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Exhibit 10.1
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RECEIVABLES SALE AGREEMENT
DATED AS OF APRIL 28, 2005
AMONG
WOLVERINE TUBE, INC., TUBE FORMING, LP AND SMALL TUBE
MANUFACTURING LLC,
AS ORIGINATORS,
AND
DEJ 98 FINANCE, LLC,
AS BUYER
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ARTICLE I AMOUNTS AND TERMS OF THE
PURCHASE................................ 5
Section 1.1 Initial Contribution of
Receivables......................... 5
Section 1.2 Purchase of
Receivables..................................... 5
Section 1.3 Payment for the
Purchases................................... 6
Section 1.4 Sale Price Credit
Adjustments............................... 7
Section 1.5 Payments and Computations,
Etc.............................. 8
Section 1.6 License of
Software......................................... 8
ARTICLE II REPRESENTATIONS AND
WARRANTIES.................................. 9
Section 2.1 Representations and Warranties of
Originators............... 9
(a) Existence and
Power............................................... 9
(b) Power and Authority; Due Authorization, Execution and
Delivery.... 9
(c) No
Conflict.......................................................
10
(d) Governmental
Authorization........................................ 10
(e) Actions,
Suits.................................................... 10
(f) Binding
Effect.................................................... 10
(g) Accuracy of
Information........................................... 10
(h) Use of
Proceeds................................................... 10
(i) Good
Title........................................................
11
(j)
Perfection........................................................
11
(k) Places of Business and Locations of
Records....................... 11
(l)
Collections.......................................................
11
(m) Material Adverse
Effect........................................... 11
(n)
Names.............................................................
11
(o) Ownership of
Buyer................................................ 12
(p) Not a Holding Company or an Investment
Company.................... 12
(q) Compliance with
Law............................................... 12
(r) Compliance with Credit and Collection
Policy...................... 12
(s) Payments to such
Originator....................................... 12
(t) Enforceability of
Contracts....................................... 12
(u) Eligible
Receivables.............................................. 13
(v)
Accounting........................................................
13
(w)
OFAC..............................................................
13
ARTICLE III CONDITIONS OF
PURCHASE......................................... 13
Section 3.1 Conditions Precedent to
Purchase............................ 13
Section 3.2 Conditions Precedent to Subsequent
Payments................. 13
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ARTICLE IV
COVENANTS.......................................................
14
Section 4.1 Affirmative Covenants of
Originators........................ 14
(a) Financial
Reporting............................................... 14
(i) Annual Reporting.........................................
14
(ii) Quarterly Reporting......................................
14
(iii) Compliance Certificate...................................
14
(iv) Shareholders Statements and Reports......................
14
(v) S.E.C. Filings...........................................
14
(vi) Copies of Notices........................................
14
(vii) Change in Credit and Collection Policy...................
14
(viii) Other Information........................................
15
(b)
Notices...........................................................
15
(i) Termination Events or Unmatured Termination Events.......
15
(ii) Judgment and Proceedings.................................
15
(iii) Material Adverse Effect..................................
15
(iv) Defaults Under Other Agreements..........................
15
(v) ERISA Events.............................................
15
(c) Compliance with Laws and Preservation of
Existence................ 15
(d)
Audits............................................................
16
(e) Keeping and Marking of Records and
Books.......................... 16
(f) Compliance with Contracts and Credit and Collection
Policy........ 17
(g)
Ownership.........................................................
17
(h) Purchasers'
Reliance.............................................. 17
(i)
Collections.......................................................
18
(j)
Taxes.............................................................
18
Section 4.2 Negative Covenants of
Originators........................... 18
(a) Name Change, Offices and
Records.................................. 18
(b) Change in Payment Instructions to
Obligors........................ 18
(c) Modifications to Contracts and Credit and Collection
Policy....... 19
(d) Sales,
Liens...................................................... 19
(e) Accounting for
Purchase........................................... 19
ARTICLE V TERMINATION
EVENTS............................................... 19
Section 5.1 Termination
Events.......................................... 19
Section 5.2
Remedies.................................................... 21
ARTICLE VI
INDEMNIFICATION.................................................
21
Section 6.1 Indemnities by
Originators.................................. 21
Section 6.2 Other Costs and
Expenses.................................... 24
ARTICLE VII
MISCELLANEOUS..................................................
24
Section 7.1 Waivers and
Amendments...................................... 24
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Section 7.2
Notices..................................................... 24
Section 7.3 Protection of Ownership Interests of
Buyer.................. 24
Section 7.4
Confidentiality............................................. 26
Section 7.6 Limitation of
Liability..................................... 27
Section 7.7 CHOICE OF
LAW............................................... 27
Section 7.8 CONSENT TO
JURISDICTION..................................... 27
Section 7.9 WAIVER OF JURY
TRIAL........................................ 28
Section 7.10 Integration; Binding Effect; Survival of
Terms.............. 28
Section 7.11 Counterparts; Severability; Section
References.............. 29
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EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of
Records; Federal
Employer Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection
Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Copy of Credit and Collection Policy
Exhibit VI - Form of Subordinated Note
Exhibit VII - Form of Purchase Report
Schedule A - List of Documents to Be Delivered to Buyer Prior to
the Purchases
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of April 28, 2005, is
by and
among WOLVERINE TUBE, INC., a Delaware corporation ("PARENT"),
TUBE FORMING, LP,
a Delaware limited partnership and SMALL TUBE MANUFACTURING LLC,
a Delaware
limited liability company (each of the foregoing including
Parent, an
"ORIGINATOR" and collectively, the "ORIGINATORS"), and DEJ 98
FINANCE, LLC, a
Delaware limited liability company ("BUYER"). UNLESS DEFINED
ELSEWHERE HEREIN,
CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL HAVE THE MEANINGS
ASSIGNED TO
SUCH TERMS IN EXHIBIT I HERETO (OR, IF NOT DEFINED IN EXHIBIT I
HERETO, THE
MEANINGS ASSIGNED TO SUCH TERMS IN EXHIBIT I TO THE PURCHASE
AGREEMENT).
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time
hereafter will
own, Receivables. Each of the Originators wishes to sell and
assign to
Buyer, and Buyer wishes to purchase from each Originator, all of
such
Originator's right, title and interest in and to its
Receivables, together
with the Related Security and Collections with respect
thereto.
Each of the Originators and Buyer intends the transactions
contemplated hereby to be true sales to Buyer by such Originator
of the
Receivables originated by it, providing Buyer with the full
benefits of
ownership of such Receivables, and none of the Originators nor
Buyer
intends these transactions to be, or for any purpose to be
characterized
as, loans from Buyer to such Originator.
Following the purchase of Receivables from each Originator,
Buyer will
sell undivided interests therein and in the associated Related
Security and
Collections pursuant to that certain Receivables Purchase
Agreement dated
as of April 28, 2005 (as the same may from time to time
hereafter be
amended, supplemented, restated or otherwise modified, the
"PURCHASE
AGREEMENT") among Buyer, Wolverine Finance, LLC, a Tennessee
limited
liability company ("WOLVERINE FINANCE"), as initial Servicer,
Blue Ridge
Asset Funding Corporation ("BLUE RIDGE"), and Wachovia Bank,
National
Association, individually ("WACHOVIA") and as agent (in such
capacity,
together with any successor agent appointed pursuant to the
terms of the
Purchase Agreement, the "AGENT").
NOW, THEREFORE, in consideration of the foregoing premises and
the
mutual agreements herein contained and other good and valuable
consideration,
the receipt and adequacy of which are hereby acknowledged, the
parties hereto
agree as follows:
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Initial Contribution of Receivables. On the date
hereof, Parent
does hereby contribute, assign, transfer, set-over and otherwise
convey to
Buyer, and Buyer does hereby accept from Parent, Receivables
originated by
Parent and existing as of the close of business on the Business
Day immediately
prior to the date hereof (the "INITIAL CUTOFF DATE") having an
aggregate
Outstanding Balance of $39,651,962 (the "INITIAL CONTRIBUTED
RECEIVABLES"),
together with all Related Security relating thereto and all
Collections thereof.
Section 1.2 Purchase of Receivables.
(a) Effective on the date hereof, in consideration for the Sale
Price
paid to each Originator and upon the terms and subject to the
conditions set
forth herein, each Originator does hereby sell, assign,
transfer, set-over and
otherwise convey to Buyer, without recourse (except to the
extent expressly
provided herein), and Buyer does hereby purchase from such
Originator, all of
such Originator's right, title and interest in and to all
Receivables originated
by such Originator and existing as of the close of business on
the Initial
Cutoff Date (other than the Initial Contributed Receivables) and
all Receivables
thereafter originated by such Originator through and including
the Termination
Date, together, in each case, with all Related Security relating
thereto and all
Collections thereof. In accordance with the preceding sentence,
on the date
hereof Buyer shall acquire all of each Originator's right, title
and interest in
and to all Receivables existing as of the Initial Cutoff Date
(other than the
Initial Contributed Receivables) and thereafter arising through
and including
the Termination Date, together with all Related Security
relating thereto and
all Collections thereof. Buyer shall be obligated to pay the
Sale Price for the
Receivables purchased hereunder from each Originator in
accordance with Section
1.3.
(b) On the 20th day of each month hereafter (or if any such day
is not
a Business Day, on the next succeeding Business Day thereafter,
each Originator
shall (or shall require the Servicer to) deliver to Buyer a
report in
substantially the form of Exhibit VII hereto (each such report
being herein
called a "PURCHASE REPORT") with respect to the Receivables sold
by such
Originator to Buyer during the Settlement Period then most
recently ended. In
addition to, and not in limitation of, the foregoing, in
connection with the
payment of the Sale Price for any Receivables purchased
hereunder, Buyer may
request that the applicable Originator deliver, and such
Originator shall
deliver, such approvals, opinions, information or documents as
Buyer may
reasonably request.
(c) It is the intention of the parties hereto that each Purchase
of
Receivables from an Originator made hereunder shall constitute a
sale, which
sale is absolute and irrevocable and provides Buyer with the
full benefits of
ownership of the Receivables originated by such Originator.
Except for the Sale
Price Credits owed to such Originator pursuant to Section 1.4,
the sale of
Receivables hereunder by each Originator is made without
recourse to such
Originator;
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PROVIDED, HOWEVER, that (i) such Originator shall be liable to
Buyer for all
representations, warranties, covenants and indemnities made by
such Originator
pursuant to the terms of the Transaction Documents to which such
Originator is a
party, and (ii) such sale does not constitute and is not
intended to result in
an assumption by Buyer or any assignee thereof of any obligation
of such
Originator or any other Person arising in connection with the
Receivables, the
related Contracts and/or other Related Security or any other
obligations of such
Originator. In view of the intention of the parties hereto that
each Purchase of
Receivables made hereunder shall constitute a sale of such
Receivables rather
than loans secured thereby, each Originator agrees that it will,
on or prior to
the date hereof and in accordance with Section 4.1(e)(ii), mark
its master data
processing records relating to the Receivables originated by it
with a legend
acceptable to Buyer and to the Agent (as Buyer's assignee),
evidencing that
Buyer has purchased such Receivables as provided in this
Agreement and to note
in its financial statements that its Receivables have been sold
to Buyer. Upon
the request of Buyer or the Agent (as Buyer's assignee), each
Originator will
execute and file such financing or continuation statements, or
amendments
thereto or assignments thereof, and such other instruments or
notices, as may be
necessary or appropriate to perfect and maintain the perfection
of Buyer's
ownership interest in the Receivables originated by such
Originator and the
Related Security and Collections with respect thereto, or as
Buyer or the Agent
(as Buyer's assignee) may reasonably request.
Section 1.3 Payment for the Purchases.
(a) Buyer is obligated to pay the Sale Price for the Purchase
from
each Originator of its Receivables in existence as of the close
of business on
the Initial Cutoff Date (other than the Initial Contributed
Receivables) in full
to such Originator on the date hereof, and such Sale Price shall
be paid to such
Originator in the following manner:
(i) by delivery of immediately available funds to the
applicable
Originator or to such bank account (the "DESIGNATED ACCOUNT")
for the account of
such Originator as such Originator may designate in writing to
Buyer, to the
extent Buyer has funds available from Collections and/or the
sale of interests
pursuant to the Purchase Agreement, and
(ii) the balance, by delivery of the proceeds of a
subordinated
revolving loan from such Originator to Buyer (a "SUBORDINATED
LOAN") in an
amount not to exceed the least of (A) the remaining unpaid
portion of such Sale
Price, (B) the maximum Subordinated Loan that could be borrowed
without
rendering Buyer's Net Worth less than the Required Capital
Amount, and (C)
fifteen percent (15%) of such Sale Price. Each Originator is
hereby authorized
by Buyer to endorse on the schedule attached to its Subordinated
Note an
appropriate notation evidencing the date and amount of each
advance thereunder,
as well as the date of each
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payment with respect thereto, PROVIDED THAT the failure to make
such notation
shall not affect any obligation of Buyer thereunder.
The Sale Price for each Receivable coming into existence after
the Initial
Cutoff Date shall be due and owing in full by Buyer, and Buyer
is obligated to
pay such Sale Price, to the applicable Originator or its
designee on the date
each such Receivable came into existence (except that Buyer may,
with respect to
any such Sale Price, offset against such Sale Price any amounts
owed by such
Originator to Buyer hereunder and which have become due but
remain unpaid) and
shall be paid to such Originator in the manner provided in the
following
paragraphs (b) and (c).
(b) With respect to any Receivables coming into existence after
the
Initial Cutoff Date, on each Business Day, Buyer shall pay the
applicable
Originator the Sale Price therefor in the following manner and
order:
FIRST, by delivery of immediately available funds to the
applicable Originator or to the Designated Account, as the case
may be, to
the extent Buyer has funds available from Collections and/or the
sale of
interests pursuant to the Purchase Agreement;
SECOND, by delivery to the applicable Originator or its
designee
of the proceeds of a Subordinated Loan, PROVIDED THAT the making
of any
such Subordinated Loan shall be subject to the provisions set
forth in
Section 1.3(a)(ii); and
THIRD, solely in the case of Receivables originated by
Parent,
unless the Termination Date has occurred in accordance with this
Agreement,
by accepting a contribution to its capital in an amount equal to
the
remaining unpaid balance of such Sale Price.
Subject to the limitations set forth in Section 1.3(a)(ii), each
Originator
irrevocably agrees to advance each Subordinated Loan requested
by Buyer on or
prior to the Termination Date. The Subordinated Loans owing to
each Originator
shall be evidenced by, and shall be payable in accordance with
the terms and
provisions of its Subordinated Note and shall be payable solely
from funds which
Buyer is not required under the Purchase Agreement to set aside
for the benefit
of, or otherwise pay over to, the Purchasers.
(c) From and after the Termination Date, (i) no Originator shall
be
obligated to (but may, at its option) sell Receivables to Buyer,
and (ii) Parent
shall not be obligated to (but may, at its option) contribute
Receivables to
Buyer's capital pursuant to clause THIRD of Section 1.3(b).
Section 1.4 Sale Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable purchased from
any
Originator is:
(i) reduced as a result of any defective or rejected or
returned
goods or services, any discount or any adjustment or otherwise
by such
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Originator (other than as a result of such Receivable becoming a
Defaulted
Receivable or to reflect cash Collections on account of such
Receivable),
(ii) reduced or canceled as a result of a setoff in respect
of
any claim by any Person (whether such claim arises out of the
same or a related
transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in
Sections
2.1(h), (i), (j), (l), (r), (s), (t), (u), the second sentence
of Section 2.1(q)
hereof and the last clause (relating to bulk sales laws) of
Section 2.1(c) are
not true when made or deemed made with respect to any
Receivable,
then, in such event, Buyer shall be entitled to a credit (each,
a "SALE PRICE
CREDIT") against the Sale Price otherwise payable to the
applicable Originator
hereunder equal to the Outstanding Balance of such Receivable
(calculated before
giving effect to the applicable reduction or cancellation). If
such Sale Price
Credit exceeds the Original Balance of the Receivables
originated by the
applicable Originator on any day, such Originator shall pay the
remaining amount
of such Sale Price Credit in cash on such day, PROVIDED THAT if
the Termination
Date has not occurred, such Originator shall be allowed to
deduct the remaining
amount of such Sale Price Credit from any indebtedness owed to
it under its
Subordinated Note.
Section 1.5 Payments and Computations, Etc. All amounts to be
paid or
deposited by Buyer hereunder shall be paid or deposited in
accordance with the
terms hereof on the day when due in immediately available funds
to the account
of the applicable Originator designated from time to time by
such Originator or
as otherwise directed by such Originator. In the event that any
payment owed by
any Person hereunder becomes due on a day that is not a Business
Day, then such
payment shall be made on the next succeeding Business Day. If
any Person fails
to pay any amount hereunder when due, such Person agrees to pay,
on demand, the
Default Fee in respect thereof until paid in full; PROVIDED,
HOWEVER, that such
Default Fee shall not at any time exceed the maximum rate
permitted by
applicable law. All computations of interest payable hereunder
shall be made on
the basis of a year of 360 days for the actual number of days
(including the
first but excluding the last day) elapsed.
Section 1.6 License of Software.
(a) To the extent that any software used by any Originator to
account
for the Receivables originated by it is non-transferable, such
Originator hereby
grants to each of Buyer, the Agent and the Servicer an
irrevocable,
non-exclusive license to use, without royalty or payment of any
kind, all such
software used by such Originator to account for such
Receivables, to the extent
necessary to administer such Receivables, whether such software
is owned by such
Originator or is owned by others and used by such Originator
under license
agreements with respect thereto, PROVIDED THAT should the
consent of any
licensor of such software be required for the grant of the
license described
herein, to be effective, such Originator hereby agrees that upon
the request of
Buyer (or Buyer's assignee), such Originator will use its
reasonable efforts to
obtain the consent of such third-party licensor. The license
granted hereby
shall be irrevocable until the later to
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occur of (i) indefeasible payment in full of the Aggregate
Unpaids (as defined
in the Purchase Agreement), and (ii) the date each of this
Agreement and the
Purchase Agreement terminates in accordance with its terms.
(b) Each Originator (i) shall take such reasonable action
requested by
Buyer and/or the Agent (as Buyer's assignee), from time to time
hereafter, that
may be necessary or appropriate to ensure that Buyer and its
assigns under the
Purchase Agreement have an enforceable ownership interest in the
Records
relating to the Receivables purchased from such Originator
hereunder, and (ii)
shall use its reasonable efforts to ensure that Buyer, the Agent
and the
Servicer each has an enforceable right (whether by license or
sublicense or
otherwise) to use all of the computer software used to account
for such
Receivables and/or to recreate such Records.
Section 1.7 UCC. All transactions contemplated or evidenced by
this
Agreement, including the sale or contribution by an Originator
to Buyer of
Receivables hereunder shall be subject to Article 9 of the UCC
and other
applicable law. Buyer and its assigns shall have, in addition to
the rights and
remedies which they may have under this Agreement, all other
rights and remedies
provided to a secured creditor under the UCC and other
applicable law, which
rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originators. Each
Originator
hereby represents and warrants to Buyer on the date hereof, on
the date of the
Purchase or contribution from such Originator hereunder and on
each date that
any Receivable is originated by such Originator on or after the
date of such
Purchase or contribution, that:
(a) Existence and Power. Such Originator is a corporation,
limited
liability company or limited partnership, duly organized under
the laws of the
state set forth after its name in the preamble to this Agreement
(the
"APPLICABLE STATE"), and no other state or jurisdiction. Such
Originator is
validly existing and in good standing under the laws of its
Applicable State and
is duly qualified to do business and is in good standing as a
foreign entity,
and has and holds all power and all governmental licenses,
authorizations,
consents and approvals required to carry on its business in each
jurisdiction in
which its business is conducted except where the failure to so
qualify or so
hold could not reasonably be expected to have a Material Adverse
Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery.
The execution and delivery by such Originator of this Agreement
and each other
Transaction Document to which it is a party, and the performance
of its
obligations hereunder and thereunder, and such Originator's use
of the proceeds
of the Purchase made from it hereunder, are within its
organizational powers and
authority and have been duly authorized by all necessary
organizational action
on its part. This Agreement and each other Transaction Document
to which such
Originator is a party has been duly executed and delivered by
such Originator.
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(c) No Conflict. The execution and delivery by such Originator
of this
Agreement and each other Transaction Document to which it is a
party, and the
performance of its obligations hereunder and thereunder do not
contravene or
violate (i) its Organizational Documents, (ii) any law, rule or
regulation
applicable to it, (iii) any restrictions under any agreement,
contract or
instrument to which it is a party or by which it or any of its
property is
bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on
or affecting it or its property, and do not result in the
creation or imposition
of any Adverse Claim on assets of such Originator or its
Subsidiaries (except as
created hereunder) except, in any case, where such contravention
or violation
could not reasonably be expected to have a Material Adverse
Effect; and no
transaction contemplated hereby requires compliance with any
bulk sales act or
similar law.
(d) Governmental Authorization. Other than the filing of the
financing
statements required hereunder, no authorization or approval or
other action by,
and no notice to or filing with, any governmental authority or
regulatory body
is required for the due execution and delivery by such
Originator of this
Agreement and each other Transaction Document to which it is a
party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or
proceedings
pending, or to the best of such Originator's knowledge,
threatened, against or
affecting such Originator, or any of its properties, in or
before any court,
arbitrator or other body, that could reasonably be expected to
have a Material
Adverse Effect. Such Originator is not in default with respect
to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document
to which such Originator is a party constitute the legal, valid
and binding
obligations of such Originator enforceable against such
Originator in accordance
with their respective terms, except as such enforcement may be
limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws relating
to or limiting creditors' rights generally and by general
principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at
law).
(g) Accuracy of Information. All information heretofore
furnished by
such Originator or any of its Affiliates to Buyer (or its
assigns) for purposes
of or in connection with this Agreement, any of the other
Transaction Documents
or any transaction contemplated hereby or thereby is, and all
such information
hereafter furnished by such Originator or any of its Affiliates
to Buyer (or its
assigns) will be, true and accurate in every material respect on
the date such
information is stated or certified and not incomplete by
omitting to state any
material fact necessary to make such information not misleading
at such time.
There is no fact now known to any Authorized Officer of any
Originator which
has, or would reasonably be expected to have, a Material Adverse
Effect which
fact has not been set forth herein, in the financial statements,
or any
certificate, opinion or other written statement made or
furnished by such
Originator or any of its Affiliates to Buyer.
(h) Use of Proceeds. No portion of any Sale Price payment
hereunder
will be used (i) for a purpose that violates, or would be
inconsistent with, any
law, rule or regulation applicable to such Originator or (ii) to
acquire any
security in any transaction which is subject to Section 12, 13
or 14 of the
Securities Exchange Act of 1934, as amended.
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(i) Good Title. Immediately prior to the Purchase or
contribution from
such Originator hereunder and upon the creation of each
Receivable originated by
such Originator after the Initial Cut-Off Date, such Originator
(i) is the legal
and beneficial owner of such Receivables and (ii) is the legal
and beneficial
owner of the Related Security with respect thereto or possesses
a valid and
perfected security interest therein, in each case, free and
clear of any Adverse
Claim, except as created by the Transaction Documents. There
have been duly
filed all financing statements or other similar instruments or
documents
necessary under the UCC (or any comparable law) of all
appropriate jurisdictions
to perfect such Originator's ownership interest in each such
Receivable, its
Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of
the
financing statements contemplated hereby, is effective to
transfer to Buyer (and
Buyer shall acquire from such Originator) (i) legal and
equitable title to, with
the right to sell and encumber each Receivable originated by
such Originator,
whether now existing and hereafter arising, together with the
Collections with
respect thereto, and (ii) all of such Originator's right, title
and interest in
the Related Security associated with each such Receivable, in
each case, free
and clear of any Adverse Claim, except as created by the
Transactions Documents.
There have been duly filed all financing statements or other
similar instruments
or documents necessary under the UCC (or any comparable law) of
all appropriate
jurisdictions to perfect Buyer's ownership interest in such
Receivables, the
Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal
places
of business and chief executive office of such Originator and
the offices where
it keeps all of its Records are located at the address(es)
listed on Exhibit II
or such other locations of which Buyer has been notified in
accordance with
Section 4.2(a) in jurisdictions where all action required by
Section 4.2(a) has
been taken and completed. such Originator's Federal Employer
Identification
Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in
Section
4.1(i) have at all times been satisfied and duly performed. The
names and
addresses of all Collection Banks, together with the account
numbers of the
Collection Accounts of such Originator at each Collection Bank
and the post
office box number of each Lock-Box, are listed on Exhibit III.
Such Originator
has not granted any Person, other than Buyer (and its assigns)
dominion and
control of any Lock-Box or Collection Account, or the right to
take dominion and
control of any such Lock-Box or Collection Account at a future
time or upon the
occurrence of a future event except that such Originator has
instructed the
Agent to assign its interest in the Collection Accounts and
Lock-Boxes to
Wachovia in its capacity as lender under the [ABL Credit
Agreement] upon
termination of all commitments under the Purchase Agreement and
payment in full
of the Aggregate Unpaids (under and as defined in the Purchase
Agreement).
(m) Material Adverse Effect. Since December 31, 2004, no event
has
occurred that would have a Material Adverse Effect.
(n) Names. The name in which such Originator has executed
this
Agreement is identical to the name of such Originator as
indicated on the public
record of its state of organization which shows such Originator
to have been
organized. In the past five (5)
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years, such Originator has not used any corporate names, trade
names or assumed
names other than the name in which it has executed this
Agreement and as listed
on Exhibit II.
(o) Ownership of Buyer. Parent owns, directly or indirectly,
100% of
the issued and outstanding non-voting Equity Interests, and 49%
of the voting
Equity Interests, of Buyer. Such Equity Interests are validly
issued, fully paid
and nonassessable, and there are no options, warrants or other
rights to acquire
securities of Buyer.
(p) Not a Holding Company or an Investment Company. Such
Originator is
not a "holding company" or a "subsidiary holding company" of a
"holding company"
within the meaning of the Public Utility Holding Company Act of
1935, as
amended, or any successor statute. Such Originator is not an
"investment
company" within the meaning of the Investment Company Act of
1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Originator has complied in all
respects
with all applicable laws, rules, regulations, orders, writs,
judgments,
injunctions, decrees or awards to which it may be subject,
except where the
failure to so comply could not reasonably be expected to have a
Material Adverse
Effect. Each Receivable, together with the Contract related
thereto, does not
contravene any laws, rules or regulations applicable thereto
(INCLUDING, WITHOUT
LIMITATION, laws, rules and regulations relating to truth in
lending, fair
credit billing, fair credit reporting, equal credit opportunity,
fair debt
collection practices and privacy), and no part of such Contract
is in violation
of any such law, rule or regulation, except where such
contravention or
violation could not reasonably be expected to have a Material
Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such
Originator has
complied in all material respects with the Credit and Collection
Policy with
regard to each Receivable originated by it and the related
Contract, and has not
made any change to such Credit and Collection Policy, except
such material
change as to which Buyer (or its assigns) has been notified in
accordance with
Section 4.1(a)(vii).
(s) Payments to such Originator. With respect to each
Receivable
originated by such Originator and sold to Buyer hereunder, the
Sale Price
received by such Originator constitutes reasonably equivalent
value in
consideration therefor. No transfer hereunder by such Originator
of any
Receivable originated by such Originator is or may be voidable
under any section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101 et
seq.), as
amended.
(t) Enforceability of Contracts. Each Contract with respect to
each
Receivable is effective to create, and has created, a legal,
valid and binding
obligation of the related Obligor to pay the Outstanding Balance
of the
Receivable created thereunder and any accrued interest thereon,
enforceable
against the Obligor in accordance with its terms, except as such
enforcement may
be limited by applicable bankruptcy, insolvency, reorganization
or other similar
laws relating to or limiting creditors' rights generally and by
general
principles of equity (regardless of whether enforcement is
sought in a
proceeding in equity or at law).
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(u) Eligible Receivables. Each Receivable reflected in any
Purchase
Report as an Eligible Receivable was an Eligible Receivable on
the date of its
acquisition by Buyer hereunder.
(v) Accounting. The manner in which such Originator accounts for
the
transactions contemplated by this Agreement in its financial
statements does not
jeopardize the characterization of the transactions contemplated
herein as being
true sales.
(w) OFAC. None of the Originators nor any of its Subsidiaries
(a) is a
Sanctioned Person, (b) does business in a Sanctioned Country in
violation of the
economic sanctions of the United States administered by OFAC or
(c) does
business in such country or with any such agency, organization
or person, in
violation of the economic sanctions of the United States
administered by OFAC.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchases
under this
Agreement are subject to the conditions precedent that (a) Buyer
shall have been
capitalized with the Initial Contributed Receivables, (b) Buyer
shall have
received on or before the date of such Purchase those documents
listed on
Schedule A and (c) all of the conditions to the initial Purchase
under the
Purchase Agreement shall have been satisfied or waived in
accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's
obligation
to pay for Receivables coming into existence after the Initial
Cutoff Date shall
be subject to the further conditions precedent that: (a) the
Facility
Termination Date shall not have occurred under the Purchase
Agreement; (b) Buyer
(or its assigns) shall have received such other approvals,
opinions or documents
as it may reasonably request and (c) on the date such Receivable
came into
existence, the following statements shall be true (and
acceptance of the
proceeds of any payment for such Receivable shall be deemed a
representation and
warranty by such Originator that such statements are then
true):
(i) the representations and warranties set forth in Article
II
are true and correct on and as of the date such Receivable came
into existence
as though made on and as of such date; and
(ii) no event has occurred and is continuing that will
constitute
a Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment
of the Sale
Price for any Receivable (whether by payment of cash, through an
increase in the
amounts outstanding under the Subordinated Note, by offset of
amounts owed to
Buyer and/or by offset of capital contributions), title to such
Receivable and
the Related Security and Collections with respect thereto shall
vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to
pay for such
Receivable were in fact satisfied. The failure of such
Originator to satisfy any
of the foregoing conditions precedent, however, shall give rise
to a right of
Buyer to rescind the related
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purchase and direct such Originator to pay to Buyer an amount
equal to the Sale
Price payment that shall have been made with respect to any
Receivables related
thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originators. Until the date
on which
this Agreement terminates in accordance with its terms, each
Originator hereby
covenants as set forth below:
(a) Financial Reporting. Such Originator will maintain, for
itself and
each of its Subsidiaries, a system of accounting established and
administered in
accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 90 days after the close of each
of
its respective fiscal years, audited, unqualified consolidated
financial
statements (which shall include balance sheets, statements of
income and
retained earnings and a statement of cash flows) of Parent and
its Subsidiaries
for such fiscal year certified in a manner acceptable to Buyer
(or its assigns)
by independent public accountants acceptable to Buyer (or its
assigns).
(ii) Quarterly Reporting. Within 45 days after the close of
the
first three (3) quarterly periods of each of its respective
fiscal years,
consolidated balance sheets of Parent and its Subsidiaries as at
the close of
each such period and consolidated statements of income and
retained earnings and
a statement of cash flows of Parent and its Subsidiaries for the
period from the
beginning of such fiscal year to the end of such quarter, all
certified by its
chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially the
form of Exhibit IV signed by such Originator's Authorized
Officer and dated the
date of such annual financial statement or such quarterly
financial statement,
as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of such Originator,
copies of all
financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies
of
all registration statements and annual, quarterly, monthly or
other regular
reports which such Originator or any of its Subsidiaries files
with the
Securities and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any
notice
of breach from any Collection Bank, or notice of default from
any lender, copies
of the same.
(vii) Change in Credit and Collection Policy. At least
thirty
(30) days prior to the effectiveness of any material change in
or material
amendment to the Credit and Collection Policy, a copy of the
Credit and
Collection Policy then in effect and a notice (A) indicating
such proposed
change or amendment, and (B) if such proposed change or
amendment
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would be reasonably likely to adversely affect the
collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables,
requesting Buyer's (and the Agent's, as Buyer's assignee)
consent thereto.
(viii) Other Information. Promptly, from time to time, such
other
information, documents, records or reports relating to the
Receivables
originated by such Originator or the condition or operations,
financial or
otherwise, of such Originator as Buyer (or its assigns) may from
time to time
reasonably request in order to protect the interests of Buyer
(and its assigns)
under or as contemplated by this Agreement.
(b) Notices. Such Originator will notify Buyer (or its assigns)
in
writing of any of the following promptly upon learning of the
occurrence
thereof, describing the same and, if applicable, the steps being
taken with
respect thereto:
(i) Termination Events or Unmatured Termination Events. The
occurrence of each Termination Event and each Unmatured
Termination Event, by a
statement of an Authorized Officer of such Originator.
(ii) Judgment and Proceedings. (1) The entry of any judgment
or
decree against any Originator or any of its Subsidiaries if the
aggregate amount
of all judgments and decrees then outstanding against the
Originators and their
Subsidiaries exceeds $2,500,000 after deducting (a) the amount
with respect to
which the applicable Originator or Subsidiary is insured and
with respect to
which the insurer has not denied coverage, and (b) the amount
for which the
applicable Originator or Subsidiary is otherwise indemnified if
the terms of
such indemnification are satisfactory to Buyer (or its assigns),
and (2) the
institution of any litigation, arbitration proceeding or
governmental proceeding
against any Originator which, individually or in the aggregate,
could reasonably
be expected to have a Material Adverse Effect.
(iii) Material Adverse Effect. The occurrence of any event
or
condition that has had, or could reasonably be expected to have,
a Material
Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a
default
or an event of default under any other financing arrangement
pursuant to which
any Originator is a debtor or an obligor and such financing
arrangement is in
excess of $2,500,000.
(v) ERISA Events. The occurrence of any ERISA Event.
(vi) Downgrade of Parent. Any downgrade in the rating of any
Indebtedness of Parent by S&P or by Moody's, setting forth
the Indebtedness
affected and the nature of such change.
(c) Compliance with Laws and Preservation of Existence. Such
Originator will comply in all respects with all applicable laws,
rules,
regulations, orders, writs, judgments, injunctions, decrees or
awards to which
it is subject, except where the failure to so comply could not
reasonably be
expected to have a Material Adverse Effect. Such Originator will
preserve and
maintain its legal existence, rights, franchises and privileges
in the
jurisdiction of its organization, and qualify and remain
qualified in good
standing as a foreign entity in each jurisdiction where its
business is
conducted, except where the failure to so qualify or remain
in
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<PAGE>
good standing could not reasonably be expected to have a
Material Adverse
Effect. Nothing herein shall be deemed to preclude any
Originator from merging
with and into any other Originator.
(d) Audits. Such Originator will furnish to Buyer (or its
assigns)
from time to time such information with respect to it and the
Receivables sold
by it as Buyer (or its assigns) may reasonably request. Such
Originator will,
from time to time during regular business hours as requested by
Buyer (or its
assigns), upon reasonable notice and at the sole cost of such
Originator, permit
Buyer (or its assigns) or their respective agents or
representatives, (i) to
examine and make copies of and abstracts from all Records in the
possession or
under the control of such Originator relating to the Receivables
and the Related
Security, including, without limitation, the related Contracts
(other than those
Contracts that contain a confidentiality provision that purports
to restrict
Buyer's (or its assigns) right to review the Contract for which
such Originator
has been unable, after diligent effort, to obtain consent to
disclosure), and
(ii) to visit the offices and properties of such Originator for
the purpose of
examining such materials described in clause (i) above, and to
discuss matters
relating to such Originator's financial condition or the
Receivables and the
Related Security or such Originator's performance under any of
the Transaction
Documents or such Originator's performance under the Contracts
and, in each
case, with any of the officers or employees of such Originator
having knowledge
of such matters (each of the foregoing examinations and visits,
a "REVIEW");
PROVIDED, HOWEVER, that, so long as no Amortization Event (under
and as defined
in the Purchase Agreement) has occurred and is continuing, the
number of Reviews
in any one calendar year shall be limited to a maximum of four
(4) and;
PROVIDED, FURTHER, that, the Originators, collectively, shall
not be responsible
for the reasonable costs and expenses of more than two (2)
Reviews in any one
calendar year unless (X) the immediately preceding audit was
unsatisfactory to
the Agent with respect to missing information, erroneous
reporting, other
non-compliance with the provisions of the Transaction Documents
or questions
that have not been answered to the Agent's satisfaction, or (Y)
the Aggregate
Invested Amount (under and as defined in the Purchase Agreement)
exceeds an
amount equal to 0.75 times the difference between the most
recently computed Net
Pool Balance (under and as defined in the Purchase Agreement)
and the most
recently computed Required Reserve (under and as defined in the
Purchase
Agreement).
(e) Keeping and Marking of Records and Books.
(i) Such Originator will maintain and implement
administrative
and operating procedures (including, without limitation, an
ability to recreate
records evidencing 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
Receivables (including, without limitation, records adequate to
permit the
immediate identification of each new Receivable and all
Collections of and
adjustments to each existing Receivable). Such Originator will
give Buyer (or
its assigns) notice of any material change in the administrative
and operating
procedures referred to in the previous sentence.
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(ii) Such Originator will (A) on or prior to the date
hereof,
mark its master data processing records and other books and
records relating to
the Receivables originated by such Originator with a legend,
acceptable to Buyer
(or its assigns), describing Buyer's ownership interests in the
Receivables and
further describing the Receivable Interests of the Agent (on
behalf of the
Purchasers) under the Purchase Agreement and (B) upon the
request of Buyer (or
its assigns) following the occurrence of a Termination Event:
(x) mark each
Contract with a legend describing Buyer's ownership interests in
the Receivables
originated by such Originator and further describing the
Receivable Interests of
the Agent (on behalf of the Purchasers) and (y) deliver to Buyer
(or its
assigns) all Contracts (including, without limitation, all
multiple originals of
any such Contract) relating to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
Such
Originator will timely and fully (i) perform and comply with all
provisions,
covenants and other promises required to be observed by it under
the Contracts
related to the Receivables originated by it, and (ii) comply in
all material
respects with the Credit and Collection Policy in regard to each
such Receivable
and the related Contract.
(g) Ownership. Such Originator will take all necessary action
to
establish and maintain, irrevocably in Buyer, (A) legal and
equitable title to
the Receivables originated by such Originator and the
Collections and (B) all of
such Originator's right, title and interest in the Related
Security associated
with the Receivables originated by such Originator, in each
case, free and clear
of any Adverse Claims other than Adverse Claims in favor of
Buyer (and its
assigns) (INCLUDING, WITHOUT LIMITATION, the filing of all
financing statements
or other similar instruments or documents necessary under the
UCC (or any
comparable law) of all appropriate jurisdictions to perfect
Buyer's interest in
such Receivables, Related Security and Collections and such
other necessary or
desirable action to perfect, protect or more fully evidence the
interest of
Buyer as Buyer (or its assigns) may reasonably request).
(h) Purchasers' Reliance.
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