwise treat, the transactions contemplated by the Purchase Agreement in any manner other than (A) with respect to each Sale of each Sold Receivable effected thereby as a sale of Receivables by the Originators to MRFC and (B) with respect to each contribution of Contributed Receivables thereunder, as an increase in the stated capital of MRFC, and (ii) will not account for (other than for tax purposes) or otherwise treat the transactions contemplated hereby in any manner other than as a sale of Transferred Receivables by MRFC to the Purchasers. In addition, MRFC shall, and shall cause each Originator to, disclose (in a footnote or otherwise) in all of its financial statements (including any such financial statements consolidated with any other Persons’ financial statements) the existence and nature of the transaction contemplated hereby and by the Purchase Agreement, as applicable, and the interest of MRFC (in the case of each Originator’s financial statements) and the Purchasers (in the case of MRFC’s financial statements) in the Receivables and MRFC Collateral.

(k)         Separate Business . MRFC shall not engage in any business not permitted by its Charter Documents as in effect on the Closing Date.

(l)          Charter Documents . MRFC shall only amend, alter, change or repeal its Charter Documents with the prior written consent of the Administrative Agent which shall not be unreasonably withheld.

(m)        Use of Proceeds . MRFC shall utilize the proceeds of the Purchases made hereunder solely for (i) the repayment of Purchases made and the payment of any fees and other MRFC Secured Obligations due hereunder, (ii) the purchase of Receivables from the Originators pursuant to the Purchase Agreement, (iii) the payment of distributions to the Originators, (iv) the repayment of Subordinated Loans, and (v) the payment of administrative fees or Servicing Fees or expenses to the Servicers or routine administrative or operating expenses, in each case only as expressly permitted by and in accordance with the terms of this Transfer Agreement and the other Related Documents.

(n)	Separate Corporate Existence . MRFC shall:

(i)     Maintain its own deposit account or accounts, separate from those of any Affiliate, with commercial banking institutions and use its commercially reasonable efforts to ensure that the funds of MRFC will not be diverted to any

 

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other Person or for other than corporate uses of MRFC and that such funds will not be commingled with the funds of any Metaldyne Group Member;

(ii)    Compensate all employees, consultants and agents directly or indirectly through reimbursement of Metaldyne, from its own funds, for services provided to MRFC by such Persons and to the extent that it shares the same officers or other employees as any of its Stockholders or Affiliates, fairly allocate among such entities the salaries of and the expenses related to providing benefits to such officers and other employees, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees;

(iii)   To the extent that it jointly contracts with any of its Stockholders or Affiliates to do business with vendors or service providers or to share overhead expenses, fairly allocate among such entities the costs incurred in so doing, and each such entity shall bear its fair share of such costs. To the extent that MRFC contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods or services are provided, and each such entity shall bear its fair share of such costs;

(iv)   Other than the purchase and acceptance through capital contribution of Transferred Receivables, the Subordinated Loan, the payment of distributions and return of capital to the Originators, the payment of the Servicing Fee to the Servicers under this Transfer Agreement, and the transactions for which allocation of expenses and costs are specifically described in this Section 5.01(n) , MRFC engages and has engaged in no intercorporate transactions with any Metaldyne Group Member;

(v)    Maintain office space separate from the office space of the Metaldyne Group Members. To the extent that MRFC and any of its Stockholders or Affiliates have offices in the same location, there shall be a fair and appropriate allocation of overhead costs among them, and each such entity shall bear its fair share of such expenses;

(vi)   Issue separate unaudited financial statements prepared not less frequently than quarterly and prepared in accordance with GAAP consistently applied;

(vii)  Conduct its affairs strictly in accordance with its bylaws and certificate of incorporation and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special stockholders’ and directors’ meetings appropriate to authorize all company action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining ac

 

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curate, complete and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts;

(viii) Not assume or guarantee any of the liabilities of, or make any loans to, any Metaldyne Group Member;

(ix)   Take, or refrain from taking, as the case may be, all other actions that are necessary to be taken or not to be taken in order to (x) ensure that the assumptions and factual recitations set forth in the Specified Bankruptcy Opinion Provisions remain true and correct with respect to MRFC and (y) comply with those procedures described in such provisions which are applicable to MRFC;

(x)    Take such actions as are necessary to ensure that not less than one member of MRFC’s board of directors shall be an individual who (A) is not, and never has been, a direct, indirect or beneficial stockholder, officer, director, employee, affiliate, associate, material supplier or material customer of any Metaldyne Group Member (other than an Independent Director of MTSPC, Inc.) and (B) has (1) prior experience as an independent director for a Person whose Charter Documents required the unanimous consent of all independent directors thereof before such Person could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (2) at least three years of employment experience related to asset securitization agreements, and (C) is otherwise acceptable to the Purchasers and the Administrative Agent (an “ Independent Director ”). The Charter Documents of MRFC shall provide that (i) at least one member of MRFC’s board of directors shall be an Independent Director, (ii) MRFC’s board of directors shall not approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with respect to MRFC unless a unanimous vote of MRFC’s board of directors (which vote shall include the affirmative vote of each Independent Director) shall approve the taking of such action in writing prior to the taking of such action and (iii) the provisions requiring an independent director and the provision described in clauses (i) and (ii) of this clause (x) cannot be amended without the prior written consent of each Independent Director;

(xi)   Take such actions as are necessary to ensure that no Independent Director shall at any time serve as a trustee in bankruptcy for MRFC or any Affiliate thereof;

(xii)  Take such actions as are necessary to ensure that the books of account, financial reports and corporate records of MRFC will be maintained separately from those of each Metaldyne Group Member;

(xiii) Take such actions as are necessary to ensure that any financial statements of any Metaldyne Group Member which are consolidated to include MRFC will contain detailed notes clearly stating that (A) all of MRFC’s as

 

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sets are owned by MRFC, and (B) MRFC is a separate corporate entity with its own separate creditors that will be entitled to be satisfied out of MRFC’s assets prior to any value in MRFC becoming available to MRFC’s equity holders; and the accounting records and the published financial statements of the Originators will clearly show that, for accounting purposes, the Transferred Receivables have been sold to MRFC;

(xiv) Take such actions as are necessary to ensure that MRFC’s assets will be maintained in a manner that facilitates their identification and segregation from those of the Metaldyne Group Members;

(xv)  Take such actions as are necessary to ensure that no Affiliates of MRFC shall, directly or indirectly, name MRFC or enter into any agreement to name MRFC a direct or contingent beneficiary or loss payee or any insurance policy covering the property of any such Affiliate; and

(xvi) Take such actions as are necessary to ensure that no Affiliate of MRFC will be, nor will hold itself out to be, responsible for the debts of MRFC or the decisions or actions in respect of the daily business and affairs of MRFC, including, but not limited to, responding to inquiries with respect to ownership of a Transferred Receivable by stating that it is the owner of such Transferred Receivable and that such Transferred Receivable is pledged to the Administrative Agent. MRFC will immediately correct any known misrepresentation with respect to the foregoing, and MRFC and its Affiliates will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity.

(o)         Enforcement of MRFC Assigned Agreements . MRFC shall use commercially reasonable efforts to (i) enforce all rights held by it under the Purchase Agreement and the other MRFC Assigned Agreements, (ii) not waive any breach of any covenant thereunder without the written consent of the Administrative Agent, and (iii) maintain the MRFC Assigned Agreements in accordance with their terms and take all action as may from time to time be requested by the Administrative Agent in order to accomplish the foregoing. Upon the request of and as directed by the Administrative Agent, MRFC shall make such demands and requests to any other party to the MRFC Assigned Agreements as are permitted to be made by MRFC thereunder at that time.

(p)	Required Currency Hedges .

(i)     MRFC shall have the Required Currency Hedge in place for the Required Hedge Notional Amount. MRFC agrees that at any time that it enters into any Required Currency Hedge, it shall have funds available to make payment of fees or other amounts due in connection with the purchase of such Required Currency Hedge at the time that such payments are due and payable thereunder. MRFC agrees that it will enter into a Required Currency Hedge only on a Settlement Date or on the Closing Date.

 

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(ii)    MRFC agrees that at any time that it enters into any Required Currency Hedge, it shall execute and deliver to the Administrative Agent, for the benefit of the Purchasers, an assignment of all amounts payable to MRFC under such Required Currency Hedge substantially in the form of Exhibit 5.01(p) (each, a “ Required Currency Hedge Assignment ”).

(q)         Credit Default Swaps . MRFC agrees that at any time that it enters into any Credit Default Swap, it shall execute and deliver to the Administrative Agent, for the benefit of the Purchasers, an assignment of all amounts payable to MRFC under such Credit Default Swap substantially in the form of Exhibit 5.01(q) (each, a “ Required Credit Default Swap Assignment ”).

(r)          Counterparties . If at any time the commercial paper or short term deposit ratings from any rating agency assigned to a counterparty to any Required Currency Hedge of Credit Default Swap is such that such counterparty is no longer an Eligible Counterparty, MRFC shall (x) require such counterparty to secure its obligations under any Required Currency Hedge or Credit Default Swap or (y) replace such counterparty with an Eligible Counterparty within the earlier of (A) 30 days or (B) within 5 Business Days in the event that such counterparty’s commercial paper rating or short-term deposit rating is withdrawn or downgraded below A-2 or P-2.

(s)	Further Assurances .

(i)     MRFC shall, by no later than the Closing Date, mark conspicuously with a legend, in form and substance satisfactory to the Administrative Agent, its books and records (including computer records) and credit files pertaining to the MRFC Collateral, and its file cabinets or other storage facilities where it maintains information pertaining thereto, to evidence this Transfer Agreement and the assignment and Liens granted pursuant to Article VIII . Upon the occurrence and during the continuance of a Termination Event, MRFC shall deliver and turn over such books and records to the Administrative Agent or its representatives at any time on demand of the Administrative Agent. MRFC shall make available to the Administrative Agent and its counsel, as quickly as is possible under the circumstances, originals or copies of all books and records, including Records, that the Administrative Agent may request. MRFC shall deliver any document or instrument necessary for the Administrative Agent, as the Administrative Agent may from time to time request, to obtain records from any service bureau or other Person that maintains records for MRFC, and shall maintain duplicate records or supporting documentation on media, including computer tapes and discs owned by MRFC.

(ii)    MRFC will reimburse the Administrative Agent for the actual cost of obtaining once during each calendar quarter a certificate of good standing (in short-form, if applicable, and on an un-expedited basis) for each of MRFC and each Originator from its state of incorporation or organization.

(t)          Payment and Performance of Charges and other Obligations . MRFC shall pay, perform and discharge or cause to be paid, performed and discharged all of its obli

 

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gations and liabilities, including all taxes, assessments and governmental charges upon its income and properties and all lawful claims for labor, materials, supplies and services, promptly when due, except that MRFC may in good faith contest, by appropriate proceedings, the validity or amount of any charges or claims described in this Section 5.01(t) if (A) adequate reserves with respect to such contest are maintained on the books of such Person, in accordance with GAAP, (B) such contest is maintained and prosecuted continuously and with diligence, (C) none of the Originator Collateral could reasonably be expected to become subject to forfeiture or loss as a result of such contest, (D) no Lien may be imposed to secure payment of such charges or claims other than inchoate tax liens and (E) the failure to pay, perform or discharge such claims could not reasonably be expected to have or result in a Material Adverse Effect.

Section 5.02.     Negative Covenants of MRFC . MRFC covenants and agrees that from and after the Closing Date until the Termination Date:

(a)         No Sales, Liens, etc . Except as otherwise provided herein and in the Transfer Agreement, MRFC will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Lien (other than Permitted MRFC Encumbrances) upon or with respect to (or the filing of any financing statement in respect of) any of the Transferred Receivables or MRFC Collateral (whether in a public or private offering or otherwise). MRFC shall not become a party to any agreement, note, indenture or instrument or take any other action that would prohibit the creation of a Lien on any of its properties or other assets in favor of the Purchasers and the Administrative Agent as additional collateral for the MRFC Secured Obligations except as otherwise expressly permitted by this Transfer Agreement or any of the other Related Documents.

(b)         No Extension or Amendment of Receivables . Except as otherwise expressly permitted hereunder, MRFC will not, and will not permit any Originator to, extend, amend, forgive, compromise, waive, cancel, discharge or otherwise modify the terms of any Transferred Receivable, or amend, modify or waive any term or condition of any Contract related thereto, except as contemplated by the Credit and Collection Policies and normal business practices, without the prior written consent of the Administrative Agent (not to be unreasonably withheld in the case of any Contract), and in each case in accordance with the Related Documents.

(c)         No Change in Business or Credit and Collection Policies . MRFC will not make any change in the character of its business, its business objectives, purposes or operations, or in the Credit and Collection Policies, which change could reasonably be expected to have a Material Adverse Effect.

(d)         No Mergers, etc . MRFC will not, directly or indirectly, by operation of law or otherwise, (i) consolidate or merge with or into any other Person, (ii) except in connection with this Transfer Agreement and the transactions contemplated hereby, sell, lease or transfer all or substantially all of its assets to any other Person, (iii) form or acquire any Subsidiary, or (iv) acquire all or substantially all of the assets of, or otherwise combine with or acquire, any Person.

 

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(e)         Change in Payment Instructions to Obligors; Deposits to Lockbox Accounts . MRFC will not, and will not permit any Originator to, add or terminate any bank as a Bank or any deposit account as a Lockbox Account, Concentration Account or MRFC Account to or from those listed in Schedule 4.01(s) attached hereto or make any change in its instructions to Obligors regarding payments to be made to any Lockbox Account, unless (i) such instructions are to deposit such payments to another existing Lockbox Account or (ii) the Administrative Agent shall have received written notice of such addition, termination or change at least thirty (30) days prior thereto and the Administrative Agent shall have received an Account Control Agreement executed by each new Bank or an existing Bank with respect to each new Account, as applicable and MRFC shall have otherwise complied with Section 6.01(a)(iii) . MRFC will not deposit or otherwise credit, or cause to be deposited or credited (and will use reasonable commercial efforts to not permit to be so deposited or credited), to any Lockbox Account or Concentration Account cash or cash proceeds other than Collections of Transferred Receivables. In the event any Person deposits or otherwise credits, or cause or permits to be so deposited or credited, to any Lockbox Account or Concentration Account, cash or cash proceeds other than Collections of Transferred Receivables, MRFC shall, or shall cause an Originator or Servicer to, segregate or cause to be segregated any such cash or cash proceeds from Collections within two (2) Business Days following the deposit or credit to any Lockbox Account or Concentration Account.

(f)          Change of Name, etc . MRFC will not change its jurisdiction of incorporation, its name from that indicated on the public records of its jurisdiction of incorporation, its capital structure (including the issuance of any Stock) or the location of its chief executive office, unless at least ten (10) Business Days prior to the effective date of any such change MRFC delivers to the Administrative Agent such documents, instruments or agreements, executed by MRFC as are necessary to reflect such change and to continue the perfection of the Administrative Agent’s ownership interests or security interests in the Transferred Receivables and the MRFC Collateral.

(g)         Amendment to Related Documents . MRFC will not, and will not permit any of the Originators to, amend, modify, or supplement the Purchase Agreement or any other Related Document, except with the prior written consent of the Administrative Agent; nor shall MRFC take, or permit any of the Originators to take, any other action under the Purchase Agreement that shall have a material adverse affect on the Administrative Agent or any Purchaser or which is inconsistent with the terms of this Transfer Agreement.

(h)         Other Debt . Except as provided for herein or in the Purchase Agreement, MRFC will not create, incur, assume or suffer to exist any Debt whether current or funded, or any other liability other than (i) Debt of MRFC representing fees, expenses and indemnities arising hereunder or under the Purchase Agreement or for the purchase price (including the Subordinated Notes) of the Receivables under the Purchase Agreement; and (ii) other Debt incurred in the ordinary course of its business to the extent permitted by or required under any other Related Document.

 

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(i)          ERISA Matters . MRFC will not, and will not permit any Originator to, (i) engage or permit any of its ERISA Affiliates to engage in any prohibited transaction (as defined in Section 4975 of the Code and Section 406 of ERISA) for which an exemption is not available or has not previously been obtained from the U.S. Department of Labor; (ii) permit to exist any “accumulated funding deficiency” (as defined in Section 302(a) of ERISA and Section 412(a) of the Code) with respect to any Pension Plan; (iii) fail to make any payments to any Multiemployer Plan that MRFC or any ERISA Affiliate of MRFC is required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (iv) terminate any Title IV Plan or withdraw from any Multiemployer Plan so as to result in any liability; or (v) permit to exist any occurrence of any reportable event described in Title IV of ERISA which represents a material risk of a liability to MRFC or any ERISA Affiliate of MRFC under ERISA or the Code, if such prohibited transactions, accumulated funding deficiencies, failure to make payments, terminations, withdrawals, and reportable events occurring within any fiscal year of MRFC in the aggregate, involve a payment of money or an incurrence of liability by MRFC or any ERISA Affiliate of MRFC in an amount which would be expected to have a Material Adverse Effect. MRFC shall not, and shall not cause or permit any ERISA Affiliate to, cause or permit to occur an event that could reasonably be expected to result in the imposition of a Lien on MRFC Collateral under Section 412 of the IRC or Section 302 or 4068 of ERISA.

(j)          Payment to the Originators . With respect to any Transferred Receivable, MRFC shall, and shall cause the Originators to, effect such sale under, and pursuant to the terms of, the Purchase Agreement, including, without limitation, the payment by MRFC either in cash or by increase in the amount of the Subordinated Notes of an amount equal to the purchase price for such Receivable as required by the terms of the Purchase Agreement.

(k)         Amendments to Credit Default Swaps . MRFC shall not supplement, amend, extend, replace, terminate or otherwise modify any Credit Default Swap without the consent of the Administrative Agent, except that no such consent shall be required for MRFC to (i) enter into an amendment solely to reduce the notional amount under a Credit Default Swap or (ii) terminate a Credit Default Swap; provided that (x) prior to (and, in any event, at least one Business Day before) reducing or terminating such Credit Default Swap, the Master Servicer provides the Administrative Agent with a certificate (signed by a Responsible Officer of the Master Servicer) which attaches a Daily Report giving pro forma effect to any reduction in the Investment Base resulting from the reduction or termination of such Credit Default Swap and which certifies that, after giving pro forma effect to the reduction or termination of such Credit Default Swap, there is no Purchase Excess and (y) after giving pro forma effect to any reduction in the Investment Base resulting from the reduction or termination of such Credit Default Swap, there is no Purchase Excess.

(l)          Restricted Payments . Except for the Subordinated Loans, MRFC shall not enter into any lending transaction with any other Person. MRFC shall not at any time (i) advance credit to any Person or (ii) declare any distributions, repurchase any membership

 

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interest, return any capital, or make any other payment or distribution of cash or other property or assets in respect of MRFC’s membership interest or make a repayment with respect to any Subordinated Loans if, in each case after giving effect to any such advance or distribution, a Purchase Excess, Potential Termination Event or Termination Event would exist or otherwise result therefrom.

(m)        Prohibited Transactions . MRFC shall not enter into, or be a party to, any transaction with any Person except as expressly permitted hereunder or under any other Related Document or its Charter Documents as in effect on the Closing Date.

(n)         Investments . Except with respect to Transferred Receivables and Permitted Investments or as otherwise expressly permitted hereunder or under the other Related Documents, MRFC shall not make any investment in, or make or accrue loans or advances of money to, any Person, including the Originators, any director, officer or employee of MRFC or any Metaldyne Group Member, through the director or indirect lending of money, holding of securities or otherwise.

(o)         Board Policies . MRFC shall not modify the terms of any policy or resolutions of its board of directors if such modification could reasonably be expected to have or result in a Material Adverse Effect.

(p)         Additional Stockholder of MRFC . MRFC shall not permit any additional Person to own or hold MRFC’s Stock without the prior written consent of the Administrative Agent other than Originators or Persons from time to time added as “Originators” in accordance with Section 3.03(a) of the Purchase Agreement.

ARTICLE VI.

 

COLLECTIONS AND DISBURSEMENTS

Section 6.01.		Establishment of Accounts .
(a)	The Lockbox Accounts and the Concentration Accounts .

(i)     MRFC has established with each Lockbox Account Bank one or more Lockbox Accounts, and MRFC has established one or more accounts with a Concentration Bank in the United States to hold all Collections received in the United States (such accounts or account, the “ U.S. Concentration Account ”) and one or more accounts in Canada with a Concentration Bank to hold all Collections received in Canada that are paid in U.S. Dollars (such accounts or account, the “ Canada U.S. Dollar Concentration Account ”), and on or prior to the Canadian Originator Addition Date MRFC shall establish one or more accounts in Canada with a Concentration Bank to hold all Collections received in Canada that are paid in Canadian Dollars (such accounts or account, the “ Canada Canadian Dollar Concentration Account ”). MRFC agrees that the Administrative Agent shall have exclusive dominion and “control” (as defined in the applicable UCC) of each Lockbox Account and the Concentration Accounts and the ability to direct

 

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all monies, instruments and other property from time to time on deposit therein. MRFC shall not make or cause to be made, or have any ability to make or cause to be made, (A) any withdrawals from any Lockbox Account or any Concentration Account except as provided in the immediately following sentence or (B) any deposits into any Lockbox, Lockbox Account or Concentration Account except in accordance with the terms of this Transfer Agreement or any other Related Document. Pursuant to Section 6.02 , MRFC shall instruct (1) each Lockbox Account Bank to transfer, and MRFC hereby grants the Administrative Agent the authority to instruct each such Lockbox Account Bank to transfer, on each Business Day in same day funds, all available funds in each Lockbox Account to the Concentration Account specified in the following sentence, and (2) each Concentration Account Bank to transfer, and MRFC hereby grants the Administrative Agent the authority to instruct each such Concentration Account Bank to transfer, on each Business Day in same day funds, all available funds in the Concentration Accounts to the Collection Account. All funds deposited in all Lockboxes and Lockbox Accounts located in the United States shall be transferred to the U.S. Concentration Account, all funds deposited into Lockboxes and Lockbox Accounts located in Canada into which U.S. Dollars are deposited shall be transferred to the Canada U.S. Dollar Concentration Account, and all funds deposited into Lockboxes and Lockbox Accounts located in Canada into which Canadian Dollars are deposited shall be transferred to the Canada Canadian Dollar Concentration Account. Notwithstanding anything herein to the contrary, prior to disbursement from the Canada Canadian Dollar Concentration Account, the amounts on deposit therein shall be exchanged by the Master Servicer into U.S. Dollars ( provided that, after the occurrence and during the continuation of a Termination Event, the Master Servicer may not give instructions with respect to the Accounts, but such amounts may be exchanged by the Administrative Agent) by soliciting offer quotations from at least two Authorized Foreign Exchange Dealers for effecting such exchange and shall compare such offer quotations to the Required Currency Hedge and select the execution which will require the least amount of Canadian Dollars (or portions thereof) to purchase one (1) U.S. dollar; provided that if as a result of changes in customary market practice in, or other changes relating to, the currency exchange markets in Canada, the Master Servicer is unable to comply with the terms hereof in respect of the purchase of U.S. Dollars with Canadian Dollars, then the parties hereto will use all reasonable efforts to agree on the terms of an amendment hereto and to amend the terms hereof in order to permit such compliance with the terms hereof or to reflect such customary market practice; provided , further , that as an alternate transfer method, so long as no Termination Event has occurred and is continuing, the Master Servicer may transfer the required amount of U.S. Dollars, calculated in accordance with the Canadian Exchange Percentage, to the U.S. Dollar Concentration Account and upon completion of such transfer, the Administrative Agent shall distribute from the Canada Canadian Dollar Collection Account the corresponding amount of Canadian Dollars to or upon the order of the Master Servicer; provided , further , that the amount of U.S. Dollars transferred is not less than the amount of U.S. Dollars that would have been transferred using the Valuation Price.

(ii)    MRFC and/or the Master Servicer have instructed all existing Obligors of Transferred Receivables, and shall instruct all future Obligors of Receivables to be transferred hereunder, to make payments in respect thereof only (A) by check or money order mailed to one or more lockboxes or post office boxes under the control of the Administrative Agent (each a “ Lockbox ” and collectively the “ Lockboxes ”) or (B) by wire transfer or moneygram directly to a Lockbox Account. Schedule 4.01(s) lists all Lockboxes, Lockbox Accounts and all Lockbox

 

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Account Banks at which MRFC maintains Lockboxes and Lockbox Accounts, and the Concentration Accounts and the Concentration Account Banks, and such schedule correctly identifies (1) with respect to each Bank, the name, address and telephone number thereof, (2) with respect to each Lockbox Account and Concentration Account, the name in which such account is held and the complete account number therefor, and (3) with respect to each Lockbox, the lockbox number and address thereof. MRFC and/or the Master Servicer shall endorse, to the extent necessary, all checks or other instruments received in any Lockbox so that the same can be deposited in the Lockbox Account, in the form so received (with all necessary endorsements), on the date of receipt thereof. In addition, each of MRFC and the Master Servicer shall deposit or cause to be deposited into a Lockbox Account all cash, checks, money orders or other proceeds of Transferred Receivables or MRFC Collateral received by it other than in a Lockbox or a Lockbox Account, in the form so received (with all necessary endorsements), not later than the close of business on the second Business Day following the date of receipt thereof, and until so deposited all such items or other proceeds shall be held in trust for the benefit of the Administrative Agent.

(iii)   If, for any reason, an Account Control Agreement terminates or any Bank fails to comply with its obligations under the Account Control Agreement to which it is a party (other than a failure by a Bank to make a payment on a Business Day to the Administrative Agent by the hour deadline specified in an Account Control Agreement provided that such Bank does make such payment to the Administrative Agent by the close of business on such Business Day), then (A) to the extent such Account Control Agreement is with respect to a Lockbox or Lockbox Account, MRFC and/or the Master Servicer shall promptly notify all Obligors of Transferred Receivables who had previously been instructed to make wire payments to a Lockbox Account maintained at any such Lockbox Account Bank to make all future payments to a new Lockbox Account in accordance with this Section 6.01(a)(iii) and (B) to the extent such Account Control Agreement is with respect to any Concentration Account, the Administrative Agent may direct the Lockbox Account Banks to forward all Collections received in the Lockbox Accounts to the Collection Account or a new Concentration Account provided that such new Concentration Account is in the same currency and located in the same country as such Lockbox or Lockbox Account. MRFC shall not voluntarily close any such Lockbox Account or Concentration Account unless it shall have (1) received the prior written consent of the Administrative Agent (not to be unreasonably withheld if MRFC is in compliance with this Section 6.01(a)(iii) after giving effect to such closure), (2) established a new account with the same Bank or with a new depositary institution reasonably satisfactory to the Administrative Agent, (3) entered into an Account Control Agreement covering such new account that is satisfactory in all respects to the Administrative Agent (whereupon, for all purposes of this Transfer Agreement and the other Related Documents, such new account shall become a Lockbox Account or Concentration Account, as applicable, such new agreement shall become an Account Control Agreement and any new depositary institution shall become a Lockbox Account Bank or Concentration Account Bank, as applicable), and (4) taken all such action as is required under applicable law to grant and perfect a first priority Lien in such new Lockbox Account or Concentration Account to the Purchasers under Section 8.01 of this Transfer Agreement. Except as permitted by this Section 6.01(a) , neither MRFC nor any Servicer shall open any new Lockbox, Lockbox Account or Concentration Account without the prior written consent of the Administrative Agent (not to be unreasonably withheld if such Account is established with a depositary institution acceptable to the Adminis

 

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trative Agent and MRFC is in compliance with this Section 6.01(a)(iii) after giving effect to such opening).

(b)	Collection Account .

(i)     The Purchasers have established and shall maintain the Collection Account with the Depositary. The Collection Account shall be registered in the name of the Administrative Agent and the Administrative Agent shall, subject to the terms of this Transfer Agreement, have exclusive dominion and control thereof and of all monies, instruments and other property from time to time on deposit therein.

(ii)    The Purchasers and the Administrative Agent may deposit into the Collection Account from time to time all monies, instruments and other property received by any of them as proceeds of the Transferred Receivables or MRFC Collateral. On each Business Day prior to the Facility Termination Date the Administrative Agent shall instruct and cause the Depositary (which instruction may be in writing or by telephone confirmed promptly thereafter in writing) to release all funds on deposit in the Collection Account in same day funds in the order of priority set forth in Section 6.03 . On each Business Day from and after the Facility Termination Date, the Administrative Agent shall apply all funds on deposit in the Collection Account when received in the Collection Account in same day funds in the manner set forth in Section 6.04 .

(iii)   If, for any reason, the Depositary wishes to resign as depositary of the Collection Account or fails to carry out the instructions of the Administrative Agent, then the Administrative Agent shall promptly notify the Purchasers and MRFC. Neither the Purchasers nor the Administrative Agent shall close the Collection Account unless (A) a new deposit account has been established with the Depositary, (B) the Purchasers and the Administrative Agent have entered into an agreement covering such new account with such new depositary institution satisfactory in all respects to the Administrative Agent (whereupon such new account shall become the Collection Account for all purposes of this Transfer Agreement and the other Related Documents), and (C) the Purchasers and the Administrative Agent have taken all such action as the Administrative Agent shall require to grant and perfect a first priority Lien in such new Collection Account to the Administrative Agent on behalf of the Purchasers.

Section 6.02.     Funding of Collection Account . As soon as practicable, and in any event no later than 3:00 p.m. (New York time) on each Business Day:

(a)        the Administrative Agent shall transfer or cause to be transferred, to the extent then available, all Collections deposited in any Lockbox Account prior to such Business Day to the Concentration Account specified in Section 6.01(a)(i) and all amounts subsequently on deposit in a Concentration Account to the Collection Account;

(b)        the Purchasers or the Administrative Agent shall deposit in the Collection Account the amount, if any, required pursuant to Section 2.04(b)(i) ;

 

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(c)        if, on the immediately preceding Business Day, the Administrative Agent shall have notified MRFC of any Purchase Excess, then MRFC shall deposit cash in the amount of such Purchase Excess in the Collection Account;

(d)        if MRFC has delivered a Repayment Notice pursuant to Section 2.03(c) with respect to such Business Day, then MRFC shall deposit in the Collection Account cash in an amount equal to the requested reduction in the Capital Investment, together with all other amounts required to be paid pursuant to Section 2.03(c) ;

(e)        if on such Business Day MRFC is required to make other payments under this Transfer Agreement not previously paid out of Collections (including Additional Amounts and Indemnified Amounts not previously paid), then MRFC shall deposit an amount equal to such payments in the Collection Account; and

(f)         if, on the immediately preceding Business Day, any Originator made a payment pursuant to Section 4.03 of the Purchase Agreement or made a payment as a result of any Dilution Factors pursuant to Section 4.02(y) of the Purchase Agreement, then MRFC shall deposit in the Collection Account cash in the amount so received from the Originators for such contribution or for such repurchase or payment.

Section 6.03.     Daily Disbursements From the Collection Account; Revolving Period . On each Business Day no later than 1:00 p.m. (New York time) during the Revolving Period, and following the transfers made or deemed to have been made pursuant to Section 6.02 , the Administrative Agent shall disburse all Collections then on deposit in the Collection Account in the following priority:

(a)        to the Administrative Agent on behalf of the Purchasers an amount equal to the sum of:

(i)     on each day that is a Settlement Date, all accrued and unpaid Daily Yield for the related Settlement Period;

(ii)    on each day that is a Settlement Date, the accrued and unpaid Unused Commitment Fee for the related Settlement Period; and

(iii)   any Additional Amounts or Indemnified Amounts then due and not paid; in each case, which aggregate amounts distributed to the Administrative Agent during any Settlement Period prior to the Facility Termination Date pursuant to this clause (a) shall be paid by the Administrative Agent to the applicable Purchasers and the Administrative Agent on the first day of each calendar month;

(b)	to the Purchasers their respective Pro Rata Shares of an amount equal to:

(i)     any Purchase Excess to be applied in reduction of Capital Investment;

 

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(ii)    all other deposits made in the Collection Account and not otherwise disbursed pursuant to Section 6.03(a) or (b)(i) to be applied in reduction of Capital Investment; provided , however , that so long as no Termination Event or Potential Termination Event has occurred and is continuing, such deposits shall not be applied in reduction of Capital Investment but rather Administrative Agent shall return such deposits to MRFC on such Business Day;

(c)        if MRFC has not paid the Servicing Fee in accordance with Section 7.05 , to the Master Servicer, an amount equal to the accrued and unpaid Servicing Fee (as advised to the Administrative Agent by the Master Servicer); and

(d)        to the MRFC Account, the balance of any amounts remaining after making the foregoing disbursements.

Section 6.04.     Liquidation Settlement Procedures . On each Business Day from and after the Facility Termination Date until the Termination Date, the Administrative Agent shall, as soon as practicable, transfer all amounts in the Collection Account in the following priority:

(a)        if a Successor Servicer has assumed the responsibilities and obligations of the Servicers in accordance with Section 11.02 , then to the Successor Servicer an amount equal to its accrued and unpaid Successor Servicing Fees and Expenses;

(b)        to the Purchasers, their respective Pro Rata Shares of an amount equal to accrued and unpaid Daily Yield;

(c)        to the Administrative Agent, on behalf of the Purchasers, an amount equal to accrued and unpaid Unused Commitment Fees;

(d)        to the Purchasers, their Pro Rata Shares of an amount equal to the unpaid Capital Investment;

(e)        all Additional Amounts incurred and payable to any Affected Party and Indemnified Amounts incurred and payable to any Indemnified Person;

(f)         if a Successor Servicer has not assumed the responsibilities and obligations of the Servicers in accordance with Section 11.02 , to the Master Servicer, its pro rata share of the accrued and unpaid Servicing Fee (as advised to the Administrative Agent by the Master Servicer); and

(g)        to the MRFC Account, the balance of any funds remaining after payment in full of all amounts set forth in this Section 6.04 .

Section 6.05.

Termination Procedures .

(a)        On the earlier of (i) the first Business Day after the Facility Termination Date on which the Capital Investment has been reduced to zero or (ii) the Final Purchase Date, if

 

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the obligations to be paid pursuant to Section 6.04 have not been paid in full, MRFC shall immediately deposit in the Collection Account an amount sufficient to make such payments in full.

(b)        On the Termination Date, all amounts on deposit in the Collection Account shall be disbursed to the MRFC Account and all ownership interests or Liens of the Purchasers in and to all Transferred Receivables and all Liens of the Purchasers and the Administrative Agent in and to the MRFC Collateral shall be automatically released by each Purchaser and the Administrative Agent without any further action by any party. Such disbursement shall constitute the final payment to which MRFC is entitled pursuant to the terms of this Transfer Agreement. The Administrative Agent agrees that, on the Termination Date, it shall take at MRFC’s expense all action reasonably requested by MRFC to evidence the termination and release of the Liens granted hereunder to the Administrative Agent for the benefit of the Purchasers.

(c)        MRFC acknowledges that it is not authorized to file any financing statement naming itself or any Originator as debtor and the Administrative Agent, the Purchasers or itself as secured party or any amendment or termination statement with respect to any such financing statement without the written consent of Administrative Agent and agrees that it will not do so without the prior written consent of Administrative Agent, subject to MRFC’s and each Originator’s rights under Section 9-509(d)(2) of the UCC.

ARTICLE VII.

 

MASTER SERVICER PROVISIONS

Section 7.01.     Appointment of the Master Servicer . The Administrative Agent and each Purchaser hereby appoints the Master Servicer as its agent, and MRFC hereby acknowledges such appointment, to service the Transferred Receivables and enforce its rights and interests in and under each Transferred Receivable and Contract therefor and the MRFC Collateral and to serve in such capacity until the termination of its responsibilities pursuant to Section 9.02 or 11.01 . In connection therewith, the Master Servicer hereby accepts such appointment and agrees to perform the applicable duties and obligations set forth herein. The Master Servicer may subcontract with each Originator for the collection, servicing or administration of the Transferred Receivables originated by such Originator (in such capacity, a “ Sub-Servicer ”); provided that (a) the Master Servicer shall remain liable for the performance of the duties of each Sub-Servicer pursuant to the terms hereof and (b) any sub-servicing agreement that may be entered into (each a “ Sub-Servicing Agreement ”) and any other transactions or services relating thereto shall be between such Sub-Servicer and the Master Servicer alone, and the Purchasers and the Administrative Agent shall not be deemed parties thereto and shall have no obligations, duties or liabilities with respect to the Sub-Servicer.

Section 7.02.     Duties and Responsibilities of the Master Servicer . Subject to the provisions of this Transfer Agreement, the Master Servicer shall conduct the servicing, administration and collection of the Transferred Receivables and the MRFC Collateral and shall take, or

 

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cause to be taken, all reasonable actions that (i) may be necessary or advisable to service, administer and collect such Transferred Receivables and the MRFC Collateral from time to time, (ii) the Master Servicer would take if such Transferred Receivables and the MRFC Collateral were owned by the Master Servicer, and (iii) are consistent with industry practice for the servicing of such Transferred Receivables.

Section 7.03.

Collections on Receivables .

(a)        In the event that the Master Servicer is unable to determine the specific Transferred Receivables on which Collections have been received from the Obligor thereunder, the parties hereto agree for purposes of this Transfer Agreement only that such Collections shall be deemed to have been received on such Receivables in the order in which they were originated with respect to such Obligor. In the event that the Master Servicer is unable to determine the specific Transferred Receivables on which discounts, offsets or other non-cash reductions have been granted or made with respect to the Obligor thereunder, the parties hereto agree for purposes of this Transfer Agreement only that such reductions shall be deemed to have been granted or made (i) prior to a Termination Event, on such Receivables as determined by the Master Servicer, and (ii) from and after the occurrence of a Termination Event, in the reverse order in which they were originated with respect to such Obligor.

(b)        If the Master Servicer determines that amounts unrelated to the Transferred Receivables (the “ Unrelated Amounts ”) have been deposited in the Collection Account, then the Master Servicer shall provide written evidence thereof to the Purchasers and the Administrative Agent no later than the first Business Day following the day on which the Master Servicer had actual knowledge thereof, which evidence shall be provided in writing and with reasonable detail. Upon receipt of any such notice, the Administrative Agent shall segregate the Unrelated Amounts and the same shall not be deemed to constitute Collections on Transferred Receivables and shall not be subject to the provisions of Article VI .

Section 7.04.     Authorization of the Master Servicer . Each Purchaser hereby authorizes the Master Servicer, and MRFC acknowledges such authorization, to take any and all reasonable steps in its name and on its behalf necessary or desirable and not inconsistent with the ownership of the Purchaser Interests purchased by such Purchaser hereunder, in the determination of the Master Servicer, to (a) collect all amounts due under any Transferred Receivable and under any MRFC Collateral, including endorsing its name on checks and other instruments representing Collections on such Receivable, and execute and deliver any and all instruments of satisfaction or cancellation or of partial or full release or discharge and all other comparable instruments with respect to any such Receivable and (b) after any Transferred Receivable becomes a Defaulted Receivable and to the extent permitted under and in compliance with applicable law and regulations, commence proceedings with respect to the enforcement of payment of any such Receivable and the Contract therefor and adjust, settle or compromise any payments due thereunder, in each case to the same extent as the applicable Originator could have done if it had continued to own such Receivable. Each Originator, MRFC, the Administrative Agent and each Purchaser shall furnish the Master Servicer with any powers of attorney and other documents reasonably necessary or appropriate to enable the Master Servicer to carry out its servicing and administrative duties hereunder. Notwithstanding anything to the contrary contained herein, the

 

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Purchasers and the Administrative Agent shall have the absolute and unlimited right to direct the Master Servicer (i) to commence or settle any legal action to enforce collection of any Transferred Receivable or (ii) to foreclose upon, repossess or take any other action that the Administrative Agent deems necessary or advisable (in its reasonable discretion) with respect thereto, in each case in a manner consistent with the Credit and Collection Policies. In no event shall the Master Servicer be entitled to make any Affected Party, in its capacity as such, a party to any Litigation in which an Obligor is an adverse party without such Affected Party’s express prior written consent, or to make MRFC a party to any Litigation without the Administrative Agent’s consent

Section 7.05.     Servicing Fees . For any period that (a) Metaldyne is the Master Servicer, MRFC agrees that it shall pay to the Master Servicer on each Settlement Date the applicable Servicing Fee, to the extent of funds available to MRFC on such Settlement Date, and (b) there is a Successor Servicer, MRFC agrees that it shall pay to the Successor Servicer on each Settlement Date the applicable Servicing Fee in accordance with Sections 6.03 and 6.04 . The Master Servicer shall be required to pay for all expenses incurred by it in connection with its activities hereunder (including any payments to accountants, counsel or any other Person) and shall not be entitled to any payment therefor other than the Servicing Fees. MRFC agrees that it will pay the Servicing Fee to the Master Servicer prior to using any funds available to it on such Settlement Date for any other purposes, including, without limitation, the purchase of additional Receivables. If MRFC does not have sufficient funds available to so pay the Servicing Fee in full on any Settlement Date, the shortfall shall be paid on the next Business Day on which MRFC does have available funds but only to the extent that funds are then available to MRFC in accordance with the provisions of Article VI .

Section 7.06.     Master Servicer Representations and Warranties . To induce the Purchasers to purchase the Purchaser Interests and the Administrative Agent to take any action hereunder, the Master Servicer hereby represents and warrants (solely as to itself) to the Administrative Agent and the Purchasers that on the Closing Date and, except to the extent provided below, as of each Purchase Date that:

(a)         Corporate Existence and Power . The Master Servicer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate power, authority, legal right and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business in each jurisdiction in which its business is now conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not have a Material Adverse Effect. The Master Servicer is duly qualified to do business in, and is in good standing in, every other jurisdiction in which the nature of its business requires it to be so qualified, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. Subject to specific representations set forth herein regarding ERISA, tax and other laws, the Master Servicer is in compliance with all applicable provisions of law, except where the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The Master Servicer is in compliance with its Charter Documents.

 

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(b)         Corporate and Governmental Authorization, Contravention . The execution, delivery and performance by the Master Servicer of this Transfer Agreement (i) are within the Master Servicer’s corporate powers, (ii) have been duly authorized by all necessary corporate action on the Master Servicer’s part, (iii) require no action by or in respect of, or filing with, any Governmental Authority or official thereof (except for the filing of UCC financing statements as required by this Transfer Agreement or as have been taken or filed and, with respect to filings other than UCC financing statements, filings where the failure to file will not have a Material Adverse Effect) or any other Person, (iv) do not contravene, or constitute a default under, accelerate or permit the accelerating of any performance required by, any provision of applicable law or rule or regulation or any order or decree of any court or Governmental Authority or of the Charter Documents of the Master Servicer or of any agreement or other material instrument binding upon the Master Servicer, except where such contravention or default would not have a Material Adverse Effect, and (v) do not result in the creation or impo