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RECEIVABLES SALE AGREEMENT
DATED AS OF MAY 30, 2001
among
ACTUANT CORPORATION, DEL CITY WIRE CO., INC., GB TOOLS AND
SUPPLIES, INC., VERSA TECHNOLOGIES, INC. AND
ENGINEERED SOLUTIONS, L.P.,
As Originators,
and
ACTUANT RECEIVABLES CORPORATION,
As Buyer
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TABLE OF CONTENTS
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PAGE
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ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE............................. 2
Section 1.1 Initial Contribution of Receivables........................ 2
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Section 1.2 Purchase of Receivables.................................... 2
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Section 1.3 Payment for the Purchases.................................. 3
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Section 1.4 Purchase Price Credit Adjustments.......................... 5
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Section 1.5 Payments and Computations, Etc............................. 6
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Section 1.6 License of Software........................................ 6
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Section 1.7 Characterization........................................... 6
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ARTICLE II REPRESENTATIONS AND WARRANTIES............................... 7
Section 2.1 Representations and Warranties of Originators.............. 7
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(a) Organization; Powers........................................... 7
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(b) Authorization.................................................. 7
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(c) No Conflict.................................................... 8
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(d) Governmental Approvals......................................... 8
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(e) Litigation..................................................... 8
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(f) Enforceability................................................. 8
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(g) Accuracy of Information........................................ 8
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(h) Use of Proceeds................................................ 9
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(i) Good Title..................................................... 9
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(j) Perfection..................................................... 9
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(k) Places of Business and Locations of Records.................... 9
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(l) Collections.................................................... 10
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(m) Material Adverse Effect........................................ 10
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(n) Names.......................................................... 10
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(o) Ownership of Buyer............................................. 10
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(p) Not a Holding Company or an Investment Company................. 10
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(q) Compliance with Law............................................ 10
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(r) Compliance with Credit and Collection Policy................... 10
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(s) Payments to such Originator.................................... 11
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(t) Enforceability of Contracts.................................... 11
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(u) Eligible Receivables........................................... 11
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(v) Accounting..................................................... 11
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ARTICLE III CONDITIONS OF PURCHASE...................................... 11
Section 3.1 Conditions Precedent to Purchase........................... 11
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i
Section 3.2 Conditions Precedent to Subsequent Payments............... 11
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ARTICLE IV COVENANTS....................................................... 12
Section 4.1 Affirmative Covenants of Originators...................... 12
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(a) Financial Reporting........................................... 12
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(i) Annual Reporting............................................ 12
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(ii) Quarterly Reporting......................................... 12
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(iii) Compliance Certificate...................................... 13
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(iv) Shareholders Statements and Reports......................... 13
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(v) S.E.C. Filings.............................................. 13
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(vi) Copies of Notices........................................... 13
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(vii) Change in Credit and Collection Policy...................... 13
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(viii) Other Information......................................... 13
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(b) Notices....................................................... 13
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(i) Termination Events or Unmatured Termination Events.......... 14
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(ii) Material Adverse Effect..................................... 14
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(iii) Defaults Under Other Agreements............................. 14
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(iv) ERISA Events................................................ 14
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(v) Downgrade of Parent......................................... 14
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(c) Compliance with Laws and Preservation of Existence............ 14
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(d) Audits........................................................ 14
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(e) Keeping and Marking of Records and Books...................... 15
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(f) Compliance with Contracts and Credit and Collection Policy.... 15
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(g) Ownership..................................................... 15
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(h) Purchasers' Reliance.......................................... 15
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(i) Collections................................................... 16
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(j) Taxes......................................................... 16
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Section 4.2 Negative Covenants of Originators......................... 17
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(a) Name Change, Offices and Records.............................. 17
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(b) Change in Payment Instructions to Obligors.................... 17
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(c) Modifications to Contracts and Credit and Collection Policy... 17
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(d) Sales, Liens.................................................. 17
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(e) Accounting for Purchase....................................... 18
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ARTICLE V TERMINATION EVENTS............................................... 18
Section 5.1 Termination Events........................................ 18
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Section 5.2 Remedies.................................................. 19
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ARTICLE VI INDEMNIFICATION................................................. 19
Section 6.1 Indemnities by Originators................................ 19
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Section 6.2 Other Costs and Expenses.................................. 22
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ARTICLE VII MISCELLANEOUS............................................... 22
Section 7.1 Waivers and Amendments..................................... 22
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Section 7.2 Notices.................................................... 22
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Section 7.3 Protection of Ownership Interests of Buyer................. 22
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Section 7.4 Confidentiality............................................ 23
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Section 7.5 Bankruptcy Petition........................................ 24
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Section 7.6 Limitation of Liability.................................... 24
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Section 7.7 CHOICE OF LAW.............................................. 24
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Section 7.8 CONSENT TO JURISDICTION.................................... 24
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Section 7.9 WAIVER OF JURY TRIAL....................................... 25
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Section 7.10 Integration; Binding Effect; Survival of Terms............. 25
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Section 7.11 Counterparts; Severability; Section References............. 26
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Exhibits and Schedules
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Exhibit I - Definitions
Exhibit II - Chief Executive Offices; Locations of Records; Federal
Employer Identification Numbers; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Copy of Credit and Collection Policy of each Originator
Exhibit VI - Form of Subordinated Note
Exhibit VII Form of Purchase Report
Schedule 2.1(e) Litigation
Schedule A Documents to Be Delivered to Buyer Prior to the Initial
Purchase
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of May 30, 2001, is by and
among Actuant Corporation, a Wisconsin corporation ("Parent"), Del City Wire
Co., Inc., an Oklahoma corporation, GB Tools and Supplies, Inc., a Wisconsin
corporation, Versa Technologies, Inc., a Delaware corporation, and Engineered
Solutions, L.P., an Indiana limited partnership (each of the foregoing, an
"Originator" and collectively, the "Originators"), and Actuant Receivables
Corporation, a Nevada corporation ("Buyer"). Unless defined elsewhere herein,
capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the
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meaning assigned to such term in Exhibit I to the Purchase Agreement).
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter will
own, Receivables. Each of the Originators wishes to sell and assign to
Buyer, and Buyer wishes to purchase from each Originator, all of such
Originator's right, title and interest in and to its Receivables, together
with the Related Security and Collections with respect thereto.
Each of the Originators and Buyer intend the transactions contemplated
hereby to be true sales to Buyer by such Originator of the Receivables
originated by it, providing Buyer with the full benefits of ownership of
such Receivables, and none of the Originators nor Buyer intends these
transactions to be, or for any purpose to be characterized as, loans from
Buyer to such Originator.
Following the purchase of Receivables from each Originator, Buyer will
sell undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Receivables Purchase Agreement dated
as of May 30, 2001 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Purchase Agreement")
among Buyer, Parent, as initial Servicer, Blue Ridge Asset Funding
Corporation ("Blue Ridge"), and Wachovia Bank, N.A. or any successor agent
appointed pursuant to the terms of the Purchase Agreement, as agent (in
such capacity, the "Agent").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Initial Contribution of Receivables. On the date
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hereof, Parent does hereby contribute, assign, transfer, set-over and otherwise
convey to Buyer, and Buyer does hereby accept from Parent, in exchange for 100
shares of Buyer's common stock, Receivables originated by Parent and existing as
of the close of business on the Business Day immediately prior to the date
hereof (the "Initial Cutoff Date") having an aggregate Outstanding Balance of
$3,372,244 (the "Initial Contributed Receivables"), together with all Related
Security relating thereto and all Collections thereof.
Section 1.2 Purchase of Receivables.
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(a) Effective on the date hereof, in consideration for the
Purchase Price paid to each Originator and upon the terms and subject
to the conditions set forth herein, each Originator does hereby sell,
assign, transfer, set-over and otherwise convey to Buyer, without
recourse (except to the extent expressly provided herein), and Buyer
does hereby purchase from such Originator, all of such Originator's
right, title and interest in and to all Receivables originated by such
Originator and existing as of the close of business on the Initial
Cutoff Date (other than the Initial Contributed Receivables) and all
Receivables thereafter originated by such Originator through and
including the Termination Date, together, in each case, with all
Related Security relating thereto and all Collections thereof. In
accordance with the preceding sentence, on the date hereof Buyer shall
acquire all of each Originator's right, title and interest in and to
all Receivables existing as of the Initial Cutoff Date (other than the
Initial Contributed Receivables) and thereafter arising through and
including the Termination Date, together with all Related Security
relating thereto and all Collections thereof. Buyer shall be obligated
to pay the Purchase Price for the Receivables purchased hereunder from
each Originator in accordance with Section 1.3.
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(b) On or before each Monthly Reporting Date, each
Originator shall (or shall require the Servicer to) deliver to Buyer a
report in substantially the form of Exhibit VII hereto (each such
report being herein called a "Purchase Report") with respect to the
Receivables sold by such Originator to Buyer during the Settlement
Period then most recently ended. In addition to, and not in limitation
of, the foregoing, in connection with the payment of the Purchase
Price for any Receivables purchased hereunder, Buyer may request that
the applicable Originator deliver, and such Originator shall deliver,
such approvals, opinions, information or documents as Buyer may
reasonably request.
(c) It is the intention of the parties hereto that each
Purchase of Receivables from an Originator made hereunder shall
constitute a sale, which sale
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is absolute and irrevocable and provides Buyer with the full benefits
of ownership of the Receivables originated by such Originator. Except
for the Purchase Price Credits owed to such Originator pursuant to
Section 1.4, the sale of Receivables hereunder by each Originator is
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made without recourse to such Originator; provided, however, that (i)
such Originator shall be liable to Buyer for all representations,
warranties, covenants and indemnities made by such Originator pursuant
to the terms of the Transaction Documents to which such Originator is
a party, and (ii) such sale does not constitute and is not intended to
result in an assumption by Buyer or any assignee thereof of any
obligation of such Originator or any other Person arising in
connection with the Receivables, the related Contracts and/or other
Related Security or any other obligations of such Originator. In view
of the intention of the parties hereto that each Purchase of
Receivables made hereunder shall constitute a sale of such Receivables
rather than loans secured thereby, each Originator agrees that it
will, on or prior to the date hereof and in accordance with Section
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4.1(e)(ii), mark its standard monthly accounts receivable aging
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reports regarding the Receivables originated by it with a legend
acceptable to Buyer and to the Agent (as Buyer's assignee), evidencing
that Buyer has purchased such Receivables as provided in this
Agreement and to note in its financial statements that its Receivables
have been sold to Buyer. Upon the request of Buyer or the Agent (as
Buyer's assignee), each Originator will execute and file such
financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to perfect and maintain the perfection of
Buyer's ownership interest in the Receivables originated by such
Originator and the Related Security and Collections with respect
thereto, or as Buyer or the Agent (as Buyer's assignee) may reasonably
request.
Section 1.3 Payment for the Purchases.
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(a) The Purchase Price for the Purchase from each
Originator of its Receivables in existence as of the close of business
on the Initial Cutoff Date (other than the Initial Contributed
Receivables) shall be payable in full by Buyer to such Originator on
the date hereof, and shall be paid to such Originator in the following
manner:
(i) by delivery of immediately available funds, to
the extent of funds made available to Buyer in connection with
its subsequent sale of an interest in such Receivables to the
Purchasers under the Purchase Agreement; provided that a
portion of such funds shall be offset by amounts owed by
Parent to Buyer on account of the issuance of equity having a
total value of not less than the Required Capital Amount, and
(ii) the balance, by delivery of the proceeds of a
subordinated revolving loan from such Originator to Buyer (a
"Subordinated Loan") in
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an amount not to exceed the least of (A) the remaining unpaid
portion of such Purchase Price, (B) the maximum Subordinated Loan
that could be borrowed without rendering Buyer's Net Worth less
than the Required Capital Amount, and (C) fifteen percent (15%)
of such Purchase Price. Each Originator is hereby authorized by
Buyer to endorse on the schedule attached to its Subordinated
Note an appropriate notation evidencing the date and amount of
each advance thereunder, as well as the date of each payment with
respect thereto, provided that the failure to make such notation
shall not affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer to the applicable Originator
or its designee on the date each such Receivable came into existence (except
that Buyer may, with respect to any such Purchase Price, offset against such
Purchase Price any amounts owed by such Originator to Buyer hereunder and which
have become due but remain unpaid) and shall be paid to such Originator in the
manner provided in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after
the Initial Cutoff Date, on each Settlement Date, Buyer shall pay the
applicable Originator the Purchase Price therefor in accordance with
Section 1.3(d) and in the following manner:
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first, by delivery to the applicable Originator or its designee
of immediately available funds, to the extent of funds available to Buyer
from its subsequent sale of an interest in all of the Receivables to the
Agent for the benefit of the Purchasers under the Purchase Agreement or
other cash on hand;
second, by delivery to the applicable Originator or its designee
of the proceeds of a Subordinated Loan, provided that the making of any
such Subordinated Loan shall be subject to the provisions set forth in
Section 1.3(a)(ii); and
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third, solely in the case of Receivables originated by Parent,
unless the Termination Date has occurred in accordance with this Agreement,
by accepting a contribution to its capital in an amount equal to the
remaining unpaid balance of such Purchase Price.
Subject to the limitations set forth in Section 1.3(a)(ii), each Originator
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irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Termination Date. The Subordinated Loans owing to each Originator
shall be evidenced by, and shall be payable in accordance with the terms and
provisions of its Subordinated Note and shall be payable solely from funds which
Buyer is not required under the Purchase Agreement to set aside for the benefit
of, or otherwise pay over to, the Purchasers.
(c) From and after the Termination Date, (i) no Originator shall
be obligated to (but may, at its option) sell Receivables to Buyer, or
(ii) Parent shall
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not be obligated to (but may, at its option) contribute Receivables to
Buyer's capital pursuant to clause third of Section 1.3(b).
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(d) Although the Purchase Price for each Receivable coming
into existence after the Initial Cutoff Date shall be due and payable
in full by Buyer to the applicable Originator on the date such
Receivable came into existence, settlement of the Purchase Price
between Buyer and such Originator shall be effected on a monthly basis
on Settlement Dates with respect to all Receivables originated by such
Originator during the same Calculation Period and based on the
information contained in the Purchase Report delivered by such
Originator for the Calculation Period then most recently ended.
Although settlement shall be effected on Settlement Dates, increases
or decreases in the amount owing under the Subordinated Note made
pursuant to Section 1.3 and any contribution of capital by Parent to
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Buyer made pursuant to Section 1.3(b) shall be deemed to have occurred
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and shall be effective as of the last Business Day of the Calculation
Period to which such settlement relates.
Section 1.4 Purchase Price Credit Adjustments. If on any day:
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(a) the Outstanding Balance of a Receivable purchased from
any Originator is:
(i) reduced as a result of any defective or rejected
or returned goods or services, any discount or any adjustment or
otherwise by such Originator (other than as a result of such
Receivable becoming a Defaulted Receivable or to reflect cash
Collections on account of such Receivable),
(ii) reduced or canceled as a result of a setoff in
respect of any claim by any Person (whether such claim arises out
of the same or a related transaction or an unrelated
transaction), or
(b) any of the representations and warranties set forth in
Sections 2.1(h), (i), (j), (l), (r), (s), (t), (u), the second
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sentence of Section 2.1(q) hereof and the last clause (relating to
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bulk sales laws) of Section 2.1(c) are not true when made or deemed
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made with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "Purchase
Price Credit") against the Purchase Price otherwise payable to the applicable
Originator hereunder equal to the Outstanding Balance of such Receivable
(calculated before giving effect to the applicable reduction or cancellation).
If such Purchase Price Credit exceeds the Original Balance of the Receivables
originated by the applicable Originator on any day, such Originator shall pay
the remaining amount of such Purchase Price Credit in cash immediately, provided
that if the Termination Date has not occurred, such Originator shall be allowed
to deduct the remaining amount of such Purchase Price Credit from any
indebtedness owed to it under its Subordinated Note.
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Section 1.5 Payments and Computations, Etc. All amounts to be paid
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or deposited by Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the
account of the applicable Originator designated from time to time by such
Originator or as otherwise directed by such Originator. In the event that any
payment owed by any Person hereunder becomes due on a day that is not a Business
Day, then such payment shall be made on the next succeeding Business Day. If any
Person fails to pay any amount hereunder when due, such Person agrees to pay, on
demand, the Default Fee in respect thereof until paid in full; provided,
however, that such Default Fee shall not at any time exceed the maximum rate
permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
Section 1.6 License of Software.
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(a) To the extent that any software used by any Originator to
account for the Receivables originated by it is non-transferable, such
Originator hereby grants to each of Buyer, the Agent and the Servicer
an irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all such software used by such Originator to
account for such Receivables, to the extent necessary to administer
such Receivables, whether such software is owned by such Originator or
is owned by others and used by such Originator under license
agreements with respect thereto, provided that should the consent of
any licensor of such software be required for the grant of the license
described herein, to be effective, such Originator hereby agrees that
upon the request of Buyer (or Buyer's assignee), such Originator will
use its reasonable efforts to obtain the consent of such third-party
licensor. The license granted hereby shall be irrevocable until the
later to occur of (i) indefeasible payment in full of the Aggregate
Unpaids (as defined in the Purchase Agreement), and (ii) the date each
of this Agreement and the Purchase Agreement terminates in accordance
with its terms.
(b) Each Originator (i) shall take such action requested by
Buyer and/or the Agent (as Buyer's assignee), from time to time
hereafter, that may be necessary or appropriate to ensure that Buyer
and its assigns under the Purchase Agreement have an enforceable
ownership interest in the Records relating to the Receivables
purchased from such Originator hereunder, and (ii) shall use its
reasonable efforts to ensure that Buyer, the Agent and the Servicer
each has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for
such Receivables and/or to recreate such Records.
Section 1.7 Characterization. If, notwithstanding the intention of
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the parties expressed in Section 1.2(c), any sale or contribution by an
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Originator to Buyer of Receivables hereunder shall be characterized as a secured
loan and not a sale or such sale shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
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agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties' intention that the sale of Receivables by
each Originator hereunder shall constitute a true sale thereof, such Originator
hereby grants to Buyer a duly perfected security interest in all of such
Originator's right, title and interest in, to and under all Receivables of such
Originator which are now existing or hereafter arising, all Collections and
Related Security with respect thereto, all other rights and payments relating to
such Receivables and all proceeds of the foregoing to secure the prompt and
complete payment of a loan deemed to have been made in an amount equal to the
Purchase Price of the Receivables purchased from such Originator together with
all other obligations of such Originator hereunder, which security interest
shall be prior to all other Adverse Claims thereto. Buyer and its assigns shall
have, in addition to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other applicable law, which rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originators. Each
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Originator hereby represents and warrants to Buyer on the date hereof, on the
date of the Purchase from such Originator hereunder and on each date that any
Receivable is originated by such Originator on or after the date of such
Purchase, that:
(a) Organization; Powers. Such Originator (a) is duly
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organized, validly existing and in good standing or active status under the laws
of the jurisdiction of its organization, (b) has all requisite power and
authority to own its Property and to carry on its business as now conducted and
as proposed to be conducted, (c) is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify could not reasonably be expected to result in a
Material Adverse Effect, and (d) has the power and authority to execute, deliver
and perform its obligations under each of the Transaction Documents and each
other agreement or instrument contemplated hereby to which it is or will be a
party.
(b) Authorization. The execution, delivery and performance by
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such Originator of each of the Transaction Documents to which it is a party (a)
have been duly authorized by all requisite corporate or partnership and, if
required, stockholder or partner action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or of the Organizational
Documents of such Originator, (B) any order of any Governmental Authority or (C)
any provision of any indenture, agreement or other instrument to which such
Originator is a party or by which any of them or any of their Property is or may
be bound, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under, or give rise to any
right to accelerate or to require the prepayment, repurchase or redemption of
any obligation under any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Adverse Claim upon or with respect
to any
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Property now owned or hereafter acquired by such Originator (other than any
Adverse Claim created hereunder or under the other Transaction Documents).
(c) No Conflict. The execution and delivery by such Originator of
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this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Originator or its Subsidiaries (except as
created hereunder) except, in any case, where such contravention or violation
could not reasonably be expected to have a Material Adverse Effect; and no
transaction contemplated hereby requires compliance with any bulk sales act or
similar law.
(d) Governmental Approvals. Other than the filing of the
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financing statements required hereunder, no action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the transactions contemplated hereby.
(e) Litigation. Except as set forth on Schedule 2.1(e), there
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are not any actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending or, to the knowledge of such Originator,
threatened against or affecting such Originator or any of its Subsidiaries or
any business, Property or rights of any such Person (i) that involve any
Transaction Document or the transactions contemplated thereby or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect
(f) Enforceability. This Agreement has been duly executed and
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delivered by such Originator and constitutes, and each other Transaction
Document to which such Originator is a party when executed and delivered by the
such Originator will constitute, a legal, valid and binding obligation of such
Originator enforceable against such Originator in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(g) Accuracy of Information. No information, report, financial
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statement, exhibit or schedule furnished by or on behalf of such Originator to
the Buyer or the Agent in connection with the negotiation of any Transaction
Document or included therein or delivered pursuant thereto contained, contains
or will contain any material misstatement of fact or omitted, omits or will omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
misleading as of
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the date such information is dated or certified; provided that to the extent any
such information, report, financial statement, exhibit or schedule was based
upon or constitutes a forecast or projection, such Originator represents only
that it acted in good faith and utilized reasonable assumptions and due care in
the preparation of such information, report, financial statement, exhibit or
schedule.
(h) Use of Proceeds. No portion of any Purchase Price payment
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hereunder will be used for a purpose that violates, or would be inconsistent
with, any law, rule or regulation applicable to such Originator including,
without limitation, Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(i) Good Title. Immediately prior to the Purchase from such
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Originator hereunder and upon the creation of each Receivable originated by such
Originator after the Initial Cut-Off Date, such Originator (i) is the legal and
beneficial owner of such Receivables and (ii) is the legal and beneficial owner
of the Related Security with respect thereto or possesses a valid and perfected
security interest therein, in each case, free and clear of any Adverse Claim,
except as created by the Transaction Documents. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect such
Originator's ownership interest in each such Receivable, its Collections and the
Related Security.
(j) Perfection. This Agreement, together with the filing of the
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financing statements contemplated hereby, is effective to transfer to Buyer (and
Buyer shall acquire from such Originator) (i) legal and equitable title to, with
the right to sell and encumber each Receivable originated by such Originator,
whether now existing and hereafter arising, together with the Collections with
respect thereto, and (ii) all of such Originator's right, title and interest in
the Related Security associated with each such Receivable, in each case, free
and clear of any Adverse Claim, except as created by the Transactions Documents.
There have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Buyer's ownership interest in such Receivables, the
Related Security and the Collections. Originator's jurisdiction of organization
is a jurisdiction whose law generally requires information concerning the
existence of a nonpossessory security interest to be made generally available in
a filing, record or registration system as a condition or result of such a
security interest's obtaining priority over the rights of a lien creditor which
respect to collateral.
(k) Places of Business and Locations of Records. The chief
-------------------------------------------
executive office of such Originator and the offices where it keeps all of its
Records are located at the address(es) listed on Exhibit II or such other
----------
locations of which Buyer has been notified in accordance with Section 4.2(a) in
--------------
jurisdictions where all action required by Section 4.2(a) has been taken and
--------------
completed. Such Originator's Federal Employer Identification Number is correctly
set forth on Exhibit II.
----------
9
(l) Collections. The conditions and requirements set forth in
-----------
Section 4.1(j) have at all times been satisfied and duly performed. The names
- --------------
and addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of such Originator at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. Such Originator
-----------
has not granted any Person, other than Buyer (and its assigns) dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and
control of any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) Material Adverse Effect. Since August 31, 2000, no event has
-----------------------
occurred that would have a Material Adverse Effect.
(n) Names. The name in which such Originator has executed this
-----
Agreement is identical to the name of such Originator as indicated on the public
record of its state of organization which shows such Originator to have been
organized. In the past five (5) years, such Originator has not used any
corporate or partnership names, trade names or assumed names other than the name
in which it has executed this Agreement and as listed on Exhibit II.
-----------
(o) Ownership of Buyer. Parent owns, directly or indirectly,
------------------
100% of the issued and outstanding equity interests of Buyer. Such equity
interests are validly issued, fully paid and nonassessable, and there are no
options, warrants or other rights to acquire securities of Buyer.
(p) Not a Holding Company or an Investment Company. Such
----------------------------------------------
Originator is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Originator is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(q) Compliance with Law. Such Originator has complied in all
-------------------
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such
--------------------------------------------
Originator has complied in all material respects with its Credit and Collection
Policy with regard to each Receivable originated by it and the related Contract,
and has not made any material change to such Credit and Collection Policy,
except such material change as to which Buyer (or its assigns) has been notified
in accordance with Section 4.1(a)(vii).
-------------------
10
(s) Payments to such Originator. With respect to each Receivable
---------------------------
originated by such Originator and sold to Buyer hereunder, the Purchase Price
received by such Originator constitutes reasonably equivalent value in
consideration therefor. No transfer hereunder by such Originator of any
Receivable originated by such Originator is or may be voidable under any section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. (S)(S) 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to each
---------------------------
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable reflected in any Purchase
--------------------
Report as an Eligible Receivable was an Eligible Receivable on the date of its
acquisition by Buyer hereunder.
(v) Accounting. The manner in which such Originator accounts for the
----------
transactions contemplated by this Agreement in its financial statements does not
jeopardize the characterization of the transactions contemplated herein as being
true sales.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchases under this
--------------------------------
Agreement is subject to the conditions precedent that (a) Buyer shall have been
capitalized with the Initial Contributed Receivables, (b) Buyer shall have
received on or before the date of such purchase those documents listed on
Schedule A and (c) all of the conditions to the initial purchase under the
- ----------
Purchase Agreement shall have been satisfied or waived in accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Buyer's
-------------------------------------------
obligation to pay for Receivables coming into existence after the Initial Cutoff
Date shall be subject to the further conditions precedent that: (a) the Facility
Termination Date shall not have occurred under the Purchase Agreement; (b) Buyer
(or its assigns) shall have received such other approvals, opinions or documents
as it may reasonably request and (c) on the date such Receivable came into
existence, the following statements shall be true (and acceptance of the
proceeds of any payment for such Receivable shall be deemed a representation and
warranty by such Originator that such statements are then true):
(i) the representations and warranties set forth in Article
-------
II are true and correct on and as of the date such Receivable came
--
into existence as though made on and as of such date; and
11
(ii) no event has occurred and is continuing that will
constitute a Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by offset of capital contributions), title to such Receivable and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to pay for such
Receivable were in fact satisfied. The failure of such Originator to satisfy
any of the foregoing conditions precedent, however, shall give rise to a right
of Buyer to rescind the related purchase and direct such Originator to pay to
Buyer an amount equal to the Purchase Price payment that shall have been made
with respect to any Receivables related thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originators. Until the date on
------------------------------------
which this Agreement terminates in accordance with its terms, each Originator
hereby covenants as set forth below:
(a) Financial Reporting. Such Originator will maintain, for
-------------------
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 90 days after the end of
----------------
each fiscal year of Parent, Parent's consolidated balance sheet and related
statements of income and cash flows showing the financial condition of Parent
and its consolidated Subsidiaries as of the close of such fiscal year and the
results of their operations during such year, all in reasonable detail and
audited by PricewaterhouseCoopers LLP or other independent public accountants of
recognized national standing and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present in all material respects the
financial condition and results of operations of Parent and its Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, setting forth
in each case in comparative form the corresponding statements for the preceding
fiscal year;
(ii) Quarterly Reporting. Within 45 days after the end
-------------------
of each of the first three fiscal quarters of each fiscal year of Parent,
Parent's consolidated balance sheet and related statements of income and cash
flows showing the financial condition of Parent and its consolidated
Subsidiaries as of the close of such fiscal quarter and the results of their
operations during such fiscal quarter and the then elapsed portion of the fiscal
year, all in reasonable detail and certified by one of its Financial Officers as
fairly presenting in all material respects the financial condition and results
of operations of Parent and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
12
audit adjustments, setting forth in each case in comparative form the
corresponding statements for the corresponding period in the preceding fiscal
year;
(iii) Compliance Certificate. Together with the financial
----------------------
statements required hereunder, a compliance certificate in substantially the
form of Exhibit IV signed by one of such Originator's Financial Officers and
----------
dated the date of such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
-----------------------------------
furnishing thereof to the shareholders of such Originator, copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. Filings. Promptly after the same become publicly
--------------
available, copies of all periodic and other reports, proxy statements and other
materials filed by Parent or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor), as the case may be.
(vi) Copies of Notices. Promptly upon its receipt of any
-----------------
notice, request for consent, financial statements, certification, report or
other communication under or in connection with any Transaction Document from
any Person other than Buyer, the Agent or Blue Ridge, copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty
--------------------------------------
(30) days prior to the effectiveness of any material change in or material
amendment to such Originator's Credit and Collection Policy, a copy of its
Credit and Collection Policy then in effect and a notice (A) indicating such
proposed change or amendment ,and (B) if such proposed change or amendment would
be reasonably likely to adversely affect the collectibility of the Receivables
or decrease the credit quality of any newly created Receivables, requesting
Buyer's (and the Agent's, as Buyer's assignee) consent thereto.
(viii) Other Information. Promptly, from time to time, such
-----------------
other information, documents, records or reports relating to the Receivables
originated by such Originator or the condition or operations, financial or
otherwise, of such Originator as Buyer (or its assigns) may from time to time
reasonably request in order to protect the interests of Buyer (and its assigns)
under or as contemplated by this Agreement.
(b) Notices. Such Originator will notify Buyer (or its assigns) in
-------
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
13
(i) Termination Events or Unmatured Termination Events. The
--------------------------------------------------
occurrence of each Termination Event and each Unmatured Termination Event, by a
statement of a Financial Officer of such Originator.
(ii) Material Adverse Effect. The occurrence of any event or
-----------------------
condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iii) Defaults Under Other Agreements. The occurrence of an
-------------------------------
event of default (as to which any notice period or cure period has expired
without cure) under any other financing arrangement involving a line of credit
or Indebtedness, in each case, of $1 million or more pursuant to which any
Originator is a debtor or an obligor.
(iv) ERISA Events. The occurrence of any ERISA Event.
------------
(v) Downgrade of Parent. Any downgrade in the rating of any
-------------------
Indebtedness of Parent by S&P or by Moody's, setting forth the Indebtedness
affected and the nature of such change.
(c) Compliance with Laws and Preservation of Existence. Such
--------------------------------------------------
Originator will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Originator will preserve and
maintain its legal existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so qualify or remain in good standing
could not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Originator will furnish to Buyer (or its assigns)
------
from time to time such information with respect to it and the Receivables sold
by it as Buyer (or its assigns) may reasonably request. Such Originator will,
from time to time during regular business hours as requested by Buyer (or its
assigns), upon reasonable notice and at the sole cost of such Originator, permit
Buyer (or its assigns) or their respective agents or representatives, (i) to
examine and make copies of and abstracts from all Records in the possession or
under the control of such Originator relating to the Receivables and the Related
Security, including, without limitation, the related Contracts, and (ii) to
visit the offices and properties of such Originator for the purpose of examining
such materials described in clause (i) above, and to discuss matters relating to
such Originator's financial condition or the Receivables and the Related
Security or such Originator's performance under any of the Transaction Documents
or such Originator's performance under the Contracts and, in each case, with any
of the officers or employees of such Originator having knowledge of such matters
(each of the foregoing examinations and visits, a "Review"); provided, however,
that, so long as no Amortization Event (under and as defined in the Purchase
Agreement) has occurred and is continuing: (A) the Originators, collectively,
shall only be responsible for the reasonable costs and expenses of one (1)
Review in any one calendar year, and (B) the Agent (as Buyer's assignee) will
not request more than four (4) Reviews in any one calendar year.
14
(e) Keeping and Marking of Records and Books.
----------------------------------------
(i) Such Originator will maintain and implement
administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables
in the event of the destruction of the originals thereof), and
keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection
of all Receivables (including, without limitation, records
adequate to permit the immediate identification of each new
Receivable and all Collections of and adjustments to each
existing Receivable). Such Originator will give Buyer (or its
assigns) notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(ii) Such Originator will (A) mark its standard monthly
accounts receivable aging reports regarding the Receivables
originated by it with a legend, acceptable to Buyer (or its
assigns), describing Buyer's ownership interests in the
Receivables and (B) upon the request of Buyer (or its assigns)
following the occurrence of a Termination Event: (x) mark each
Contract with a legend describing Buyer's ownership interests in
the Receivables originated by such Originator and further
describing the Receivable Interests of the Agent (on behalf of
the Purchasers) and (y) deliver to Buyer (or its assigns) all
Contracts (including, without limitation, all multiple originals
of any such Contract) relating to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
----------------------------------------------------------
Such Originator will timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables originated by it, and (ii) comply in all
respects with its Credit and Collection Policy in regard to each such Receivable
and the related Contract.
(g) Ownership. Such Originator will take all necessary action
---------
to establish and maintain, irrevocably in Buyer, (A) legal and equitable title
to the Receivables originated by such Originator and the Collections and (B) all
of such Originator's right, title and interest in the Related Security
associated with the Receivables originated by such Originator, in each case,
free and clear of any Adverse Claims other than Adverse Claims in favor of Buyer
(and its assigns) (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Buyer's interest
in such Receivables, Related Security and Collections and such other action to
perfect, protect or more fully evidence the interest of Buyer as Buyer (or its
assigns) may reasonably request).
(h) Purchasers' Reliance. Such Originator acknowledges that the
--------------------
Agent and the Purchasers are entering into the transactions contemplated by the
Purchase
15
Agreement in reliance upon Buyer's identity as a legal entity that is separate
from such Originator and any Affiliates thereof. Therefore, from and after the
date of execution and delivery of this Agreement, such Originator will take all
reasonable steps including, without limitation, all steps that Buyer or any
assignee of Buyer may from time to time reasonably request to maintain Buyer's
identity as a separate legal entity and to make it manifest to third parties
that Buyer is an entity with assets and liabilities distinct from those of such
Originator and any Affiliates thereof and not just a division of such Originator
or any such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, such Originator (i) will not
hold itself out to third parties as liable for the debts of Buyer nor purport to
own any of the Receivables and other assets acquired by Buyer, (ii) will take
all other actions necessary on its part to ensure that Buyer is at all times in
compliance with the "separateness covenants" set forth in Section 7.1(i) of the
--------------
Purchase Agreement and (iii) will cause all Tax liabilities arising in
connection with the transactions contemplated herein or otherwise to be
allocated between such Originator and Buyer on an arm's-length basis and in a
manner consistent with the procedures set forth in U.S. Treasury Regulations
(S)(S)1.1502-33(d) and 1.1552-1.
(i) Collections. Such Originator will cause (1) all proceeds
-----------
from all Lock-Boxes to be directly deposited by a Collection Bank into a
Collection Account and (2) each Lock-Box and Collection Account to be subject at
all times to a Collection Account Agreement that is in full force and effect;
provided, however, that unless otherwise requested by Buyer (or the Agent as its
assignee), no Collection Account Agreement will be required with respect to any
Lock-Box or Collection Account at Bank of America, N.A. so long as the existing
Lock-Box and Collection Account at such bank are closed by September 15, 2001.
In the event any payments relating to Receivables are remitted directly to such
Originator or any Affiliate of such Originator, such Originator will remit (or
will cause all such payments to be remitted) directly to a Collection Bank and
deposited into a Collection Account within two (2) Business Days following
receipt thereof and, at all times prior to such remittance, such Originator will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of Buyer and its assigns. Such Originator will transfer
exclusive ownership, dominion and control of each Lock-Box and Collection
Account to Buyer, free and clear of all Adverse Claims (including, without
limitation, that of Credit Suisse First Boston (or its successor) as collateral
agent) and, will not grant the right to take dominion and control of any Lock-
Box or Collection Account at a future time or upon the occurrence of a future
event to any Person, except to Buyer (or its assigns) as contemplated by this
Agreement and the Purchase Agreement.
(j) Taxes. Such Originator will file all Tax returns and
-----
reports required by law to be filed by it and promptly pay all Taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Such Originator will pay when due any Indemnified
Taxes payable in connection with the Receivables originated by it.
16
Section 4.2 Negative Covenants of Originators. Until the date on
---------------------------------
which this Agreement terminates in accordance with its terms, each Originator
hereby covenants that:
(a) Name Change, Offices and Records . Such Originator will not
--------------------------------
change its (i) state of organization, (ii) name, (iii) identity or structure
(within the meaning of Article 9 of any applicable enactment of the UCC) or
relocate its chief executive office at any time while the location of its chief
executive office is relevant to perfection of Buyer's interest in the
Receivables or the associated Related Security and Collections or any office
where Records are kept unless it shall have: (i) given Buyer (and the Agent, as
its assignee) at least forty-five (45) days' prior written notice thereof and
(ii) delivered to the Agent (as Buyer's assignee) all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation.
(b) Change in Payment Instructions to Obligors. Such Originator
------------------------------------------
will not add or terminate any bank as a Collection Bank, or make any change in
the instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer (or its assigns) shall have received, at least
ten (10) days before the proposed effective date therefor, (i) written notice of
such addition, termination or change and evidence reasonably satisfactory to
Buyer (and the Agent, as its assignee) that all Adverse Claims to such Lock-Box
or Collection Account have been released and (ii) with respect to the addition
of a Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that such Originator may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy.
-----------------------------------------------------------
Such Originator will not make any change to its Credit and Collection Policy
that could reasonably be expected to adversely affect the collectibility of the
Receivables originated by it or decrease the credit quality of any of its newly
created Receivables. Except as otherwise permitted in its capacity as Servicer
pursuant to the Purchase Agreement, such Originator will not extend, amend or
otherwise modify the terms of any Receivable or any Contract related thereto
other than in accordance with its Credit and Collection Policy.
(d) Sales, Liens. Such Originator will not sell, assign (by
------------
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer provided
for herein), and such Originator will defend the right, title and interest of
Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under such Originator.
17
(e) Accounting for Purchase. Such Originator will not, and will
-----------------------
not permit any Affiliate to, financially account (whether in financial
statements or otherwise) for the transactions contemplated hereby in any manner
other than the sale or other outright conveyance by such Originator to Buyer of
the Receivables originated by such Originator and the associated Related
Security or in any other respect account for or treat the transactions
contemplated hereby in any manner other than as a sale of such Receivables and
Related Security by such Originator to Buyer except to the extent that such
transactions are not recognized on account of consolidated financial reporting
in accordance with generally accepted accounting principles.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of
------------------
the following events shall constitute a Termination Event:
(a) Such Originator shall fail to make any payment or deposit
required hereunder within 5 Business Days after the same becomes due.
(b) Such Originator shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause
(i) of this paragraph (a)) or any other Transaction Document to which
it is a party and such failure shall continue for 20 consecutive days
after written notice of such failure.
(c) Any representation, warranty, certification or statement
made by such Originator in this Agreement, any other Transaction
Document or in any other document delivered pursuant hereto or thereto
shall prove to have been incorrect in any material respect when made
or deemed made; provided that the materiality threshold in the
preceding clause shall not be applicable with respect to any
representation or warranty which itself contains a materiality
threshold and provided further, that any misrepresentation or
certification for which Buyer has actually received a Purchase Price
Credit shall not constitute a Termination Event hereunder.
(d) Parent or any Subsidiary shall (i) fail to pay any principal
or interest, regardless of amount, due in respect of any Indebtedness
in a principal amount in excess of $5,000,000, when and as the same
shall become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness
if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf (with or without the giving of notice,
the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity.
(e) An Event of Bankruptcy shall occur with respect to any
Originator.
18
(f) One or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against
Parent, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties
of Parent or any Subsidiary to enforce any such judgment.
(g) An ERISA Event shall have occurred that, when taken together
with all other such ERISA Events, could reasonably be expected to
result in liability of Parent and its ERISA Affiliates in an aggregate
amount exceeding $1,000,000.
(h) There shall have occurred a Change in Control.
Section 5.2 Remedies. Upon the occurrence and during the continuation
--------
of a Termination Event, Buyer may take any of the following actions: (i) declare
the Termination Date to have occurred, whereupon the Termination Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by each Originator; provided, however, that
upon the occurrence of a Termination Event described in Section 5.1(e), or of an
--------------
actual or deemed entry of an order for relief with respect to such Originator
under the Federal Bankruptcy Code, the Termination Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Originator and (ii) to the fullest extent
permitted by applicable law, declare that the Default Fee shall accrue with
respect to any amounts then due and owing by such Originator to Buyer. The
aforementioned rights and remedies shall be without limitation and shall be in
addition to all other rights and remedies of Buyer and its assigns otherwise
available under any other provision of this Agreement, by operation of law, at
equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of which
rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by Originators. Without limiting any other
--------------------------
rights that Buyer may have hereunder or under applicable law, each Originator
hereby agrees to indemnify (and pay upon demand to) Buyer and its assigns,
officers, directors, agents and employees (each an "Indemnified Party") from and
against any and all damages, losses, claims, Other Taxes, Indemnified Taxes,
liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of Buyer or any
such assign) 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 the acquisition, either directly or
indirectly, by Buyer of an interest in the Receivables originated by such
Originator, excluding, however:
19
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables originated by such Originator that are uncollectible
on account of the insolvency, bankruptcy or lack of creditworthiness of the
related Obligor; or
(c) Excluded Taxes;
provided, however, that nothing contained in this sentence shall limit the
liability of such Originator or limit the recourse of Buyer to such Originator
for amounts otherwise specifically provided to be paid by such Originator under
the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject in each case to clauses (a), (b) and (c) above,
each Originator shall indemnify Buyer for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by such Originator (or
any officers of such Originator) under or in connection with any Purchase
Report, this Agreement, any other Transaction Document or any other
information or report delivered by such Originator pursuant hereto or
thereto for which Buyer has not received a Purchase Price Credit that shall
have been false or incorrect when made or deemed made;
(ii) the failure by such Originator, to comply with any
applicable law, rule or regulation with respect to any Receivable or
Contract related thereto, or the nonconformity of any Receivable or
Contract included therein with any such applicable law, rule or regulation
or any failure of such Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of such Originator to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being 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
service
20
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, such Originator's use of the proceeds of
the Purchase from it hereunder, the ownership of the Receivables originated
by such Originator or any other investigation, litigation or proceeding
relating to such Originator in which any Indemnified Party becomes involved
as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor
in respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Event of Bankruptcy with respect to any Originator;
(x) any failure to vest and maintain vested in Buyer, or to
transfer to Buyer, legal and equitable title to, and ownership of, the
Receivables originated by such Originator and the associated Collections,
and all of such Originator's right, title and interest in the Related
Security associated with such Receivables, in each case, free and clear of
any Adverse Claim;
(xi) the failure to have filed, 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 Receivable originated by such Originator, the Related Security and
Collections with respect thereto, and the proceeds of any thereof, whether
at the time of the Purchase from such Originator hereunder or at any
subsequent time;
(xii) any action or omission by such Originator which reduces
or impairs the rights of Buyer with respect to any Receivable or the value
of any such Receivable;
(xiii) any attempt by any Person to void the Purchase from such
Originator hereunder under statutory provisions or common law or equitable
action; and
(xiv) the failure of any Receivable reflected as an Eligible
Receivable on any Purchase Report prepared by such Originator to be an
Eligible Receivable at the time acquired by Buyer.
21
Section 6.2 Other Costs and Expenses. Each Originator shall pay
------------------------
to Buyer on demand all Other Taxes and other costs and out-of-pocket expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder. Each Originator shall pay to Buyer on demand any and all
costs and expenses of Buyer, if any, including reasonable counsel fees and
expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following a Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
----------------------
(a) No failure or delay on the part of Buyer (or its assigns)
in exercising any power, right or remedy under this Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies
herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing signed by each
Originator and Buyer and, to the extent required under the Purchase
Agreement, the Agent and the Liquidity Banks or the Required Liquidity
Banks. Any material amendment, supplement, modification of waiver will
required satisfaction of the Rating Agency Condition.
Section 7.2 Notices. All communications and notices provided
-------
for hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses or telecopy numbers set forth on
the signature pages hereof or at such other address or telecopy number as such
Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice or other communication shall be effective (a)
if given by telecopy, upon the receipt thereof, (b) if given by mail, five (5)
Business Days after the time such communication is deposited in the mail with
first class postage prepaid or (c) if given by any other means, when received at
the address specified in this Section 7.2.
-----------
Section 7.3 Protection of Ownership Interests of Buyer.
------------------------------------------
(a) Each Originator agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and
documents, and take all actions, that may be necessary or desirable, or
that Buyer (or its assigns) may request, to perfect,
22
protect or more fully evidence the interest of Buyer hereunder and the
Receivable Interests, or to enable Buyer (or its assigns) to exercise and
enforce their rights and remedies hereunder. At any time, Buyer (or its
assigns) may, at such Originator's sole cost and expense, direct such
Originator to notify the Obligors of Receivables of the ownership interests
of Buyer under this Agreement and may also direct that payments of all
amounts due or that become due under any or all Receivables be made
directly to Buyer or its designee.
(b) If any Originator fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to)
perform, or cause performance of, such obligations, and Buyer's (or such
assigns') costs and expenses incurred in connection therewith shall be
payable by such Originator as provided in Section 6.2. Each Originator
-----------
irrevocably authorizes Buyer (and its assigns) at any time and from time to
time in the sole discretion of Buyer (or its assigns), and appoints Buyer
(and its assigns) as its attorney(ies)-in-fact, to act on behalf of such
Originator (i) to execute on behalf of such Originator as debtor and to
file financing statements necessary or desirable in Buyer's (or its
assigns') sole discretion to perfect and to maintain the perfection and
priority of the interest of Buyer in the Receivables originated by such
Originator and the associated Related Security and Collections and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Receivables as a financing
statement in such offices as Buyer (or its assigns) in their sole
discretion deem necessary or desirable to perfect and to maintain the
perfection and priority of Buyer's interests in such Receivables. This
appointment is coupled with an interest and is irrevocable.
Section 7.4 Confidentiality.
---------------
(a) Each Originator and Buyer shall maintain and shall cause each
of its employees and officers to maintain the confidentiality of the Fee
Letter and the other confidential or proprietary information with respect
to the Agent and Blue Ridge and their respective businesses obtained by it
or them in connection with the structuring, negotiating and execution of
the transactions contemplated herein, except that such Originator and its
officers and employees may disclose such information to such Originator's
external accountants, attorneys and other advisors and as required by any
applicable law or order of any judicial or administrative proceeding.
(b) Each Originator hereby consents to the disclosure of any
nonpublic information with respect to it (i) to Buyer, the Agent, the
Liquidity Banks or Blue Ridge by each other, (ii) to any prospective or
actual assignee or participant of any of the Persons described in clause
(i), and (iii) to any rating agency, Commercial Paper dealer or provider of
a surety, guaranty or credit or liquidity enhancement to Blue Ridge or any
entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which Wachovia Bank, N.A. (or its successor) acts as
the administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the
23
foregoing, provided each such Person described in the foregoing clauses
(ii) and (iii) is informed of the confidential nature of such information.
In addition, the Purchasers and the Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or
order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
Section 7.5 Bankruptcy Petition.
-------------------
(a) Each Originator and Buyer each hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Blue Ridge, it will not institute against, or
join any other Person in instituting against, Blue Ridge any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
(b) Each Originator covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding
obligations of Buyer under the Purchase Agreement, it will not institute
against, or join any other Person in instituting against, Buyer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 7.6 Limitation of Liability. Except with respect to any claim
-----------------------
arising out of the willful misconduct or gross negligence of any Originator,
Buyer, Blue Ridge, the Agent or any Liquidity Bank, no claim may be made by any
such Person (or its Affiliates, directors, officers, employees, attorneys or
agents) against any such other Person (or its Affiliates, directors, officers,
employees, attorneys or agents) for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each of the parties hereto, on behalf of itself and its
Affiliates, directors, officers, employees, attorneys, agents, successors and
assigns, hereby waives, releases, and agrees not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
-------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS.
Section 7.8 CONSENT TO JURISDICTION. ORIGINATOR HEREBY IRREVOCABLY
-----------------------
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
24
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING
PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY
AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
--------------------
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
----------------------------------------------
(a) This Agreement and each other Transaction Document
contain the 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.
(b) This Agreement shall be binding upon and inure to the
benefit of the Originators, Buyer and their respective successors and
permitted assigns (including any trustee in bankruptcy). No Originator may
assign any of its rights and obligations hereunder or any interest herein
without the prior written consent of Buyer. Buyer may assign at any time
its rights and obligations hereunder and interests herein to any other
Person without the consent of any Originator. Without limiting the
foregoing, each Originator acknowledges that Buyer, pursuant to the
Purchase Agreement, may assign to the Agent, for the benefit of the
Purchasers, its rights, remedies, powers and privileges hereunder and that
the Agent may further assign such rights, remedies, powers and privileges
to the extent permitted in the Purchase Agreement. Each Originator agrees
that the Agent, as the assignee of Buyer, shall, subject to the terms of
the Purchase Agreement, have the right to enforce this Agreement and to
exercise directly all of Buyer's rights and remedies under this Agreement
(including, without limitation, the right to give or withhold any consents
or approvals of Buyer to be given or withheld hereunder) and each
Originator agrees to cooperate fully with the Agent in the exercise of such
rights and remedies. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms
and shall remain in full force
25
and effect until terminated in accordance with its terms; provided,
however, that the rights and remedies with respect to (i) any breach of any
representation and warranty made by any Originator pursuant to Article II;
----------
(ii) the indemnification and payment provisions of Article VI; and (iii)
----------
Section 7.5 shall be continuing and shall survive any termination of this
-----------
Agreement.
Section 7.11 Counterparts; Severability; Section References. This
----------------------------------------------
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
(signature pages follow)
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
ACTUANT CORPORATION
By: /s/ Terence M. Braatz
---------------------
Name: Terence M. Braatz
Title:
Address: 6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
DEL CITY WIRE CO., INC.
By: /s/ Terence M. Braatz
---------------------
Name: Terence M. Braatz
Title: Treasurer
Address: 6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
27
GB TOOLS AND SUPPLIES, INC.
By: /s/ Terence M. Braatz
---------------------
Name: Terence M. Braatz
Title: Treasurer
Address: 6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
VERSA TECHNOLOGIES, INC.
By: /s/ Terence M. Braatz
---------------------
Name: Terence M. Braatz
Title: Treasurer
Address: 6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
28
ENGINEERED SOLUTIONS, L.P.
By: Versa Technologies, Inc., its general partner
By: /s/ Terence M. Braatz
---------------------
Name: Terence M. Braatz
Title: Treasurer
Address: 6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
ACTUANT RECEIVABLES CORPORATION
By: /s/ Patrick C. Dorn
-------------------
Name: Patrick C. Dorn
Title: President
Address: 3993 Howard Hughes Pkwy.
Suite 100
Las Vegas, Nevada 89109
Attn: Pat Dorn
Phone: (702) 735-1811
Fax: (702) 735-1785
29
Exhibit I
Definitions
-----------
This is Exhibit I to the Agreement (as hereinafter defined). As used
in the Agreement and the Exhibits and Schedules thereto, capitalized terms have
the meanings set forth in this Exhibit I (such meanings to be equally applicable
to the singular and plural forms thereof). If a capitalized term is used in the
Agreement, or any Exhibit or Schedule thereto, and is not otherwise defined
therein or in this Exhibit I, such term shall have the meaning assigned thereto
in Exhibit I to the Purchase Agreement (hereinafter defined).
"Account" means an "account" under and as defined in the UCC as in
effect from time to time in the State of Illinois.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 5% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
"Agent" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of May 30,
2001, among Originators and Buyer, as the same may be amended, restated or
otherwise modified.
"Blue Ridge" has the meaning set forth in the Preliminary Statements
to the Agreement.
"Board of Directors" means the Board of Directors of Parent or any
committee thereof authorized to act on behalf of such Board.
"Buyer" has the meaning set forth in the preamble to the Agreement.
"Calculation Period" means each calendar month or portion thereof
which elapses during the term of the Agreement. The first Calculation Period
shall commence on the date of the Purchases hereunder and the final Calculation
Period shall terminate on the Termination Date.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or Personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and
30
the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" shall be deemed to have occurred if:
(a) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that for purposes of this clause (a)
such Person shall be deemed to have "beneficial ownership" of all shares that
any such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the Voting Stock of Parent (for the
purpose of this clause (a) a Person shall be deemed to beneficially own the
Voting Stock of a corporation that is beneficially owned (as defined above) by
another corporation (a "parent corporation") if such Person beneficially owns
(as defined above) at least 50% of the aggregate voting power of all classes of
Voting Stock of such parent corporation);
(b) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the shareholders of Parent was approved by a vote of 66-2/3% of the
directors of Parent then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office;
(c) the adoption of a plan relating to the liquidation or dissolution
of Parent;
(d) the merger or consolidation of Parent with or into another Person
or the merger of another Person with or into Parent, or the sale of all or
substantially all the assets of Parent to another Person, and, in the case of
any such merger or consolidation, the securities of Parent that are outstanding
immediately prior to such transaction and which represent 100% of the aggregate
voting power of the Voting Stock of Parent are changed into or exchanged for
cash, securities or property, unless pursuant to such transaction such
securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving corporation that represent
immediately after such transaction, at least a majority of the aggregate voting
power of the Voting Stock of the surviving corporation;
(e) Parent ceases to own, directly or indirectly, 100% of the
outstanding voting Equity Interests of any Originator, or
(f) Parent ceases to own, directly or indirectly, 100% of the
outstanding voting Equity Interests of Buyer.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collection Account" has the meaning specified in the Purchase
Agreement.
31
"Collection Account Agreement" has the meaning specified in the
Purchase Agreement.
"Collection Bank" has the meaning specified in the Purchase Agreement.
"Contingent Obligation" means, as to any person, any obligation of
such person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business and any
products warranties for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such person may be liable pursuant
to the terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such person is required to perform thereunder) as determined
by such person in good faith.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable including, without
limitation, all "contracts" as, when and if such term is defined in the UCC, of
the applicable Originator, and in any event, shall include, without limitation,
all sale, service, performance and equipment or property lease contracts,
agreements and grants (whether written or oral, or third party or intercompany),
and any other documents (whether written or oral) between the applicable
Originator and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Credit and Collection Policy" means each Originator's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit V, as modified from time to time in
accordance with the Agreement.
"Default Fee" means a per annum rate of interest equal to the sum of
(i) the Prime Rate, plus (ii) 2% per annum.
"Discount Factor" means a percentage calculated to provide Buyer with
a reasonable return on its investment in the Receivables originated by each
Originator after taking
32
account of (i) the time value of money based upon the anticipated dates of
collection of such Receivables and the cost to Buyer of financing its investment
in such Receivables during such period, (ii) the risk of nonpayment by the
Obligors, and (iii) the cost to Buyer of servicing such Receivables. Each
Originator and Buyer may agree from time to time to change the Discount Factor
based on changes in one or more of the items affecting the calculation thereof,
provided that any change to the Discount Factor shall take effect as of the
commencement of a Calculation Period, shall apply only prospectively and shall
not affect the Purchase Price payment made prior to the Calculation Period
during which such Originator and Buyer agree to make such change.
"Disqualified Capital Stock" means any capital stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, (a) matures (excluding
any maturity as the result of an optional redemption by the issuer thereof) or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part, on or
prior to July 30, 2009, or (b) is convertible into or exchangeable (unless at
the sole option of the issuer thereof) for (i) debt securities or (ii) any
capital stock referred to in (a) above, in each case at any time prior to July
30, 2009.
"Dollars," "dollars" or "$" means lawful money of the United States of
America.
"Equity Interests" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with Parent, is treated as a single employer under
Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Parent or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by Parent or any of its ERISA Affiliates from the PBGC or
a plan administrator of any notice relating to the
33
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by Parent or any of its ERISA Affiliates of any
liability with respect to the withdrawal from any Plan or Multiemployer Plan;
and (g) the receipt by Parent or any of its ERISA Affiliates of any notice, or
the receipt by any Multiemployer Plan from Parent or any of its ERISA Affiliates
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Event of Bankruptcy" means an event in which:
(i) a Person shall generally not pay its debts as such debts become
due or shall admit in writing its inability to pay its debts generally or shall
make a general assignment for the benefit of creditors,
(ii) any proceeding shall be instituted by a Person seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property,
(iii) a Person shall take any corporate or partnership action to
authorize any of the actions set forth in clauses (i) or (ii) above, or
(iv) any proceeding shall be instituted against a Person seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property and, if such Person is an Originator who is not
then acting as the Servicer, such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of sixty (60)
consecutive days.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Taxes" means, with respect to any Indemnified Party or any
other recipient of any payment to be made by or on account of any obligation of
any Originator hereunder, income or franchise taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located.
"Finance Charges" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
34
"Financial Officer" of any Person means the chief financial officer,
principal accounting officer, Treasurer or Controller of such Person.
"fiscal quarter" means a quarter ending on the last day of each
February, May, August and November.
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"General Intangibles" shall mean, collectively, with respect to each
Originator, all "general intangibles," as such term is defined in the UCC, of
such Originator and, in any event shall include, without limitation, (i) all of
such Originator's rights, title and interest in, to and under all Contracts and
Insurance Policies, (ii) all know-how and warranties relating to any of the
Receivables, (iii) any and all other rights, claims, choses-in-action and causes
of action of such Originator against any other Person and the benefits of any
and all collateral or other security given by any other Person in connection
therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any
of the Receivables, (v) all Records, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any Person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Originator pertaining to
operations now or hereafter conducted by such Originator or any of the
including, without limitation, building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and certificates of
operation, and (vii) all rights to reserves, deferred payments, deposits,
refund, indemnification or claims to the extent the foregoing relate to any
Receivables and claims for tax or other refunds against any Governmental
Authority relating to any Receivables.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Indebtedness" of any person means, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person other than customary reservations of
title under agreements with suppliers or lessors entered into in the ordinary
course of business, (e) all obligations of such person issued or assumed as the
deferred purchase price of property or services (excluding trade accounts
payable and accrued obligations incurred in the ordinary course of business),
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Contingent Obligations of
such person, (h) all Capital Lease Obligations of such person, (i) all
obligations of such person in respect of interest rate protection agreements,
foreign currency exchange agreements or other interest or exchange rate hedging
arrangements, (j) all outstanding
35
obligations of such person as an account party in respect of letters of credit
and bankers' acceptances, and (k) all Disqualified Capital Stock issued by such
person with the amount of Indebtedness represented by such Disqualified Capital
Stock being deemed to be the greater of its voluntary or involuntary liquidation
preference and its maximum repurchase price, including accrued and unpaid
dividends. The Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner.
"Indemnified Party" has the meaning set forth in Section 6.1.
-----------
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Initial Contributed Receivables" has the meaning set forth in Section
-------
1.1.
- ---
"Initial Cutoff Date" has the meaning set forth in Section 1.1.
-----------
"Insurance Policies" means, collectively, with respect to each
Originator, all insurance policies with respect to any Receivable(s) now or
hereafter held by such Originator or naming such Originator as insured,
additional insured or loss payee, and all rights, claims and recoveries relating
thereto (including, without limitation, all dividends, returned premiums and
other rights to receive money in respect of any of the foregoing).
"Lock-Box" has the meaning specified in the Purchase Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, results of operations, prospects or condition, financial or
otherwise, of Parent and its Subsidiaries, taken as a whole, (ii) the ability of
any Originator to perform its obligations under any Transaction Document to
which it is a party or of the Performance Guarantor to perform its obligations
under the Performance Undertaking, (iii) the legality, validity or
enforceability of this Agreement or any other Transaction Document, (iv) the
Buyer's ownership interest (or the Agent's security interest, for the benefit of
the Secured Parties) in the Receivables generally or in any significant portion
of the Receivables, the Related Security or the Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"Monthly Reporting Date" means the 16th day of each month after the
date of this Agreement (or if any such day is not a Business Day, the next
succeeding Business Day thereafter).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Worth" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance
36
of the Receivables at such time, over (b) the sum of (i) the Aggregate Invested
Amount outstanding at such time, plus (ii) the aggregate outstanding principal
balance of the Subordinated Loans (including any Subordinated Loan proposed to
be made on the date of determination).
"Organizational Documents" means, for any Person, the documents for
its formation and organization, which, for example, (a) for a corporation are
its corporate charter and bylaws, (b) for a partnership are its certificate of
partnership (if applicable) and partnership agreement, (c) for a limited
liability company are its certificate of formation or organization and its
operating agreement, regulations or the like and (d) for a trust is the trust
agreement, declaration of trust, indenture or bylaws under which it is created.
"Original Balance" means, with respect to any Receivable coming into
existence after the Initial Cutoff Date, the Outstanding Balance of such
Receivable on the date it was created.
"Originator" has the meaning set forth in the preamble to the
Agreement.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Transaction Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Transaction
Document.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Parent" has the meaning set forth in the preamble to the Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which Parent or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Wachovia Bank, N.A. or its successor
(which is not necessarily the lowest rate charged to any customer), changing
when and as said prime rate changes.
"Property" means any right, title or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible and including Equity Interests or other ownership
interests of any person.
37
"Purchase" means the purchase by Buyer from an Originator pursuant to
Section 1.2(a) of the Agreement of the Receivables originated by such Originator
- --------------
and the Related Security and Collections related thereto, together with all
related rights in connection therewith.
"Purchase Agreement" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Purchase Price" means, with respect to the Purchase from each
Originator, the aggregate price to be paid by Buyer to such Originator for such
Purchase in accordance with Section 1.3 of the Agreement for the Receivables
-----------
originated by such Originator and the associated Collections and Related
Security being sold to Buyer, which price shall equal on any date (i) the
product of (x) the Outstanding Balance of such Receivables on such date,
multiplied by (y) one minus the Discount Factor in effect on such date, minus
(ii) any Purchase Price Credits to be credited against the Purchase Price
otherwise payable in accordance with Section 1.4 of the Agreement.
-----------
"Purchase Price Credit" has the meaning set forth in Section 1.4 of
-----------
the Agreement.
"Purchase Report" has the meaning set forth in Section 1.2(b) of the
--------------
Agreement.
"Receivable" means each Account owed to an Originator (at the times it
arises, and before giving effect to any transfer or conveyance under the
Agreement) or to Buyer (after giving effect to the transfers under the
Agreement) including, without limitation, the obligation to pay any Finance
Charges with respect thereto: provided, however, that with respect to Actuant
Corporation, only an Account arising in connection with the sale of goods or the
rendering of services by its Enerpac Division and Powerpacker Division shall be
included in "Receivable" and with respect to Versa Technologies, Inc., only an
Account arising in connection with the sale of goods or the rendering of
services by its Powergear Division shall be included in "Receivable".
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided, further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless or whether the account debtor or such
Originator treats such indebtedness, rights or obligations as a separate payment
obligation.
"Records" means any and all lists, books, records, correspondence,
ledgers, print-outs, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any of
the Receivables including, without limitation, all customer lists,
identification of suppliers, data, plans, blueprints, specifications, designs,
drawings, appraisals, recorded knowledge, surveys, studies, engineering reports,
test reports, manuals, standards, processing standards, performance standards,
catalogs, research data, computer and automatic machinery software and programs
and the like pertaining to the operations of the applicable Originator or any of
the Receivables, field repair data, sales data and
38
other information relating to sales of products now or hereafter manufactured,
distributed or franchised by such Originator, accounting information pertaining
to any of the Receivables and all media in which or on which any of the
information or knowledge or data or records relating to such operations or any
of the Receivables may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or data.
"Related Security" means, with respect to any Receivable:
(A) all margin accounts, futures positions, book debts and other
forms of obligations and receivables now or hereafter owned or held by or
payable to the applicable Originator relating in any way to or arising from
the sale or lease of goods or the rendering of services by such Originator
or any other party, including the right to payment of any interest or
finance charge with respect thereto, together with all merchandise
represented by any of the accounts,
(B) all such merchandise that may be reclaimed or repossessed or
returned to the applicable Originator,
(C) all of the applicable Originator's rights as an unpaid
vendor, including stoppage in transit, reclamation, replevin and
sequestration,
(D) all assets pledged, assigned, hypothecated or granted to, and
all letters of credit, guarantee claims, Adverse Claims and security
interests held by the applicable Originator to secure payment of any
Accounts and which are delivered for or on behalf of any Obligor,
(E) all accessions to all of the foregoing described properties
and interests in properties,
(F) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection with the foregoing,
(G) all evidence of the filing of financing statements and other
statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured
parties and certificates from filing or other registration offices
(H) all General Intangibles related to such Receivable,
(I) all of the applicable Originator's right, title and interest
in each Lock-Box and each Collection Account, and
(J) all proceeds of any of the foregoing.
39
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Capital Amount" means, as of any date of determination, an
amount equal to the greater of (a) 3% of the Purchase Limit under the Purchase
Agreement, and (b) the product of (i) 1.5 times the product of the Default Ratio
times the Default Horizon Ratio, each as determined from the most recent Monthly
Report received from the Servicer under the Purchase Agreement, and (ii) the
Outstanding Balance of all Receivables as of such date, as determined from the
most recent Monthly Report received from the Servicer under the Purchase
Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Settlement Date" means (A) the 2nd Business Day after each Monthly
Reporting Date, and (B) the last day of the relevant Interest Period in respect
of each Receivable Interests funded through a Liquidity Funding.
"Subordinated Loan" has the meaning set forth in Section 1.3(a) of the
--------------
Agreement.
"Subordinated Note" means a promissory note in substantially the form
of Exhibit VI hereto as more fully described in Section 1.3 of the Agreement, as
---------- -----------
the same may be amended, restated, supplemented or otherwise modified from time
to time.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" means the earliest to occur of (i) the Facility
Termination Date (as defined in the Purchase Agreement), (ii) the Business Day
immediately prior to the occurrence of a Termination Event set forth in Section
-------
5.1(e), (iii) the Business Day specified in a written notice from Buyer to the
- ------
Originators following the occurrence of any other Termination Event, and (iv)
the date which is 10 Business Days after Buyer's receipt of written notice from
any Originator that it wishes to terminate the facility evidenced by this
Agreement.
"Termination Event" has the meaning set forth in Section 5.1 of the
-----------
Agreement.
40
"Transaction Documents" means, collectively, this Agreement, each
Collection Account Agreement, the Subordinated Notes, and all other instruments,
documents and agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as in effect in the applicable
state or jurisdiction.
"Unmatured Termination Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute a Termination Event.
"Voting Stock" means any class or classes of capital stock of Parent
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
Parent.
"Wholly Owned Subsidiary" means, as to any Person, (a) any corporation
100% of whose capital stock (other than directors' qualifying shares) is at the
time owned by such Person and/or one or more Wholly Owned Subsidiaries of such
Person and (b) any partnership, association, joint venture, limited liability
company or other entity in which such Person and/or one or more Wholly Owned
Subsidiaries of such Person has a 100% equity interest at such time (other than
directors', managing partners' or managing members' qualifying equity
interests).
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. 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.
41
Exhibit II
----------
Exhibit II Chief Executive Offices; Locations of Records;
---------------------------------------------------------
Federal Employer Identification Numbers; Other Names
----------------------------------------------------
Chief Executive Office for Each Originator:
6100 North Baker Road
Glendale, WI 53209
Locations of Records for Each Originator:
6100 North Baker Road
Glendale, WI 53209
Federal Employer Identification Number for Each Originator:
Actuant Corporation: 39-0168610
Del City Wire Co., Inc.: 73-0666761
GB Tools and Supplies, Inc.: 39-0964876
Versa Technologies, Inc.: 39-1143618
Engineered Solutions, L.P.: 31-1757546
Legal, Trade and Assumed Names for Each Originator:
Actuant Corporation: Applied Power Inc. (1/11/01)
Del City Wire Co., Inc.: n/a
GB Tools and Supplies, Inc.: Gardner Bender, Inc. (12/22/00); APW Tools and
Supplies, Inc. (9/21/00); GB Electrical, Inc.
(4/19/99)
Versa Technologies, Inc.: n/a
Engineered Solutions, L.P.: n/a
42
- --------------------------------------------------------------------------------
Exhibit III
-----------
Lock-boxes; Collection Accounts; Collection Banks
-------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Legal Entity Business Unit Existing Existing Existing Revised Revised
Bank Lockbox # Dda # Bank Lockbox #
- ----------------------------------------------------------------------------------------------------------------------------------
Actuant Receivables (new "SPE") n/a n/a n/a Bank One n/a
Corporation
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Tools & Supplies
- ----------------
- ----------------------------------------------------------------------------------------------------------------------------------
Actuant Corporation Enerpac Bank of 98093 8765-0-60760 Bank One 22730
America
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
GB Tools & Supplies, Inc. Gardner Bender (GB) Marshall & 88397 122-2546 Bank One 22732
Ilsley
- ----------------------------------------------------------------------------------------------------------------------------------
" Calterm Bank of n/a 8765-9-60398 Bank One 22732
America
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
" Ancor Products Bank of n/a 8765-0-01091 Bank One n/a
America
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Del City Wire Co. Inc. Del City Bank of n/a 8765-0-01092 Bank One 22736
America
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Engineered Solutions
- --------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Actuant Corporation Power Packer Bank of 98093 8765-0-60760 Bank One 22738
America
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Versa Technologies, Inc. Power Gear Marshall & 10199 486-6114 Bank One 22742
Ilsley
- ----------------------------------------------------------------------------------------------------------------------------------
Engineered Solutions LP Engineered Solutions Bank One 22626 10-81348 Bank One 22626
(sub of VT Holdings, Inc.) Americas
----------------------------------------------------------------------------------------------------
(i.e., currently Dewald only)
- ----------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Legal Entity Revised Concentration
Dda # Effective
5/31/01
- ---------------------------------------------------------------------------------------------------
Actuant Receivables 10-87832 ZBA to 10-61597
Corporation
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Tools & Supplies
- ----------------
- ---------------------------------------------------------------------------------------------------
Actuant Corporation 10-87766 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
GB Tools & Supplies, Inc. 10-87774 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------------------------------
" 10-87774 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
" 10-87782 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Del City Wire Co. Inc. 10-87790 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Engineered Solutions ZBA to new SPE
- -------------------- a/c
- ---------------------------------------------------------------------------------------------------
Actuant Corporation 10-87808 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Versa Technologies, Inc. 10-87816 ZBA to new SPE
ac
- ---------------------------------------------------------------------------------------------------
Engineered Solutions LP 10-81348 ZBA to new SPE
(sub of VT Holdings, Inc.) a/c
43
Exhibit IV
----------
[Form of] Compliance Certificate
--------------------------------
This Compliance Certificate is furnished pursuant to that certain
Receivables Sale Agreement dated as of May 30, 2001, among Actuant Corporation
("Parent"), Del City Wire Co., Inc., GB Tools and Supplies, Inc., Versa
Technologies, Inc., Engineered Solutions, L.P. and Actuant Receivables
Corporation (the "Agreement"). Capitalized terms used and not otherwise defined
herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of Parent.
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of Parent and its Subsidiaries during the accounting
period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Termination Event or an Unmatured Termination Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate[, except as set forth below].
[4. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Parent has taken, is taking, or
proposes to take with respect to each such condition or
event:_______________________________].
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of
______________, 200_.
______________________________
[Name]
44
Exhibit V
---------
Credit and Collection Policy of each Originator
-----------------------------------------------
[attached]
45
Exhibit VI
----------
Form of Subordinated Note
-------------------------
SUBORDINATED NOTE
May 30, 2001
1. Note. FOR VALUE RECEIVED, the undersigned, Actuant Receivables
----
Corporation, a Nevada corporation ("SPV"), hereby unconditionally promises to
pay to the order of [ORIGINATOR NAME], a(n) __________ corporation
("Originator"), in lawful money of the United States of America and in
immediately available funds, on or before the date following the Termination
Date which is one year and one day after the date on which (i) the Outstanding
Balance of all Receivables sold by Originator under the "Sale Agreement"
referred to below has been reduced to zero and (ii) Originator has paid to Buyer
all indemnities, adjustments and other amounts which may be owed thereunder in
connection with the Purchase thereunder (the "Collection Date"), the aggregate
unpaid principal sum outstanding of all "Subordinated Loans" made from time to
time by Originator to SPV pursuant to and in accordance with the terms of that
certain Receivables Sale Agreement dated as of May 30, 2001 among Originator and
certain of its affiliates, as sellers, and SPV, as buyer (as amended, restated,
supplemented or otherwise modified from time to time, the "Sale Agreement").
Reference to Section 1.3 of the Sale Agreement is hereby made for a statement of
-----------
the terms and conditions under which the loans evidenced hereby have been and
will be made. All terms which are capitalized and used herein and which are not
otherwise specifically defined herein shall have the meanings ascribed to such
terms in the Sale Agreement.
2. Interest. SPV further promises to pay interest on the outstanding
--------
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to the 1-month LIBOR rate published in The Wall Street Journal
on the first Business Day of each month (or portion thereof) during the term of
this Subordinated Note, computed for actual days elapsed on the basis of a year
consisting of 360 days and changing on the first business day of each month
hereafter ("LIBOR"); provided, however, that if SPV shall default in the payment
of any principal hereof, SPV promises to pay, on demand, interest at the rate
equal to LIBOR plus 2.00% per annum on any such unpaid amounts, from the date
such payment is due to the date of actual payment. Interest shall be payable on
the first Business Day of each month in arrears; provided, however, that SPV may
elect on the date any interest payment is due hereunder to defer such payment
and upon such election the amount of interest due but unpaid on such date shall
constitute principal under this Subordinated Note. The outstanding principal of
any loan made under this Subordinated Note shall be due and payable on the
Collection Date and may be repaid or prepaid at any time without premium or
penalty.
3. Principal Payments. Originator is authorized and directed by SPV
------------------
to enter on the grid attached hereto, or, at its option, in its books and
records, the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment
46
of principal made by SPV, and absent manifest error, such entries shall
constitute prima facie evidence of the accuracy of the information so entered;
provided that neither the failure of Originator to make any such entry or any
error therein shall expand, limit or affect the obligations of SPV hereunder.
4. Subordination. Originator shall have the right to receive, and
-------------
SPV shall make, any and all payments and prepayments relating to the loans made
under this Subordinated Note provided that, after giving effect to any such
payment or prepayment, the aggregate Outstanding Balance of Receivables (as each
such term is defined in the Purchase Agreement hereinafter referred to) owned by
SPV at such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the
Purchase Agreement) outstanding at such time under the Purchase Agreement, plus
(b) the aggregate outstanding principal balance of all loans made under this
Subordinated Note. Originator hereby agrees that at any time during which the
conditions set forth in the proviso of the immediately preceding sentence shall
not be satisfied, Originator shall be subordinate in right of payment to the
prior payment of any indebtedness or obligation of SPV owing to the Agent or any
Purchaser under that certain Receivables Purchase Agreement dated as of May 30,
2001 by and among SPV, Actuant Corporation, as initial Servicer, various
"Purchasers" from time to time party thereto, and Wachovia Bank, N.A., as the
"Agent" (as amended, restated, supplemented or otherwise modified from time to
time, the "Purchase Agreement"). The subordination provisions contained herein
are for the direct benefit of, and may be enforced by, the Agent and the
Purchasers and/or any of their respective assignees (collectively, the "Senior
Claimants") under the Purchase Agreement. Until the date on which the "Aggregate
Invested Amount" outstanding under the Purchase Agreement has been repaid in
full and all other obligations of SPV and/or the Servicer thereunder and under
the "Fee Letter" referenced therein (all such obligations, collectively, the
"Senior Claim") have been indefeasibly paid and satisfied in full, Originator
shall not institute against SPV any proceeding of the type described in the
definition of "Event of Bankruptcy" in the Sale Agreement unless and until the
Collection Date has occurred. Should any payment, distribution or security or
proceeds thereof be received by Originator in violation of this Section 4,
Originator agrees that such payment shall be segregated, received and held in
trust for the benefit of, and deemed to be the property of, and shall be
immediately paid over and delivered to the Agent for the benefit of the Senior
Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of
----------------------
the type described in the definition of "Event of Bankruptcy" in the Sale
Agreement involving SPV as debtor, then and in any such event the Senior
Claimants shall receive payment in full of all amounts due or to become due on
or in respect of the Aggregate Invested Amount and the Senior Claim (including
"Yield" as defined and as accruing under the Purchase Agreement after the
commencement of any such proceeding, whether or not any or all of such Yield is
an allowable claim in any such proceeding) before Originator is entitled to
receive payment on account of this Subordinated Note, and to that end, any
payment or distribution of assets of SPV of any kind or character, whether in
cash, securities or other property, in any applicable insolvency proceeding,
which would otherwise be payable to or deliverable upon or with respect to any
or all indebtedness under this Subordinated Note, is hereby assigned to and
shall be paid or delivered
47
by the Person making such payment or delivery (whether a trustee in bankruptcy,
a receiver, custodian or liquidating trustee or otherwise) directly to the Agent
for application to, or as collateral for the payment of, the Senior Claim until
such Senior Claim shall have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or
----------
modified except in accordance with Section 7.1 of the Sale Agreement. The terms
-----------
of this Subordinated Note may not be amended or otherwise modified without the
prior written consent of the Agent for the benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED
-------------
AT CHICAGO, ILLINOIS, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF
THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE
STATE OF ILLINOIS. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE
PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.
8. Waivers. All parties hereto, whether as makers, endorsers, or
-------
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. Originator additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Note and expressly waives reliance by any Senior Claimant upon
the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged
----------
or otherwise transferred to any party other than Originator without the prior
written consent of the Agent, and any such attempted transfer shall be void.
ACTUANT RECEIVABLES CORPORATION
By:________________________
Title:
48
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
- ---------------------------------------------------------------------------------------------------
Amount of Amount of Unpaid
Subordinated Principal Principal Notation Made
Date Loan Paid Balance by (Initials)
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
49
Exhibit VII
-----------
[Form of] Purchase Report
-------------------------
For the Calculation Period beginning [date] and ending [date]
---------
TO: BUYER AND THE AGENT (AS BUYER's ASSIGNEE)
- --------------------------------------------------------- -------------------------- ----------------------- ---------
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Aggregate Outstanding Balance of all Receivables sold
during the period: $_____________ A
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Less: Aggregate Outstanding Balance of all Receivables
sold during such period which were not Eligible
Receivables on the date when sold: ($____________) (B)
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Aggregate Outstanding Balance of all Eligible
Receivables sold during the period (A - B): $___________ =C
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Less: Purchase Price discount during the Period: ($____________) (D)
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Gross Purchase Price Payable during the period
(C - D) $____________ =E
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Less: Total Purchase Price Credits arising during the (F)
Period: ($____________)
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Net Purchase Price payable during the Period
(E - F): $____________ =G
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Cash Purchase Price Paid to Originator during the H
Period: $_____________
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Subordinated Loans made during the Period: I
$_____________
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Less: Repayments of Subordinated Loans received during (J)
the Period: ($____________)
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Equals: Purchase Price paid in Cash or Subordinated
Loans during the period
(H + I - J): $_____________ =K
- --------------------------------------------------------- -------------------------- ----------------------- ---------
Aggregate Outstanding Balance of Receivables
contributed during the Period: $_____________ L
- --------------------------------------------------------- -------------------------- ----------------------- ---------
50
Schedule 2.1(e)
---------------
Pending Litigation
------------------
1. Actuant Corporation and its subsidiaries (collectively the
"Company") self-insures a significant portion of its product liability exposure
by maintaining a significant retention provision under its insurance program.
The retention (relative to accident occurrences for the fiscal years of the
retention program) are as follows:
Retention Per Aggregate
Year/1/ Occurrence Retention
---------- -------------- ------------
1978 $1,000,000 $1,000,000
1979 1,000,000 1,250,000
1980 500,000 1,500,000
1981 1,000,000 1,000,000
1982 700,000 700,000
1983 700,000 700,000
1984 700,000 700,000
1985 750,000 750,000
1986 800,000 800,000
1987 1,000,000 1,000,000
1988 1,000,000 1,000,000
1989 1,000,000 1,000,000
1990 1,000,000 1,000,000
1991 1,000,000 1,000,000
1992 500,000 1,000,000
1993 500,000 1,000,000
1994 300,000 1,000,000
1995 300,000 1,000,000
1996 300,000 1,000,000
1997 300,000 1,000,000
1998 300,000 1,000,000
1999 300,000 1,000,000
2000 300,000 1,000,000
_________________________
/1/Each year is for the fiscal year ended August 31 of such year, except
that (i) effective January 1, 1990 the Company changed its policy year
to the calendar year. Accordingly, 1990 refers to calendar year 1990.
1989 refers to the period from September 1, 1988 through December 31,
1989 and (ii) 1991 is for the period from January 1, 1991 through
August 31, 1991. 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999 and
2000, are for the fiscal year periods.
51
For the fiscal year ended August 31, 2000, the figures set forth in the table
above relate only to product liability claims and there is a $100,000 retention
for liability claims other than product liability. Further, the Company carries
excess liability insurance in the current aggregate amount of $50,000,000 in
excess of the primary aggregate limit of $1,000,000. There are a number of
product liability cases pending against the Company, but the Company's total
exposure for these years would not, in the opinion of the Company, exceed the
retention amounts set forth above. Of course, if detailed information on these
cases is desired, the Company can provide such information. You are aware of the
reserves which the Company carries on its balance sheet for general liability
exposure.
2. In late January 2001, the Company received an indemnity
claim from Teleflex Incorporated. Teleflex had purchased the Company's former
Air Cargo Equipment Corporation subsidiary during the previous year, and claimed
that it had expended substantial sums in correcting defective containers sold by
Air Cargo to Emery Air Freight. After deducting the minimum specified in the
parties' contract, Teleflex claimed it was entitled to be indemnified in the
amount of $1,458,840. On March 9, 2001 Quarles & Brady wrote to Teleflex on
behalf of the Company, and stated that the Company denied there had been any
breach of the parties' contract which would entitle Teleflex to indemnity, and
that Teleflex had failed to comply with the contractually-specified indemnity
process by giving the Company prompt written notice of the claim, tendering
defense of the claim and affording Actuant the opportunity to protect its
interests by assuming the defense. On March 26, 2001 Teleflex sent a response
letter in which it stated its disagreement with the Company's position and
reiterated its assertion that the Company had breached the parties' contract by
failing to disclose Emery warranty claims. On April 11, 2001 Quarles & Brady
responded to that letter on behalf of the Company, again stating that the
Company rejected the claim. No response to this letter has been received to
date.
3. In late January 2001, the Company received a letter from
Hutchinson, S.A., tendering the defense of a claim by Northwest Airlines. The
Northwest Airlines claim was made against Barry Controls, a business unit which
the Company had sold to a subsidiary of Hutchinson in April 2000, and related to
Barry Controls' sale of certain noise and vibration control devices known as the
ATMA system. Northwest's claim was for refund of the $6.3 million purchase price
it had paid for the ATMA equipment and for unspecified incidental, consequential
and other damages allegedly caused by failures of the ATMA system. On January
24, 2001, the Company sent Hutchinson a letter in which it accepted tender of
the Northwest claim, reserving its rights to contest Hutchinson's right of
indemnification if the facts so warrant. The Company's investigation of the
claim continues. In May 2001, the Company was contacted by Northwest and asked
whether it wished to enter into discussions regarding the settlement of
Northwest's claim. The Company offered to do so, provided such discussions
included the merits of Northwest's claim. On May 23, 2001 Northwest notified the
Company that it did not wish to meet with the Company on those terms, and
intended to commence arbitration. The Purchase Order between Barry Controls and
Northwest, pursuant to which the ATMA units were apparently purchased, states
that disputes are to be resolved through mediation and arbitration.
52
Both the Company and Barry Controls have informed Northwest that they insist
upon mediation of the dispute.
4. In November 2000, the Company was sued by Richard E.
Schnell, a former employee who had sold his business to the Company in 1995.
Schnell's complaint alleges various breaches of his business acquisition and
employment contracts with the Company, as well as certain alleged acts of fraud
and misrepresentation, and appears to seek damages in the range of $500,000 to
$600,000. The Company filed motions attacking certain of these claims, and the
Court recently granted certain of these motions but allowed Schnell an
opportunity to re-plead certain of his claims.
5. The Company received a letter dated March 10, 1999 from
attorneys for Lemelson Medical, Education & Research Foundation ("the Lemelson
Foundation") purporting to give the Company notice of infringement of 17 patents
and to offer a license under those patents. The patents all relate to either
machine vision systems or automatic identification systems, most commonly known
as bar code scanners, which the Company purchased from third party suppliers.
The Company has obtained an opinion of patent counsel that it does not infringe
any valid, enforceable claim of any of the patent claims identified in the
letter. The Lemelson Foundation has filed a Complaint naming the Company and
over one hundred other defendants and served it on the Company on August 2,
2000. The Company has retained the Phoenix, Arizona law firm of Roshka, Heyman &
DeWulf to represent it in this matter. Please refer additional inquiries
regarding this matter to Attorney John DeWulf.
53
Schedule A
----------
DOCUMENTS TO BE DELIVERED TO BUYER
PRIOR TO THE INITIAL PURCHASE
1. Executed copies of the Receivables Sale Agreement, duly executed by the
parties thereto.
2. Copy of each Originator's Credit and Collection Policy to attach to the
Receivables Sale Agreement as an Exhibit.
3. A certificate of each Originator's [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of such
Originator, authorizing Originator's execution, delivery and
performance of the Receivables Sale Agreement and the other documents
to be delivered by it thereunder;
(b) A copy of the Organizational Documents of such Originator
(also certified, to the extent that such documents are filed with any
governmental authority, by the Secretary of State of the jurisdiction
of organization of such Originator on or within thirty (30) days prior
to closing);
(c) Good Standing Certificates for such Originator issued by the
Secretaries of State of its state of incorporation and each
jurisdiction where it has material operations; and
(d) The names and signatures of the officers authorized on its
behalf to execute the Receivables Sale Agreement and any other
documents to be delivered by it thereunder.
4. Pre-filing state and federal tax lien, judgment lien and UCC lien searches
against each Originator from the following jurisdictions:
Actuant Corporation: Wisconsin DFI; Milwaukee County, WI
Del City Wire Co., Inc.: Wisconsin DFI; Milwaukee County, WI;
Okla. County, OK
GB Tools and Supplies, Inc.: Wisconsin DFI; Milwaukee County, WI
Versa Technologies, Inc.: Wisconsin DFI; Milwaukee County, WI
Engineered Solutions, L.P.: Wisconsin DFI; Milwaukee County, WI;
Indiana SOS
5. Proper financing statements in form suitable for filing under the UCC on or
before the date of the initial Purchase (as defined in the Receivables Sale
Agreement) in all jurisdictions as may be necessary or, in the opinion of
Buyer (or its assigns), desirable, under the UCC of all appropriate
jurisdictions or any comparable law in order to perfect the ownership
interests contemplated by the Receivables Sale Agreement, including,
without limitation, the UCC as in effect in the jurisdiction where each
Originator's jurisdiction of organization.
54
6. UCC partial releases in form suitable for filing necessary to release all
security interests and other rights of any Person in the Receivables and
Related Security previously granted by each Originator, together with an
executed copy of any instrument of release delivered in connection
therewith.
7. Executed Collection Account Agreements for each Lock-Box and Collection
Account at Bank One, NA or M&I Bank.
8. A favorable opinion of legal counsel for each Originator licensed to give
opinions under Illinois law reasonably acceptable to Buyer (and the Agent,
as Buyer's assignee) as to the following:
(a) Such Originator is a [corporation/limited partnership]
duly organized, validly existing, and in good standing under the laws of the
state of ______________.
(b) Such Originator has all requisite authority to conduct its
business in each jurisdiction where failure to be so qualified would have a
material adverse effect on such Originator's business.
(c) The execution and delivery by such Originator of the
Receivables Sale Agreement and each other Transaction Document to which it is a
party and its performance of its obligations thereunder have been duly
authorized by all necessary organizational action and proceedings on the part of
such Originator and will not:
(i) require any action by or in respect of, or filing with,
any governmental body, agency or official (other than the filing of UCC
financing statements);
(ii) contravene, or constitute a default under, any provision
of applicable law or regulation or of its Organizational Documents or
of any agreement, judgment, injunction, order, decree or other
instrument binding upon such Originator; or
(iii) result in the creation or imposition of any Adverse
Claim on assets of such Originator or any of its Subsidiaries (except
as contemplated by the Receivables Sale Agreement).
(d) The Receivables Sale Agreement and each other Transaction
Document to which it is a party has been duly executed and delivered by such
Originator and constitutes the legally valid, and binding obligation of such
Originator enforceable in accordance with its terms, except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
55
(e) In the event that the receivables Sale Agreement is held
to create a transfer for security purposes rather than a true sale or other
outright assignment, the provisions of the Receivables Sale Agreement are
effective to create valid security interests in favor of Buyer in all of such
Originator's right, title and interest in and to the Receivables and Related
Security described therein which constitute "accounts," "chattel paper" or
"general intangibles" (each as defined in the UCC) (collectively, the "Opinion
Collateral"), as security for the payment of a loan deemed to have been made by
Buyer to such Originator in an amount equal to the Purchase Price (as defined
therein) of the Receivables (as defined therein) acquired from such Originator,
together with all other obligations of such Originator thereunder.
(f) Each of the UCC-1 Financing Statements naming such
Originator as debtor, Buyer, as secured party, and Agent, as assignee of secured
party to be filed in the [describe filing offices], is in appropriate form for
filing therein. Upon filing of such UCC-1 Financing Statements in such filing
offices and payment of the required filing fees, the security interest in favor
of Buyer in the Opinion Collateral will be perfected and assigned of record to
the Agent.
(g) Based solely on our review of the [describe UCC Search
Reports], and assuming (i) the filing of the Financing Statements and payment of
the required filing fees in accordance with paragraph (f) and (ii) the absence
of any intervening filings between the date and time of the Search Reports and
the date and time of the filing of the Financing Statements, the security
interest of Buyer in the Opinion Collateral is prior to any security interest
granted in the Opinion Collateral by such Originator, the priority of which is
determined solely by the filing of a financing statement in the [describe filing
offices].
(h) To the best of the opinion giver's knowledge, there is no
action, suit or other proceeding against such Originator or any Affiliate of
such Originator, which would materially adversely affect the business or
financial condition of such Originator and its Affiliates taken as a whole or
which would materially adversely affect the ability of such Originator to
perform its obligations under the Receivables Sale Agreement.
(i) Such Originator is not an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
9. A "true sale" opinion and "substantive consolidation" opinion of counsel
for Originator with respect to the transactions contemplated by the
Receivables Sale Agreement.
10. A Certificate of each Originator's [chief financial officer] certifying
that, as of the closing date, no Termination Event or Unmatured Termination
Event exists and is continuing.
11. Executed copies of (i) all consents from and authorizations by any Persons
and (ii) all waivers and amendments to existing credit facilities, that are
necessary in connection with the Receivables Sale Agreement.
12. Executed Subordinated Note by Buyer in favor of each Originator.
56
13. If applicable, a direction letter executed by each Originator authorizing
Buyer (and the Agent, as its assignee) and directing warehousemen to allow
Buyer (and the Agent, as its assignee) to inspect and make copies from such
Originator's books and records maintained at off-site data processing or
storage facilities.
57