Exhibit 99.2
Execution Copy
RECEIVABLES TRANSFER AGREEMENT
BY AND AMONG
MRFC, INC.,
AS TRANSFEROR,
METALDYNE CORPORATION,
INDIVIDUALLY,
AS COLLECTION AGENT AND AS GUARANTOR,
THE PERSONS PARTIES HERETO AS
PURCHASERS
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT
DATED AS OF APRIL 29, 2005
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions .......................................1
SECTION 1.01. Certain Defined Terms
...................................1
SECTION
1.02. Other Terms
.............................................1
SECTION
1.03. Computation of
Time Periods .............................1
ARTICLE II
Purchases and Settlements .........................1
SECTION
2.01. Facility
................................................1
SECTION
2.02. Transfers;
Certificates; Eligible Receivables. ..........2
SECTION
2.03. Selection of
Tranche Periods and Tranche Rates. .........4
SECTION
2.04. Discount, Fees
and Other Costs and Expenses .............4
SECTION
2.05. Non-Liquidation
Settlement and Reinvestment Procedures ..5
SECTION
2.06. Liquidation
Settlement Procedures .......................5
SECTION
2.07. Reduction of
Commitments ................................7
SECTION
2.08. Fees
....................................................7
SECTION
2.09. Protection of
Ownership Interest of the Purchasers. .....7
SECTION
2.10. Deemed
Collections; Application of Payments. ............9
SECTION
2.11. Payments and
Computations, etc ..........................9
SECTION
2.12. Reports
................................................10
SECTION 2.13.
Collection Account
.....................................10
SECTION
2.14. Right of Setoff
........................................11
SECTION
2.15. Sharing of
Payments, etc ...............................11
SECTION
2.16. Broken Funding
.........................................11
SECTION
2.17. Conversion and
Continuation of Outstanding Tranches ....12
SECTION
2.18. Illegality.
............................................12
SECTION
2.19. Inability to
Determine Eurodollar Rate .................13
SECTION
2.20. Indemnities by
the Transferor ..........................14
SECTION
2.21. Indemnity for
Reserves and Expenses ....................16
SECTION
2.22. Indemnity for
Taxes ....................................18
SECTION
2.23. Other Costs,
Expenses and Related Matters ..............19
SECTION
2.24. Administrative
Agent ...................................20
SECTION
2.25. Use of
Historical Data .................................20
ARTICLE III
Representations and Warranties ...................20
SECTION
3.01. Representations
and Warranties of the Transferor .......20
SECTION
3.02. Reaffirmation of
Representations and Warranties
by the Transferor ................................24
ARTICLE IV
Conditions Precedent .............................24
SECTION
4.01. Conditions to
Effectiveness ............................24
ARTICLE V
Covenants
........................................26
SECTION
5.01. Affirmative
Covenants of the Transferor ................26
SECTION
5.02. Negative
Covenants of the Transferor ...................32
ARTICLE VI
Administration and Collections ...................34
SECTION
6.01. Appointment of
Collection Agent ........................34
SECTION
6.02. Duties of
Collection Agent. ............................34
SECTION
6.03. Rights After
Designation of New Collection Agent .......37
SECTION
6.04. Representations
and Warranties of the Collection Agent .37
SECTION
6.05. Covenants of the
Collection Agent ......................38
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SECTION
6.06. Negative
Covenants of the Collection Agent .............39
SECTION
6.07. Collection Agent
Default ...............................40
SECTION
6.08. Responsibilities
of the Transferor and the Sellers .....41
ARTICLE VII
Termination Events ...............................41
SECTION
7.01. Termination
Events .....................................41
SECTION
7.02. Remedies Upon
the Occurrence of a Termination Event. ...43
SECTION
7.03. Reconveyance
Under Certain Circumstances ...............43
ARTICLE VIII
The Administrative Agent .........................43
SECTION
8.01. Appointment
............................................43
SECTION
8.02. Delegation of
Duties ...................................44
SECTION
8.03. Exculpatory
Provisions .................................44
SECTION
8.04. Reliance by
Administrative Agent .......................44
SECTION
8.05. Notice of
Collection Agent Default .....................45
SECTION
8.06. Non-Reliance on
the Administrative Agent and Other
Purchasers .......................................45
SECTION
8.07. Indemnification
........................................46
SECTION
8.08. The
Administrative Agent in Its Individual Capacity ....46
SECTION
8.09. Resignation of
Administrative Agent; Successor
Administrative Agent .............................46
ARTICLE IX
Limited Guaranty .................................47
SECTION
9.01. Guaranty of
Obligations ................................47
SECTION
9.02. Validity of
Obligations; Irrevocability ................47
SECTION
9.03. Several
Obligations ....................................48
SECTION
9.04. Subrogation
Rights .....................................48
SECTION
9.05. Rights of
Set-Off ......................................48
SECTION
9.06. Representations
and Warranties .........................49
ARTICLE X
Miscellaneous ....................................50
SECTION
10.01. Term of
Agreement .....................................50
SECTION
10.02. Waivers;
Amendments ...................................50
SECTION
10.03. Notices
...............................................50
SECTION
10.04. Governing Law;
Submission to Jurisdiction;
Integration. .....................................52
SECTION
10.05. Severability;
Counterparts ............................52
SECTION
10.06. Successors and
Assigns ................................53
SECTION
10.07. Confidentiality
.......................................54
SECTION
10.08. [Reserved].
...........................................54
SECTION
10.09. [Reserved].
...........................................54
SECTION
10.10.
Characterization of the Transactions Contemplated
by the Agreement .................................55
SECTION 10.11.
[Reserved].
...........................................55
SECTION
10.12. GE Capital
Conflict Waiver ............................55
SECTION
10.13. Limitation on
the Termination of Sellers ..............55
ARTICLE XI
Intercreditor Condition Amendments ...............56
SCHEDULE A
Definitions
SCHEDULE B
Schedule of Purchasers
SCHEDULE C
Schedule of Special Obligors
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EXHIBIT A
Credit and Collection Policies and Practices
EXHIBIT B
List of Lockbox Banks and Accounts
EXHIBIT C
Form of Lockbox Agreement
EXHIBIT D-1
Form of Deposit Report
EXHIBIT D-2
Form of Settlement Statement
EXHIBIT E
Form of Transfer Certificate
EXHIBIT F
List of Actions and Suits
EXHIBIT G
Location of Records
EXHIBIT H
Wire Transfer Instructions of Administrative Agent
EXHIBIT I
Form of Secretary's Certificate
EXHIBIT J
Trade Names of the Sellers
EXHIBIT K
Form of Transfer Supplement
EXHIBIT L
Form of Credit Default Swaps Assignment
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RECEIVABLES TRANSFER AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time
to time, this "Agreement"), dated as of April 29, 2005, by
and among MRFC, Inc., a Delaware corporation, as transferor
(in such capacity, the "Transferor"), METALDYNE CORPORATION,
a Delaware corporation, individually (the "Parent"), as
collection agent (in such capacity, the "Collection Agent")
and as guarantor under the Limited Guaranty set forth in
Article IX (in such capacity, the "Guarantor"), the
purchasers
identified on Schedule B and their respective
permitted successors and assigns (the "Purchasers"; each,
individually, a "Purchaser"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation ("GE Capital"), as
administrative agent for the benefit of the Purchasers (in
such capacity, the "Administrative Agent").
PRELIMINARY STATEMENTS
WHEREAS the
Transferor may desire to convey, transfer and assign, from time
to time, undivided percentage interests in
certain accounts receivable, and
subject to the terms and conditions hereof,
shall accept such conveyance,
transfer and assignment of such undivided
percentage interests, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE,
the parties hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01.
Certain Defined Terms. Capitalized terms used herein shall
have the meanings assigned to such terms
in, or incorporated by reference into,
Schedule A attached hereto, which Schedule
A is incorporated by reference
herein.
SECTION 1.02.
Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance
with GAAP.
SECTION 1.03.
Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period
of time from a specified date to a
later specified date, the word "from" means
"from and including," the words "to"
and "until" each means "to but excluding,"
and the word "within" means "from and
excluding a specified date and to and
including a later specified date."
ARTICLE II
Purchases and Settlements
SECTION 2.01.
Facility. Upon the terms and subject to the conditions set
forth herein and in the other Transaction
Documents prior to the Termination
Date, (x) the Transferor may, at its
option, convey, transfer and assign to each
Purchaser and (y) each Purchaser shall
ac-
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cept such conveyance, transfer and
assignment from the Transferor of, without
recourse except as provided herein,
undivided percentage ownership interests in
the Receivables, together with Related
Security, Collections and Proceeds with
respect thereto, from time to time. Such
purchases by the Purchasers from the
Transferor shall be made in accordance with
their respective Pro Rata Shares. By
accepting any conveyance, transfer and
assignment hereunder, none of the
Purchasers or the Administrative Agent
assumes or shall have any obligations or
liability under any of the Contracts, all
of which shall remain the obligations
and liabilities of the Sellers.
The Purchasers'
several obligations to make purchases from the Transferor
hereunder shall terminate on the
Termination Date. Notwithstanding anything to
the contrary contained herein or in the
other Transaction Documents, no
Purchaser shall be obligated to provide the
Transferor with funds in an amount
that would exceed such Purchaser's unused
Commitment then in effect, and the
failure of any Purchaser to make its Pro
Rata Share of such purchase available
to the Transferor (subject to the terms and
conditions set forth herein) shall
not relieve any other Purchaser of its
obligations hereunder.
SECTION 2.01.
Transfers; Certificates; Eligible Receivables.
(a) Incremental
Transfers. Prior to the Termination Date, upon the terms
and subject to the conditions set forth
herein and in the other Transaction
Documents, the Transferor may, at its
option from time to time, convey, transfer
and assign to each Purchaser and (y) each
Purchaser shall accept such
conveyance, transfer and assignment from
the Transferor, without recourse except
as provided herein, undivided percentage
ownership interests in the Receivables,
together with Related Security, Collections
and Proceeds with respect thereto
(each, an "Incremental Transfer") from time
to time prior to the Termination
Date; provided that the representations and
warranties set forth in Section 3.01
shall be true and correct as of the date of
such Incremental Transfer and the
payment to the Transferor of the Transfer
Price related thereto.
The Transferor
shall, by notice to the Administrative Agent given by
telecopy, offer to convey, transfer and
assign to the Purchasers undivided
percentage ownership interests in the
Receivables and Related Security,
Collections and Proceeds with respect
thereto at least one (1) Business Day
prior to the proposed date of any
Incremental Transfer. Each such notice shall
specify (x) the desired Transfer Price
(which shall be at least $1,000,000 per
Purchaser or integral multiples of $100,000
in excess thereof) or such lesser
amount that would not cause the Percentage
Factor to exceed the Maximum
Percentage Factor; (y) the desired date of
such Incremental Transfer which shall
be a Business Day; and (z) the desired
Transfer Period(s) and allocations of the
Net Investment of such Incremental Transfer
thereto as required by Section 2.03.
Each Incremental Transfer shall be subject
to the condition precedent that the
Collection Agent shall have delivered to
the Administrative Agent, in form and
substance satisfactory to the
Administrative Agent, a completed Deposit Report
dated within five (5) Business Days prior
to the desired date of such
Incremental Transfer, together with such
other additional information as the
Administrative Agent may reasonably
request. The Administrative Agent will
promptly notify the Purchasers of the
Administrative Agent's receipt of any
request for an Incremental Transfer to be
made to such Person.
Each notice of
proposed Incremental Transfer shall be irrevocable and
binding on the Transferor, and the
Transferor shall indemnify the Purchasers
against any loss or expense
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incurred by the Purchasers, either directly
or indirectly, as a result of any
failure by the Transferor to complete such
Incremental Transfer, including,
without limitation, any loss or expense
incurred by the Purchasers by reason of
the liquidation or reemployment of funds
acquired by the Purchasers (including,
without limitation, funds obtained by
issuing Commercial Paper or promissory
notes, obtaining deposits as loans from
third parties and reemployment of funds)
to fund such Incremental Transfer.
On the date of
the initial Incremental Transfer, the Administrative Agent,
on behalf of the Purchasers, shall deliver
written confirmation to the
Transferor of the Transfer Price, the
Tranche Period(s) and the Tranche Rate(s)
relating to such Transfer as required by
Section 2.03, and the Transferor shall
deliver to the Administrative Agent the
Transfer Certificate in the form of
Exhibit E hereto (the "Transfer
Certificate"). The Transfer Price for the
initial Incremental Transfer shall be
$107,359,019.71. The Administrative Agent
shall indicate the amount of the initial
Incremental Transfer together with the
date thereof on the grid attached to the
Transfer Certificate; provided,
however, that the failure by the
Administrative Agent to make the foregoing
notations shall not in any way affect the
Transferor's obligations hereunder. On
the date of each subsequent Incremental
Transfer, the Administrative Agent shall
send written confirmation to the Transferor
of the Transfer Price, the Tranche
Period(s), the Transfer Date and the
Tranche Rate(s) applicable to such
Incremental Transfer. The Administrative
Agent shall indicate the amount of the
Incremental Transfer together with the date
thereof as well as any decrease in
the Net Investment on the grid attached to
the Transfer Certificate. The
Transfer Certificate shall evidence the
Incremental Transfers. On the day of
such Incremental Transfer, each of the
Purchasers shall deposit to the
Transferor's account, in immediately
available funds, an amount equal to the
Transfer Price for such Incremental
Transfer made to the Purchasers.
(b) Reinvestment
Transfers. On each Business Day occurring after the
initial Incremental Transfer hereunder and
prior to the Termination Date, the
Transferor hereby agrees to convey,
transfer and assign to the Purchasers, and
each Purchaser shall purchase from the
Transferor, undivided percentage
ownership interests in each and every
Receivable, together with Related
Security, Collections and Proceeds with
respect thereto, to the extent that
Collections are available for such Transfer
in accordance with Section 2.05
hereof. The Transferor agrees to maintain,
at all times prior to the Termination
Date, a Net Receivables Balance in an
amount at least sufficient to maintain the
Percentage Factor at an amount not greater
than the Maximum Percentage Factor.
Accordingly, the maximum amount of funding
that the Transferor may obtain on the
Closing Date or at any time thereafter
shall be equal to the maximum Net
Investment that would not cause the
Percentage Factor to exceed the Maximum
Percentage Factor.
(c) All
Transfers. Each Transfer shall constitute a purchase of
undivided
percentage ownership interests in each and
every Receivable, together with
Related Security, Collections and Proceeds
with respect thereto, then existing,
as well as in each and every Receivable,
together with Related Security,
Collections and Proceeds with respect
thereto, which arises at any time after
the date of such Transfer. The Purchasers'
aggregate undivided percentage
ownership interest in the Receivables,
together with the Related Security,
Collections and Proceeds with respect
thereto, shall equal the Percentage Factor
in effect from time to time.
(d) Percentage
Factor. The Percentage Factor shall be initially computed as
of the opening of business of the
Collection Agent on the date of the initial
Incremental Transfer
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hereunder. Thereafter, until the
Termination Date, the Percentage Factor shall
be automatically recomputed as of the close
of business of the Collection Agent
on each day (other than a day after the
Termination Date). The Percentage Factor
shall remain constant from the time as of
which any such computation or
recomputation is made until the time as of
which the next such recomputation, if
any, shall be made. At all times on and
after the Termination Date until the
date on which the Net Investment has been
reduced to zero and all accrued
Discount, Servicing Fees and all other
Aggregate Unpaids have been paid in full,
the Percentage Factor shall equal 100%.
SECTION 2.03.
Selection of Tranche Periods and Tranche Rates.
(a)
[Reserved].
(b)
[Reserved].
(c) Prior to the
Termination Date. At all times with respect to any portion
of the Transferred Interest which is owned
by or transferred to a Purchaser
pursuant to this Agreement, but prior to
the Termination Date, the initial
Tranche Period applicable to such portion
of the Net Investment allocable
thereto shall be a period of not greater
than three (3) days, and such Tranche
shall be a BR Tranche. Thereafter (but
prior to the Termination Date or the
occurrence and continuation of a Potential
Termination Event), with respect to
such portion, and with respect to any other
portion of the Transferred Interest
held by any Purchaser, the Tranche Period
applicable thereto shall be, at the
Transferor's sole option, either a BR
Tranche or a Eurodollar Tranche. The
Transferor shall give the Administrative
Agent and the Purchasers irrevocable
notice by telephone of the new Tranche
Period at least three (3) Business Days
prior to the expiration of any then
existing Tranche Period. Any Tranche Period
maintained by the Purchasers which is
outstanding on the Termination Date shall
end on the Termination Date.
(d) After the
Termination Date. At all times on and after the Termination
Date, subject to Section 2.17 hereof, the
Administrative Agent shall select all
Tranche Periods and Tranche Rates
applicable thereto upon the expiration of
Tranche Periods in effect on the
Termination Date.
SECTION 2.04.
Discount, Fees and Other Costs and Expenses. Notwithstanding
the limitation on recourse under Section
2.01 hereof, the Transferor shall pay,
as and when due in accordance with this
Agreement and the other Transaction
Documents, all Discount, Servicing Fees,
Fees and other Aggregate Unpaids to the
extent not otherwise provided for by the
provisions of this Agreement. As
provided in Section 2.05 and 2.06, the
Transferor shall pay to the
Administrative Agent, on behalf of the
Purchasers, an amount equal to the
accrued and unpaid Discount for such
Tranche Period; provided that (i) in the
event of any repayment or prepayment of a
BR Tranche or a Eurodollar Tranche,
accrued Discount on the principal amount
repaid or prepaid shall be payable on
the date of such repayment or prepayment
and (ii) in the event of any conversion
of a BR Tranche or a Eurodollar Tranche,
accrued interest on such BR Tranche or
Eurodollar Tranche shall be payable on the
effective date of such conversion.
Discount shall accrue with respect to each
Tranche on each day occurring during
the Tranche Period related thereto.
Further, the Transferor 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 ap-
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plicable, and on an un-expedited basis) for
each of the Transferor and each
Seller from its state of incorporation or
organization.
Nothing in this
Agreement or the other Transaction Documents shall limit in
any way the obligations of the Transferor
to pay the amounts set forth in this
Section 2.04.
SECTION 2.05.
Non-Liquidation Settlement and Reinvestment Procedures. On
each day after the date of any Incremental
Transfer but prior to the Termination
Date, and provided that Section 2.06 shall
not be applicable, the Collection
Agent shall, out of the Percentage Factor
of Collections received on or prior to
such day and not previously set aside or
paid:
(i) set aside and hold in trust for the Purchasers (or deposit
into
the Collection
Account if so required pursuant to Section 2.13 hereof) an
amount equal to
all Discount, Fees and the Servicing Fee accrued through
such day and not
so previously set aside or paid;
(ii) apply the balance of such Percentage Factor of Collections
remaining after
application of Collections as provided in clause (i) of
this Section
2.05 to the Transferor, for the benefit of the Purchasers, to
the purchase of
additional undivided percentage interests in each
Receivable
pursuant to Section 2.02(b) hereof; and
(iii) remit the balance, if any, of such Percentage Factor of
Collections
remaining after the applications provided in clauses (i) and
(ii) to the
Transferor.
On the Settlement Date, from the amounts
set aside as described in clause (i) of
the first sentence of this Section 2.05
hereof, the Collection Agent shall
deposit to the Collection Account, for the
benefit of the Purchasers, an amount
equal to the accrued and unpaid Discount
and Fees for the related Settlement
Period and shall deposit to its own account
an amount equal to the accrued and
unpaid Servicing Fee for such Settlement
Period. The Administrative Agent, upon
its receipt of such amounts in the
Collection Account, shall distribute such
amounts to the Purchasers entitled thereto
in accordance with the records
maintained by the Administrative Agent
pursuant to Section 2.24; provided
further that if the Administrative Agent
shall have insufficient funds to pay
all of the above amounts in full on any
such date, the Administrative Agent
shall notify the Transferor and the
Transferor shall immediately pay to the
Administrative Agent, from funds previously
paid to the Transferor, an amount
equal to such insufficiency. In addition,
the Collection Agent shall remit to
the Transferor for its account or apply on
behalf of the Transferor as
instructed by the Transferor to other
accounts specified herein, on each
Settlement Date, such portion of
Collections not allocated to the Purchasers or
applied towards payment of its Servicing
Fee so long as all of the above amounts
are paid in full when due. Such Collections
remitted to the Transferor shall be
available for the ordinary business
purposes of the Transferor or otherwise,
subject to the provisions of the
Transaction Documents.
SECTION 2.06.
Liquidation Settlement Procedures. If at any time on or prior
to the Termination Date, the Percentage
Factor is greater than the Maximum
Percentage Factor, then the Transferor
shall immediately pay to the
Administrative Agent, for the benefit of
the Purchasers, from previously
received Collections, an amount that, when
applied to reduce the Net Investment,
will result in a Percentage Factor less
than or equal to the Maximum Percentage
Fac-
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tor. Such amount shall be applied to reduce
the Net Investment of Tranche
Periods selected by the Administrative
Agent. On the Termination Date and on
each day thereafter, and on each day on
which a Potential Termination Event has
occurred and is continuing, the Collection
Agent, at the direction of the
Administrative Agent, shall set aside and
hold in trust for the Purchasers (or
deposit into the Collection Account if so
required pursuant to Section 2.12
hereof), the Percentage Factor of all
Collections received on such day and shall
set aside and hold in trust for the
Transferor such portion of Collections not
allocated to the Purchasers. On the
Termination Date or the day on which a
Potential Termination Event occurs, the
Collection Agent shall deposit to the
Collection Account, for the benefit of the
Purchasers, any amounts set aside
pursuant to Section 2.05 above.
On the last day
of each Tranche Period to occur on or after the Termination
Date or during the continuation of a
Potential Termination Event, the Collection
Agent, at the direction of the
Administrative Agent, shall deposit to the
Collection Account, for the benefit of the
Purchasers, the amounts so set aside
for the Purchasers pursuant to the second
preceding sentence, to be applied to
the payment in full of (i) the accrued
Discount for such Tranche Period, (ii)
the portion of the Net Investment allocated
to such Tranche Period, and (iii)
all other Aggregate Unpaids not covered in
clauses (i) and (ii). On such day,
the Collection Agent shall deposit to its
account, from the amounts set aside
for the Purchasers pursuant to the
preceding sentence which remain after payment
in full of the aforementioned amounts, the
accrued Servicing Fee for such
Tranche Period. If there shall be
insufficient funds on deposit for the
Collection Agent to distribute funds in
payment in full of the aforementioned
amounts, the Collection Agent shall
distribute funds in the following order of
priority:
(i) first, in payment of the accrued Discount;
(ii) second, if the Transferor, the Parent or any Affiliate of
the
Transferor or
the Parent is not then the Collection Agent, to the
Collection
Agent's account, in payment of the Servicing Fee payable to the
Collection
Agent;
(iii) third, in reduction of the Net Investment allocated to
any
Tranche Period
ending on such date;
(iv) fourth, in payment of all Fees payable by the Transferor
hereunder;
(v) fifth, in payment of all other Aggregate Unpaids not covered
in
clauses (i)
through (iv) above; and
(iv) sixth, if the Transferor, any Seller or any Affiliate of
the
Transferor or
any Seller is the Collection Agent, to its account as
Collection
Agent, in payment of the Servicing Fee payable to such Person
as
Collection
Agent.
The Administrative Agent, upon its receipt
of such amounts in the Administrative
Agent's account, shall distribute such
amounts to the Purchasers entitled
thereto in accordance with the records
maintained by the Administrative Agent
pursuant to Section 2.24; provided that if
the Administrative Agent shall have
insufficient funds to pay all of the above
amounts in full on any such date, the
Administrative Agent shall pay such amounts
in the order of priority set forth
above and, with respect to any such
category above for which the Administrative
Agent shall
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have insufficient funds to pay all amounts
owing on such date, ratably (based on
the amounts in such categories owing to
such Persons) among all such Persons
entitled to payment thereof.
Following the
date on which the Net Investment has been reduced to zero and
all accrued Discount, Servicing Fees and
all other Aggregate Unpaids have been
paid in full, (i) the Percentage Factor
shall equal zero, (ii) the
Administrative Agent, on behalf of the
Purchasers, shall be considered to have
reconveyed to the Transferor all of the
Purchasers' right, title and interest
in, to and under the Receivables and
Related Security, Collections and Proceeds
with respect thereto, (iii) the Collection
Agent shall pay to the Transferor any
remaining Collections set aside and held by
the Collection Agent pursuant to the
third sentence of this Section 2.06 and
(iv) the Administrative Agent, on behalf
of the Purchasers, shall execute and
deliver to the Transferor, at the
Transferor's expense, such documents or
instruments as are necessary to
terminate the Purchasers' respective
interests in the Receivables and Related
Security, Collections and Proceeds with
respect thereto. Any such documents
shall be prepared by or on behalf of the
Transferor. On the last day of each
Tranche Period, the Collection Agent shall
remit to the Transferor such portion
of Collections set aside for the Transferor
pursuant to this Section 2.06.
SECTION 2.07.
Reduction of Commitments. Upon ten (10) Business Days written
notice to the Administrative Agent, the
Transferor may reduce the Commitments of
the Purchasers in an amount equal to
$5,000,000 or a whole multiple of $500,000
in excess thereof; provided that no such
termination or reduction shall be
permitted if, after giving effect thereto,
the Net Investment would exceed the
Aggregate Commitment. Upon any such
reduction, the Commitment of each Purchaser
shall be reduced in an amount equal to such
Purchaser's Pro Rata Share of the
amount of such reduction. Once reduced, the
Commitments shall not be
subsequently reinstated. The Commitment of
each Purchaser shall be automatically
reduced to zero on the Commitment Expiry
Date.
SECTION 2.01.
Fees.
(a) The
Transferor agrees to pay to the Administrative Agent an unused
facility fee equal to one half of one
percent (0.50%) per annum (the "Unused
Line Fee") calculated daily from the
Closing Date until the Commitment Expiry
Date and payable monthly on the Settlement
Date, commencing with the first full
month following the Closing Date, on the
amount by which the Aggregate
Commitment as in effect on such date
exceeds the Net Investment on such date,
which fee shall be fully earned when
payable and shall be non-refundable. All
computations of the Unused Line Fee shall
be made by Administrative Agent on the
basis of a 365 or 366-day year, as
applicable, for the actual number of days
occurring in the period for which the
Unused Line Fee is payable.
(b) To the
extent not otherwise provided for by the provisions of the
Agreement, the Transferor shall pay to the
Administrative Agent, for its own
account and the account of each Purchaser,
the Fees specified in the Fee Letter.
SECTION 2.09.
Protection of Ownership Interest of the Purchasers; Lockbox
Accounts.
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<PAGE>
(a) The
Transferor agrees that it will, and will cause each Seller to,
from
time to time, at its expense, promptly
execute and deliver all instruments and
documents and take all actions as may be
necessary or as the Administrative
Agent may reasonably request in order to
perfect or protect the Transferred
Interest or to enable the Administrative
Agent or the Purchasers to exercise or
enforce any of their respective rights
hereunder. Without limiting the
foregoing, the Transferor will, and will
cause each Seller to, upon the request
of the Administrative Agent or any of the
Purchasers, in order to accurately
reflect this purchase and sale transaction,
(x) file (or authorize the filing
of) such financing or continuation
statements or amendments thereto or
assignments thereof (as permitted pursuant
to Section 10.06 hereof) as may be
requested by the Administrative Agent for
the benefit of the Purchasers and (y)
mark its respective master data processing
records and other documents with a
legend describing the conveyance to the
Transferor (in the case of the Sellers)
and the Administrative Agent for the
benefit of the Purchasers, of the
Transferred Interest. The Transferor shall,
and will cause the Sellers to, upon
request of the Administrative Agent, obtain
such additional search reports as
the Administrative Agent, for the benefit
of the Purchasers, shall reasonably
request. To the fullest extent permitted by
applicable law, the Administrative
Agent shall be permitted to file
continuation statements and amendments thereto
and assignments thereof without the
Transferor's or any Seller's signature. The
Transferor shall not, and shall not permit
any Seller to, change its respective
name, identity or corporate structure
(within the meaning of Section 9-503 of
the Relevant UCC), change its jurisdiction
of incorporation or organization or
relocate its respective chief executive
office or any office where Records are
kept unless it shall have: (i) given the
Administrative Agent at least thirty
(30) days' prior notice thereof and (ii)
prepared at Transferor's expense and
delivered to the Administrative Agent all
financing statements, instruments and
other documents necessary to preserve and
protect the Transferred Interest or
requested by the Administrative Agent in
connection with such change or
relocation. Any filings under the Relevant
UCC or otherwise that are occasioned
by such change in name or location shall be
made at the expense of Transferor.
(b) The
Collection Agent shall instruct, and shall cause the other
Sellers
to instruct, all Obligors to cause all
Collections to be deposited directly with
a Lockbox Bank. Any Lockbox Account
maintained by a Lockbox Bank pursuant to the
related Lockbox Agreement shall be under
the exclusive dominion and control of
the Administrative Agent which is hereby
granted to the Administrative Agent by
the Transferor. The Collection Agent shall
be permitted to give instructions to
the Lockbox Banks except during the
occurrence of a Collection Agent Default or
any other Termination Event. The Collection
Agent shall not add any bank as a
Lockbox Bank to those listed on Exhibit B
attached hereto unless such bank has
entered into a Lockbox Agreement. The
Collection Agent shall not terminate any
bank as a Lockbox Bank unless the
Administrative Agent shall have received sixty
(60) days' prior notice of such
termination. If the Transferor, any Seller or
the Collection Agent receives any
Collections, the Transferor or the Collection
Agent, as applicable, shall, or shall cause
such Seller to, remit such
Collections to a Lockbox Account within one
(1) Business Day.
(c) The
Collection Agent hereby transfers and assigns all of its
rights,
titles and interests in each Lockbox
Account and all cash, checks and other
negotiable instruments, funds and other
evidences of payment held therein to the
Transferor, and the Transferor hereby
pledges, assigns and transfers to the
Administrative Agent, for the benefit of
the Purchasers, and hereby creates and
grants to the Administrative Agent, for the
benefit of the Purchasers, a
secu-
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<PAGE>
rity interest in the Lockbox Accounts and
all cash, checks and other negotiable
instruments, funds and other evidences of
payment held therein. Administrative
Agent and Transferor shall enter into cash
dominion Lockbox Agreements, in form
and substance satisfactory to
Administrative Agent; provided, however, that so
long as no Termination Event or Potential
Termination Event has occurred and is
continuing, Administrative Agent shall
return to Transferor on each business day
the cash swept from the Lockbox Accounts to
Administrative Agent on such day.
SECTION 2.10.
Deemed Collections; Application of Payments.
(a) If on any
day a Receivable becomes a Diluted Receivable, the Transferor
shall be deemed to have received on such
day a Collection of such Receivable in
the amount of such reduction or
cancellation, and the Transferor shall pay to
the Collection Agent an amount equal to
such reduction or cancellation. Any such
amount shall be applied by the Collection
Agent as a Collection in accordance
with Section 2.05 or 2.06 hereof, as
applicable. The Net Investment shall be
reduced by the amount of such payment
actually received by the Administrative
Agent.
(b) If on any
day any of the representations or warranties in Article III
was or becomes untrue with respect to a
Receivable or the nature of the
Administrative Agent's interest therein
(whether on or after the date of any
transfer of an interest therein to the
Purchasers), the Transferor shall be
deemed to have received on such day a
Collection of such Receivable in full and
the Transferor shall, on such day, pay to
the Collection Agent an amount equal
to the Outstanding Balance of such
Receivable and such amount shall be allocated
and applied by the Collection Agent as a
Collection allocable to the Transferred
Interest in accordance with Section 2.05 or
2.06 hereof, as applicable. The Net
Investment shall be reduced by the amount
of such payment actually received by
the Administrative Agent. Simultaneously
with any such payment by the
Transferor, each of the Purchasers shall
convey all of its right, title and
interest in such Receivable and Related
Security to the Transferor, and the
Administrative Agent, on behalf of the
Purchasers, shall take all action
reasonably requested by the Transferor to
effectuate such conveyance.
(c) Any payment
by an Obligor in respect of any indebtedness owed by it to
the Transferor or any Seller shall, except
as provided in paragraphs (a) and (b)
of this Section 2.10 or as otherwise
specified by such Obligor or otherwise
required by contract or law and unless
otherwise instructed by the Required
Purchasers, be applied as a Collection of
any Receivable of such Obligor
included in the Transferred Interest (in
order of the age of such Receivable,
starting with the oldest such Receivable)
to the extent of any amounts then due
and payable thereunder before being applied
to any other receivable or other
indebtedness of such Obligor.
SECTION 2.11.
Payments and Computations, etc. All amounts to be paid or
deposited by the Transferor or the
Collection Agent hereunder shall be paid or
deposited in accordance with the terms
hereof (including without limitation in
accordance with the wire transfer
instructions set forth as Exhibit H hereto) no
later than 12:00 p.m. (New York time) on
the day when due in immediately
available funds; if such amounts are
payable to any Purchaser, they shall be
paid or deposited to the Collection
Account, until otherwise notified by the
Administrative Agent. No later than 3:00
p.m. (New York time) on the date of any
Incremental Transfer hereunder, the
Purchasers, will make available to the
Transferor, in immediately available
funds,
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<PAGE>
the amount of such Incremental Transfer on
such day by remitting such amount to
an account of the Transferor specified in
the related notice of Transfer. The
Transferor shall, to the extent permitted
by law, pay to the Administrative
Agent, for the benefit of the Purchasers
upon demand, interest on all amounts
not paid or deposited by it when due
hereunder at a rate equal to 1.5% per annum
plus the Base Rate. All computations of
interest hereunder shall be made on the
basis of a year of 365 or 366 days, as
applicable for the actual number of days
(including the first but excluding the last
day) elapsed. Whenever any payment
or deposit to be made hereunder shall be
due on a day other than a Business Day,
such payment or deposit shall be made on
the next succeeding Business Day and
such extension of time shall be included in
the computation of such payment or
deposit. Any computations by the
Administrative Agent of amounts payable by the
Transferor hereunder shall be binding upon
the Transferor absent manifest error.
SECTION 2.12.
Reports. (a) Deposit Report. The Collection Agent shall
deliver to the Administrative Agent and the
Transferor, no later than 1:00 p.m.,
New York City time, on each Weekly
Settlement Date (or, after the occurrence of
a Termination Event or after the occurrence
and during the continuance of a
Potential Termination Event, on each
Business Day), a written report
substantially in the form attached hereto
as Exhibit D-1 (the "Deposit Report")
setting forth total Collections received
and Receivables originated during the
immediately preceding calendar week,
Eligible Receivables balances at the end of
the immediately preceding calendar week,
and such other information as the
Administrative Agent may reasonably
request. If any Sellers or Seller Divisions
are shut down during any week, the Deposit
Report for such week may be prepared
on the basis of the information with
respect to the Collections and Receivables
of such Sellers and Seller Divisions for
their last week of operations preceding
the shut down. The Deposit Report may be
delivered in an electronic format
mutually agreed upon by the Collection
Agent and the Administrative Agent, or
pending such agreement, by facsimile.
(b) Settlement
Statement. On each Settlement Date, the Collection Agent
shall deliver to the Administrative Agent
and the Transferor a monthly report,
substantially in the form of Exhibit D-2
(the "Settlement Statement"), showing
(i) the aggregate Purchase Price of
Receivables acquired or generated by the
Sellers in the preceding month, (ii) the
aggregate Outstanding Balance of such
Receivables that are Eligible Receivables
and (iii) such other information as
the Administrative Agent may reasonably
request.
SECTION 2.13.
Collection Account. (i) There shall be established on or
before the day of the initial Incremental
Transfer hereunder and maintained, for
the benefit of the Administrative Agent on
behalf of the Purchasers, a
segregated account (the "Collection
Account"), bearing a designation clearly
indicating that the funds deposited therein
are held for the benefit of the
Purchasers. On and after the occurrence of
a Termination Event or a Potential
Termination Event, the Collection Agent, at
the direction of the Administrative
Agent, shall remit daily to the Collection
Account all Collections received with
respect to any Receivables as provided in
Section 2.06. Funds on deposit in the
Collection Account (other than investment
earnings) shall be invested by the
Administrative Agent in Permitted
Investments that will mature so that such
funds will be available prior to the last
day of each successive Tranche Period
or prior to each Settlement Date, as
applicable, following such investment. On
the last day of each Tranche Period or on
each Settlement Date, as applicable,
all interest and earnings (net of losses
and investment expenses) on funds on
deposit in the Collection Account shall be
retained in the Collection Account
and be available to make any payments
required to be made hereunder (including
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<PAGE>
Discount) by the Transferor. On the date on
which the Net Investment is zero,
all accrued Discount, Servicing Fees, Fees
and all other Aggregate Unpaids have
been paid in full, any funds remaining on
deposit in the Collection Account
shall be paid to the Transferor.
(b) For so long
as any amounts remain due and owing to the Purchasers
hereunder or under the Transaction
Documents, the Administrative Agent shall
distribute all payments received by it in
respect of the Transaction Documents
immediately after receipt thereof by (i)
transferring to the Purchasers, on a
pro rata basis, based on the amounts
thereof owing to each Purchaser and each
Purchaser, respectively, all payments of
Discount, (ii) transferring to the
Purchasers, on a pro rata basis, all
payments in reduction of the Net Investment
and (iii) transferring to the Purchasers,
any other amounts owing to the
Purchasers under this Agreement. Such
transfers shall be made by the
Administrative Agent by withdrawing funds
on deposit in the Collection Account
and remitting such funds to the accounts of
the Purchasers specified by each of
them from time to time. The Administrative
Agent shall remit any such funds to
the Purchasers ratably in accordance with
their Pro Rata Shares.
SECTION 2.14.
Right of Setoff. Each of the Purchasers is hereby authorized
(in addition to any other rights it may
have) at any time after the occurrence
of the Termination Date, or during the
continuation of a Termination Event, to
set off, appropriate and apply (without
presentment, demand, protest or other
notice which are hereby expressly waived)
any deposits and any other
indebtedness held or owing by such
Purchasers to, or for the account of, the
Transferor against the amount of the
Aggregate Unpaids owing by the Transferor
to such Person (even if contingent or
unmatured).
SECTION 2.15.
Sharing of Payments, etc. If any Purchaser(for purposes of
this Section 2.15 only, a "Recipient")
shall obtain any payment (whether
voluntary, involuntary, through the
exercise of any right of setoff, or
otherwise) on account of any interest in
the Transferred Interest owned by it in
excess of its ratable share of payments on
account of any interest in the
Transferred Interest obtained by the
Purchasers entitled thereto, such Recipient
shall forthwith purchase from the
Purchasers entitled to a share of such amount
participations in the percentage interests
owned by such Persons as shall be
necessary to cause such Recipient to share
the excess payment ratably with each
such other Person entitled thereto;
provided, however, that if all or any
portion of such excess payment is
thereafter recovered from such Recipient, such
purchase from each such other Person shall
be rescinded and each such other
Person shall repay to the Recipient the
purchase price paid by such Recipient
for such participation to the extent of
such recovery, together with an amount
equal to such other Person's ratable share
(according to the proportion of (a)
the amount of such other Person's required
payment to (b) the total amount so
recovered from the Recipient) of any
interest or other amount paid or payable by
the Recipient in respect of the total
amount so recovered.
SECTION 2.16.
Broken Funding. In the event of (a) the payment of any
principal of any Eurodollar Tranche other
than on the last day of the Eurodollar
Tranche Period applicable thereto
(including as a result of the occurrence of
the Termination Date or an optional
prepayment of a Eurodollar Tranche), (b) the
conversion of any Eurodollar Tranche other
than on the last day of the related
Eurodollar Tranche Period, or (c) any
failure to borrow, convert, continue or
prepay any Eurodollar Tranche on the date
specified in any notice delivered
pursuant hereto, then, in any such event,
the Transferor shall compensate each
of the Purchasers for the
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<PAGE>
loss, cost and expense actually incurred by
such Purchaser attributable to such
event. Such loss, cost or expense to any
Purchaser shall include an amount
determined by such Purchaser to be the
excess, if any, of (i) the amount of
Discount which would have accrued on the
principal amount of such Eurodollar
Tranche had such event not occurred, at the
Eurodollar Rate that would have been
applicable to such Eurodollar Tranche, for
the period from the date of such
event to the last day of the Eurodollar
Tranche Period (or, in the case of a
failure to borrow, convert or continue, for
the period that would have been the
related Eurodollar Tranche Period), over
(ii) the amount of interest which would
accrue on such principal amount for such
period at the interest rate which such
Purchaser would bid were it to bid, at the
commencement of such period, for
dollar deposits of a comparable amount and
period from other banks in the
interbank Eurodollar market. Within
forty-five (45) days after any Purchaser
hereunder receives actual knowledge of any
of the events specified in this
Section 2.16, a certificate of such
Purchaser setting forth any amount or
amounts that such Purchaser is entitled to
receive pursuant to this Section 2.16
and the reason(s) therefor shall be
delivered to the Transferor (with a copy to
the Administrative Agent) and shall be
conclusive absent manifest error. The
Transferor shall pay each such Purchaser
the amount shown as due on any such
certificate within ten (10) days after
receipt thereof.
SECTION 2.17.
Conversion and Continuation of Outstanding Tranches. Prior to
the occurrence of the Termination Date or a
Potential Termination Event, (a)
each BR Tranche hereunder may, at the
option of the Transferor, be converted to
a Eurodollar Tranche and (b) each
Eurodollar Tranche may, at the option of the
Transferor, be continued as a Eurodollar
Tranche or converted to a BR Tranche.
If the Termination Date has occurred or a
Potential Termination Event has been
declared by the Administrative Agent and is
continuing, then (i) no outstanding
Tranche funded by the Purchasers may be
converted to, or continued as, a
Eurodollar Tranche and (ii) unless repaid,
each Eurodollar Tranche shall be
converted to a BR Tranche on the last day
of the Tranche Period related thereto.
For any such conversion or continuation,
the Transferor shall give the
Administrative Agent irrevocable notice
(each, a "Conversion/Continuation
Notice") of such request not later than
12:30 p.m. (New York City time) (i) in
the case of a conversion of a BR Tranche
into a Eurodollar Tranche, or a
continuation of a Eurodollar Tranche as a
Eurodollar Tranche, three (3) Business
Days before the date of such conversion or
continuation, as applicable, and (ii)
following the Termination Date or the
declaration by the Administrative Agent
and continuation of a Potential Termination
Event, in the case of a conversion
of a Eurodollar Tranche into a BR Tranche
or a continuation of a BR Tranche as a
BR Tranche, on the Business Day of such
conversion. If a Conversion/Continuation
Notice has not been timely delivered with
respect to any BR Tranche or
Eurodollar Tranche, such Tranche shall be
automatically continued as, or
converted to, a BR Tranche. Each
Conversion/Continuation Notice shall specify
(a) the requested date (which shall be a
Business Day) of such conversion or
continuation, (b) the aggregate amount and
rate option applicable to the Tranche
which is to be converted or continued and
(c) the amount and rate option(s) of
Tranche(s) into which such Tranche is to be
converted or continued.
SECTION 2.18.
Illegality.
(a) Notwithstanding
any other provision herein, if, after the Closing Date,
the adoption of any Law or bank regulatory
guideline or any amendment or change
in the interpretation of any existing or
future Law or bank regulatory guideline
by any Official Body charged with the
administration, interpretation or
application thereof, or the compliance with
any direc-
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<PAGE>
tive of any Official Body (in the case of
any bank regulatory guideline, whether
or not having the force of Law), shall make
it unlawful for any Purchaser to
acquire or maintain a Eurodollar Tranche as
contemplated by this Agreement, (i)
such Purchaser shall, within forty-five
(45) days after receiving actual
knowledge thereof, deliver a certificate to
the Transferor (with a copy to the
Administrative Agent) setting forth the
basis for such illegality, which
certificate shall be conclusive absent
manifest error, (ii) the commitment of
such Purchaser hereunder to make a portion
of a Eurodollar Tranche, continue any
portion of a Eurodollar Tranche as such and
convert a BR Tranche to a Eurodollar
Tranche shall forthwith be canceled, and
such cancelation shall remain in effect
so long as the circumstance described above
exists, and (iii) such Purchaser's
portion of any Eurodollar Tranche then
outstanding shall be converted
automatically to a BR Tranche on the last
day of the related Eurodollar Tranche
Period, or within such earlier period as
required by law.
If any such
conversion of a portion of a Eurodollar Tranche occurs on a day
which is not the last day of the related
Eurodollar Tranche Period, then
pursuant to Section 2.16 the Transferor
shall pay to such Purchaser such
amounts, if any, as may be required to
compensate such Purchaser. If
circumstances subsequently change so that
it is no longer unlawful for an
affected Purchaser to acquire or to
maintain a portion of a Eurodollar Tranche
as contemplated hereunder, such Purchaser
will, as soon as reasonably
practicable after such Purchaser knows of
such change in circumstances, notify
the Transferor and the Administrative
Agent, and upon receipt of such notice,
the obligations of such Purchaser to
acquire or maintain its acquisition of
portions of Eurodollar Tranches or to
convert its portion of a BR Tranche into
portions of Eurodollar Tranches shall be
reinstated.
(b) Each
Purchaser agrees that, upon the occurrence of any event giving
rise to the operation of Section 2.18(a)
with respect to such Purchaser, it
will, if requested by the Transferor and to
the extent permitted by law or by
the relevant Official Body, endeavor in
good faith to change the office at which
it books its portions of Eurodollar
Tranches hereunder if such change would make
it lawful for such Purchasers to continue
to acquire or to maintain its
acquisition of portions of Eurodollar
Tranches hereunder; provided, however,
that such change may be made in such manner
that such Purchaser, in its sole
determination, suffers no unreimbursed cost
or expense or any other disadvantage
whatsoever.
SECTION 2.19.
Inability to Determine Eurodollar Rate. If, prior to the
first day of any Eurodollar Tranche
Period:
(i) the Administrative Agent shall have determined (which
determination in
the absence of manifest error shall be conclusive and
binding upon the
Transferor) that, by reason of circumstances affecting the
interbank
Eurodollar market, either (a) dollar deposits in the relevant
amounts and for
the relevant Tranche Period are not available, or (b)
adequate and
reasonable means do not exist for ascertaining the Eurodollar
Rate for such
Eurodollar Tranche Period; or
(ii) the Administrative Agent shall have received notice from
the
Required
Purchasers that the Eurodollar Rate determined or to be
determined
for such
Eurodollar Tranche Period will not adequately and fairly
reflect
the cost to such
Purchasers (as
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<PAGE>
conclusively
certified by such Purchasers) of purchasing or maintaining
their affected
portions of Eurodollar Tranches during such Eurodollar
Tranche
Period;
then, in either such event, the
Administrative Agent shall give telecopy or
telephonic notice thereof (confirmed in
writing) to the Transferor and the
Purchasers as soon as practicable (but, in
any event, within ten (10) days after
such determination or notice, as
applicable) thereafter. Until such notice has
been withdrawn by the Administrative Agent,
no further Eurodollar Tranches shall
be made. The Administrative Agent agrees to
withdraw any such notice as soon as
reasonably practicable after the
Administrative Agent is notified of a change in
circumstances which makes such notice
inapplicable.
SECTION 2.20.
Indemnities by the Transferor. Without limiting any other
rights which the Administrative Agent may
have hereunder or under applicable
law, the Transferor hereby agrees to
indemnify the Purchasers and the
Administrative Agent and any successors and
permitted assigns and their
respective officers, directors, agents and
employees (collectively, "Indemnified
Parties") from and against any and all
damages, losses, claims, liabilities,
costs and expenses, including, without
limitation, reasonable attorneys' fees
(which such attorneys may be employees of
the Administrative Agent) and
disbursements (all of the foregoing being
collectively referred to as
"Indemnified Amounts") awarded against or
incurred by any of them in any action
or proceeding between the Transferor, the
Collection Agent in such capacity or
the Sellers and any of the Indemnified
Parties or between any of the Indemnified
Parties and any third party or otherwise
arising out of or as a result of this
Agreement, the other Transaction Documents,
the ownership or maintenance, either
directly or indirectly, by the
Administrative Agent or any Purchaser of the
Transferred Interest or any of the other
transactions contemplated hereby or
thereby, excluding, however, (i)
Indemnified Amounts to the extent relating to
or resulting from (x) gross negligence or
willful misconduct on the part of an
Indemnified Party as finally determined
pursuant to a nonappealable order or
judgment issued by a court of competent
jurisdiction or (y) recourse (except as
otherwise specifically provided in this
Agreement) for uncollectible Receivables
or (ii) all taxes (other than Indemnified
Taxes). Without limiting the
generality of the foregoing, the Transferor
shall indemnify each Indemnified
Party for Indemnified Amounts (without
duplication of amounts for which any
Indemnified Party is effectively held
harmless under any other provision hereof)
relating to or resulting from:
(a) any
representation or warranty made in writing by the Transferor,
the
Collection Agent or the Sellers or any
officers of the Transferor, the
Collection Agent or the Sellers under or in
connection with this Agreement, any
of the other Transaction Documents, any
Deposit Report, any Settlement Report or
any other information or report delivered
by any of them pursuant hereto or
thereto, which shall have been false or
incorrect in any material respect when
made or deemed made;
(b) the failure
by the Transferor, the Collection Agent or the Sellers to
comply with any applicable law, rule or
regulation with respect to any
Receivable or the related Contract, or the
nonconformity of any Receivable or
the related Contract with any such
applicable law, rule or regulation;
(c) the failure
to either (x) vest and maintain vested in the
Administrative Agent, for the benefit of
the Purchasers, an undivided first
priority, perfected percentage owner-
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<PAGE>
ship interest, to the extent of the
Transferred Interest, in the Receivables and
Related Security, Collections and Proceeds
with respect thereto, free and clear
of any Adverse Claim or (y) to create or
maintain a valid and perfected first
priority security interest in favor of the
Administrative Agent, for the benefit
of the Purchasers, in the Transferor's
interest in the Receivables and Related
Security, Collections and Proceeds with
respect thereto, free and clear of any
Adverse Claim (other than any Adverse Claim
created by or through the
Purchasers);
(d) the failure
to file, or any delay in filing, financing statements,
continuation statements, or other similar
instruments or documents under the
Relevant UCC or other applicable laws with
respect to any of the Receivables or
Related Security, Collections and Proceeds
with respect thereto;
(e) any dispute,
claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor
to the payment of any Receivable
(including, without limitation, a defense
based on such Receivable or the
related Contract not being legal, valid and
binding obligation of such Obligor
enforceable against it in accordance with
its terms), or any other claim
resulting from the sale of merchandise or
services related to such Receivable or
the furnishing or failure to furnish such
merchandise or services (if such
collection activities were performed by the
Transferor or any of its Affiliates
acting as the Collection Agent);
(f) any products
liability claim or personal injury or property damage suit
or other similar or related claim or action
of whatever sort arising out of or
in connection with merchandise or services
which are the subject of any
Receivable;
(g) the transfer
of an ownership interest in any Receivable other than an
Eligible Receivable;
(h) the failure
by any of the Transferor, the Collection Agent or the
Sellers to comply with any term, provision
or covenant contained in this
Agreement or any of the other Transaction
Documents to which it is a party or to
perform any duty or obligation in
accordance with the provisions hereof or
thereof or to perform any of its duties or
obligations under the Contracts;
(i) the
Percentage Factor exceeding the Maximum Percentage Factor at
any
time on or prior to the Termination
Date;
(j) the failure
of the Sellers to pay when due any taxes, including without
limitation, sales, excise or personal
property taxes payable in connection with
any of the Receivables with respect to
which an Indemnified Party may be held
liable as a transferee of such
Receivables;
(k) any
repayment by any Indemnified Party of any amount previously
distributed in reduction of Net Investment
which such Indemnified Party believes
in good faith is required to be made;
(l) the
commingling by the Transferor, the Sellers or the Collection
Agent
of Collections of Receivables at any time
with other funds;
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(m) any
investigation, litigation or proceeding related to this
Agreement,
any of the other Transaction Documents, the
use of proceeds of Transfers by the
Transferor or the Sellers, the ownership of
Transferred Interests, or any
Receivable, Related Security or
Contract;
(n) the failure
of any Lockbox Bank to remit any amounts held in the
Lockbox Accounts pursuant to the
instructions of the Collection Agent, the
Transferor, the Sellers or the
Administrative Agent (to the extent such Person
is entitled to give such instructions in
accordance with the terms hereof and of
any applicable Lockbox Agreement) whether
by reason of the exercise of set-off
rights or otherwise;
(o) any
inability to obtain any judgment in or utilize the court or
other
adjudication system of, any state in which
an Obligor may be located as a result
of the failure of the Transferor or the
Sellers to qualify to do business or
file any notice of business activity report
or any similar report;
(p) any failure
of the Transferor to give reasonably equivalent value to
the Sellers in consideration of the
purchase by the Transferor from the Sellers
of any Receivable, or any attempt by any
Person to void, rescind or set aside
any such transfer under statutory
provisions or common law or equitable action,
including, without limitation, any
provision of the Bankruptcy Code; or
(q) any action
taken by the Transferor, the Sellers or the Collection Agent
in the enforcement or collection of any
Receivable;
provided, however, that the Transferor
shall not be liable for Indemnified
Amounts attributable to the fraud, gross
negligence, breach of fiduciary duty or
willful misconduct of any Collection Agent
in the enforcement or collection of
any Receivable if such Collection Agent is
not the Parent or an Affiliate of the
Parent; and provided, further, that if such
Indemnified Amounts are attributable
solely to the Transferor, the Transferor
shall be solely liable for such
Indemnified Amounts, and if such
Indemnified Amounts are attributable solely to
Other Transferors, such Other Transferors
shall be solely liable for such
Indemnified Amounts.
SECTION 2.21.
Indemnity for Reserves and Expenses. (a) If after the date
hereof, the adoption of any Law or bank
regulation or regulatory guideline or
any amendment or change in the
interpretation of any existing or future Law or
bank regulation or regulatory guideline by
any Official Body charged with the
administration, interpretation or
application thereof, or the compliance with
any directive of any Official Body (in the
case of any bank regulation or
regulatory guideline, whether or not having
the force of Law), other than Laws,
interpretations, guidelines or directives
relating to Taxes:
(i) shall impose, modify or deem applicable any reserve,
special
deposit or
similar requirement (including, without limitation, any such
requirement
imposed by the Board of Governors of the Federal Reserve
System) against
assets of, deposits with or for the account of, or credit
extended by, any
Indemnified Party or shall impose on any Indemnified Party
or on the United
States market for certificates of deposit or the London
interbank market
any other condition affecting this Agreement, the other
Transaction
Documents, the ownership, maintenance or financing of the
Transferred
Interest,
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the Receivables
or payments of amounts due hereunder or its obligation to
advance funds
hereunder or under the other Transaction Documents; or
(ii) imposes upon any Indemnified Party any other expense
(including,
without
limitation, reasonable attorneys' fees and expenses, and
expenses
of litigation or
preparation therefor in contesting any of the foregoing)
with respect to
this Agreement, the other Transaction Documents, the
ownership,
maintenance or financing of the Transferred Interest, the
Receivables or
payments of amounts due hereunder or its obligation to
advance funds
hereunder or otherwise in respect of this Agreement, the
other
Transaction Documents, the ownership, maintenance or financing of
the
Transferred
Interests or the Receivables;
and the result of any of the foregoing is
to increase the cost to such
Indemnified Party with respect to this
Agreement, the other Transaction
Documents, the ownership, maintenance or
financing of the Transferred Interest,
the Receivables, the obligations hereunder,
the funding of any Purchases
hereunder or under the other Transaction
Documents, by an amount deemed by such
Indemnified Party to be material, then,
within ten (10) Business Days after
demand by such Indemnified Party through
the Administrative Agent, the
Transferor shall pay to the Administrative
Agent, for the benefit of such
Indemnified Party, such additional amount
or amounts (other than with respect to
taxes) as will compensate such Indemnified
Party for such increased cost or
reduction; provided that no such amount
shall be payable with respect to any
period commencing more than two hundred
seventy (270) days prior to the date the
Administrative Agent first notifies the
Transferor of its intention to demand
compensation therefor under this Section
2.21; provided further that if such
change in Law, rule or regulation giving
rise to such increased costs or
reductions is retroactive, then such
270-day period shall be extended to include
the period of retroactive effect thereof.
In making demand hereunder, the
applicable Indemnified Party shall submit
to the Transferor a certificate as to
such increased costs incurred which shall
provide in reasonable detail the basis
for such claim.
(b) If any
Indemnified Party shall have determined that after the date
hereof, the adoption of any applicable Law
or bank regulation or regulatory
guideline regarding capital adequacy, or
any change therein, or any change in
the interpretation thereof by any Official
Body, or any directive regarding
capital adequacy (in the case of any bank
regulatory guideline, whether or not
having the force of law) of any such
Official Body, has or would have the effect
of reducing the rate of return on capital
of such Indemnified Party (or its
parent) as a consequence of such
Indemnified Party's obligations hereunder or
with respect hereto to a level below that
which such Indemnified Party (or its
parent) could have achieved but for such
adoption, change, request or directive
(taking into consideration its policies
with respect to capital adequacy) by an
amount deemed by such Indemnified Party to
be material, then from time to time,
within ten (10) Business Days after demand
by such Indemnified Party through the
Administrative Agent, the Transferor shall
pay to the Administrative Agent, for
the benefit of such Indemnified Party, such
additional amount or amounts (other
than with respect to taxes) as will
compensate such Indemnified Party (or its
parent) for such reduction; provided that
no such amount shall be payable with
respect to any period commencing more than
two hundred seventy (270) days prior
to the date the Administrative Agent first
notifies the Transferor of its
intention to demand compensation therefor
under this Section 2.21(b); provided
further that if such change in Law, rule or
regulation giving rise to such
increased costs or reductions is
retroactive, then such 270-
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day period shall be extended to include the
period of retroactive effect
thereof. In making demand hereunder, the
applicable Indemnified Party shall
submit to the Transferor a certificate as
to such increased costs incurred which
shall provide in reasonable detail the
basis for such claim.
SECTION 2.22.
Indemnity for Taxes. (a) All payments made by the Transferor
or the Collection Agent to the
Administrative Agent for the benefit of the
Purchasers under this Agreement and any
other Transaction Document shall be made
free and clear of, and without deduction or
withholding for or on account of any
Indemnified Taxes. If any such Indemnified
Taxes are required to be withheld
from any amounts payable to the
Administrative Agent or any Indemnified Party
hereunder, (i) the amounts so payable to
the Administrative Agent or such
Indemnified Party shall be increased to the
extent necessary to yield to the
Administrative Agent or such Indemnified
Party (after payment of all Indemnified
Taxes) all amounts payable hereunder at the
rates or in the amounts specified in
this Agreement and the other Transaction
Documents and (ii) the Transferor or
the Collection Agent, as the case may be,
shall make such deductions or
withholdings and shall pay the amount so
deducted or withheld to the applicable
Official Body in accordance with the
applicable law. The Transferor shall
indemnify the Administrative Agent or any
Indemnified Party for the full amount
of any Indemnified Taxes paid by the
Administrative Agent or the Indemnified
Party within ten (10) Business Days after
the date of written demand therefor by
the Administrative Agent or such
Indemnified Party if the Administrative Agent
or such Indemnified Party, as the case may
be, has delivered to the Transferor a
certificate signed by an officer of the
Administrative Agent or such Indemnified
Party, as the case may be, setting forth in
reasonable detail the amount so paid
and the computations made to determine such
amount. Such certificate shall be
conclusive absent manifest error.
(b) Each
Indemnified Party that is not a United States person (within
the
meaning of Section 7701(a)(30) of the Code)
(a "United States Person") shall:
(i) at the time such Indemnified Party becomes a party to this
Agreement or the
Transaction Documents, deliver to the Transferor and the
Administrative
Agent (A) two duly completed copies of IRS Form 4224, or
successor
applicable form, as the case may be, and (B) an IRS Form W-8 or
W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Transferor 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 the
Transferor 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 the Transferor
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 Indemnified
Party from duly completing and
delivering
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<PAGE>
any such form with respect to it, and such
Indemnified Party so advises the
Transferor and the Administrative Agent.
Each such Indemnified Party that is not
a United States person (A) shall certify
(i) in the case of an IRS Form 4224, or
successor applicable form, that it is
entitled to receive payments under this
Agreement and the other Transaction
Documents without deduction or withholding
of any United States federal income taxes
and (ii) in the case of an IRS Form
W-8 or IRS Form W-9, or successor
applicable form, 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 the
Transferor, the Sellers or the
Collection Agent. Each Person that is a
Purchaser or Participant hereunder, or
which otherwise becomes a party to this
Agreement and the other Transaction
Documents 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 2.22.
SECTION 2.23.
Other Costs, Expenses and Related Matters. (a) The Transferor
agrees, upon receipt of a written invoice,
to pay or cause to be paid, and to
save the Administrative Agent and the
Purchasers harmless against liability for
the payment of, all reasonable
out-of-pocket expenses (including, without
limitation, reasonable attorneys',
accountants' and other third parties' fees
and expenses, any filing fees and expenses
incurred by officers or employees of
the Administrative Agent and/or the
Purchasers) or intangible, documentary or
recording taxes incurred by or on behalf of
the Administrative Agent or any of
the Purchasers (i) in connection with the
negotiation, execution, delivery and
preparation of this Agreement, the other
Transaction Documents and any documents
or instruments delivered pursuant hereto
and thereto and the transactions
contemplated hereby or thereby (including,
without limitation, the perfection or
protection of the Transferred Interest) and
(ii) (A) relating to any amendments,
waivers or consents under this Agreement
and the other Transaction Documents,
(B) arising in connection with the
Administrative Agent's, or any Purchasers'
enforcement or preservation of rights
(including, without limitation, the
perfection and protection of the
Transferred Interest under this Agreement), or
(C) arising in connection with any audit,
dispute, disagreement, litigation or
preparation for litigation involving this
Agreement or any of the other
Transaction Documents (all of such amounts,
collectively, "Transaction Costs").
All Transaction Costs owed by the
Transferor pursuant to this subsection 2.23(a)
shall be payable in accordance with Section
2.05 and 2.06.
(b) The
Transferor shall pay the Administrative Agent, for the account
of
the Purchasers, on demand any Early
Collection Fee due on account of the
reduction of a Tranche on any day prior to
the last day of its Tranche Period.
(c) The
Administrative Agent will within forty-five (45) days after
receipt
of notice of any event occurring after the
date hereof which will entitle an
Indemnified Party to compensation pursuant
to this Article II, notify the
Transferor in writing of such event. Any
notice by the Administrative Agent
claiming compensation under this Article II
and setting forth the additional
amount or amounts to be paid to it
hereunder shall be conclusive in the absence
of manifest error, provided that such claim
is made in good faith and on a
reasonable basis. In determining such
amount, the Administrative Agent or any
applicable Indemnified Party may use any
reasonable averaging and attributing
methods.
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(d) If the
Transferor is required to pay any additional amount to any
Purchaser pursuant to Sections 2.21 or
2.22, then such Purchaser shall use
reasonable efforts (which shall not require
such Purchaser to incur an
unreimbursed loss or unreimbursed cost or
expense or otherwise take any action
inconsistent with its internal policies or
legal or regulatory restrictions or
suffer any disadvantage or burden
reasonably deemed by it to be significant) (A)
to file any certificate or document
reasonably requested in writing by the
Transferor or (B) to assign its rights and
delegate and transfer its obligations
hereunder to another of its offices,
branches or affiliates, if such filing or
assignment would reduce amounts payable
pursuant to Sections 2.21 or 2.22, as
the case may be, in the future.
SECTION 2.24.
Administrative Agent. (a) The Administrative Agent is hereby
authorized to record on each Business Day
the Funded Amount with respect to each
Purchaser and the aggregate amount of
Discount and Fees accruing with respect
thereto on such Business Day. Any such
recordations by the Administrative Agent,
absent manifest error, shall constitute
prima facie evidence of the accuracy of
the information so recorded. The
Administrative Agent will report the aggregate
amounts due to the Purchasers for the prior
calendar month to the Transferor and
the Collection Agent not later than two (2)
Business Days prior to the related
Settlement Date. Furthermore, the
Administrative Agent will maintain records
sufficient to identify the percentage
interest of each Purchaser in the
Receivables and any amounts owing
thereunder.
(b) Upon receipt
of funds from the Administrative Agent on each Settlement
Date pursuant to Sections 2.05 and 2.06,
the Administrative Agent shall pay such
funds to the Purchasers owed such funds in
accordance with the recordations
maintained by it in accordance with Section
2.24(a). If the Administrative Agent
shall have paid to any Purchaser any funds
that (i) must be returned for any
reason (including bankruptcy) or (ii)
exceeds that which such Purchaser was
entitled to receive, such amount shall be
promptly repaid to the Administrative
Agent by such Purchaser.
SECTION 2.25.
Use of Historical Data. Where necessary to calculate any
ratios or other amounts under this
Agreement with reference to periods prior to
the Closing Date, historical data shall be
used.
ARTICLE III
Representations and Warranties
SECTION 3.01.
Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants
to the Administrative Agent and the
Purchasers that:
(a) Corporate
Existence and Power. The Transferor is a corporation duly
incorporated, validly existing and in good
standing under the laws of the State
of Delaware and has all corporate power and
all material governmental licenses,
authorizations, consents and approvals
required to carry on its business in each
jurisdiction in which its business is now
conducted. The Transferor is duly
qualified (or has duly applied for such
qualification) 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.
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<PAGE>
(b) Corporate
and Governmental Authorization; Contravention. The execution,
delivery and performance by the Transferor
of this Agreement and the other
Transaction Documents to which the
Transferor is a party are within the
Transferor's corporate powers, have been
duly authorized by all necessary
corporate action, require no action by or
in respect of, or filing with, any
Official Body or official thereof, and do
not contravene any provision of
applicable law, rule or regulation or of
the Certificate of Incorporation or
Bylaws of the Transferor or constitute a
default under any agreement or any
judgment, injunction, order, writ, decree
or other instrument binding upon the
Transferor or result in the creation or
imposition of any Adverse Claim on the
assets of the Transferor (except as
contemplated by Section 2.09 hereof).
(c) Binding
Effect. Each of this Agreement and the other Transaction
Documents to which the Transferor is a
party constitutes, and the Transfer
Certificate, upon payment of the Transfer
Price set forth therein, will
constitute the legal, valid and binding
obligation of the Transferor,
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).
(d) Perfection.
Immediately preceding each Transfer hereunder, the
Transferor shall be the owner of all of the
Receivables, free and clear of all
Adverse Claims. On or prior to each
Transfer and each recomputation of the
Transferred Interest, all financing
statements and other documents required to
be recorded or filed in order to perfect
and protect the Transferred Interest
against all creditors of, and purchasers
from, the Transferor and the Sellers
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.
(e) Accuracy of
Information. All information heretofore furnished by or on
behalf of the Transferor or the Collection
Agent on its behalf (including,
without limitation, the Deposit Reports,
the Settlement Statements, any other
reports delivered pursuant to the terms of
this Agreement and the Transferor's
financial statements) to any Purchaser or
the Administrative Agent for purposes
of, or in connection with, this Agreement
and the other Transaction Documents
are, and all such information hereafter
furnished by or on behalf of the
Transferor 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.
(f) Tax Status.
The Transferor has filed all material tax returns (Federal,
state and local) required to be filed and
has paid or made adequate provision
for the payment of all material taxes,
assessments and other governmental
charges other than taxes or filings
contested in good faith or taxes which are
not yet due and payable, and for which
adequate reserves have been established
in accordance with GAAP.
(g) Action,
Suits. There are no actions, suits or proceedings pending or,
to the knowledge of the Transferor
threatened, against or affecting the
Transferor or its properties, in or before
any court, arbitrator or other
Official Body, which could reasonably be
expected to, individually or in the
aggregate, have a Material Adverse Effect
on the performance by the Transferor
of its obligations under the Agreement or
the validity and enforceability of
this Agreement,
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the Receivables, the Contracts or any other
Transaction Document, except as set
forth in Exhibit F concerning Affiliates of
the Transferor.
(h) Use of
Proceeds. No proceeds of any Transfer will be used by the
Transferor to acquire any security in any
transaction which violates Regulation
T, U or X of the Federal Reserve Board.
(i) Place of
Business; Jurisdiction of Organization. The principal place of
business and chief executive office of the
Transferor are located at the address
of the Transferor indicated in Section
10.03 hereof, and the offices where the
Transferor keeps all its Records, are
located at the address(es) described on
Exhibit G or such other locations notified
to the Administrative Agent in
accordance with Section 2.09 hereof in
jurisdictions where all action required
by Section 2.09 hereof has been taken and
completed. The Transferor is a
corporation organized under the laws of the
state of Delaware.
(j) Good Title.
Upon each Transfer and each recomputation of the
Transferred Interest, 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
Transferred Interest or (B) a first
priority perfected security interest in
each Receivable that exists on the date
of such Transfer and recomputation and in
the Related Security, Collections and
Proceeds with respect thereto, in either
case free and clear of any Adverse
Claim.
(k) Trade Names,
etc. As of the date hereof: (i) the Transferor's chief
executive office is located at the address
for notices set forth in Section
10.03 hereof; (ii) the Transferor has no
subsidiaries or divisions; and (iii)
the Transferor has not operated under any
trade name within the last five (5)
years, and, within the last five (5) years,
has not changed its name, changed
its organizational or corporate form,
changed its jurisdiction of incorporation
or organization, merged with or into or
consolidated with any other corporation
or been the subject of any proceeding under
Title 11, United States Code
(Bankruptcy).
(l) Nature of
Receivables. Each Receivable (x) represented by the
Transferor or the Collection Agent to be an
Eligible Receivable (including in
any Settlement Statement or other report
delivered pursuant to Section 2.12
hereof) or (y) included in the calculation
of the Net Receivables Balance in
fact satisfies at such time the definition
of "Eligible Receivable."
(m) Coverage
Requirement; Amount of Receivables. The Percentage Factor does
not exceed the Maximum Percentage Factor.
As of April 29, 2005, the aggregate
Outstanding Balance of the Receivables in
existence was $248,493,000, and the
Net Receivables Balance was
$156,185,000.
(n) Credit and
Collection Policy. Since the Closing Date, there have been
no material changes in the Credit and
Collection Policy, other than as permitted
hereunder. Since such date, no material
adverse change has occurred in the
overall rate of collection of the
Receivables.
(o) Collections
and Servicing. Since January 2, 2005, there has been no
material adverse change in the ability of
the Collection Agent, the Sellers, the
Transferor or any Subsidiary or Affiliate
of any of the foregoing to service and
collect the Receivables.
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<PAGE>
(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. The Transferor is not, and is not
controlled
by, an "investment company" within the
meaning of the Investment Company Act of
1940, as amended, or is exempt from all
provisions of such Act.
(r) ERISA. Each
of the Transferor and its ERISA Affiliates is in compliance
in all material respects with ERISA, and no
lien exists in favor of the Pension
Benefit Guaranty Corporation on any of the
Receivables.
(s) Lockbox
Accounts. The names and addresses of all the Lockbox Banks,
together with the account numbers of the
Lockbox Accounts at such Lockbox Banks,
are specified in Exhibit B hereto (or at
such other Lockbox Banks and/or with
such other Lockbox Accounts as have been
notified to the Administrative Agent
and for which Lockbox Agreements have been
executed in accordance with Section
2.09(b) hereof and delivered to the
Collection Agent). All Obligors have been
instructed to make payment to a Lockbox
Account, and only Collections are
deposited into a Lockbox Account.
(t) Bulk Sales.
No transaction contemplated hereby or by the Receivables
Purchase Agreement requires compliance with
any "bulk sales" act or similar law.
(u) Transfers
Under Receivables Purchase Agreement. Each Receivable which
has been transferred to the Transferor by
any Seller has been purchased by the
Transferor from such Seller pursuant to,
and in accordance with, the terms of
the Receivables Purchase Agreement.
(v) Preference;
Voidability. The Transferor shall have given reasonably
equivalent value to each Seller in
consideration for the transfer to the
Transferor of the Receivables and Related
Security, Collections and Proceeds
with respect thereto from such Seller, and
each such transfer shall not have
been made for or on account of an
antecedent debt owed by any Seller to the
Transferor, and no such transfer is or may
be voidable under any Section of the
Bankruptcy Reform Act of 1978 (11 U.S.C.
ss.ss. 101 et seq.), as amended (the
"Bankruptcy Code").
(w)
Subsidiaries. The Transferor shall not have any subsidiaries.
(x) Material
Adverse Effect. Between the date of its formation and the
Closing Date, (i) the Transferor has not
incurred any obligations, contingent or
non-contingent liabilities, liabilities for
charges, long-term leases or unusual
forward or long-term commitments except
with respect to receivables financing
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 the
Transferor or has become binding upon
the Transferor's assets except with respect
to receivables financing and no law
or regulation applicable to the Transferor
has been adopted, in each case that
has had or could reasonably be expected to
have a Material Adverse Effect, and
(iii) the Transferor has not, except with
respect to receivables financing,
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 the
Transferor is a party that alone or in the
aggregate
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could reasonably be expected to have a
Material Adverse Effect. Between the date
of the formation of the Transferor and the
Closing Date, no event has occurred
that alone or together with other events
could reasonably be expected to have a
Material Adverse Effect.
Any document,
instrument, certificate or notice delivered to the
Administrative Agent or any Purchaser by
the Transferor or any agent of the
Transferor hereunder shall be deemed a
representation and warranty by the
Transferor.
SECTION 3.02.
Reaffirmation of Representations and Warranties by the
Transferor. On each day that a Transfer is
made hereunder, the Transferor, by
accepting the proceeds of such Transfer,
whether delivered to the Transferor
pursuant to Section 2.02(a) or Section 2.05
hereof, shall be deemed to have
certified that all representations and
warranties described in Section 3.01
hereof are true and correct on and as of
such day as though made on and as of
such day.
ARTICLE IV
Conditions Precedent
SECTION 4.01.
Conditions to Effectiveness. This Agreement shall become
effective on the first day on which the
Administrative Agent shall have received
the following documents, instruments and
Fees, all of which shall be in a form
and substance acceptable to the
Administrative Agent:
(a) A
Certificate of the Secretary or Assistant Secretary of the
Transferor
in substantially the form of Exhibit I
hereto certifying (i) the names and
signatures of the officers and employees
authorized on its behalf to execute
this Agreement and any other documents to
be delivered by it hereunder (on which
Certificate the Administrative Agent and
the Purchasers may conclusively rely
until such time as the Administrative Agent
shall receive from the Transferor a
revised Certificate meeting the
requirements of this clause (a)(i)), (ii) a copy
of the Transferor's Certificate of
Incorporation, certified by the Secretary of
State of the State of Delaware, (iii) a
copy of the Transferor's By-Laws, (iv) a
copy of resolutions of the Board of
Directors of the Transferor approving this
transaction and (v) certificates of the
Secretary of State of the State of
Delaware certifying the Transferor's good
standing under the laws of the State
of Delaware.
(b) A
Certificate of the Secretary or Assistant Secretary of each Seller
in
substantially the form of Exhibit I hereto
certifying (i) the names and
signatures of the officers and employees
authorized on its behalf to execute the
Receivables Purchase Agreement and any
other documents to be delivered by it (on
which Certificate the Administrative Agent
and the Purchasers may conclusively
rely until such time as the Administrative
Agent shall receive from any Seller a
revised Certificate meeting the
requirements of this clause (b)(i)), (ii) a copy
of such Seller's certificate of
incorporation, certified by the Secretary of
State of the state of such Seller's
incorporation, (iii) a copy of such Seller's
By-Laws, (iv) a copy of resolutions of the
Board of Directors of such Seller
approving this transaction and (v)
certificates of the Secretary of State of the
state of such Seller's incorporation,
certifying such Seller's good standing
under the laws of such state.
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(c) Evidence
satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper
financing statements (Form UCC-1), naming
the Transferor as the debtor, the
Administrative Agent, as secured party, and of
such other similar instruments or documents
as may be necessary or, in the
reasonable opinion of the Administrative
Agent, desirable under the Relevant UCC
of all appropriate jurisdictions or any
comparable law to perfect the
Administrative Agent's security interest in
all Receivables, Related Security,
Proceeds and Collections.
(d) Evidence
satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper
financing statements (Form UCC-1), naming
each Seller as debtor, the Transferor as
secured party, and the Administrative
Agent, as assignee of the secured party,
and of such other similar instruments
or documents as may be necessary or, in the
reasonable opinion of the
Administrative Agent, desirable under the
Relevant UCC of all appropriate
jurisdictions or any comparable law to
perfect the Transferor's ownership or
security interest in all Receivables,
Related Security and Collections.
(e) Evidence
satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper
financing statements (Form UCC-3), if any,
necessary to terminate or assign to the
Administrative Agent all security
interests and other rights of any person in
Receivables previously granted by
the Transferor.
(f) Evidence
satisfactory to the Administrative Agent of the filing in the
appropriate filing offices of proper
financing statements (Form UCC-3), if any,
necessary to terminate or assign to the
Administrative Agent all security
interests and other rights of any person in
Receivables, Related Security or
Proceeds previously granted by the
Sellers.
(g) Certified
copies of request for information or copies (Form UCC-11) (or
a similar search report certified by
parties acceptable to the Administrative
Agent), dated a date reasonably near the
Closing Date, listing all effective
financing statements which name the
Transferor and any Seller (under their
respective present names and any previous
names) as debtor and which are filed
in jurisdictions in which the filings were
made pursuant to item (c), (d), (e)
or (f) above together with copies of such
financing statements (none of which,
except for those filed pursuant to item (c)
or (d) or those terminated pursuant
to item (e) or (f), shall cover any
Receivables, Related Security or Contracts).
(h) Executed
copies of the Lockbox Agreements relating to each of the
Lockbox Banks and the Lockbox Accounts.
(i) An opinion
of Cahill Gordon & Reindel LLP, special counsel to the
Transferor and the Sellers, addressed to
the Administrative Agent and the
Purchasers, regarding (x) substantive
consolidation in the event of a bankruptcy
of Metaldyne or any Seller and true sale
between each Seller and the Transferor
and (y) enforceability of the Transaction
Documents to which the Transferor and
each Seller is a party, certain corporate
matters and perfection of the interest
granted by the Sellers incorporated or
organized in the state of Delaware to the
Transferor and the security interest
granted by the Transferor to the
Administrative Agent.
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(j) Opinions of
special counsel to the Sellers and the Transferor in the
states of Illinois, Indiana, Michigan and
Pennsylvania, respectively, addressed
to the Administrative Agent and the
Purchasers, regarding perfection and
priority of the interest granted by the
Sellers to the Transferor and the
security interest granted by the Transferor
to the Administrative Agent.
(k) An executed
copy of this Agreement and each other Transaction Document
to be executed by the Transferor and the
Sellers.
(l) A Settlement
Statement for 2005 and a Deposit Report for the week
ending April 22, 2005.
(m) The most
recent audited and unaudited consolidated financial statements
of the Parent and a balance sheet of the
Transferor certified by its chief
financial officer.
(n) All Fees
required to be paid on or prior to the Closing Date in
accordance with the Fee Letter shall have
been paid.
(o) A
certificate of a Responsible Officer of the Transferor to the
effect
that no Termination Event or Potential
Termination Event shall have occurred and
be continuing as of the Closing Date.
(p) Such other
documents, instruments, certificates and opinions as the
Administrative Agent shall reasonably
request.
ARTICLE V
Covenants
SECTION 5.01.
Affirmative Covenants of the Transferor. At all times from
the date hereof to the later to occur of
(i) the Termination Date or (ii) the
date on which the Net Investment has been
reduced to zero, all accrued Discount,
Servicing Fees and all other Aggregate
Unpaids shall have been paid in full, in
cash, unless the Administrative Agent shall
otherwise consent in writing:
(a) Financial
Reporting. The Transferor will maintain a system of
accounting established and administered in
accordance with GAAP, and furnish to
the Administrative Agent:
(i) Annual Reporting. Within ninety-five (95) days after the close
of
the Transferor's
fiscal year, audited financial statements of the Parent
and unaudited
financial statements of the Transferor, prepared in
accordance with
GAAP consistently applied, in the case of the Parent on a
consolidated
basis for the Parent and its Subsidiaries, including balance
sheets as of the
end of such period, related statements of operations,
shareholders'
equity and cash flows, accompanied by (in the case of the
Parent) an audit
report certified by PriceWaterhouseCoopers LLC or other
nationally
recognized independent certified public accountants (without a
"going concern"
or like qualification or exception and without any
qualification or
exception as to the scope of the audit), accept-
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able to the
Administrative Agent, prepared in accordance with generally
accepted
auditing standards and any management letter prepared by said
accountants.
(ii) Quarterly Reporting. Within fifty (50) days after the close
of
the first three
(3) quarterly periods of the Transferor's fiscal year, for
(x) the
Transferor and (y) for the Parent and its Subsidiaries, on a
consolidated
basis, unaudited balance sheets as at the close of each such
period and
related statements of operations, shareholders' equity and cash
flows in each
case for the period from the beginning of such fiscal year to
the end of such
quarter, in each case certified by its senior financial
officer.
(iii) Compliance Certificate. Together with the financial
statements
required
hereunder, a compliance certificate signed by the Transferor's
chief financial
officer stating that (x) the attached financial statements
have been
prepared in accordance with GAAP and accurately reflect the
financial
condition of the Transferor or the Parent, as applicable, 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.
(iv) 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 the Transferor of the occurrence of
each Termination
Event or each Potential Termination Event, a statement of
the chief
financial officer of the Transferor setting forth details of
such
Termination
Event or Potential Termination Event and the action which the
Transferor has
taken or proposes to take with respect thereto.
(v) Change in Credit and Collection Policy. Within ten (10)
Business
Days after the
date any material change in or amendment to the Credit and
Collection
Policy is made, a copy of the Credit and Collection Policy then
in effect
indicating such change or amendment.
(vi) Credit and Collection Policy. Within ninety (90) days after
the
close of each
Seller's and the Transferor's fiscal years, a complete copy
of the Credit
and Collection Policy then in effect.
(vii) ERISA. Promptly after the filing or receiving thereof, copies
of
all reports and
notices with respect to any reportable event (as defined in
Article IV of
ERISA) which the Transferor, any of the Sellers or any ERISA
Affiliate of the
Transferor or the Sellers files under ERISA with the
Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the
U.S. Department
of Labor or which the Transferor, any of the Sellers or any
ERISA Affiliates
of the Transferor or the Sellers receives from the
Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the
U.S. Department
of Labor.
(viii) Other Information. Such other information (including
non-financial
information) as the Administrative Agent or any Purchaser may
from time to
time reasonably request with respect to the Sellers, the
Transferor or
any Subsidiary of any of the foregoing.
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(b) Conduct of
Business. The Transferor will 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 do all things necessary to remain
duly incorporated, validly existing and in
good standing as a domestic
corporation in its jurisdiction of
incorporation and 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.
(c) Compliance
with Laws. The Transferor will, and will cause each Seller
and each of the Transferor's and such
Seller'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 the Transferor to perform
its obligations under the Agreement.
(d) Furnishing
of Information and Inspection of Records. The Transferor
will, and will cause each Seller to,
furnish to the Administrative Agent from
time to time such information with respect
to the Receivables as the
Administrative Agent may reasonably
request, including, without limitation,
listings identifying the Obligor and the
Outstanding Balance for each
Receivable, together with an aging of
Receivables. The Transferor will, and will
cause each Seller to, at any time and from
time to time during regular business
hours and upon reasonable notice and permit
the Administrative Agent or any
Purchaser, or their agents or
representatives, (i) to examine and make copies of
and abstracts from all Records and (ii) to
visit the offices and properties of
the Transferor and the Sellers for the
purpose of examining such Records, and to
discuss matters relating to Receivables or
the Transferor's and the Sellers'
performance hereunder and under the other
Transaction Documents to which such
Person is a party with any of the officers
or employees of the Transferor and
the Sellers having knowledge of such
matters.
(e) Keeping of
Records and Books of Account. The Transferor will, and will
cause each Seller to, 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 daily
identification of each new Receivable and
all Collections of and adjustments to
each existing Receivable). The Transferor
will, and will cause each Seller to,
give the Administrative Agent and each
Purchaser prompt notice of any change in
the administrative and operating procedures
of the Transferor or such Seller, as
applicable, referred to in the previous
sentence to the extent such change may
have a Material Adverse Effect.
(f) Performance
and Compliance with Contracts. The Transferor, at its
expense, will instruct the Collection Agent
to, and to the extent applicable,
timely and fully perform and comply with
all material provisions, covenants and
other promises required to be observed by
the Transferor under the Contracts
related to the Receivables.
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(g) Credit and
Collection Policies. The Transferor will instruct the
Collection Agent and the Sellers to comply
in all material respects with the
Credit and Collection Policy in regard to
each Receivable and the related
Contract.
(h) Collections.
The Transferor shall instruct the Collection Agent and the
Sellers to instruct all Obligors to cause
all Collections (other than
Collections remitted directly) to be
deposited directly to a Lockbox Account.
(i) Collections
Received. The Transferor shall, and shall instruct the
Collection Agent and the Sellers 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 all Collections received
from time to time by the Transferor,
the Collection Agent and the Sellers.
(j) Sale
Treatment. The Transferor will not (i) account for (including
for
accounting purposes), or otherwise treat,
the transactions contemplated by the
Receivables Purchase Agreement in any
manner other than as a sale of Receivables
by the Sellers to the Transferor, or (ii)
account for (other than for tax
purposes) or otherwise treat the
transactions contemplated hereby in any manner
other than as a sale of Receivables by the
Transferor to the Purchasers. In
addition, the Transferor shall 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
Receivables Purchase Agreement and
the interest of the Transferor and the
Purchasers in the Receivables and Related
Security, Collections and Proceeds with
respect thereto.
(k) Separate
Business. The Transferor shall not engage in any business not
permitted by its Certificate of
Incorporation as in effect on the Closing Date.
(l) Corporate
Documents. The Transferor shall only amend, alter, change or
repeal its Certificate of Incorporation or
the By-laws or change its
jurisdiction of incorporation or
organization with the prior written consent of
the Administrative Agent which shall not be
unreasonably withheld.
(m) Net Worth.
The Transferor on the Closing Date has a net worth, and
thereafter maintain at all times a net
worth (as defined in accordance with
GAAP), of at least $25,000,000.
(n) Separate
Corporate Existence. The Transferor 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 the Transferor
will not be
diverted to any other Person or for other than corporate uses
of the
Transferor and that, except as contemplated by Section 6.02(b)
such
funds will not
be commingled with the funds of any Seller or any Subsidiary
or Affiliate of
the Sellers;
(ii) 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
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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 the Transferor 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) Enter into all material transactions between the Transferor
and
any of its
Affiliates, whether currently existing or hereafter entered
into, only on an
arm's length basis, it being understood and agreed that
the transactions
contemplated in the Transaction Documents meet the
requirements of
this clause (iv);
(v) Maintain office space separate from the office space of the
Sellers and any
Affiliates of the Sellers. To the extent that the
Transferor 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 financial statements prepared not less
frequently
than quarterly
and prepared in accordance with GAAP;
(vii) Conduct its affairs strictly in accordance with its
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 corporate 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 accurate 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 the
Sellers
or any Affiliate
thereof;
(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 the
Transferor and (y) comply with those procedures described in
such provisions
which are applicable to the Transferor;
(x) Take such actions as are necessary to ensure that not less
than
one member of
Transferor's Board of Directors shall be an individual who is
not, and never
has been, a direct, indirect or beneficial stockholder,
officer,
director, employee, affiliate, associate, material supplier or
material
customer of the Collection Agent or any of its Affiliates
(other
than an
Independent Director of MTSPC, Inc.) (the "Independent Direc-
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tors"). The
certificate of incorporation of the Transferor shall provide
that (i) at
least one member of the Transferor's Board of Directors shall
be an
Independent Director, (ii) the Transferor's Board of Directors
shall
not approve, or
take any other action to cause the filing of, a voluntary
bankruptcy
petition with respect to the Transferor unless a unanimous vote
of the
Transferor'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 paragraph (b) 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 the
Transferor or
any Affiliate thereof;
(xii) Take such actions as are necessary to ensure that the books
of
account,
financial reports and corporate records of the Transferor will
be
maintained
separately from those of the Parent and each other Affiliate of
the
Transferor;
(xiii) Take such actions as are necessary to ensure that any
financial
statements of
Parent or Affiliate thereof which are consolidated to include
the Transferor
will contain detailed notes clearly stating that (A) all of
the Transferor's
assets are owned by the Transferor, and (B) the Transferor
is a separate
corporate entity with its own separate creditors that will be
entitled to be
satisfied out of the Transferor's assets prior to any value
in the
Transferor becoming available to the Transferor's equity
holders;
and the
accounting records and the published financial statements of
the
Sellers will
clearly show that, for accounting purposes, the Receivables
and Related
Security have been sold to the Transferor;
(xiv) Take such actions as are necessary to ensure that the
Transferor's
assets will be maintained in a manner that facilitates their
identification
and segregation from those of the Parent, the Sellers and
other Affiliates
of the Parent;
(xv) Take such actions as are necessary to ensure that no
Affiliates
of the
Transferor shall, directly or indirectly, name the Transferor
or
enter into any
agreement to name the Transferor 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 the
Transferor will be, nor will hold itself out to be, responsible
for
the debts of the
Transferor or the decisions or actions in respect of the
daily business
and affairs of the Transferor. The Transferor will
immediately
correct any known misrepresentation with respect to the
foregoing, and
the Transferor 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 Receivables Purchase Agreement. The
