EXHIBIT 4.6
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF AUGUST 31, 1994
AMONG
APPLIED POWER INC.,
BARRY WRIGHT CORPORATION,
WRIGHT LINE INC.,
AND
GB ELECTRICAL, INC.
AS SELLERS
APPLIED POWER INC.
AS SELLERS' REPRESENTATIVE AND SERVICER
AND
PNC BANK, NATIONAL ASSOCIATION AND OTHER FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTIES HERETO
AS PURCHASERS
AND
PNC BANK, NATIONAL ASSOCIATION
AS AGENT
TABLE OF CONTENTS
Section Page
- - ------- ----
ARTICLE I
THE COMMITMENT . . . . . . . . . . . . . . . . . . . . . . 2
1.01. Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02. Commitment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03. Purchase and Reinvestment Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04. Making Purchases from Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.05. Voluntary Termination of Commitment or Reduction
of Purchase Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.06. Investment Multiples; Number of Undivided Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.07. Limitation of Ownership Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
UNDIVIDED INTEREST AND PURCHASERS' SHARE . . . . . . . . . . . . . . . . 4
2.01. Undivided Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02. Frequency of Computation of Undivided Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.03. Purchasers' Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.04. Loss Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.05. Earned Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.06. Servicer's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.07. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.08. Purchasers' Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
SETTLEMENTS . . . . . . . . . . . . . . . . . . . . . . . 8
3.01. Non-Liquidation Settlement Procedures for
Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.02. Liquidation Settlement Procedures for Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.03. General Settlement Procedures; Reduction of
Purchaser's Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.04. Credit Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.05. Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.06. Payments and Computations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.07. Dividing or Combining Undivided Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.08. Treatment of Collections and Deemed Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.09. Repurchases for Administrative Convenience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.10 Sale of a Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
FEES AND YIELD PROTECTION . . . . . . . . . . . . . . . . . . . . 16
4.01. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.02. Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
CONDITIONS OF PURCHASES . . . . . . . . . . . . . . . . . . . . 18
5.01. Conditions Precedent to Initial Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.02. Conditions Precedent to All Purchases and
Reinvestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-i-
Section Page
- - ------- ----
ARTICLE VI
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 20
6.01. Representations and Warranties of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VII
GENERAL COVENANTS OF SELLERS . . . . . . . . . . . . . . . . . . 24
7.01. Affirmative Covenants of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.02. Reporting Requirements of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.03. Negative Covenants of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII
ADMINISTRATION AND COLLECTION . . . . . . . . . . . . . . . . . . 29
8.01. Designation of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.02. Duties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.03. Rights of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.04. Responsibilities of each Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.05. Further Action Evidencing Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.06. Application of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IX
TERMINATION EVENTS . . . . . . . . . . . . . . . . . . . . 34
9.01. Termination Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.02. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE X
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . 36
10.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.02. Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.03. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.04. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.05. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.06. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.07. Notices, etc. to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XI
ASSIGNMENT OF UNDIVIDED INTERESTS . . . . . . . . . . . . . . . . . 39
11.01. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.02. Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.03. Rights of Assignee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.04. Assignment by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 40
12.01. Indemnities by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-ii-
Section Page
- - ------- ----
ARTICLE XIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 42
13.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
13.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.04. Binding Effect; Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.06. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.07. Captions and Cross References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.08. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.09. Allocation Among Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
-iii-
DEFINITIONAL APPENDIX
SCHEDULE I - DEFINITIONS
SCHEDULE IA - FOREIGN OBLIGORS
SCHEDULE IB - DUE DATES
SCHEDULE IC - SPECIAL CONCENTRATION LIMITS
LIST OF EXHIBITS
EXHIBIT IA Assignment
EXHIBIT IB Certificate of Assignments
EXHIBIT IC Forms of Contracts
EXHIBIT ID Description of Credit and Collection Policy
EXHIBIT IE-1 Form of Lock-Box Agreement
EXHIBIT IE-2 Form of Lock-Box Notice
EXHIBIT IF Form of Periodic Report
EXHIBIT 5.01(i) Form of Opinion of Counsel for Sellers
EXHIBIT 6.01(i) Description of Material Adverse Changes
EXHIBIT 6.01(j) Description of Litigation
EXHIBIT 6.01(n) List of Offices of Sellers where Records Are Kept
EXHIBIT 6.01(o) List of Lock-Box Banks
-iv-
RECEIVABLES PURCHASE AGREEMENT
Dated as of August 31, 1994
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among APPLIED POWER INC., a
Wisconsin corporation having its principal office at 13000 W. Silver Spring
Drive, Butler, Wisconsin 53007 ("API"), BARRY WRIGHT CORPORATION, a
Massachusetts corporation having its principal office at 40 Guest Street,
Brighton, Massachusetts ("BWC"), WRIGHT LINE INC., a Massachusetts corporation,
having its principal office at 160 Gold Star Blvd., Worcester, Massachusetts
("WLI"), GB ELECTRICAL, INC., a Wisconsin corporation, having its principal
office at 6101 N. Baker Road, Glendale, Wisconsin ("GB"; API, BWC, WLI and GB
are collectively called "Sellers" and individually "Seller"), API, as
representative of Sellers (in such capacity, the "Sellers' Representative"),
PNC BANK, NATIONAL ASSOCIATION, a national banking association having its
principal office at Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania
15265 (together with the other financial institutions that may become parties
hereto from time to time, "Purchasers"), and PNC BANK, NATIONAL ASSOCIATION, a
national banking association having its principal office at Fifth Avenue and
Wood Street, Pittsburgh, Pennsylvania 15265 ("PNC Bank"), as agent for the
Purchasers (in such capacity, the "Agent"). Unless otherwise indicated,
certain terms that are capitalized and used throughout this Agreement are
defined in Schedule I.
Background
1. Each Seller has, and expects to have, Pool Receivables in
which it intends to sell interests referred to herein as Undivided Interests.
Sellers have requested Purchasers, and Purchasers have agreed, subject to the
terms and conditions contained in this Agreement, to purchase such Undivided
Interests from Sellers from time to time during the term of this Agreement.
2. Sellers and Purchasers also desire that, subject to the terms
and conditions of this Agreement, certain of the daily Collections in respect
of such Undivided Interests be reinvested in Pool Receivables through the sale
by Sellers to Purchasers of additional Undivided Interests in the Pool
Receivables, such daily reinvestment of Collections to be effected by an
automatic daily adjustment to such Undivided Interests, and to be intended to
permit each Purchaser to maintain its Total Investment fully invested in
uncollected Pool Receivables.
3. PNC Bank has been requested, and is willing, to act as the
Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
THE COMMITMENT
SECTION 1.01. Commitment. On the terms and subject to the conditions
set forth in this Agreement (including Article V):
(a) Purchases. Each Purchaser shall purchase from
Sellers undivided, percentage interests in Pool Receivables by making
Purchases of Undivided Interests from time to time during the period
from the date hereof to the Commitment Termination Date.
(b) Reinvestments. Pursuant to Section 3.01, each
Purchaser shall make Reinvestments by permitting Servicer to cause
certain of the Collections in respect of its Undivided Interests to be
applied to the purchase of additional undivided percentage interests
in the Pool Receivables, thereby resulting in an appropriate
readjustment of such Undivided Interests.
Each Purchaser's obligation to make such Purchases and Reinvestments is herein
called its "Commitment".
SECTION 1.02. Commitment Termination Date. The "Commitment
Termination Date" shall be the earlier to occur of (i) August 30, 1997 (herein,
as the same may be extended, called the "Scheduled Commitment Termination
Date"), and (ii) the date of termination of the Commitment pursuant to Section
1.05 or Section 9.02.
SECTION 1.03. Purchase and Reinvestment Limits. Under no
circumstances shall any Purchaser make any Purchase or Reinvestment to the
extent that, after giving effect to such Purchase or Reinvestment, as the case
may be:
(a) Purchase Limit. The Aggregate Purchasers'
Investments under this Agreement would exceed an amount (the "Purchase
Limit") equal to $30,000,000, as such amount may be reduced pursuant
to Section 1.05; or
(b) Participation Amounts Limit. The Aggregate
Participation Amounts under this Agreement would exceed an
-2-
amount (the Participation Amounts Limit") equal to 100% of the Net
Pool Balance; or
(c) Percentage Limit. Any Purchaser's Total Investment
would exceed its Percentage of the Purchase Limit.
SECTION 1.04. Making Purchases from Sellers. (a) Notice of
Purchase. Each Purchase from Sellers by Purchasers shall be made on notice
from Sellers to the Agent received by the Agent not later than 12:00 noon
(Pittsburgh time) on the second Business Day next preceding the date of such
proposed Purchase. Each such notice of a proposed Purchase shall specify the
desired amount (which shall not be less than $250,000), the amount due to each
Seller, the date (which shall be a Business Day) and duration of the initial
Yield Period for such Purchase. The Agent shall promptly thereafter notify
each Purchaser of such proposed Purchase.
(b) Funding of Purchase. On the date of each Purchase, each
Purchaser shall, upon satisfaction of the applicable conditions set forth in
Article V, make available to the Agent not later than 1:00 p.m. (Pittsburgh
time) at its office at Fifth Avenue and Wood Street, Pittsburgh, Pennsylvania
15265 its Percentage of the amount of such Purchase in immediately available
funds, and after receipt by the Agent of such funds, the Agent will make such
funds immediately available to each Seller, in the amount set forth for such
Seller in the notice delivered pursuant to Section 1.04, at such office not
later than 2:00 p.m. (Pittsburgh time).
(c) Notice of Discount Rate. The Agent shall, on the date of each
Purchase of an Undivided Interest and on the first day of each successive Yield
Period for such Undivided Interest, notify the Sellers' Representative and each
Purchaser of the Discount Rate for such Yield Period.
SECTION 1.05. Voluntary Termination of Commitment or Reduction of
Purchase Limit. Sellers' Representative may, upon at least thirty days' notice
to the Agent, terminate the Commitments in whole or reduce in part the unused
portion of the Purchase Limit; provided, however, that (i) each partial
reduction shall be in an amount equal to $1,000,000 or an integral multiple
thereof and (ii) after giving effect to such partial reduction, the remaining
Purchase Limit will not be less than $10,000,000.
SECTION 1.06. Investment Multiples; Number of Undivided Interests.
No Undivided Interest, whether created by purchase pursuant to Section 1.04 or
by reinvestment pursuant to Section 3.01 or by division pursuant to Section
3.07, shall have an
-3-
initial related Purchasers' Investments of less than $1,000,000 and each
Undivided Interest when created, whether by purchase, division or combination,
shall have a related Purchasers' Investments equal as near as practicable to an
integral multiple of $100,000. The number of Undivided Interests hereunder at
any one time, after giving effect to any Purchase, division or combination,
shall not exceed 5.
SECTION 1.07. Limitation of Ownership Interest. Nothing in this
Agreement shall be interpreted as providing any Purchaser with an ownership
interest in any Receivables that are not Pool Receivables.
ARTICLE II
UNDIVIDED INTEREST AND PURCHASERS' SHARE
SECTION 2.01. Undivided Interest. For purposes of this Agreement,
"Undivided Interest" means, at any time, an undivided percentage ownership
interest at such time in (i) all then outstanding Pool Receivables, (ii) all
Related Security with respect to such Pool Receivables, and (iii) all
Collections with respect to, and other proceeds of, such Pool Receivables.
Such undivided percentage interest for any time for such Undivided Interest
shall be computed as:
PA = PI + LR
--- -------
NPB NPB
where:
PA = Participation Amount of such
Undivided Interest = PI + LR;
PI = the Purchasers' Investments as to such Undivided
Interest at the time of such computation, as determined
per Section 2.03;
LR = the Loss Reserve as to such Undivided Interest, if any,
at the time of such computation, as determined per
Section 2.04; and
NPB = the Net Pool Balance at the time of such computation,
as determined per Section 2.07.
The "related" Undivided Interest with respect to any of the foregoing items
shall mean the Undivided Interest as to which such item is calculated. The
then sum of all Participation Amounts of all Undivided Interests shall
constitute "Aggregate
-4-
Participation Amounts". Each Purchaser shall own its Percentage of each
Undivided Interest, and any reference to a Purchaser's Undivided Interest shall
refer to such Percentage thereof.
SECTION 2.02. Frequency of Computation of Undivided Interest. Each
Undivided Interest shall be initially computed as of the opening of business of
Servicer on the date of Purchase of such Undivided Interest from Sellers.
Thereafter until such Undivided Interest shall be reduced to zero, such
Undivided Interest shall be deemed to be automatically recomputed as of the
close of business of Servicer on each day, and such Undivided Interest shall
constitute the percentage ownership interest in Pool Receivables on such date
held by the Purchasers with respect to such Undivided Interest. Such Undivided
Interest shall become zero at such time as the Purchasers shall have received
the Earned Discount for such Undivided Interest, shall have recovered the
related Purchasers' Investments and shall have received all other amounts
payable to Purchasers pursuant to this Agreement, and Servicer shall have
received the accrued Servicer's Fee for such Undivided Interest. Such
Undivided Interest 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.
SECTION 2.03. Purchasers' Investment. "Purchasers' Investments" as
to any Undivided Interest means an amount equal to the original amount paid to
Sellers for such Undivided Interest at the time of its acquisition by
Purchasers pursuant to Sections 1.01 and 1.04 and by Reinvestments pursuant to
Section 3.01, reduced from time to time by Collections received and distributed
on account of such Purchasers' Investments pursuant to Sections 3.01 and 3.02.
Each Purchaser's "Outstanding Investment" as to any Undivided Interest means an
amount equal to such Purchaser's Percentage of the Purchasers' Investments as
to such Undivided Interest. Each Purchaser's "Total Investment" at any time
means the sum of all of such Purchaser's Outstanding Investments for all
Undivided Interests. The "related" Purchasers' Investments with regard to a
Yield Period or Undivided Interest means the Purchasers' Investments calculated
with regard to such Yield Period or Undivided Interest, as the case may be.
The then sum of the Dollar amount of all Purchasers' Investments for all
Undivided Interests shall constitute "Aggregate Purchasers' Investments".
SECTION 2.04. Loss Reserve. The "Loss Reserve" for a related
Undivided Interest means, at any time (i) prior to the occurrence of a
Termination Event, zero, and (ii) after the occurrence and during the
continuance of a Termination Event, an amount determined as follows:
-5-
LR = RP x PI
where:
LR = the Loss Reserve of such Undivided Interest at the time of
computation;
PI = the Purchasers' Investments of such Undivided Interest on
such day, as determined pursuant to Section 2.03; and
RP = the Recourse Percentage on such day.
If the Aggregate Participation Amounts exceed the Participation Amount Limit on
the day on which a Termination Event occurs after giving effect to the
inclusion of the Loss Reserve as set forth above, Sellers jointly and
severally, on a recourse basis, agree to deposit into the Agent's Account an
amount equal to such excess; such amounts shall be held by the Agent for the
benefit of the Purchasers, and shall be applied to reduce Purchasers'
Investments on the next occurring Settlement Date(s).
SECTION 2.05. Earned Discount. The "Earned Discount" for any
Undivided Interest for each day in a related Yield Period means an amount
determined as follows:
ED = PI x DR x 1/360;
where:
ED = Earned Discount of such Undivided Interest at the time of
computation;
PI = the Purchasers' Investments of such Undivided Interest on such
day, as determined pursuant to Section 2.03; and
DR = the Discount Rate for such Undivided Interest on such day
during such Yield Period, as determined pursuant to Section
2.07.
Notwithstanding any other provision of this Agreement to the contrary, Earned
Discount shall be a joint and several recourse obligation of the Sellers. No
provision of this Agreement or the Certificates shall require the payment or
permit the collection of Earned Discount in excess of the maximum permitted by
applicable law. Earned Discount for any Undivided Interest shall not be
considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.
-6-
SECTION 2.06. Servicer's Fee. The "Servicer's Fee" for any
Undivided Interest at any time means (i) an amount accrued for each day equal
to 1.00% per annum times the amount of the related Purchasers' Investments at
the close of business on such day, times 1/360; or (ii) on Servicer's
reasonable request from and after any time that API shall no longer be
Servicer, an alternative amount charged by Servicer to perform its obligations
under this Agreement. Notwithstanding any other provision to this Agreement to
the contrary, Servicer's Fee shall be a joint and several recourse obligation
of the Sellers.
SECTION 2.07. Certain Definitions. For purposes hereof, the
following terms shall have the meanings as indicated:
"Bank Rate" for any Yield Period for the related Undivided Interest
means an interest rate per annum equal to the Eurodollar Rate (Reserve
Adjusted) for such Yield Period; provided, however, that if it shall become
unlawful for the Agent to obtain funds in the interbank eurodollar market in
order to make, fund or maintain any Purchase hereunder, or if such funds shall
not be reasonably available to the Agent, then the "Bank Rate" for any Yield
Period for such Undivided Interest shall be equal to the Alternate Reference
Rate for such Yield Period.
"Discount Rate" for any Yield Period for any related Undivided
Interest (or portion thereof) means:
(a) in the case of an Undivided Interest (or portion
thereof) other than one referred to in clause (b), the sum of (1) the
Bank Rate for such Undivided Interest (or such portion) for such Yield
Period plus (2) the then applicable Spread; and
(c) in the case of an Undivided Interest (or portion
thereof) funded at a time when a Termination Event or Unmatured
Termination Event has occurred and is continuing, a rate per annum
equal for each day during such Yield Period to the Alternate Reference
Rate in effect on such day plus 2% per annum.
"Net Pool Balance" means at any time the Unpaid Balance of the
Eligible Receivables in the Receivables Pool at such time, as reduced by (i)
the sum of the aggregate amount by which the Unpaid Balance of all Pool
Receivables of each Obligor exceeds the Concentration Limit for such Obligor at
such time and (ii) the outstanding amounts payable by WLI to Arredi Tecnici
Villa S.p.A. at such time. For purposes hereof, "Concentration Limit" for any
Obligor means at any time the greater of (x) the Special Concentration Limit
for such Obligor and (y) 2.5% of the aggregate Unpaid Balance of the Eligible
Receivables in the Receivables Pool at such time. "Special Concentration
Limit" for
-7-
any Obligor means the amount designated for such Obligor on Schedule IC or the
amount designated as such by the Agent in a writing delivered to Sellers'
Representative; it being understood and agreed that the Agent, in setting any
Special Concentration Limit for any Obligor, shall be entitled to consider,
among other things, the credit exposure of each Purchaser to such Obligor
arising in connection with this Agreement and other agreements to which such
Purchaser is a party; provided that the Agent may change the Special
Concentration Limit for any Obligor, at the Agent's sole discretion, at any
time by written notice thereof to the Sellers' Representative. In the case of
any Obligor that is an Affiliate of any other Obligor (an "Affiliated
Obligor"), the Concentration Limit, the Special Concentration Limit and the
Receivables related thereto shall be calculated as if such Obligor and such
Affiliated Obligor were one Obligor.
"Spread" means (i) at any time that the Debt to Capital Ratio exceeds
50%, 0.45% per annum and (ii) at all other times, 0.30% per annum.
SECTION 2.08. Purchasers' Share. "Purchasers' Share" of any
Undivided Interest with regard to any Collections of Pool Receivables received
(or deemed received) by any Seller or Servicer on any day shall be determined
as an amount equal to such Collections, times:
(a) if such day is not a Liquidation Day, such Undivided
Interest on such day expressed as a decimal, and
(b) if such day is a Liquidation Day, either (i) such
Undivided Interest on the day immediately preceding the first
Liquidation Day to have occurred during the then current Liquidation
Period or (ii) if higher, upon the request of the Agent, such
Undivided Interest on such Liquidation Day;
provided that after such time as an Undivided Interest shall equal zero the
Purchasers' Share of Collections therefor shall also equal zero.
ARTICLE III
SETTLEMENTS
SECTION 3.01. Non-Liquidation Settlement Procedures for
Collections. (a) Daily Procedure. On each day (other than a Liquidation Day)
with regard to each Yield Period for each Undivided Interest, Servicer shall
deem an amount equal to Purchasers' Share (as determined in Section 2.08) of
Collections
-8-
of Pool Receivables received or deemed received on such day to be received in
respect of such Undivided Interest; and
(i) out of Purchasers' Share of such Collections of Pool
Receivables in respect of such Undivided Interest, hold in trust for
the benefit of Purchasers an amount equal to the Earned Discount and
Servicer's Fee accrued through such day for such Undivided Interest
and not previously so held for the benefit of Purchasers or paid by
the Sellers,
(ii) apply an amount equal to the remainder of Purchasers'
Share of such Collections (the "Remaining Collections") to reduce the
Purchasers' Investments of such Undivided Interest (it being
understood that such amount need not be physically paid to the Agent
or the Purchasers under this clause (ii)),
(iii) after such reduction, apply such Remaining
Collections to the Reinvestment, for the benefit of Purchasers, of
additional undivided interests in Pool Receivables by recomputation of
such Undivided Interest pursuant to Section 2.02 as of the end of such
day, thereby increasing the related Purchasers' Investments, and
(iv) pay to Sellers' Representative such Remaining
Collections.
The recomputed Undivided Interest shall constitute the percentage ownership
interest in Pool Receivables on such day held by Purchasers with regard to such
Undivided Interest.
(b) Settlement Date Procedure. On each Settlement Date for each
Undivided Interest, for each day in the related Yield Period that is not a
Liquidation Day for such Undivided Interest, Servicer shall deposit to the
Agent's Account, the amounts set aside as described in Section 3.01(a)(i); it
being understood that in the event that the amounts so set aside are
insufficient to satisfy in full the Earned Discount and accrued Servicer's Fee
payable with respect to such Undivided Interest, Sellers, jointly and
severally, agree to deposit such deficit to the Agent's Account on such
Settlement Date.
(c) Order of Application. Upon receipt by the Agent of funds
distributed pursuant to subsection (b), the Agent shall distribute to each
Purchaser such Purchaser's Percentage of such funds in payment of the Earned
Discount on such Purchaser's Outstanding Investment related to such Undivided
Interest and to Servicer in payment of the accrued Servicer's Fee payable with
respect to such Undivided Interest. If there shall be insufficient funds on
deposit for the Agent to distribute funds in payment in full of the
aforementioned amounts, the Agent shall
-9-
distribute funds, first, to Purchasers in payment of the Earned Discount for
such Undivided Interest, and second, in payment of the accrued Servicer's Fee
payable with respect to such Undivided Interest.
SECTION 3.02. Liquidation Settlement Procedures for Collections.
(a) Daily Procedure. On each Liquidation Day with regard to each Yield
Period for each Undivided Interest, Servicer shall set aside and hold in trust
for Purchasers, Purchasers' Share of the Collections of Pool Receivables in
respect of such Undivided Interest for such Liquidation Day by depositing such
Collections within one Business Day of Servicer's receipt of good funds
therefor into a bank account acceptable to the Agent located at PNC Bank in
which no other funds shall be deposited.
(b) Settlement Date Procedure. On each Settlement Date for each
Undivided Interest, if one or more Liquidation Days for such Undivided Interest
occurs during the related Yield Period, Servicer shall deposit to the Agent's
Account the amounts set aside pursuant to Section 3.02(a) and Sellers shall
deposit to the Agent's Account the Earned Discount for such Undivided Interest,
the Servicer's Fee payable with respect to such Undivided Interest and all
other amounts owed by Sellers to the Purchasers hereunder, provided that the
aggregate amount of such deposits shall not exceed the sum of (i) the Earned
Discount for such Undivided Interest, (ii) the related Purchasers' Investments
of such Undivided Interest, (iii) the aggregate of other amounts owed hereunder
by Sellers to the Purchasers, and (iv) the accrued Servicer's Fee payable with
respect to such Undivided Interest. Any amounts set aside pursuant to Section
3.02(a) and not required to be deposited to the Agent's Account pursuant to the
next preceding sentence shall be held for application to the next maturing
Undivided Interest.
(c) Order of Application. Upon receipt of funds deposited to the
Agent's Account pursuant to Section 3.02(b), the Agent shall distribute (i) to
each Purchaser, its Percentage of such funds (A) in payment of such Purchaser's
Percentage of the Earned Discount for such Undivided Interest, (B) in reduction
of the related Purchaser's Outstanding Investment and (C) in payment of any
other amounts owed by Sellers hereunder to such Purchaser, in each case until
reduced to zero, and (ii) any remaining funds to Servicer in payment of the
accrued Servicer's Fee payable with respect to such Undivided Interest, also
until reduced to zero. If there shall be insufficient funds on deposit for the
Agent to distribute funds in payment in full of the aforementioned amounts, the
Agent shall distribute funds, first, in payment of the Earned Discount for such
Undivided Interest, second, in reduction of related Purchasers' Investments,
third, in payment of other amounts payable to Purchasers, and fourth, in
payment of
-10-
the Servicer's Fee payable with respect to such Undivided Interest.
SECTION 3.03. General Settlement Procedures; Reduction of Purchaser's
Investment.
(a) Deemed Collections. If on any day the Unpaid Balance of any
Pool Receivable is (i) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, or any adjustment by any
Seller or any Affiliate of any Seller (other than any adjustment permitted by
Section 8.02(a)(i) unless the Agent shall reasonably object thereto within 30
days of being informed thereof) or (ii) reduced or cancelled as a result of a
setoff in respect of any claim by the Obligor thereof against any Seller or any
Affiliate of any Seller or any other Person (whether such claim arises out of
the same or a related or an unrelated transaction), or (iii) reduced on account
of the obligation of any Seller to pay to the related Obligor any rebate or
refund, such Seller shall be deemed to have received on such day a Collection
of such Receivable in the amount of such reduction or cancellation. If on any
day any of the representations or warranties of any Seller set forth in Section
6.01(l) or (p) is no longer true with respect to a Pool Receivable, such Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full.
(b) Unreinvested Collections. Collections that may not be
reinvested by means of Reinvestments in an Undivided Interest on account of the
application of the Participation Amounts Limit or the Purchase Limit pursuant
to Section 2.01 shall be so reinvested as soon as practicable without violating
such Participation Amounts Limit or Purchase Limit, as the case may be. To the
extent and so long as such Collections may not be so reinvested, Servicer shall
hold such Collections in trust for the benefit of the Purchasers, for payment
to the Agent on the Settlement Date for the Yield Period in which such
Collections are accumulated, and the related Purchasers' Investments as to such
Undivided Interest shall be deemed reduced in the amount to be paid to the
Agent only when in fact so paid. During any Liquidation Period, upon one
Business Day's written notice given by the Agent to Sellers' Representative,
Servicer shall pay in immediately available funds such Collections to the Agent
within one Business Day of receipt thereof by Servicer.
(c) Allocations of Obligor's Payments. Except as provided in
Section 3.03(a) or as otherwise required by law or the underlying Contract, all
Collections received from an Obligor of any Receivable shall be applied to
Receivables then outstanding of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable, except if payment is
designated by such Obligor for application to specific
-11-
Receivables, in which case it shall be applied to such specified Receivables.
SECTION 3.04. Credit Recourse. As of the last day of each calendar
month (a "Month End Date") during which a Liquidation Day has occurred, the
"Recourse Amount" shall be an amount equal to the Recourse Percentage of the
Aggregate Purchasers' Investments as of such Month End Date, if such Month End
Date is the first date on which such Recourse Amount is being calculated, or
the Recourse Amount as of the previous Month End Date in all other
circumstances, minus the Unpaid Balances on such current Month End Date of
Receivables that became Defaulted Receivables prior thereto (and on account of
which the Recourse Amount had not been previously debited ("Recourse Unpaid
Balances")) unless the Agent has notified Sellers' Representative in writing
two Business Days' before such current Month End Date to refrain from so
debiting the Recourse Amount with respect to any Defaulted Receivable, plus the
Unpaid Balances on such current Month End Date of all Receivables that were
previously debited in the calculation of the Recourse Amount on account of
being Defaulted Receivables but were no longer Defaulted Receivables on such
current Month End Date plus all Collections received or deemed received by any
Seller or Servicer during such month then ending on account of Defaulted
Receivables that had previously been debited in the calculation of the Recourse
Amount, provided that, the Recourse Amount shall never exceed 100% of Aggregate
Participation Amounts.
Sellers shall be deemed to have received Collections on each Month End
Date for a month in which a Liquidation Day has occurred in an amount equal to
the amount of the Recourse Unpaid Balances referred to above, but solely to the
extent that, after giving effect to the credits above, the Recourse Amount does
not become a negative number; provided that if the Loss Reserve is greater than
zero, and Sellers have made the payment required by the last sentence of
Section 2.04, Sellers shall have no obligation to make payments of deemed
Collections pursuant to this Section 3.04. Such Collections shall be in
addition to the Collections actually received on such date.
SECTION 3.05. Reporting. Prior to the twenty-fifth calendar day in
each month (each a "Reporting Date") Servicer shall prepare and forward to the
Agent for each Purchaser a Periodic Report, relating to each Undivided
Interest, as of the close of business of Servicer on the next preceding Month
End Date, including an aging of each Seller's Pool Receivables. At or prior to
the day Servicer is required to make a deposit with respect to a Settlement
Period pursuant to Section 3.01 or 3.02, Seller will advise the Agent of each
Liquidation Day occurring during such Settlement Period and of the allocation
of the amount of such deposit to each outstanding Undivided Interest; provided,
-12-
however, that if API is not Servicer, API shall advise Servicer of the
occurrence of each such Liquidation Day occurring during such Settlement Period
at or prior to such Liquidation Day.
SECTION 3.06. Payments and Computations, Etc. All amounts to be
paid or deposited by Sellers hereunder shall be paid or deposited in accordance
with the terms hereof no later than 12:00 noon (Pittsburgh time) on the day
when due in lawful money of the United States of America in immediately
available funds to a special account in the name of the Agent, attention:
Commercial Loan Operations, and maintained at PNC Bank's office at Fifth Avenue
and Wood Street, Pittsburgh, Pennsylvania 15265, (the "Agent's Account").
Sellers, jointly and severally, or Servicer, as applicable, shall, to the
extent permitted by law, pay to the Agent interest on all amounts not paid or
deposited when due hereunder at 2% per annum above the Alternate Reference
Rate, payable on demand, provided, however, that such interest rate shall not
at any time exceed the maximum rate permitted by applicable law. Such interest
shall be retained by the Agent except to the extent that such failure to make a
timely payment or deposit has continued beyond the date for distribution by the
Agent of such overdue amount to the Purchasers, in which case such interest
accruing after such date shall be for the account of, and distributed by the
Agent, to the Purchasers ratably in accordance with their respective interests
in such overdue amount. All computations of interest and all computations of
Earned Discount and fees hereunder shall be made on the basis of a year of 360
days for the actual number of days (including the first but excluding the last
day) elapsed.
SECTION 3.07. Dividing or Combining Undivided Interests.
(a) Division of Undivided Interests. Sellers' Representative may,
on notice received by the Agent not later than 12:00 noon (Pittsburgh time) two
Business Days before the last day of any Yield Period for any then existing
Undivided Interest, divide such existing Undivided Interest on such last day
into two or more new Undivided Interests, each such new Undivided Interests
having Purchasers' Investments as designated in such notice and all such new
Undivided Interests collectively having aggregate Purchasers' Investments equal
to the Purchasers' Investments of such existing Undivided Interest.
(b) Combination of Undivided Interests. Sellers' Representative
may, on notice received by the Agent not later than 12:00 noon (Pittsburgh
time) two Business Days before the last day of any Yield Period for two or more
existing Undivided Interests, or before the date of any proposed Purchase of an
Undivided Interest pursuant to Sections 1.01 and 1.04, on such
-13-
last day or such date of Purchase, as the case may be, combine into one new
Undivided Interest such existing and/or proposed Undivided Interests or any
combination thereof, such new Undivided Interest having Purchasers' Investments
equal to the aggregate Purchasers' Investments of such Undivided Interests so
combined.
(c) Effect of Division or Combination. On and after any division
or combination of Undivided Interests as described above, each of the new
Undivided Interests resulting from such division, or the new Undivided Interest
resulting from such combination, as the case may be, shall be a separate
Undivided Interest having Purchasers' Investments as set forth above, and shall
take the place of such existing Undivided Interest or Undivided Interests or
proposed Undivided Interest, as the case may be, in each case under and for all
purposes of this Agreement.
SECTION 3.08. Treatment of Collections and Deemed Collections.
Each Seller shall forthwith deliver to Servicer all Collections deemed received
by such Seller pursuant to Sections 3.03(a) and 3.04 and such Seller shall hold
or distribute such Collections as Earned Discount, accrued Servicer's Fee,
repayment of Purchasers' Investments, etc. to the same extent as if such
Collections had actually been received on such date. If Collections are then
being paid to the Agent, or lock boxes or accounts directly or indirectly owned
or controlled by the Agent, Servicer shall forthwith cause such deemed
Collections to be paid to the Agent or such lock boxes or accounts. So long as
any Seller shall hold any Collections or deemed Collections required to be paid
to Servicer or the Agent, it shall hold such Collections in trust and separate
and apart from its own funds and shall clearly mark its records to reflect such
trust.
SECTION 3.09. Repurchases for Administrative Convenience. If on the
last day of a Yield Period with respect to any Undivided Interest, the
Purchasers' Investments equal or are less than 10% of the greatest amount of
Aggregate Purchasers' Investments at any time prior to such last day, Sellers
shall be entitled to repurchase all of the Undivided Interests from Purchasers
on the respective Settlement Date. Sellers' Representative shall give the
Agent at least three Business Days' prior written notice of such repurchase and
upon payment of the repurchase price therefor, as hereinafter provided, the
Purchasers shall be obligated to reconvey their entire interest in such
Undivided Interest to the Seller or Sellers designated by Sellers'
Representative pursuant to an assignment acceptable to the parties, but without
representation or warranty except that the interest assigned is free of offset,
liens and other encumbrances created by the assignor. Sellers, jointly and
severally, shall pay such repurchase price in cash to the Agent
-14-
in an amount equal to, for each Undivided Interest, the sum of (i) Earned
Discount for such Undivided Interest, (ii) the related Purchasers' Investments
therefor, (iii) the aggregate of other amounts then owed hereunder by Sellers
to the Purchasers, and (iv) the accrued Servicer's Fee payable with respect to
such Undivided Interest. Upon receipt of the aforesaid repurchase price with
regard to each Undivided Interest, the Agent shall distribute it (i) to
Purchasers (pro rata based on their respective Percentages) (a) in payment of
the Earned Discount for such Undivided Interest, (b) in reduction of the
related Purchasers' Investments and (c) in payment of any other amounts owed by
Sellers hereunder to Purchasers, in each case until reduced to zero, and (ii)
to Servicer in payment of the accrued Servicer's Fee payable with respect to
such Undivided Interest, also until reduced to zero.
SECTION 3.10 Sale of a Seller. In the event that API shall desire
to sell any Seller (other than API) to any person (the "Acquiring Entity"),
then, if the Agent shall so request, as a condition to the effectiveness of
such sale, API shall require the Acquiring Entity to purchase the Pool
Receivables generated by such Seller, on the last day of a Yield Period, for a
purchase price, in cash, in an amount equal to (i) the Purchasers' Investments
related to such Pool Receivables, (ii) Earned Discount on such portion of
Purchasers' Investments, (iii) the accrued Servicer's Fee payable with respect
to such portion of Purchasers' Investments and (iv) in the event that the
Purchasers' Investments with respect to Pool Receivables generated by such
Seller is greater than the Purchasers' Investments related to the Yield Period
maturing on the date of repurchase, any costs incurred by Purchasers as a
result of prepaying such excess portion of the Purchasers' Investments prior to
the last day of a Yield Period. Upon receipt of the aforesaid repurchase
price, the Agent shall distribute (i) to the Purchasers (pro rata based on
their respective Percentages) (a) in payment of the Earned Discount for the
related Purchasers' Investments and (b) in reduction of the related Purchasers'
Investments (beginning with that portion related to the Yield Period ending on
the date of repurchase, and then to the Purchasers' Investments related to the
Yield Period next maturing), (ii) to Servicer in payment of the accrued
Servicer's Fee payable with respect to such Purchasers' Investments, to the
extent paid. In the event that API sells a Seller without the occurrence of
such repurchase, then, notwithstanding the limitations on the Recourse Amount
set forth in Section 3.04, API shall repurchase any Defaulted Receivable
originally generated by such Seller.
-15-
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees. (a) Arrangement Fee. Sellers shall pay to
the Agent for its own account an arrangement fee as set forth in the letter
from PNC Bank to API dated August 5, 1994 ("Arrangement Fee").
(b) Commitment Fee. From the date of the initial Purchase until
the Commitment Termination Date, Sellers, jointly and severally, shall pay to
each Purchaser a commitment fee ("Commitment Fee") for each day in such period
equal to (x) 0.15% per annum (or, if the Debt to Capital Ratio exceeds 50%,
0.20% per annum) times (y) the excess, if any, of such Purchaser's Percentage
of the Purchase Limit over such Purchaser's Total Investments on such day
divided by (z) 360. Such Commitment Fee shall be paid in arrears, on each
Month End Date and on the Commitment Termination Date, in the amount of such
Commitment Fee that shall have accrued during the monthly or other period then
ending for which no such fee shall have been paid.
SECTION 4.02. Yield Protection. (a) If (i) Regulation D of the
Board of Governors of the Federal Reserve System or (ii) any Regulatory Change
occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty or other
charge with respect to any Undivided Interest or Interests owned by or
funded by it, its Certificate, if any, or any obligations or right to
make Purchases or Reinvestments or to provide funding therefor, or
shall change the basis of taxation of payments to the Affected Party
of any Purchaser's Investments or Earned Discount made by or owed to
or funded by it or any other amounts due under this Agreement in
respect of any Undivided Interests owned by or funded by it or its
obligations or rights, if any, to make Purchases or Reinvestments or
to provide funding therefor (except for changes in the rate of tax on
the overall net income of such Affected Party imposed by the United
States of America or the jurisdiction in which such Affected Party's
principal executive office is located); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve System, but excluding any reserve
included in the determination of Earned Discount), special deposit or
similar requirement against assets of, deposits or obligations with or
for the account of (or with or for the account of any affiliate of),
or credit extended by, any Affected Party; or
-16-
(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by such Affected
Party; or
(D) shall impose any other condition affecting any
Undivided Interests owned or funded by any Affected Party, its
Certificates, if any, or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost to or to impose a cost on (I) an
Affected Party funding or making or maintaining any Purchases or
Reinvestments, or any commitment of such Affected Party with respect
to any of the foregoing, or (II) the Agent for continuing its, or any
Seller's, relationship with any Purchaser,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or under its
Certificates, or
(z) in the reasonable determination of such Affected
Party, to reduce the rate of return on the capital of an Affected
Party as a consequence of its obligations hereunder or arising in
connection herewith to a level below that which any such Affected
Party could otherwise have achieved,
then within thirty days after demand by such Affected Party, each Seller,
jointly and severally, shall pay directly to such Affected Party its pro rata
share of such additional amount or amounts as will compensate such Affected
Party for such additional or increased cost or such reduction.
(b) Each Affected Party will promptly notify Sellers'
Representative and the Agent of any event of which it has knowledge occurring
after the date hereof which will entitle such Affected Party to compensation
pursuant to this Section 4.02; provided, however, no failure to give or delay
in giving such notification shall adversely affect the rights of any Affected
Party to such compensation; provided, further, however that no Affected Party
shall be entitled to claim additional amounts pursuant to this Section 4.02 for
any period occurring more than 120 days prior to the date of demand.
(c) In determining any amount provided for in this Section 4.02,
the Affected Party may use any reasonable averaging and attribution methods
that it shall deem applicable. Any Affected Party when making a claim under
this Section 4.02 shall submit to Sellers' Representative a statement as to
such increased cost or
-17-
reduced return (including calculation thereof in reasonable detail), which
statement shall, in the absence of manifest error, be conclusive and binding
upon the Sellers.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase. The
initial Purchase hereunder is subject to the condition precedent that the Agent
shall have received on or before the date of such Purchase the following, each
(unless otherwise indicated) dated such date, in form and substance
satisfactory to the Agent:
(a) A Certificate duly executed by each Seller;
(b) A copy of the resolutions of the Board of Directors of each
Seller approving this Agreement, the Certificate(s) and the other Agreement
Documents to be delivered by it hereunder and the transactions contemplated
hereby, certified by its Secretary or Assistant Secretary;
(c) Good standing certificates for each Seller issued by the
Secretaries of State of Wisconsin and Massachusetts, as appropriate;
(d) A certificate of the Secretary or Assistant Secretary of each
Seller certifying the names and true signatures of the officers authorized on
its behalf to sign this Agreement, the Certificate and the other Agreement
Documents to be delivered by it hereunder (on which certificate the Agent and
each Purchaser may conclusively rely until such time as the Agent shall receive
from such Seller a revised certificate meeting the requirements of this
subsection (d));
(e) The Articles of Incorporation of each Seller, duly certified
by the Secretary of State of Wisconsin or Massachusetts, as appropriate, as of
a recent date acceptable to Agent, together with a copy of the By-laws of each
Seller, duly certified by the Secretary or an Assistant Secretary of such
Seller;
(f) Acknowledgment copies of proper Financing Statements (Form
UCC-1), filed on or prior to the date of the initial Purchase, naming each
Seller as an assignor of Receivables or an undivided interest therein and the
Agent, for the benefit of the Purchasers, as assignee, or other, similar
instruments or documents, as may be necessary or, in the opinion of the Agent,
desirable under the UCC or any comparable law of all appropriate
-18-
jurisdictions to perfect Purchasers' ownership interests in all Undivided
Interests in which an interest may be assigned to it hereunder;
(g) A search report provided in writing to the Agent by LEXIS
Document Services, listing all effective financing statements that name any
Seller as debtor and that are filed in the jurisdictions in which filings were
made pursuant to subsection (f) above, together with copies of such financing
statements (none of which shall cover any Receivables or Contracts);
(h) Duly executed copies of Lock-Box Notices to each of the
Lock-Box Banks;
(i) A favorable opinion of Quarles & Brady, counsel to Sellers, in
substantially the form of Exhibit 5.01(i);
(j) Such powers of attorney as the Agent shall reasonably request
to enable Agent to collect all amounts due under any and all Pool Receivables;
(k) Evidence of the payment of the Arrangement Fee; and
(l) Duly executed copy of Part I of a Periodic Report together
with a completed Schedule I thereto calculated as of July 31, 1994.
SECTION 5.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase (including the initial Purchase) hereunder and
the right of Servicer to reinvest in Pool Receivables, on behalf of Purchasers,
those Collections allocable to an Undivided Interest pursuant to Section 3.01
shall be subject to the further conditions precedent ("Conditions Precedent")
that on the date of such Purchase or Reinvestment the following statements
shall be true (and each Seller by accepting the amount of such Purchase, or a
portion thereof, or by receiving the proceeds of such Reinvestment, or a
portion thereof, shall be deemed to have certified that):
(i) The representations and warranties contained in Section
6.01 are correct on and as of such day as though made on and as of
such day and shall be deemed to have been made on such day,
(ii) No event has occurred and is continuing, or would
result from such Purchase or Reinvestment, which constitutes a
Termination Event or Unmatured Termination Event,
-19-
(iii) After giving effect to each proposed Purchase or
Reinvestment, Aggregate Purchasers' Investments will not exceed the
Purchase Limit and Aggregate Participation Amounts will not exceed the
Participation Amounts Limit, and
(iv) The Commitment Termination Date shall not have occurred.
The absence of the occurrence of an Unmatured Termination Event shall not be a
Condition Precedent to (i) any Reinvestment being made with the proceeds of
Collections that were, on the same day, applied in reduction of the Purchasers'
Investments, or (ii) any other Reinvestment or any Purchase on any day which
does not cause the Aggregate Purchasers' Investments, after giving effect to
such Reinvestment or Purchase (and any Reinvestment referred to in clause (i)
next above) to exceed the Aggregate Purchasers' Investments as of the opening
of business on such day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Sellers. Each Seller
represents and warrants as follows:
(a) Organization and Good Standing. Such Seller is validly existing
as a corporation in good standing under the laws of the State of its
incorporation, with power and authority to own its properties and to conduct
its business as such properties are presently owned and such business is
presently conducted, and had at all relevant times, and now has, all necessary
power, authority, and legal right to acquire and own the Pool Receivables.
(b) Due Qualification. Such Seller is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions where the failure to preserve and
maintain such qualification, licenses or approvals would materially adversely
affect (i) the interests of the Agent or any Purchaser hereunder, (ii) the
ability of such Seller or Servicer to perform their respective obligations
hereunder or (iii) the validity or enforceability of any Pool Receivable.
(c) Power and Authority; Due Authorization. Such Seller has (i) all
necessary power, authority and legal right to (A) execute and deliver this
Agreement and the documents to be executed and delivered in connection herewith
(together, the "Agreement Documents"), (B) carry out the terms of the Agreement
Documents, (C) sell and assign Undivided Interests on the terms
-20-
and conditions herein provided and (ii) duly authorized such sale and
assignment to Purchasers by all necessary corporate action; and such Seller has
duly authorized by all necessary corporate action the execution, delivery, and
performance of this Agreement and the other Agreement Documents.
(d) Valid Sale; Binding Obligations. This Agreement constitutes a
valid sale, transfer, and assignment of the Undivided Interests to Purchasers,
enforceable against creditors of, and purchasers from, such Seller; and this
Agreement constitutes, and each other Agreement Document to be signed by such
Seller when duly executed and delivered will constitute, a legal, valid and
binding obligation of such Seller enforceable in accordance with its terms,
except, in the case of all the foregoing clauses, as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the other Agreement Documents and the fulfillment of the
terms hereof will not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or by-laws of such Seller, or any
indenture, loan agreement, mortgage, deed of trust, or other material agreement
or instrument to which such Seller is a party or by which it is bound, or
result in the creation or imposition of any Adverse Claim upon any of its
properties pursuant to the terms of any such indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument, other than this
Agreement, or violate any law or any order, rule, or regulation applicable to
such Seller of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over such Seller or any of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to such Sellers' knowledge, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (A) asserting the invalidity of this Agreement or any other
Agreement Document, (B) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this or any other
Agreement Document, (C) seeking any determination or ruling that might
materially and adversely affect (i) the performance by such Seller or Servicer
of its obligations under this Agreement, or (ii) the validity or enforceability
of this Agreement, the Certificates, any other Agreement Document, the
Receivables or the Contracts or (D)
-21-
seeking to adversely affect the federal income tax attributes of the
Certificates.
(g) Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
such Seller of this Agreement, the Certificates or any other Agreement Document
except for the filing of the UCC Financing Statements referred to in Article V,
all of which, at the time required in Article V, shall have been duly made and
shall be in full force and effect.
(i) Financial Condition. (x) The consolidated balance sheets of API
and its consolidated subsidiaries as at August 31, 1993, and the related
statements of income, shareholders' equity and cash flows of API and its
consolidated subsidiaries for the fiscal year then ended certified by Deloitte
Touche, independent accountants, and the consolidated balance sheets of API and
its consolidated subsidiaries as at May 31, 1994, and the related statements of
income, shareholders' equity and cash flows of API and its consolidated
subsidiaries for the nine month period then ended, copies of which have been
furnished to the Agent, fairly present the consolidated financial position of
API and its consolidated subsidiaries as at such date and the consolidated
results of the operations of API and its consolidated subsidiaries for the
period ended on such date, all in accordance with GAAP consistently applied,
and (y) since August 31, 1993 there has been no material adverse change in the
financial condition, business, business prospects or operations of any Seller
or of API and its consolidated subsidiaries, taken as a whole, except as
described in Exhibit 6.01(i).
(j) Litigation. No injunction, decree or other decision has been
issued or made by any court, government or agency or instrumentality thereof
that prevents, and, to such Seller's knowledge, no threat by any Person has
been made to attempt to obtain any such decision that would prevent, such
Seller from conducting a significant part of its business operations except as
described in Exhibit 6.01(j).
(k) Margin Regulations. The use of all funds acquired by Sellers
under this Agreement will not conflict with or contravene any of Regulations G,
T, U and X promulgated by the Board of Governors of the Federal Reserve System
from time to time.
(l) Quality of Title. Each Pool Receivable related to such Seller,
together with the related Contract and all purchase orders and other agreements
related to such Pool Receivable, is
-22-
owned by such Seller, free and clear of any Adverse Claim (other than any
Adverse Claim arising solely as the result of any action taken by a Purchaser
or by the Agent) except as provided herein and when a Purchaser makes a
Purchase it shall have acquired and shall continue to have maintained a valid
and perfected first priority undivided percentage ownership interest to the
extent of its Percentage of the Undivided Interest in each Pool Receivable, and
in the Related Security and Collections with respect thereto, free and clear of
any Adverse Claim (other than any Adverse Claim arising solely as the result of
any action taken by a Purchaser or by the Agent) except as provided hereunder;
and no effective financing statement or other instrument similar in effect
covering any Pool Receivable, any interest therein, the Related Security or
Collections with respect thereto is on file in any recording office except such
as may be filed in favor of such Seller in accordance with the Contracts, in
favor of the Agent, for the benefit of the Purchasers in accordance with this
Agreement or in connection with any Adverse Claim arising solely as the result
of any action taken by a Purchaser or by the Agent.
(m) Accurate Reports. No Periodic Report (if prepared by such
Seller, or to the extent that information contained therein was supplied by
such Seller), information, exhibit, financial statement, document, book, record
or report furnished or to be furnished by any Seller to the Agent or any
Purchaser in connection with this Agreement was or will be inaccurate in any
material respect as of the date it was or will be dated or (except as otherwise
disclosed to the Agent or such Purchaser, as the case may be, at such time) as
of the date so furnished, or contained or will contain any material
misstatement of fact or omitted or will omit to state a material fact or any
fact necessary to make the statements contained therein not materially
misleading.
(n) Offices. The chief place of business and chief executive office
of such Seller are located at the address of such Seller referred to in Section
13.02 and the offices where such Seller keeps all its books, records and
documents evidencing Pool Receivables, the related Contracts and all purchase
orders and other agreements related to such Pool Receivables are located at the
addresses specified in Exhibit 6.01(n) (or at such other locations, notified to
the Agent in accordance with Section 7.01(f), in jurisdictions where all action
required by Section 8.05 has been taken and completed).
(o) Lock-Box Accounts. The names and addresses of all the Lock-Box
Banks, together with the account numbers of the lock-box accounts of such
Seller at such Lock-Box Banks, are specified in Exhibit 6.01(o) (or at such
other Lock-Box Banks and/or with such other lock-box accounts as have been
notified to the Agent in accordance with Section 7.03(d)).
-23-
(p) Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase or Reinvestment
shall in fact be an Eligible Receivable.
ARTICLE VII
GENERAL COVENANTS OF SELLERS
SECTION 7.01. Affirmative Covenants of Sellers. From the date hereof
until the first day following the Commitment Termination Date on which all
Undivided Interests shall be reduced to zero, each Seller will, unless the
Agent shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the Pool
Receivables and related Contracts.
(b) Preservation of Corporate Existence. Except as permitted by
Section 7.03(e), preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would materially adversely affect (i)
the interests of the Agent or any Purchaser hereunder, (ii) the ability of such
Seller or Servicer to perform their respective obligations hereunder or (iii)
the validity or enforceability of any Pool Receivable.
(c) Audits. At any time and from time to time during regular
business hours, permit the Agent and each Purchaser, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes and
disks) in the possession or under the control of such Seller relating to Pool
Receivables, including, without limitation, the related Contracts and purchase
orders and other agreements, and (ii) to visit the offices and properties of
such Seller for the purpose of examining such materials described in clause (i)
next above, and to discuss matters relating to Pool Receivables or such
Seller's performance hereunder with any of the officers or employees of Seller
having knowledge of such matters.
(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool 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
-24-
collection of all Pool Receivables (including, without limitation, records
adequate to permit the daily identification of each new Pool Receivable and all
Collections of and adjustments to each existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts. At
its expense timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Pool Receivables and all purchase orders and other agreements
related to such Pool Receivables.
(f) Location of Records. Keep its chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Pool Receivables, all related Contracts and all purchase orders and other
agreements related to such Pool Receivables (and all original documents
relating thereto), at the address(es) of such Seller referred to in Section
6.01(n) or, upon 30 days' prior written notice to the Agent, at such other
locations in jurisdictions where all action required by Section 8.05 shall have
been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in regard to each Pool Receivable and the
related Contracts.
(h) Collections. Instruct all Obligors to cause all Collections of
Pool Receivables to be deposited directly with a Lock-Box Bank.
(i) Lock-Box Agreements. As promptly as possible, but in any
event on or prior to September 21, 1994, deliver to the Agent copies of the
Lock-Box Agreements, executed by each Lock-Box Bank.
(j) Termination Statement. Use its best efforts promptly to obtain
and file a UCC termination statement from Sanwa Business Credit Corporation
with respect to the UCC-1 financing statement filed against API with the
Wisconsin Secretary of State.
SECTION 7.02. Reporting Requirements of Sellers. From the date
hereof until the first day following the Commitment Termination Date on which
all Undivided Interests shall be reduced to zero, API will, unless the Agent
shall otherwise consent in writing, furnish, or cause to be furnished, to the
Agent:
(a) Quarterly Financial Statements. Promptly when available and in
any event within 60 days after the end of each Fiscal Quarter (except the last
Fiscal Quarter of each Fiscal
-25-
Year), consolidated balance sheets of API and its Subsidiaries as of the end of
such Fiscal Quarter, consolidated statements of earnings and a consolidated
statement of cash flow for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such
Fiscal Quarter of API and its respective Subsidiaries, with comparable
information at the close of and for the corresponding Fiscal Quarter of the
prior Fiscal Year and for the corresponding portion of such prior Fiscal Year,
together with a certificate of an Authorized Financial Officer of API to the
effect that such financial statements fairly present the financial condition
and results of operations of API and its Subsidiaries as of the date and
periods indicated (subject to normal year-end adjustments).
(b) Annual Financial Statements. Promptly when available and in any
event within 90 days after the close of each Fiscal Year, a copy of the annual
audit report of API and its Subsidiaries for such Fiscal Year, including
therein consolidated balance sheets of API and its Subsidiaries as of the end
of such Fiscal Year and consolidated statements of earnings and cash flow of
API and its Subsidiaries for such Fiscal Year certified, without qualification
as to going concern or scope, by independent auditors of recognized national
standing selected by API and reasonably acceptable to the Agent, and an
unaudited consolidating balance sheet and statements of earnings and cashflow
of such Fiscal Year, with comparable information at the close of and for the
prior Fiscal Year.
(c) Compliance Certificate. Concurrently with each set of financial
statements delivered pursuant to subsections (a) and (b) next above, a
certificate of an Authorized Financial Officer of API (a) to the effect that
such officer is not aware of any Termination Event or Unmatured Termination
Event that has occurred and is continuing or, if there is any such event,
describing it in reasonable detail, and (b) containing a computation of each of
(x) the financial ratios and restrictions set forth in Section 7.03.
(d) Reports to Holders and Exchanges. In addition to the reports
required by subsections (a) and (b) next above, promptly upon the Agent's
request, copies of any reports specified therein which API sends to any of its
security holders, and any reports or registration statements that API files
with the Securities and Exchange Commission or any national securities exchange
other than registration statements relating to employee benefit plans, to stock
plans for dealers and/or distributors and to registrations of securities for
selling Security holders;
(e) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event defined in Article
IV of ERISA which any Seller files under
-26-
ERISA with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which any Seller receives from
such Corporation;
(f) Termination Events. As soon as possible and in any event within
five Business Days after any Seller has become aware of the occurrence of each
Termination Event and each Unmatured Termination Event, a written statement of
the chief financial officer or chief accounting officer of API setting forth
details of such Termination Event or Unmatured Termination Event and the action
that the related Seller proposes to take with respect thereto;
(g) Litigation. As soon as possible and in any event within fifteen
Business Days of any Seller's knowledge thereof, notice of (i) any litigation,
investigation or proceeding which may exist at any time which could have a
material adverse effect on the business, operations, property or financial
condition of any Seller or impair the ability of any Seller to perform its
obligations under this Agreement, unless such Seller is insured (including self
retention amounts consistent with past practice and the exercise of prudent
business judgment) with respect thereto and the insurer, except to the extent
covered by permitted self insurance, has assumed responsibility therefor in
writing and (ii) any material adverse development in previously disclosed
litigation; and
(h) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of any Seller as the Agent may from time to
time reasonably request in order to protect the interests of the Agent or of
any Purchaser under or as contemplated by this Agreement.
SECTION 7.03. Negative Covenants of Sellers. From the date hereof
until the date following the Commitment Termination Date on which all Undivided
Interests shall be reduced to zero, no Seller will, without the prior written
consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein, sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon or with respect to, any Seller's
undivided interest in any Pool Receivable or related Contract or Related
Security, or upon or with respect to any lock-box account to which any
Collections of any Pool Receivable are sent, or assign any right to receive
income in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 8.02, extend, amend or otherwise
-27-
modify the terms of any Pool Receivable, or amend, modify or waive any term or
condition of any Contract related thereto.
(c) Change in Business or Credit and Collection Policy. Make any
change in the character of its business or in the Credit and Collection Policy,
which change would, in either case, impair the collectability of any Pool
Receivable.
(d) Change in Payment Instructions to Obligors. Add or terminate any
bank as a Lock-Box Bank from those listed in Exhibit 6.01(o) or make any change
in its instructions to Obligors regarding payments to be made to any Seller or
payments to be made to any Lock-Box Bank, unless the Agent shall have received
notice of such addition, termination or change and duly executed copies of a
Lock-Box Agreement with each new Lock-Box Bank.
(e) Mergers, Acquisitions, Sales, etc. Be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or any substantial part of its
assets, or sell or assign with or without recourse any Receivables (other than
pursuant hereto), or permit any Subsidiary to do any of the foregoing, except
for:
(i) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any Subsidiary into, with or
to API or into, with or to any wholly-owned Subsidiary;
(ii) any such purchase or other acquisition by API of the
assets or stock of any wholly-owned Subsidiary;
(iii) any sale, transfer, conveyance or lease of any asset
(other than Receivables, except pursuant hereto) if (x) the aggregate
book value (disregarding any write-downs of such book value other than
ordinary depreciation and amortization) of all assets disposed of
pursuant to this clause (iii) in any Fiscal Year are less than 15% of
the total book value of tangible assets of API and its Subsidiaries as
of the last day of the most recently ended Fiscal Year and (y) no
Termination Event or Unmatured Termination Event exists or would
result therefrom;
(iv) any acquisition if (A) after such acquisition API (if it
is the acquiring entity) or a Subsidiary owns (1) at least a majority
of the securities of each class having ordinary voting power of, or a
majority of the ownership interest in, the acquired Person or (2) more
than 10% but less than a majority of the securities of each class
having ordinary voting power of, or more than 10% but
-28-
less than a majority of the ownership interest in, the acquired
Person and, immediately after giving effect to any acquisition
described in this subclause (2), the aggregate book value of all such
minority Investments in the equity securities or other ownership
interests of other Persons by API and its Subsidiaries does not exceed
20% of the consolidated tangible assets of API and its Subsidiaries,
(B) no Termination Event or Unmatured Termination Event exists or
would result therefrom and (C) prior to the consummation of such
acquisition, API provides to each Purchaser a certificate of the chief
financial officer of API (attaching computations to demonstrate
compliance with all financial covenants hereunder) stating that such
acquisition complies with this Section 7.03(e) and that any other
conditions under this Agreement relating to such acquisition have been
satisfied; or
(v) any sale of a Seller (other than API) if API has complied
with all of the requirements of Section 3.10.
(f) Financial Covenants. (a) Minimum Shareholders' Equity. Permit at
any time Shareholders' Equity for API to be less than the sum of $81,500,000
plus 25% of Consolidated Net Income for each Fiscal Quarter ending after August
31, 1994 (excluding any Fiscal Quarter in which there is a loss).
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio to be less than 1.5:1.
(c) Debt to Capital Ratio. Permit at any time the Debt to Capital
Ratio to exceed 58%.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by such Person
("Servicer") so designated from time to time in accordance with this Section
8.01. Until the Agent gives notice ("Successor Notice") to API of the
designation of a new Servicer, API is hereby designated as, and hereby agrees
to perform the duties and obligations of, Servicer pursuant to the terms
hereof. The Agent agrees not to provide API with the Successor Notice until
after the occurrence of any Termination Event ("Servicer Transfer Event"), in
which case such Successor Notice may be given at any time in Agent's
discretion.
-29-
(b) Upon API's receipt of a Successor Notice, API agrees that it will
terminate its activities as Servicer hereunder in a manner which the Agent
believes will facilitate the transition of the performance of such activities
to the new Servicer, and the Agent (or its designee) shall assume each and all
of API's obligations to service and administer such Receivables, on the terms
and subject to the conditions herein set forth and API shall use its best
efforts to assist the Agent (or its designee) in assuming such obligations. If
API disputes the occurrence of a Servicer Transfer Event, API may take
appropriate action to resolve such dispute; provided that API must terminate
its activities hereunder as Servicer and allow the newly designated Servicer to
perform such activities on the date provided by the Agent as described above,
notwithstanding the commencement or continuation of any proceeding to resolve
the aforementioned dispute.
(c) Servicer may allow any Seller to service, administer and collect
any Receivables generated by such Seller and may with the prior consent of the
Agent, subcontract with any other person for servicing, administering or
collecting the Pool Receivables, provided that, in each case, Servicer shall
remain liable for the performance of the duties and obligations of Servicer
pursuant to the terms hereof.
SECTION 8.02. Duties of Servicer. (a) Servicer shall take or cause to
be taken all such actions as may be necessary or advisable to collect each Pool
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy. Each of the Agent, each Purchaser and each
Seller hereby appoints as its agent Servicer, from time to time designated
pursuant to Section 8.01, to enforce its respective rights and interests in and
under the Pool Receivables, the Related Security and the Contracts. Servicer
shall set aside for the account of Sellers and each Purchaser their respective
allocable shares of the Collections of Pool Receivables in accordance with
Sections 3.01 and 3.02 but shall not be required (unless otherwise requested by
the Agent and subject to Section 3.08) to segregate the funds constituting such
portions of such Collections, or to segregate the respective allocable shares
of each Purchaser, prior to the remittance thereof in accordance with said
Sections. If instructed by the Agent, Servicer shall segregate and deposit
with a bank (which may be PNC Bank) designated by the Agent such allocable
shares of Collections of Pool Receivables, set aside for Purchasers, on the
first Business Day following receipt by Servicer of such Collections in
immediately available funds. So long as no Termination Event or Purchase
Termination Event shall have occurred and be continuing, each Seller, while API
is Servicer, may, in accordance with the Credit and Collection Policy, (i)
-30-
extend the maturity or adjust the Unpaid Balance of any Defaulted Receivable as
it may reasonably determine to be appropriate to maximize Collections thereof,
provided that, after giving effect to such extension of maturity the Aggregate
Participation Amounts will not exceed the Participation Amounts Limit, and (ii)
adjust the Unpaid Balance of any Receivable to reflect the reductions or
cancellations described in the first sentence of Section 3.03(a). Each Seller
shall hold in trust for each Purchaser all documents, instruments and records
(including, without limitation, computer tapes or disks) that evidence or
relate to Pool Receivables generated by such Seller.
(b) Servicer shall as soon as practicable following receipt turn over
to Sellers (i) that portion of Collections of Pool Receivables not representing
Purchasers' Undivided Interest therein, less, in the event API is no longer
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering the Pool Receivables
to the extent not covered by the Servicer's Fee received by it and (ii) the
Collections of any Receivable which is not a Pool Receivable. Servicer, if
other than API, shall as soon as practicable upon demand deliver to API all
documents, instruments and records in its possession that evidence or relate to
Receivables of any Seller other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables. Servicer's authorization under this Agreement shall terminate
after the Commitment Termination Date, upon receipt by each Purchaser of an
amount equal to such Purchaser's Total Investment plus accrued Earned Discount
thereon plus all other amounts owed to Purchaser and Sellers and (unless
otherwise agreed to by the Agent and Servicer) Servicer under this Agreement.
SECTION 8.03. Rights of the Agent. (a) At any time following the
occurrence of a Termination Event, the Agent is hereby authorized to give
notice to the Lock-Box Banks of the transfer to the Agent of dominion and
control over the lock-box accounts to which the Obligors of Pool Receivables
shall make payments, as set forth in the Lock-Box Agreement, or to send the
Lock-Box Notices, as the case may be. Each Seller hereby transfers to the
Agent, effective when the Agent shall give such notice to the Lock-Box Banks,
the exclusive dominion and control over such lock-box accounts, and shall take
any further action that the Agent may reasonably request to effect such
transfer. Further, at any time the Agent may notify the Obligors of Pool
Receivables, or any of them, of the ownership of Undivided Interests by
Purchasers.
(b) At any time after the occurrence of a Termination Event:
-31-
(i) The Agent may direct the Obligors of Pool Receivables, or
any of them, that payment of all amounts payable under any Pool
Receivable be made directly to the Agent or its designee.
(ii) API shall, at the Agent's request and at API's expense,
give notice of the ownership of the Pool Receivables by the Purchasers
to each said Obligor and direct that payments be made directly to the
Agent or its designee.
(iii) Each Seller shall, at the Agent's request, (A) assemble
all of the documents, instruments and other records (including,
without limitation, computer programs, tapes and disks) which evidence
the Pool Receivables, and the related Contracts and Related Security,
or which are otherwise necessary or desirable to collect such Pool
Receivables, and shall make the same available to the Agent at a place
selected by the Agent or its designee, and (B) segregate all cash,
checks and other instruments received by it from time to time
constituting Collections of Pool Receivables in a manner acceptable to
the Agent and shall, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(iv) Each of each Purchaser and each Seller hereby authorizes
the Agent to take any and all steps in any Seller's name and on behalf
of any Seller and any Purchaser necessary or desirable, in the
determination of the Agent, to collect all amounts due under any and
all Pool Receivables, including, without limitation, endorsing any
Seller's name on checks and other instruments representing Collections
and enforcing such Pool Receivables and the related Contracts.
SECTION 8.04. Responsibilities of each Seller. Anything herein to the
contrary notwithstanding:
(a) Each Seller shall perform all of its obligations under the
Contracts related to the Pool Receivables generated by it and under the related
purchase orders and other agreements to the same extent as if Undivided
Interests had not been sold hereunder and the exercise by the Agent of its
rights hereunder shall not relieve any Seller from such obligations.
(b) Neither the Agent nor any Purchaser shall have any obligation or
liability with respect to any Pool Receivables, Contracts related thereto or
any other related purchase orders or other agreements, nor shall any of them be
obligated to perform any of the obligations of any Seller thereunder.
-32-
(c) Each Seller hereby grants to Servicer an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to take in
the name of such Seller all steps necessary or advisable to endorse, negotiate
or otherwise realize on any writing or other right of any kind held or
transmitted by such Seller or transmitted or received by any Purchaser (whether
or not from such Seller) in connection with any Receivable.
SECTION 8.05. Further Action Evidencing Purchases. Each Seller agrees
that from time to time, at its expense, it will promptly execute and deliver
all further instruments and documents, and take all further action that the
Agent may reasonably request in order to perfect, protect or more fully
evidence the Undivided Interests purchased by Purchasers hereunder, or to
enable any Purchaser or the Agent to exercise or enforce any of their
respective rights hereunder or under their Certificates. Without limiting the
generality of the foregoing, each Seller will upon the request of the Agent:
(i) execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may
be necessary or appropriate; (ii) mark conspicuously each Contract evidencing
each Pool Receivable generated by it with a legend, acceptable to the Agent,
evidencing that such Undivided Interests have been sold in accordance with this
Agreement; and (iii) mark its master data processing records evidencing any
Pool Receivables and related Contracts with such legend. Each Seller hereby
authorizes the Agent to file one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any of the
Pool Receivables and the Related Security now existing or hereafter arising in
the name of such Seller. If any Seller fails to perform any of its agreements
or obligations under this Agreement, the Agent may (but shall not be required
to) itself perform, or cause performance of, such Agreement or obligation, and
the expenses of the Agent incurred in connection therewith shall be payable by
Sellers, jointly and severally, as provided in Section 12.01.
SECTION 8.06. Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to a Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Agent, be applied as a Collection of any Pool
Receivable or Receivables of such Obligor to the extent of any amounts then due
and payable thereunder before being applied to any other indebtedness of such
Obligor.
ARTICLE IX
TERMINATION EVENTS
-33-
SECTION 9.01. Termination Events. Each of the following events shall
be a "Termination Event" hereunder:
(a) (i) Servicer (if API) shall fail to perform or observe any term,
covenant or agreement hereunder in its capacity as Servicer (other than as
referred to in clause (ii) next following) and such failure shall remain
unremedied for three Business Days or (ii) either Servicer (if API) or any
Seller shall fail to make any payment or deposit to be made by it hereunder
when due; or
(b) Any representation or warranty made or deemed to be made by any
Seller (or any of its officers) under or in connection with this Agreement or
any Periodic Report or Settlement Statement or other information or report
delivered pursuant hereto shall prove to have been false or incorrect in any
material respect when made; or
(c) Any Seller shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed
or observed and any such failure shall remain unremedied for ten Business Days
after written notice thereof shall have been given by the Agent to Sellers'
Representative; or
(d) A default shall have occurred and be continuing under or any
instrument, contract, indenture or agreement evidencing, securing or providing
for the issuance of indebtedness for borrowed money in excess of $2,000,000 of,
or guaranteed by, any Seller or any Affiliate of any thereof, which default if
unremedied, uncured, or unwaived (with or without the passage of time or the
giving of notice) would permit acceleration of the maturity of such
indebtedness and such default shall have continued unremedied, uncured or
unwaived for a period long enough to permit such acceleration and any notice of
default required to permit acceleration shall have been given; or
(e) The Delinquency Ratio exceeds 14.5%; or
(f) An Event of Bankruptcy shall have occurred and remained continuing
with respect to any Seller or any Affiliate of any thereof; or
(g) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed in
writing by Sellers' Representative to the Agent and Purchasers prior to the
date of execution and delivery of this Agreement is pending against any Seller
or (ii) any material development not so disclosed has occurred in any
litigation (including, without limitation, derivative actions), arbitration
proceedings or governmental proceedings so disclosed,
-34-
which, in the case of clause (i) or (ii), in the reasonable opinion of the
Agent is likely to materially adversely affect the financial position or
business of any Seller or impair the ability of any Seller to perform its
obligations under this Agreement; or
(h) Aggregate Participation Amounts shall exceed the Participation
Amounts Limit; or
(i) The Pool Losses to Liquidations Ratio exceeds 12.75%; or
(j) There shall have occurred any event which materially adversely
affects the collectability of the Pool Receivables or there shall have occurred
any other event which materially adversely affects the ability of any Seller or
Servicer to collect Pool Receivables or the ability of any Seller or Servicer
to perform hereunder or the warranty in Section 6.01(i)(y) shall not be true at
any time; or
(k) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any of the assets
of any Seller and such lien shall not have been released and such lien shall
not have been released within 8 Business Days, or the Pension Benefit Guaranty
Corporation shall, or shall indicate its intention to, file notice of a lien
pursuant to Section 4068 of the Employee Retirement Income Security Act of 1974
with regard to any of the assets of any Seller and such lien shall not have
been released within 8 Business Days; or
(l) One Person, or a group of Persons acting in concert that are
unacceptable to the Agent or the Purchasers obtain, in one or more
transactions, control of more than 50% of the issued and outstanding shares of
capital stock of API having the power to elect a majority of directors of API;
or any Seller other than API ceases to be a wholly-owned Subsidiary of API); or
(m) The Dilution Ratio exceeds 8.5%; or
(n) The Net Charge-Off Ratio exceeds 2%.
SECTION 9.02. Remedies.
(a) Optional Termination. Upon the occurrence of a Termination Event
(other than a Termination Event described in subsection (f) or (h) of Section
9.01), the Agent shall, at the request, or may, with the consent, of the
Majority Purchasers, by notice to Sellers' Representative declare the
Commitment Termination Date to have occurred.
-35-
(b) Automatic Termination. Upon the occurrence of a Termination Event
described in subsection (f) or (h) of Section 9.01, the Commitment Termination
Date shall be deemed to have occurred automatically upon the occurrence of such
event; provided however, that with respect to the occurrence of a Termination
Event described in subsection (h) of Section 9.01 the settlement procedures
described in Section 3.02 shall become applicable upon the occurrence of such
event and no further Purchases or Reinvestments of Collections shall be made;
and provided, further, that if the Aggregate Participation Amounts are reduced
below the Participation Amounts Limit within 1 Business Day, and if no other
Termination Event has occurred, then following such reduction, the Commitment
shall be reinstated as if the Commitment Termination Date had not occurred upon
the occurrence of such event.
(c) Additional Remedies. Upon any termination of the facility pursuant
to this Section 9.02, the Agent and each Purchaser shall have, in addition to
all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction and
other applicable laws, which rights shall be cumulative. Without limiting the
foregoing the occurrence of a Termination Event shall not deny to any Purchaser
any remedy in addition to termination of the Commitment to which such Purchaser
may be otherwise appropriately entitled, whether at law or in equity.
ARTICLE X
THE AGENT
SECTION 10.01. Authorization and Action. Each Purchaser hereby
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto.
SECTION 10.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or the Agent under or in connection with this
Agreement (including, without limitation, the Agent's servicing, administering
or collecting Pool Receivables as Servicer pursuant to Section 8.01), except
for its or their own gross negligence or willful misconduct. Without limiting
the generality of the foregoing, the Agent: (i) may consult with legal counsel
(including counsel for Sellers), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no
-36-
warranty or representation to any Purchaser and shall not be responsible
to any Purchaser for any statements, warranties or representations made in or
in connection with this Agreement; (iii) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of any Seller or to
inspect the property (including the books and records) of any Seller; (iv)
shall not be responsible to any Purchaser for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the Certificates or any other instrument or document furnished pursuant hereto;
and (v) shall incur no liability under or in respect of this Agreement by
acting upon any notice (including notice by telephone), consent, certificate or
other instrument or writing (which may be by telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 10.03. Agent and Affiliates. With respect to any Certificate
held by PNC Bank, it shall have the same rights and powers under this
Agreement as would a Purchaser if it were holding such Certificate and may
exercise the same as though it were not the Agent. PNC Bank and its Affiliates
may generally engage in any kind of business with any Seller or any Obligor,
any of their respective Affiliates and any Person who may do business with or
own securities of any Seller or any Obligor or any of their respective
Affiliates, all as if PNC Bank were not the Agent and without any duty to
account therefor to any Purchaser.
SECTION 10.04. Indemnity. Each Purchaser agrees (which agreement shall
survive any termination of this Agreement) to indemnify the Agent, on a pro
rata basis, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement, the Certificates and the other Agreement Documents, including the
reimbursement of the Agent for all reasonable out-of-pocket expenses (including
attorneys' fees) incurred by the Agent hereunder or in connection herewith or
in enforcing the obligations of any Seller under this Agreement, the
Certificates and the other Agreement Documents, in all cases as to which the
Agent is not reimbursed by the Sellers; provided that no Purchaser shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
determined by a court of competent jurisdiction in a final proceeding to have
resulted from the Agent's gross negligence or willful misconduct. The Agent
shall not be required to take any action hereunder, under the Certificates or
under any other Agreement Document, or to prosecute or defend any
-37-
suit in respect of this Agreement, the Certificates or any other Agreement
Document, unless indemnified to its satisfaction by the Purchasers against
loss, costs, liability, and expense, which indemnity need not indemnify the
Agent for its gross negligence or willful misconduct. If any indemnity in
favor of the Agent shall become impaired, it may call for additional indemnity
and cease to do the acts indemnified against until such additional indemnity is
given. The Agent may delegate its duties hereunder to Affiliates, agents or
attorneys-in-fact selected in good faith by the Agent.
SECTION 10.05. Successor. The Agent may resign as such at any time
upon at least thirty days' prior notice to the Sellers' Representative and all
Purchasers. If the Agent at any time shall resign, the Majority Purchasers may
appoint a successor Agent; provided that, if such successor Agent is not a
Purchaser, such successor Agent shall be reasonably acceptable to the Sellers'
Representative. If the Majority Purchasers do not make such appointment within
thirty days, the retiring Agent shall appoint a new Agent from among the
Purchasers or, if no Purchaser accepts such appointment, from among commercial
banking institutions or trust institutions generally. Upon the acceptance of
any appointment as Agent by a successor Agent, such successor Agent shall
thereupon become the Agent hereunder and shall be entitled to receive from the
prior Agent such documents of transfer and assignment as such successor Agent
may reasonably request, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement, the Certificates and the other
Facility Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Agreement and the other Agreement
Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
SECTION 10.06. Credit Decisions. Each Purchaser acknowledges that it
has, independently of the Agent and each other Purchaser, and based on the
financial information referred to in Section 6.01(i) and such other documents,
information, and investigations as it has deemed appropriate, made its own
credit decision to make its Purchases from time to time. Each Purchaser also
acknowledges that it will, independently of the Agent and each other Purchaser,
and based on such other documents, information, and investigations as it shall
deem appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement, the Certificates or the other Agreement
Documents.
SECTION 10.07. Notices, etc. to Agent. The Agent shall give prompt
notice to each Purchaser of each notice or request given to the Agent by any
Seller pursuant to the terms of this
-38-
Agreement and of each Termination Event or Unmatured Termination Event of
which the Agent has actual knowledge. The Agent will promptly distribute to
each Purchaser copies of all other communications and financial statements
received by the Agent from any Seller for distribution to the Purchasers by the
Agent in accordance with the terms of this Agreement. The Agent shall not be
deemed to have actual knowledge of any event unless an authorized corporate
officer of the Agent whose duties include administration of this Agreement has
discovered or has received actual notice of such event.
ARTICLE XI
ASSIGNMENT OF UNDIVIDED INTERESTS
SECTION 11.01. Assignments. Any Purchaser may assign its Commitment
and any Undivided Interest owned by it to any other Person proposed by Purchaser
and consented to by the Agent and the Sellers' Representative, which consent
shall not be unreasonably withheld, provided that such assignment (i) shall be
in an amount at least equal to $5,000,000 and (ii) shall not result in more
than 4 Purchasers. Within five Business Days after notice of such proposed
assignment, Sellers' Representative agrees to advise the Agent of its consent
or non-consent thereto. All of the aforementioned assignments shall be upon
such terms and conditions as the relevant Purchaser and the assignee may
mutually agree. Each assigning Purchaser shall pay the Agent a fee of $3,500
in connection with each such assignment, which fee shall be payable on the
effective date of such assignment.
SECTION 11.02. Documentation. Each assignment by a Purchaser hereunder
shall be evidenced by an Assignment. If requested by the Agent, Sellers agree
to execute and deliver new Certificates in replacement of the original
Certificate in order to reflect such assignment.
SECTION 11.03. Rights of Assignee. Upon the assignment of any
Commitment and Undivided Interest (or portion thereof) from any Purchaser
pursuant to this Article XI, the respective assignee receiving such
assignment shall have all of the rights of a Purchaser hereunder with respect
to such Undivided Interest (or portion thereof).
SECTION 11.04. Assignment by Sellers. No Seller shall assign its
rights or obligations under this Agreement and the other Agreement Documents
without the prior written consent of the Agent and each Purchaser.
-39-
ARTICLE XII
INDEMNIFICATION
SECTION 12.01. Indemnities by Sellers. Without limiting any other
rights which any such Person may have hereunder or under applicable law,
Sellers, jointly and severally, hereby agree to indemnify each of the
Agent, each Purchaser, PNC Bank, each of PNC Bank's Affiliates, their
respective successors, transferees and assigns and all officers, directors,
shareholders, controlling persons, employees and agents of any of the foregoing
(each an "Indemnified Party"), forthwith on demand, from and against any and
all damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them arising out of or as a result of this Agreement or any
of the other Agreement Documents or the transactions contemplated thereby or
the use of the proceeds by the Sellers therefrom, including, without
limitation, in respect of the ownership or funding of an Undivided Interest or
in respect of any Receivable or any Contract, excluding, however, recourse
(except as otherwise specifically provided in this Agreement) for Defaulted
Receivables. Without limiting the foregoing, Sellers, jointly and severally,
shall indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(i) the transfer by any Seller of any interest in any
Receivable other than an Undivided Interest;
(ii) the breach of any representation or warranty made by any
Seller (or any of its officers) under or in connection with this
Agreement, any Periodic Report or any other information or report
delivered by any Seller pursuant hereto, which shall have been false
or incorrect in any material respect when made or deemed made;
(iii) the failure by any Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the
related Contract, or the nonconformity of any Pool Receivable or the
related Contract with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in each
Purchaser an undivided percentage ownership interest, to the extent of
each Undivided Interest owned by it hereunder, in the Receivables in,
or purporting to be in, the Receivables Pool, free and clear of any
Adverse Claim, other than an Adverse Claim arising solely as a result
of an act of such Purchaser or the Agent (when used in this clause
(iv), an Adverse Claim shall include any lien for taxes whether
-40-
accrued and payable or not), whether existing at the time of the
Purchase of such Undivided Interest or at any time thereafter;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any receivables in, or purporting to be in, the Receivables Pool,
whether at the time of any Purchase, Reinvestment or at any subsequent
time, or the failure of the Purchasers' interests in Pool Receivables
to be perfected as a result of the failure to comply with the Federal
Assignment of Claims Act, the laws of any foreign jurisdiction or
otherwise;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivable's
or the related Contract's not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the
merchandise or services related to such Receivable or the furnishing
or failure to furnish such merchandise or services;
(vii) any failure of API, as Servicer or otherwise, to
perform its duties or obligations in accordance with the provisions of
Article VII;
(viii) any products liability claim arising out of or in
connection with merchandise or services that are the subject of any
Pool Receivable; or
(ix) any tax or governmental fee or charge (but not including
taxes upon or measured by net income), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase
or ownership of any Undivided Interest, or other interest in the Pool
Receivables or in any goods which secure any such Pool Receivables.
If any Indemnified Party shall have notice of any attempt to impose or
collect any tax or governmental fee or charge for which
indemnification will be sought from Sellers hereunder, such
Indemnified Party shall give prompt and timely notice of such attempt
to Sellers' Representative and Sellers' Representative shall have the
right, at its expense, to conduct or participate in any proceedings
resisting or objecting to the imposition or collection of any such
tax, governmental fee or charge.
-41-
Indemnification hereunder shall be in an amount necessary to
make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the payment of any of the
aforesaid taxes and the receipt of the indemnity provided hereunder or
of any refund of any such tax previously indemnified hereunder,
including the effect of such tax or refund on the amount of tax
measured by net income or profits which is or was payable by the
Indemnified Party.
Notwithstanding anything to the contrary herein, an Indemnified Party shall
refund to the Sellers any amount received from the Sellers for losses, damages,
costs and expenses incurred by such Indemnified Party which a court of
competent jurisdiction has found, in a final nonappealable order, resulted from
such Indemnified Party's bad faith, gross negligence or willful misconduct
(individually and not as a co-conspirator with a Seller or any Affiliate
thereof). No Seller shall be liable for any settlement of any claim or action
effected without its written consent at a time when no Termination Event had
occurred and was continuing, provided such consent was not unreasonably delayed
or withheld. If for any reason the indemnification provided above in this
Section 12.01 is unavailable to an Indemnified Party or is insufficient to hold
an Indemnified Party harmless to the extent contemplated by such
indemnification, then Sellers, jointly and severally, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on the one hand
and Sellers on the other hand but also the relative fault of such Indemnified
Party as well as any other relevant equitable considerations.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Seller
therefrom shall in any event be effective unless the same shall be in writing
and signed by (i) Sellers, the Agent and the Majority Purchasers (with respect
to an amendment) or (ii) the Agent and the Majority Purchasers (with respect to
a waiver or consent by them) or Sellers (with respect to a waiver or consent by
them), as the case may be, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given,
provided, that, without the consent of each Purchaser, no such amendment or
waiver shall (i) reduce the amount of, or change the date of payment of, any
Earned Discount, any fee or such Purchaser's Outstanding
-42-
Investment, (ii) extend the Commitment Termination Date, (iii) change
the definition of Majority Purchasers or this proviso or (iv) release any
interest in Pool Receivables, except as expressly set forth herein. This
Agreement, together with the other Agreement Documents, contains a final and
complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof, superseding
all prior oral or written understandings.
SECTION 13.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent
by certified mail, postage prepaid, or by facsimile, to the intended party at
the address or facsimile number of such party set forth under its name on the
signature pages hereof or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (i) if personally
delivered, when received, (ii) if sent by certified mail, three Business Days
after having been deposited in the mail, postage prepaid, (iii) if sent by
overnight delivery service, the next Business Day, and (iv) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means,
except that notices and communications pursuant to Article I shall not be
effective until received.
SECTION 13.03. No Waiver; Remedies. No failure on the part of the
Agent, any Purchaser, any Seller or the Sellers' Representative to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 13.04. Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of Sellers, the Agent, the Purchasers and
their respective successors and permitted assigns, and the provisions of
Section 4.02 and Article XII shall inure to the benefit of the Affected Parties
and the Indemnified Parties, respectively, and their respective successors and
assigns. This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until such time, after the Commitment Termination Date, as no
Undivided Interest shall be outstanding. The rights and remedies with respect
to any breach of any representation and warranty made by each Seller pursuant
to Article VI and the
-43-
indemnification and payment provisions of Article XII and Sections 4.02
and 13.06 shall be continuing and shall survive any termination of this
Agreement.
SECTION 13.05. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Illinois,
except to the extent that the validity or perfection of the interests of
Purchasers in the Receivables, or remedies hereunder in respect thereof, are
governed by the laws of a jurisdiction other than the State of Illinois.
SECTION 13.06. Costs, Expenses and Taxes. In addition to its
obligations under Article XII, Sellers, jointly and severally, agree to pay on
demand:
(a) all costs and expenses in connection with the preparation,
execution and delivery of this Agreement, the Certificates, the other Agreement
Documents and any other documents to be delivered hereunder, including, without
limitation, any amendments, waivers, consents, supplements or other
modifications to any Agreement Documents and the reasonable fees and expenses
of counsel for the Agent, Purchasers and PNC Bank with respect thereto and all
costs and expenses in connection with the administration (including periodic
auditing) and enforcement of this Agreement or the Agreement Documents,
including, without limitation, the reasonable fees and expenses of counsel,
incurred by any Affected Party, including, those costs and expenses incurred
with respect to advising the Agent, Purchasers, PNC Bank, PNC Bank's Affiliates
and any other Affected Party as to their respective rights and remedies under
this Agreement; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement, the Certificates or the other documents to be delivered
hereunder, and agrees to indemnify each Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes and fees.
SECTION 13.07. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this
Agreement to any underscored Section or Exhibit are to such Section or Exhibit
of this Agreement, as the case may be.
SECTION 13.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so
-44-
executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same Agreement.
SECTION 13.09. Allocation Among Sellers. API hereby agrees to take, or
cause to be taken, all steps necessary to allocate the liabilities and the
benefits under this Agreement among the Sellers on the basis of the aggregate
Unpaid Amount of Pool Receivables generated by each such Seller from time to
time. To the extent that any Seller makes a payment, whether from Collections
of Receivables generated by such Seller or otherwise, for any liability
hereunder, in excess of its pro rata share, such Seller shall have a claim for
contribution, which claim shall be subordinated to all of the claims of the
Purchaser, the Agent, the Affected Parties and the Indemnified Parties
hereunder, against the other Sellers to the extent necessary to result in a pro
rata payment by all of the Sellers. Each Seller hereby agrees to promptly pay
any such claims for contribution.
-45-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
Percentage PNC BANK, NATIONAL ASSOCIATION,
100% as a Purchaser
By
Name Printed: Richard T. Jander
Title: Assistant Vice President
Fifth Avenue and Wood Street
Pittsburgh, PA 15265
with notice to:
PNC Bank, National Association
500 West Madison, Suite 3140
Chicago, Illinois 60661
Phone: (312) 906-3440
Facsimile: (312) 906-3420
Attention: Richard T. Jander
PNC BANK, NATIONAL ASSOCIATION,
as the Agent
By
Name Printed: Richard T. Jander
Title: Assistant Vice President
Fifth Avenue and Wood Street
Pittsburgh, PA 15265
Eurodollar Office:
Fifth Avenue and Wood Street
Pittsburgh, PA 15265
with notice to:
PNC Bank, National Association
500 West Madison, Suite 3140
Chicago, Illinois 60661
Phone: (312) 906-3440
Facsimile: (312) 906-3420
Attention: Richard T. Jander
-46-
APPLIED POWER INC.,
as a Seller and initial Servicer
By
Name Printed: Karen Trickle
Title: Assistant Treasurer
Address: 13000 W. Silver Spring Drive
Butler, Wisconsin 53007
Facsimile No.: 414/783-9790
Attention: Treasurer
BARRY WRIGHT CORPORATION,
as a Seller
By
Name Printed: Terence Dooher
Title: Treasurer
Address: 40 Guest Street
Brighton, Massachusetts 02135
Facsimile No.: 617/254-7381
Attention: Treasurer
GB ELECTRICAL, INC., as a Seller
By
Name Printed: Karen Trickle
Title: Assistant Treasurer
Address: 6101 N. Baker Road
Glendale, Wisconsin 53209
Facsimile No.: 414/228-1616
Attention: Vice President
WRIGHT LINE INC., as a Seller
By
Name Printed: Karen Trickle
Title: Assistant Treasurer
Address: 160 Gold Star Boulevard
Worcester, MA 01606
Facsimile No.: 508/752-4909
Attention: Treasurer
-47-
DEFINITIONAL APPENDIX
TO RECEIVABLES PURCHASE AGREEMENT
SCHEDULE I
DEFINITIONS
1.1. Definitions. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings as
indicated:
"Adverse Claim" means a lien, security interest, charge, or
encumbrance, or other right or claim of any Person other than (i) a potential
claim or right (that has not yet been asserted) of a trustee appointed for an
Obligor in connection with any Event of Bankruptcy or (ii) an unfiled lien for
taxes accrued but not yet payable.
"Affected Party" means each of each Purchaser, any permitted assignee
of a Purchaser, the Agent, PNC Bank and any holding company of PNC Bank.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person.
"Affiliated Obligor" has the meaning set forth in the definition of
"Net Pool Balance" in Section 2.07.
"Agent" has the meaning set forth in the preamble.
"Agent's Account" has the meaning set forth in Section 3.06.
"Aggregate Participation Amounts" has the meaning set forth in Section
2.01.
"Aggregate Purchasers' Investments" has the meaning set forth in
Section 2.03.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Agreement Documents" has the meaning set forth in Section 6.01(c).
"Alternate Reference Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of
I-1
(a) the rate of interest most recently announced by PNC Bank
at its principal office in Pittsburgh, Pennsylvania as its prime rate;
and
(b) the Federal Funds Rate (as defined below) most recently
determined by PNC Bank plus 1.0%.
For purposes of this definition, "Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal (for each day during such period) to
(i) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New
York; or
(ii) if such rate is not so published for any day
which is a Business Day, the average of the quotations for
such day on such transactions received by PNC Bank from three
federal funds brokers of recognized standing selected by it.
The Alternate Reference Rate is not necessarily intended to be the lowest rate
of interest determined by PNC Bank in connection with extensions of credit.
"API" has the meaning set forth in the preamble.
"Arrangement Fee" has the meaning set forth in Section 4.01(a).
"Authorized Financial Officer" of a Person means the chief financial
officer, chief accounting officer, controller, treasurer, assistant treasurer
or vice president - finance of such Person.
"Assignment" means an assignment, in substantially the form of Exhibit
IA, by which a Purchaser's Commitment (or portion thereof) or its interest in
Undivided Interests previously purchased hereunder may be assigned, with such
changes as to which the assigning Purchaser, the related assignee and the Agent
may agree.
"Bank Rate" has the meaning set forth in Section 2.07.
"Business Day" means a day on which both (a) the Agent at its
principal office in Pittsburgh, Pennsylvania is open for
I-2
business and (b) commercial banks in New York City are not authorized or
required to be closed for business.
"BWC" has the meaning set forth in the preamble.
"Capital Lease" means, with respect to any Person, any lease of (or
other agreement conveying the right to use) any real or personal property
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
"Certificate" means a certificate of assignment, by Sellers to each
Purchaser, in the form of Exhibit IB, evidencing each Undivided Interest owned
by such Purchaser.
"Collections" means, with respect to any Receivable, all funds which
either (a) are received by any Seller or Servicer from or on behalf of the
related Obligors in payment of any amounts owed (including, without limitation,
purchase prices, finance charges, interest and all other charges) in respect of
such Receivable, or applied to such amounts owed by such Obligors (including,
without limitation, insurance payments that any Seller or Servicer applies in
the ordinary course of its business to amounts owed in respect of such
Receivable and net proceeds of sale or other disposition of repossessed goods
or other collateral or property of the Obligor or any other party directly or
indirectly liable for payment of such Receivable and available to be applied
thereon), or (b) are deemed to have been received by any Seller or any other
Person as a Collection pursuant to Section 3.03 or 3.04; provided that, prior
to such time as API shall cease to be the Servicer, late payment charges,
collection fees and extension fees shall not be deemed to be Collections.
"Commitment" has the meaning set forth in Section 1.01.
"Commitment Fee" has the meaning set forth in Section 4.01(b).
"Commitment Termination Date" has the meaning set forth in Section
1.02.
"Computation Period" means any period of four consecutive Fiscal
Quarters ending on the last day of a Fiscal Quarter.
"Conditions Precedent" has the meaning set forth in Section 5.02.
"Concentration Limit" has the meaning set forth in the definition of
"Net Pool Balance" in Section 2.07.
"Consolidated Interest Expense" means, for any period, the
consolidated interest expense of API and its Subsidiaries for
I-3
such period, as determined in accordance with GAAP and in any event including,
without duplication, all commissions, discounts and other fees and charges owed
with respect to letters of credit and banker's acceptances, net costs under
interest rate protection agreements and the portion of any Capital Leases
allocable to consolidated interest expense.
"Consolidated Net Income" means, for any period, all amounts which, in
conformity with GAAP, would be included under net income on a consolidated
income statement of API and its Subsidiaries for such period.
"Contract" means a contract between a Seller and any Person, or an
invoice from a Seller to any Person, in one of the forms of contracts or
invoices, as appropriate, set forth in Exhibit IC or otherwise approved by the
Agent, pursuant to or under which such Person shall be obligated to make
payments to a Seller from time to time.
"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables described in
Exhibit ID, as modified without violating Section 7.03(c).
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all obligations of such Person as
lessee under Capital Leases which have been recorded as liabilities on a
balance sheet of such Person, (c) all obligations of such Person to pay the
deferred purchase price of property or services (other than current accounts
payable in the ordinary course of business), (d) all indebtedness secured by a
Lien on the property of such Person, whether or not such indebtedness shall
have been assumed by such Person (it being understood that if such Person has
not assumed or otherwise become personally liable for any such indebtedness,
the amount of the Debt of such Person in connection therewith shall be limited
to the lesser of the face amount of such indebtedness or the fair market value
of all property of such Person securing such indebtedness), (e) all
obligations, contingent or otherwise, with respect to the face amount of all
letters of credit (whether or not drawn) and banker's acceptances issued for
the account of such Person, (f) all obligations of such Person in respect of
Hedging Arrangements, (g) all Suretyship Liabilities of such Person and (h) all
Debt (as defined above) of any partnership in which such Person is a general
partner. The amount of the Debt of any Person in respect of Hedging
Arrangements shall be deemed to be the unrealized net loss position of such
Person thereunder (determined for each counterparty individually, but netted
for all Hedging Arrangements maintained with such counterparty).
I-4
"Debt to Capital Ratio" means the ratio of (a) Funded Debt to (b)
Total Capital.
"Defaulted Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for sixty (60) days from the original
due date for such payment, (ii) as to which the obligor thereof is the obligor
on any other Defaulted Receivable or with regard to which an Event of
Bankruptcy has occurred and remains continuing, (iii) as to which payments have
been extended, or the terms of payment thereof rewritten, without the Agent's
consent or (iv) which, consistent with the Credit and Collection Policy, would
be written off a Seller's books as uncollectible.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and: (i) as to which any payment, or part thereof, remains unpaid
for thirty (30) days or more from the original due date for such payment; or
(ii) which, consistent with the Credit and Collection Policy, would be
classified as delinquent by a Seller.
"Discount Rate" has the meaning set forth in Section 2.07.
"Delinquency Ratio" means the percentage that (x) is the aggregate
Unpaid Balances of all Delinquent Receivables as of a Month End Date was of (y)
the aggregate Unpaid Balance of all Pool Receivables as of such Month End Date.
"Designated Obligor" means, at any time, all Obligors of any Seller
except any such Obligor as to which the Agent has, at least three Business Days
prior to the date of determination, given notice to Sellers' Representative
that such Obligor shall not be considered a Designated Obligor.
"Dilution Ratio" means the percentage that (x) the aggregate amount of
credits, offsets, reductions, discounts or adjustments to the Unpaid Balance of
Pool Receivables granted or allowed by the Sellers, or any of them, during a
month was of (y) the Unpaid Balance of all Pool Receivables as of the Month End
Date for such month.
"Dollars" means dollars in lawful money of the United States of
America.
"Earned Discount" has the meaning set forth in Section 2.05.
"Eligible Receivable" means, at any time and with respect to any
Undivided Interest, a Receivable evidenced by a Contract:
(i) which, (i) if the perfection of Purchasers' undivided
ownership interests therein is governed by the
I-5
laws of a jurisdiction where the Uniform Commercial Code -- Secured
Transactions is in force, constitutes an account or general intangible
as defined in the Uniform Commercial Code as in effect in such
jurisdiction, and (ii) if the perfection of Purchasers' undivided
ownership interest therein is governed by the law of any jurisdiction
where the Uniform Commercial Code -- Secured Transactions is not in
force, Sellers have furnished to the Agent such opinions of counsel
and other evidence as has reasonably been requested, establishing to
the reasonable satisfaction of the Agent that Purchasers' undivided
ownership interest and other rights with respect thereto are not
significantly less protected and favorable than such rights under the
Uniform Commercial Code;
(ii) the primary Obligor of which is not an Affiliate of any of the
parties hereto, and is either a United States resident or is listed on Schedule
IA;
(iii) if the primary Obligor of which is the United States government
or a subdivision or agency thereof, the Unpaid Balance of all such Receivables
owed by the United States government or a subdivision or agency thereof is less
than 10% of the Net Pool Balance;
(iv) the Obligor of which is a Designated Obligor;
(v) the Obligor of which is not the Obligor of any Defaulted
Receivable, the Unpaid Balance of which exceeds 25% of the aggregate Unpaid
Balance of all Receivables of such Obligor;
(vi) which is not a Defaulted Receivable;
(vii) with regard to which the warranty in Section 6.01(l) is true
and correct;
(viii) the balance of which is required to be paid within the number
of days of the original billing date therefor set forth opposite the name of
the Seller that generated such Receivable on Schedule IB, unless the Unpaid
Balance of such Receivable, when combined with the Unpaid Balance of all other
Pool Receivables that are the subject of extended terms, does not exceed 27% of
the Net Pool Balance;
(ix) the sale of an Undivided Interest in which does not contravene
or conflict with any law;
(x) which is denominated and payable only in Dollars drawn on an
account in the United States;
I-6
(xi) which arises under a Contract that has been duly authorized and
that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms and is
not subject to any dispute, offset, counterclaim or defense whatsoever (except
the discharge in bankruptcy of such Obligor);
(xii) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and with
respect to which no party to the Contract related thereto is in violation of
any such law, rule or regulation in any material respect if such violation
would impair the collectability of such Receivable;
(xiii) which (A) satisfies all applicable requirements of the Credit
and Collection Policy and (B) complies with such other criteria and
requirements (other than those relating to the collectability of such
Receivable) as the Agent may from time to time specify to Sellers'
Representative following thirty days' notice;
(xiv) the face amount of which does not include any amounts
representing sales tax; and
(xv) as to which the Agent has not notified Sellers' Representative
that the Agent has determined, in its sole discretion, that such Receivable (or
class of Receivables) is not acceptable for purchase hereunder.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any
Undivided Interest (or portion thereof) for any Yield Period, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant
to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1-Eurodollar
Reserve Percentage
where: "Eurodollar Rate" means, with respect to any Undivided Interest (or
portion thereof) for any Yield Period, the rate per annum at which Dollar
deposits in immediately available funds are offered to the Eurodollar Office of
the Agent two Eurodollar Business Days prior to the beginning of such Yield
Period by
I-7
major banks in the major interbank eurodollar market as at or about 12:00,
noon, Pittsburgh time, for delivery on the first day of such Yield Period, for
the number of days comprised therein and in an amount equal or comparable to
the amount of the related Purchasers' Investments of such Undivided Interest
(or such portion) for such Yield Period. "Eurodollar Business Day" means a day
of the year on which dealings are carried on in the eurodollar interbank market
and banks are open for business in New York City. "Eurodollar Office" shall
mean the office of the Agent designated as such with its signature hereto and,
thereafter, such other office or offices of the Agent (as designated from time
to time by notice from the Agent to Sellers' Representative) which shall be
funding the Undivided Interests of the Agent hereunder or such other office or
offices through which the Agent determines the Eurodollar Rate. A Eurodollar
Office of the Agent may be, at the option of the Agent, either a domestic or
foreign office. "Eurodollar Reserve Percentage" means, with respect to each
Yield Period, the then applicable percentage (expressed as a decimal)
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D or any other then applicable regulation
of the Board of Governors (or any successor) that prescribes reserve
requirements applicable to "Eurocurrency Liabilities" as presently defined in
Regulation D.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or
all or substantially all of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent
to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar
I-8
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
to, or admit in writing its inability to, pay its debts generally as they
become due, or, if a corporation or similar entity, its board of directors
shall vote to implement any of the foregoing.
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of API and its Subsidiaries, which
period shall be the 12-month period ending on August 31 of each year.
"Fixed Charge Coverage Ratio" means, for any Computation Period, the
ratio of
(a) the sum of
(i) Consolidated Net Income for such period,
plus
(ii) the aggregate amount deducted in respect of
federal, state, local and foreign income taxes
in determining such Consolidated Net Income,
plus
(iii) Consolidated Interest Expense for such period,
plus
(iv) the aggregate amount deducted in respect of
leases that were not Capital Leases in
determining such Consolidated Net Income,
plus
(v) the aggregate amount deducted in respect of
amortization of intangible assets (including
goodwill) in determining such Consolidated Net
Income,
to
(b) the sum of
(i) Consolidated Interest Expense for such period,
plus
I-9
(ii) the aggregate amount deducted in respect of
leases that were not Capital Leases in
determining such Consolidated Net Income.
"Funded Debt" of any Person at any date of determination means the sum
of all Debt described in clauses (a) and (b) of the definition of "Debt".
"GAAP" means those U.S. generally accepted accounting principles
applied in the preparation of the audited financial statements referred to in
Section 6.01(i).
"GB" has the meaning set forth in the preamble.
"Hedging Arrangement" means any interest rate swap, cap or collar
agreement, currency swap agreement or other arrangement designed to hedge
interest rate and/or currency risk.
"Indemnified Amounts" has the meaning set forth in Section 12.01.
"Indemnified Party" has the meaning set forth in Section 12.01.
"Investment" means, with respect to any Person:
(a) any loan or advance made by such Person to any other
Person; and
(b) any capital contribution made by such Person to, or
ownership or similar interest held by such Person in, any other
Person.
The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity thereon (and
without adjustment by reason of the financial condition of such other Person)
and shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to
the fair market value of such property.
"Liquidation Day" for any Undivided Interest means any of (i) each day
which occurs on or after the date designated by the Agent to Sellers'
Representative to be the "Liquidation Commencement Date", provided such date is
designated on at least one Business Day's notice during a time when any of the
conditions set forth in Section 5.02 are not satisfied, (ii) each day which
occurs on or after the Commitment Termination Date for such Undivided Interest,
or (iii) each day which occurs thirty days after Sellers' Representative shall
have given written
I-10
notice to the Agent that Sellers no longer wishes to sell undivided interests
in the Receivables Pool to Purchasers. There shall be no Liquidation Day for
any Undivided Interest after it shall equal zero.
"Liquidation Period" means one or more contiguous Liquidation Days.
"Liquidations" means for any period, the Collections of a Seller for
such period.
"Lock-Box Agreement" means an agreement, in substantially the form of
Exhibit IE-1, executed by a Seller and a Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more lock-box
accounts for receiving Collections from Pool Receivables.
"Lock-Box Notice" means a notice to a Lock-Box Bank, in substantially
the form of Exhibit IE-2, executed by a Seller.
"Loss Reserve" has the meaning set forth in Section 2.04.
"Majority Purchasers" means Purchasers having aggregate Percentages in
excess of 67%.
"Month End Date" has the meaning set forth in Section 3.04.
"Net Charge-Off Ratio" means the percentage that (x) the aggregate net
charge-offs and net write-offs of Pool Receivables recognized during any month
was of (y) Liquidations of Pool Receivables during such month.
"Net Pool Balance" has the meaning set forth in Section 2.07.
"Obligor" means a Person obligated to make payments pursuant to a
Receivable.
"Outstanding Investment" has the meaning set forth in Section 2.03.
"Participation Amounts" with respect to any Undivided Interest at any
time means the sum of Purchasers' Investments and the Loss Reserve with respect
to such Undivided Interest at such time.
"Participation Amounts Limit" has the meaning set forth in Section
1.03(b).
I-11
"Percentage" with respect to any Purchaser, means the percentage set
forth for such Purchaser on the signature page hereto, as it may be adjusted
from time to time pursuant to an Assignment.
"Periodic Report" means a report, in substantially the form of Exhibit
IF, furnished by Servicer to the Agent for each Purchaser pursuant to Section
3.05.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"PNC Bank" has the meaning set forth in the preamble.
"Pool Losses to Liquidations Ratio" means the percentage that (x) the
aggregate Unpaid Balances of all Defaulted Receivables recognized during the
month ending on the most recent Month End Date was of (y) Liquidations of Pool
Receivables during such period.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Purchase" means a purchase by Purchasers of an Undivided Interest
from Sellers pursuant to Article II; it being understood, that a Reinvestment
is not a "Purchase".
"Purchase Limit" has the meaning set forth in Section 1.03(a).
"Purchase Termination Event" means any failure to satisfy the
condition set forth in Section 5.02.
"Purchaser" has the meaning set forth in the preamble.
"Purchasers' Investments" has the meaning set forth in Section 2.03.
"Purchasers' Share" has the meaning set forth in Section 2.08.
"Receivable" means any right to payment from an obligor, whether
constituting an account, chattel paper, instrument or general intangible,
arising from the sale of products by a Seller in the ordinary course of its
business, and includes the right to payment of any interest or finance charges
and other obligations of such obligor with respect thereto.
I-12
"Receivables Pool" means at any time all then outstanding Receivables
which (i) were generated by a Seller in the ordinary course of business, and
(ii) as to which the Obligors thereunder are Designated Obligors. If, with
respect to any Undivided Interest, a Receivable is a Pool Receivable on the day
immediately preceding the Termination Date for such Undivided Interest, such
Receivable shall continue to be considered a Pool Receivable with respect to
such Undivided Interest at all times thereafter.
"Recourse Amount" has the meaning set forth in Section 3.04.
"Recourse Percentage" means the greatest of (i) 16%, (ii) the Net
Charge-Off Ratio (rounded upwards to the nearest 1/10 of 1%) multiplied by 4
plus 11% and (iii) the Delinquency Ratio (rounded upwards to the nearest 1/10
of 1%) multiplied by 1.2.
"Recourse Unpaid Balances" has the meaning set forth in Section 3.04.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Affected Party of (A) any court, government authority charged with the
interpretation or administration of any law referred to in clause
(a)(i) or of (B) any fiscal, monetary or other authority having
jurisdiction over such Affected Party; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Affected Party and affecting
the application to such Affected Party of any law, regulation,
interpretation, directive, requirement or request referred to in
clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request or
accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii) above.
"Reinvestment" means the purchase of additional undivided interests
that are added to a related Undivided Interest with
I-13
proceeds of Collections that initially were applied to reduce such Undivided
Interest pursuant to Section 3.01.
"Related Security" means, with respect to any Pool Receivable: (i)
all of any Seller's right, title and interest in and to all security agreements
or other agreements that relate to such Pool Receivable; (ii) all of any
Seller's interest in the merchandise (including returned merchandise), if any,
relating to the sale which gave rise to such Pool Receivable; (iii) all other
security interests or liens and property subject thereto from time to time
purporting to secure payment of such Pool Receivable, whether pursuant to the
Contract related to such Pool Receivable or otherwise; (iv) all UCC financing
statements covering any collateral securing payment of such Pool Receivable;
and (v) all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the Contract related to such Pool Receivable or
otherwise. The interest of the Purchasers' in any Related Security is only to
the extent of the Purchasers' Undivided Interest, as more fully described in
the definition of an Undivided Interest.
"Remaining Collections" has the meaning set forth in Section
3.01(a)(ii).
"Reporting Date" has the meaning set forth in Section 3.05.
"Repurchase Termination Date" for any Undivided Interest means that
Business Day which Sellers' Representative designates, or, if any of the
Conditions Precedent in Section 5.02 are not satisfied (other than the absence
of an Unmatured Termination Event), such Business Day which the Agent
designates, as the Repurchase Termination Date for such Undivided Interest by
notice to the Agent (if Sellers' Representative so designates) or to Seller's
Representative (if the Agent so designates) at least one Business Day prior to
such Business Day.
"Scheduled Commitment Termination Date" has the meaning set forth in
Section 1.02.
"Seller" and "Sellers" have the meanings set forth in the preamble.
"Sellers' Representative" has the meaning set forth in the preamble.
"Servicer" means at any time the Person then authorized pursuant to
Article VIII to service, administer and collect Pool Receivables.
I-14
"Servicer Transfer Event" has the meaning set forth in Section 8.01(a).
"Servicer's Fee" has the meaning set forth in Section 2.07.
"Settlement" means the payments and other actions provided for on the
last day of each Settlement Period.
"Settlement Date" means the last day of each Yield Period.
"Settlement Period" for any Undivided Interest means each period
commencing on the first day of each Yield Period for such Undivided Interest
and ending on the last day of such Yield Period, and, on and after the
Termination Date for such Undivided Interest, such period (including, without
limitation, a daily period) as shall be selected from time to time by the Agent
or, in absence of any such selection, each period of thirty days from the last
day of the immediately preceding Settlement Period; provided, however, that
with respect to any Yield Period of one day as described in clause (ii) of the
proviso clause of the definition of "Yield Period", the related Settlement
Period shall be the first day following such Yield Period.
"Shareholders' Equity" means, at any date of determination, all
amounts which would be included under shareholders' equity on a consolidated
balance sheet of API and its Subsidiaries or APSA and its Subsidiaries, as the
case may be.
"Special Concentration Limit" has the meaning set forth in the
definition of "Net Pool Balance" in Section 2.07.
"Subsidiary" means a corporation of which any Seller and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Successor Notice" has the meaning set forth in Section 8.01(a).
"Suretyship Liability" means any agreement, undertaking or other
contractual arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to or
otherwise to invest in a debtor, or otherwise to assure a creditor against
loss) any indebtedness, obligation or other liability (including accounts
payable) of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Suretyship Liability shall (subject to any limitation set
I-15
forth therein) be deemed to be the principal amount of the indebtedness,
obligation or other liability guaranteed thereby.
"Termination Date" for any Undivided Interest means the earlier of (i)
the Repurchase Termination Date for such Undivided Interest and (ii) the
Commitment Termination Date.
"Termination Event" has the meaning set forth in Section 9.01.
"Total Capital" at any date of determination means the sum of
(a) Funded Debt,
plus
(b) all federal, state, local and foreign income taxes carried as
deferred income taxes in accordance with GAAP on the consolidated balance sheet
of API and its Subsidiaries,
plus
(c) Shareholders' Equity of the Company and its Subsidiaries.
"Total Investment" has the meaning set forth in Section 2.03.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Undivided Interest" has the meaning set forth in Section 2.01.
"Unmatured Termination Event" means any event which, with the giving
of notice or lapse of time, or both, would become a Termination Event.
"Unpaid Balance" of any Receivable means at any time the unpaid amount
thereof (but excluding all late payment charges, delinquency charges, and
extension or collection fees to the extent such charges or fees, if collected,
would not be Collections).
"WLI" has the meaning set forth in the preamble.
"Yield Period" means with respect to any Undivided Interest (or
portion thereof) (i) prior to the Termination Date, the period, commencing on
the date of the initial Purchase of such Undivided Interest or on the prior
Settlement Date, as the case
I-16
may be, of one, two or three months, as designated by the notice by Sellers'
Representative received by the Agent (including notice by telephone, confirmed
in writing) not later than 12:00 noon (Pittsburgh time) two Business Days prior
to such date of Purchase or Settlement Date, except that if the Agent shall not
have received such notice prior to such day, such period shall be one month;
and (ii) after the Termination Date, such number of days as the Agent shall
select; provided, however, that (I) any such Yield Period which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day (unless the related Undivided Interest shall be
accruing Earned Discount at a rate determined by reference to the Eurodollar
Rate (Reserve Adjusted), in which case if such succeeding Business Day is in a
different calendar month, such Yield Period shall instead be shortened to the
next preceding Business Day); (II) in the case of Yield Periods of one day for
any Undivided Interest, (A) the initial Yield Period shall be the day of the
related Purchase; (B) any subsequently occurring Yield Period which is one day
shall, if the immediately preceding Yield Period is more than one day, be the
last day of such immediately preceding Yield Period, and if the immediately
preceding Yield Period is one day, be the day next following such immediately
preceding Yield Period; and (C) any Yield Period of one day which occurs on a
day immediately preceding a day which is not a Business Day shall be extended
to the next succeeding Business Day; and (III) in the case of any Yield Period
for any Undivided Interest which commences before the Termination Date for such
Undivided Interest and would otherwise end on a date occurring after such
Termination Date, such Yield Period shall end on such Termination Date and the
duration of each such Yield Period which commences on or after the Termination
Date for such Undivided Interest shall be of such duration as shall be selected
by the Agent. The "related" Yield Period for any Undivided Interest at any
time means the Yield Period pursuant to which Earned Discount is then accruing
for such Undivided Interest.
1.2. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of Illinois,
and not specifically defined herein, are used herein as defined in such Article
9.
1.3. 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" and the words
"to" and "until" each means "to but excluding".
I-17