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BLADE RECEIVABLES MASTER TRUST
CLASS A CERTIFICATES SERIES 1996-1
CLASS B CERTIFICATES SERIES 1996-1
DESK COPIES OF
PROGRAM DOCUMENTS
FOR
HOWMET CORPORATION
April 18, 1996
FIRST CHICAGO CAPITAL MARKETS, INC.
CREDIT SUISSE
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CONTENTS
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PROJECT BLADE - TAKEOUT
DESK SET
APRIL 18, 1996
Key To Parties and Counsel
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BRC Blade Receivables Corporation
CS Credit Suisse
FNBC The First National Bank of Chicago
HRAW&G Hodgson Russ Andrews Woods & Goodyear
HCI Howmet Cercast (U.S.A.), Inc.
Howmet Howmet Corporation
HRI Howmet Refurbishment, Inc.
HTI Howmet-Tempcraft, Inc.
KKB&R Kummer Kaempfer Bonner & Renshaw
L&W Latham & Watkins
Trustee Manufacturers and Traders Trust Company
PHJ&W Paul, Hastings, Janofsky & Walker
PW Price Waterhouse, LLP
TCC Turbine Components Corporation
VRC Valuation Research Corporation
VSS&P Vorys, Sater, Seymour & Pease
DOCUMENT TAB NUMBER
I. Operative Documents
1. Blade Receivables Master Trust Amended and
Restated Pooling and Servicing Agreement ........................ 1
EXHIBIT A Form of Lockbox Account Letter Agreement
EXHIBIT B Form of Concentration Account Letter
Agreement
EXHIBIT C Form of Monthly Servicer's Certificate
EXHIBIT D Annual Agreed-Upon Procedures
EXHIBIT E Form of Transferor Certificate
EXHIBIT F Form of Certificate to be Given by
Certificate Owner
EXHIBIT G Form of Certificate to be Given by
Euroclear or Cedel
EXHIBIT H Form of Certificate to be Given by
Transferee of Beneficial Interest in a
Regulation S Temporary Book-Entry
Certificate
EXHIBIT I Form of Transfer Certificate for
Exchange or Transfer from 144A Book-
Entry Certificate to Regulation S Book-
Entry Certificate
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EXHIBIT J Form of Placement Agent Exchange
Instructions
EXHIBIT K Form of Certificate to be Delivered upon
Exchange or Registration of Transfer of
Definitive 144A Certificates
EXHIBIT L Form of Transfer Certificate for
Exchange or Transfer from Regulation S
Temporary Book-Entry Certificate to Rule
144A Book-Entry Certificate
SCHEDULE 1 Account Banks - Lockbox Banks
Account Banks - Concentration Account
Bank
APPENDIX A Definitions
2. Series 1996-1 Supplement to Amended and
Restated Pooling and Servicing Agreement ........................ 2
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
EXHIBIT B Form of Daily Report
EXHIBIT C Form of Monthly Report
3. Amended and Restated Receivables
Purchase Agreement .............................................. 3
EXHIBIT A Form of Buyer Note
EXHIBIT B Form of Seller Assignment Certificate
EXHIBIT C Form of Contribution Agreement
SCHEDULE 1 Litigation and Other Proceedings
SCHEDULE 2 Changes in Financial Condition
SCHEDULE 3 Offices of the Sellers where Records are
Maintained
SCHEDULE 4 Legal Names, Trade Names and Names Under
Which the Companies Do Business
4. Certificate Purchase Agreement
(Series 1996-1, Class A) ........................................ 4
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX X Index of Additional Defined Terms
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5. Certificate Purchase Agreement
(Series 1996-1, Class B) ........................................ 5
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX X Index of Additional Defined Terms
6. Series 1996-1 Certificate (Class A) ............................. 6
7. Series 1996-1 Certificate (Class B) ............................. 7
8. Guaranty of Howmet .............................................. 8
9. Intercreditor Agreement ......................................... 9
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PROJECT BLADE - TAKEOUT
BLADE RECEIVABLES MASTER TRUST
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions .............................. page 1
SECTION 1.2 Transitional Matters ..................... page 1
ARTICLE II CONVEYANCE OF ASSETS
SECTION 2.1 Creation of the Trust;
Conveyance of Certain
Assets ................................... page 1
SECTION 2.2 Acceptance by Trustee .................... page 3
SECTION 2.3 Representations and Warranties
of Tranferor Relating to
the Transferred Assets ................... page 3
SECTION 2.4 No Assumption of Obligations
Relating to Receivables,
Related Transferred Assets
or Contracts ............................. page 5
SECTION 2.5 Conveyance of Purchased
Interests by the Trust ................... page 5
ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1 Acceptance of Appointment;
Other Matters ............................ page 6
SECTION 3.2 Duties of Servicer and
Transferor ............................... page 7
SECTION 3.3 Lockbox Accounts;
Concentration Accounts ................... page 10
SECTION 3.4 Servicing Compensation ................... page 13
SECTION 3.5 Records of Servicer and
Reports to be Prepared by
Servicer ................................. page 14
SECTION 3.6 Monthly Servicer's Certificate ........... page 16
SECTION 3.7 Servicing Report of
Independent Public
Accountants; Forms 10-Q
and 10-K ................................. page 16
SECTION 3.8 Rights of Trustee ........................ page 17
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SECTION 3.9 Ongoing Responsibilities of
Howmet .................................. page 19
SECTION 3.10 Further Action Evidencing
Transfers ............................... page 20
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS
AND PURCHASERS; ALLOCATIONS
SECTION 4.1 Rights of Certificateholders and
Purchasers ............................... page 20
SECTION 4.2 Establishment of Transaction
Accounts ................................. page 21
SECTION 4.3 Trust-Level Calculations and
Funds Allocations ........................ page 23
SECTION 4.4 Investment of Funds in
Transaction Accounts ..................... page 23
SECTION 4.5 Attachment of Transaction
Accounts ................................. page 24
ARTICLE V DISTRIBUTIONS AND REPORTS
ARTICLE VI THE CERTIFICATES
SECTION 6.1 The Certificates ........................ page 24
SECTION 6.2 Authentication of Certificates .......... page 25
SECTION 6.3 Registration of Transfer and
Exchange of Certificates ................ page 25
SECTION 6.4 Mutilated, Destroyed, Lost or
Stolen Certificates ..................... page 28
SECTION 6.5 Persons Deemed Owners ................... page 28
SECTION 6.6 Appointment of Paying Agent ............. page 29
SECTION 6.7 Access to List of
Certificateholders' Names
and Addresses ........................... page 30
SECTION 6.8 Authenticating Agent .................... page 30
SECTION 6.9 Tax Treatment ........................... page 32
SECTION 6.10 Issuance of Additional Series
of Certificates and Sales
of Purchased Interests .................. page 32
SECTION 6.11 Book-Entry Certificates ................. page 37
SECTION 6.12 Notices to Clearing Agency .............. page 44
SECTION 6.13 Definitive Certificates ................. page 44
SECTION 6.14 Letter of Representations ............... page 45
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ARTICLE VII TRANSFEROR
SECTION 7.1 Representations and Warranties
of Transferor Relating to
Transferor and the
Transaction Documents .................... page 45
SECTION 7.2 Covenants of Transferor .................. page 48
SECTION 7.3 Indemnification by Transferor ............ page 55
ARTICLE VIII SERVICER
SECTION 8.1 Representations and Warranties
of Servicer .............................. page 57
SECTION 8.2 Covenants of Servicer .................... page 59
SECTION 8.3 Merger or Consolidation of or
Assumption of the
Obligations of Servicer .................. page 60
SECTION 8.4 Indemnification by Servicer .............. page 61
SECTION 8.5 Servicer Liability ....................... page 62
SECTION 8.6 Limitation on Liability of
Servicer and Others ...................... page 62
ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1 Early Amortization Events ................ page 63
SECTION 9.2 Remedies ................................. page 63
SECTION 9.3 Additional Rights Upon the
Occurrence of Certain
Events ................................... page 63
ARTICLE X SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults ....................... page 64
SECTION 10.2 Trustee to Act; Appointment of
Successor ............................... page 66
SECTION 10.3 Notification of Servicer
Default; Notification of
Appointment of Successor
Servicer ................................ page 68
ARTICLE XI TRUSTEE
SECTION 11.1 Duties of Trustee ....................... page 69
SECTION 11.2 Certain Matters Affecting
Trustee ................................. page 72
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SECTION 11.3 Limitation on Liability of
Trustee ................................ page 74
SECTION 11.4 Trustee May Deal with Other
Parties ................................ page 75
SECTION 11.5 Servicer To Pay Trustee's Fees
and Expenses ........................... page 75
SECTION 11.6 Eligibility Requirements for
Trustee ................................ page 76
SECTION 11.7 Resignation or Removal of
Trustee ................................ page 77
SECTION 11.8 Successor Trustee ...................... page 77
SECTION 11.9 Merger or Consolidation of
Trustee ................................ page 78
SECTION 11.10 Appointment of Co-Trustee or
Separate Trustee ....................... page 78
SECTION 11.11 Tax Returns ............................ page 80
SECTION 11.12 Trustee May Enforce Claims
Without Possession of
Certificates ........................... page 80
SECTION 11.13 Suits for Enforcement .................. page 81
SECTION 11.14 Rights of Required Investors
To Direct Trustee ...................... page 81
SECTION 11.15 Representations and
Warranties of Trustee .................. page 81
SECTION 11.16 Maintenance of Office or
Agency ................................. page 82
ARTICLE XII TERMINATION
SECTION 12.1 Termination of Trust ................... page 82
SECTION 12.2 Final Distribution ..................... page 83
SECTION 12.3 Rights Upon Termination of
the Trust .............................. page 84
SECTION 12.4 Optional Repurchase of
Investor Interests ..................... page 85
SECTION 12.5 Defeasance and
Refinancing of Certificates ............ page 85
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment, Waiver, Etc .................. page 86
SECTION 13.2 Actions by Certificateholders
and Purchasers .......................... page 88
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SECTION 13.3 Limitation on Rights of
Certificateholders ..................... page 89
SECTION 13.4 Limitation on Rights of
Purchasers ............................. page 90
SECTION 13.5 Governing Law .......................... page 91
SECTION 13.6 Notices ................................ page 91
SECTION 13.7 Severability of Provisions ............. page 92
SECTION 13.8 Certificates Nonassessable and
Fully Paid ............................. page 92
SECTION 13.9 Nonpetition Covenant ................... page 93
SECTION 13.10 No Waiver; Cumulative
Remedies ............................... page 93
SECTION 13.11 Counterparts ........................... page 93
SECTION 13.12 Third-Party Beneficiaries .............. page 93
SECTION 13.13 Integration ............................ page 94
SECTION 13.14 Binding Effect; Assignability;
Survival of Provisions ................. page 94
SECTION 13.15 Limitation on Liability of
Certain Persons ........................ page 94
SECTION 13.16 Recourse to Transferred Assets ......... page 95
SECTION 13.17 Submission to Jurisdiction ............. page 95
SECTION 13.18 Waiver of Jury Trial ................... page 96
SECTION 13.19 Certain Partial Releases ............... page 96
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EXHIBITS
EXHIBIT A Form of Lockbox Account Letter Agreement
EXHIBIT B Form of Concentration Account Letter Agreement
EXHIBIT C Form of Monthly Servicer's Certificate
EXHIBIT D Annual Agreed-Upon Procedures
EXHIBIT E Form of Transferor Certificate
EXHIBIT F Form of Certificate to be Given by Certificate Owner
EXHIBIT G Form of Certificate to be Given by Euroclear or Cedel
EXHIBIT H Form of Certificate to be Given by Transferee of
Beneficial Interest in a Regulation S Temporary
Book-Entry Certificate
EXHIBIT I Form of Transfer Certificate for Exchange or
Transfer from 144A Book-Entry Certificate to
Regulation S Book-Entry Certificate
EXHIBIT J Form of Placement Agent Exchange Instructions
EXHIBIT K Form of Certificate to be Delivered upon
Exchange or Registration of Transfer of
Definitive 144A Certificates
EXHIBIT L Form of Transfer Certificate for Exchange
or Transfer from Regulation S Temporary Book-Entry
Certificate to Rule 144A Book-Entry Certificate
SCHEDULES
SCHEDULE 1 Account Banks - Lockbox Banks
Account Banks - Concentration Account Bank
APPENDIX
APPENDIX A Definitions
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This AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of
April 18, 1996 (this "Agreement"), is made among BLADE RECEIVABLES CORPORATION,
a Nevada corporation ("Transferor"), HOWMET CORPORATION, a Delaware corporation
("Howmet"), and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as Trustee.
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used in this Agreement have
the meanings that Appendix A assigns to them, and this Agreement shall be
interpreted in accordance with Part B of Appendix A.
SECTION 1.2 Transitional Matters. The Pooling and Servicing Agreement
dated as of December 13, 1995 (the "Existing Pooling Agreement") among the
parties to this Agreement shall be amended and restated in its entirety to read
as set forth in this Agreement. Each reference to the Existing Pooling Agreement
in any document shall (unless the context otherwise requires) be deemed to refer
to the Existing Pooling Agreement as amended and restated by this Agreement.
ARTICLE II CONVEYANCE OF ASSETS
SECTION 2.1 Creation of the Trust; Conveyance of Certain Assets. (a)
Transferor confirms the transfer, assignment, set over, grant and conveyance to
Trustee under the Existing Pooling Agreement, and hereby transfers, assigns,
sets over, grants and otherwise conveys to Trustee, in its capacity as
representative of the Certificateholders and the Purchasers, without recourse
(except as expressly provided herein), all of its right, title and interest in,
to and under, (i) each Receivable (including each Contributed Receivable) that
has been or is hereafter transferred by the Sellers to Transferor (each, a
"Transferred Receivable"), (ii) all Related Assets, (iii) all of Transferor's
rights to receive payment or pursue remedies under the Seller Transaction
Documents (the property described in clauses (ii) and (iii) being called the
"Related Transferred Assets"), (iv) all funds from time to time on deposit in
each of the Transaction Accounts (including funds deposited in a Transaction
Account in connection with the issuance of any prefunded Series) and all funds
from time to time on deposit in each of the Bank Accounts representing
Collections on, or other proceeds of, the foregoing and, in each case, all
certificates and instruments, if any, from time to time evidencing such funds,
all investments made with such funds, all claims thereunder or in connection
therewith and all interest, dividends, monies, instruments, securities and other
property from time to time received, receivable or otherwise distributed in
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respect of or in exchange for any or all of the foregoing, (v) any Enhancements
obtained for the benefit of any Series or Purchased Interest and (vi) all moneys
due or to become due and all amounts received or receivable with respect to any
of the foregoing and all proceeds of the foregoing. Such property, whether now
existing or hereafter acquired, shall constitute the assets of the Trust
(collectively, the "Transferred Assets"). The foregoing transfer, assignment,
setover, grant and conveyance to the Trust is made to Trustee, on behalf of the
Trust, and each reference in this Agreement to such transfer, assignment,
setover and conveyance shall be construed accordingly.
(b) In connection with the transfer described in subsection (a),
Transferor and Servicer have recorded and filed or caused to be recorded and
filed, as an expense of Servicer paid out of the Servicing Fee, financing
statements with respect to the Transferred Assets meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the transfer and assignment of the Transferred Assets to the Trust.
In connection with the transfer described in subsection (a), Transferor and
Servicer further agree to deliver to Trustee each Transferred Asset (including
any original documents or instruments included in the Transferred Assets as are
necessary to effect such transfer) in which the transfer of an interest is
perfected under the UCC or otherwise by possession. Transferor or Servicer shall
deliver each such Transferred Asset to Trustee, as an expense of Servicer paid
out of the Servicing Fee, immediately upon the transfer of any such Transferred
Asset to Trustee pursuant to subsection (a).
(c) In connection with the transfer described above in subsection (a),
Servicer shall, on behalf of Transferor, as an expense of Servicer paid out of
the Servicing Fee, on or prior to the date hereof, mark the master data
processing records evidencing the Receivables with the following legend:
"CERTAIN RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO BLADE
RECEIVABLES CORPORATION ("BRC") PURSUANT TO A RECEIVABLES PURCHASE
AGREEMENT, DATED AS OF DECEMBER 13, 1995, AND AMENDED AND RESTATED AS
OF APRIL 18, 1996, AMONG HOWMET CORPORATION ("HOWMET"), CERTAIN OF ITS
SUBSIDIARIES AND BRC; AND SUCH RECEIVABLES HAVE BEEN TRANSFERRED TO THE
BLADE RECEIVABLES MASTER TRUST PURSUANT TO A POOLING AND SERVICING
AGREEMENT, DATED AS OF DECEMBER 13, 1995, AND AMENDED AND RESTATED AS
OF APRIL 18, 1996, AMONG BRC, AS TRANSFEROR, HOWMET, AS INITIAL
SERVICER, AND
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MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE."
(d) Upon the request of Transferor, Trustee will cause Certificates in
authorized denominations evidencing the entire interest in the Trust to be duly
authenticated and delivered to or upon the order of Transferor pursuant to
Section 6.2. Pursuant to the Transferor Certificate, Transferor shall be
entitled to receive current and deferred transfer payments at the times and in
the amounts specified in the various Supplements and PI Agreements executed from
time to time.
(e) If the transfer, assignment, set-over, grant and conveyance
described in subsection (a) of this Section 2.1 are deemed to create a security
interest in any of the property described in that Section, Transferor hereby (i)
grants to the Trustee, for the benefit of the Trustee, the Certificateholders
and the Purchasers, a security interest in that property (which shall be deemed
to be a first perfected security interest and shall secure Transferor's
obligations under the Transaction Documents, the Certificates and the Purchased
Interests), and (ii) agrees that this Agreement shall constitute a security
agreement under applicable law.
SECTION 2.2 Acceptance by Trustee. Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
Transferred Assets and declares that it shall maintain such right, title and
interest, upon the trust herein set forth, for the benefit of all
Certificateholders and Purchasers, on the terms and subject to the conditions
hereinafter set forth.
SECTION 2.3 Representations and Warranties of Transferor Relating to
the Transferred Assets.
(a) Representations and Warranties. At the time that any Receivable or
Related Asset is transferred by Transferor to the Trust, Transferor hereby
represents and warrants that:
(i) Valid Transfer. Each transfer of Receivables and other
Transferred Assets by Transferor to the Trust pursuant to this
Agreement constitutes a valid transfer and assignment to the Trust of
all right, title and interest of Transferor in, to and under such
Receivables and the Related Transferred Assets, free and clear of any
Adverse Claim (other than any Permitted Adverse Claim), and constitutes
either an absolute transfer of such property to the Trust or a grant of
a first priority perfected security interest in such property to the
Trust, in
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either case enforceable against creditors of, and purchasers from,
Transferor and the Sellers.
(ii) Quality of Title. (A) Immediately before each transfer to
be made by Transferor hereunder, each Receivable and Related
Transferred Asset that was then to be transferred to the Trust
hereunder was owned by Transferor free and clear of any Adverse Claim
(other than any Permitted Adverse Claim); and, within two Business Days
of the First Issuance Date, Transferor and Servicer will make, or
caused to be made, all filings and take all other action under
applicable law in each relevant jurisdiction in order to protect and
perfect the Trust's interest in such Receivables, such Related
Transferred Assets and the funds in the Transaction Accounts against
all creditors of, and purchasers from, Transferor and the Sellers.
(B) No effective financing statement or other instrument
similar in effect that covers all or part of any Transferred
Receivable, any Related Transferred Asset, any other Transferred Asset
or any interest in any proceeds thereof is on file in any recording
office except financing statements as to which termination statements
or releases are filed on the First Issuance Date or within two Business
Days after the First Issuance Date and except any filings relating to
any Permitted Adverse Claim.
(C) No acquisition of any Receivable or Related Transferred
Asset by Transferor or the Trust constitutes a fraudulent transfer or
fraudulent conveyance under the United States Bankruptcy Code or
applicable state bankruptcy or insolvency laws or is otherwise void or
voidable or subject to subordination under similar laws or principles
or for any other reason.
(iii) Governmental Approvals. With respect to each Transferred
Receivable and Related Transferred Asset, all consents, licenses,
approvals or authorizations of, or notices to or registrations,
declarations or filings with, any Governmental Authority required to be
obtained, effected or made by the Sellers, Servicer or Transferor in
connection with the conveyance of such Transferred Receivable and
Related Transferred Asset by the Sellers to Transferor, or by
Transferor to the Trust, have been duly obtained, effected or given and
are in full force and effect.
(iv) Eligible Receivables. (A) On the date on which any Seller
transfers a Receivable to Transferor, and Transferor transfers such
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Receivable to the Trust, unless otherwise identified by Servicer in the
Daily Report for such date, such Receivable is an Eligible Receivable,
and (B) on the date of each Daily Report or Monthly Report that
identifies a Receivable as an Eligible Receivable, such Receivable is
an Eligible Receivable.
(b) Notice of Breach. The representations and warranties set forth in
subsection (a) shall survive the transfer of the Transferred Receivables and the
Related Transferred Assets to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties set forth in
subsection (a), the party discovering the breach shall give written notice to
the others within four Business Days following the discovery; provided, however
that if such breach arises from a Seller's failure to perform its obligations
under the Purchase Agreement and such failure is of the type that may be cured
by settlement of a Seller Non-Complying Receivables Adjustment or Seller
Dilution Adjustment under Sections 3.1 and 3.5 of the Purchase Agreement, and
such settlement shall have (in fact) been made within the time limit specified
under such sections, then no breach shall be deemed to have occurred under this
Agreement. Trustee's obligations in respect of discovering any breach are
limited as provided in Section 11.2(g).
SECTION 2.4 No Assumption of Obligations Relating to Receivables,
Related Transferred Assets or Contracts. The transfer, assignment, set over,
grant and conveyance described in Section 2.1 does not constitute and is not
intended to result in a creation or an assumption by the Trust, Trustee or any
Investor Certificateholder of any obligation of Servicer, Transferor, any Seller
or any other Person in connection with the Transferred Receivables or the
Related Transferred Assets or under the related Contracts or any other agreement
or instrument relating thereto. None of Trustee, the Trust, any Investor
Certificateholder or any Purchaser shall have any obligation or liability to any
Obligor.
SECTION 2.5 Conveyance of Purchased Interests by the Trust. Pursuant to
the terms of a PI Agreement, Trustee, on behalf of the Trust, from time to time
may sell, transfer, assign, set over and otherwise convey Purchased Interests to
a Purchaser or an Agent for the account of a Purchaser; and Trustee, on behalf
of the Trust, is authorized and directed (subject to the applicable terms of
Section 6.10), upon the written request of Transferor, to enter into one or more
PI Agreements in the form annexed to each such written request. Pursuant to a PI
Agreement, Collections allocated to Purchased Interests may be reinvested and
such Purchased Interests may be recomputed, each from time to time as provided
therein.
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ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1 Acceptance of Appointment; Other Matters.
(a) Designation of Servicer. The servicing, administering and
collection of the Transferred Receivables and the Related Transferred Assets
shall be conducted by the Person designated as Servicer hereunder from time to
time in accordance with this section. Until Trustee gives a Termination Notice
to Howmet pursuant to Section 10.1, Howmet is designated (and agrees to act) as
Servicer.
(b) Delegation of Certain Servicing Activities. In the ordinary course
of business, Servicer may at any time delegate its duties hereunder with respect
to the Transferred Receivables and the Related Transferred Assets to any Person.
Each Person to whom any such duties are delegated in accordance with this
Section is called a "Sub-Servicer". Notwithstanding any such delegation,
Servicer shall remain liable for the performance of all duties and obligations
of Servicer pursuant to the terms of this Agreement and the other Transaction
Documents. The fees and expenses of any Sub-Servicers shall be as agreed between
Servicer and the Sub-Servicers from time to time and none of the Trust, Trustee,
any Certificateholder or any Purchaser shall have any responsibility therefor.
Upon any termination of a Servicer pursuant to Section 10.1, all Sub-Servicers
designated pursuant to this subsection by such Servicer shall automatically be
terminated.
(c) Termination. The designation of Servicer (and each Sub-Servicer)
under this Agreement shall automatically terminate upon termination of the Trust
pursuant to Section 12.1.
(d) Resignation of Servicer. Howmet shall not resign as Servicer unless
it determines that (i) the performance of its duties is no longer permissible
under applicable law and (ii) there is no reasonable action that it could take
to make the performance of its duties permissible under applicable law. If
Howmet determines that it must resign for the reasons stated above, it shall,
prior to the tendering of its resignation, deliver to Trustee an Opinion of
Counsel confirming the satisfaction of the conditions set forth in clause (i) of
the preceding sentence. No resignation by Howmet shall become effective until a
Successor Servicer shall have assumed the responsibilities and obligations of
Servicer in accordance with Section 10.2; provided, however, that if Howmet is
prevented by law from continuing to serve as Servicer, Trustee shall assume the
responsibilities and obligations of Servicer in accordance with Section 10.2.
Trustee shall give prompt notice to the Rating Agencies of the appointment of
any Successor Servicer.
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SECTION 3.2 Duties of Servicer and Transferor.
(a) Duties of Servicer in General. Servicer shall service the
Transferred Receivables and the Related Transferred Assets and, subject to the
terms and provisions of this Agreement, shall have full power and authority,
acting alone or through any Sub-Servicer, to do any and all things in connection
with such servicing that it may deem necessary or appropriate. Trustee shall
execute and deliver to Servicer any powers of attorney or other instruments or
documents that are prepared by Servicer and stated in an Officer's Certificate
to be, and shall furnish Servicer with any documents in its possession,
necessary or appropriate to enable Servicer to carry out its servicing duties.
Servicer shall exercise the same care and apply the same policies with respect
to the collection and servicing of the Transferred Receivables and the Related
Transferred Assets that it would exercise and apply if it owned such Receivables
and the Related Transferred Assets, all in substantial compliance with
applicable law and in accordance with the Credit and Collection Policy.
Servicer shall take or cause to be taken (and shall cause each
Sub-Servicer (if any) to take or cause to be taken) all such actions as Servicer
deems reasonably appropriate to collect each Transferred Receivable and Related
Transferred Asset, all in accordance with applicable law and the Credit and
Collection Policy.
Without limiting the generality of the foregoing and subject to the
next preceding paragraph and Section 10.1, Servicer or its designee is hereby
authorized and empowered, unless such power and authority is revoked by Trustee
on account of the occurrence of a Servicer Default, (i) to instruct Trustee to
make withdrawals and payments from the Transaction Accounts as set forth in this
Agreement, (ii) to execute and deliver, on behalf of the Trust for the benefit
of the Certificateholders and Purchasers, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Transferred Receivables
and the Related Transferred Assets, (iii) to make any filings, reports, notices,
applications and registrations with, and to seek any consents or authorizations
from, the Securities and Exchange Commission and any state securities authority
on behalf of the Trust as may be necessary or appropriate to comply with any
federal or state securities laws or reporting requirements or other laws or
regulations, and (iv) to the extent permitted under and in compliance with the
Credit and Collection Policy and with all applicable laws, rules, regulations,
judgments, orders and decrees of courts and other governmental authorities
(whether federal, state, local or foreign) and all other tribunals, to commence
or settle collection proceedings with
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respect to the Transferred Receivables and otherwise to enforce the rights and
interests of the Trust and the Certificateholders and Purchasers in, to and
under the Transferred Receivables or Related Transferred Assets (as applicable).
(b) Identification and Transfer of Collections. Servicer shall cause
Collections and all other Transferred Assets that consist of cash or cash
equivalents to be deposited into the Bank Accounts and the Transaction Accounts
pursuant to the terms and provisions of Section 3.3 and Article IV. Following
notification from any Seller to Servicer or discovery by Servicer that
collections of any receivable or other asset that is not a Collection of a
Transferred Receivable or a Related Transferred Asset have been deposited into a
Bank Account or the Master Collection Account, Servicer shall cause all such
collections to be segregated, apart and in different accounts, from the Bank
Accounts and the Transaction Accounts. Servicer and, to the extent applicable,
Trustee shall hold all such funds in trust, separate and apart from such
Person's other funds. On each Business Day, after such misdirected collections
have been reasonably identified by Servicer to Trustee, Servicer shall instruct
Trustee to, and Trustee shall, turn over to the appropriate Lockbox Bank,
applicable Seller or other applicable Howmet Person (or their designees) all
such misdirected collections less all reasonable and appropriate out-of-pocket
costs and expenses, if any, incurred by Servicer in collecting such receivables.
All payments made by an Obligor that is obligated to make payments with
respect to both Receivables included in the Transferred Assets and Receivables
not included in the Transferred Assets shall be applied against the Receivables,
if any, that are designated by such Obligor by reference to the applicable
invoice as the Receivables with respect to which such payments should be
applied. In the absence of such designation, such payments shall be applied
first against the oldest outstanding Receivables owed by such Obligor.
Following notification from a Lockbox Bank that any item has been
returned or is uncollected and that such Lockbox Bank has not been otherwise
reimbursed pursuant to the terms of the applicable Lockbox Agreement for any
amounts it credited to the relevant Lockbox Account (and then transferred to the
Master Collection Account), Servicer shall instruct Trustee to, and Trustee
shall, turn over to such Lockbox Bank Collections in such amount from
Collections on deposit in the Master Collection Account (and such payments shall
have priority over any distributions to Certificateholders and Purchasers).
(c) Modification of Receivables, Etc. So long as no Servicer Default
shall have occurred and be continuing, Servicer may adjust, and may permit
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each Sub-Servicer to adjust, in accordance with Section 3.2(a) and the Credit
and Collection Policy, the Unpaid Balance of any Transferred Receivable, or
otherwise modify the terms of any Transferred Receivable or amend, modify or
waive any term or condition of any Contract related thereto, all as it may
determine to be appropriate to maximize collection thereof. Servicer shall, or
shall cause the applicable Sub-Servicer to, write off Transferred Receivables
from time to time in accordance with the Credit and Collection Policy.
(d) Documents and Records. At any time when Howmet is not Servicer,
Transferor, to the extent that it is entitled to do so under the Purchase
Agreement, shall, upon the request of the then-acting Servicer, cause each
Seller to deliver to Servicer, and Servicer shall hold in trust for Transferor
and Trustee in accordance with their respective interests, all Records that
evidence or relate to the Transferred Receivables and Related Transferred Assets
of such Seller.
(e) Certain Duties to the Sellers. Servicer, if other than Howmet,
shall, as soon as practicable after a demand by any Seller, deliver to the
Seller all documents, instruments and records in its possession that evidence or
relate to accounts receivable of the Seller or other Howmet Persons that are not
Transferred Receivables or Related Transferred Assets, and copies of all
documents, instruments and records in its possession that evidence or relate to
Transferred Receivables and Related Transferred Assets.
(f) Identification of Eligible Receivables. The initial Servicer will
(i) establish and maintain such procedures as are necessary for determining no
less frequently than each Business Day whether each Transferred Receivable
qualifies as an Eligible Receivable, and for identifying, on any Business Day,
all Transferred Receivables that are not Eligible Receivables, and (ii) include
in each Dally Report information that shows whether, and to what extent, the
Receivables described in such Dally Report are Eligible Receivables.
(g) Authorization to Act as Transferor's Agent. Without limiting the
generality of subsection (a), Transferor hereby appoints Servicer as its agent
for the following purposes: (i) specifying accounts to which payments are to be
made to Transferor, (ii) making transfers among, and deposits to and withdrawals
from, all deposit accounts of Transferor for the purposes described in the
Transaction Documents, and (iii) arranging payment by Transferor of all fees,
expenses and other amounts payable by Transferor pursuant to the Transaction
Documents. Transferor irrevocably agrees that (A) it shall be bound by all
actions taken by Servicer pursuant to the preceding sentence, and (B) Trustee
and the banks holding all deposit accounts of Transferor are entitled to accept
submissions, determinations, selections,
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specifications, transfers, deposits and withdrawal requests, and payments from
Servicer on behalf of Transferor.
(h) Grant of Power of Attorney. Transferor and Trustee hereby each
grant to Servicer a power of attorney, with full power of substitution, to take
in the name of Transferor and Trustee all steps that are necessary or
appropriate to endorse, negotiate, deposit or otherwise realize on any writing
of any kind held or transmitted by Transferor or transmitted or received by
Trustee (whether or not from Transferor) in connection with any Transferred
Receivable or Related Transferred Asset. The power of attorney that Transferor
and Trustee have granted to Servicer may be revoked by Trustee, and shall be
revoked by Transferor, on the date on which Trustee shall be entitled to
exercise the powers granted to Trustee pursuant to Section 3. 8(b). In
exercising its power granted hereby, Servicer shall take directions from
Trustee, if any, arising out of the exercise of the rights granted under Section
11.14.
(i) Turnover of Collections. If Servicer, Transferor or any of their
respective agents or representatives shall at any time receive any cash, checks
or other instruments constituting Collections, such recipient shall segregate
such payments and hold such payments in trust for Trustee and shall, promptly
upon receipt (and in any event within two Business Days following receipt),
remit all such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Bank Account or the Master Collection Account.
(j) Annual Statement as to Compliance. Servicer will deliver to Trustee
and each Rating Agency on or before March 31 of each year, beginning with March
31, 1997 an Officer's Certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Pooling Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Pooling
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and remedies therefor being pursued.
SECTION 3.3 Lockbox Accounts; Concentration Accounts. (a) Each Lockbox
Account shall be subject to a Lockbox Agreement substantially in the form of
Exhibit A (or such other form acceptable to the Trustee). Unless instructed
otherwise by Servicer (or, after the occurrence and continuance of an Early
Amortization Event, Trustee), each Lockbox Bank shall be instructed by Servicer
to remit, on a daily basis (but subject to the Lockbox Bank's
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customary funds availability schedule), all amounts deposited in the Lockbox
Accounts maintained with it to a Concentration Account or the Master Collection
Account. Any Concentration Account shall be maintained in the name of Trustee on
behalf of the Trust pursuant to a Concentration Account Agreement substantially
in the form of Exhibit B (or such other form acceptable to the Trustee). Except
as provided in this Agreement and the applicable Account Agreements, none of any
Seller, Transferor, Servicer, or any Person claiming by, through or under any
Seller, Transferor or Servicer shall have any control over the use of, or any
right to withdraw any item or amount from, any Lockbox Account or Concentration
Account. Servicer and Trustee are each hereby irrevocably authorized and
empowered, as Transferor's attorney-in-fact, to endorse any item deposited in a
lockbox or presented for deposit in any Lockbox Account or Concentration Account
requiring the endorsement of Transferor, which authorization is coupled with an
interest and is irrevocable. Each Lockbox Account shall be an Eligible Deposit
Account.
(b) Servicer shall instruct (or shall cause each Seller to instruct)
all Obligors to make all payments due to Transferor or any Seller relating to or
constituting Collections (or any proceeds thereof) (i) to lockboxes maintained
at the Lockbox Banks for deposit in a Lockbox Account or a Concentration Account
or (ii) directly to a lockbox Account. If Transferor or any Seller receives any
Collections or any other payment of proceeds of any other Related Transferred
Asset, Servicer shall instruct such recipient to (x) segregate such payment and
hold it in trust for the benefit of Trustee, and (y) as soon as practicable, but
no later than the second Business Day following receipt of such item by such
Person, deposit such payment in a Bank Account or the Master Collection Account.
Servicer shall, and shall instruct Transferor and the applicable Seller to, use
reasonable efforts to prevent the deposit of any amounts other than Collections
in any Lockbox Account or Concentration Account. If Servicer is notified by any
Seller that any amount other than Collections has been deposited in any Lockbox
Account or Concentration Account, Servicer shall promptly instruct the
appropriate Account Bank and Trustee to segregate such amount, and shall direct
such Account Bank or Trustee (as appropriate) to turn over such amounts to such
Seller or other Howmet Person (or their designees) to whom such amounts are
owed.
(c)(i) Servicer may, from time to time after the First Issuance Date,
designate a new account as a Lockbox Account or a Concentration Account, and
such account shall become a Lockbox Account or Concentration Account (and the
bank at which such account is maintained shall become a Lockbox Bank or a
Concentration Account Bank for purposes of this Agreement); provided that
Trustee shall have received not less than 15 Business Days' (or
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such shorter number of days as is acceptable to the Trustee) prior written
notice of the account and/or the bank that are proposed to be added as a Bank
Account or an Account Bank (as applicable) and, not less than ten Business Days
prior to the effective date of any such proposed addition, Trustee shall have
received (x) counterparts of a Lockbox Agreement or a Concentration Account
Agreement, as applicable, with each new Account Bank, duly executed by such new
Account Bank and all other parties thereto and (y) copies of all other
agreements and documents signed by the new Account Bank or such other parties
with respect to any new Lockbox Account or Concentration Account, as applicable.
(ii) Servicer may, from time to time after the First Issuance Date,
terminate an account as a Lockbox Account or a Concentration Account or a bank
as an Account Bank; provided that (x) no such termination shall occur unless
Trustee shall have received not less than ten Business Days' (or such shorter
number of days as is acceptable to the Trustee) prior written notice of the
account and/or the bank that are proposed to be terminated as a Bank Account or
an Account Bank (as applicable) and, not less than ten Business Days' (or such
shorter number of days as is acceptable to the Trustee) prior to the effective
date of any such proposed termination, Trustee shall have received counterparts
of an agreement, duly executed by such Account Bank and reasonably satisfactory
in form and substance to Trustee, pursuant to which such Account Bank agrees
that, if it receives any funds or items that constitute Collections on or after
the effective date of the termination of such Bank Account or the effective date
of its termination as an Account Bank (as the case may be), such Account Bank or
former Account Bank (as applicable) shall cause such funds and items to be
delivered in the form received to another lockbox or transferred to another
Lockbox Account, Concentration Account or the Master Collection Account promptly
after such Account Bank or former Account Bank (as applicable) discovers that it
has received any such funds or items, and (y) notwithstanding clause (x),
Transferor and Servicer may at any time establish alternative collection
procedures that do not require the use of Lockbox Accounts with the consent of
each Agent and any Enhancement Provider and upon satisfaction of the
Modification Condition.
(d) Servicer shall instruct each Concentration Account Bank (if any),
to transfer on a daily basis (subject to such Concentration Account Bank's
customary funds availability schedule) in same day funds to the Master
Collection Account all collected funds on deposit in the Concentration Account
maintained with such Concentration Account Bank. All such transfers shall be
made in accordance with the relevant Concentration Account Agreement.
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SECTION 3.4 Servicing Compensation. As full compensation for its
servicing activities hereunder and under any Supplement or PI Agreement, and as
reimbursement for any expense incurred by it in connection therewith, Servicer
shall be entitled to receive a monthly servicing fee (the "Servicing Fee") in
respect of each Series and Purchased Interest, payable in arrears on each
Distribution Date in respect of each Distribution Period (or portion thereof)
during which that Series or Purchased Interest is outstanding. The Servicing Fee
in respect of any Series or Purchased Interest shall be payable solely as
provided in the related Supplement or PI Agreement.
Unless otherwise provided in the applicable Supplement or PI Agreement,
the Servicing Fee payable with respect to any Series or Purchased Interest shall
be calculated as follows. At any time when Howmet or any of its affiliates is
Servicer, the Servicing Fee for any Distribution Period for any Series of
Certificates or Purchased Interest shall be equal to one-twelfth of the product
of (a) 2%, multiplied by (b) the aggregate Unpaid Balance of the Transferred
Receivables as measured on the first Business Day of that Distribution Period,
multiplied by (c) the applicable Series Collection Allocation Percentage. If
Howmet ceases to be Servicer, the Servicing Fee for a Successor Servicer that is
not a Howmet Person for any Distribution Period shall be an amount equal to the
greater of (i) the amount calculated pursuant to the preceding sentence and (ii)
an alternative amount specified by such Servicer not exceeding the sum of (x)
110% of the aggregate reasonable costs and expenses incurred by such Servicer
during such Distribution Period in connection with the performance of its
obligations under this Agreement and the other Transaction Documents, and (y)
the other costs and expenses that are to be paid out of the Servicing Fee, as
described in the next sentence; provided that, without the consent of Trustee
and the Required Investors, the amount provided for in clause (x) shall not
exceed one-twelfth of 2% of the aggregate Unpaid Balance of the Transferred
Receivables as measured on the first Business Day of such Distribution Period.
The fees, costs and expenses of Trustee, the Paying Agent, any authenticating
agent, the Lockbox Banks, the Concentration Account Banks and the Transfer Agent
and Registrar, and certain other costs and expenses payable from the Servicing
Fee pursuant to other provisions of this Agreement, and all other fees and
expenses that are not expressly stated in this Agreement, any Series Supplement
or any PI Agreement to be payable by the Trust or Transferor, other than
Federal, state, local and foreign income and franchise taxes, if any, or any
interest or penalties with respect thereto, of the Trust, shall be paid out of
the Servicing Fee and shall be paid by Servicer from the funds that constitute
the Servicing Fee.
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SECTION 3.5 Records of Servicer and Reports to be Prepared by Servicer.
(a) Keeping of Records and Books of Account. Servicer shall maintain at
all times accurate and complete books, records and accounts relating to the
Transferred Receivables, Related Transferred Assets and Contracts of each Seller
and all Collections thereon in which timely entries shall be made. Servicer
shall maintain and implement administrative and operating procedures (including
an ability to generate duplicates of Records evidencing Transferred Receivables
and the Related Transferred Assets in the event of the destruction of the
originals thereof), and shall keep and maintain all documents, books, records
and other information that Servicer deems reasonably necessary for the
collection of all Transferred Receivables and Related Transferred Assets.
(b) Receivables Reviews. Servicer shall provide Trustee access to the
documentation regarding the Transferred Receivables when Trustee is required, in
connection with the enforcement of the rights of Certificateholders or the
Purchasers or by applicable statutes or regulations, to review such
documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to
Servicer's normal security and confidentiality procedures, (iv) at reasonably
accessible offices in the continental United States of America designated by
Servicer and (v) upon five Business Days' prior notice; provided that no notice
shall be required if an Early Amortization Event shall have occurred and be
continuing; provided further, that the number of reviews conducted by Trustee,
absent an Early Amortization Event or an Unmatured Early Amortization Event, may
be limited by the terms of a Supplement (or related Certificate Purchase
Agreement) or PI Agreement.
(c) Daily Reports. Prior to 11:00 a.m., New York City time, on each
Business Day, Servicer shall prepare and deliver to Trustee and any Agent a
report relating to each outstanding Series and Purchased Interest, substantially
in the form specified by the applicable Supplement or PI Agreement or in such
other form as is reasonably acceptable to Trustee and Servicer (each such report
being a "Daily Report") setting out, among other things, the Base Amount and
Series Collection Allocation Percentage for that Series or Purchased Interest as
of the end of business on the preceding Business Day; provided that if, on any
Business Day, Servicer is unable to prepare and deliver a Daily Report to
Trustee because of acts of God or the public enemy, riots, acts of war, acts of
terrorism, epidemics, fire, failure of communication lines, equipment or power
failure, computer systems failure, flood, embargoes, weather, earthquakes or
other unanticipated disruptions of Servicer's ability to monitor the origination
and/or preparation of Receivables,
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then (x) the Base Amount for purposes of each outstanding Series and Purchased
Interest shall be the lowest Base Amount shown in the related Daily Reports
delivered during the immediately preceding month (such amount, an "Estimated
Base Amount") and (y) the Series Collection Allocation Percentage for that
Series or Purchased Interest shall be the one most recently reported. Servicer
may use an Estimated Base Amount and the most recently reported Series
Collection Allocation Percentage to prepare the Daily Report until the earlier
to occur of (i) the day upon which disruption no longer prevents Servicer from
preparing the Daily Report using the actual data required by the Daily Report
and delivering it to Trustee, and (ii) the sixth Business Day following the
commencement of such disruption. Notwithstanding the foregoing, on an Exempt
Holiday, Servicer may elect to not deliver a Daily Report for such day, provided
that (i) Servicer shall have given Trustee at least one Business Days' prior
written notice of such election, (ii) funds in the Lockbox Accounts are
transferred to a Concentration Account or the Trustee, and funds in the
Concentration Accounts are transferred to the Trustee, on such day
notwithstanding such election, (iii) no funds in any of the Transaction Accounts
will be transferred to Transferor on such day, (iv) one or more of the Sellers
shall not be open for business on such day, and (v) if any Exempt Holiday is an
Interest Payment Date (as defined in any Supplement or PI Agreement), Servicer
shall have given Trustee sufficient instructions (as determined by the Trustee)
to make all payments to Holders required on such date. "Exempt Holiday" means
(i) any of six Business Days between December 24 of one year and January 1 of
the next year, and (ii) any of five other days selected by Servicer during any
year.
(d) Monthly Report. On each Report Date, Servicer shall prepare and
deliver to Trustee and the Rating Agencies a report relating to each outstanding
Series and Purchased Interest, substantially in the form specified by the
applicable Supplement or PI Agreement or in such other form as is reasonably
acceptable to Trustee and Servicer (each such report being a "Monthly Report").
(e) Notice of Seller Change Events; Supplements to Monthly Reports.
Sections 1.7 and 1.8 of the Purchase Agreement describe circumstances under
which (i) additional Sellers may be added to the Program and (ii) a Seller may
terminate its status as Seller under the Program (each such event being a
"Seller change Event"). Those Sections of the Purchase Agreement require Howmet
to give written notice to Transferor of the occurrence of a Seller Change Event
not less than 30 days (or such shorter period as is acceptable to Trustee) prior
to the occurrence thereof, and Transferor hereby agrees to give prompt written
notice of its receipt of any such notice to Trustee and the Rating Agencies. If
the notice is given to Trustee, within five Business Days
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after the receipt of the notice by Trustee (or such later date, as specified in
the notice, on which the applicable Seller Change Event shall become effective),
Servicer shall deliver to Trustee and the Rating Agencies a supplement to the
Monthly Report then in effect for each outstanding Series or Purchased Interest,
which supplement shall show (A) the calculation or recalculation of the Required
Receivables and the "Applicable Reserve Ratio" (as defined in the applicable
Supplement or PI Agreement) to reflect the addition of accounts receivable
originated by any Person that is being added to the Program as a Seller, and the
exclusion of any Transferred Receivables originated by any such Person that is
terminating its status as a Seller (as applicable), and (B) the Loss Discount
and the Purchase Discount for any such Person that is being added to the Program
as a Seller. For purposes of all calculations hereunder and under the Purchase
Agreement, the Required Receivables and (if applicable) the Loss Discount and
the Purchase Discount for the relevant Person shown in such supplement shall
supersede and/or supplement the calculation of such items in the then
outstanding Monthly Report, effective as of the fifth Business Day following
Trustee's receipt of such notice (or such later date, as specified in such
notice, on which the applicable Seller Change Event shall become effective).
SECTION 3.6 Monthly Servicer's Certificate. On each Report Date,
Servicer shall deliver to Trustee, the Paying Agent, Transferor and the Rating
Agencies a certificate of an Authorized Officer of Servicer substantially in the
form of Exhibit C, with such additions as may be required by any Supplement.
SECTION 3.7 Servicing Report of Independent Public Accountants; Forms
10-Q and 10-K. (a)(i) On or before 120 days after the end of each fiscal year of
Transferor (beginning with the end of Transferor's fiscal year 1997), Servicer
shall, as an expense of Servicer paid out of the Servicing Fee, cause Ernst &
Young or another firm of nationally recognized independent public accountants
(which may also render other services to Servicer, the Sellers or Transferor) to
furnish a report to Trustee, Servicer, the Rating Agencies and Transferor (which
report shall be addressed to Trustee and shall relate to Transferor's most
recently ended fiscal year). The accountants' report shall set forth the results
of their performance of the procedures described in Exhibit D with respect to
the Monthly Reports and Daily Reports delivered to Trustee pursuant to Section
3.5 during the prior fiscal year.
(ii) Each accountants' report shall state that the accountants have
compared the amounts contained in the Monthly Reports and a sample randomly
selected from all Daily Reports delivered to Trustee during the period covered
by the report with the records (including computer records) from which the
amounts were derived and that, on the basis of such
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comparison, the amounts are in agreement with the documents and records, except
for such exceptions as they believe to be immaterial and such other exceptions
as shall be set forth in the report. Except as provided otherwise in a
Supplement, a copy of the accountants' report may be obtained by any Investor
Certificateholder by a request in writing to Trustee addressed to the Corporate
Trust Office.
(b) In the event that Servicer is required to file Quarterly Reports on
Form 10-Q, Annual Reports on Form 10-K or Reports on Form 8-K with the SEC,
Servicer shall provide each of the Rating Agencies with copies of such reports
promptly after such reports have been filed with the SEC.
SECTION 3.8 Rights of Trustee.
(a) Trustee has the exclusive dominion and control over the Bank
Accounts, and Transferor shall take any action that Trustee may reasonably
request to effect or evidence such dominion and control. At any time following
the occurrence of a Servicer Default, Trustee is hereby authorized to give
notice to the Account Banks, as provided in the Account Agreements, of the
revocation of Servicer's authority to give instructions or take any other
actions with respect to the Bank Accounts that Servicer would otherwise be
authorized to give or to take.
(b) At any time following the designation of a Servicer other than
Howmet until a Successor Servicer (if other than Trustee) has been appointed:
(i) Trustee may direct any Obligors of Transferred Receivables
to pay all amounts payable under any Transferred Receivable or any
Related Transferred Assets directly to Trustee or its designee;
provided that Trustee shall provide each affected Seller with a copy of
such notice at least two Business Days prior to sending it to any
Obligor and consult in good faith with each such Seller as to the text
of the notice.
(ii) Trustee may direct any Seller to make payment of all
amounts payable by such Seller to Transferor under any Transaction
Document to which the Seller is a party directly to Trustee or its
designee.
(iii) Transferor and Servicer shall, at Trustee's request and
as an expense of Servicer paid out of the Servicing Fee, give notice of
the Trust's ownership of the Transferred Receivables and the Related
Transferred Assets to each Obligor and direct that payments be made
directly to Trustee or its designee.
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(iv) Transferor shall, and shall cause the Sellers to, at
Trustee's request, (A) assemble all of the Records that are necessary
or appropriate to collect the Transferred Receivables and Related
Transferred Assets, and shall make the same available to Trustee at one
or more places selected by Trustee or its designee, (B) segregate all
cash, checks and other instruments received by it from time to time
constituting Collections in a manner acceptable to Trustee and shall,
promptly upon receipt (and, subject to Section 3.2(i), in no event
later than the second Business Day following receipt), remit all such
cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Bank Account or the Master Collection
Account and (C) permit, upon not less than two Business Days' prior
written notice, any Successor Servicer and its agents, employees and
assignees access to their respective facilities and their respective
Records.
(c) Each of Transferor and Servicer hereby authorizes Trustee, from
time to time after the designation of a Servicer other than Howmet, to take any
and all steps in Transferor's name and on behalf of Transferor and Servicer that
are necessary or appropriate, in the reasonable determination of Trustee, to
collect all amounts due under any and all Transferred Receivables or Related
Transferred Assets, including endorsing the name of Transferor or the applicable
Seller on checks and other instruments representing Collections and enforcing
such Transferred Receivables and the Related Transferred Assets.
(d) Transferor hereby irrevocably appoints Trustee to act as
Transferor's attorney-in-fact, with full authority in the place and stead of
Transferor and in the name of Transferor or otherwise, from time to time after
the designation of a Servicer other than Howmet, to take (subject to Section
11.14 hereof) any action and to execute any instrument or document that Trustee,
in its reasonable determination, may deem necessary to accomplish the purposes
of this Agreement, including:
(i) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any Transferred Receivable or any Related
Transferred Asset;
(ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i);
(iii) to file any claims or take any action or institute any
proceedings that Trustee in its reasonable determination may deem
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necessary or appropriate for the collection of any of the Transferred
Receivables or any Related Transferred Asset or otherwise to enforce
the rights of Trustee and the Certificateholders with respect to any of
the Transferred Receivables or any Related Transferred Asset; and
(iv) to perform the affirmative obligations of Transferor
under any Transaction Document.
Transferor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 3.9 Ongoing Responsibilities of Howmet Anything herein to the
contrary notwithstanding:
(a) If at any time Howmet shall not be Servicer, it shall
deliver all Collections received or deemed received by it or its
Subsidiaries to Trustee no later than two Business Days after receipt
or deemed receipt thereof and Trustee shall distribute such Collections
to the same extent as if such Collections had actually been received
from the related Obligor on the applicable dates. So long as Howmet or
any of its Subsidiaries shall hold any Collections or deemed
Collections required to be paid to Trustee, each of them shall hold
such amounts in trust (and separate and apart from its own funds) and
shall clearly mark its records to reflect such trust. Howmet hereby
grants to Trustee an irrevocable power of attorney, with full power of
substitution, coupled with an interest, upon the occurrence of a
Servicer Default, to take in the name of Howmet all steps necessary or
appropriate to endorse, negotiate or otherwise realize on any writing
or other right of any kind held or transmitted by Howmet or transmitted
and received by Trustee (whether or not from Howmet) in connection with
any Transferred Receivable or Related Transferred Asset.
(b) In addition, if at any time Howmet shall not be Servicer,
it shall act (if the Successor Servicer so requests) as the data
processing agent of Servicer and, in such capacity, Howmet shall
conduct (and shall cause any other necessary Persons to conduct) the
data processing functions of the administration of the Transferred
Receivables, the Related Transferred Assets and the Collections thereon
in substantially the same way that Howmet (or its Sub-Servicers)
conducted such data processing functions while Howmet acted as
Servicer. Howmet and each such other Person shall be entitled to
reasonable compensation for such service to be paid from the Servicing
Fee.
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(c) Notwithstanding any termination of Howmet as Servicer
hereunder, Howmet shall continue to indemnify Trustee on the terms set
out in Section 11.5 with respect to circumstances existing, or actions
taken or omitted, prior to such termination.
SECTION 3.10 Further Action Evidencing Transfers. Servicer shall cause
all financing statements and continuation statements and any other necessary
documents relating to the right, title and interest of Trustee in and to the
Transferred Assets to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
right, title and interest of Trustee hereunder in and to all property comprising
the Transferred Assets. Servicer shall deliver to Trustee file-stamped copies
of, or filing receipts for, any document recorded, registered or filed as
provided above, as soon as available following such recording, registration or
filing. Transferor shall cooperate fully with Servicer in connection with the
obligations set forth above and will execute any and all documents that are
reasonably required to fulfill the intent of this section.
If Transferor or Servicer falls to perform any of its agreements or
obligations under any Transaction Document and does not remedy such failure
within the applicable cure period, if any, then Trustee or its designee may (but
shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of Trustee or its designee
incurred in connection therewith shall be payable by Servicer as provided in
Section 11.5 and (if applicable) by Transferor as provided in Section 73.
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND PURCHASERS; ALLOCATIONS
SECTION 4.1 Rights of Certificateholders and Purchasers. Each Series of
Investor Certificates shall collectively represent a fractional undivided
beneficial interest (as to any Series, the "Series Interest") in the Trust, and
the amount of that undivided beneficial interest shall equal the Series
Collection Allocation Percentage for that Series from time to time. Each
Certificate within a Series shall represent a partial ownership interest in the
related Series Interest, representing the right to receive, to the extent
necessary to make the required payments with respect to that Certificate at the
times and in the amounts specified in this Article IV and in the related
Supplement, the portion of Collections allocable to Investor Certificateholders
of such Series pursuant to this Agreement and such Supplement, funds on deposit
in the Transaction Accounts allocable to Investor Certificateholders of such
Series and funds available pursuant to any related Enhancement. Each "Purchased
Interest"
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shall represent a fluctuating undivided ownership interest in the Transferred
Assets, purchased pursuant to the PI Agreement related thereto, that shall
include the right to receive, to the extent necessary to make required payments
to Purchasers at the time and in the amounts specified in the related PI
Agreement, the portion of Collections allocable to such Purchased Interest
pursuant to this Agreement and the PI Agreement, funds on deposit in the Master
Collection Account allocable to the Purchased Interest pursuant to this
Agreement and the PI Agreement and funds available pursuant to any related
Enhancement. Unless the applicable Supplement or PI Agreement provides
otherwise, the Investor Certificates of any Series or class and any Purchased
Interest shall not represent any interest in any funds allocable to, or
Enhancement for the benefit of, any other Series or Purchased Interest. The
"Transferor Certificate" shall represent an interest in the Trust (the
"Transferor Interest") consisting of the right to receive current and deferred
transfer payments in respect of the various Series and Purchased Interests
outstanding from time to time at the times and in the amounts specified in the
related Supplements and PI Agreements.
SECTION 4.2 Establishment of Transaction Accounts. (a) On or prior to
the date of this Agreement, Trustee has established, and until the Trust is
terminated Trustee shall (except as expressly permitted or required below)
maintain, in the name of Trustee and for the benefit of the Certificateholders
and Purchasers, the following accounts:
(i) account no. 185590981, which shall be called the "Master
Collection Account" and into which all Collections and all other
Transferred Assets consisting of cash or cash equivalents shall be
transferred on a daily basis from the Bank Accounts;
(ii) account no. 185591070, which shall be called the
"Carrying Cost Account" and into which funds shall be allocated from
time to time to cover carrying costs of each Series and Purchased
Interest (including interest payable on, and the Servicing Fee
allocated to, each Series and Purchased Interest);
(iii) account no. 185591161, which shall be called the
"Equalization Account" and into which funds will from time to time be
transferred from the Master Collection Account to compensate for
fluctuations in the Base Amounts for the outstanding Series and
Purchased Interests; and
(iv) account no. 185591252, which shall be called the
"Principal Funding Account" and into which funds will from time to
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time be transferred in anticipation of distributions to Investor
Certificateholders or Purchasers on account of their respective
principal investments.
(b) In addition, if an Early Amortization Period occurs with respect to
any Series or Purchased Interest, Trustee shall establish an additional account
which shall be called the "Holdback Account" and into which funds that would
otherwise be remitted by Trustee to the Transferor in respect of the Transferor
Certificate will be deposited if and to the extent so provided in the related
Supplement or PI Agreement.
(c) The Master Collection Account, the Carrying Cost Account, the
Equalization Account, the Principal Funding Account, any Holdback Account and
any additional accounts required by any Supplement or PI Agreement to be
established (unless otherwise indicated in such Supplement or PI Agreement) are
collectively called the "Transaction Accounts." Each of the Transaction Accounts
shall be established and maintained as an Eligible Deposit Account and shall
bear a designation clearly indicating that funds deposited therein are held for
the benefit of the Certificateholders and the Purchasers. If any Transaction
Account ceases to be an Eligible Deposit Account, Servicer shall cause Trustee
to open a substitute Transaction Account that is an Eligible Deposit Account and
transfer the funds in the existing Transaction Account to the substitute
Transaction Account, and thereafter all references in any Transaction Document
to the original Transaction Account shall be deemed instead to refer to the
substitute Transaction Account.
(d) The Master Collection Account, the Carrying Cost Account, the
Equalization Account, the Principal Funding Account and any Holdback Account
shall be held by Trustee for the benefit of all Certificateholders and
Purchasers. However, there shall be established within each of the Carrying Cost
Account, the Equalization Account, the Principal Funding Account and any
Holdback Account an administrative sub-account for each outstanding Series and
Purchased Interest. Funds allocated to the Carrying Cost Account, the
Equalization Account, the Principal Funding Account and any Holdback Account
pursuant to any Supplement or PI Agreement shall be allocated to the applicable
Series' or Purchased Interest's sub-account and shall be available solely to the
holders of the Certificates in that Series or the Purchaser of that Purchased
Interest, as applicable, except to the extent that such funds are subsequently
reallocated to another Series or Purchased Interest, or the Transferor, in
accordance with the terms of the applicable Supplement or Purchase Agreement and
this Agreement. Any additional Transaction Accounts established pursuant to any
Supplement or PI Agreement shall be held by Trustee for the benefit of only the
related Series or Purchased Interest.
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(e) Trustee shall possess (for its benefit and for the benefit of the
Certificateholders and the Purchasers) all right, title and interest in and to
all funds on deposit from time to time in each of the Transaction Accounts and
in all proceeds thereof. The Transaction Accounts shall be under the sole
dominion and control of Trustee for the benefit of the applicable
Certificateholders and/or Purchasers. Each of Servicer and Trustee agrees that
it shall have no right of setoff against, and no right otherwise to deduct from,
any funds held in any of the Transaction Accounts or the Bank Accounts for any
amount owed to it by the Trust, any party hereto or any Certificateholder or
Purchaser.
SECTION 4.3 Trust-Level Calculations and Funds Allocations.
(a) Allocation of Daily Collections. On each Business Day, Servicer
shall determine the amount of collected funds received in the Master Collection
Account (other than (i) funds transferred to the Master Collection Account
pursuant to any Supplement or PI Agreement and (ii) funds that are required to
be returned to Howmet Persons (or their designees) pursuant to Sections 3.2(b)
and 3.3(1))) since the preceding Business Day and shall allocate to each
outstanding Series and Purchased Interest a share of such funds in an amount
equal to the product of the applicable Series Collection Allocation Percentage
and the amount of such funds. The portion of such funds allocated to any Series
or Purchased Interest shall be further allocated and otherwise dealt with in
accordance with the terms of the related Supplement or PI Agreement. In
addition, funds initially allocated to a Series or Purchased Interest on any
Business Day that are designated as Shared Investor Collections shall be
reallocated to other Series or Purchased Interests pro rata based upon the
respective Shortfalls (if any) of the other Series and Purchased Interests.
(b) Allocation of Write-Offs and Dilution. In each Monthly Report
relating to a Series or Purchased Interest that is in an Early Amortization
Period, Servicer shall calculate the amount of (1) Write-Offs (net of
Recoveries) and (ii) Dilutions as to which no settlement payment has been made
pursuant to Section 3.3 of the Purchase Agreement, in each case during the
related Calculation Period (or the portion of that Calculation Period failing in
the Early Amortization Period) and shall allocate to such Series or Purchased
Interest a portion of the amounts referred to in clauses (i) and (ii) equal to
the product of each such amount and the related Series Loss Allocation
Percentage.
SECTION 4.4 Investment of Funds in Transaction Accounts. On any day
when funds on deposit in any Transaction Account exceed $10,000 (after giving
effect to the allocations of such funds required by this Article IV and the
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various Supplements and PI Agreements), and at such other times as investment is
practicable, Trustee, at the direction of Servicer, shall invest and reinvest
monies on deposit in such Transaction Account (in the name of Trustee) in such
Eligible Investments as are specified in a notice from Servicer, subject to the
restrictions set forth hereinafter. All Eligible Investments made from funds in
any Transaction Account, and the interest, dividends and income received thereon
and therefrom and the net proceeds realized on the sale thereof, shall be
deposited in such Transaction Account. Trustee may liquidate an Eligible
Investment prior to maturity if such liquidation would not result in a loss of
all or part of the principal portion of such Eligible Investment or if, prior to
the maturity of such Eligible Investment, a default occurs in the payment of
principal, interest or any other amount with respect to such Eligible
Investment. In the absence of negligence of Trustee or willful misconduct by
Trustee, Trustee shall have no liability in connection with investment losses
incurred on Eligible Investments. It is intended for income tax purposes that
the income earned through investment of funds in the Transaction Accounts shall
be treated as income of Transferor.
SECTION 4.5 Attachment of Transaction Accounts. If Trustee receives
written notice that any Transaction Account has or will become subject to any
writ, judgment, warrant of attachment, execution or similar process, Trustee
shall (notwithstanding any other provision of the Transaction Documents)
promptly notify Transferor, Servicer and the Certificateholders thereof, and
shall not deposit or transfer funds into such Transaction Account but shall
cause funds otherwise required to be deposited into such Transaction Account to
be held in another account pending distribution of such funds in the manner
required by the Transaction Documents.
ARTICLE V DISTRIBUTIONS AND REPORTS
DISTRIBUTIONS SHALL BE MADE, AND REPORTS SHALL BE PROVIDED, TO
CERTIFICATEHOLDERS AS SET FORTH IN THE APPLICABLE SUPPLEMENT.
ARTICLE VI THE CERTIFICATES
SECTION 6.1 The Certificates. The Investor Certificates in each Series
shall be substantially in the forms contemplated by the Supplements pursuant to
which the Investor Certificates are issued, and the Transferor Certificate shall
be substantially in the form of Exhibit E. Upon issuance, all Certificates shall
be executed and delivered by Transferor to Trustee for authentication and
redelivery as provided in Sections 6.2 and 6.10. Except to the extent provided
otherwise in an applicable Supplement, Investor
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Certificates shall be issued in minimum denominations of $1,000,000 and in
integral multiples of $100,000 and shall not be subdivided for resale into
Certificates smaller than a Certificate, the initial offering price for which
would have been at least $1,000,000.
Each Certificate issued as a Definitive Certificate shall be executed
by manual or facsimile signature on behalf of Transferor by its President or any
Vice President or by any attorney-in-fact duly authorized to execute the
Definitive Certificate on behalf of any such officer. The Definitive
Certificates shall be authenticated on behalf of the Trust by manual signature
of a duly authorized signatory of Trustee. Definitive Certificates bearing the
manual or facsimile signature of the individual who was, at the time when the
signature was affixed, authorized to sign on behalf of Transferor or the Trust
(as applicable) shall be valid and binding, notwithstanding that the individuals
or any of them ceased to be so authorized prior to the authentication and
delivery of the Definitive Certificates or does not hold such office on the date
of issuance of such Definitive Certificates. No Definitive Certificates shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on the Definitive Certificate a certificate of
authentication substantially in the form provided for herein executed by or on
behalf of Trustee by the manual signature of a duly authorized signatory, and
the certificate of authentication upon any Definitive Certificate shall be
conclusive evidence, and the only evidence, that the Definitive Certificate has
been duly authenticated and delivered hereunder and is entitled to the benefits
of this Agreement. Except as otherwise provided in the applicable Supplement,
all Definitive Certificates shall be dated the date of their authentication.
As provided in any Supplement, Investor Certificates of any Series may
be issued and sold pursuant to an exemption from the Securities Act. Any Series
sold pursuant to Rule 144A, Regulation S or another exemption under the
Securities Act may be delivered in hook-entry form as provided in Sections 6.12
and 6.13.
SECTION 6.2 Authentication of Certificates. Contemporaneously with the
initial assignment and transfer of Receivables and other Transferred Assets to
the Trust, Trustee shall authenticate and deliver the Transferor Certificate to
Transferor. On each Issuance Date, upon the order of Transferor, Trustee shall
authenticate and deliver to Transferor the Series of Certificates that are to be
issued originally on such Issuance Date pursuant to the applicable Supplement.
SECTION 6.3 Registration of Transfer and Exchange of Certificates. (a)
Trustee, as agent for Transferor, shall keep, or shall cause to be kept, at
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the office or agency to be maintained in accordance with the provisions of
Section 11.16, a register in written form or capable of being converted into
written form within a reasonable time (the "Certificate Register") in which,
subject to such reasonable regulations as it may prescribe, a transfer agent and
registrar (which may be Trustee) (the "Transfer Agent and Registrar") shall
provide for the registration of the Certificates and of transfers and exchanges
of the Certificates as herein provided. Transferor hereby appoints Trustee as
the initial Transfer Agent and Registrar.
Transferor, or Trustee as agent for Transferor, may revoke the
appointment as Transfer Agent and Registrar and remove the then-acting Transfer
Agent and Registrar if Trustee or Transferor (as applicable) determines in its
sole discretion that the then-acting Transfer Agent and Registrar has failed to
perform its obligations under this Agreement in any material respect. The
then-acting Transfer Agent and Registrar shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' prior written notice to Trustee,
Transferor and Servicer; provided that such resignation shall not be effective
and the then-acting Transfer Agent and Registrar shall continue to perform its
duties as Transfer Agent and Registrar until Trustee has appointed a successor
Transfer Agent and Registrar reasonably acceptable to Transferor and such
successor has given Trustee written notice that it accepts the appointment. The
provisions of Sections 11.1 through 11.5 shall apply to the Transfer Agent and
Registrar as if all references to "Trustee" in the applicable provisions of
Sections 11.1 through 11.5 were references to the Transfer Agent and Registrar.
It is intended that the registration of Certificates that is described
in this Section comply with the registration requirements contained in Section
163 of the Internal Revenue Code.
(b) No transfer of all or any part of the Transferor Certificate shall
be made unless (i) either Transferor or any other Holder of the Transferor
Certificate shall have given the Rating Agencies and Trustee prior written
notice of the proposed transfer, (ii) the Modification Condition shall have been
satisfied in connection with the proposed transfer and (iii) either Transferor
or any other Holder of the Transferor Certificate shall have delivered to
Trustee, the Rating Agencies, each Purchaser and each Enhancement Provider a Tax
Opinion for each outstanding Series of Investor Certificates, Purchased Interest
and Enhancement (provided that the opinion delivered to any Purchaser or Credit
Enhancer shall be limited to the Tax Opinion required by the related Purchased
Interest or Series) with respect to such transfer.
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(c) Subject to the requirements of subsection (e), if applicable,
having been fulfilled, upon surrender for registration of transfer of any
Certificate, and, in the case of Investor Certificates, at any office or agency
of the Transfer Agent and Registrar maintained for such purpose, Transferor
shall execute, and Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the
appropriate class and Series that are in authorized denominations of like
aggregate fractional interest in the related Series Interest that bear numbers
that are not contemporaneously outstanding.
At the option of an Investor Certificateholder, its Investor
Certificates may be exchanged for other Investor Certificates of the same class
and Series (and bearing the same interest rate as the Investor Certificate
surrendered for registration of exchange) of authorized denominations of like
aggregate fractional interests in the related Series Interest and being numbers
that are not contemporaneously outstanding, upon surrender of the Investor
Certificates to be exchanged at any such office or agency. Whenever any Investor
Certificates are so surrendered for exchange, Transferor shall execute, and
Trustee shall authenticate and deliver, the appropriate number of Investor
Certificates of the class and Series that the Investor Certificateholder making
the exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to Trustee or the Transfer
Agent and Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in a writing delivered to the Transfer Agent
and Registrar.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Registrar may require the
Certificateholder to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Investor Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be cancelled and disposed of in a manner satisfactory to Trustee.
(d) Certificates may be surrendered for registration of transfer or
exchange at the office of the Transfer Agent and Registrar designated in Section
13.6.
(e) Unless otherwise provided in the applicable Supplement,
Certificateholders holding Definitive Certificates shall not sell, transfer or
otherwise dispose of the -Certificates unless the sale, transfer or disposition
is being made pursuant to an exemption from the registration requirements of the
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Securities Act and applicable state securities laws and, prior to the proposed
sale, transfer or disposition, the Certificateholder and the proposed transferee
each provide Trustee and Transferor with representations and, if requested by
Trustee or Transferor, an Opinion of Counsel concerning the proposed sale,
transfer or disposition and the availability of the exemption.
(f) The Investor Certificates shall bear such restrictive legends as
shall be set forth in the applicable Supplements.
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Transfer Agent and Registrar, or
the Transfer Agent and Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar and Trustee such security or indemnity as may be
required by them and Transferor to hold each of them, the Trust and Transferor
harmless, then, in the absence of notice to Trustee that such Certificate has
been acquired by a bona fide purchaser, Transferor shall execute and, upon the
request of Transferor, Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like class, Series, tenor, terms and principal amount and bearing
a number that is not contemporaneously outstanding. In connection with the
issuance of any new Certificate under this section, Trustee or the Transfer
Agent and Registrar may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the reasonable fees and
expenses of Trustee and Transfer Agent and Registrar) connected therewith. Any
duplicate Certificate issued pursuant to this section shall constitute
conclusive and indefeasible evidence of ownership of an interest in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all
Certificates of the same class and Series that are duly issued hereunder.
SECTION 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, Transferor, Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article V and
for all other purposes whatsoever, and none of Transferor, Trustee, the Paying
Agent, the Transfer Agent and Registrar or any agent of any of them shall be
affected by any notice to the contrary; provided that, in determining whether
the Holders of the requisite principal amount or Stated Amount (as applicable)
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of Certificates or Purchased Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates and
Purchased Interests owned by Transferor, Servicer or any Affiliate thereof shall
be disregarded and deemed not to be outstanding, except that, in determining
whether Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates and
Purchased Interests that Trustee knows to be so owned shall be so disregarded.
Certificates and Purchased Interests so owned that have been pledged in good
faith shall not be disregarded and may be regarded as outstanding if the pledgee
establishes to the satisfaction of Trustee the pledgee's right so to act with
respect to such Certificates or Purchased Interests and that the pledgee is not
Transferor, Servicer or an Affiliate thereof.
SECTION 6.6 Appointment of Paying Agent. The Paying Agent initially
shall be Trustee. Transferor hereby appoints the Paying Agent as its agent to
make distributions to Certificateholders pursuant to the applicable Supplements
and to report the amounts of the distributions to Trustee. Any Paying Agent
shall have the revocable power to withdraw funds from the Master Collection
Account for the purpose of making the distributions. Trustee or, at any time
when Trustee is also the Paying Agent, Transferor may revoke such power of the
Paying Agent and remove the Paying Agent if Trustee or Transferor (as
applicable) determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
prior written notice to Trustee, Transferor, Servicer and the Rating Agencies.
Any resignation of the Paying Agent or removal of Trustee as the Paying Agent,
and, in either case, appointment of a successor Paying Agent, shall not become
effective until the appointment has been accepted by the successor Paying Agent.
If no successor Paying Agent shall have been appointed and shall have accepted
appointment within 30 days after the giving of the notice of the resignation of
the Paying Agent or the removal of Trustee as the Paying Agent, as applicable,
the Paying Agent may petition any court of competent jurisdiction to appoint a
successor Paying Agent. In the event of the removal of the Paying Agent (other
than Trustee), Trustee, without further action, shall automatically be appointed
the successor Paying Agent. Upon the resignation or removal of any Paying Agent,
Trustee shall appoint a successor Paying Agent (which shall be a batik or trust
company) reasonably acceptable to Transferor, which appointment shall be
effective on the date on which the Person so appointed gives Trustee written
notice that it accepts the appointment. Trustee shall cause the successor Paying
Agent or any additional Paying Agent appointed by Trustee to execute and deliver
to Trustee an instrument in which it shall agree with Trustee that, as Paying
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Agent, it will hold all sums, if any, held for payment to the Certificateholders
and Purchasers in trust for the benefit of the Certificateholders and Purchasers
entitled thereto until the sums shall be paid to the Certificateholders and
Purchasers. The Paying Agent shall return all unclaimed funds to Trustee, and
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to Trustee. The provisions of Sections 11.1 through 11.5 shall
apply to the Paying Agent as if all references in the applicable provisions
thereof to "Trustee" were references to the Paying Agent.
SECTION 6.7 Access to List of Certificateholders' Names and Addresses.
Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to Transferor, Servicer, any Seller or the Paying Agent, within two
Business Days after receipt by Trustee of a written request therefor from
Servicer or the Paying Agent, a list in the form Servicer or the Paying Agent
may reasonably require of the names and addresses of the Certificateholders as
of the most recent Distribution Date. If any Holder or group of Holders of
Investor Certificates in any Series evidencing not less than 10% of the
aggregate unpaid principal amount of the Series (the "Applicant") applies in
writing to Trustee, and the application states that the Applicant desires to
communicate with other Certificateholders with respect to their rights under
this Agreement, any Supplement or the Certificates and is accompanied by a copy
of the communication that the Applicant proposes to transmit, then Trustee,
after having been adequately indemnified by the Applicant for its costs and
expenses, shall afford or shall cause the Transfer Agent and Registrar to afford
the Applicant access during normal business hours to the most recent list of
Certificateholders held by Trustee, within five Business Days after the receipt
of the application and indemnification. The list shall be as of a date no more
than 45 days prior to the date of receipt of the Applicant's request.
Every Certificateholder, by receiving and holding a Certificate, agrees
with Trustee that neither Trustee, the Transfer Agent and Registrar, Transferor,
Servicer, any Seller nor any of their respective agents shall be held
accountable by reason of the disclosure of any information as to the names and
addresses of the Certificateholders hereunder, regardless of the sources from
which the information was derived.
SECTION 6.8 Authenticating Agent. (a) Trustee may appoint one or more
authenticating agents with respect to the Certificates that shall be authorized
to act on behalf of Trustee in authenticating the Certificates in connection
with the issuance, delivery, registration of transfer, exchange or repayment of
the Certificates. Either Trustee or the authenticating agent, if any, then
appointed and acting on behalf of Trustee shall authenticate the
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Certificates. Whenever reference is made in this Agreement to the authentication
of Certificates by Trustee or Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of Trustee by an
authenticating agent and a certificate of authentication executed on behalf of
Trustee by an authenticating agent. Each authenticating agent must be acceptable
to Transferor.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any document or any further act on the part of Trustee,
the authenticating agent or any other Person.
(c) Ah authenticating agent may at any time resign by giving written
notice of resignation to Trustee and Transferor. Trustee may at any time
terminate the agency of an authenticating agent by giving notice of termination
to the authenticating agent and Transferor. Upon receiving a notice of
resignation or upon a termination, or in case at any time an authenticating
agent shall cease to be acceptable to Trustee or Transferor, Trustee may
promptly appoint a successor authenticating agent. Any successor authenticating
agent, upon acceptance of its appointment, shall become vested with all the
rights, powers and duties of its predecessor, with like effect as if originally
named as an authenticating agent. No successor authenticating agent shall be
appointed unless acceptable to Transferor.
(d) Servicer agrees to pay to each authenticating agent (if any), as an
expense of Servicer paid Out of the Servicing Fee, reasonable compensation from
time to time for services performed under this section.
(e) The provisions of Sections 11.1, 11.2, 11.3 and 11.4 shall be
applicable to any authenticating agent as if the references in the applicable
provisions thereof to "Trustee" were references to the authenticating agent.
(f) Pursuant to an appointment made under this section, the
Certificates may have endorsed thereon, in lieu of Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
"This is one of the Certificates described in the Supplement
dated as of April 18, 1996.
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MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________
as Authenticating Agent
for Trustee,
By:____________________
Authorized Officer."
SECTION 6.9 Tax Treatment. It is the intent of Transferor and the
Investor Certificateholders that, for purposes of Federal, applicable state and
local income and franchise and other taxes measured by or imposed on income, the
Investor Certificates will be treated as evidence of indebtedness secured by the
Transferred Assets and the Trust will not be characterized as an association
taxable as a corporation. The provisions of this Agreement and all related
Transaction Documents shall be construed to further that intent. Transferor, by
entering into this Agreement, and each Investor Certificateholder, by its
acceptance of its Investor Certificate, agree to treat the Investor Certificates
as indebtedness for purposes of Federal and applicable state and local income
and franchise and other taxes measured by or imposed on income. Except to the
extent otherwise required by applicable law or any Governmental Authority,
Trustee hereby agrees to treat the Trust as a security device only, and shall
not file tax returns or obtain an employer identification number on behalf of
the Trust.
SECTION 6.10 Issuance of Additional Series of Certificates and Sales of
Purchased Interests. (a) Transferor may from time to time issue and direct
Trustee to authenticate one or more classes of any newly issued Series of
Investor Certificates (a "New Issuance"). In addition, to the extent permitted
for any Series of Investor Certificates as specified in the related Supplement,
the Investor Certificateholders of the Series may tender their Investor
Certificates to Trustee, and Transferor may allocate a portion of the Transferor
Interest pursuant to the terms and conditions set forth in the Supplement, in
exchange for one or more newly issued Series of Investor Certificates (an
"Investor Exchange"). New Issuances and Investor Exchanges collectively are
referred to as "Issuances".
(b) Transferor may direct Trustee to authenticate an Issuance by
notifying Trustee, in writing, at least five Business Days (or such shorter
period as shall be acceptable to Trustee) in advance (an "Issuance Notice") of
the date upon which the Issuance is to occur (an "Issuance Date"). Any Issuance
Notice shall state the designation of any Series to be issued on the Issuance
Date and, with respect to each class or Series: (i) its initial invested amount
(or the method for calculating the initial invested amount), (ii) its interest
rate (or the method for allocating interest payments or other cash flows
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to the Series), if any, and (iii) the Enhancement Provider, if any, with respect
to the Series.
(c) On the Issuance Date, Transferor shall deliver to Trustee for
authentication under Section 6.2, and Trustee shall authenticate and deliver any
such class or classes of Series of Investor Certificates only upon delivery to
it (and, in the case of item (iv) below, each Rating Agency, Purchaser and any
Enhancement Provider) of the following:
(i) a Supplement satisfying the criteria set forth in
subsection (d) and in form reasonably satisfactory to Trustee executed
by Transferor and Servicer and specifying the principal terms of the
Series;
(ii) the applicable Enhancement, if any;
(iii) the agreement, if any, pursuant to which the Enhancement
Provider agrees to provide the Enhancement, if any;
(iv) a Tax Opinion for each outstanding Series of Investor
Certificates, Purchased Interest and Enhancement (provided that the
opinion delivered to any Purchaser or Enhancement Provider shall be
limited to the Tax Opinion required by the related Purchased Interest
or Series) with respect to such Issuance;
(v) evidence that the Modification Condition has been
satisfied with respect to such Issuance;
(vi) an Officer's Certificate of Transferor that on the
Issuance Date, after giving effect to the Issuance (and the repayment,
on the date of the Issuance Date, of any existing Investor Certificates
with funds (including proceeds of sale of the new Series) on deposit in
the Principal Funding Account), any requirements set out in the
Supplement with respect to any then-outstanding Series with respect to
the amount of Certificates that may not, by their terms, be transferred
has been satisfied;
(vii) an Officer's Certificate of Servicer stating that no
Early Amortization Event or Unmatured Early Amortization Event has
occurred and is continuing and that Servicer does not reasonably expect
that the Issuance would result in an Early Amortization Event or an
Unmatured Early Amortization Event;
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(viii) in the case of an Investor Exchange, any Investor
Certificates that are being exchanged in connection therewith;
(ix) any other documents, certificates and Opinions of Counsel
as may be required by the applicable Supplement; and
(x) an Officer's Certificate of Servicer to the effect that
all conditions specified in clauses (i) through (ix) of this subsection
(c) have been satisfied.
Upon satisfaction or waiver of the conditions for any Issuance, Trustee shall
cancel any Investor Certificates that are to be cancelled in connection with
such Issuance and issue, as provided above, the new Series of Investor
Certificates dated the Issuance Date. Any such Series of Investor Certificates.
shall be substantially in the form specified in the related Supplement and shall
bear, upon its face, the designation for the Series to which it belongs, as
selected by Transferor. There is no limit to the number of Issuances that may be
made under this Agreement.
(d) In conjunction with an Issuance, the parties hereto shall execute a
Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include: (i) its name or
designation, (ii) the initial invested amount or the method of calculating the
initial invested amount, (iii) the applicable interest rate (or formula for the
determination thereof), (iv) the Issuance Date, (v) the rating agency or
agencies rating the Series, if any, (vi) the name of the Clearing Agency, if
any, (vii) the interest payment date or dates and the date or dates from which
interest shall accrue, (viii) the method of allocating Collections with respect
to Transferred Receivables for the Series and. if applicable, with respect to
any paired Series and the method by which the principal amount of Investor
Certificates of the Series shall amortize or accrete and the method for
allocating write-offs, (ix) the names of any accounts to be used by the Series
and the terms governing the operation of any such account, (x) the terms of any
Enhancement with respect to the Series, (xi) the Enhancement Provider, if
applicable, (xii) the base rate applicable to the Series, (xiii) the terms on
which the Certificates of the Series may be repurchased or remarketed to other
investors, (xiv) any deposit into any account provided for the Series, (xv) the
number of classes of the Series, and if more than one class, the rights and
priorities of each class, (xvi) whether any fees, breakage payments or early
termination payments will be included in the funds available to be paid for the
Series, (xvii) the subordination of the Series to any other Series, (xviii)
whether the Series will be a part of a group or subject to being paired with any
other Series, (xix) whether the Series will be prefunded and (xx) any other
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relevant terms of the Series. The terms of the Supplement may modify or amend
the terms of this Agreement or the Purchase Agreement (including the related
definitions) solely as applied to the new Series.
(e) Except as specified in any Supplement for the related Series, all
Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Enhancement provided for any Series shall not be available for any other Series)
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the related Supplement.
(f) Transferor may from time to time direct Trustee, on behalf of the
Trust, to sell one or more Purchased Interests pursuant to, and direct Trustee
to enter into, a PI Agreement. No Purchased Interest shall represent any
interest in any Enhancement for the benefit of any Series, any class of Investor
Certificates or any other Purchased Interest, any Transaction Account
established pursuant to any Supplement or the PI Agreement relating to any other
Purchased Interest except to the extent set forth in the PI Agreement with
respect to such other Purchased Interest. Each PI Agreement may provide that no
Investor Certificateholder, Purchaser under any other PI Agreement or
Enhancement Provider shall be a third-party beneficiary thereof or have any
benefit or any legal or equitable right, remedy or claim under the PI Agreement.
(g) On or before the date of the initial sale of a Purchased Interest
(a "Purchase Date") pursuant to a particular PI Agreement, the parties hereto
and the related Purchaser will execute and deliver a PI Agreement that will
specify the terms of the Purchased Interest. The obligation of Trustee to
execute and deliver the related PI Agreement is subject to the satisfaction or
waiver of the following conditions:
(i) on or before the tenth Business Day (or a shorter period
as shall be acceptable to the parties) immediately preceding the
related Purchase Date, Transferor shall have given Trustee, Servicer,
each Rating Agency (if any rated Investor Certificates are
outstanding), each Purchaser and each Enhancement Provider (if any)
written notice of the sale of the Purchased Interest and the Purchase
Date;
(ii) Transferor shall have delivered to Trustee the related PI
Agreement, in form satisfactory to Trustee, each executed by each party
thereto other than Trustee;
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(iii) the Modification Condition shall have been satisfied
with respect to the sale;
(iv) the sale will not contravene any provision of this
Agreement, any Supplement, any agreement pursuant to which any
Enhancement is provided or any PI Agreement (or any agreement related
thereto);
(v) Trustee shall have received an Officer's Certificate of
Servicer stating that no Early Amortization Event or an Unmatured Early
Amortization Event has occurred and is continuing and that Servicer
does not reasonably expect the sale to result in an Early Amortization
Event or an Unmatured Early Amortization Event;
(vi) Transferor shall have delivered to Trustee, each Rating
Agency, each Purchaser and any Enhancement Provider, a Tax Opinion for
each outstanding Series of Investor Certificates, Purchased Interest
and Enhancement (provided that the opinion delivered to any Purchaser
or Enhancement Provider shall be limited to the Tax Opinion required by
the related Purchased Interest or Series), dated the Purchase Date,
with respect to the sale; and
(vii) Transferor shall have delivered to Trustee an Officer's
Certificate, dated the Purchase Date for such Purchased Interest, to
the effect that all conditions set forth in clauses (i) and (iv) of
this subsection (g) for the sale of the Purchased Interest and the
execution and delivery of the related PI Agreement have been satisfied.
Upon satisfaction or waiver of the above conditions, Trustee shall execute and,
at the written direction of Transferor, deliver the related PI Agreement and any
related documents that Transferor shall reasonably request. The terms of the PI
Agreement may modify or amend the terms of this Agreement or the Purchase
Agreement (including the related definitions) solely as applied to the new
Purchased Interest.
(h) Transferor may from time to time direct Trustee to extend any PI
Agreement, subject to the satisfaction or waiver of the following conditions:
(i) on or before the tenth Business Day (or a shorter period
as shall be acceptable to the parties) immediately preceding the date
of the extension, Transferor shall have given Trustee, Servicer, the
Rating Agency and any Enhancement Provider written notice of the
extension and the date on which the extension shall occur;
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(ii) Transferor shall have delivered to Trustee the required
agreements, certificates, documents and filings, in form satisfactory
to Trustee, executed by each party thereto other than Trustee;
(iii) the extension will not (A) contravene any provision of
this Agreement, any Supplement, any agreement pursuant to which any
Enhancement is provided or any PI Agreement (or any agreement related
thereto) or (B) constitute, or result in the occurrence of, an Early
Amortization Event or an Unmatured Early Amortization;
(iv) Transferor shall have delivered to the Trust, the Rating
Agency, each Purchaser and any Enhancement Provider a Tax Opinion for
each outstanding Series of Investor Certificates, Purchased Interest
and Enhancement (provided that the opinion delivered to any Purchaser
or Enhancement Provider shall be limited to the Tax Opinion required by
the related Purchased Interest or Series), dated the date of the
extension, with respect to the extension;
(v) Transferor shall have delivered to Trustee an Officer's
Certificate, dated the date of the extension, to the effect that all
conditions set forth in clauses (i) and (iii) of this subsection (h)
for the extension of such PI Agreement and the execution and delivery
of the related documents has been satisfied; and
(vi) the Modification Condition shall have been satisfied.
SECTION 6.11 Book-Entry Certificates. (a) If provided in any
Supplement, the Investor Certificates of any Series, upon original issuance,
will be issued in the form of one or more Book-Entry Certificates, to be
delivered to the applicable Clearing Agency, by, or on behalf of, Transferor.
The Investor Certificates in any Series that are issued as Book-Entry
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of the Clearing Agency, and no Certificate Owner will
receive a Definitive Certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.13. Unless and
until Definitive Certificates have been issued to Certificate Owners pursuant to
Section 6.13:
(i) the provisions of this section shall be in full force and
effect;
(ii) Transferor, Servicer, the Paying Agent, the Transfer
Agent and Registrar and Trustee may deal with the Clearing Agency and
the
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Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this section
conflict with any other provisions of this Agreement, the provisions of
this section shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between the
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 6.13, the initial Clearing Agency will make
bock-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal and interest on the Investor
Certificates to the Clearing Agency Participants.
(b) Investor Certificates that are sold to Qualified Institutional
Buyers in reliance on Rule 144A under the Securities Act shall be represented by
one or more Book-Entry Certificates (the "144A Book-Entry Certificates"), in
registered form, without coupons, which will be deposited upon the order of
Transferor on the Issuance Date with Trustee as custodian for, and registered in
the name of, a nominee of the Clearing Agency.
(c) Investor Certificates that are sold in offshore transactions in
reliance on Regulation S shall be represented initially by one or more temporary
Bock-Entry Certificates (the "Regulation S Temporary Book-Entry Certificates").
The Regulation S Temporary Book-Entry Certificates shall be exchanged on the
later of (i) 40 days (or such longer period of time, if any, required under
Regulation S) after the later of (A) the Issuance Date and (B) the completion of
the distribution of the Certificates, as certified by the Lead Placement Agent
and (ii) the date on which the requisite certifications are due to and provided
to Trustee (the later of clauses (i) and (ii) is referred to as the "Exchange
Date") for permanent Bock-Entry Certificates (the "Unrestricted Regulation S
Book-Entry Certificates," and together with the Regulation S Temporary
Book-Entry Certificates, the "Regulation S Book-Entry Certificates"). The
Regulation S Temporary Book-Entry Certificates for any Series shall be issued in
registered form, without coupons, and deposited upon the order of Transferor
with Trustee as custodian for, and registered in the name of, a nominee of the
Clearing Agency for credit to the account of the depositaries for Euroclear and
Cedel, which depositaries shall, on behalf of Euroclear and Cedel, hold the
interests on behalf of account holders (each a
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"Member Organization"), which have rights in respect of the Certificates
credited to their securities accounts with Euroclear or Cedel from time to time.
(d) A Certificate Owner holding an interest in a Regulation S Temporary
Book-Entry Certificate may receive payments in respect of the Certificates on
the Regulation S Temporary Book-Entry Certificate only after delivery to
Euroclear or Cedel, as the case may be. of a written certification substantially
in the form of a certification in the form set forth in Exhibit F, and upon
delivery by Euroclear or Cedel, as the case may be, to the Transfer Agent and
Registrar of a certification or certifications substantially in the form set
forth in Exhibit G. The delivery by a Certificate Owner of the certification
referred to above shall constitute its irrevocable instruction to Euroclear or
Cedel, as the case may be, to arrange for the exchange of the Certificate
Owner's interest in a Regulation S Temporary Book-Entry Certificate for a
beneficial interest in an Unrestricted Regulation S Book-Entry Certificate after
the Exchange Date in accordance with the paragraph below.
After the Exchange Date for any Series in which a Regulation S Temporary
Book-Entry Certificate was issued, one or more Unrestricted Regulation S
Book-Entry Certificates with no outstanding principal amount shall be issued in
registered form, without coupons, and deposited with Trustee as custodian for,
and registered in the name of, a nominee of the Clearing Agency. After (i) the
Exchange Date for the Regulation S Temporary Book-Entry Certificates for any
Series and (ii) receipt by the Transfer Agent and Registrar of written
instructions from Euroclear or Cedel, as the case may be, directing the Transfer
Agent and Registrar to credit or cause to be credited to either Euroclear's or
Cedel's, as the case may be, depositary's account a beneficial interest in the
Unrestricted Regulation S Book-Entry Certificate for such Series in a principal
amount not greater than that of the beneficial interest in the Regulation S
Temporary Book-Entry Certificate for such Series, the Transfer Agent and
Registrar shall instruct the Clearing Agency to reduce the principal amount of
such Regulation S Temporary Book-Entry Certificate and increase the principal
amount of such Unrestricted Regulation S Book-Entry Certificate by the principal
amount of the beneficial interest in such Regulation S Temporary Book-Entry
Certificate being transferred or exchanged, and to credit or cause to be
credited to the account of the depositary for the Clearing Agency, Euroclear or
Cedel (which depositary shall hold interests on behalf of Member Organizations
or Persons who have an account with the Clearing Agency (each, a "Clearing
Agency Participant")), as the case may be, a beneficial interest in such
Unrestricted Regulation S Book-Entry Certificate having a principal amount of
the Regulation S Temporary Book-Entry Certificate that was reduced upon the
transfer or exchange.
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Upon return of the entire principal amount of the Regulation S Temporary
Book-Entry Certificate for any Series to Trustee in exchange for beneficial
interests in the Unrestricted Regulation S Book-Entry Certificate for that
Series, Trustee shall cancel such Regulation S Temporary Book-Entry Certificate
by perforation and shall forthwith destroy it.
(e) Transfers within a single Series between different Book-Entry
Certificates shall be made in accordance with this subsection (e).
(i) For transfer of a beneficial interest in a Regulation S
Book-Entry Certificate for a beneficial interest in a 144A Book-Entry
Certificate, if the Certificateholder of a beneficial interest in an
Unrestricted Regulation S Book-Entry Certificate wishes at any time to
exchange all or part of its beneficial interest in such Unrestricted
Regulation S Book-Entry Certificate, or to transfer all or part of its
beneficial interest in such Unrestricted Regulation S Book-Entry
Certificate to a Person who wishes to take delivery thereof in the form of
a beneficial interest in a 144A Book-Entry Certificate, the
Certificateholder may, subject to the applicable rules and procedures of
Euroclear or Cedel and the Clearing Agency, give directions for the
Transfer Agent and Registrar to exchange or cause the exchange or transfer
or cause the transfer of all or part of its beneficial interest in a
Regulation S Book-Entry Certificate for an equivalent beneficial interest
in a 144A Book-Entry Certificate. Upon receipt by the Transfer Agent and
Registrar of (A) instructions from Euroclear or Cedel, a Clearing Agency
Participant or the Clearing Agency, as the case may be, directing the
Transfer Agent and Registrar to debit (or cause to be debited) a reduction
in a Regulation S Book-Entry Certificate by the amount of the beneficial
interest in such Regulation S Book-Entry Certificate being transferred or
exchanged and to credit (or cause to be credited) an increase in the
appropriate 144A Book-Entry Certificate by an amount equal to the
beneficial interest being exchanged or transferred (such instructions to
contain such information as is necessary for the Clearing Agency to
effectuate such transfer or exchange (including, but not limited to,
information regarding the accounts to be credited and debited)), and (B)
in the case of the transfer of a Regulation S Temporary Book-Entry
Certificate, a certificate in the form of Exhibit L given by the
Certificate Owner, the Transfer Agent and Registrar shall instruct the
Clearing Agency to reduce the appropriate Unrestricted Regulation S
Book-Entry Certificate by the aggregate principal amount of the beneficial
interest being exchanged or transferred, and the Transfer Agent shall
instruct the Clearing Agency, concurrently with the reduction, to increase
the principal amount of the
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appropriate 144A Book-Entry Certificate by the aggregate principal amount
of the beneficial interest being exchanged or transferred, and to take
such other action as is necessary or appropriate to effectuate the
exchange or transfer of such beneficial interest (including, but not
limited to, crediting the increase in the beneficial interest in such 144A
Book-Entry Certificate, or causing such increase to be credited to, the
appropriate account and debiting the decrease in the beneficial interest
in such Regulation S Book-Entry Certificate, or causing such increase to
be debited to, the appropriate account).
(ii) For transfers of a beneficial interest in a 144A Book-Entry
Certificate for a beneficial interest in a Regulation S Book-Entry
Certificate, if a Certificate Owner holding a beneficial interest in a
144A Book-Entry Certificate wishes at any time to exchange all or part of
its beneficial interest in such 144A Book-Entry Certificate for a
beneficial interest in a Regulation S Book-Entry Certificate, or to
transfer all or part of its beneficial interest in such 144A Book-Entry
Certificate to a Person who wishes to take delivery thereof in the form of
a beneficial interest in a Regulation S Book-Entry Certificate, the
Certificateholder may, subject to the applicable rules and procedures of
the Clearing Agency, give directions for the Transfer Agent and Registrar
to exchange or cause the exchange or transfer or cause the transfer of all
or part of its beneficial interest in a Rule 144A Book-Entry Certificate
for an equivalent beneficial interest in a Regulation S Book-Entry
Certificate. Upon receipt by the Transfer Agent and Registrar of (A)
instructions given in accordance with the Clearing Agency's procedures
from a Clearing Agency Participant directing the Transfer Agent and
Registrar to debit (or cause to be debited) a reduction in a 144A
Book-Entry Certificate by the amount of the beneficial interest to be
transferred or exchanged and to credit (or cause to be credited) an
increase in the appropriate Regulation S Book-Entry Certificate in an
amount equal to the beneficial interest being exchanged or transferred,
(B) a written order given in accordance with the Clearing Agency's
procedures containing such information as is necessary for the Clearing
Agency to effectuate such transfer or exchange (including, but not limited
to, information regarding the accounts to be debited and credited) and (C)
certificates in the forms of Exhibits H and I, respectively, given by the
Certificate Owner and the proposed transferee of the interest, the
Transfer Agent and Registrar shall instruct the Clearing Agency to reduce
the appropriate 144A Book-Entry Certificate by the aggregate principal
amount of the beneficial interest being exchanged or transferred and the
Transfer Agent and Registrar shall instruct the Clearing Agency,
concurrently
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with the reduction, to increase the principal amount of the appropriate
Regulation S Book-Entry Certificate by the aggregate principal amount of
the beneficial interest being exchanged or transferred, and to take such
other action as is necessary or appropriate to effectuate the exchange or
transfer of such beneficial interest (including, but not limited to,
crediting the increase in the beneficial interest in such Regulation S
Book-Entry Certificate, or causing such increase to be credited to, the
appropriate account and debiting the decrease in the beneficial interest
in such 144A Book-Entry Certificate, or causing such decrease to be
debited to, the appropriate account).
(iii) Notwithstanding any other provisions of this subsection (e), a
placement agent for the Investor Certificates may exchange beneficial
interests in a Regulation S Temporary Book-Entry Certificate held by it
for beneficial interests in the 144A Book-Entry Certificate after delivery
by such placement agent of instructions for the exchange substantially in
the form of Exhibit J (and such placement agent shall not be required to
comply with any other provision of this subsection (e) in connection with
such exchange). Upon receipt of the instructions provided in the preceding
sentence, the Transfer Agent and Registrar shall instruct the Clearing
Agency to reduce the principal amount of the appropriate Regulation S
Temporary Book-Entry Certificate to be exchanged and shall instruct the
Clearing Agency to increase the principal amount of such appropriate 144A
Book-Entry Certificate and credit or cause to be credited to the account
of the placement agent a beneficial interest in such 144A Book-Entry
Certificate having a principal amount equal to the amount of the
beneficial interest in the Regulation S Temporary Book-Entry Certificate
being exchanged.
(iv) Except as provided herein, all 144A Book-Entry Certificates
(and all Definitive Certificates issued in exchange for a beneficial
interest in a 144A Book-Entry Certificate) and all Definitive Certificates
issued under Rule 144A or Regulation D under the Securities Act shall bear
a legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE
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EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE."
As long as a Definitive Certificate bears such a legend, such
Definitive Certificate may only be transferred or exchanged if such
transfer or exchange would be in compliance with the Securities Act as
evidenced by a letter in the form of Exhibit K that shall be delivered by
the Holder of such Definitive Certificate to the Transfer Agent and
Registrar with any request to transfer or exchange such Definitive
Certificate; provided, however, that if any transfer is not pursuant to
Rule 144A, Rule 144 or Rule 904 under the Securities Act or pursuant to an
effective registration statement, the transferor shall provide Transferor
and Trustee with an opinion of counsel, in form and
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substance satisfactory to Transferor and Trustee, that such transfer would
be in compliance with the Securities Act. Notwithstanding the foregoing, a
Definitive Certificate shall not be required to bear such a legend (and
the Transfer Agent and Registrar shall issue a Definitive Certificate
without such a legend in exchange for a Definitive Certificate that has
such a legend) if (i) such Definitive Certificate is transferred pursuant
to Rule 144 or an effective registration statement under the Securities
Act, and (ii) the Holder of such Definitive Certificate delivers to the
Trustee a certificate substantially in the form of Exhibit K.
SECTION 6.12 Notices to Clearing Agency. Whenever notice or other
communication to the Investor Certificateholders of any Series represented by
Book-Entry Certificates is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificate Owners pursuant to
Section 6.13, Trustee, Servicer and the Paying Agent shall give all such notices
and communications specified herein to be given to the Investor
Certificateholders of the Series to the Clearing Agency.
SECTION 6.13 Definitive Certificates. If (a)(i) Transferor advises Trustee
in writing that Transferor has received notice from the Clearing Agency that the
Clearing Agency is no longer willing or able to discharge its responsibilities
under any Letter of Representations and (ii) Transferor is unable to locate a
qualified successor, (b) Transferor, at its option, advises Trustee in writing
that, with respect to any Series, it elects to terminate the Book-Entry system
through the Clearing Agency or (c) after the occurrence of a Servicer Default,
Certificate Owners representing beneficial interests aggregating not less than
50% of the Invested Amount of the Series advise Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
Book-Entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners of the Series, Trustee shall notify the Clearing
Agency of the occurrence of any such event and of the availability of Definitive
Certificates of the Series to Certificate Owners of the Series requesting the
same. Upon surrender to Trustee of the Book-Entry Certificates for any such
Series by the Clearing Agency accompanied by registration instructions from the
Clearing Agency for registration, Trustee shall authenticate and deliver
Definitive Certificates for that Series to the Certificate Owners of that Series
and the Trustee shall recognize the Holders of such Definitive Certificates as
Certificateholders under this Agreement. Neither Transferor, the Transfer Agent
and Registrar nor Trustee shall be liable for any delay in delivery of the
instructions and may conclusively rely on, and shall be protected in relying on,
any such instructions from the Clearing Agency.
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SECTION 6.14 Letter of Representations. Notwithstanding anything to the
contrary in this Agreement or any Supplement, the parties hereto shall comply
with the terms of each Letter of Representations.
ARTICLE VII TRANSFEROR
SECTION 7.1 Representations and Warranties of Transferor Relating to
Transferor and the Transaction Documents. On the date hereof and on each
Issuance Date and Purchase Date, Transferor hereby represents and warrants for
the benefit of Trustee, the Certificateholders, the Purchasers and the
Enhancement Providers that:
(a) Organization and Good Standing. Transferor is a corporation duly
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to acquire, own and transfer the Receivables and the Related
Transferred Assets.
(b) Due Qualification. Transferor is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in
all jurisdictions in which the ownership or lease of property or the
conduct of its business requires qualification, licenses or approvals and
where the failure so to qualify, to obtain the licenses and approvals or
to preserve and maintain the qualification, licenses or approvals would
have a Material Adverse Effect.
(c) Power and Authority. Transferor has all necessary corporate
power and authority to execute, deliver ad perform its obligations under
this Agreement and the other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, ad each other
Transaction Document to which Transferor is a party when executed and
delivered will constitute, a legal, valid and binding obligation of
Transferor, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
(e) Authorization; No Conflict or Violation. The execution, delivery
and performance of, and the consummation of the transactions
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contemplated by, this Agreement and the other Transaction Documents to be
signed by Transferor and the fulfillment of the terms hereof and thereof
have been duly authorized by ail necessary action and will not (i)
conflict with, violate, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, (A) its Certificate of Incorporation or Bylaws or
(B) any indenture, loan agreement, mortgage, deed of trust or other
material agreement or instrument to which Transferor is a party or by
which it or any of its properties is bound, (ii) result in the creation or
imposition of any Adverse Claim (other than a Permitted Adverse Claim)
upon any of its properties pursuant to the terms of any such contract,
indenture, loan agreement, mortgage, deed of trust, or other agreement or
instrument, other than this Agreement and the other Transaction Documents,
or (iii) conflict with or violate any federal, state, local or foreign law
or any decision, decree, order, rule or regulation applicable to it or any
of its properties of any court or of any federal, state, local or foreign
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties,
which conflict, violation, breach, default or Adverse Claim (other than a
Permitted Adverse Claim), individually or in the aggregate, would have a
Material Adverse Effect.
(f) Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of
Transferor, threatened against it before any court, regulatory body,
arbitrator, administrative agency or other tribunal or governmental
instrumentality and (ii) it is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
government authority that, in the case of clauses (i) and (ii), (A)
asserts the invalidity of this Agreement or any other Transaction
Document, (B) seeks to prevent the transfer of any Receivables or Related
Transferred Assets to the Trust, the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (C) seeks any determination or ruling that
would materially and adversely affect the performance by Transferor of its
obligations under this Agreement or any other Transaction Document or the
validity or enforceability of this Agreement or any other Transaction
Document, (D) seeks to affect materially and adversely the income tax
attributes of the transfers hereunder or the Trust under the United States
Federal income tax system or any applicable state income tax system or (E)
individually or in the aggregate for all such actions, suits, proceedings
and investigations would have a Material Adverse Effect.
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(g) Governmental Approvals. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by Transferor, and all notices to and filings with
any Governmental Authority, that are required to be made by it, in the
case of each of the foregoing in connection with the transfer of
Receivables and Related Transferred Assets to the Trust or the execution,
delivery and performance by it of this Agreement and any other Transaction
Documents to which it is a party and the consummation of the transactions
contemplated by this Agreement, have been obtained or made and are in full
force and effect, except where the failure to obtain or make any such
authorization, consent, order, approval, notice or filing, individually or
in the aggregate for all such failures, would not reasonably be expected
to have a Material Adverse Effect.
(h) Offices. Transferor's principal place of business and chief
executive office is, and since the date of its incorporation has been,
located at the address set forth under Transferor's signature hereto (or
at such other locations, notified to Servicer and Trustee in accordance
with Section 7.2(c), in jurisdictions where all action required by Section
7.2(c) has been taken and completed).
(i) Account Banks. The names and addresses of all the Account Banks
are specified in Schedule 1 or, after the First Issuance Date, have been
provided by Servicer to Trustee pursuant to Section 3.3(c), and the
account numbers of the Bank Accounts at such Account Banks have been
specified in a letter provided on or prior to the First Issuance Date to
Trustee or, after the First Issuance Date, have been provided by Servicer
to Trustee pursuant to Section 3.3(c). The Account Agreements to which
Transferor is a party constitute the legal, valid and binding obligations
of the parties thereto enforceable against such parties in accordance with
their respective terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights
generally and general equitable principles.
(j) Investment Company Act. Transferor is not, and is not controlled
by, an "investment company" registered or required to be registered under
the Investment Company Act of 1940, as amended.
The representations and warranties set forth in this section shall survive
the transfer and assignment of the Transferred Receivables and the other
Transferred Assets to the Trust. Upon discovery by Transferor, Servicer or
Trustee of a breach of any of the foregoing representations and warranties, the
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party discovering the breach shall give written notice to the other parties to
this Agreement within three Business Days following the discovery; provided,
however that if such breach arises from a Seller's failure to perform its
obligations under the Purchase Agreement and such failure is of the type that
may be cured by settlement of a Seller Non-Complying Receivables Adjustment or
Seller Dilution Adjustment under Sections 3.1 and 3.5 of the Purchase Agreement,
and such settlement shall have (in fact) been made within the time limit
specified under such sections, then no breach shall be deemed to have occurred
under this Agreement. Trustee's obligations in respect of discovering any breach
are limited as provided in Section 11.2(g).
SECTION 7.2 Covenants of Transferor. So long as any Investor Certificates
or Purchased Interests remain outstanding (other than any Investor Certificates
or Purchased Interests payment for which has been duly provided for in
accordance with this Agreement), Transferor shall:
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations, judgments, decrees and orders
(including those relating to the Transferred Receivables, the Related
Transferred Assets, the funds in the Transaction Accounts and the related
Contracts and any other agreements related thereto), in each case to the
extent the failure to comply, individually or in the aggregate for all
such failures, would have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualifications would have a Material Adverse Effect.
(c) Location of Offices. Keep its principal place of business and
chief executive office at the address referred to in Section 7.1(h) or,
upon not less than 30 days' (or such shorter number of days as is
acceptable to the Servicer and Trustee) prior written notice given by
Transferor to Servicer and Trustee, at such other location in a
jurisdiction where all action required pursuant to Section 3.10 shall have
been taken and completed. Transferor will at all times maintain its chief
executive offices within the United States of America, and will cause
Servicer to maintain at all times Servicer's chief executive offices
within the United States of America.
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(d) Reporting Requirements of Transferor. Unless Trustee and the
Required Investors shall otherwise consent in writing, furnish to Trustee,
the Investor Certificateholders and the Rating Agencies:
(i) Early Amortization Events. As soon as possible, and in any
event within five Business Days after an Authorized Officer of
Transferor has obtained knowledge of the occurrence of any Early
Amortization Event or any Unmatured Early Amortization Event, a
written statement of an Authorized Officer of Transferor describing
the event and the action that Transferor proposes to take with
respect thereto, in each case in reasonable detail,
(ii) Material Adverse Effect. As soon as possible and in any
event within five Business Days after an Authorized Officer of
Transferor has knowledge thereof, written notice that describes in
reasonable detail any Adverse Claim, other than any Permitted
Adverse Claim, against the Transferred Assets or any other event or
occurrence that, individually or in the aggregate for all such
events or occurrences, has had, or would have a substantial
likelihood of having, in the reasonable, good faith judgment of
Transferor, a Material Adverse Effect,
(iii) Proceedings. As soon as possible and in any event within
five Business Days after an Authorized Officer of Transferor has
knowledge thereof, written notice of (A) any litigation,
investigation or proceeding of the type described in Section 7.1(f)
not previously disclosed to Trustee and (B) any material adverse
development that has occurred with respect to any such previously
disclosed litigation, investigation or proceeding,
(iv) Other. Promptly, from time to time, any other
information, documents, records or reports respecting the
Transferred Receivables or the Related Transferred Assets or any
other information respecting the condition or operations, financial
or otherwise, of Transferor, in each case as Trustee may from time
to time reasonably request in order to protect the interests of
Trustee, the Trust or the Investor Certificateholders under or as
contemplated by this Agreement.
(e) Adverse Claims. Except for any conveyances under the Transaction
Documents, not permit to exist any Adverse Claim (other
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than Permitted Adverse Claims) to or in favor of any Person upon or with
respect to, or cause to be filed any financing statement or equivalent
document relating to perfection that covers, any Transferred Receivable,
related Contract, Related Transferred Asset or other Transferred Asset, or
any interest therein. Transferor shall defend the right, title and
interest of the Trust in, to and under the Transferred Assets, whether now
existing or hereafter created, against all claims of third parties
claiming through or under Transferor.
(f) Extension or Amendment of Receivables; Change in Credit and
Collection Policy or Contracts. Not (i) extend, amend or otherwise modify
the terms of any Transferred Receivable or Contract (except as permitted
by the Credit and Collection Policy) in a manner that would have a
material adverse effect on the Investor Certificateholders or the
Purchasers, or (ii) permit any Seller to make any change in its Credit and
Collection Policy that would have a material adverse effect on the
Investor Certificateholders or the Purchasers; provided that Transferor or
Servicer, as applicable, may change the terms and provisions of the Credit
and Collection Policy if (A) with respect to any material change of
collection policies, the change is made with the prior written approval of
each Agent, if any, and the Modification Condition is satisfied with
respect thereto, (B) with respect to any material change of collection
procedures, the change is made with prior written notice to each Agent and
no material adverse effect on any Series or Purchased Interest would
result, and (C) with respect to any material change in accounting policies
relating to Write-Offs, the change is made in accordance with GAAP; and,
provided further, that Transferor or Servicer may change the terms and the
provisions of a Contract on a prospective basis, and a Seller may enter
into a new Contract, so long as such change or new Contract does not have
a material adverse affect on the validity, enforceability or
collectibility of any then outstanding Transferred Receivable.
(g) Mergers, Acquisitions, Sales, Etc. Not:
(i) except pursuant to the Transaction Documents or m
connection with the transactions contemplated by the Acquisition, as
defined and described in the Offering Memorandum dated November 22,
1995 for the note offering under and pursuant to the Note Indenture,
(A) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest
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in, any other Person, or (B) directly or indirectly, sell, transfer,
assign, convey or lease, whether in one transaction or in a series
of transactions, all or substantially all of its assets, or sell or
assign with or without recourse any Receivables or Related
Transferred Assets (other than as provided in the Transaction
Documents) unless:
(x)(1) the corporation formed by the consolidation or into
which Transferor is merged or the Person that acquires by
conveyance or transfer the properties and assets of Transferor
substantially as an entirety shall be, if Transferor is not
the surviving entity, organized and existing under the laws of
the United States of America or any state thereof or the
District of Columbia, and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to
Trustee, in form satisfactory to Trustee and each Agent, the
performance of every covenant and obligation of Transferor
hereunder, including its obligations under Section 7.3, under
each Supplement and under each PI Agreement, and (2)
Transferor has delivered to Trustee an Officer's Certificate
stating that the consolidation, merger, conveyance or transfer
and the supplemental agreement comply with this section and an
Opinion of Counsel stating that the supplemental agreement is
a valid and binding obligation of the surviving entity
enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in
effect and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at
law or in equity),
(y) the Modification Condition shall have been satisfied with
respect to the consolidation, merger, conveyance or transfer,
and the Transferor's independent director shall have approved
such consolidation, merger, conveyance or transfer,
(z) Transferor shall have delivered to Trustee, each Rating
Agency, each Purchaser and each Enhancement Provider a Tax
Opinion for each outstanding Series of
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Investor Certificates, Purchased Interest and Enhancement
(provided that the opinion delivered to any Purchaser or
Enhancement Provider shall be limited to the Tax Opinion
required by the related Purchased Interest or Series), dated
the date of the consolidation, merger, conveyance or transfer,
with respect thereto, or
(ii) except as contemplated in the Purchase Agreement in
connection with Transferor's purchases of Specified Receivables and
Related Assets from the Sellers, (A) make, incur or suffer to exist
an investment in, equity contribution to, or payment obligation in
respect of the deferred purchase price of property or services from,
any Person, or (B) make any loan or advance to any Person other than
loans to Howmet (which loans shall be made in accordance with
Section 3.3 of the Purchase Agreement).
(h) Change in Name. Not change its corporate name or the name under
or by which it does business, or permit any Seller to change its corporate
name or the name under or by which it does business, unless prior to the
change in name, Transferor shall have filed (or shall have caused to be
filed) any financing statements or amendments as Servicer or Trustee
determines may be necessary to continue the perfection of the Trust's
interest in the Transferred Receivables, the Related Transferred Assets
and the proceeds thereof.
(i) Amendment of Articles of Incorporation; Change in Business. Not
amend Article Sixth, Ninth, Tenth (a), Tenth (d) or Thirteenth (b) of its
Articles of Incorporation, or engage in any business other than as
contemplated by the Transaction Documents, unless the Modification
Condition has been satisfied in connection with the amendment or change in
Transferor's business.
(j) Amendments to Purchase Agreement. Except as expressly provided
otherwise in this Agreement, make no amendment to the Purchase Agreement
that would adversely affect in any material respect the interests of the
Investor Certificateholders, the Purchasers or any Enhancement Provider.
(k) Enforcement of Purchase Agreement. Perform all its obligations
under and otherwise comply with the Purchase Agreement in all material
respects and, if requested by Trustee, enforce, for the
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benefit of the Trust, the covenants and agreements of any Seller in the
Purchase Agreement.
(l) Other Indebtedness. Not (i) create, incur or permit to exist any
Indebtedness, Guaranty or liability or (ii) cause or permit to be issued
for its account any letters of credit or bankers' acceptances, except for
(A) Indebtedness incurred pursuant to any Buyer Note, (B) other
liabilities specifically permitted to be created, incurred or owed by
Transferor pursuant to or in connection with the Transaction Documents,
(C) liabilities for reasonable and customary operating expenses in an
aggregate amount not to exceed $150,000 per calendar quarter, (D)
liabilities under a tax sharing agreement among Howmet and its
Subsidiaries, provided that such agreement is in substantially the form
disclosed to the Trustee prior to the date hereof (or in a form otherwise
acceptable to the Trustee), and (E) liabilities for taxes not yet due and
taxes contested in good faith by proper proceedings, provided that
Transferor has maintained adequate reserves with respect thereto in
accordance with GAAP.
(m) Separate Corporate Existence. Hereby acknowledge that Trustee
and the Investor Certificateholders are, and will be, entering into the
transactions contemplated by the Transaction Documents in reliance upon
Transferor's identity as a legal entity separate from any Seller, Servicer
and any other Person. Therefore, from and after the First Issuance Date,
Transferor shall take all reasonable steps to maintain its existence as a
corporation separate and apart from Servicer, each Seller and any other
Howmet Person. Without limiting the generality of the foregoing,
Transferor shall take such actions as shall be reasonably required in
order that:
(i) Transferor will not incur any material indirect or
overhead expenses for items shared between Transferor and any Howmet
Person that are not reflected in the Servicing Fee, other than
shared items of expenses not reflected in the Servicing Fee, such as
legal, auditing and other professional services, that will be
allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably
related to the actual use or the value of services rendered, it
being understood that Howmet will pay all expenses owing by
Transferor or any Howmet Person relating to the preparation,
negotiation, execution and delivery of the Transaction Documents
(and any amendments, modifications or
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supplements thereto), including, without limitation, legal,
commitment, agency and other fees.
(ii) Transferor will account for and manage its liabilities
separately from those of every other Howmet Person, including
payment of all payroll and administrative expenses and taxes (other
than taxes that are determined or required to be determined on a
consolidated or combined basis) from its own assets.
(iii) Transferor will conduct its business at an office
segregated from the offices of each Howmet Person, which office of
Transferor may consist of office space shared with a Howmet Person,
a portion of which is allocated solely to Transferor.
(iv) Transferor will maintain corporate records, books of
account and stationery separate from those of every Howmet Person.
(v) Any annual financial statements of any Howmet Person that
are made publicly available and which are consolidated to include
Transferor will contain footnotes stating that Howmet and certain of
its Subsidiaries has entered into an agreement with Transferor with
respect to the sale of the Specified Receivables and indicating that
the assets of Transferor will not be available to Howmet or any such
Subsidiary unless Transferor's liabilities have been paid in full.
(vi) Transferor's assets will be maintained in a manner that
facilitates their identification and segregation from those of any
other Howmet Person.
(vii) Transferor shall not, directly or indirectly, be named
and shall not enter into an agreement to be named as a direct or
contingent beneficiary or loss payee on any insurance policy with
respect to any loss relating to the property of a Howmet Person.
(viii) Any transaction between Transferor and any Howmet
Person will be the type of transaction which would be entered into
by a prudent Person in the position of Transferor with a Howmet
Person, and will be on terms that are at least as
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favorable as may be obtained from a Person that is not a Howmet
Person (it being understood and agreed that the transactions
contemplated in the Transaction Documents meet the requirements of
this clause).
(ix) Except to the extent required by law, neither Transferor
nor any Howmet Person will be or will hold itself out to be
responsible for the debts of the other.
(n) Taxes. File or cause to be filed, and cause each Person with
whom it shares consolidated tax liability to file, all Federal, state and
local tax returns that are required to be filed by it, except where the
failure to file such returns would not have a Material Adverse Effect, and
pay or cause to be paid all taxes shown to be due and payable on such
returns or on any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which Transferor shall have
set aside adequate reserves on its books in accordance with GAAP and which
proceedings would not have a Material Adverse Effect.
The covenants set forth in this section shall survive the transfer and
assignment of the Transferred Receivables and the other Transferred Assets to
the Trust. Upon discovery by Transferor, Servicer or Trustee of a breach of any
of the foregoing covenants, the party discovering the breach shall give written
notice to the other parties to this Agreement within three Business Days
following such discovery; provided, however that if such breach arises from a
Seller's failure to perform its obligations under the Purchase Agreement and
such failure is of the type that may be cured by settlement of a Seller
Non-Complying Receivables Adjustment or Seller Dilution Adjustment under
Sections 3.1 and 3.5 of the Purchase Agreement, and such settlement shall have
(in fact) been made within the time limit specified under such sections, then no
breach shall be deemed to have occurred under this Agreement. Trustee's
obligations in respect of discovering any breach are limited as provided in
Section 11.2(g).
SECTION 7.3 Indemnification by Transferor. (a) Transferor hereby agrees to
indemnify the Trust, Trustee and each of the successors, permitted transferees
and assigns of any such Person and all officers, directors, shareholders,
controlling Persons, employees, affiliates and agents of any of the foregoing
(each of the foregoing Persons individually being called an "Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims (whether on account of settlement or otherwise, and whether or not the
relevant Indemnified Party is a party to any action or
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proceeding that gives rise to any Indemnified Losses (as defined below)),
judgments, liabilities and related reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) (all of the foregoing collectively
being called "Indemnified Losses") awarded against or incurred by any of them
that arise out of or relate to Transferor's performance of, or failure to
perform, any of its obligations under or in connection with any Transaction
Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
indemnified against any Indemnified Losses (a) resulting from gross negligence
or willful misconduct on the part of such Indemnified Party (or the gross
negligence or willful misconduct on the part of any of its officers, directors,
employees, affiliates or agents), (b) to the extent they include Indemnified
Losses in respect of Transferred Receivables and reimbursement therefor that
would constitute credit recourse to Transferor for the amount of any Transferred
Receivable or Related Transferred Asset not paid by the related Obligor, (c) to
the extent they are or result from lost profits, (d) to the extent they are or
result from taxes (including interest and penalties thereon) asserted with
respect to (i) distributions on the Investor Certificates, (ii) franchise or
withholding taxes imposed on any Indemnified Party other than the Trust or
Trustee in its capacity as Trustee or (iii) federal or other income taxes on or
measured by the net income of the Indemnified Party and costs and expenses in
defending against the same, (e) resulting from any breach by such Indemnified
Party of its representations, warranties or covenants m the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this Section is
unavailable to an Indemnified Party or is insufficient to hold it harmless, then
Transferor shall contribute to the amount paid by the Indemnified Party as a
result of any loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party on the one hand and Transferor on the other hand, but also the
relative fault of the Indemnified Party (if any) and Transferor and any other
relevant equitable consideration.
(b) Transferor shall be liable to all creditors of the Trust (but not to
the Trust, Trustee, Investor Certificateholders or Purchasers) for all
liabilities of the Trust to the same extent as it would be if the Trust
constituted a partnership under Delaware law and Transferor were a general
partner thereof (to the extent Transferred Assets remaining after Investor
Certificateholders and Purchasers have been paid in full are insufficient to pay
such losses, claims, damages or liabilities). Notwithstanding anything to the
contrary
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herein, any such creditor shall be a third party beneficiary of this Section
7.3. Nothing in this provision shall be construed as waiving any rights or
claims (including rights of recoupment or subrogation) which the Transferor may
have against any third party under this Agreement or applicable laws.
ARTICLE VIII SERVICER
SECTION 8.1 Representations and Warranties of Servicer. On the date hereof
and on each Issuance Date and Purchase Date, Servicer hereby makes, and any
Successor Servicer also shall be deemed to make by its acceptance of its
appointment hereunder, the following representations and warranties for the
benefit of Trustee, the Certificateholders, the Purchasers and the Enhancement
Providers:
(a) Organization and Good Standing. Servicer is a corporation duly
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to own its properties and to conduct its business as the
properties presently are owned and as the business presently is conducted.
(b) Due Qualification. Servicer is duly qualified to do business and
is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in
all jurisdictions in which the servicing of the Transferred Receivables
and the Related Transferred Assets as required by this Agreement requires
qualification, licenses or approvals and where the failure so to qualify,
to obtain the licenses and approvals or to preserve and maintain the
qualification, licenses or approvals would have a material adverse effect
on its ability to perform its obligations as Servicer under this Agreement
or a Material Adverse Effect.
(c) Power and Authority. Servicer has all necessary corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, and each other
Transaction Document to which Servicer is a party when executed and
delivered will constitute, a legal, valid and binding obligation of
Servicer, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
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or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
(e) Authorization; No Conflict or Violation. The execution and
delivery by Servicer of this Agreement and the other Transaction Documents
to which it is a party, the performance by it of its obligations hereunder
and thereunder and the fulfillment by it of the terms hereof and thereof
that are applicable to it have been duly authorized by all necessary
action and will not (i) conflict with, violate, result in any breach of
any of the terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, (A) its Certificate of
Incorporation or Bylaws or (B) any indenture, loan agreement, mortgage,
deed of trust, or other material agreement or instrument to which it is a
party or by which it or any of its properties is bound (excluding any such
agreement that is terminated on or before the First Issuance Date or under
which Servicer has obtained all necessary consents) or (ii) conflict with
or violate any federal, state, local or foreign law or any decision,
decree, order, rule or regulation applicable to it or any of its
properties of any court or of any federal, state, local or foreign
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties,
which conflict, violation, breach or default described, individually or in
the aggregate, would have a Material Adverse Effect.
(f) Governmental Approvals. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by Servicer, and all notices to and filings with
any Governmental Authority that are required to be made by it, in the case
of each of the foregoing in connection with the execution, delivery and
performance by it of this Agreement and any other Transaction Documents to
which it is a party and the consummation of the transactions contemplated
by this Agreement, have been obtained or made and are in full force and
effect (other than the filing of the UCC financing statements referred to
in Section 2.3(a)(ii)(A), all of which, at the time required in Section
2.3(a)(ii)(A), will be duly made), except where the failure to obtain or
make such authorization, consent, order, approval, notice or filing,
individually or in the aggregate for all such failures, would not
reasonably be expected to have a Material Adverse Effect.
(g) Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of Servicer,
threatened against it before any court, regulatory body,
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arbitrator, administrative agency or other tribunal or governmental
instrumentality and (ii) it is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
government authority that, in the case of clauses (i) and (ii), (A) seeks
to affect adversely the income tax attributes of the transfers hereunder
or the Trust under the United States federal income tax system or any
state income tax system or (B) individually or in the aggregate for all
such actions, suits, proceedings and investigations would have a Material
Adverse Effect.
(h) Business; Balance Sheet. Since its incorporation, Transferor has
conducted no business other than the purchase of Receivables and Related
Assets from the Sellers under the Existing Purchase Agreement, the
transfer of such Receivables and Related Assets to the Trust (pursuant to
the Existing Pooling Agreement), the offering of Certificates and
Purchased Interests and such other activities as are contemplated by the
Transaction Documents or that are incidental to the foregoing. The balance
sheet of Transferor delivered to Trustee on the date hereof has been
prepared in accordance with GAAP and fairly presents the financial
condition of Transferor (after taking into account on a pro forma basis
the transactions occurring on such date). As of the date hereof, (i)
Transferor has no contingent liabilities other than expense reimbursement
and indemnity provisions of the Series 1995-1 Supplement to the Existing
Pooling Agreement which survive termination thereof, and (ii) Transferor
has not received notice from any party to such Supplement of any claim, or
of such party's intent to make a claim, under such provisions.
The representations and warranties set forth in this section shall survive
the transfer and assignment of the Transferred Receivables and the other
Transferred Assets to the Trust. Upon discovery by Transferor, Servicer or
Trustee of a breach of any of the foregoing representations and warranties, the
party discovering the breach shall give written notice to the other parties to
this Agreement within three Business Days following the discovery. Trustee's
obligations in respect of discovering any breach are limited as provided in
Section 11.2(g).
SECTION 8.2 Covenants of Servicer. So long as any Investor Certificates or
Purchased Interests remain outstanding (other than any Investor Certificates or
Purchased Interests payment for which has been duly provided for in accordance
with this Agreement), Servicer shall:
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(a) Compliance with Laws, Etc. Maintain in effect ail qualifications
required under applicable law in order to service properly the Transferred
Receivables and shall comply in all material respects with all applicable
laws, rules, regulations, judgments, decrees and orders, in each case to
the extent the failure to comply, individually or in the aggregate for all
such failures, would have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.
(c) Notice. As soon as possible (and in any event within five
Business Days after an Authorized Officer has knowledge thereof), furnish
to Transferor, Trustee, the Investor Certificateholders and the Rating
Agencies notice of any of the events described in clauses (i), (ii) and
(iii) of Section 7.2(d).
The covenants set forth in this section shall survive the transfer and
assignment of the Transferred Assets to the Trust. Upon discovery by Transferor,
Servicer or Trustee of a breach of any of the foregoing covenants, the party
discovering the breach shall give written notice to the other parties to this
Agreement within three Business Days following the discovery. Trustee's
obligations in respect of discovering any breach are limited as provided in
Section 11.2(g).
SECTION 8.3 Merger or Consolidation of or Assumption of the Obligations of
Servicer. Servicer shall not consolidate with or merge into any other Person or
convey, transfer or sell all or substantially all of its properties and assets
to any Person, unless (a) Servicer is the surviving entity or, if it is not the
surviving entity, the Person formed by the consolidation or into which Servicer
is merged or the Person that acquires by conveyance, transfer or sale all or
substantially all of the properties and assets of Servicer shall be a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and such corporation
shall expressly assume, by an agreement supplemental hereto, executed and
delivered to Trustee and in form and substance satisfactory to Trustee, the
performance of every covenant and obligation of Servicer hereunder and under the
other Transaction Documents to which Servicer is a party, and (b) Servicer shall
have delivered to Trustee an Officer's Certificate stating that the
consolidation, merger, conveyance, transfer or sale and the supplemental
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agreement comply with this Section 8.3 and an Opinion of Counsel stating that
the supplemental agreement is a valid and binding obligation of the surviving
entity enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity.
SECTION 8.4 Indemnification by Servicer. Servicer hereby agrees to
indemnify each Indemnified Party forthwith on demand, from and against any and
all Indemnified Losses awarded against or incurred by any of them that arise out
of or relate to Servicer's performance of, or failure to perform, any of its
obligations under or in connection with any Transaction Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
indemnified against any Indemnified Losses (a) resulting from gross negligence
or willful misconduct on the part of such Indemnified Party (or the gross
negligence or willful misconduct on the part of any of its officers, directors,
employees, affiliates or agents), (b) to the extent they include Indemnified
Losses in respect of Transferred Receivables and reimbursement therefor that
would constitute credit recourse to Servicer for the amount of any Transferred
Receivable or Related Transferred Asset not paid by the related Obligor, (c) to
the extent they are or result from lost profits, (d) to the extent they are or
result from taxes (including interest and penalties thereon) asserted with
respect to (i) distributions on the Investor Certificates, (ii) franchise or
withholding taxes imposed on any Indemnified Party other than the Trust or
Trustee in its capacity as Trustee or (iii) federal or other income taxes on or
measured by the net income of the Indemnified Party and costs and expenses in
defending against the same, (e) resulting from any breach by such Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnified Party or is insufficient to hold it harmless, then
Servicer shall contribute to the amount paid by the Indemnified Party as a
result of any loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party on the one hand and Servicer on the other hand, but also the
relative fault of the Indemnified Party (if any) and Servicer and any other
relevant equitable consideration.
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SECTION 8.5 Servicer Liability. Servicer shall be liable in accordance
with this Agreement only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein and as set forth herein.
SECTION 8.6 Limitation on Liability of Servicer and Others. No recourse
under or upon any obligation or covenant of this Agreement, any Supplement, any
PI Agreement, any Certificate or any other Transaction Document, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of Servicer or of any successor corporation, either directly or through
Servicer, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Agreement, any Supplement, any PI Agreement, all other
relevant Transaction Documents and the obligations incurred hereunder or
thereunder are solely corporate obligations, and that no such personal liability
whatsoever shall attach to, or is or shall be incurred by the incorporators,
shareholders, officers or directors, as such, of Servicer or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement, any Supplement, any PI Agreement, any of
the Certificates or any other Transaction Documents, or implied therefrom; and
that any and all such personal liability of, either at common law or in equity
or by constitution or statute, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations or covenants contained in this Agreement, any Supplement, any PI
Agreement, any of the Certificates or any other Transaction Documents, or
implied therefrom, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Agreement, any PI Agreement
and any Supplement. Servicer and any director, officer, employee or agent of
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its duties to service the Transferred
Receivables in accordance with this Agreement, any PI Agreement or any
Supplement that in its reasonable opinion may involve it in any expense or
liability. Servicer may, in its sole discretion, undertake any legal action
relating to the servicing, collection or administration of Transferred
Receivables and Related Transferred Assets that it may reasonably deem necessary
or appropriate for the benefit of the Certificateholders and the Purchasers with
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders and Purchasers hereunder.
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ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1 Early Amortization Events. The Early Amortization Events with
respect to each Series and Purchased Interest shall be specified in the related
Supplement or PI Agreement.
SECTION 9.2 Remedies. Upon the occurrence of an Early Amortization Event,
Trustee shall have, in addition to all other rights and remedies available to
Trustee under this Agreement or otherwise, (a) the right to apply Collections as
provided herein, and (b) all rights and remedies provided under all other
applicable laws, which rights, in the case of each and all of the foregoing,
shall be cumulative. Trustee shall exercise the rights at the direction of the
Investor Certificateholders pursuant to (and subject to the limitations
specified in) Section 11.14.
SECTION 9.3 Additional Rights Upon the Occurrence of Certain Events. (a)
If a Bankruptcy Event shall occur with respect to Transferor, this Agreement
(other than this Section 9.3) and the Trust shall be deemed to have terminated
on the day of the Bankruptcy Event. Within seven Business Days of the date of
written notice to Trustee of the Bankruptcy Event, Trustee shall:
(i) publish a notice in an Authorized Newspaper that a Bankruptcy
Event has occurred with respect to Transferor, that the Trust has
terminated, and that Trustee intends to (A) if all amounts owed in respect
of all Investor Certificates and Purchased Interests shall have been paid
in full or if sufficient funds are on deposit in the Transaction Accounts
for such purpose, transfer the Transferred Receivables and Related
Transferred Assets to Transferor or (B) in any other event, sell, dispose
of or otherwise liquidate the Transferred Receivables and the Related
Transferred Assets pursuant to this Agreement in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids (a "Disposition"), and
(ii) send written notice to the Investor Certificateholders and
Purchasers describing the provisions of this section and requesting each
Investor Certificateholder and Purchaser to advise Trustee in writing
whether (A) it wishes Trustee to instruct Servicer not to effectuate a
Disposition, (B) it refuses to advise Trustee as to the specific action
Trustee shall instruct Servicer to take or (C) it wishes Servicer to
effect a Disposition.
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If, after 60 days from the day notice pursuant to subsection (a)(i) is
first published (the "Publication Date"), Trustee shall not have received the
written instruction described in subsection (a)(ii)(A) from Holders
representing at least a majority in interest within the meaning of Internal
Revenue Service Revenue Procedure 94-46 (or subsequent authority promulgated by
the Internal Revenue Service), determined as if the Trust were classified as a
partnership for Federal income tax purposes (a "majority in interest"), of all
Series of Investor Certificates and Purchased Interests, Trustee shall instruct
Servicer to effectuate a Disposition, and Servicer shall proceed to consummate a
Disposition. If, however, Holders representing at least a majority in interest
of all Series of Investor Certificates and Purchased Interests instruct Trustee
not to effectuate a Disposition, the Trust shall be reconstituted and continue
pursuant to the terms of this Agreement.
(b) Notwithstanding the termination of this Agreement and the Trust
pursuant to subsection (a), the proceeds from any Disposition of the Transferred
Receivables and the Related Transferred Assets pursuant to subsection (a) shall
be treated as Collections on the Transferred Receivables and shall be allocated
and deposited in accordance with the provisions of Article IV.
(c) Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this section with respect to competitive bids.
(d) Transferor or any of its Affiliates shall be permitted to bid for the
Transferred Receivables and the Related Transferred Assets. Trustee may obtain a
prior determination from any bankruptcy trustee, receiver or liquidator that the
terms and manner of any proposed Disposition are commercially reasonable.
(e) Notwithstanding the termination of this Agreement and the Trust
pursuant to subsection (a), Trustee shall continue to have the rights described
in Section 9.2 and Article XI, and be subject to direction on terms consistent
with those set out in Section 11.14, pending the completion of any Disposition
and/or the reconstitution of the Trust.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults. Any of the following events shall
constitute a "Servicer Default":
(a) any failure by Servicer in its capacity as Servicer to make any
payment, transfer or deposit required by any Transaction Document
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to be made by it or to give instructions or to give notice to Trustee to
make such payment, transfer or deposit, which failure continues unremedied
for three Business Days,
(b) failure on the part of Servicer in its capacity as Servicer duly
to observe or perform in any material respect any other covenants or
agreements of Servicer set forth in this Agreement or any other
Transaction Document, which failure continues unremedied for a period of
30 days after the date on which written notice of the failure, requiring
the same to be remedied, shall have been given to Servicer by Trustee, or
to Servicer and Trustee by any Investor Certificateholder or Purchaser,
(c) Servicer shall assign its duties under this Agreement, except as
permitted by Sections 3.1(b) and 8.3,
(d) any Daily Report or Monthly Report or any representation,
warranty or certification made by Servicer in any Transaction Document or
in any certificate or other document or instrument delivered pursuant to
any Transaction Document shall prove to have been incorrect in any
material respect when made or delivered and results in a material adverse
effect on any Investor Certificateholder of any Series or any Purchaser,
and which material adverse effect continues for a period of three Business
Days and such material adverse effect has not been cured, or
(e) any Bankruptcy Event shall occur with respect to Servicer.
In the event of any Servicer Default, so long as Servicer Default shall not have
been remedied, Trustee may (and, at the direction of the Required Investors,
shall), by notice then given in writing to Servicer (a "Termination Notice"),
terminate all (but not less than all) the rights (other than rights to any
earned Servicing Fee, indemnity and exculpation, if any, under this Agreement or
any other Transaction Document) and obligations of Servicer as Servicer under
this Agreement and in and to the Transferred Receivables, the Related
Transferred Assets and the proceeds thereof.
As soon as possible, and in any event within five Business Days, after an
Authorized Officer of Servicer has obtained knowledge of the occurrence of any
Servicer Default, Servicer shall furnish Trustee, each Agent and the Rating
Agencies, and Trustee shall promptly furnish each Investor Certificateholder,
notice of such Servicer Default.
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Notwithstanding the foregoing, a delay in or failure in performance
referred to in subsection (a) for a period of ten Business Days after the
applicable grace period, or in subsection (b) or (d) for a period of 30 Business
Days after the applicable grace period, shall not constitute a Servicer Default
if the delay or failure could not have been prevented by the exercise of
reasonable diligence by Servicer and the delay or failure was caused by an act
of God or the public enemy, riots, acts of war, acts of terrorism, epidemics,
flood, embargoes, weather, landslides, fire, earthquakes or similar causes. The
preceding sentence shall not relieve Servicer from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of the
Transaction Documents, and Servicer shall promptly give Trustee, each Agent and
Transferor an Officer's Certificate notifying them of its failure or delay.
SECTION 10.2 Trustee to Act; Appointment of Successor. (a) On and after
Servicer's receipt of a Termination Notice pursuant to Section 10.1, Servicer
shall continue to perform ail servicing functions under this Agreement until the
date specified in the Termination Notice or otherwise specified by Trustee in
writing or, if no such date is specified in the Termination Notice, or otherwise
specified by Trustee, until a date mutually agreed upon by Servicer and Trustee.
Trustee shall, as promptly as possible after the giving of a Termination Notice,
nominate an Eligible Servicer as successor servicer (the "Successor Servicer");
provided that (a) in appointing any Successor Servicer, Trustee shall give due
consideration to any Successor Servicer proposed by any Agent and (b) the
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to Trustee and each Agent. In the event that a Successor
Servicer has not been appointed or has not accepted its appointment at the time
when Servicer ceases to act as Servicer, Trustee without further action shall
automatically be appointed the Successor Servicer. Trustee may delegate any of
its servicing obligations to an affiliate or agent in accordance with Section
3.1(b). If Trustee is prohibited by applicable law from performing the duties of
Servicer hereunder, Trustee may appoint, or may petition a court of competent
jurisdiction to appoint, a Successor Servicer hereunder. Trustee shall give
prompt notice to the Rating Agencies and each Investor Certificateholder upon
the appointment of a Successor Servicer.
(b) After Servicer's receipt of a Termination Notice, and on the
termination date specified in the Termination Notice or selected by Trustee and
Servicer in accordance with subsection (a), all authority and power of Servicer
under this Agreement shall pass to and be vested in the Successor Servicer (a
"Service Transfer"); and, without limitation, Trustee is hereby authorized and
empowered to execute and deliver, on behalf of Servicer, as attorney-in-fact or
otherwise, all documents and instruments, and to do and accomplish all other
acts or things that Trustee reasonably determines are necessary or appropriate
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to effect the purposes of the Service Transfer. Servicer agrees that it will
terminate its activities as Servicer hereunder in a manner that Trustee
indicates will facilitate the transition of the performance of such activities
to the Successor Servicer. Servicer agrees that it shall use reasonable efforts
to assist the Successor Servicer in assuming the obligations to service and
administer the Transferred Receivables and the Related Transferred Assets, on
the terms and subject to the conditions set forth herein, and to effect the
termination of the responsibilities and rights of Servicer to conduct servicing
hereunder, including the transfer to such Successor Servicer of all authority of
Servicer to service the Transferred Receivables and Related Transferred Assets
provided for under this Agreement and all authority over all cash amounts that
shall thereafter be received with respect to the Transferred Receivables or the
Related Transferred Assets. Servicer shall, within five Business Days after the
designation of a Successor Servicer, transfer its electronic records (including
software) relating to the Transferred Receivables, the related Contracts and the
Related Transferred Assets to the Successor Servicer in such electronic form as
the Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Transferred Receivables and the Related
Transferred Assets in the manner and at such times as the Successor Servicer
shall request. To the extent that compliance with this Section shall require
Howmet or any Servicer to disclose to the Successor Servicer information of any
kind that Howmet reasonably deems to be confidential, prior to the transfer
contemplated by the preceding sentence the Successor Servicer shall be required
to enter into such licensing and confidentiality agreements as Howmet shall
reasonably deem necessary to protect its interest. All reasonable costs and
expenses (including attorneys' fees and disbursements) incurred in connection
with transferring the Transferred Receivables, the Related Transferred Assets
and all related Records (including the related Contracts) to the Successor
Servicer and amending this Agreement and the other Transaction Documents to
reflect the succession as Servicer pursuant to this Section shall be paid by the
predecessor Servicer (or, if Trustee serves as Successor Servicer on an interim
basis, the preceding Servicer) within 15 days after presentation of reasonable
documentation of the costs and expenses.
(c) Upon its appointment and acceptance thereof, the Successor Servicer
shall be the successor in all respects to Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities
and duties relating thereto placed on Servicer by the terms and provisions
hereof (and shall carry out such responsibilities and duties in accordance with
standards of reasonable commercial prudence), and all
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references in this Agreement to Servicer shall be deemed to refer to the
Successor Servicer.
(d) Unless otherwise agreed by Transferor and Servicer or Successor
Servicer, all authority and power granted to Servicer or the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to Section 12.1, and shall pass to and be vested in
Transferor and, without limitation, Transferor is hereby authorized and
empowered, on and after the effective date of such termination, to execute and
deliver, on behalf of the Servicer or the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments and to do and
accomplish all other acts or things that Transferor reasonably determines are
necessary or appropriate to effect the purposes of such transfer of servicing
rights. The Servicer or Successor Servicer agrees to cooperate with Transferor
in effecting the termination of the responsibilities and rights of the Servicer
or Successor Servicer to conduct servicing of the Transferred Receivables and
the Related Transferred Assets. The Servicer or Successor Servicer shall, within
five Business Days after such termination, transfer its electronic records
relating to the Transferred Receivables and the Related Transferred Assets to
Transferor in such electronic form as Transferor may reasonably request and
shall transfer all other records, correspondence and documents relating to the
Transferred Receivables and the Related Transferred Assets to Transferor in the
manner and at such times as Transferor shall reasonably request. To the extent
that compliance with this Section shall require the Servicer or Successor
Servicer to disclose to Transferor information of any kind that the Servicer or
Successor Servicer deems to be confidential, Transferor shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer or Successor Servicer shall reasonably deem necessary to protect its
interests. All reasonable costs and expenses (including attorneys' fees and
disbursements) incurred by Trustee, in its capacity as Successor Servicer, in
connection with the termination shall be paid by Transferor within 15 days after
presentation of reasonable documentation of the costs and expenses.
SECTION 10.3 Notification of Servicer Default; Notification of Appointment
of Successor Servicer. Within four Business Days after an Authorized Officer of
Servicer becomes aware of any Servicer Default, Servicer shall give written
notice thereof to Trustee and the Rating Agencies, and Trustee shall, promptly
upon receipt of the written notice, give notice to the Investor
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Purchasers. Upon any termination or appointment of a
Successor Servicer pursuant to this Article X, Trustee shall give prompt written
notice thereof to the Investor Certificateholders at their
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respective addresses appearing in the Certificate Register and to the Purchasers
and the Rating Agencies.
ARTICLE XI TRUSTEE
SECTION 11.1 Duties of Trustee. (a) Trustee undertakes to perform the
duties and only the duties as are specifically set forth in this Agreement. The
provisions of this Article XI shall apply to Trustee solely in its capacity as
Trustee, and not to Trustee in its capacity as Servicer if it is acting as
Servicer. Following the occurrence of a Servicer Default of which a Responsible
Officer has actual knowledge, Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; provided that if Trustee
shall assume the duties of Servicer pursuant to Section 10.2, Trustee in
performing the duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to trade receivables that it services for
itself or others. Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in, or incidental to the performance of its duties under, the
Transaction Documents.
(b) Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to Trustee
that are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are substantially in the
form required by this Agreement. Trustee shall give written notice to the Person
who furnished any item of the type listed in the preceding sentence of any lack
of substantial conformity of any such item to the applicable requirements of
this Agreement. In addition, Trustee shall give prompt written notice to the
Investor Certificateholders and each Agent of any lack of substantial conformity
of any such instrument to the applicable requirements of this Agreement
discovered by Trustee that would entitle a specified percentage of the Investor
Certificateholders or the Holders of any Series of Certificates or Purchasers or
Agents to take any action pursuant to this Agreement. Within two Business Days
of its receipt of any Monthly Report, Trustee shall verify the mathematical
computations contained therein and shall notify Servicer and each of the Rating
Agencies of the accuracy of such computations or of any discrepancies therein
(provided that the rounding of numbers will not constitute a discrepancy),
whereupon Servicer shall deliver to the Rating Agencies within 5 Business Days
thereafter a certificate describing the nature and cause of such discrepancies
and the action that Servicer proposes to take with respect thereto. During the
first week of each year, Trustee shall provide the Rating Agencies
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with a certificate, signed by a Responsible Officer, to the effect that Trustee
is not aware of any Early Amortization Event (or, if it is aware of any Early
Amortization Event, specifying the nature of that event).
(c) Subject to subsection (a), no provision of this Agreement shall be
construed to relieve Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided that:
(i) Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of Trustee,
unless it shall be proved that Trustee was negligent. in ascertaining the
pertinent facts,
(ii) Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction (as applicable) of the Majority Investors, the Required
Investors, all Investors, any Agent, or the Required Series Holders
relating to the time, method and place of conducting any proceeding for
any remedy available to Trustee, or exercising any trust or power
conferred upon Trustee, under this Agreement,
(iii) Trustee shall not be charged with knowledge of (A) any failure
by Servicer to comply with the obligations of Servicer referred to in
subsections (a), (b) or (c) of Section 10.1, (B) any breach of the
representations and warranties of Transferor set forth in Section 2.3 or
7.1 or the representations and warranties of Servicer set forth in Section
8.1, (C) any breach of the covenants of Transferor set forth in Section
7.2 or the covenants of Servicer set forth in Section 8.2 or (D) the
ownership of any Certificate or Purchased Interest for purposes of
Section 6.5, in each case unless a Responsible Officer of Trustee
obtains actual knowledge of the matter or Trustee receives written notice
of the matter from Servicer or from any Holder,
(iv) the duties and obligations of Trustee shall be determined
solely by the express provisions of this Agreement, Trustee shall not be
liable except for the performance of the duties and obligations that
specifically shall be set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against Trustee and, in the
absence of bad faith on the part of Trustee, Trustee may conclusively rely
on the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions that are furnished to Trustee
and that conform to the requirements of this Agreement, and
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(v) without limiting the generality of this section or Section 11.2,
Trustee shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement evidencing a security interest in the Transferred
Receivables or the Related Transferred Assets, or to see to the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof (except that Trustee
(x) shall note in its records the date of filing of each UCC financing
statement identified to it in writing as having been filed in connection
with the Transaction Documents, or filed in connection with a predecessor
receivables securitization and amended and/or assigned in connection with
the Transaction Documents, and naming Trustee as secured party or assignee
of the secured party and (y) shall, unless it shall have received an
Opinion of Counsel to the effect that no such filing is necessary to
continue the perfection of Transferor's or Trustee's interests in the
Transferred Receivables and the Related Assets, cause continuation
statements to be filed with respect to each such financing statement not
less than four years and six months and not more than five years after (1)
its filing date and (2) the date of filing of any prior continuation
statement), (B) to see to the payment or discharge of any tax, assessment,
or other governmental charge or any Adverse Claim or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the
Trust, (C) to confirm or verify the contents of any reports or
certificates of Servicer delivered to Trustee pursuant to this Agreement
that are believed by Trustee to be genuine and to have been signed or
presented by the proper party or parties or (D) to ascertain or inquire as
to the performance or observance of any of Transferor's or Servicer's
representations, warranties or covenants or Servicer's duties and
obligations as Servicer.
(d) Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if Trustee
reasonably believes that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require Trustee to
perform, or be responsible for the manner of performance of, any obligations of
Servicer under this Agreement except during the time, if any, that Trustee shall
be the successor to, and be vested with the rights, duties, powers and
privileges of, Servicer in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, Trustee
shall take no action reasonably likely to impair the interests of the Trust in
any
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Transferred Asset now existing or hereafter created or to impair the value of
any Transferred Asset now existing or hereafter created.
(f) Except to the extent expressly provided otherwise in this Agreement,
Trustee shall have no power to vary the Transferred Assets.
(g) In the event that the Paying Agent or the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the manner or on the
day on which such obligation, duty or agreement is required to be performed by
the Paying Agent or the Transfer Agent and Registrar, as the case may be, under
this Agreement, Trustee shall be obligated, promptly upon its actual knowledge
thereof, to perform the obligation, duty or agreement in the manner so required.
SECTION 11.2 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 11.1:
(a) Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accordance with, any resolution, Officer's
Certificate, opinion of counsel, certificate of auditors or any other
certificate, statement, instrument, instruction, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document and
any information contained therein believed by it to be genuine and to have
been signed or presented to it pursuant to this Agreement by the proper
party or parties including, but not limited to, reports and records
required by Article III,
(b) Trustee may consult with counsel and any opinion of counsel
rendered by counsel reasonably satisfactory to Transferor shall be full
and complete authorization and protection in respect of any action taken
or permitted or omitted by it hereunder in good faith and in accordance
with such opinion of counsel,
(c) Trustee (including in its role as Successor Servicer, if it ever
acts in that capacity) shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation or other proceeding hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders, the Purchasers or any Agent, pursuant to the
provisions of this Agreement, unless such Certificateholders, the
Purchasers or Agent shall have offered to Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; provided that nothing contained herein shall
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relieve Trustee of the obligations, upon the occurrence and continuance of a
Servicer Default that has not been cured, to exercise such of the rights and
powers vested in it by this Agreement and to use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs,
(d) Trustee shall not be personally liable for any action taken, permitted
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement,
(e) Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by the Required Investors;
provided that if the payment within a reasonable time to Trustee of the costs,
expenses, or liabilities likely to be incurred by it in connection with making
such investigation shall be, in the opinion of Trustee, not reasonably assured
to Trustee by the security afforded to it by the terms of this Agreement,
Trustee may require reasonable indemnity against such cost, expense, or
liability as a condition to proceeding with the investigation. The reasonable
expense of every examination shall be paid by Servicer or, if paid by Trustee,
shall be reimbursed by Servicer upon demand,
(f) Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, representatives,
attorneys or a custodian, and Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, representative, attorney or
custodian appointed with due care by it hereunder,
(g) except as may be required by Section 11.1(b) and Section 11.1(c)(v)
hereof, Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Transferred Assets for
the purpose of establishing the presence or absence of defects or for any other
purpose,
(h) whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to Trustee shall be subject to the provisions of this Section 11.2,
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(i) Trustee shall have no liability with respect to the acts or
omissions of Servicer (except and to the extent Servicer is Trustee),
including, but not limited to, acts or omissions in connection with: (A)
the servicing, management or administration of the Transferred Receivables
or the Related Transferred Assets, (B) calculations made by Servicer
whether or not reported to Trustee, and (C) deposits into or withdrawals
from any Bank Accounts or Transaction Accounts established pursuant to the
terms of this Agreement, and
(j) in the event that Trustee is also acting as Paying Agent or
Transfer Agent and Registrar hereunder, the rights and protections
afforded to Trustee pursuant to this Article XI shall also be afforded to
Trustee acting as Paying Agent or as Transfer Agent and Registrar.
SECTION 11.3 Limitation on Liability of Trustee. Trustee shall at no time
have any responsibility or liability for or with respect to the correctness of
the recitals contained herein or in the Certificates (other than the certificate
of authentication on the Certificates) or the Purchased Interests. Except as set
forth in Section 11.15, Trustee makes no representations as to the validity or
sufficiency of this Agreement, any PI Agreement, any Supplement, the
Certificates (other than the certificate of authentication on the Certificates)
or the Purchased Interests, any other Transaction Document or any Transferred
Asset or related document. Trustee shall not be accountable for the use or
application (i) by Transferor of any of the Certificates or the Purchased
Interests or of the proceeds of such Certificates or the Purchased Interests, or
(ii) for the use or application of any funds paid to Transferor or to Servicer
(other than to Trustee in its capacity as Servicer) in respect of the
Transferred Assets or deposited by Servicer in or withdrawn by Servicer from the
Bank Accounts, the Transaction Accounts or any other accounts hereafter
established to effectuate the transactions contemplated herein or in the other
Transaction Documents and in accordance with the terms hereof or thereof.
Except as provided in Section 11.1(c)(v), Trustee shall at no time have
any responsibility or liability for or with respect to the legality, validity,
or enforceability of any ownership or security interest in any Transferred
Asset, or the perfection or priority of such a security interest or the
maintenance of any such perfection or priority, or for the generation of the
payments to be distributed to Certificateholders or Purchasers under this
Agreement, including: (a) the existence and substance of any Transferred Asset
or any related Record or any computer or other record thereof, (b) the validity
of the transfer of any Transferred Asset to the Trust or of any preceding or
intervening transfer, (c) the performance or enforcement of any Transferred
Asset, (d) the compliance by Transferor or Servicer with any warranty or
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representation made under this Agreement or in any other Transaction Document
and the accuracy of any such warranty or representation prior to Trustee's
receipt of actual notice of any noncompliance therewith or any breach thereof,
(e) any investment of monies pursuant to Section 4.4 or any loss resulting
therefrom, (f) the acts or omissions of Transferor, Servicer or any Obligor, (g)
any action of Servicer taken in the name of Trustee, or (h) any action by
Trustee taken at the instruction of Servicer; provided that the foregoing shall
not relieve Trustee of its obligation to perform its duties (including but not
limited to its duties, if any, to act as Servicer in accordance with Section
10.2) under the Agreement in accordance with the terms hereof.
Except with respect to a claim based on the failure of Trustee to perform
its duties under this Agreement or based on Trustee's negligence or willful
misconduct, no recourse shall be had against Trustee in its individual capacity
for any claim (a "Non-Recourse Claim") based on any provision of this Agreement,
any other Transaction Document, the Certificates, the Purchased Interests, any
Transferred Asset or any assignment thereof. Trustee shall not have any personal
obligation, liability, or duty whatsoever to any Certificateholder, any
Purchaser or any other Person with respect to any Non-Recourse Claim, and any
such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity to the Trust or Trustee as provided in this Agreement.
SECTION 11.4 Trustee May Deal with Other Parties. Subject to any
restrictions that may otherwise be imposed by Section 406 of ERISA, Section
4975(e) of the Internal Revenue Code or any other applicable law, Trustee in its
individual or any other capacity may deal with the other parties hereto (other
than Transferor) and their respective affiliates, with the same rights as it
would have if it were not Trustee.
SECTION 11.5 Servicer To Pay Trustee's Fees and Expenses. (a) To the
extent not paid by Servicer to Trustee from funds constituting the Servicing
Fee, Servicer covenants and agrees to pay to Trustee from time to time, and
Trustee shall be entitled to receive, such reasonable compensation as is agreed
upon in writing between Trustee and Servicer (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in connection with the Transaction Documents and
in the exercise and performance of any of the powers and duties hereunder of
Trustee, and Servicer will pay or reimburse Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by Trustee in
accordance with any of the provisions of the Transaction Documents to which it
is a party (including the reasonable fees and expenses
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of its agents, any co-Trustee and counsel) except any expense, disbursement or
advance that may arise from Trustee's negligence or willful misconduct.
(b) In addition, Servicer agrees to indemnify Trustee from, and hold it
harmless against, any and all losses, liabilities, damages, claims or expenses
incurred by Trustee in connection with the Transaction Documents or in the
exercise or performance of any of the powers or duties of Trustee hereunder,
other than those resulting from the negligence or willful misconduct of Trustee.
(c) If Trustee is appointed Successor Servicer pursuant to Section 10.2,
the provisions of this section shall not apply to expenses, disbursements and
advances made or incurred by Trustee in its capacity as Successor Servicer,
which shall be paid out of the Servicing Fee. Servicer's covenant to pay the
fees, expenses, disbursements and advances provided for in this section shall
survive the resignation or removal of Trustee and the termination of this
Agreement.
(d) Trustee shall look solely to Servicer for payment of amounts described
in this Section 11.5, and Trustee shall have no claim for payment of such
amounts against Transferor or the Transferred Assets.
SECTION 11.6 Eligibility Requirements for Trustee. Trustee hereunder shall
at all times: (a) be (i) a banking institution organized under the laws of the
United States, (ii) a member bank of the Federal Reserve System or (iii) any
other banking institution or trust company, incorporated and doing business
under the laws of any State or of the United States, a substantial portion of
the business of which consists of receiving deposits or exercising fiduciary
powers similar to those permitted to national banks under the authority of the
Comptroller of the Currency, and that is supervised and examined by a state or
federal authority having supervision over banks, (b) not be an Enhancement
Provider, (c) have, in the case of an entity that is subject to risk-based
capital adequacy requirements, risk-based capital of at least $250,000,000 or,
in the case of an entity that is not subject to risk-based capital adequacy
requirements, a combined capital and surplus of at least $250,000,000 and (d)
have an unsecured long-term debt rating of at least "A" or its equivalent from
at least one nationally recognized statistical rating agency. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purpose of this section, the combined capital and
surplus of the corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time Trustee shall cease to be eligible in
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accordance with the provisions of this section, Trustee shall resign immediately
in the manner and with the effect specified in Section 11.7.
SECTION 11.7 Resignation or Removal of Trustee. (a) Trustee may at any
time resign and be discharged from its obligations hereunder by giving 30 days'
prior written notice thereof to Transferor, Servicer, the Rating Agencies, the
Investor Certificateholders and the Agents. Upon receiving the notice of
resignation, Transferor shall promptly appoint, subject to satisfaction of the
Modification Condition, a successor Trustee who meets the eligibility
requirements set forth in Section 11.6 by written instrument, in duplicate, one
copy of which shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
shall have accepted appointment within 30 days after the giving of the notice of
resignation, the resigning Trustee, upon notice to each Agent, may petition any
court of competent jurisdiction to appoint a successor Trustee.
(b) If at any time Trustee shall cease to be eligible to be Trustee
hereunder in accordance with the provisions of Section 11.6 hereof and shall
fall to resign promptly after its receipt of a written request therefor by
Servicer, or if at any time Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or if a receiver for Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then Servicer may remove Trustee and, subject to
the consent of each Agent (which consent shall not be unreasonably withheld or
delayed) and satisfaction of the Modification Condition, promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which shall
be delivered to Trustee so removed and one copy to the successor Trustee.
(c) Any resignation or removal of Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.7 shall not become
effective until (i) acceptance of appointment by the successor Trustee as
provided in Section 11.8 hereof, and (ii) such successor Trustee shall have
agreed in writing to be bound by any Intercreditor Agreements then in effect.
SECTION 11.8 Successor Trustee. (a) Any successor Trustee appointed as
provided in Section 11.7 shall execute, acknowledge and deliver to Transferor,
Servicer, the Investor Certificateholders, the Purchasers and the predecessor
Trustee an instrument accepting such appointment hereunder and an instrument
pursuant to which it agrees to be bound by any existing Intercreditor Agreement,
and thereupon the resignation or removal of the predecessor Trustee shall, upon
payment of its fees and expenses and other
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amounts owed to it pursuant to Section 11.5, become effective and the successor
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor Trustee, at the expense of
Servicer, all documents or copies thereof and statements held by it hereunder;
and Transferor and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations. Servicer shall promptly give notice to the Rating Agencies upon
the appointment of a successor Trustee.
(b) No successor Trustee shall accept appointment as provided in this
Section 11.8 unless at the time of the acceptance the successor Trustee shall be
eligible to become Trustee under the provisions of Section 11.6.
(c) Upon acceptance of appointment by a successor Trustee as provided in
this Section 11.8, the successor Trustee shall mall notice of the succession
hereunder to all Investor Certificateholders at their addresses as shown in the
Certificate Register and to each Rating Agency.
SECTION 11.9 Merger or Consolidation of Trustee. Any Person into which
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of Trustee, shall be the successor of Trustee
hereunder, if the Person meets the requirements of Section 11.6, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. Servicer shall
promptly give notice to the Rating Agencies upon any merger or consolidation of
Trustee.
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust may at the time be located, Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons (who may be
an employee or employees of Trustee) to act as a co-Trustee or co-Trustees, or
separate Trustee or separate Trustees, with respect to all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Purchasers, such title to the Trust,
or any part thereof, and, subject to the other provisions of this section, such
powers, duties, obligations, rights and trusts as Trustee may
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consider necessary or appropriate; provided, that such appointment shall be
subject to the prior written consent of Transferor unless an Early Amortization
Event or Servicer Termination Event is continuing; and provided further, that in
any event Trustee will give Transferor and Servicer prior written notice of such
appointment. No co-Trustee or separate Trustee shall be required to meet the
terms of eligibility as a successor Trustee under Section 11.6 and no notice to
Certificateholders, Agents or Purchasers of the appointment of any co-Trustee or
separate Trustee shall be required under Section 11.8.
(b) Every separate Trustee and co-Trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon Trustee shall be conferred or imposed upon and exercised or performed
by Trustee and the separate Trustee or co-Trustee jointly (it being
understood that the separate Trustee or co-Trustee is not authorized to
act separately without Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed (whether as Trustee hereunder or as successor to
Servicer hereunder), Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate Trustee or co-Trustee, but solely at the direction of
Trustee,
(ii) no Trustee or co-Trustee hereunder shall be personally liable
by reason of any act or omission of any other Trustee or co-Trustee
hereunder, and
(iii) Trustee may at any time accept the resignation of or remove
any separate Trustee or co-Trustee.
(c) Any notice, request or other writing given to Trustee shall be deemed
to have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate Trustee and co-Trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to
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the conduct of, affecting the liability of, or affording protection or indemnity
to, Trustee. Every such instrument shall be filed with Trustee and a copy
thereof given to Servicer.
(d) Any separate Trustee or co-Trustee may at any time appoint Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect to this Agreement or
any other Transaction Document on its behalf and in its name. If any separate
Trustee or co-Trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest in
and be exercised by Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee or co-Trustee.
SECTION 11.11 Tax Returns. No Federal income or other tax or informational
return shall be filed on behalf of the Trust unless required by applicable law
or any Governmental Authority. In the event the Trust shall be required to file
tax or informational returns, Servicer shall prepare or shall cause to be
prepared any tax or informational returns required to be filed by the Trust and
shall remit the returns to Trustee for signature at least five Business Days
before the returns are due to be filed. Trustee shall promptly sign and deliver
the returns to Servicer and Servicer shall promptly file the returns. Subject to
the responsibilities of Trustee set forth in any Supplement, Servicer, in
accordance with that Supplement, shall also prepare or shall cause to be
prepared all tax information required by law to be made available to
Certificateholders and Purchasers and shall deliver the information to Trustee
at least five Business Days prior to the date it is required by law to be made
available to the Certificateholders and Purchasers. Trustee, upon request, will
furnish Servicer with all the information known to Trustee as may be reasonably
required in connection with the preparation of all tax or informational returns
on behalf of the Trust and shall, upon request, execute such returns as Trustee
determines are appropriate.
SECTION 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement, the
Certificates, the Purchased Interests or the other Transaction Documents may be
prosecuted and enforced by Trustee without the possession of any of the
Certificates or Purchased Interests or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by Trustee shall be brought
in its own name as Trustee. Any recovery of judgment shall, after provision for
the payment of the reasonable compensation, expenses, disbursements and advances
of Trustee, its agents and counsel, be distributed to the Certificateholders or
Purchasers in respect of which such judgment has been obtained in accordance
with the related Supplement or PI Agreement.
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SECTION 11.13 Suits for Enforcement. If an Early Amortization Event or a
Servicer Default shall occur and be continuing, Trustee, in its discretion may,
subject to the provisions of Sections 11.1 and 11.14, proceed to protect and
enforce its rights and the rights of the Certificateholders or Purchasers under
this Agreement by suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or any other Transaction Document or in aid of the execution of
any power granted in this Agreement or any other Transaction Document or for the
enforcement of any other legal, equitable or other remedy as Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights of Trustee or the Certificateholders or Purchasers. Nothing herein
contained shall be deemed to authorize Trustee to authorize or consent to or
accept or adopt on behalf of any Certificateholder or Purchaser any plan of
reorganization, arrangement, adjustment or composition affecting the Investor
Certificates or the rights of any Holder thereof, any Purchased Interests or any
Purchaser, or to authorize Trustee to vote in respect of the claim of any
Investor Certificateholder or Purchaser in any such proceeding.
SECTION 11.14 Rights of Required Investors To Direct Trustee. The Required
Investors shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to Trustee, or exercising any
trust or power conferred on Trustee; provided that, subject to Section 11.1,
Trustee may decline to follow any such direction if Trustee, being advised by
counsel, determines that the action so directed may not be taken lawfully, or if
a Responsible Officer or Responsible Officers of Trustee shall determine, in
good faith, that the proceedings so directed would be illegal or involve Trustee
in personal liability or be unduly prejudicial to the rights of the Investor
Certificateholders or Purchasers not giving such direction; and provided
further, that nothing in this Agreement shall impair the right of Trustee to
take any action deemed proper by Trustee and that is not inconsistent with such
direction of the Required Investors.
SECTION 11.15 Representations and Warranties of Trustee. Trustee
represents and warrants that:
(a) it is a banking corporation organized, existing and in good
standing under the laws of New York and satisfies the eligibility
requirements of Section 11.6,
(b) it has full power, authority and right to execute, deliver and
perform the Transaction Documents to which it is a party, and has
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taken all necessary action to authorize the execution, delivery and
performance by it of the Transaction Documents, and
(c) the Transaction Documents to which it is a party have been duly
executed and delivered by Trustee and, in the case of all such Transaction
Documents, are legal, valid and binding obligations of Trustee,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
SECTION 11.16 Maintenance of Office or Agency. Trustee will maintain, at
its address designated pursuant to Section 13.6, an office, offices, agency or
agencies where notices and demands to or upon Trustee in respect of the
Certificates, the Purchased Interests and the Transaction Documents to which it
is a party may be served. Trustee will give prompt written notice to Servicer
and to the Certificateholders and Agents of any change in the location of the
Certificate Register or any such office or agency.
ARTICLE XII TERMINATION
SECTION 12.1 Termination of Trust. (a) If not earlier terminated pursuant
to Section 9.3, the Trust and the respective obligations and responsibilities of
Transferor, Servicer and Trustee created hereby (other than the obligation of
Trustee to make payments to Certificateholders or Purchasers as hereinafter set
forth and the obligations of Servicer contained in Section 11.11) shall
terminate, except with respect to the duties and obligations described in
Sections 3.9(c), 7.3, 8.4, 11.5, 12.2(b), 13.9, 13.15 and 13.16 upon the
earliest to occur of (i) the day on which the Investor Certificateholders, the
Purchasers and Trustee shall have been paid all amounts required to be paid to
them pursuant to this Agreement and Trustee has disposed of all property held
hereunder (including pursuant to Section 12.3) and (ii) the day which is 21
years less one day after the death of the officers and the last survivor of all
the lineal descendants of every officer of the Trustee who are living on the
date hereof.
(b) Notwithstanding the foregoing, the last payment of the principal of
and interest on the Investor Certificates of any Series or any Purchased
Interests shall be due and payable no later than the Final Scheduled Payment
Date for such Series or Purchased Interests. If, on the Distribution Date
immediately prior to the Final Scheduled Payment Date for any Series or
Purchased Interests, Servicer determines that the Invested Amount for such
Series or Purchased Interests on such Final Scheduled Payment Date (after
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giving effect to all changes therein on such date) will exceed zero, Servicer
shall solicit bids for the sale of undivided interests in the Transferred Assets
for a purchase price equal to 110% of the Base Amount (or comparable amount) for
such Series or Purchased Interests on the Final Scheduled Payment Date for the
Series or Purchased Interests (after giving effect to all distributions required
to be made on the Final Scheduled Payment Date for the Series or Purchased
Interests), provided that the undivided interests so transferred shall not
exceed the Series Collection Allocation Percentage (for that Series or Purchased
Interest) of the Transferred Assets held by the Trust as of the date of sale.
Transferor and its Affiliates shall be entitled to participate in and to receive
notice of each bid submitted in connection with the bidding process. Upon the
expiration of the period, Servicer shall determine (x) the Highest Bid and (y)
the Available Final Distribution Amount for such Series or Purchased Interests.
Servicer shall sell such undivided interests in the Transferred Assets on the
Final Scheduled Payment Date for that Series or Purchased Interests to the
bidder with the Highest Bid and shall deposit the proceeds of such sale in the
Master Collection Account for allocation (together with the Available Final
Distribution Amount for such Series or Purchased Interests) to the
Certificateholders of such Series or the Purchasers of such Purchased Interests.
SECTION 12.2 Final Distribution. (a) Servicer shall give Trustee at least
ten days' prior written notice of the date on which the Trust is expected to
terminate in accordance with Section 12.1(a). The notice shall be accompanied by
a certificate of an Authorized Officer of Servicer setting forth the information
specified in Section 3.6 covering the period during the then current calendar
year through the date of the notice. Upon receiving the notification from
Servicer, Trustee shall give the Certificateholders and/or the Agents (as
applicable) written notice as soon as practicable after Trustee's receipt of
notice from Servicer, which notice shall specify (i) the Distribution Date (the
"Final Distribution Date") upon which final payment with respect to the
Certificates is expected to be made and (ii) the amount of any such final
payment. Trustee shall give the notice to the Transfer Agent and Registrar and
the Paying Agent at the time such notice is given to Certificateholders On the
Final Distribution Date, Trustee shall, based upon the Dally Report relating to
the Final Distribution Date, cause to be distributed to the Certificateholders
the amounts distributable to them on the Final Distribution Date pursuant to the
applicable Supplement. Each Certificateholder shall present its Certificate to
Trustee and surrender its Certificate for cancellation at the address of Trustee
set forth in Section 13.6 not more than ten Business Days after the Final
Distribution Date upon which final payment with respect to the Certificates has
been made.
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(b) Notwithstanding the termination of the Trust pursuant to Section
12.1(a), all funds then on deposit in the Master Collection Account shall
continue to be held in trust for the benefit of the Certificateholders and the
Purchasers and the Paying Agent or Trustee shall pay such funds to the
Certificateholders and the Purchasers at the time set forth in Section 12.1(a).
If any Certificateholder or Purchaser does not claim the portion of such funds
to which it is entitled to receive on the Final Distribution Date, interest
shall cease to accrue on its Certificate or Purchased Interest (as applicable)
and Trustee shall hold such funds in trust for such Person, subject to the
further provisions of this Section . In the event that any of the
Certificateholders shall not have claimed their final payment with respect to
their Certificates within six months after the Final Distribution Date, Trustee
shall give a second written notice to the remaining Certificateholders
concerning payment of the final distribution with respect thereto and surrender
of their Certificates for cancellation. If within one year after the second
notice all the Certificates shall not have been surrendered for cancellation,
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds in the Master
Collection Account held for the benefit of such Certificateholders Trustee and
the Paying Agent shall pay to Transferor any monies held by them for the payment
of principal of or interest on the Certificates that remains unclaimed for two
years after the termination of the Trust pursuant to Section 12.1(a). After
payment of the monies to Transferor, Certificateholders entitled to the money
must look to Transferor for payment as unsecured general creditors unless an
applicable abandoned property law designates another Person.
SECTION 12.3 Rights Upon Termination of the Trust. Upon the termination of
the Trust pursuant to Section 12.1 and the surrender of the Transferor
Certificate by Transferor to Trustee, Trustee shall transfer, assign, set over
and otherwise convey to Transferor (without recourse, representation or
warranty), all right, title and interest of the Trust in the Transferred
Receivables, whether then existing or thereafter created, the Related
Transferred Assets and all of the other property and rights previously conveyed
to Trustee hereunder, except for amounts held by Trustee pursuant to Section
12.2(b) and except for the rights of RPA Indemnified Parties (other than
Transferor and its officers, directors, shareholders, controlling Persons,
employees and agents) to indemnification and contribution under Section 9.1 of
the Purchase Agreement. Trustee shall execute and deliver the instruments of
transfer and assignment (including any document necessary to release the
security interest in favor of the Trust (for the benefit of the
Certificateholders and the Purchasers) in the Transferred Receivables and
Related Transferred Assets, to release any filing evidencing or perfecting such
security interest and
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to terminate all powers of attorney created by the Transaction Documents), in
each case without recourse, representation or warranty, that shall be reasonably
requested by Transferor to vest in Transferor all right, title and interest that
Trustee had in the Transferred Assets.
SECTION 12.4 Optional Repurchase of Investor Interests. Any Supplement may
provide that on any Distribution Date occurring on or after the date that the
Invested Amount of the Series governed by such Supplement is reduced to 10% or
less of the initial aggregate principal amount of the Investor Certificates of
such Series, Transferor shall have the option, upon the giving of ten days'
prior written notice to Servicer, Trustee and the Rating Agencies, to repurchase
the undivided interest of such Series in the Trust by depositing into the
Principal Funding Account, on such Distribution Date (the "Repurchase
Distribution Date"), an amount (the "Repurchase Amount") equal to the unpaid
Invested Amount of the Series plus accrued and unpaid interest on the unpaid
principal amount of the Series (and accrued and unpaid interest with respect to
interest amounts that were due but not paid on a prior Distribution Date)
through the day preceding such Distribution Date at the Certificate Rate
applicable to such Series. Upon tender of all outstanding Certificates of the
Series owned by a Certificateholder, Trustee shall then distribute to such
Certificateholder the portion of such amounts owed to such Certificateholder,
together with all other amounts on deposit in the Principal Funding Account with
respect to that Series which are owed to such Certificateholder, on the next
Distribution Date in repayment of the principal amount and all accrued and
unpaid interest owing to such Certificateholder. Following the Repurchase
Distribution Date, the Certificateholders of the Series shall have no further
rights with respect to the Transferred Receivables and Trustee shall execute and
deliver the instruments of transfer and assignment (including any document
necessary to release the security interest in favor of Trustee (for the benefit
of the Certificateholders) in the Transferred Receivables and Related
Transferred Assets and to release any filing evidencing or perfecting the
security interest), in each case without recourse, representation or warranty,
as shall be reasonably requested by Transferor to vest in Transferor all right,
title and interest that Trustee had in the Transferred Assets. In the event that
Transferor falls for any reason to deposit the Repurchase Amount for any Series,
payments shall continue to be made to the Certificateholders of the Series in
accordance with the terms of this Agreement. The provisions, if any, in respect
of the optional repurchase of any Purchased Interest shall be set forth in the
applicable PI Agreement.
SECTION 12.5 Defeasance and Refinancing of Certificates. Any Supplement
may provide that the Certificates issued pursuant to such Supplement may be
defeased or refinanced. The terms and conditions under
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which such Certificates may be defeased or refinanced will be set forth in such
Supplement.
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment, Waiver, Etc. (a) This Agreement and any Supplement
may be amended from time to time by Servicer, Transferor and Trustee by a
written instrument signed by each of them, without the consent of any of the
Certificateholders, the Purchasers or the Agents; provided that such action
shall not adversely affect in any material respect the interests of any
Certificateholder or Purchaser; and provided further, that any amendment of this
Agreement to effect any modification of the Lockbox Account arrangements
pursuant to Section 3.3(c)(ii)(y) shall not require the consent of any of the
Certificateholders, the Purchasers or the Agents. This Agreement and any
Supplement may not be amended unless Transferor shall have delivered the
proposed amendment to each Agent and the Rating Agencies at least ten Business
Days (or such shorter period as shall be acceptable to each of them) prior to
the execution and delivery thereof and the Modification Condition has been
satisfied with respect to such amendment; provided, however, that the
Modification Condition shall not apply to proposed amendments the purpose of
which is to correct any ambiguities or inconsistencies in this Agreement or such
Supplement.
(b) Any PI Agreement may be amended from time to time by the parties
thereto but without the consent of any Investor Certificateholder; provided that
any amendment will not adversely affect in any material respect the interests of
the Certificateholders, as evidenced by an Officer's Certificate of Servicer.
(c) The provisions of this Agreement, any Supplement and any PI Agreement
may also be amended, modified or waived from time to time by Servicer,
Transferor and Trustee with the consent of: (i) in the case of this Agreement or
any Supplement, (A) the Required Series Holders of each affected Series and (B)
if any Purchased Interest shall or would be adversely affected, each Agent of a
Purchaser, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Certificateholders or the Purchasers;
provided that no amendment shall (w) reduce in any manner the amount of or delay
the timing of any distributions to be made to Investor Certificateholders or
deposits of amounts to be so distributed or the amount available under any
Enhancement without the consent of each affected Certificateholder, (x) change
the definition of or the manner of calculating the interest of any Investor
Certificateholder without the consent
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of each affected Investor Certificateholder, (y) reduce the aforesaid percentage
required to consent to any amendment without the consent of each Investor
Certificateholder or (z) adversely affect the rating of any Series or class by
any Rating Agency without the consent of the Holders of Investor Certificates of
the Series or class evidencing not less than 66 2/3% of the aggregate unpaid
principal amount of the Investor Certificates of the Series or class or (ii) in
the case of any PI Agreement, (A) each Agent of a Purchaser and the other
parties thereto and (B) if any Series of Investor Certificates shall or would be
adversely affected, the Required Series Holders of each such adversely affected
Series. It is understood that the consent of the Required Series Holders of any
Series or the Agent of a Purchaser shall not be required for any amendment,
modification or waiver if all amounts owed to the Holders of such Series or such
Purchaser (as the case may be) will be paid (and any commitments of such Holders
or Purchaser will terminate) prior to, or contemporaneously with, the
effectiveness of such amendment, modification or waiver.
Transferor or Trustee shall establish a record date for determining which
Certificateholders may give such waivers and consents. No waiver of any Early
Amortization Event or other default hereunder given at any time shall apply to
any other prior or subsequent Early Amortization Event or default.
(d) Promptly after the execution of any amendment, consent or waiver
described in subsection (b) or (c), Trustee shall furnish written notification
of the substance of the amendment, consent or waiver to each Investor
Certificateholder and each Agent, and Servicer shall furnish written
notification of the substance of the amendment or consent to the Rating Agency
and each Enhancement Provider.
(e) It shall not be necessary for the Certificateholders or Purchasers
under this section to approve the particular form of any proposed consent,
waiver or amendment, but it shall be sufficient if the substance thereof has
been approved. The manner of obtaining any waiver, consent or amendment and of
evidencing the authorization of the execution thereof by the Certificateholders
or Purchasers shall be subject to such reasonable requirements as Trustee may
prescribe.
(f) Notwithstanding anything in this section to the contrary, no amendment
may be made to this Agreement, any Supplement or any PI Agreement that would
adversely affect in any material respect the interests of any Enhancement
Provider without the consent of the Enhancement Provider.
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(g) Any Supplement or PI Agreement executed in accordance with the
provisions of Section 6.10 shall not be considered an amendment to this
Agreement for the purposes of this section.
(h) Prior to the execution of any amendment to this Agreement, Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of the amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery have been satisfied.
Trustee may, but shall not be obligated to, enter into any amendment that
affects Trustee's own rights, duties or immunities under this Agreement.
SECTION 13.2 Actions by Certificateholders and Purchasers. (a) By its
acceptance of Certificates pursuant to this Agreement and the applicable
Supplement, each Certificateholder acknowledges and agrees that, wherever in
this Agreement a provision states that an action may be taken or a notice,
demand or instruction given by any Series of Investor Certificateholders, any
class of Investor Certificateholders or the Investor Certificateholders, the
action, notice or instruction may be taken or given by any Holder of an Investor
Certificate of the Series or class or by any Investor Certificateholder,
respectively, unless the provision requires a specific percentage of the Series
or class of Investor Certificateholders or of all Investor Certificateholders By
its acceptance of Purchased Interests pursuant to this Agreement and the
applicable PI Agreement, each Purchaser acknowledges and agrees that, wherever
in this Agreement a provision states that an action may be taken or a notice,
demand or instruction given by any Purchasers, the action, notice or instruction
may be taken or given by any Purchaser, unless the provision requires a specific
percentage of the Purchasers.
(b) By its acceptance of Certificates pursuant to this Agreement and the
applicable Supplement, each Certificateholder acknowledges and agrees that any
request, demand, authorization, direction, notice, consent, waiver or other act
by the Holder of a Certificate shall bind the Holder and every subsequent Holder
of the Certificate and of any Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by Trustee or Servicer in reliance thereon,
whether or not notation of the action is made upon such Certificate. By its
acceptance of Purchased Interests pursuant to this Agreement and the applicable
PI Agreement, each Purchaser acknowledges and agrees that any request, demand,
authorization, direction, notice, consent, waiver or other act by a Purchaser
shall bind the Purchaser and every subsequent Purchaser of the Purchased
Interest in respect of anything done or omitted to be done by Trustee or
Servicer in reliance thereon.
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(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement, any Supplement or any PI Agreement
to be given or taken by Certificateholders or any Agent for a Purchaser may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by the Certificateholders or any Agent for a Purchaser in person or
by agent duly appointed in writing; and except as herein otherwise expressly
provided, the action shall become effective when the instrument or instruments
are delivered to Trustee and, when required, to Servicer. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement, any Supplement or any PI Agreement
and conclusive in favor of Trustee and Servicer, if made in the manner provided
in this Section 13.2.
(d) The fact and date of the execution by any Certificateholder or any
Agent for a Purchaser of any such instrument or writing may be proved in any
reasonable manner that Trustee deems sufficient.
SECTION 13.3 Limitation on Rights of Certificateholders. (a) The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement, any Supplement or the Trust, nor shall the death or incapacity
entitle such Certificateholder' s legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as expressly
provided otherwise in this Agreement) or in any manner otherwise to control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provisions
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to the Transaction Documents (except to the
extent any Supplement or related certificate purchase agreement creates
independent and non-duplicative rights), unless the Certificateholder previously
shall have given to Trustee, and unless the Required Investors shall have made,
written request upon Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to Trustee such reasonable
indemnity as it may require against the costs,
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expenses and liabilities to be incurred therein or thereby, and Trustee, for 30
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder, every Purchaser and
Trustee, that no one or more Certificateholders or Purchasers shall have any
right in any manner whatever by virtue of, or by availing itself or themselves
of, any provisions of a Transaction Document to affect, disturb or prejudice the
rights of any other Investor Certificateholder or Purchaser, or to obtain or
seek to obtain priority over or preference to any such other Investor
Certificateholder or Purchaser, except to the extent provided in the Transaction
Documents, or to enforce any right under the Transaction Documents, except in
the manner herein provided and for the equal, ratable and common benefit of all
Investor Certificateholders and Purchasers (subject to the priorities set forth
in the Transaction Documents). For the protection and enforcement of the
provisions of this Section 13.3, each and every Certificateholder, each and
every Purchaser and Trustee shall be entitled to such relief as can be given
either at law or in equity.
(d) By their acceptance of Certificates pursuant to this Agreement and the
applicable Supplement, the Certificateholders agree to the provisions of this
Section 13.3.
SECTION 13.4 Limitation on Rights of Purchasers. (a) The death or
incapacity of any Purchaser shall not operate to terminate this Agreement, any
PI Agreement or the Trust, nor shall the death or incapacity entitle such
Purchaser's legal representatives or heirs to claim an accounting or to take any
action or commence any proceeding in any court for a partition or winding up of
the Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Purchaser shall have any right to vote (except provided otherwise
in this Agreement) or in any manner otherwise to control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Purchased Interests,
be construed so as to constitute the Purchasers from time to tune as partners or
members of an association, nor shall any Purchaser be under any liability to any
third Person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Purchaser shall have any right by virtue of any provisions of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to any Transaction Document (except to the
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extent a PI Agreement creates independent and non-duplicative rights), unless
such Purchaser previously shall have given to Trustee, and unless the Required
Investors shall have made, written request upon Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and Trustee,
for 30 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Purchaser with every other Purchaser, every Certificateholder and Trustee,
that no one or more Purchasers or Certificateholders shall have any right in any
manner whatever by virtue of, or by availing itself or themselves of, any
provisions of a Transaction Document to affect, disturb or prejudice the rights
of any other Investor Certificateholder or a Purchaser, or to obtain or seek to
obtain priority over or preference to any such other Investor Certificateholder
or Purchaser, except to the extent provided in the Transaction Documents, or to
enforce any right under the Transaction Documents, except in the manner herein
provided and for the ratable and common benefit of all Investor
Certificateholders and Purchasers (subject to the priorities set forth in the
Transaction Documents). For the protection and enforcement of the provisions of
this Section 13.4, each and every Certificateholder, each and every Purchaser
and Trustee shall be entitled to such relief as can be given either at law or in
equity.
(d) By their acceptance of Purchased Interests pursuant to this Agreement
and the applicable Supplement, the Purchasers agree to the provisions of this
Section 13.4.
SECTION 13.5 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 13.6 Notices. All demands, notices, instructions and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered, four Business Days after mailing if mailed
by registered mall, return receipt requested, or sent by facsimile transmission
(a) in the case of Transferor, to its address set forth below its signature
hereto, (b) in the case of Howmet, to its address set forth below its signature
hereto, and (c) in the case of Trustee, the Paying Agent or the Transfer Agent
and Registrar, to the address of Trustee set forth on the
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signature pages hereof; or, as to each party, at such other address or facsimile
number as shall be designated by it in a written notice to each other party
given in accordance with this Section 13.6. Except to the extent expressly
provided otherwise in an applicable Supplement, any notice required or permitted
to be mailed to a Certificateholder shall be sent by first-class mail, postage
prepaid, to the address of such Certificateholder as shown in the Certificate
Register. Except to the extent expressly provided otherwise in the applicable PI
Agreement, any notice required or permitted to be mailed to a Purchaser shall be
sent by first-class mail, postage prepaid, to the address of such Purchaser as
shown in the applicable PI Agreement or at such other address designated by such
Purchaser. Except to the extent expressly provided otherwise in an applicable
Supplement or PI Agreement, any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given on the
fourth Business Day after the notice is so mailed, whether or not a
Certificateholder or Purchaser receives the notice. Servicer shall deliver or
make available to the Rating Agencies each certificate and report required to be
prepared, forwarded or delivered pursuant to Section 3.5 (excluding the Daily
Reports) or 3.6 and a copy of any amendment, consent or waiver to this
Agreement, at the address of the Rating Agency set forth above or at the other
address as shall be designated by the Rating Agency in a written notice to
Servicer.
SECTION 13.7 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement,
the Certificates, the Purchased Interests or any of the other Transaction
Documents or the rights of the Certificateholders or the Purchasers.
SECTION 13.8 Certificates Nonassessable and Fully Paid. Except to the
extent otherwise expressly provided in Section 7.3 with respect to Transferor,
it is the intention of the parties to this Agreement that the Certificateholders
shall not be personally liable for obligations of the Trust, that the interests
in the Trust represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever and that
Certificates upon authentication thereof by Trustee pursuant to Section 6.2 are
and shall be deemed fully paid.
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SECTION 13.9 Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, each of Trustee, Servicer, Transferor, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar (and each Investor
Certificateholder or Purchaser by its acceptance of a Certificate or Purchased
Interest) agrees that it shall not, with respect to the Trust or Transferor,
institute or join any other Person in instituting any proceeding of the type
referred to in the definition of "Bankruptcy Event" so long as any Certificates
or Purchased Interests issued by the Trust shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Certificates or Purchased Interests shall have been outstanding. The foregoing
shall not limit the right of Servicer, Transferor, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar to file any claim in
or otherwise take any action with respect to any such insolvency proceeding that
was instituted against Transferor or the Trust by any Person other than
Servicer, Transferor, the Paying Agent, the Authenticating Agent or the Transfer
Agent and Registrar. In addition, each of Servicer, the Paying Agent, the
Authenticating Agent, the Transfer Agent and Registrar and (as to the Trust)
Transferor agree that all amounts owed to them by the Trust or Transferor shall
be payable solely from amounts that become available for such payment pursuant
to this Agreement and the Receivables Purchase Agreement, and no such amounts
shall constitute a claim against the Trust or Transferor to the extent that they
are in excess of the amounts available for their payment.
SECTION 13.10 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of Trustee, the Investor Certificateholders
or the Purchasers, any right, remedy, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and are
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 13.11 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
SECTION 13.12 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the Certificateholders,
the Purchasers, the Enhancement Providers and their
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respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, nothing contained in this Agreement shall confer any
rights upon any Person that is not a party to, or a permitted assignee of a
party to, this Agreement.
SECTION 13.13 Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
SECTION 13.14 Binding Effect; Assignability; Survival of Provisions. This
Agreement shall be binding upon and inure to the benefit of Transferor, Servicer
and Trustee and their respective successors and permitted assigns; provided,
that Transferor shall not delegate any of its obligations hereunder. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the termination of the Trust pursuant to Section 12.1. The rights and
remedies with respect to (a) any breach of any representation and warranty made
by Transferor in Section 2.3 or Section 7.1, (b)any breach of any representation
and warranty made by Servicer in Section 8.1 and (c) the indemnification and
payment provisions in Sections 3.9, 7.3, 8.4, 11.5 and 12.2(b) shall be
continuing and shall survive any termination of this Agreement.
SECTION 13.15 Limitation on Liability of Certain Persons. No recourse
under or upon any obligation or covenant of this Agreement, any Supplement, any
PI Agreement, any Certificate or any other Transaction Document, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of Transferor or of any successor corporation, either directly or
through Transferor, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Agreement, any Supplement, any PI Agreement, all
other relevant Transaction Documents and the obligations incurred hereunder or
thereunder are solely corporate obligations, and that no such personal liability
whatsoever shall attach to, or is or shall be incurred by the incorporators,
shareholders, officers or directors, as such, of Transferor or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement, any Supplement, any PI Agreement, any of
the Certificates or any other Transaction Documents, or implied therefrom; and
that any and all such personal liability of, either at
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common law or in equity or by constitution or statute, and any and all such
rights and claims against, every such incorporator, shareholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or covenants contained in
this Agreement, any Supplement, any PI Agreement, any of the Certificates or any
other Transaction Documents, or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Agreement, any PI Agreement and any Supplement. Transferor and any
director, officer, employee or agent of Transferor may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. Payments to be made by Transferor
pursuant to this Agreement shall be paid to the extent that funds are available
to make the payments after all amounts to be paid to the Certificateholders and
the Purchasers pursuant to the applicable Supplement and PI Agreement shall have
been paid, and there shall be no recourse to Transferor for all or any part of
any amounts payable pursuant to any Transaction Document if the funds are at any
time insufficient to make all or part of any such payments. The provisions of
this section shall survive the termination of this Agreement.
SECTION 13.16 Recourse to Transferred Assets. The Certificates do not
represent an obligation of, or an interest in, Transferor, any Seller, Servicer,
Trustee or any Affiliate of any of them. Except as expressly provided otherwise
in this Agreement, the Certificates and Purchased Interests are limited in right
of payment to the Transferred Assets.
SECTION 13.17 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK,
NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTION DOCUMENTS, (B) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF THE
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN THE STATE OR FEDERAL COURT,
(C) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF THE ACTION OR PROCEEDING,
AND (D) IN THE CASE OF TRANSFEROR AND HOWMET, IRREVOCABLY APPOINTS THE PROCESS
AGENT AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTY SERVICE OF COPIES
OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS THAT MAY BE SERVED IN ANY
ACTION OR PROCEEDING. THE SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF
THE PROCESS TO TRANSFEROR OR HOWMET IN CARE OF THE PROCESS AGENT AT THE PROCESS
AGENT'S ADDRESS, AND TRANSFEROR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT THE SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF
SERVICE, EACH OF TRANSFEROR AND SERVICER ALSO
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IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF THE PROCESS TO TRANSFEROR OR SERVICER (AS
APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS SECTION SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OR ALL OF THE OTHER PARTIES HERETO OR ANY OF THEIR
RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 13.18 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THE TRANSACTION DOCUMENTS, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF ANY OF THE PARTIES HERETO OR
ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THE TRANSACTION DOCUMENTS,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 13.19 Certain Partial Releases. If any Seller is discontinued as a
Seller pursuant to Section 1.8(a) or 1.8(c) of the Purchase Agreement, Trustee
shall, upon the request (and at the expense) of Howmet, execute and deliver to
Howmet such statements of partial release and/or amendment relating to the UCC-1
financing statements filed against such Seller pursuant to the Purchase
Agreement as shall be prepared by Howmet and provided to Trustee to evidence
such termination; provided that Trustee shall have received (i) an Officer's
Certificate of Servicer to the effect that all conditions to such termination
specified in subclauses (i), (ii) and (iii) of such Section 1.8(a) have been
satisfied (and shall not have received notice from any Investor
Certificateholder, Purchaser or Agent to the contrary) and (ii) an Opinion of
Counsel to the effect that the filing of such statements of partial release
and/or amendment will not impair the validity, perfection or priority of
Transferor's or Trustee's rights in and to (A) any Receivables or Related Assets
conveyed prior to the effective date of such termination or (B) any Receivables
or Related Assets generated by Howmet on or after the effective date of such
termination. In addition, after a termination that complies with the
requirements set Out in the preceding sentence, Trustee shall, upon the request
(and at the expense) of Howmet, execute and deliver to Howmet the termination
statements relating to the UCC-1 financing statements filed against the Seller
pursuant to the Purchase Agreement as shall be prepared by Howmet and provided
to Trustee to evidence the termination; provided that Trustee shall have
received an Officer's Certificate of Servicer to the effect that Trustee no
longer holds any right, title or interest in the Transferred
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Receivables generated by the terminated Seller. In connection with a termination
described in Section 1.8(c) of the Purchase Agreement, Trustee shall, if
demanded by Transferor, convey all of its right, title and interest in all (but
not less than all) of the Transferred Receivables (and Related Transferred
Assets with respect thereto) originated by the terminating Seller to a Person
designated by the terminating Seller, provided that such conveyance by Trustee
shall be made only against receipt by Trustee from the purchaser, in cash, of a
release price of not less than the aggregate Unpaid Balance of the released
Receivables. No such release and conveyance by Trustee shall, however, be
permitted if as a result thereof any Howmet Person would acquire the released
Transferred Receivables.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
Title: Vice President
Address: c/o Nevada Corporate Management, Inc
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION,
as Initial Servicer
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
-------------------------------
Title: Vice President
------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee
By: /s/ Russell T. Whitley
---------------------------------
Name: Russell T. Whitley
------------------------------
Title: ASST. VICE PRESIDENT
------------------------------
Address: 1 M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
Attention: Russell Whitley
Telephone: (716) 842-5602
Facsimile: (716) 8424474
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EXHIBIT A
to Pooling Agreement
FORM OF
LOCKBOX ACCOUNT LETTER AGREEMENT
__, 1995
[NAME OF LOCKBOX BANK]
[ADDRESS OF LOCKBOX BANK)
Ladies and Gentlemen:
By this letter agreement, (a) _____________ ("Seller") irrevocably
transfers exclusive ownership and control of its lockbox[es] numbered _________
([each, a] [the] "Lockbox" [and collectively referred to herein as the
"Lockboxes"]) and the corresponding demand deposit account[s] numbered
___________ ([each, a] [the] "Lockbox Account" [and collectively referred to
herein as the "Lockbox Accounts"]) maintained with you to Blade Receivables
Corporation ("BRC"), and (b) BRC irrevocably transfers all of its rights and
title to and interest in the Lockbox[es] and the Lockbox Account[s] acquired
hereby to Manufacturers and Traders Trust Company, as trustee (the "Trustee")
for the benefit of (i) certain holders of certificates and purchased interests
(collectively, the "Holders") issued by the Trustee under a Pooling and
Servicing Agreement, dated as of ____________, 1995 (the "Pooling Agreement"),
among BRC, Howmet Corporation ("Howmet") as initial Servicer, and the Trustee
and (ii) BRC (to the extent of BRC's residual interest in the Transferred Assets
(as defined in the Pooling Agreement). Seller acknowledges and agrees that BRC
is transferring to the Trustee the rights, titles and interests transferred by
Seller to BRC as provided above, and each of Seller and BRC agrees to cooperate
fully with the Trustee and its agents and representatives (including, without
limitation, the Servicer referred to hereinafter) in the exercise of such
rights. The transfers described in this paragraph are effective on and as of the
date of this letter agreement.
By executing this letter agreement, you acknowledge the existence of the
Trustee's right to dominion and control over the Lockbox[es] and the Lockbox
Account[s] and its ownership of and security interest in the Lockbox[es], all
moneys and instruments delivered to the Lockbox[es], the Lockbox Account[s] and
the amounts from time to time on deposit therein, and agree that, from and after
the date hereof, you shall maintain the Lockbox[es] and the Lockbox Account[s]
and shall hold all such moneys and instruments and such amounts for the benefit
and subject to the interests of the Trustee (for the benefit of itself, the
Holders and BRC (to the extent described above)). You also acknowledge that your
112
execution of this letter agreement is a condition precedent to continued
maintenance of the Lockbox Account[s] with you. The Lockbox Account[s] [is]
[are] to be maintained in the name of "Manufacturers and Traders Trust Company,
as Trustee."
Seller and BRC hereby irrevocably instruct you, and the Trustee, by its
acknowledgement hereof, hereby instructs you, at all times from and after the
date hereof until your receipt of contrary and/or terminating instructions from
the Trustee, to remit, on a daily basis, in immediately available funds, all
available amounts deposited in the Lockbox Account[s] to the following account
(the "Master Collection Account") or such other account as the Trustee or the
Servicer may specify:
Manufacturers and Traders Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
ABA #022000046
CC # 880
For credit to the
Manufacturers and Traders Trust Company, as Trustee
Account No. _________
No such transfer of funds shall either reflect the rounding off of any funds so
transferred or constitute a partial remittance except for (i) amounts applied to
fees and expenses under the terms of this letter agreement, and (ii) amounts
deducted for returned checks that were previously deposited in [a] (the] Lockbox
Account and with respect to which funds were previously transferred to the
Master Collection Account.
All transfers referred to above shall be made by you irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off (except
as expressly permitted otherwise by this letter agreement) and shall be final,
and you agree that you will not seek to recover any amount from the Trustee,
BRC, or the Servicer for any reason once any payment or transfer has been made.
The Trustee's instructions with respect to the Lockbox[es] and the Lockbox
Account[s] may be given through a Servicer that the Trustee may appoint from
time to time and will notify you thereof in writing, and you agree to follow the
instructions of such Servicer with the same effect as if such instructions were
given by the Trustee directly (subject to any limitations on such appointment
imposed by the Trustee that are communicated in writing to you) until such time
as the Trustee notifies you of the revocation of the Servicer's authority to act
for the Trustee. The initial servicer will be Howmet. The Trustee and the
Servicer shall each provide to you a list of their respective employees
authorized to issue instructions and give notices with respect to the
Lockbox(es] and the Lockbox Account(s], which lists may be revised from time to
time, and you shall be entitled to rely on (and to assume) the authority of any
employee of the Trustee or the Servicer identified on such lists, and are hereby
authorized to act on any notice given on behalf of the
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113
Trustee or the Servicer by any such employee, subject to any limitations on the
appointment of the Servicer and the revocation of the Servicer's authority as
provided above.
Seller and BRC also hereby irrevocably notify you that, at all times from
and after the date hereof until your receipt of contrary and/or terminating
instructions from the Trustee, the Trustee shall be entitled (subject to your
rights set forth herein) to exercise in the place and stead of Seller and BRC
(or either of them) any and all rights of Seller and BRC in respect of or in
connection with the Lockbox[es], this letter agreement and the Lockbox
Account(s], including, without limitation (i) the right to specify that payments
are to be made out of or in connection with the Lockbox Account[s] to different
accounts or at different times than those specified above (subject to your
customary and then-current procedures for lockbox processing) and (ii) the right
to require preparation of duplicate monthly bank statements on the Lockbox
Account(s] for mailing directly to an address specified by the Trustee.
By executing this letter agreement you acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person asserting, claiming or exercising, any right of set-off, banker's
lien or other purported form of claim with respect to the items collected from
the Lockbox[es], the Lockbox Account[s] or any funds from time to time therein
or in transit thereto, and agree to immediately inform the Trustee in writing of
any such action in the future.
By executing this letter agreement, you irrevocably waive and agree not to
assert, any right to setoff against, or otherwise deduct from, any items
collected from the Lockbox[es], the Lockbox Account[s] or any funds from time to
time therein or in transit thereto; provided, however, that you may (i) debit
[a] [the] Lockbox Account for any items deposited in [such] [the] Lockbox
Account that are returned or otherwise not collected in accordance with your
customary practices for the chargeback of returned items and (ii) apply funds in
the Lockbox Account[s] for reimbursement of any fees and expenses incurred by
you in connection with this letter agreement, to the extent that such fees and
expenses are not paid or reimbursed by Seller.
Seller shall pay, or reimburse you for, customary and reasonable fees and
expenses incurred by you in the maintenance and operation of the Lockbox
Account[s] in accordance with this letter agreement. The Trustee will have no
liability to you or the Servicer for any costs, fees or charges under your usual
and customary procedures or this letter agreement.
You also agree that, notwithstanding anything to the contrary herein: (i)
you shall promptly notify all relevant postmasters that the Trustee is
authorized to have access to the Lockbox [es]; and (ii) you shall promptly
notify the Trustee of your failure to receive timely payment of any fee under
this letter agreement.
You may terminate this letter agreement by cancelling the Lockbox
Account[s] and Lockbox[es], which cancellation and termination shall become
effective only upon sixty days'
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114
prior written notice thereof from you to the Trustee. Upon the termination of
this letter agreement, you will close the Lockbox Account[s] and transfer any
monies remaining therein to the Master Collection Account. You agree that you
shall forward all incoming mail addressed to (any of] the Lockbox[es] or [the]
Lockbox Account[s] and all wire transfers and deposits to (any of] the Lockbox
Account[s] that you receive after such cancellation in the form received to
another lockbox or to another lockbox account or the Concentration Account or to
such other address or account as the Trustee (or the Servicer on behalf of the
Trustee) shall specify, promptly after you discover that you have received any
such mail or transfers. 'This letter agreement may also be terminated upon
written notice to you by the Trustee. Except as expressly set forth in this
paragraph, this letter agreement may not be terminated or amended without the
prior written consent of the Trustee.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, by
facsimile or by overnight courier, to the intended person at the address or
facsimile number of such person set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such person in a written notice to the other parties hereto given in accordance
with the requirements of this paragraph. All notices and other communications
hereunder shall also be provided to the Trustee and shall be addressed as
follows until you receive written notice from the Trustee to the contrary:
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust and Agency Services
Telephone: (716) 842-5602
Facsimile: (716) 842-4474.
All notices and communications provided for hereunder shall be effective,
(i) if personally delivered, when received, (ii) if sent by certified mail, four
business days after having been deposited in the mail, postage prepaid and
properly addressed, (iii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means and (iv) if sent by overnight
courier, two business days after having been given to such courier unless sooner
received by the addressee.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of Seller, BRC, and the Trustee and their
respective successors, transferees and assigns; provided, however, that you may
not assign your rights and duties under this letter agreement without the prior
written consent of the Trustee.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York, not including the choice of law rules
thereof.
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115
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing five (5) copies of this letter agreement in the space
provided below and returning such copies to us at the address indicated below
for Seller.
Very truly yours,
[NAME OF SELLER]
By:__________________________________
Title:_______________________________
Address: C/O Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski
Telephone: (203) 625-8744
Facsimile: (203) 8614746
BLADE RECEIVABLES CORPORATION
By:__________________________________
Title:_______________________________
Address: C/O Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski
Telephone: (203) 625-8744
Facsimile: (203) 8614746
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The undersigned hereby acknowledges and agrees to the foregoing letter
agreement as of this __ day of ______, 1995.
[NAME OF LOCKBOX BANK]
By:_____________________________________
Title:_____________________________
Address: _________________________
_________________________
Attention: _________________________
Telephone: _________________________
Facsimile: _________________________
The undersigned hereby acknowledges and agrees to the foregoing letter
agreement dated as of the__day of ______,1995
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:_____________________________________
Title:_____________________________
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EXHIBIT B
to Pooling Agreement
FORM OF CONCENTRATION ACCOUNT AGREEMENT
_____________________
[NAME OF CONCENTRATION BANK]
[ADDRESS OF CONCENTRATION BANK]
Ladies and Gentlemen:
By this letter agreement, (a) _____________ ("Seller") irrevocably
transfers exclusive ownership and control of its demand deposit account numbered
__________ the "Concentration Account" maintained with you to Blade Receivables
Corporation ("BRC"), and (b) BRC irrevocably transfers all of its rights and
title to and interest in the Concentration Account acquired hereby to
Manufacturers and Traders Trust Company, as trustee (the "Trustee") for the
benefit of (i) certain holders of certificates and purchased interests
(collectively, the "Holders") issued by the Trustee under a Pooling and
Servicing Agreement, dated as of ____________, 1995 (the "Pooling Agreement"),
among BRC, Howmet Corporation ("Howmet") as initial Servicer, and the Trustee
and (ii) BRC (to the extent of BRC's residual interest in the Transferred Assets
(as defined in the Pooling Agreement). Seller acknowledges and agrees that BRC
is transferring to the Trustee the rights, titles and interests transferred by
Seller to BRC as provided above, and each of Seller and BRC agrees to cooperate
fully with the Trustee and its agents and representatives (including, without
limitation, the Servicer referred to hereinafter) in the exercise of such
rights. The transfers described in this paragraph are effective on and as of the
date of this letter agreement.
By executing this letter agreement, you acknowledge the existence of the
Trustee's right to dominion and control over the Concentration Account and its
ownership of and security interest in the Concentration Account, all moneys and
instruments delivered to the Concentration Account and the amounts from time to
time on deposit therein, and agree that, from and after the date hereof, you
shall maintain the Concentration Account and shall hold all such moneys and
instruments and such amounts for the benefit and subject to the interests of the
Trustee. You also acknowledge that your execution of this letter agreement is a
condition precedent to continued maintenance of the Concentration Account with
you. The Concentration Account is to be maintained in the name of "Manufacturers
and Traders Trust Company, as Trustee."
118
Seller and BRC hereby irrevocably instruct you, and the Trustee, by its
acknowledgement hereof, hereby instructs you, at all times from and after the
date hereof until your receipt of contrary and/or terminating instructions from
the Trustee, to remit, on a daily basis, in immediately available funds, all
available amounts deposited in the Concentration Account to the following
account (the "Master Collection Account") or such other account as the Trustee
or the Servicer may specify:
Manufacturers and Traders Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
ABA # 022000046
CC # 880
For credit to the
MANUFACTURERS AND TRADERS TRUST COMPANY,
AS TRUSTEE
Account No. ______________
No such transfer of funds shall either reflect the rounding off of any funds so
transferred or constitute a partial remittance except for (i) amounts applied to
fees and expenses under the terms of this letter agreement, and (ii) amounts
deducted for returned checks that were previously deposited in the Concentration
Account and with respect to which funds were previously transferred to the
Master Collection Account.
All transfers referred to above shall be made by you irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off (except
as expressly permitted otherwise by this letter agreement) and shall be final,
and you agree that you will not seek to recover any amount from the Trustee, BRC
or the Servicer for any reason once any payment or transfer has been made.
The Trustee's instructions with respect to the Concentration Account may
be given through a Servicer that the Trustee may appoint from time to time and
will notify you thereof in writing, and you agree to follow the instructions of
such Servicer with the same effect as if such instructions were given by the
Trustee directly (subject to any limitations on such appointment imposed by the
Trustee that are communicated in writing to you) until such time as the Trustee
notifies you of the revocation of the Servicer's authority to act for the
Trustee. The initial servicer will be Howmet. The Trustee and the Servicer shall
each provide to you a list of their respective employees authorized to issue
instructions and give notices with respect to the Concentration Account, which
lists may be revised from time to time, and you shall be entitled to rely on
(and to assume) the authority of any employee of the Trustee or the Servicer
identified on such lists, and are hereby authorized to act on any notice given
on behalf of the Trustee or the Servicer by any such employee, subject to any
limitations on the appointment of the Servicer and the revocation of the
Servicer's authority as provided above.
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119
Seller and BRC also hereby irrevocably notify you that, at all times from
and after the date hereof until your receipt of contrary and/or terminating
instructions from the Trustee, the Trustee shall be entitled (subject to your
rights set forth herein) to exercise in the place and stead of Seller and BRC
(or either of them) any and all of the rights of Seller and BRC in respect of or
in connection with this letter agreement and the Concentration Account,
including, without limitation (i) the right to specify that payments are to be
made out of or in connection with the Concentration Account to different
accounts or at different times than those specified above (subject to your
customary and then-current procedures for account processing) and (ii) the right
to require preparation of duplicate monthly bank statements on the Concentration
Account for mailing directly to an address specified by the Trustee.
By executing this letter agreement you acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person asserting, claiming or exercising any right of set-off, banker's
lien or other purported form of claim with respect to the items collected from
the Concentration Account or any funds from time to time therein or in transit
thereto, and agree to immediately inform the Trustee in writing of any such
action in the future.
By executing this letter agreement, you irrevocably waive and agree not to
assert any right to setoff against, or otherwise deduct from, any items
collected from the Concentration Account or any funds from time to time therein
or in transit thereto; provided, however, that you may (i) debit the
Concentration Account for any items deposited in the Concentration Account that
are returned or otherwise not collected in accordance with your customary
practices for the chargeback of returned items, and (ii) apply funds in the
Concentration Account for reimbursement of any fees and expenses incurred by you
in connection with this letter agreement, to the extent that such fees and
expenses are not paid or reimbursed by WRO.
WRO shall pay, or reimburse you for, customary and reasonable fees and
expenses incurred by you in the maintenance and operation of the Concentration
Account in accordance with this letter agreement. The Trustee will have no
liability to you or the Servicer for any costs, fees or charges under your usual
and customary procedures or this letter agreement. You will not be liable for
any actions taken in accordance with the instructions of the Trustee or the
Servicer.
You also agree that, notwithstanding anything to the contrary herein, you
shall promptly notify the Trustee of your failure to receive timely payment of
any fee under this letter agreement.
You may terminate this letter agreement by cancelling the Concentration
Account, which cancellation and termination shall become effective only upon
sixty days' prior written notice thereof from you to the Trustee. Upon the
termination of this letter agreement, you will close the Concentration Account
and transfer any monies remaining therein to the Master
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Collection Account. You agree that you shall forward all wire transfers and
deposits to the Concentration Account that you receive after such cancellation
in the form received to the Master Collection Account or to such other address
or account as the Trustee (or the Servicer on behalf of the Trustee) shall
specify, promptly after you discover that you have received any such transfers.
This letter agreement may also be terminated upon written notice to you by the
Trustee. Except as expressly set forth in this paragraph, this letter agreement
may not be terminated or amended without the prior written consent of the
Trustee.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, by
facsimile or by overnight courier, to the intended person at the address or
facsimile number of such person set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such person in a written notice to the other parties hereto given in accordance
with the requirements of this paragraph. All notices and other communications
hereunder shall also be provided to the Trustee and shall be addressed as
follows until you receive written notice from the Trustee to the contrary:
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust and Agency Services
Telephone: (716) 842-5602
Facsimile: (716) 842-4474.
All notices and communications provided for hereunder shall be effective,
(i) if personally delivered, when received, (ii) if sent by certified mail, four
business days after having been deposited in the mail, postage prepaid and
properly addressed, (iii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means and (iv) if sent by overnight
courier, two business days after having been given to such courier unless sooner
received by the addressee.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of Seller, BRC and the Trustee and their
respective successors, transferees and assigns; provided, however, that you may
not assign your rights and duties under this letter agreement without the prior
written consent of the Trustee.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York, not including the choice of law rules
thereof.
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Please acknowledge your agreement to the terms set forth in this letter
agreement by signing five (5) copies of this letter agreement in the space
provided below and returning such copies to us at the address indicated below
for WRO.
Very truly yours,
[NAME OF SELLER]
By:__________________________________
Title:_____________________________
Address: c/o Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski, Treasurer
Telephone: (203)625-8744
Facsimile: (203)8614746
BLADE RECEIVABLES CORPORATION
By:__________________________________
Title:_____________________________
Address: C/O Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski, Treasurer
Telephone: (203)625-8744
Facsimile: (203)861-4746
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The undersigned hereby acknowledges and agrees to the foregoing letter
agreement as of this __ day of November, 1995.
[NAME OF CONCENTRATION BANK]
By:____________________________
Title:_________________________
Address:
Telephone:
Facsimile:
The undersigned hereby acknowledges and agrees to the foregoing letter
agreement dated as of the ___ day of November, 1995.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:_________________________________
Title:______________________________
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123
EXHIBIT C
to Pooling Agreement
FORM OF
MONTHLY SERVICER'S CERTIFICATE
TO: MANUFACTURERS AND TRADERS TRUST COMPANY
[Paying Agent]
BLADE RECEIVABLES CORPORATION
[Name of Rating Agency]
HOWMET CORPORATION (the "Servicer") hereby certifies that:
(A) This Certificate is being delivered pursuant to Section 3.6 of the
Amended and Restated Pooling and Servicing Agreement, dated as of April 18,
1996, (as the same may be amended, supplemented or otherwise modified from time
to time, the "Pooling Agreement"), among BLADE RECEIVABLES CORPORATION, as
Transferor, Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee.
(B) As of the date of this Certificate, the Authorized Officer (as defined
in the Pooling Agreement) that is executing this Certificate is not aware of the
occurrence and continuance of any Early Amortization Event or Unmatured Early
Amortization Event (each as defined in the Pooling Agreement). [If an Early
Amortization Event or Unmatured Early Amortization Event has occurred and is
continuing, specify each such Early Amortization Event or Unmatured Early
Amortization Event (as applicable) of which the Authorized Officer executing
this Certificate is aware and the nature and status thereof and further certify,
on behalf of the Servicer, that such information is true and accurate in all
material respects.]
IN WITNESS WHEREOF, Servicer has caused this Certificate to be executed by
its duly authorized officer this __ day of _______________, 19 .
HOWMET CORPORATION
By:_____________________________________
Title: _________________________________
124
EXHIBIT D
to Pooling Agreement
ANNUAL AGREED-UPON PROCEDURES
MONTHLY REPORTS
Select at random four Monthly Reports prepared during the fiscal year and:
1. Compare/reconcile the following Monthly Report items with the
Servicer's original source documents noted below for five selected
operating units (letters refer to the applicable section of the
Monthly Report):
A. Monthly Receivable Activity:
1. Monthly Sales Journal
2. Cash Application Journal
3. Aged Trial Balance
4. Journal entries and related support affecting cash
application or receivables
5. Receivable Write-off Approval List
6. Lockbox Bank Statements and PC generated Lockbox Reports
7. Credit Memo Report
D. Loss Reserve Ratio:
1. Schedule A of the Monthly Report
2. Applicable Daily Report for Cutoff Date
3. Previous Monthly Reports
E. Dilution Reserve Ratio:
1. Section A of the Monthly Report
2. Previous Monthly Reports
G. Carrying Cost Receivables Reserve:
1. Section C of the Monthly Report
2. Carrying Cost Worksheet
H. Loss to Liquidation Ratio:
1. Receivable Write-off Approval List
2. Aged Trial Balance
3. Journal entries and related back-up on write-offs and
recoveries
125
4. Previous Monthly Reports
I. Discount Rate:
1. Carrying Cost Worksheet
Schedule A. Aged Receivables Ratio:
1. Section A of the Monthly Report
2. Previous Monthly Reports
3. Aged Trial Balance Summary - invoices only, and
2. Recalculate the mathematical accuracy of Sections A,B,C,D,E,F,G,H,J
and K and Schedule A.
For each quarter end date that a Monthly Report is obtained, obtain the accounts
receivable Write-Off Report for five selected operating units and randomly
select a total of five write-offs greater than $1000 individually. Then obtain
the write-off documentation and verify that the write-offs had been approved and
were deleted from the Aged Trial Balance Report.
DAILY REPORTS
Select at random ten Dally Reports prepared during the fiscal year (of which not
more than two shall relate to any single fiscal month) and:
1. Compare/reconcile the following Daily Report items with the
Servicer's original source documents noted below for five selected
operating units (letters refer to the applicable section of the
Daily Report):
A. Daily Receivable Activity:
1. Daily Sales Summary
2. Cash Application Journal
3. Aged Trial Balance
4. Journal entries and related support affecting cash
applications or receivables
5. Receivable Write-off Approval List
6. Lockbox Bank Statement and PC generated Lockbox Reports
B. Net Eligible Receivables Calculation (if not closing period):
1. Ineligible Receivables Program Reports
page 2
126
C. Excess Concentration Balances:
1. Ineligible Receivables Program Reports
Schedule A (if settlement date):
1. Most recent Monthly Report
2. Daily Report last day prior to settlement date, and
2. Recalculate the mathematical accuracy of sections A-C and Schedule
A.
CREDIT DOCUMENTATION
Select at random two fiscal month ends during the fiscal year and:
1. Direct the Servicer to prepare a Credit File Contents Schedule (the
"Credit Schedule") that summarizes the contents of the credit files
for each customer we select for testing. The Credit Schedule will
include the following information as of the cut-off date selected:
customer name, customer account number, customer statement, approved
credit limit, date of credit limit approval, name and title of
highest authority that approved the credit limit and other
supporting documentation in support of extension of the credit limit
(e.g., Dun & Bradstreet report, customer financial statement and
bank or trade references), and
2. For each customer selected:
A. Compare the customer's account receivables balance with the
approved credit limit to verify that the balance is less than
or equal to the approved limit
B. Compare the customer's account balance per the Credit Schedule
with the balance per the Account Receivable Aged Trial Balance
C. Compare the date of the customer , s most recent invoice
indicated on the customer's statement to the date of the
credit approval to verify that the date of the invoice is the
date of or subsequent to, but within one year of the date of,
credit approval
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127
D. Note that at least one of the following items is included with
the credit documentation: Dun & Bradstreet Credit Report or
other credit report, bank or trade reference, financial
statements or a memorandum or workpapers regarding credit
evaluation/justification.
For each of the ten Daily Reports selected:
1. Invoices: Obtain the detail Aged Trial Balance Report for five selected
operating units and randomly select a total of 15 different invoices and verify
the invoice date, amount and customer name with a system generated copy of the
invoice;
2. Dilutions and Credits: Obtain the detail Aged Trial Balance Report for
five selected operating units and randomly select a total of 15 different credit
names and verify the credit memo date, amount and customer name with a system
generated copy of the credit memo;
3. Cash Application: Randomly select a total of 15 individual cash
receipts comprising the cash collection amount and verify the bank receipt date
with the receipt date and application amount on the Daily Report, adjusted for
available balances;
4. Ineligible Receivables: Obtain the Aged Trial Balance for five selected
operating units and randomly select a total of ten customers that have balances
over 90 days past due and calculate the customer balances over 90 days past due
as a percentage of the customer's total balance. If this calculated percentage
is more than 50%, determine if the customer is classified as part of the
Ineligible Receivables;
5. Aging Reports: Using the 15 invoices selected in paragraph 1 above,
find that the invoice is in the appropriate aging category on the Aged Trial
Balance; and
6. Purchase Options: Using the 15 invoices selected in paragraph 1 above,
verify the purchase order reference number on the invoice with the purchase
order (if available).
page 4
128
EXHIBIT E
to Pooling Agreement
FORM OF
TRANSFEROR CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN Effective REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. IN ADDITION TO THE
RESTRICTIONS SET FORTH ABOVE, RESALE, TRANSFER OR DISPOSITION OF THIS
CERTIFICATE IS PROHIBITED TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT (AS
DEFINED BELOW).
129
BLADE RECEIVABLES MASTER TRUST
TRANSFEROR CERTIFICATE
THIS CERTIFIES THAT BLADE RECEIVABLES CORPORATION is the registered owner
of an interest in the Blade Receivables Master Trust (the "Trust"), which was
created pursuant to the Amended and Restated Pooling and Servicing Agreement,
dated as of April 18, 1996 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Pooling Agreement"), by and among
BLADE RECEIVABLES CORPORATION, a Nevada corporation, as Transferor
("Transferor"), HOWMET CORPORATION, as initial Servicer (in such capacity, the
"Servicer"), and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee (in such
capacity, together with its successors and assigns in such capacity, the
"Trustee"). This Certificate is the duly authorized Transferor Certificate
designated and issued under the Pooling Agreement. To the extent not otherwise
defined herein, capitalized terms have the meanings assigned to them in Appendix
A to the Pooling Agreement. This Certificate is subject to the terms, provisions
and conditions of, and is entitled to the benefits afforded by, the Pooling
Agreement, to which terms, provisions and conditions the holder of this
Certificate by virtue of the acceptance hereof assents and by which the holder
is bound.
This Certificate shall not bear interest.
The Pooling Agreement may be amended and the rights and obligations of the
parties thereto and of the holder of this Certificate modified as set forth in
the Pooling Agreement.
Unless the certificate of authentication hereon shall have been executed
by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the holder hereof to any benefit
under the Pooling Agreement or under any other Transaction Document or be valid
for any purpose.
This Certificate is limited in right of payment to the Transferred Assets.
Transferor may not transfer, assign, exchange or otherwise convey or
pledge, hypothecate or otherwise grant a security interest in this Certificate
or any interest represented hereby except in compliance with the terms,
conditions and restrictions set forth in the Pooling Agreement.
page 2
130
This Certificate shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of laws principles, and all
obligations, rights and remedies under, or arising in connection with, this
Certificate shall be determined in accordance with the laws of the State of New
York.
This Certificate amends and restates in its entirety the Transferor
Certificate dated December 13, 1995 and issued to Transferor under the Pooling
and Servicing Agreement, dated as of December 13,1995, by and among Transferor,
Servicer and Trustee.
page 3
131
IN WITNESS WHEREOF, Transferor has caused this Certificate to be executed
by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:________________________________________
Title: _______________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate referred to in the Pooling Agreement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________________
Title: _______________________________
Dated: ________________________, 199_
page 4
132
EXHIBIT F
to Pooling Agreement
FORM OF CERTIFICATE TO BE GIVEN BY CERTIFICATE OWNER
[Euroclear [Cedel, Societe anonyme
151 Boulevard Jacqmain 67 Boulevard Grand-Duchesse Charlotte
B-1210 Brussels. Belgium] L-1331 Luxembourg]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, (the
"Certificates").
This is to certify that as of the date hereof, and except as set forth
below, the beneficial interest in the Certificates held by you for our account
is owned by persons that are not U.S. persons (as defined in Rule 901 under the
Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned has acquired, or intends
to acquire, a beneficial interest in accordance with your operating procedures
if any applicable Statement herein is not correct on such date. In the absence
of any such notification, it may be assumed that this certification applies as
of such date.
[This certification excepts beneficial interests in and does not relate to
U.S. $_________ principal amount of the Certificates appearing in your books as
being held for our account but that we have sold or as to which we are not yet
able to certify.]
We understand that this certification is required in connection with
certain Securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated: __________________,* By:_________________________,
Account Holder
* Certification must be dated on or after the 15th day before the date of the
Euroclear or Cedel certificate to which the certification relates.
133
EXHIBIT G
to Pooling Agreement
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, (the
"Certificates").
This is to certify that, based solely on certifications we have received
in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") as of the date
hereof, $__________ principal amount of the Certificates is owned by persons (a)
that are not U.S. persons (as defined in Rule 901 under the Securities Act of
1933, as amended (the "Securities Act")) or (b) who purchased their Certificates
(or interests therein) in a transaction or transactions that did not require
registration under the Securities Act.
We further certify (a) that we are not making available herewith for
exchange any portion of the related Regulation S Temporary Book-Entry
Certificate excepted in such certifications and (b) that as of the date hereof
we have not received any notification from any of our Member Organizations to
the effect that the statements made by them with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
134
We understand that this certification is required in connection with
certain securities laws of the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy hereof to any interested party in such proceedings.
Date:_________________________* Yours faithfully,
* To be dated no earlier By:__________________________
than the Effective Date. [Morgan Guaranty Trust Company of
New York, Brussels Office, as
Operator of the Euroclear Clearance
System] [Cedel, societe anonyme]
page 2
135
EXHIBIT H
to Pooling Agreement
FORM OF CERTIFICATE TO BE GIVEN BY TRANSFEREE
OF BENEFICIAL INTEREST IN A REGULATION S TEMPORARY
BOOK-ENTRY CERTIFICATE
[Euroclear [Cedel, societe anonyme
151 Boulevard Jacqmain 67 Boulevard Grand-Duchesse Charlotte
B-1210 Brussels, Belgium] L-1331 Luxembourg]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, (the
"Certificates").
This is to certify that as of the date hereof, and except as set forth
below , for purposes of acquiring a beneficial interest in the Certificates, the
undersigned certifies that it is not a U.S. person (as defined in Rule 901 under
the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned intends to acquire a
beneficial interest in accordance with your operating procedures if any
applicable statement herein is not correct on such date. In the absence of any
such notification, it may be assumed that this certification applies as of such
date.
We understand that this certification is required in connection with
certain securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated: ___________________, By:_________________________
136
EXHIBIT I
to Pooling Agreement
FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY CERTIFICATE TO
REGULATION S BOOK-ENTRY CERTIFICATE
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
(the "Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET
CORPORATION and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee,
(the "Certificates").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $___________ principal amount of Certificates
that are held as a beneficial interest in the 144A Book-Entry Certificate (CUSIP
No. ) with DTC in the name of [insert name of transferor] (the "Transferor").
The Transferor has requested an exchange or transfer of the beneficial interest
for an interest in the Regulation S Book-Entry Certificate (CUSIP No. ) to be
held with [Euroclear] [Cedel] through DTC.
In connection with the request and in receipt of the Certificates, the
Transferor does hereby certify that the exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Agreement and the
Certificates and:
(a) pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and accordingly
the Transferor does hereby certify that:
(i) the offer of the Certificates was not made to a person in
the United States of America,
[(ii) at the time the buy order was originated, the transferee
was outside the United States of America or the Transferor and any
person acting on its behalf reasonably believed that the transferee
was outside the United States of America,
137
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States of
America,] *
(iii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable,
(iv) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act. and
(b) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Certificates
are being transferred in a transaction permitted by Rule 144 under the
Securities Act.
This certification and the statements contained herein are made for your
benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Dated: _________________ By:_____________________________
Title: _________________________
* Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
page 2
138
EXHIBIT J
to Pooling Agreement
FORM OF PLACEMENT AGENT EXCHANGE INSTRUCTIONS
Depository Trust Company
55 Water Street
50th Floor
New York, New York 10041
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
(the "Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET
CORPORATION and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee.
(the "Certificates").
Pursuant to Section 6.11 of the Agreement, ________________________ (the
"Placement Agent") hereby requests that $____________ aggregate principal amount
of the Certificates held by you for our account and represented by the
Regulation S Temporary Book-Entry Certificate (CUSIP No. ) (as defined in the
Agreement) be exchanged for an equal principal amount represented by the 144A
Book-Entry Certificate (CUSIP No. ) to be held by you for our account.
Dated: __________________________ [placement agent]
By:_______________________________
Title: ___________________________
139
EXHIBIT K
to Pooling Agreement
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF DEFINITIVE 144A CERTIFICATES
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18, 1996 (the
"Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee (the "Certificates").
This letter relates to $___________ principal amount of Certificates held
in definitive form by _____________ (the "Transferor").
The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Certificate (the "Transfer Certificate"). In
connection with such request, the Transferor hereby certifies that it is
familiar with the Agreement and all other documents governing or relating to the
Certificates and that the transfer of the Transfer Certificate does not require
registration under the Securities Act of 1933, as amended (the "Securities Act")
because:*
[ ] the Transfer Certificate is being acquired for the Transferor's own
account, without transfer.
[ ] the Transfer Certificate is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A) in reliance on Rule 144A or
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act.
[ ] the Transfer Certificate is being transferred in accordance with Rule
144 under the Securities Act, or pursuant to an effective registration statement
under the Securities Act.
_____________________________
* Check applicable box.
140
[ ] the Transfer Certificate is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 14A, Rule 144 or Rule 904 under the Securities
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this letter.
[Transferor]
By:__________________________________
Title:_______________________________
Dated:____________________
141
EXHIBIT L
to Pooling Agreement
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM REGULATION S
TEMPORARY BOOK-ENTRY CERTIFICATE TO RULE 144A
BOOK-ENTRY CERTIFICATE
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
(the "Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET
CORPORATION and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee,
(the "Certificates").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $___________ principal amount of Certificates
that are held as a beneficial interest in a Regulation S Temporary Book-Entry
Certificate (CUSIP No. -) (the "Regulation S Certificate "") with DTC in the
name of [insert name of transferor] (the "Transferor"). The Transferor has
requested an exchange or transfer of the beneficial interest in the Regulation S
Certificate for an interest in a 144A Book-Entry Certificate (CUSIP No. -) (the
"144A Certificate"") to be held with [Euroclear] [Cedel] through DTC.
In connection with such request, the Transferor hereby certifies that (a)
its beneficial interest in the Regulation S Certificate is being transferred or
exchanged in accordance with (i) the provisions set forth in the Pooling
Agreement, (ii) Rule 144A under the Securities Act, and (iii) any applicable
securities laws of any state of the United States or any other jurisdiction, and
(b) if the Transferor's beneficial interest is being transferred, such
beneficial interest is being transferred to a transferee that the Transferor
reasonably believes is purchasing the beneficial interest in the 144A
Certificate for its own account or an account with respect to which the
transferee exercises sole investment discretion and the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A
142
This certification and the statements contained herein are made for your
benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Dated:_____________ By:_______________________________
Title: _____________________
page 2
143
SCHEDULE 1
to Pooling Agreement
ACCOUNT BANKS - LOCKBOX BANKS
ACCOUNT BANKS - CONCENTRATION ACCOUNT BANK
144
HOWMETCORP.
TAX ID # 132838093
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS AC TYPE AC # LO# AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Citibank Peter Pellegrine Peter Pellegrine Conrentration 4086-5864 NA Resolutions
Phone # 212 559-9700 Citibank
Fax # 212 7934806 399 Park Avenue Incumbency Forms
10th Fl., Zone 3 Concentration Agree
New York, NY 10022 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of Montreal L. Cynthia Semenic L. Cynthia Semenic Lockbox 4619436 70371 Resolutions
Phone#514-877-8685 Bank of Montreal Incumbency
Fax #514-877-8933 Crop. Banking L/B Agreements
129 St. Jacques 12-FI. Wire Agreements
Montreal, Quebec H2Y-
1L6
- ------------------------------------------------------------------------------------------------------------------------------------
Harris Bank Bill C. Broot Mary Rafacz Pipeline 331-5308 N/A Resolutions
Phone #312-461-7162 Harris Bank Incumbency Forms
Fax #312-461-2117 115 S. LaSalle Street L/B Agreements
12th Floor Wire Agreements
Chicago, IL 60603
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Manhattan Steven Epstein Carolyn V. Weiss Howmet FX91G- 30142 Resolutions
Phone #212-552-1314 Chase Manhattan Bank Wires 455946
Fax #212-582-4786 1 Chase Manhattan Incumbency Forms
Plaza - 50th Fl. L/B Agreements
New York, NY 10081 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
Fleet Bank Kerry McElhiney Linda Hartunian Lockbox 5044-4083 N/A Resolutions
Phone #61 7-282-3064 Fleet Nat'l. Bankof CT. Incumbency Forms
Fax #617-292-2506 1 Landmark Square L/B Agreements
MSN 790 Wire Agreements
Stamford CT 06904
- ------------------------------------------------------------------------------------------------------------------------------------
First interstate Bank John Albanesus John H. Albanesus Lockbox 101133031 600551 Resolutions
Phone #212-836-4136 First interstate Bank 001614265 53509 Incumbency Forms
Fax #212-593-5241 685 3rd Avenue L/B Agreements
Fifth Floor Wire Agreements
New York, NY 10022-
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Michael Daves Blanca Rodriguez Lockbox 1866075276 75280 Resolutions
Blanca Rodriguez Wachovia Corp. Senv. Incumbency Forms
Phone #404-322-1094 181 Peach Tree Street L/B Agreements
Fax #404-322-6894 Atlanta, GA 30303 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------
COMMENT
- ------------
New AC
- ------------
New AC
- ------------
New AC
- ------------
Modified
- ------------
New/Modified
- ------------
Modified
- ------------
Modified
- ------------
1
145
HOWMETCORP.
TAX ID # 132838093
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS AC TYPE AC # LO# AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
PNC Michele Weisman Jean Kisling EDI 1264083 N/A Resolutions
Phone #212 559-5361 PNC Incumbency Forms
Fax #212 557-5461 2 PNC Plaza #32 L/B Agreements
620 Liberty Avenue Wire Agreements
Pittsburgh PA 15265
- ------------------------------------------------------------------------------------------------------------------------------------
NBD Steve Kremenski Steve Kremenski Pipeline 03667-73 2414 Resolutions
Phone #313 225-1646 NBD Lockbox 0001- Incumbency Forms
Fax #313-225-2089 611 Woodward Avenue 153701 - L/B Agreements
Detroit Ml 46226 010 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of Montreal L. Cynthia Sememic L. Cynthia Semenic Lockbox 4613-806 70231 Resolutions
Phone #514 877-8685 Bank of Montreal Incumbency Forms
Fax #514 877-8933 Corp. Banking L/B Agreements
129 St. Jacques-12 Fl. Wire Agreements
Montreal, Quebec
H2Y 1 L8
- ------------------------------------------------------------------------------------------------------------------------------------
Harris Bank Bill C. Broot Nary Rafacz Pipeline 292-077-5 71250 Resolutions
Phone #312 461-7162 Harris Bank Lockbox Incumbency Forms
Fax #312 461 -2117 115 5. LaSalle Street L/B Agreements
12WFI. W re Agreements
Chicago, IL 60600
- ------------------------------------------------------------------------------------------------------------------------------------
Chase ManhaNan Steven Epstein Carolyn V. Weiss Howmet FX 91 G- N/A Resolutions
Phone #212 552-1314 Chase ManhaNan Bank Wires 455946
Fax #212 582-4786 1 Chase ManhaNan
Plaza - 50th Floor
New York, NY 10081
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Michael Davis Blanca Rodriguez Lockbox 8735- 75085 Resolutions
Blanca Rodriguez Wachovia Corp. Sent. 071434 951294 Incumbency Form
Phone #404 332-1 094 191 Peach Tree St. L/B Agreements
Fax #404 332-6894 Atlanta GA30003 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
PNC Michele Weisman Jean Kisling EDI 1000-312 N A Resolutions
Phone #212 557-5362 PNC 295 Incumbency Form
Fax #212 557-5461 2 PWC Plaza Fl 32 L/B Agreements
620 Liberty Avenue
Pittsburgh, PA 1 5205 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
HOWMET CERCAST USA
Tax ID # 06-1245785
BANK BANK CONTACTS ADDRESS A/C TYPE A/C # L/B # AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Harris Bank Phone # 312 461-7162 Maw Rafacz Lockbox 290-075-8 71916 Resolutions
Fax #312461-2117 Harris Bank 71966 Incumbency
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------
COMMENT
- ------------
Modified
- ------------
Modified
- ------------
Modified
- ------------
Modified
- ------------
Mod if ed
- ------------
Modified
- ------------
Modified
- ------------
Comments
- ------------
Modified
- ------------
2
146
HOWMET CERCAST USA
Tax ID # 06-1245785
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS A/C TYPE A/C # L/B # AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Bill C. Broot 1155 LaSalle Street 71896 L/B Agreements
12WFI Wire Agreements
Chicago, lll 60603
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Michael Davis Blanca Rodriquez Lockbox 1867- 951378 Resolutions
Blanca Rodriquez Wachovia Corp. Serv. 075366 951386 Incumbency Form
Phone #404 332-1094 191 Peach Tree St. 951391 L/B Agreements
Fax #404 332-6894 Atlanta, GA 30303 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
HOWMET TEMPCRAFT
ID # 34-0908274
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS A/C Type A/C # IL/B 3 AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Soceity National Bank John Avallone John Avallone Lockbox 001099- 71284 Resolutions
Phone # 216 689-6351 Key Corp. 4687 Incumbency Forms
Fax# 216 689-4421 127 Public Square L/B Agreements
Mail Code Ohio Wire Agreements
1270725
- ------------------------------------------------------------------------------------------------------------------------------------
TURBINE COMPONENTS
CORP
Tax ID # 06-0863947
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS A/C TYPE A/C # L/B # AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Fleet Bank Kerry McElhney Linda Hartman Lockbox 5044-4115 30815 Resolutions
Phone # 617 292-3064 Fleet Natl Bk of CT. Incumbency Forms
Fax # 617-292-2566 1 Landmark Sq. L/B Agreements
MSK 759 Wire Agreements
Stamford CT 06904
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of New Haven Frank Gentilesco Frank Genrilesco Lockbox 1310958 9512 Resolutions
Phone # 203 498-3532 Bank of New Haven Incumbency Forms
430 Forbes Ave L/B agreements
New Haven 06512 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------
Comments
- -------------
- -------------
Modified
- -------------
- -------------
COMMENTS
- -------------
New A/C
Modified
L/B
- -------------
- -------------
- -------------
New A/C
- -------------
New A/C
Modified
L/B
- -------------
3
147
PROJECT BLADE - TAKEOUT
APPENDIX A
DEFINITIONS
A. Defined Terms. As used in the Purchase Agreement, the Pooling Agreement
or any Supplement:
"Account Agreements" means the Concentration Account Agreements and the
Lockbox Agreements.
"Account Banks"" means the Concentration Account Banks and the Lockbox
Banks.
"Acquisition" means Howmet Acquisition Corporation, a Delaware
corporation.
"Acquisition Loan"" means the loan, in the principal amount of
$100,000,000, made by Transferor to Acquisition, the obligation to repay which
loan has been assumed by Howmet (as successor by merger to Acquisition).
"Adverse Claim" means any claim of ownership interest or any mortgage,
deed of trust, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other) or other security interest.
"Affiliate" means, with respect to a Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Agent" means, with respect to a Series or Purchased Interest, any
Person(s) designated as the agent(s) for the Certificateholders or the Purchaser
in the related Supplement or PI Agreement.
"Aggregate Unpaid Balance" is defined in Section 2. 1(b) of the Purchase
Agreement.
"Amortization Period" is defined, for purposes of any Series or Purchased
Interest, in the related Supplement or PI Agreement.
"Applicant" is defined in Section 6.7 of the Pooling Agreement.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
148
"Authorized Officer" means, with respect to Transferor, Servicer or any
Seller, the Chief Executive Officer, the President, the Treasurer, the Chief
Financial Officer, any Vice President and any Assistant Treasurer.
"Available Final Distribution Amount" means, (i) with respect to any
Series, the amount that would be available in the Master Collection Account on
the Final Scheduled Payment Date for the Series for distribution to the
Certificateholders of such Series, and (ii) with respect to any Purchased
Interests, the amount that would be available in the Master Collection Account
on the Final Scheduled Payment Date for the Purchased Interests for distribution
to the Purchasers of such Purchased Interests.
"Bank Accounts" means the Lockbox Accounts and the Concentration Accounts.
"Bankruptcy Event" means, for any Person. any of the following events:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
Like for such Person or any substantial part of its assets, or any similar
action with respect to such Person under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of
debts, and such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of (i) in the case of any Person other than
Transferor, 60 days and (ii) in the case of Transferor, 10 days; or an
order for relief in respect of such Person shall be entered in an
involuntary case under the federal bankruptcy laws or other similar laws
now or hereafter in effect, or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or the like, for
such Person or any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail to, or
admit in writing its inability to, pay its debts generally as they become
due.
"Base Amount" is defined, for purposes of any Series or Purchased
Interest, in the applicable Supplement or PI Agreement.
"Book-Entry Certificates" means certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.11 of
the Pooling Agreement; provided that after the occurrence of a condition
whereupon book-entry registration and transfer are no
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longer permitted and Definitive Certificates are to be issued to the Certificate
Owners. such certificates shall no longer be "Book-Entry Certificates."
"Business Day" means a day (other than a Saturday or Sunday) on which
commercial banks in New York, New York and Chicago, Illinois are not authorized
or required to be closed for business.
"Buyer" is defined in the preamble to the Purchase Agreement.
"Buyer Note" is defined in Section 3.2 of the Purchase Agreement.
"Calculation Period" means a fiscal month of Howmet.
"Carrying Cost Account"is defined in Section 4.2 of the Pooling Agreement.
"Carrying Costs" means, for any period, (a) interest or yield payable with
respect to any Series or Purchased Interest for that period, (b) the aggregate
Servicing Fee for the period in the applicable amount provided for in Section
3.4 of the Pooling Agreement, (c) the operating expenses described in Section
7.2(l) of the Pooling Agreement for the period and (d) other fees, costs and
expenses incurred by Transferor and Trustee for the period and paid to Persons
other than Howmet Persons in connection with their duties under the Transaction
Documents (in the case of Trustee, to the extent not included in the Servicing
Fee).
"Certificate" means any Investor Certificate or the Transferor
Certificate.
"Certificateholder" means the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Certificate Register" means the register maintained pursuant to Section
6.3 of the Pooling Agreement.
"Clearing Agency" means, with respect to any Book-Entry Certificate, any
Person designated as such by Transferor, which person must be registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934.
"Clearing Agency Participant" is defined in Section 6.11(d) of the Pooling
Agreement.
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"Closing Date" means December 13, 1995.
"Collections" means all funds that are received by any Seller, Transferor,
Servicer or Trustee from or on behalf of any Obligor in payment of any amounts
owed (including invoice prices, finance charges, interest and all other charges,
if any) in respect of any Transferred Receivable or Related Asset, or otherwise
applied to repay or discharge any Transferred Receivable (including insurance
payments that any Seller, Transferor or Servicer applies in the ordinary course
of its business to amounts owed in respect of such Transferred Receivable and
net proceeds of sale or other disposition of repossessed goods that were the
subject of such Transferred Receivable).
"Concentration Account" means any bank account that is maintained in
accordance with, and to perform the functions contemplated for Concentration
Accounts in, Section 3.3 of the Pooling Agreement.
"Concentration Account Agreement" means a letter agreement, substantially
in the form of Exhibit B to the Pooling Agreement (or such other form as to
which the Modification Condition has been satisfied), among Transferor,
Servicer, a Concentration Account Bank and Trustee that relates to one or more
Concentration Accounts, as it may be amended, supplemented or otherwise modified
from time to time.
"Concentration Account Banks" means any of the banks at which one or more
Concentration Accounts are maintained from time to time.
"Contra Account" means, at any time and with respect to any Obligor, the
maximum accrued refund, rebate or other incentive payment that such Obligor may
be owed by the Sellers on account of sales incentive programs.
"Contract" means an agreement between a Seller and any Person pursuant to
which such Person is obligated to make payments in respect of any Receivable or
Related Asset.
"Contributed Receivables" means all right, title and interest of Howmet in
the Receivables (and Related Security in connection therewith) contributed by
Howmet to Buyer.
"Contribution Agreement" means any Contribution Agreement, substantially
in the form of Exhibit D to the Purchase Agreement, between Howmet and Buyer, as
it may be amended, supplemented, amended and restated or otherwise modified from
time to time in accordance with the Purchase Agreement and the Pooling
Agreement.
"Corporate Trust Office" means the principal office of Trustee in Buffalo,
New York, at which at any particular time its corporate trust business shall be
principally administered.
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"Credit and Collection Policy" means (a) so long as no Successor Servicer
has been appointed, with respect to any Seller, its credit and collection
policies and practices relating to the Contracts and Receivables of such Seller
that such Seller has provided to Transferor and Trustee prior to the First
Issuance Date, as such credit and collection policies may be modified without
violating Section 6.3(b) of the Purchase Agreement or Section 7.2(f) of the
Pooling Agreement or (b) with respect to any Successor Servicer, its collection
policies and practices with respect to receivables like the Receivables.
"Cut-Off Date" means the last day of any Calculation Period.
"Daily Report" is defined in Section 3.5 of the Pooling Agreement.
"Definitive Certificates" means any Certificate other than a Book-Entry
Certificate.
"DCR" means Duff & Phelps Credit Rating Co.
"Dilution" means any reduction in the balance of a Receivable or check
issued by any Seller to an Obligor on account of discounts, incorrect billings,
credits, rebates, allowances, chargebacks, returned or repossessed goods,
allowances for early payments or any other reduction in the balance of a
Receivable for a reason unrelated to the inability of the Obligor to pay the
Receivable; provided that if the Receivables owed by an Obligor shall have been
reduced by a Contra Account for purposes of determining whether such Receivables
constitute Eligible Receivables, any rebate to such Obligor represented by such
Contra Account shall not be included in Dilution.
"Discount Rate" is defined in Section 2.2(c) of the Purchase Agreement.
"Disposition" is defined in Section 9.3(i) of the Pooling Agreement.
"Distribution Date" means the 15th day of each calendar month (or, if not
a Business Day, the next Business Day).
"Distribution Period" means each period from one Distribution Date to the
next Distribution Date.
"Dollars" means dollars in lawful money of the United States of America.
"Domestic Person" means any Person that has a place of business located in
the United States or Puerto Rico or otherwise is subject to the jurisdiction of
one or more civil courts of the United States (other than by reason of
contractual submission to such jurisdiction).
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"Early Amortization Event" means, with respect to any Series or Purchased
Interest. any event identified as an Early Amortization Event in the related
Supplement or PI Agreement.
"Early Amortization Period" is defined, for purposes of any Series or
Purchased Interest, in the related Supplement or PI Agreement.
"Eligible Deposit Account" means (a) a segregated trust account maintained
at a national bank with a long-term debt rating of at least A (or, in the case
of a Bank Account, BBB) from S&P, (b) a deposit account maintained with a bank
that has an unsecured long-term debt rating of A, or a short-term rating of at
least A-1, from S&P or (c) another deposit account as to which the Modification
Condition has been satisfied.
"Eligible Investments" means any of the following:
(a) deposit accounts that are established and maintained at a
financial institution, the short-term debt securities or certificates of
deposit of which have at the time of investment the highest short-term
debt or certificate of deposit rating (as the case may be) available from
the Rating Agencies (or, if no outstanding Investor Certificates are
rated, such rating available from S&P), and that are held in the name of
Trustee in trust for the benefit of the Certificateholders, subject to the
exclusive custody and control of Trustee and for which Trustee has sole
signature authority; provided that this clause shall not apply to the
Lockbox Accounts or to the Transaction Accounts;
(b) marketable obligations of the United States of America, the full
and timely payment of principal and interest on which is backed by the
full faith and credit of the United States of America, that have a
maturity date not later than the next succeeding Distribution Date;
(c) marketable obligations directly and fully guaranteed by the
United States of America, the full and timely payment of principal and
interest on which is backed by the full faith and credit of the United
States of America, that have a maturity date not later than the next
succeeding Distribution Date;
(d) banker's acceptances, certificates of deposit and other
interest-bearing obligations denominated in Dollars (subject to the
proviso at the end of this definition), that have a maturity date not
later than the next succeeding Distribution Date;
(e) repurchase agreements (i) that are entered into with any
financial institution having the ratings referred to in clause (a) and
(ii) that are secured by a perfected first priority security interest in
an obligation of the type described in clause
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(b) or (c); provided that such obligation may mature later than the next
succeeding Distribution Date if such bank is required to repurchase such
obligation not later than the next succeeding Distribution Date; and
provided further, that (i) the market value of the obligation with respect
to which such bank has a repurchase obligation, determined as of the date
on which such obligation is originally purchased, shall equal or exceed
102% of the repurchase price to be paid by such bank and (ii) Trustee or a
custodian acting on its behalf shall have possession of the instruments or
documents evidencing such obligations;
(f) guaranteed investment contracts entered into with any financial
institution, the short-term debt securities of which have the highest
short-term debt rating available from the Rating Agencies (or, if no
outstanding Investor Certificates are rated, such rating available from
S&P), that, in each case, have a maturity date not later than the next
succeeding Distribution Date;
(g) commercial paper (except for commercial paper issued by any
Howmet Person) rated at the time of investment not less than "A-1 +" or
the equivalent thereof by the Rating Agencies (or, if no outstanding
Investor Certificates are rated, by S&P) and having a maturity date not
later than the next succeeding Distribution Date; and
(h) freely redeemable shares in open-end money market mutual funds
(including such mutual funds that are offered by the Person who is acting
as Trustee or by any agent of such Person) that (i) maintain a constant
net-asset value and (ii) at the time of such investment have been rated
not less than "AAAm" or the equivalent thereof by S&P;
provided that (A) Trustee shall only acquire banker's acceptances and
certificates of deposit of, and enter into repurchase agreements with,
institutions whose short-term obligations have been rated not less than "A-1+"'
or the equivalent thereof by the Rating Agencies (or, if no outstanding Investor
Certificates are rated, by S&P) and whose long-term obligations have been rated
not less than "AA-" by S&P, (B) the securities, banker's acceptances,
certificates of deposit, other obligations and repurchase agreements described
above shall only constitute "Eligible Investments if and to the extent that
Servicer is satisfied that Trustee will have a perfected security interest
therein for the benefit of the Certificateholders and (C) notwithstanding
anything to the contrary herein or in the other Transaction Documents, the term
"Rating Agency," whenever used in this definition of "Eligible Investments",
shall be deemed to not include DCR to the extent that an investment is rated by
S&P, but not by DCR.
"Eligible Obligor" means, for purposes of any Series (unless otherwise
specified in the related Supplement) at any time, an Obligor that satisfies the
following criteria:
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(a) it is a Domestic Person and is not (except as otherwise
specified for any Series in the related Supplement) (i) the United States
government or any of its agencies or instrumentalities or (ii) a state or
local government agency or instrumentality;
(b) it is not a direct or indirect Subsidiary of Howmet or any other
Person with respect to which Howmet or any of its Subsidiaries owns,
directly or indirectly, 50% or more of the entity's equity interests;
(c) with respect to which no Bankruptcy Event had occurred and was
continuing as of the end of the most recent Calculation Period and is
continuing; provided that this clause shall not apply if a bankruptcy
court has approved the Obligor's payment of its obligations on the
Receivables;
(d) as of the end of the most recent Calculation Period, no more
than 50% of all Receivables of the Obligor were (for reasons other than
disputes) aged more than 90 days past their respective due dates;
(e) as of the end of the most recent Calculation Period, none of the
Receivables of the Obligor were evidenced by promissory notes; and
(f) it is not an Obligor with whom the applicable Seller has a "cash
in advance" or "cash on account" arrangement (but may be an Obligor that
the applicable Seller bills in advance in accordance with that Seller's
customary practices, and not on account of concerns about the
creditworthiness of the Obligor).
"Eligible Receivable" means, for purposes of any Series (unless otherwise
specified in the related Supplement) at any time, a Transferred Receivable:
(a) that arises from the sale of goods or services by a Seller in
the ordinary course of its business;
(b) that represents a bona fide obligation resulting from a sale of
goods that have been shipped or services that have been performed and is
due and payable not more than 120 days after the date on which the invoice
for services or merchandise, the sale of which gave rise to such
Receivable, is provided or delivered;
(c) that, as of that time, has not been written off and is not aged
more than 90 days past its original due date;
(d) that constitutes an account or a general intangible for the
payment of money and not an instrument or chattel paper;
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(e) the Obligor of which is an Eligible Obligor;
(f) with regard to which both the representation and warranty of
Transferor in Section 2.3(a)(ii) of the Pooling Agreement and the
representation and warranty of the relevant Seller in Section 5.1(k) of
the Purchase Agreement are true and correct;
(g) the transfer of which (including the sale by the applicable
Seller to Transferor and the transfer by Transferor to the Trust) does not
contravene or conflict with any law, rule or regulation or any contractual
or other restriction, limitation or encumbrance that applies to the
applicable Seller, Transferor or the Trust, and the sale, assignment or
transfer of which, and the granting of a security interest in which, does
not require the consent of the Obligor thereof or any other Person, other
than any such consent that has been obtained;
(h) that is denominated and payable only in Dollars in the United
States of America and is non-interest bearing; provided that a Receivable
shall not be deemed to be interest-bearing solely as a result of the
applicable Seller's imposition of an interest or other charge on any such
Receivable that remains unpaid for some specified period (but such
interest charge or other charge shall not be included in the Unpaid
Balance of a Receivable for purposes of calculating the Base Amount);
(i) that arises under a Contract that has been duly authorized and
that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity;
(j) that is not subject to any asserted reduction, cancellation, or
refund or any dispute, offset, counterclaim, lien or defense whatsoever
(including any Contra Account or any other potential reduction on account
of any offsetting account payable of Transferor or the applicable Seller
to an Obligor or funds of an Obligor held by Transferor or the Seller);
provided that a Receivable that is subject only in part to any of the
foregoing shall be an Eligible Receivable to the extent not subject to
reduction, cancellation. refund, dispute, offset, counterclaim, lien or
other defense;
(k) that, together with the Contract related thereto, was created in
accordance with, and conforms in all material respects with, all
applicable laws, rules, regulations, orders, judgments, decrees and
determinations of all courts and other governmental authorities (whether
Federal, state, local or foreign and including usury laws);
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(l) that satisfies all applicable requirements of the Credit and
Collection Policy of the applicable Seller; and
(m) that has not been compromised. adjusted, satisfied,
subordinated, rescinded or modified (including by extension of time or
payment or the granting of any discounts, allowances or credits), except
as permitted by Section 7.2(f) of the Pooling Agreement.
"Eligible Servicer" means (a) Howmet, (b) Trustee or (c) an entity that,
at the time of its appointment as Servicer, (i) is servicing a portfolio of
trade receivables, (ii) is legally qualified and has the capacity to service the
Receivables, (iii) has demonstrated the ability to service professionally and
competently a portfolio of trade receivables similar to the Receivables in
accordance with high standards of skill and care, (iv) is qualified to use the
software that is then being used to service the Receivables or obtains the right
to use or has its own software that is adequate to perform its duties under the
Pooling Agreement and (v) as to which the Modification Condition has been
satisfied.
"Enhancement" means, with respect to any Series or Purchased Interest, any
surety bond, letter of credit, guaranteed rate agreement, maturity guaranty
facility, cash collateral account or guaranty, tax protection agreement,
interest rate swap or other contract or agreement for the benefit of
Certificateholders of the Series or Purchaser of the Purchased Interest.
"Enhancement Provider" means the Person providing any Enhancement, other
than any Certificateholders, the Certificates of which are subordinated to any
Series or class of Certificates.
"Equalization Account" is defined in Section 4.2 of the Pooling Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Estimated Base Amount" is defined in Section 3.5 of the Pooling
Agreement.
"Exchange Date" is defined in Section 6.11(c) of the Pooling Agreement.
"Exempt Holiday" is defined in Section 3.5(c) of the Pooling Agreement.
"Exempt Obligor" means an Obligor that is (a) the United States government
or any of its agencies or instrumentalities, (b) a state or local government
agency or instrumentality, (c) Howmet, (d) a direct or indirect Subsidiary of
Howmet, (e) any other Person with respect to which Howmet or any of its
Subsidiaries owns, directly or indirectly, 50% or more of the equity interests
of such Person, and (f) for purposes of any Supplement or PI Agreement, any
other Person specified in such Supplement or PI Agreement as an Exempt Obligor;
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provided that each of the following requirements must be satisfied with respect
to such Obligor (x) such Obligor has been instructed to make all payments in
respect to its receivables to a location other than to any of the Bank Accounts,
(y) such Obligor can reasonably be expected to follow such instructions and (z)
none of the data included in the Daily Reports, Monthly Reports or other
information supplied to the Trustee or Holders includes any information about
such Obligor or its receivables.
"Existing Pooling Agreement" is defined in Section 1.2 of the Pooling
Agreement.
"Existing Purchase Agreement" is defined in the first recital to the
Purchase Agreement.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Final Distribution Date" is defined in Section 12.2(a) of the Pooling
Agreement.
"Final Scheduled Payment Date" is defined, for purposes of any Series, in
the applicable Supplement, and for purposes of any Purchased Interest, in the
applicable PI Agreement.
"First Issuance Date" means December 13, 1995.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity in the United States of
America or any applicable foreign jurisdiction that exercises executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" means any agreement or arrangement by which any Person directly
or indirectly guarantees, endorses, agrees to purchase or otherwise becomes
contingently liable upon any liability of any other Person (other than by
endorsements of instruments in the course of collection) or guarantees the
payment of distributions upon the shares of any other Person.
"Highest Bid" means the highest cash purchase offer for a Series received
by Servicer pursuant to Section 12.1 of the Pooling Agreement.
"Holdback Account" is defined in Section 4.2 of the Pooling Agreement.
"Holder" means the Person in whose name a Certificate is registered in the
Certificate Register or a Person who holds a Purchased Interest.
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"Howmet" means Howmet Corporation, a Delaware corporation.
"Howmet Person" means Howmet and each of its Affiliates (other than
Transferor).
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of Howmet, any qualification or exception to such opinion or certification that
is of a "going concern" or similar nature.
"Indebtedness" of any Person means all of that Person's obligations for
borrowed money, obligations evidenced by bonds, debentures, notes or other
similar instruments, obligations as lessee under leases that are required by
GAAP to be recorded as capitalized leases and obligations to pay the deferred
purchase price of property or services.
"Indemnified Losses" is defined in Section 7.3 of the Pooling Agreement.
"Indemnified Party" is defined in Section 7.3 of the Pooling Agreement.
"Initial Cut-Off Date" means the Business Day immediately preceding the
First Issuance Date.
"Intercreditor Agreement" means an intercreditor agreement, in form and
substance satisfactory to the Trustee, between the Trustee and a secured
creditor of a Seller.
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Invested Amount" is defined, with respect to any Series or Purchased
Interest, in the related Supplement or PI Agreement.
"Investor Certificateholder" means the Person in whose name an Investor
Certificate is registered in the Certificate Register.
"Investor Certificates" means the Certificates issued pursuant to any
Supplement.
"Investor Exchange" is defined in Section 6.10(a) of the Pooling
Agreement.
"Issuance" is defined in Section 6.10(a) of the Pooling Agreement.
"Issuance Date" is defined in Section 6.10(b) of the Pooling Agreement.
"Issuance Notice" is defined in Section 6.10(b) of the Pooling Agreement.
"Lead Placement Agent" means any Person designated as such by Transferor
in connection with the issuance of any Investor Certificates.
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"Letter of Representations" means the agreement among Transferor, Trustee
and the applicable Clearing Agency, with respect to any Book-Entry Certificates,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Lockbox Accounts" means the bank accounts, maintained at those certain
locations described in Schedule 1 to the Pooling Agreement, into which
Collections from Receivables are deposited, and any bank account that is
hereafter created in accordance with, and to perform the functions contemplated
for ""Lockbox Accounts" in, Section 3.3 of the Pooling Agreement.
"Lockbox Agreement" means any of the letter agreements delivered in
connection with the Pooling Agreement and any other letter agreement,
substantially in the form of Exhibit A to the Pooling Agreement (or such other
form as to which the Modification Condition is satisfied), among a Lockbox Bank,
one or more Sellers, Servicer and Trustee that relates to one or more Lockbox
Accounts, as they may be amended, supplemented or otherwise modified from time
to time.
"Lockbox Bank" means any of the banks at which one or more Lockbox
Accounts are maintained from time to time.
"Loss to Liquidation Ratio" means, as calculated in each Monthly Report, a
fraction (a) the numerator of which is the aggregate Unpaid Balance of
Receivables (net of recoveries) that were written off as uncollectible or
(without duplication) converted into promissory notes during the three preceding
Calculation Periods in accordance with the Credit and Collection Policy, and (b)
the denominator of which is the aggregate amount of collections on the
Receivables received during such three Calculation periods.
"Majority Investors" means Holders of Investor Certificates and Purchasers
that collectively evidence more than 50% of the outstanding principal amount of
all Investor Certificates and Purchased Interests.
"Mandatory Terminating Seller" is defined in Section 1.8(c) of the
Purchase Agreement.
"Master Collection Account" is defined in Section 4.2 of the Pooling
Agreement.
"Material Adverse Effect" means, with respect to Transferor, any Howmet
Person, any Servicer and any event or circumstance at any time, a material
adverse effect on (a) the ability of that Person to perform its obligations
under any Transaction Document in any material respect or (b) the validity,
enforceability or collectibility of any Receivables, Related Assets or Contracts
that, individually or in the aggregate, represent or evidence a right to payment
in excess of 5% of the aggregate Unpaid Balance of the Receivables at such time;
provided, that for the purpose of determining whether any Adverse Claim or other
event
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would result in a Material Adverse Effect, the effect of such event or
circumstance shall be considered in the aggregate with the effect of all other
Adverse Claims (including Permitted Adverse Claims) or other events and
circumstances occurring or existing at the time of such determination.
"Member Organization" is defined in Section 6.11(c) of the Pooling
Agreement.
"Modification Condition" means, with respect to any action, that each
Rating Agency has confirmed in writing that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series with respect to
which it is a Rating Agency, or if no outstanding Investor Certificates have
been rated, the Trustee shall have consented in writing to such action;
provided, however, that the definition may be modified by a Supplement or PI
Agreement with respect to the related Series or Purchased Interest and
subsequent Series and Purchased Interests.
"Monthly Report" is defined in Section 3.5(d) of the Pooling Agreement.
"Net Invested Amount" is defined, for purposes of any Series, in the
applicable Supplement.
"New Issuance" is defined in Section 6.10(a) of the Pooling Agreement.
"Noncomplying Receivables and Dilution Adjustment" is defined in Section
3.1(b) of the Purchase Agreement.
"Obligations" means (a) all obligations of Buyer, the Sellers and the
Servicer to the Trustee, the Trust, any other Indemnified Party, the Investor
Certificateholders and their respective successors, permitted transferees and
assigns, arising under or in connection with the Transaction Documents, and (b)
all obligations of a Seller to Buyer, any other RPA Indemnified Party and their
respective successors, transferees and assigns, arising under or in connection
with the Transaction Documents, in each case howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.
"Obligor" means a Person obligated to make payments on a Receivable.
"Officer's Certificate" means, unless otherwise specified in the Pooling
Agreement or in any Supplement, a certificate signed by an Authorized Officer of
Transferor or the initial Servicer, as the case may be, or, in the case of a
Successor Servicer, a certificate signed by the President, any Vice President,
Assistant Treasurer or the financial controller (or an officer holding an office
with equivalent or more senior responsibilities) of such Successor Servicer,
that, in the case of any of the foregoing, is delivered to Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who shall be
reasonably acceptable to Trustee and, if any outstanding Investor Certificates
have been rated and if the Rating Agencies are addressees, the Rating Agencies.
"Paying Agent" means any paying agent appointed pursuant to Section 6.6 of
the Pooling Agreement and shall initially be Trustee.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Adverse Claims" means (a) ownership or security interests
arising under the Transaction Documents, (b) liens for taxes, assessments or
charges of any governmental authority (other than Tax or ERISA Liens) and liens
of landlords, carriers, warehousemen, mechanics and materialmen imposed by law
in the ordinary course of business, in each case (i) for amounts not yet due or
(ii) which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP, provided that the aggregate amount secured
by all liens referred to in this clause (ii) does not exceed $1,000,000 (or for
purposes of any Series or Purchased Interest, any different amount that may be
specified in the applicable Supplement or PI Agreement) and (c) any Tax or ERISA
Lien, the existence of which does not give rise to an Early Amortization Event.
"Permitted Terminating Seller" is defined in Section 1.8(a) of the Pooling
Agreement.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"PI Agreement" means an agreement or agreements executed and delivered in
connection with the sale of a Purchased Interest, as amended, supplemented or
otherwise modified from time to time.
"Pooling Agreement" means the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 among Transferor, as transferor, Howmet,
as Servicer, and Trustee, as it may be amended, supplemented or otherwise
modified from time to time.
"Previously Terminated Seller Amount" is defined in Section 1.8 of the
Purchase Agreement.
"Principal Funding Account" is defined in Section 4.2 of the Pooling
Agreement.
"Private Holder" shall mean, in respect of any Certificate or Purchased
Interest, each holder of a right (including a participation right) to receive
interest, principal or other
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payments with respect to such Certificate or Purchased Interest or any other
right which the Transferor reasonably determines would be treated as an interest
in a partnership within the meaning of Treasury Regulation Section 1.7704-1
assuming the Trust were classified as a partnership for Federal income tax
purposes, other than certificates (or other such interests) with respect to
which an opinion is rendered that such certificates (or other such interests)
will be treated as debt for federal income tax purposes and any holder of a
right to receive any amount in respect of the Transferor Certificate. A Person
holding more than one interest in the Trust, each of which separately would
cause such Person to be a Private Holder, shall be treated as a single Private
Holder. Any Person that owns an interest in a Private Holder that is or would be
a partnership, an S corporation or a grantor trust under the Internal Revenue
Code (as reasonably determined by Transferor) shall be treated as a Private
Holder.
"Pro Forma Financial Data" is defined in Section 5.1(i) of the Purchase
Agreement.
"Process Agent" is defined in Section 10.7 of the Purchase Agreement.
"Program" means the transactions contemplated in the Transaction
Documents.
"Publication Date" is defined in Section 9.3(a) of the Pooling Agreement.
"Purchase" means each purchase of Receivables and Related Assets by
Transferor from a Seller under the Purchase Agreement.
"Purchase Agreement" means the Amended and Restated Receivables Purchase
Agreement, dated as of April 18, 1996, among the Sellers and Transferor, as it
may be amended, supplemented or otherwise modified from time to time.
"Purchase Date" is defined in Section 6.10(g) of the Pooling Agreement.
"Purchase Discount Reserve Ratio" is defined in Section 2.2(b) of the
Purchase Agreement.
"Purchase Price" is defined in Section 2.1(b) of the Purchase Agreement.
"Purchase Price Credit" is defined in Section 3.1(d) of the Purchase
Agreement.
"Purchase Price Percentage" is defined in Section 2.2(a) of the Purchase
Agreement.
"Purchase Termination Date" means the earlier to occur of (a) the date
specified by the Sellers pursuant to Section 8.1 of the Purchase Agreement and
(b) any event referred to in Section 8.2 of the Purchase Agreement.
"Purchased Assets" is defined in Section 1.1 of the Purchase Agreement.
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"Purchased Interest" is defined in Section 4.1 of the Pooling Agreement.
"Purchased Receivables" is defined in Section 1.1 of the Purchase
Agreement.
"Purchaser" means a purchaser, or any owner by permitted assignment, of a
Purchased Interest.
"Rating Agency" means each statistical rating agency, if any, that, at the
request of the Seller or Transferor, has rated any then-issued and outstanding
Series of Investor Certificates.
"Receivable" means, for purposes of any Series (unless otherwise specified
in the related Supplement), any right of any Seller to payment, whether
constituting an account, chattel paper, instrument, general intangible or
otherwise, arising from the sale of goods, services or future services by such
Seller and includes the right to payment of any interest or finance charges and
other obligations with respect thereto; provided that "Receivable" shall not
include any such right to payment from an Exempt Obligor
"Receivables Pool" means at any time all Receivables then held by the
Trust.
"Record Date" means the Business Day that is three Business Days prior to
a Distribution Date.
"Records" means all Contracts, purchase orders, invoices and other
agreements, documents, books, records and other media for the storage of
information (including tapes, disks, punch cards, computer programs and
databases and related property) maintained by Transferor, the Sellers or
Servicer with respect to the Transferred Assets and/or the related Obligors.
"Recoveries" means all Collections received by the Trust in respect of any
Write-Off held by the Trust.
"Regulation S Book-Entry Certificate" is defined in Section 6.11(c) of the
Pooling Agreement.
"Regulation S Temporary Book-Entry Certificate" is defined in Section
6.11(c) of the Pooling Agreement.
"Related Assets" is defined in Section 1.1 of the Purchase Agreement.
"Related Contributed Assets" is defined in Section 2.1 of any Contribution
Agreement.
"Related Purchased Assets" is defined in Section 1.1 of the Purchase
Agreement.
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"Related Security" means, with respect to any Receivable, (a) all of the
applicable Seller's right, title and interest in and to the goods, if any,
relating to the sale that gave rise to the Receivable, (b) all other security
interests or liens and property subject thereto from time to time purporting to
secure payment of the Receivable, whether pursuant to the Contract related to
the Receivable or otherwise, and (c) all letters of credit, guarantees and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of the Receivable, whether pursuant to the Contract related to
the Receivable or otherwise.
"Related Transferred Assets" is defined in Section 2.1(a) of the Pooling
Agreement.
"Report Date" means the Business Day that is three Business Days prior to
a Distribution Date.
"Repurchase Amount" is defined in Section 12.4 of the Pooling Agreement.
"Repurchase Distribution Date" is defined in Section 12.4 of the Pooling
Agreement.
"Required Investors" means Holders of Investor Certificates and Purchasers
that evidence at least 66-2/3% of the total outstanding principal amount of
Investor Certificates and Purchased Interests; provided, however, that the
definition may be modified by a Supplement or PI Agreement with respect to the
related Series or Purchased Interest and subsequent Series and Purchased
Interests.
"Required Receivables" is defined, for purposes of any Series, in the
applicable Supplement.
"Required Series Holders" means with respect to any action to be taken by
Investor Certificateholders of any Series, unless otherwise specified in a
Supplement with respect to the related Series, Investor Certificateholders that
evidence at least 66-2/3% of the principal amount of those Certificates.
"Responsible Officer" means, when used with respect to Trustee, (a) any
officer within the Corporate Trust Office (or any successor group of Trustee),
including any vice president, assistant vice president or any officer or
assistant trust officer of Trustee customarily performing functions similar to
those performed by the persons who hold the office of vice president, assistant
vice president, or assistant secretary and (b,) any other officer within the
Corporate Trust Office with direct responsibility for the administration of the
Pooling Agreement or to whom any corporate trust matter is referred at Trustee's
Corporate Trust Office because of his knowledge of and familiarity with the
particular subject.
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"Revolving Period" means, with respect to any Series, the period before
the commencement of the earliest of any applicable amortization period,
accumulation period or early amortization period (other than a prepayment
accumulation period with respect to a partial prepayment of any such Series) for
any such Series; provided that the Revolving Period for any such Series shall be
suspended during a prepayment accumulation period with respect to a partial
prepayment of any such Series.
"RPA Indemnified Losses" is defined in Section 9.1 of the Purchase
Agreement.
"RPA Indemnified Party" is defined in Section 9.1 of the Purchase
Agreement.
"S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means each Person from time to time party to the Purchase
Agreement as a "Seller."
"Seller Assignment Certificate" means an assignment by a Seller,
substantially in the form of Exhibit C to the Purchase Agreement, evidencing
Transferor's acquisition of the Receivables (excluding the Contributed
Receivables) and Related Assets generated by the Seller, as it may be amended,
supplemented or otherwise modified from time to time.
"Seller Change Event" is defined in Section 3.5(e) of the Pooling
Agreement.
"Seller Dilution Adjustment" is defined in Section 3.5(b) of the Purchase
Agreement.
"Seller Guaranty" means the Guaranty, dated December 13, 1995, by Howmet
of the Obligations of the other Sellers, as it may be amended, supplemented or
otherwise modified from time to time.
"Seller Maturity Date" is defined in Section 3.2 of the Purchase
Agreement.
"Seller Noncomplying Receivable" means a Transferred Receivable that does
not meet the criteria set forth in the definition of Eligible Receivables.
"Seller Noncomplying Receivables Adjustment" is defined in Section 3.5(a)
of the Purchase Agreement.
"Seller Receivables Review" is defined in Section 6.1(c) of the Purchase
Agreement.
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166
"Seller Transaction Documents" means the Purchase Agreement, the Seller
Assignment Certificates and the Account Agreements.
"Senior Interest" is defined in each Buyer Note.
"Series" means any series of Investor Certificates issued pursuant to
Section 6.10 of the Pooling Agreement.
"Series Collection Allocation Percentage" means, for any Series or
Purchased Interest at any time, the percentage equivalent of a fraction the
numerator of which is the Required Receivables for that Series or Purchased
Interest and the denominator of which is the sum of the Required Receivables for
all then outstanding Series and Purchased Interests.
"Series Interest" is defined in Section 4.1 of the Pooling Agreement.
"Series Loss Allocation Percentage" means, for any Series or Purchased
Interest for purposes of any Monthly Report, the percentage equivalent of a
fraction the numerator of which is the Invested Amount of that Series or
Purchased Interest and the denominator of which is the sum of the Invested
Amounts of all then outstanding Series and Purchased Interests, in each case
determined as of the beginning of the related Calculation Period (or such other
date as may be specified in the related Supplement or PI Agreement).
"Servicer" means at any time the Person then authorized pursuant to
Article III of the Pooling Agreement to service, administer and collect
Receivables and Related Transferred Assets.
"Servicer Default" is defined in Section 10.1 of the Pooling Agreement.
"Service Transfer" is defined in Section 10.2(b) of the Pooling Agreement.
"Servicing Fee" is defined in Section 3.4 of the Pooling Agreement.
"Shared Investor Collections" means any funds identified as such in any
Supplement or PI Agreement.
"Shortfall" is defined, for any Series or Purchased Interest, in the
related Supplement or PI Agreement.
"Specified Assets" is defined in Section 1.1 of the Purchase Agreement.
"Specified Receivables" is defined in Section 1.1 of the Purchase
Agreement.
"Sub-Servicer" is defined in Section 3.1 of the Pooling Agreement.
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167
"Subsidiary" means, with respect to any Person, any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person.
"Successor Servicer" is defined in Section 10.2(a) of the Pooling
Agreement.
"Supplement" means each supplement to the Pooling Agreement executed by
Transferor, Servicer and Trustee to specify the terms of a Series of
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time.
"Tax or ERISA Lien" means a lien arising under Section 6321 of the
Internal Revenue Code or Section 302(f) or 4068 of ERISA.
"Tax Opinion" means, with respect to any action and any Series of Investor
Certificates or Purchased Interest, an Opinion of Counsel meeting the
requirements specified in the related Supplement or PI Agreement.
"Terminating Seller" is defined in Section 1.8(a) of the Purchase
Agreement.
"Termination Effective Date" is defined in Section 1.8(d) of the Purchase
Agreement.
"Termination Notice" is defined in Section 10.1 of the Pooling Agreement.
"Transaction Accounts" is defined in Section 4.2 of the Pooling Agreement.
"Transaction Documents" means the Purchase Agreement, the Pooling
Agreement, the Seller Guaranty, each Supplement, each PI Agreement, each
Contribution Agreement and each other agreement designated as a Transaction
Document in any Supplement or PI Agreement, as the same may from time to time be
amended, supplemented, amended and restated or otherwise modified in accordance
with the terms of the Transaction Documents.
"Transfer Agent and Registrar" means any transfer agent and registrar
appointed pursuant to Section 6.3 of the Pooling Agreement and shall initially
be Trustee.
"Transferor" means Blade Receivables Corporation, a Nevada corporation.
"Transferor Certificate" is defined in Section 4.1 of the Pooling
Agreement, substantially in the form of Exhibit E to the Pooling Agreement, as
such Exhibit may be amended, supplemented or modified from time to time in
accordance with the terms of the Transaction Documents.
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"Transferor Interest" is defined in Section 4.1 of the Pooling Agreement.
"Transferred Assets" is defined in Section 2.1 of the Pooling Agreement.
"Transferred Receivable" is defined in Section 2.1 of the Pooling
Agreement.
"Trust" means the trust created by the Pooling Agreement, which shall be
known as the Blade Receivables Master Trust.
"Trustee" means Manufacturers and Traders Trust Company, in its capacity
as agent for the Certificateholders and the Purchasers, or its
successor-in-interest, or any successor trustee appointed as provided in the
Pooling Agreement.
"Turnover Days" means, at any time, the product of (a) the sum of the
beginning and ending Unpaid Balances of Receivables during the immediately
preceding Calculation Period divided by two, multiplied by (b) the number of
days in the immediately preceding Calculation Period, divided by the aggregate
amount payable pursuant to invoices giving rise to Receivables that were
generated during the preceding Calculation Period.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.
"Unmatured Early Amortization Event" means any event that, with the giving
of notice or lapse of time, or both, would become an Early Amortization Event.
"Unpaid Balance" of any Receivable means at any time the unpaid amount
thereof as shown in the books of Servicer at such time.
"Unrestricted Regulation S Book-Entry Certificate" is defined in Section
6.11(c) of the Pooling Agreement.
"Voluntary Terminating Seller" is defined in Section 1.8(b) of the
Purchase Agreement.
"Write-Off" means any Receivable that, consistent with the applicable
Credit and Collection Policy, has been written off as uncollectible.
"144A Book-Entry Certificate" is defined in Section 6.12(b) of the Pooling
Agreement.
B. Other Interpretative Matters. For purposes of any Transaction Document,
unless otherwise specified therein: (1) accounting terms used and not
specifically defined therein shall be construed in accordance with GAAP; (2)
terms used in Article 9 of the New York
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169
UCC, and not specifically defined in that Transaction Document, are used therein
as defined in such Article 9; (3) the term "including means "including without
limitation," and other forms of the verb "to include" have correlative meanings;
(4) references to any Person include such Person's permitted successors and
assigns; (5) in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding"; (6) the words "hereof", "herein"
and "hereunder" and words of similar import refer to such Transaction Document
as a whole and not to any particular provision of such Transaction Document; (7)
references to "Section ", "Schedule" and "Exhibit" in such Transaction Document
are references to Sections , Schedules and Exhibits in or to such Transaction
Document; (8) the various captions (including any table of contents) are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of such Transaction Document; and (9) references to any statute
or regulation refer to that statute or regulation as amended from time to time,
and include any successor statute or regulation of similar import.
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PROJECT BLADE - TAKE OUT
SERIES 1996-1 SUPPLEMENT
to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
171
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; INCORPORATION OF TERMS ........................... 1
SECTION 1.1 Definitions .......................................... 1
SECTION 1.2 Modification Condition ............................... 22
SECTION 1.3 Incorporation of Terms ............................... 22
ARTICLE II DESIGNATION .................................................. 23
SECTION 2.1 Designation .......................................... 23
SECTION 2.2 Group I .............................................. 23
SECTION 2.3 Investor Ownership Percentage ........................ 23
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS ..................... 24
SECTION 3.1 Conditions to Issuance ............................... 24
SECTION 3.2 Use of Proceeds ...................................... 24
ARTICLE IV PAYMENTS AND ALLOCATIONS ..................................... 24
SECTION 4.1 Interest; Additional Amounts ......................... 24
SECTION 4.2 Daily Calculations and Group Allocations ............. 25
SECTION 4.3 Allocations of Daily Group Collections
(Other Than in a Group Amortization Period) .... 25
SECTION 4.4 Allocations of Daily Group Collections
During a Group Amortization Period ............. 27
SECTION 4.5 Withdrawals from the Equalization Account
and Principal Funding Account .................. 29
SECTION 4.6 Available Subordinated Amount ........................ 29
SECTION 4.7 Write-Offs and Recoveries ............................ 30
SECTION 4.8 Certain Dilution in a Group Amortization Period ...... 31
SECTION 4.9 Optional Early Pay Out ............................... 32
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations 33
SECTION 4.11 Tax Opinion .......................................... 36
SECTION 4.12 Reset of Benchmark Percentages and
Special Concentration Limits ................... 37
ARTICLE V DISTRIBUTIONS AND REPORTS ..................................... 37
SECTION 5.1 Distributions ......................................... 37
SECTION 5.2 Special Distributions on the Refinancing
Date ........................................... 38
SECTION 5.3 Payments in Respect of Transferor
Certificate .................................... 39
SECTION 5.4 Daily Reports and Monthly Reports ..................... 39
172
Page
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SECTION 5.5 Annual Tax Information ............................... 39
SECTION 5.6 Periodic Perfection Certificate ...................... 40
ARTICLE VI EARLY AMORTIZATION EVENTS ................................... 40
SECTION 6.1 Early Amortization Events ............................ 40
SECTION 6.2 Early Amortization Period 43
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES ............... 43
SECTION 7.1 Optional Redemption of Investor Interests ............ 43
SECTION 7.2 Termination .......................................... 44
SECTION 7.3 Indemnification by Transferor ........................ 44
SECTION 7.4 Indemnification by Servicer .......................... 45
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law ........................................ 45
SECTION 8.2 Counterparts ......................................... 45
SECTION 8.3 Severability of Provisions ........................... 46
SECTION 8.4 Amendment, Waiver, Etc. .............................. 46
SECTION 8.5 Trustee .............................................. 46
SECTION 8.6 Instructions in Writing .............................. 46
EXHIBITS
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
EXHIBIT B Form of Daily Report
EXHIBIT C Form of Monthly Report
ii
173
This SERIES 1996-1 SUPPLEMENT, dated as of April 18, 1996 (this
"Supplement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada
corporation, as Transferor, HOWMET CORPORATION, a Delaware corporation
("Howmet"), as Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of December 13,
1995, as amended and restated in its entirety by the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18, 1996 (as the same may be
further amended, supplemented or otherwise modified from time to time, and as
supplemented hereby, the "Pooling Agreement"), among Transferor, Servicer and
Trustee, Transferor may from time to time direct Trustee to issue and
authenticate, on behalf of the Trust, one or more Series of Certificates in one
or more Groups of Series representing undivided interests in the Transferred
Assets. Certain terms applicable to a Series are to be set forth in a
Supplement. This Supplement is a "Supplement" as that term is defined in the
Pooling Agreement.
Pursuant to this Supplement, Transferor and Trustee shall create a Series
of Certificates and specify certain of their terms.
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS
SECTION 1.1 Definitions. (a) Capitalized terms used and not otherwise
defined herein are used as defined in Appendix A to the Pooling Agreement. This
Supplement shall be interpreted in accordance with the conventions set forth in
Part B of that Appendix A.
(b) Each reference in this Supplement to funds on deposit in the Carrying
Cost Account, the Equalization Account or the Principal Funding Account (or
similar phrase) refers only to funds in the administrative sub-accounts of those
Accounts that are allocated to the Series in Group I. Unless the context
otherwise requires, in this Supplement: (i) each reference to a "Dally Report"
or "Monthly Report" refers to a Dally Report or Monthly Report for Group I; (ii)
each reference to the "Servicing Fee" refers to the Servicing Fee allocable to
Group I; (iii) each reference to the "Series Collection Allocation Percentage"
or the "Series Loss Allocation Percentage" refers to Group I's Series Collection
Allocation Percentage or Series Loss Allocation Percentage, and (iv) each
reference to the Transaction Documents shall include a reference to the
Certificate Purchase Agreements.
(c) Each capitalized term defined below relates only to the Series 1996-1
Certificates and to no other Series of Certificates (except to the extent that
certain of such terms are explicitly used as defined herein in any Supplement
relating to another Series in Group I). Whenever used in this Supplement, the
following words and phrases shall have the following meanings:
174
"ABR Tranche" means, at any time, the portion of the Series 1996-I
Invested Amount that is designated by Transferor in accordance with a
Certificate Purchase Agreement to accrue interest based on the Alternate Base
Rate.
"Acquisition Amount" is defined in Section 2.3.
"Additional Amounts" means (a) as to the Series 1996-1 Certificates, the
Prepayment Premium and other amounts payable pursuant to Sections 4.3, 4.5, 4.6
and 10.5 of the Class A Certificate Purchase Agreement and amounts payable
pursuant to Sections 4.3, 4.5, 4.6 and 10.5 of the Class B Certificate Purchase
Agreement, and (b) as to any other Series in Group I, any amounts identified as
"Additional Amounts" in the related Supplement.
"Adjusted Eligible Receivables" means, on any Business Day, the result of
(a) the aggregate Unpaid Balance of Eligible Receivables held by the Trust on
that day, minus (b) the Unapplied Cash held by the Trust on that day, plus (c)
the Aggregate Retained Balances, in each case as shown in the Daily Report for
such day.
"Affected Party" shall mean, with respect to any Structured Lender, any
Support Bank of such Structured Lender.
"Aged Receivables Ratio" means, as calculated in each Monthly Report as of
the Cut-Off Date for the related Calculation Period, a fraction (expressed as a
percentage) having (a) a numerator that is the sum of (i) the aggregate Unpaid
Balance of Receivables that remained outstanding 121 to 150 days after their
respective due dates, as determined as of the Cut-Off Date for such Calculation
Period, plus (ii) the aggregate Unpaid Balance of Receivables that were written
off as uncollectible during the most recently ended Calculation Period and that,
if not so written off, would have been outstanding not more than 120 days after
their respective due dates, as determined as of that Cut-Off Date, and (b) a
denominator that is the aggregate amount payable pursuant to invoices giving
rise to Receivables that were generated during the Calculation Period that
occurred five Calculation Periods prior to the most recently ended Calculation
Period. as determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means The First National Bank of Chicago, in its capacity as Agent
under (and as defined in) the Certificate Purchase Agreements, together with its
respective successors in such capacity. The Agent is an "Agent" for purposes of
the Pooling Agreement.
"Aggregate Retained Balances" means, on any Business Day, the aggregate of
the balances retained in Lockbox Accounts or Concentration Accounts for items in
the process of collection but for which funds have not been made available by
the related Lockbox Bank or Concentration Account Bank, provided that (i) no
notice of insufficient funds or similar
2
175
situation shall exist with respect thereto and (ii) the Unpaid Balance of
Receivables shall have been reduced by an amount equal to such balances.
"Alternate Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest announced, from time to time, by Agent as its
prime commercial rate for United States dollar loans made in the
United States for any day, and
(b) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime commercial
rate announced by the Agent shall become effective without prior notice to
Transferor or the Servicer as of 12:01 a.m., New York City time, on the Business
Day on which each change in the prime commercial rate is announced by the Agent.
The prime commercial rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged by the Agent to any customer. The Agent
may make commercial loans or other loans at rates of interest at, above or below
the prime commercial rate.
"Amortization Period" means the period (x) beginning on the earlier of (i)
the date on which a termination notice is given by the Sellers pursuant to
Section 8.1 of the Purchase Agreement and (ii) the first day of the Calculation
Period that begins on June 1, 2000, and (y) ending on the earlier of (i) the
Expected Final Payment Date and (ii) the date, if any, on which an Early
Amortization Period begins; provided that there will be no Amortization Period
if an Early Amortization Period commences on or prior to the date specified
above for the beginning of the Amortization Period.
"Applicable Ratings Factor" means the Class A Ratings Factor or the Class
B Ratings Factor, as specified in each calculation where the Applicable Ratings
Factor is used.
"Approval Condition" means, with respect to any event or change in the
terms applicable to this Supplement or the Series 1996-I Certificates, such
event or change shall have been approved in writing, prior to becoming
effective, by the Agent and the Majority Class B Purchasers.
"ASA Measuring Period" means, for any Cut-Off Date falling in a Group
Amortization Period, the Calculation Period ending on that Cut-Off Date (or the
portion thereof falling after the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization Period).
"Available Subordinated Amount" means, at any time during a Group
Amortization Period, the amount calculated pursuant to Section 4.6.
3
176
"Base Amount" means, on any Business Day, the result of the following
formula:
[NER x SCAP x (100%-CBRR)]-CASD-CCRR
where:
NER = the Net Eligible Receivables as reported in the Daily Report for
that Business Day;
SCAP = the Series Collection Allocation Percentage for that Business Day;
CBRR = the Class B Reserve Ratio in effect for that Business Day;
CASD = the Class A Subordination Deficit for that Business Day; and
CCRR = the Carrying Cost Receivables Reserve as reported in the Daily
Report for such day.
"Basic Concentration Limit" means, with respect to a Concentration Unit on
any day, (i) if such Concentration Unit includes a Special Obligor, the Special
Concentration Limit for such Special Obligor, and (ii) otherwise, the
Concentration Limit applicable to the Parent for such Concentration Unit.
"Carrying Cost Receivables Reserve" means, on any Business Day, the result
of:
(a) the Current Carrying Costs; plus
(b) the product of (i) the Class A Invested Amount, multiplied by
(ii) 1.5 times the weighted average of the interest rates on Class A
Certificates, multiplied by (iii) a fraction the numerator of which is the
product of two and the number of Turnover Days and the denominator of
which is 360; plus
(c) the product of (i) the Class B Invested Amount, multiplied by
(ii) 1.5 times the weighted average of the interest rates on the Class B
Certificates, multiplied by (iii) a fraction the numerator of which is the
product of two and the number of Turnover Days and the denominator of
which is 360; plus
(d) the product of (i) the Series Collection Allocation Percentage
on the next preceding Distribution Date, multiplied by (ii) the aggregate
Unpaid Balance of Receivables on the next preceding Distribution Date,
multiplied by (iii) 2%, multiplied by (iv) a fraction the numerator of
which is the product of two and the number of Turnover Days and the
denominator of which is 360; plus
(e) if there is any Series in Group I in addition to the Series
1996-1 Certificates, the Carrying Cost Receivables Reserve Increments for
each such other Series in Group I (as defined, and calculated as provided,
in the related Supplement); minus
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(f) the balance on deposit in the Carrying Cost Account at the
beginning of that Business Day.
"Category One Balance" is defined in Section 4.10.
"Category One Eligibles" is defined in Section 4.10.
"Category One Obligors" means the following persons: Alfa Romeo Avio
S.p.A., ABB Power Generation Ltd., Boeing Canada Technology Ltd., Fiat Avio
S.p.A., General Electric Canada Inc., Hitachi Ltd., KLM Royal Dutch Airlines,
Mitsubishi Heavy Industries America, Inc., Mitsui & Co. USA, Inc., Motoren-Und
Turbinen-Union Munchen GmbH, Pratt & Whitney Canada Inc., Rolls-Royce PLC,
Siemens A.G. KWU, and Walbar of Canada Inc.
"Category Three Balance" is defined in Section 4.10.
"Category Three Eligibles" is defined in Section 4.10.
"Category Three Excess Concentration" is defined in Section 4.10.
"Category Three Obligors" means Foreign Obligors that are not Category One
Obligors or Category Two Obligors.
"Category Two Balance" is defined in Section 4.10.
"Category Two Eligibles" is defined in Section 4.10.
"Category Two Excess Concentration" is defined in Section 4.10.
"Category Two Obligors" means Foreign Obligors (other than Category One
Obligors) with principal places of business in Canada, Germany, Italy,
Netherlands, Switzerland, England or Sweden.
"Certificate Purchase Agreements" means the Class A Certificate Purchase
Agreement and the Class B Certificate Purchase Agreement.
"Certificate Rate" means, at any time, the weighted average of the
interest rates on all outstanding Series 1996-1 Certificates at that time.
"Certificate Spread" means:
(a) with respect to the Class A Certificates, (i) .50% per annum in
the case of Eurodollar Tranches, and (ii) 0% per annum in the case of the
ABR Tranche; and
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(b) with respect to the Class B Certificates, (i) .80% per annum in
the case of the Eurodollar Tranche, and (ii) 0% per annum in the case of
the ABR Tranche.
"Class A Certificate" is defined in Section 2.1. Each Class A Certificate
shall be substantially in the form of Part 1 of Exhibit A.
"Class A Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class A) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class A Certificates and the Agent.
"Class A Concentration Factor" means, as of any Cut-Off Date, the greatest
of:
(i) 1.333 times the "Benchmark Percentage" for purposes of clause
(c) of the definition of "Concentration Limit,"
(ii) two times the "Benchmark Percentage" for purposes of clause (d)
of that definition, and
(iii) the sum of (A) all Special Concentration Limits, if any, plus
(B) the product of (x) the "Benchmark Percentage" for purposes of clause
(e) of the definition of Concentration Limit times (y) the excess of four
over the number of Special Obligors.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made pursuant to the Class A Certificate
Purchase Agreement at or prior to that time, reduced (but not below zero) by (a)
the aggregate amount of all distributions that have been made to the Holders of
the Class A Certificates on account of principal, and (b) the amount of all
Investor Write-Offs that have been applied to reduce the Class A Invested Amount
(net of Investor Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the Class A Invested Amount).
"Class A Minimum Reserve Ratio" means the sum, as of any Cut-Off Date, of
(a) the Class A Concentration Factor for that Cut-Off Date plus (b) the product
of the average of the Dilution Ratios for the period of 12 preceding Calculation
Periods ending on that Cut-Off Date, multiplied by the Dilution Horizon Variable
for that Cut-Off Date.
"Class A Purchases" means Purchases made in respect of Class A
Certificates.
"Class A Ratings Factor" means 2.0.
"Class A Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class A Ratings Factor.
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"Class A Required Reserves" means, at any time, the product of (a) the Net
Eligible Receivables multiplied by (b) the Class A Reserve Ratio multiplied by
(c) the Series Collection Allocation Percentage.
"Class A Reserve Ratio" means, during any Distribution Period, the greater
of (a) the Class A Minimum Reserve Ratio and (b) the Class A Required Reserve
Ratio, each as calculated in the Monthly Report required to be delivered on the
Report Date immediately prior to the start of that Distribution Period; provided
that during the period from the date hereof to the first Distribution Date
thereafter the Class A Reserve Ratio shall be 26.01%.
"Class A Subordination Deficit" means, on any Business Day, the positive
result (if any) of (a) the Class A Required Reserves, minus (b) the sum of (i)
the Class B Required Reserves plus (ii) the outstanding principal amount of all
Subordinated Classes (all calculated as of the beginning of that Business Day);
provided that at any time when no Senior Class is outstanding the Class A
Subordination Deficit shall equal zero.
"Class B Certificate" is defined in Section 2.1. Each Class B Certificate
shall be substantially in the form of Part 2 of Exhibit A.
"Class B Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class B) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class B Certificates and the Agent.
"Class B Concentration Factor" means, as of any Cut-Off Date, the greatest
of:
(i) the "Benchmark Percentage" for purposes of clause (c) of the
definition of "Concentration Limit,"
(ii) 1.5 times the "Benchmark Percentage" for purposes of clause (d)
of the definition of "Concentration Limit," and
(iii) the sum of (A) all Special Concentration Limits, if any, plus
(B) the product of (x) the "Benchmark Percentage" for purposes of clause
(e) of the definition of Concentration Limit times the excess (if any) of
2.75 over the number of Special Obligors.
"Class B Invested Amount" means, at any time, the sum of the purchase
prices paid for Class B Purchases made pursuant to (and as defined in) the Class
B Certificate Purchase Agreement at or prior to that time, reduced (but not
below zero) by (a) the aggregate amount of all distributions that have been made
to the Holders of the Class B Certificates on account of principal, and (b) the
amount of all Investor Write-Offs that have been applied to reduce
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the Class B Invested Amount (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to reinstate the Class B
Invested Amount).
"Class B Minimum Reserve Ratio" means the sum, as of any Cut-Off Date, of
(a) the Class B Concentration Factor for that Cut-Off Date plus (b) the product
of the average of the Dilution Ratios for the period of 12 preceding Calculation
Periods ending on that Cut-Off Date, multiplied by the Dilution Horizon Variable
for that Cut-Off Date; provided that in no event shall the Class B Minimum
Reserve Ratio be less than 15%.
"Class B Purchases" means Purchases made in respect of Class B
Certificates.
"Class B Ratings Factor" means 1.5.
"Class B Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class B Ratings Factor.
"Class B Required Reserves" means, at any time, the product of (a) the Net
Eligible Receivables multiplied by (b) the Class B Reserve Ratio multiplied by
(c) the Series Collection Allocation Percentage.
"Class B Reserve Ratio" means, during any Distribution Period, the greater
of (a) the Class B Minimum Reserve Ratio and (b) the Class B Required Reserve
Ratio, each as calculated in the Monthly Report required to be delivered on the
Report Date immediately prior to the start of that Distribution Period, provided
that during the period from the date hereof to the first Distribution Date
thereafter the Class B Reserve Ratio shall be 21.01%.
"Class Invested Amount" means (a) with respect to Class A, the Class A
Invested Amount, (b) with respect to Class B, the Class B Invested Amount and
(c) with respect to any other Senior Class or Subordinated Class of
Certificates, the amount identified as its "Class Invested Amount" in the
Supplement for such Senior Class or Subordinated Class of Certificates.
"Concentration Limit" means:
(a) 100% for any Tier-1 Obligor;
(b) 100% for any Tier-2 Obligor;
(c) 15% for any Tier-3 Obligor;
(d) 10% for any Tier-4 Obligor; and
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(e) 4% for any Tier-5 Obligor
Each of the percentages above is called a "Benchmark Percentage".
"Concentration Unit Excess Concentration" is defined in Section 4.10.
"Concentration Unit" means, on any day, each Obligor and its Affiliates,
if any, that are Obligors; it being understood that each Obligor shall belong to
only one Concentration Unit, and that a single Obligor can be a Concentration
Unit.
"Current Carrying Costs" means, during any Distribution Period, the sum of
(i) the amount of interest on the Series 1996-1 Certificates that will be
payable on the next Interest Payment Date and any other Interest Payment Date
falling not later than one week after such Interest Payment Date, (ii) the
amount of the Servicing Fee that will be payable on or before the next
Distribution Date plus (iii) the Current Carrying Costs Increments for each
other Series in Group I (as defined, and calculated as provided in, the
Supplement for each such Series.)
"Daily Group Collections" is defined in Section 4.2.
"Deferred Portion" means, on any day with respect to Group I, the portion
of the Acquisition Amount for the Series of Certificates in Group I as to which
payment has been deferred, which portion shall equal the product of (a) the
Series Collection Allocation Percentage times (b) the sum of the following
amounts (as shown in the Dally Report for such day): (i) the Excess
Concentration Balances, plus (ii) the aggregate unpaid balance of Receivables
that are not Eligible Receivables (including any such Receivables that are
ineligible due to the attachment of Adverse Claims), plus (iii) the Carrying
Cost Receivables Reserve, plus (iv) the Class B Reserve Ratio times the Net
Eligible Receivables, plus (v) the Class A Subordination Deficit (it being
understood that the Deferred Portion may vary from day to day); provided that
the Deferred Portion shall be fixed as of the Group Amortization Calculation
Date.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
giving rise to Receivables and generated during the two Calculation Periods
ending on the most recent Cut-Off Date (as of that Cut-Off Date) and (b) a
denominator equal to the Adjusted Eligible Receivables as of the most recent
Cut-Off Date.
"Dilution Ratio" means, as calculated in each Monthly Report as of the
most recent Cut-Off Date, a fraction (expressed as a percentage) having (a) a
numerator equal to the aggregate amount of Dilution on the Receivables occurring
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated during the second preceding Calculation
Period (so that, for example, if the Calculation Period
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specified in clause (a) corresponded to the March fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the January fiscal
month).
"Dilution Reserve Ratio" means as calculated in each Monthly Report, the
result (expressed as a percentage) calculated in accordance with the following
formula:
{(ARF x ADR) + [(HDR-ADR) x (HDR/ADR)]} x DHV
where:
ADR = the average of the Dilution Ratios during the period of 12
consecutive Calculation Periods ending on the related Cut-Off Date;
ARF = the Applicable Ratings Factor;
DHV = the Dilution Horizon Variable; and
HDR = the highest average of the Dilution Ratios for any two consecutive
Calculation Periods within the 12 consecutive Calculation Periods
ending on the related Cut-Off Date.
"Distribution Period" means a period from and including a Distribution
Date to but excluding the next Distribution Date.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 6.2 and ending on the day on which the Series Invested
Amount has been reduced to zero. The term "Early Amortization Period" means each
of the Early Amortization Period and any period identified as an "Early
Amortization Period" in the Supplement for any other Series in Group I.
"Eurodollar Tranche" means, during any Interest Period, any portion of the
Series 1996-1 Invested Amount that is designated by Transferor in accordance
with a Certificate Purchase Agreement to accrue interest based on the
Reserve-Adjusted Eurodollar Rate.
"Excess Concentration Balances" means, on any day, the sum of (i) the sum
of the Concentration Unit Excess Concentrations for all Groups, plus (ii) the
Category Two Excess Concentration, plus (iii) the Category Three Excess
Concentration, plus (iv) the Total Foreign Concentration Excess.
"Excess Foreign Obligor Balances" is defined in Section 4.10.
"Expected Final Payment Date" means December 15, 2000.
"Federal Funds Rate" means (a) the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the day (or, if the day is
not a Business Day, the immediately
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preceding Business Day) by the Federal Reserve Bank of New York; provided that
if the rate is not so published for any Business Day, the rate for purposes of
this clause will be the average of the quotations for the day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it, pius (b) 100 basis points.
"Final Scheduled Payment Date" means December 15, 2001.
"First Step Excess" is defined in Section 4.10.
"First Step Residual" is defined in Section 4.10.
"Foreign Obligor" is defined in Section 4.10.
"Fourth Step Excess" is defined in Section 4.10.
"Fully Funded Date" means the first date falling in a Group Amortization
Period or when all Series in Group I are in a Series Amortization Period and on
which there are funds on deposit in the Carrying Cost Account and the Principal
Funding Account that, in the aggregate, equal or exceed the Investor Repayment
Amount and any Servicing Fee payable to anyone other than a Howmet Person on the
first Distribution Date falling after that date.
"Group Amortization Calculation Date" means the day before a Group
Amortization Period begins.
"Group Amortization Period" means the period (if any) commencing on the
first day on which all outstanding Series in Group I are in Early Amortization
Periods.
"Group Initial Invested Amount" means, at any time, the sum of the Series
Initial Invested Amounts of each Series in Group I at that time.
"Group Invested Amount" means, at any time, the sum of the Series Invested
Amounts of each Series in Group I at that time.
"Group I" means a group of Series, including Series 1996-1 and each other
Series that is identified in its Supplement as belonging to Group I.
"Guarantor" means Howmet, in its capacity as the guarantor under the
Seller Guaranty.
"Holdback Account Termination Date" is defined in Section 4.4.
"Holder" means a Holder (as defined in the Pooling Agreement) of a
Certificate in any Series in Group I.
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"Howmet" is defined in the preamble.
"Howmet Credit Agreement" means the Credit Agreement dated as of December
13, 1995 among Blade Acquisition Corp., Howmet Holdings Acquisition Corp.,
Howmet Acquisition Corp., the financial institutions named therein and The First
National Bank of Chicago, as Administrative Agent and a Managing Agent, Bankers
Trust Company, as Syndication Agent and a Managing Agent, and Citicorp USA,
Inc., as Documentation Agent and a Managing Agent. as the same may from time to
time be amended or supplemented.
"Intercreditor Provisions" means the following provisions of the Howmet
Credit Agreement (as such Agreement was in effect on the Closing Date): Section
9.12 and the definitions of Intercreditor Agreement, Investor Certificates,
Purchased Interest, Receivables Amendment Conditions, Receivables Bridge
Facility, Receivables Documents, Receivables Facility, Receivables Facility
Assets, Receivables Maximum Funded Amount, Receivables Pooling Agreement,
Receivables Purchasers, Receivables Stated Amount and Receivables Subsidiary.
"Interest Payment Date" means (a) as to the Series 1996-1 Certificates,
any date upon which interest is payable with respect to the ABR Tranche or any
Eurodollar Tranche, as specified in Section 4.1, and (b) as to any interest
payable on any other Series in Group I, the date specified as the "Interest
Payment Date" in the related Supplement.
"Interest Period" means
(a) for Class A Certificates, (i) as to the ABR Tranche (if any)
from time to time, (x) the period from the date hereof to, but excluding,
the first subsequent Distribution Date and (y) each Distribution Period
thereafter and (ii) as to each Eurodollar Tranche (if any) from time to
time, each period from the date upon which that Eurodollar Tranche was
first designated as such pursuant to the Class A Certificate Purchase
Agreement (or the end of the next preceding Interest Period for the
Eurodollar Tranche, if there has been one) to the date that is one month,
two months or three months, at the option of Transferor, thereafter; and
if any Interest Period for a Eurodollar Tranche would otherwise end on a
day that is not a Business Day, the Eurodollar Tranche shall instead end
on the next Business Day (or, if the next Business Day falls in the next
calendar month, then on the next preceding Business Day); and
(b) for Class B Certificates, (i) as to the ABR Tranche (if any)
from time to time, (x) the period from the date hereof to, but excluding,
the first subsequent Distribution Date and (y) each Distribution Period
thereafter and (ii) as to the Eurodollar Tranche (if any) from time to
time, each period from the date upon which the Eurodollar Tranche was
first designated as such pursuant to the Class B Certificate Purchase
Agreement (or the end of the next preceding Interest Period for
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the Eurodollar Tranche, if there has been one) to the date that is one
month, two months or three months, at the option of Transferor,
thereafter; and if any Interest Period for the Eurodollar Tranche would
otherwise end on a day that is not a Business Day, the Eurodollar Tranche
shall instead end on the next Business Day (or, if the next Business Day
falls in the next calendar month, then on the next preceding Business
Day).
"Invested Amount" means, at any time:
(a) for purposes of calculating the Series Loss Allocation
Percentage for Group I, the Group Invested Amount; and
(b) for purposes of the application of Sections 6.13 and 12.4 of the
Pooling Agreement to the Series 1996-1 Certificates, the Series 1996-1
Invested Amount.
"Investor Allocable Dilution" means, for any ASA Measuring Period, the
product of the aggregate amount of Dilution for that ASA Measuring Period as to
which neither the applicable Seller nor the Guarantor has made any payment
required by Section 3.1 of the Purchase Agreement or the Seller Guaranty on
account of Seller Dilution Adjustments, multiplied by the Series Loss Allocation
Percentage as of the beginning of that ASA Measuring Period, multiplied by the
Investor Allocation Percentage as of the first Business Day of that ASA
Measuring Period.
"Investor Allocable Dilution Adjustments" is defined in Section 4.8.
"Investor Allocable Loss Amount" means, for any ASA Measuring Period, the
product of the Loss Amount for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the beginning of
that ASA Measuring Period.
"Investor Allocable Recoveries" means, for any ASA Measuring Period, the
product of the Net Recoveries for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the first
Business Day of that ASA Measuring Period.
"Investor Allocation Percentage" means:
(x) on any Business Day that does not fall in a Series Amortization
Period, a fraction (expressed as a percentage, which in any event may not
exceed 100%) (a) the numerator of which is the Net Invested Amount as of
that Business Day, and (b) the denominator of which is the Base Amount as
of that Business Day;
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(y) on any Business Day falling in any Series Amortization Period, a
fraction (expressed as a percentage, which in any event may not exceed
100%) (a) the numerator of which is the Net Invested Amount as of the
beginning of the Series Amortization Period, and (b) the denominator of
which is the Base Amount as of that Business Day; and
(z) on any Business Day falling in the Group Amortization Period, a
fraction (expressed as a percentage, which in any event may not exceed
100%) (a) the numerator of which is the Net Invested Amount as of the
Group Amortization Calculation Date, and (b) the denominator of which is
the Base Amount as of the Group Amortization Calculation Date.
"Investor Ownership Percentage" means, on any day with respect to Group I,
a fraction (expressed as a percentage, which in any event may not exceed 100%),
(x) the numerator of which is the Acquisition Amount on such day and (y) the
denominator of which is the product of (a) the Series Collection Allocation
Percentage times (b) the excess of (i) the Unpaid Balance of Receivables on such
day over (ii) the Unapplied Cash on such day; provided that the Investor
Ownership Percentage shall be fixed as of the Group Amortization Calculation
Date; and provided further that if the Investor Ownership Percentage is being
calculated on any day when a Series in Group I is in an accumulation,
amortization or early amortization period, the Investor Ownership Percentage
shall not be less than the Investor Ownership Percentage immediately prior to
the commencement of such period.
"Investor Repayment Amount" means, on any Business Day, the sum of (a) the
principal amount of the Series 1996-1 Certificates and all other Series in Group
I then outstanding, plus (b) the interest and any Additional Amounts known to be
payable on the Series 1996-1 Certificates and all other Series in Group I on or
before the first Distribution Date falling after that date.
"Investor Write-Offs" means, as calculated in any Monthly Report relating
to a Calculation Period falling completely or partially in a Group Amortization
Period:
(a) if the Available Subordinated Amount is greater than zero at the
end of the related ASA Measuring Period, zero; and
(b) if the Available Subordinated Amount is zero at the end of the
related ASA Measuring Period (taking into account any reduction in the
Available Subordinated Amount shown in such Monthly Report), the excess
(if any) of (x) the sum of the Investor Allocable Loss Amount and the
Investor Allocable Dilution minus Investor Allocable Recoveries for the
related ASA Measuring Period, over (y) the Available Subordinated Amount
as of the beginning of that ASA Measuring Period.
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"Loss Amount" means, with respect to any ASA Measuring Period, an amount
equal to the positive difference (if any) of (a) the amount of Receivables held
by Trust that became Write-Offs during that ASA Measuring Period, minus (b) the
amount of Recoveries received during that ASA Measuring Period.
"Loss Reserve Ratio" means, as calculated in each Monthly Report, the
result (expressed as a percentage) of (a) the Applicable Ratings Factor
multiplied by (b) the highest average of the Aged Receivables Ratio for any
three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
multiplied by (c) a fraction having (i) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise to Receivables
generated during the four Calculation Periods preceding or ending on the most
recent Cut-Off Date, and (ii) a denominator equal to the Adjusted Eligible
Receivables, as of the most recent Cut-Off Date, multiplied by (d) the Payment
Term Multiplier.
"Majority Class B Purchasers" is defined in Section 8.1 of the Class B
Certificate Purchase Agreement.
"Net Eligible Receivables" means, at any time, (a) the Adjusted Eligible
Receivables, minus (b) the Excess Concentration Balances; it being understood
that the amount of Eligible Receivables will be reduced by Adverse Claims that
attach to Receivables otherwise satisfying the requirements of the definition of
Eligible Receivable.
"Net Invested Amount" means, on any Business Day, the Group Invested
Amount, minus the balance on deposit in the Equalization Account and the
Principal Funding Account with respect to Series in Group I.
"Net Recoveries" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of Recoveries
received in that ASA Measuring Period minus (b) the amount of Receivables that
became Write-Offs in that ASA Measuring Period.
"Note Indenture" means the Indenture dated as of December 13, 1995 by and
between Howmet, as successor to the obligations thereunder of Howmet
Acquisition Corp., and Marine Midland Bank, as Trustee, under and pursuant to
which certain senior subordinated notes have been issued, as the same may at any
time be amended or supplemented.
"Parent" means, with respect to any Concentration Unit, the Domestic
Person in such Concentration Unit that owns or controls (directly or indirectly)
the largest number of other Obligors in such Concentration Unit; provided that
if there is no Domestic Person in such Concentration Unit, "Parent" shall mean
the Obligor in such Concentration Unit that owns or controls (directly or
indirectly) the largest number of other Obligors in such Concentration Unit.
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"Past Due Receivables Ratio" means, as calculated in each Monthly Report
as of the Cut-Off Date, a faction (expressed as a percentage) having (a) a
numerator that is the aggregate Unpaid Balance of Receivables that remain
outstanding 61 to 91 days after their respective due dates, as determined as of
such Cut-Off Date, and (b) a denominator that is the aggregate Unpaid Balance of
Receivables as of such Cut-Off Date.
"Payment Term" shall mean, with respect to any Receivable, the number of
days between its invoice date and its due date.
"Payment Term Multiplier" shall mean (a) 1.0, if the Payment Term Variable
is less than 41. (b) 1.17, if the Payment Term Variable is equal to or more than
41 but less than 51, (c) 1.25, if the Payment Term Variable is equal to or more
than 51 but less than 61, and (d) 1.5, if the Payment Term Variable is equal to
or more than 61 but less than 91; provided, however, that if the Payment Term
Variable equals or exceeds 91, the Payment Term Multiplier for such Receivable
shall be determined by calculating the sum of (x) 1.5, and (y) 0.05, for each
5-day increment by which the Payment Term Variable exceeds 91, it being
understood that the same number shall apply for all Payment Term Variables that
fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each Monthly Report
as of the most recently ended Cut-Off Date, the quotient of:
(x) the sum of (1) the product of the Outstanding Balance of each
Receivable as of such Cut-Off Date times (2) the Payment Term with respect
to such Receivable; divided by
(y) the aggregate Outstanding Balance of all Receivables as of such
Cut-Off Date.
"Prepayment Accumulation Period" means a period beginning on the day that
Transferor gives a Prepayment Notice to Trustee of a prepayment of the Series
1996-1 Certificates pursuant to Section 4.9 (and does not notify Trustee that it
intends to cause the Series Interest to be conveyed as described in subsection
4. 9(b)) and ending on the earlier to occur of (a) the day when amounts
sufficient for that prepayment have been accumulated pursuant to Section 4.3 and
r the end of the Revolving Period for the Series 1996-1 Certificates.
"Prepayment Notice " is defined in Section 4.9.
"Prepayment Premium" means, with respect to any prepayment pursuant to
Section 4.9 or 7.1 or as a result of an Early Amortization Event, the net
present value (as of the date of such prepayment) of the amount of interest that
would have accrued on the amount of principal prepaid from the date of
prepayment through the one year anniversary of the date
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hereof at an interest rate equal to the applicable Certificate Spread in respect
of the Eurodollar Tranche(s), discounted to such prepayment date at a rate per
annum, compounded monthly, equal to the Reserve Adjusted Eurodollar Rate in
effect on the date on which notice of prepayment is given to the Holders of the
Series 1996-1 Certificates being prepaid.
"Principal Deposit Amount" means, with respect to any Series in any
Calculation Period falling in a Series Amortization Period, the amount
determined in accordance with the Supplement for that Series. The Principal
Deposit Amounts for the Series Amortization Periods that may apply to the Series
1996-1 Certificates are:
(a) for any Calculation Period falling in the Amortization Period or
the Early Amortization Period for the Series 1996-1 Certificates, the
Series 1996-1 Invested Amount; and
(b) for any Calculation Period falling in a Prepayment Accumulation
Period for the Series 1996-1 Certificates, the amount of principal to be
prepaid.
"Principal Payment Date" means (a) for the Series 1996-1 Certificates, (i)
any date on which any prepayment is to be made pursuant to Section 4.9, (ii) the
end of each Interest Period in respect of the next maturing Eurodollar Tranche
and/or ABR Tranche, in such order as the Agent shall select so as to minimize
"breakage costs," (iii) each Distribution Date falling in an Early Amortization
Period (beginning with the Distribution Date falling in the Calculation Period
after the Calculation Period in which the Early Amortization Period begins) and
(iv) any Distribution Date falling after the commencement of the Amortization
Period, and (b) for any other Series in Group I, each date specified as a
"Principal Payment Date" in the related Supplement. The Refinancing Date is not
a Principal Payment Date.
"Purchase" means any Purchase as defined in either of the Certificate
Purchase Agreements.
"Reference Bank" means The First National Bank of Chicago.
"Refinancing Date" is defined in subsection 4.9(b).
"Required Purchasers" is defined in Section 9.9 of the Certificate
Purchase Agreements.
"Required Receivables" means, on any Business Day, collectively for all
Series in Group I:
(a) So long as a Group Amortization Period has not commenced, the
result of the following formula:
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GIIA+CCRR R
--------- x ---
(1-CARR) NER
where:
CARR = the Class A Reserve Ratio in effect for that Business Day;
CCRR = the Carrying Cost Receivables Reserve as reported in the Daily
Report for that Business Day;
GIIA = the Group Initial Invested Amount;
NER = the Net Eligible Receivables as reported in the Daily Report
for that Business Day; and
R = the aggregate Unpaid Balance of Receivables held by Trustee
as reported in the Daily Report for that Business Day.
(b) If a Group Amortization Period has commenced, the result of the
following formula:
AGIIA + ASA + UCCRR
where:
AGIIA = the adjusted Group Initial Invested Amount on that Business
Day (which shall equal the Group Initial Invested Amount,
reduced (but not below zero) by the amount of all Investor
Write-Offs (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to
reinstate the Group Invested
Amount));
UCCRR = the Unfunded Carrying Cost Receivables Reserve on that
Business Day; and
ASA = the Available Subordinated Amount on that Business Day.
"Required Series Holders" means the Required Purchasers.
"Reserve-Adjusted Eurodollar Rate" means for any Interest Period, the rate
per annum obtained by dividing (i) the arithmetic average (rounded upward to the
nearest 1/100 of one percent) of the offered quotation, if any, to first class
banks in the interbank Eurodollar market by the Reference Bank for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Investor Certificate of the Reference Bank with maturities comparable to such
Interest Period as of approximately 10:00 a.m. (New York time) on the second
Business Day prior to the first day of that Interest Period by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements
(including any marginal, emergency, supplemental, special or other reserves)
applicable on
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such second preceding Business Day to any member bank of the Federal Reserve
System m respect of "Eurocurrency liabilities" as defined in Regulation D of the
Federal Reserve Board (or any successor category of liabilities under Regulation
D).
"Revolving Period" means, with respect to any Series in Group I, the
period beginning on the Closing Date and ending on the day before the first day
of an accumulation period, an amortization period or an early amortization
period (other than a prepayment accumulation period with respect to a partial
prepayment of such Series) for such Series; provided that the Revolving Period
for such Series shall be suspended during a prepayment accumulation period with
respect to a partial prepayment of such Series.
"Second Step Excess" is defined in Section 4.10.
"Second Step Residual" is defined in Section 4.10.
"Senior Class" means each of Class A and each class of any other Series in
Group I that is identified in its Supplement as a Senior Class.
"Series Allocable Dilution Adjustments" means, for any ASA Measuring
Period, the product of the aggregate amount of payments pursuant to Section 3.1
of the Purchase Agreement or pursuant to the Seller Guaranty on account of
Seller Dilution Adjustments received during that ASA Measuring Period relating
to Dilution that occurred prior to that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period.
"Series Amortization Period" means (a) as to Series 1996-1, the
Amortization Period, any Prepayment Accumulation Period and any Early
Amortization Period and (b)as to any other Series in Group I any period
identified in the related Supplement as a "Series Amortization Period."
"Series Invested Amount" means (a) as to the Series 1996-1 Certificates,
the Series 1996-1 Invested Amount, and (b) as to any other Series in Group I,
the amount determined as such in accordance with the Supplement for that Series.
"Series Initial Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Initial Invested Amount, and (b) as to any other
Series in Group I, the amount determined as such in accordance with the
Supplement for that Series; provided that from and after the date on which the
Series Invested Amount for any Series is reduced to zero, the Series Initial
Invested Amount for that Series will also equal zero.
"Series 199&1 Certificates" means the Class A Certificates and the Class B
Certificates.
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"Series 1996-1 Holder" means a Holder of a Series 1996-1 Certificate.
"Series 1996-1 Initial Invested Amount" means (i) during the Revolving
Period for the Series 1996-1 Certificates, the Series 1996-1 Invested Amount,
and (ii) thereafter, the Series 1996-1 Invested Amount as of the last day of the
Revolving Period; provided that after the principal amount of the Series 1996-1
Certificates and interest and any Additional Amounts known to be payable in
respect of such Series are reduced to zero, the Series 1996-1 Initial Invested
Amount will equal zero.
"Series 1996-1 Invested Amount" means, at any time, the sum of the Class A
Invested Amount plus the Class B Invested Amount.
"Special Concentration Limit" means:
(i) with respect to the Tier-5 Obligor that owes the highest
aggregate Unpaid Balance of Eligible Receivables, 7%; and
(ii) with respect to the Tier-5 Obligor that owes the second highest
aggregate Unpaid Balance of Eligible Receivables, 5%.
"Special Obligor" means, at any time, the two Tier-5 Obligors that owe the
highest aggregate Unpaid Balances of Receivables and are designated in the most
recent Monthly Report as "Special Obligors"; provided that in the case of any
Obligor (other than Westinghouse Electric Corp.), the Approval Condition shall
have been satisfied with request to such designation.
"Specified Rating Agency" means S&P.
"Stated Amount" means as to any Certificate, the maximum principal amount
that may be required to be funded by the Holder of such Certificate.
"Structured Lender" shall mean Falcon Asset Securitization Corporation,
Alpine Securitization Corp. and any other Holder of a Certificate (x) whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and (y) which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement similar to that set forth in Section 13.9 of the
Pooling Agreement in order to maintain such rating.
"Subordinated Class" means each of Class B and each class of any other
Series in Group I that is identified in its Supplement as a Subordinated Class.
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"Support Bank" shall mean any bank or other financial institution
extending or having a commitment to extend funds to or for the account of any
Structured Lender (including by agreement to purchase an assignment of, or
participation in, the Certificate held by such Person) under a liquidity or
credit support agreement which relates to the Certificate purchased by such
Structured Lender.
"Third Step Excess" is defined in Section 4.10.
"Third Step Residual" is defined in Section 4.10.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper rating
from the Specified Rating Agency of at least "A-1+" (or its equivalent) or (b) a
senior actual or implied debt rating from the Specified Rating Agency of at
least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-I Obligor) that has
(a) a commercial paper rating from the Specified Rating Agency of at least "A-1"
(or its equivalent) or (b) a senior actual or implied debt rating from the
Specified Rating Agency of at least "A+" (or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a
Tier-2 Obligor) that has (a) a commercial paper rating from the Specified Rating
Agency of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Specified Rating Agency of at least "BBB+"(or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a Tier-2
Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from the
Specified Rating Agency of at least "A-3" (or its equivalent) or (b) a senior
actual or implied debt rating from the Specified Rating Agency of at least
"BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a Tier-2
Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Total Dollar Limit" is defined in Section 4.10.
"Total Foreign Concentration Excess" is defined in Section 4.10.
"Tranche" means each of the ABR Tranche and each Eurodollar Tranche.
"Transferor Indemnified Losses" is defined in Section 7.3.
"Transferor Indemnified Party" is defined in Section 7.3.
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"Transferor Payment Percentage" means, on any Business Day, the difference
of 100% minus the Investor Allocation Percentage on that Business Day.
"Unapplied Cash" means, on any Business Day, available funds received in
the Master Collection Account and reflected in the Daily Report for that
Business Day that have not been applied as Collections on a particular
Receivable on or prior to the time as of which that Daily Report is prepared.
"Unfunded Carrying Cost Receivables Reserve" means, on any Business Day
falling in a Group Amortization Period, the difference (but not less than zero)
of (a) the Carrying Cost Receivables Reserve as of the Group Amortization
Calculation Date, minus (b) the aggregate Collections deposited into the
Carrying Cost Account during the portion of the Group Amortization Period up to
and including that Business Day.
"Unmatured Early Amortization Event" means an event that, with the giving
of notice or lapse of time (or both) will constitute an Early Amortization
Event.
SECTION 1.2 Modification Condition. (a) For so long as the Series 1996-1
Certificates remain outstanding, for purposes of the Transaction Documents the
definition of the term "Modification Condition" shall be as follows:
"Modification Condition" means, with respect to any action, that (i)
each Rating Agency has confirmed in writing that such action will not
result in a reduction or withdrawal of the rating of any outstanding
Series or Purchased Interest that was rated by such Rating Agency, and
(ii) if any Series or Purchased Interest has not been rated, the Required
Series Holders for that Series or the Agent for such Purchased Interest
(as the case may be) shall have consented in writing to such action.
(b) For so long as the Series 1996-1 Certificates remain outstanding, for
purposes of the Transaction Documents the term "Required Investors" shall be as
follows:
"Required Investors" means the Required Series Holders for each
Series and the Agent for each Purchased Interest."
SECTION 1.3 Incorporation of Terms. The terms of the Pooling Agreement are
incorporated in this Supplement as if set forth in full herein. As supplemented
by this Supplement, the Pooling Agreement is in all respects ratified and
confirmed and both together shall be read, taken and construed as one and the
same agreement. If the terms of this Supplement and the terms of the Pooling
Agreement conflict, the terms of this Supplement shall control with respect to
the Series 1996-1 Certificates.
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ARTICLE II DESIGNATION
SECTION 2.1 Designation. There is hereby created a Series to be known as
the "Series 1996-1 Certificates," consisting of two classes: the $47,500,000
Variable Rate Class A, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class A Certificates), which shall be a Senior Class; and the $7,500,000
Variable Rate Class B, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class B Certificates"), which shall be a Subordinated Class. Subject to the
conditions set forth in Article III, Trustee shall authenticate and deliver the
Class A Certificates and the Class B Certificates, to or upon the order of
Transferor in the aggregate principal amount indicated for each above.
Notwithstanding the terms of Section 61 of the Pooling Agreement, the Class A
Certificates will be issued in minimum denominations of $5,000,000 and in
integral multiples of $1,000,000 and the Class B Certificates will be issued in
minimum denominations of $2,500,000 and in integral multiples of $500,000.
SECTION 2.2 Group I. The Series 1996-1 Certificates are included in Group
I. Consequently, the Series 1996-1 Certificates will share a single Series
Collection Allocation Percentage (determined using the Required Receivables as
defined herein), a single Series Loss Allocation Percentage (determined using
the Invested Amount as defined herein), and if a Group Amortization Period
occurs, a single Available Subordinated Amount (determined as provided herein)
with the other Series in Group I. Collections, Investor Allocable Dilution,
Investor Allocable Loss Amounts and Investor Write-Offs will be allocated
collectively to Group I in accordance with such shared Series Collection
Allocation Percentage and Series Loss Allocation Percentage, as applicable, and
will be further allocated among Series included in Group I (and the various
Senior Classes and Subordinated Classes) in accordance with this Supplement. The
Servicing Fee with respect to all Series in Group I shall be paid in accordance
with this Supplement and shall be determined in accordance with Section 3.4 of
the Pooling Agreement using the collective Series Collection Allocation
Percentage for Group I. The Series in Group I share a collective Series
Interest, the amount of which equals the shared Series Collection Allocation
Percentage for Group I.
Subsection 12.1(b) of the Pooling Agreement shall not apply to any Series
in Group I and shall be superseded for all such Series by Section 7.2 of this
Supplement. All terms of this Supplement applying generally to Group I shall
survive the repayment in full or other termination of the Series 1996-1
Certificates until such time as all Series in Group I have been repaid in full
and any revolving purchase commitments made by the Holders relating to
Certificates in any such Series have been terminated (or, if earlier, on the
Final Scheduled Payment Date for the last Series in Group I). Such terms of
general applicability include all of Article IV (excluding Sections 4.1 and
4.9), Article V, Section 7.2 and Article VIII and all related definitions.
SECTION 2.3 Investor Ownership Percentage. The Investor Certificates in
Group I represent an undivided interest in the portion of the Transferred Assets
allocable to Group I,
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which undivided interest (expressed as a percentage) shall equal the Investor
Ownership Percentage. The amount payable on any day by the Holders of such
Investor Certificates for the acquisition of such undivided interest (the
"Acquisition Amount") shall equal the Group Invested Amount plus the Deferred
Portion (it being understood that the Acquisition Amount may vary from day to
day); provided that Acquisition Amount shall be fixed as of the Group
Amortization Calculation Date.
The Deferred Portion of the Acquisition Amount shall be subject to a
holdback and shall be paid to the extent (and only to the extent) Daily Group
Collections are not required to pay amounts described in clauses first through
fourth of Section 4.3 or Section 4.4 (as applicable), it being understood that
the Holders of Series 1996-1 Certificates shall not be liable to pay any portion
of the Deferred Portion not paid out of Dally Series Collections.
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS
SECTION 3.1 Conditions to Issuance. Trustee will not authenticate the
Series 1996-1 Certificates unless all conditions to the issuance of the Series
1996-1 Certificates under Section 6.10 of the Pooling Agreement shall have been
satisfied or waived by the Purchasers.
SECTION 3.2 Use of Proceeds. The proceeds from the issuance of the Series
1996-1 Certificates shall be used first to repay the Series 1995-1 Certificates
in full and second for general corporate purposes of Transferor (including, but
not limited to, purchasing Receivables, repaying indebtedness and/or making
distributions to Howmet).
ARTICLE IV PAYMENTS AND ALLOCATIONS
SECTION 4.1 Interest; Additional Amounts.
(a) Subject to Section 4.1 of the Class A Certificate Purchase
Agreement, Transferor may from time to time allocate the outstanding
principal amount under the Class A Certificates to an ABR Tranche and up
to four Eurodollar Tranches. Subject to Section 4.1 of the Class B
Certificate Purchase Agreement, Transferor may from time to time allocate
the outstanding principal amount under the Class B Certificates to an ABR
Tranche and a Eurodollar Tranche. Interest on an ABR Tranche shall be
payable on each Distribution Date, and interest on a Eurodollar Tranche
shall be payable at the end of the applicable Interest Period, except that
interest on the amount of any principal repaid on any other date shall be
payable on the date of the repayment. If, any such day is not a Business
Day, interest shall instead be due on the next Business Day (or, if the
next Business Day falls in the next calendar month, then on the next
preceding Business Day).
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(b) Interest on a Eurodollar Tranche shall accrue during any
Interest Period at a rate per annum equal to the Reserve Adjusted
Eurodollar Rate plus the applicable Certificate Spread and shall be
calculated on the basis of actual days over a year of 360 days.
(c) Interest on an ABR Tranche shall accrue at the Alternate Base
Rate in effect from time to time plus the applicable Certificate Spread
and shall be calculated on the basis of actual days over a year of 365 or
366 days, as the case may be.
(d) Interest with respect to the Series 1996-1 Certificates due but
not paid on any Distribution Date or the last day of an Interest Period,
as the case may be, will bear additional interest on the amount at 2% per
annum above the Alternate Base Rate to the extent permitted by law, which
additional interest shall be due on demand.
(e) Additional Amounts shall also be payable with respect to the
Series 1996-1 Certificates as specified in the Certificate Purchase
Agreements and to the extent (but only to the extent) that funds become
available for payment of such Additional Amounts in accordance with
Sections 4.2, 4.3 and 4.4.
SECTION 4.2 Daily Calculations and Group Allocations. On each Business
Day, Servicer shall calculate the Series Collection Allocation Percentage for
Group I (and, if necessary for that calculation, the Required Receivables), the
Current Carrying Costs and, prior to the Group Amortization Period, the Base
Amount. On each Business Day prior to the Group Amortization Period, Servicer
shall also determine whether the Net Invested Amount is greater than, equal to
or less than the Base Amount.
Pursuant to Section 4.3 of the Pooling Agreement, Servicer shall allocate
the Series Collection Allocation Percentage of available funds received in the
Master Collection Account (other than any Shared Investor Collections) since the
preceding Business Day's allocation to the shared Series Interest of Group I.
The portion of funds so allocated, together with any funds released from the
Equalization Account or any Principal Funding Account in accordance with Section
4.5 on that Business Day, are called the "Daily Group Collections."
SECTION 4.3 Allocations of Daily Group Collections (Other Than in a Group
Amortization Period). On each Business Day (other than an Exempt Holiday or a
Business Day falling in a Group Amortization Period or after the Fully Funded
Date), Servicer shall allocate the Dally Group Collections (or, if less, the
aggregate amount of Dally Group Collections required to fund the items described
in priorities first through fourth below) to the following purposes, in the
priority indicated (and to the extent of Daily Group Collections available):
first, to the Carrying Cost Account until the amount allocated to
the Carrying Cost Account equals the Current Carrying Costs;
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198
second, if the Net Invested Amount is greater than the Base Amount,
to the Equalization Account in an amount sufficient to reduce the Net
Invested Amount to an amount equal to the Base Amount; provided that
during a Series Amortization Period in respect of any Series, funds that
would otherwise be required to be deposited in the Equalization Account
pursuant to this priority second shall instead be deposited in the
sub-account of the Principal Funding Account for such Series (and, if
there is more than one such Series, shall be divided ratably between such
sub-accounts, on the basis of the respective Principal Deposit Amounts of
each such Series), but the amount deposited in any such sub-account shall
in no event cause the balance therein to exceed the applicable Principal
Deposit Amount (and any remaining amount not deposited in any sub-account
of the Principal Funding Account because of this limitation shall be
shared among the other sub-accounts for such Series in Group I (ratably as
described above), in each case to the extent that it will not cause the
balance therein to exceed the applicable Principal Deposit Amount, and any
remaining amount shall be deposited in the Equalization Account); and
provided further that no deposit shall be made to a sub-account of the
Principal Funding Account pursuant to the immediately preceding proviso
(and such proviso shall not apply notwithstanding the existence of a
Series Amortization Period) unless, after giving effect thereto, the Net
Invested Amount would equal the Base Amount;
third, during any Series Amortization Period, to the applicable
sub-account of the Principal Funding Account until the amount on deposit
in that sub-account equals the applicable Principal Deposit Amount;
provided that
(i) the amount allocated to all Investor Certificates. in the
aggregate pursuant to this priority third on any Business Day shall
not exceed the product of (x) the Investor Ownership Percentage,
multiplied by (y) the excess of the Dally Group Collections over the
amounts allocated on that Business Day pursuant to priorities first
and second, and
(ii) if more than one Series in Group I is in a Series
Amortization Period, the amount so allocated shall be divided
ratably between such subaccounts, on the basis of the respective
Principal Deposit Amounts of each such Series, but the amount
deposited in any such sub-account shall in no event cause the
balance therein to exceed the applicable Principal Deposit Amount
for any such Series (and any remaining amount not deposited in any
sub-account of the Principal Funding Account because of this
limitation shall be shared among the other sub-accounts for Series
in Group I (ratably as described above), in each case to the extent
that it will not cause the balance therein to exceed the Principal
Deposit Amount for any such other Series); and
fourth, to hold in the Master Collection Account the amount, if any,
necessary to pay on the next Distribution Date all Additional Amounts
payable to the Holders.
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On such Business Day, Servicer shall allocate and pay the remainder of
Daily Group Collections to make current and/or deferred transfer payments to
Transferor in respect of the Transferor Certificate, provided that Transferor
may, from time to time, direct Servicer to direct Trustee to hold all or part of
the funds to be paid pursuant to this sentence in the Master Collection Account
to be applied as Daily Group Collections on the following Business Day.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in priorities second through fourth, and in the
preceding paragraph, in the order of priority set forth therein.
In addition, if, on any day, funds on deposit in the Master Collection
Account and available (as described in the first paragraph of this Section ) for
allocation under priority fourth are less than the amount of the obligations
described therein, then the available Collections shall be allocated by Servicer
to the holders of such obligations pro rata according to the respective amounts
of such obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily Group
Collections shall be paid to Transferor as deferred transfer payments.
SECTION 4.4 Allocations of Daily Group Collections During a Group
Amortization Period. On each Business Day (other than an Exempt Holiday) falling
in a Group Amortization Period and prior to or on the Fully Funded Date,
Servicer shall allocate the Daily Group Collections to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account to the extent that the balance
therein is less than the amount of Current Carrying Costs (other than any
Servicing Fee payable to any Howmet Person) payable on the Distribution
Date relating to the Calculation Period during which such Business Day
falls;
second, to the Principal Funding Account and to Transferor (or,
prior to the Holdback Account Termination Date, to the Holdback Account)
in the following amounts:
(a) the amount to he transferred to the Principal Funding
Account shall equal the product of (i) the Investor Allocation
Percentage, multiplied by (ii) the excess of the Daily Group
Collections over the amount allocated on that Business Day pursuant
to priority first, provided that the aggregate amount so deposited
shall in no event exceed the lesser of (x) the Group Invested Amount
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200
and (y) the Investor Ownership Percentage times the aggregate Unpaid
Balance of Receivables as of the Group Amortization Calculation
Date; and
(b) the amount to be transferred to Transferor (or, prior to
the Holdback Account Termination Date, to the Holdback Account)
shall equal the product of (i) the Transferor Payment Percentage,
multiplied by (ii) the excess of the Daily Group Collections over
the amount allocated on that Business Day pursuant to priority
first;
the amount allocated to the Principal Funding Account pursuant to clause
(a) of this priority second shall be divided among the sub-accounts for
each Series in Group I as follows:
(1) first such amount shall be divided among the sub-accounts
for each Series that has an outstanding Senior Class, on the basis
of the respective Principal Deposit Amounts of each such Senior
Class, but the amount deposited in any such sub-account shall in no
event cause the balance therein to exceed the Principal Deposit
Amount of any such Senior Class; and
(2) any remaining amount shall he divided among the
sub-accounts for each Series that has an outstanding Subordinated
Class, on the basis of the respective Principal Deposit Amounts of
each such Subordinated Class, but the amount deposited in any such
sub-account shall in no event cause the balance therein to exceed
the Principal Deposit Amount of any such Subordinated Class;
third, to hold in the Master Collection Account the amount necessary
to pay on the next Distribution Date all Additional Amounts payable to the
Holders;
fourth, to pay any Servicing Fee payable to any Howmet Person on the
Distribution Date relating to the Calculation Period during which such
Business Day falls; and
fifth, the balance to Transferor, provided that prior to the
Holdback Account Termination Date, amounts payable to Transferor pursuant
to this priority fifth shall be deposited into the Holdback Account and
held as provided below.
The "Holdback Account Termination Date" shall be the earlier to occur of
(i) the date that falls twelve months after the beginning of the Group
Amortization Period and (Ii) the Fully Funded Date. If at any time prior to the
Holdback Account Termination Date, the amount of funds on deposit in the
Holdback Account exceeds the difference of (1) the Investor Repayment Amount
minus (2) the amount of funds then held in the Carrying Cost Account and the
Principal Funding Account that are available to pay the Investor Repayment
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201
Amount, then the amount of such excess funds shall be released from the Holdback
Account and paid to Transferor as deferred transfer payments. On each Business
Day in a Group Amortization Period prior to the Holdback Account Termination
Date, Servicer shall calculate the aggregate Investor Allocable Dilution for the
Group Amortization Period as to which no Series Allocable Dilution Adjustments
have been received. Such amount (or, if less. the aggregate amount of funds in
the Holdback Account) shall be transferred to the Master Collection Account and
applied to the items listed in the first paragraph of this Section as priorities
first through fifth, in that order (except that no such funds shall be allocated
to Transferor or the Holdback Account pursuant to priority second and the amount
allocable to the Principal Funding Account shall not be limited by application
of the Investor Allocation Percentage). On the Holdback Account Termination
Date, all remaining funds in the Holdback Account shall be paid to Transferor.
If, on any day, funds on deposit in the Master Collection Account and
available (as described in the first paragraph of this Section , for allocation
under priority third are less than the amount of the obligations described
therein, then the available Collections shall be allocated by Servicer to the
holders of such obligations pro rata according to the respective amounts of such
obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily Group
Collections shall be paid to Transferor in respect of the Transferor Certificate
as deferred transfer payments.
SECTION 4.5 Withdrawals from the Equalization Account and Principal
Funding Account. On any Business Day (other than an Exempt Holiday) prior to the
Group Amortization Period on which no Early Amortization Event or Unmatured
Early Amortization Event has occurred with respect to any Series in Group I,
Servicer may instruct Trustee in writing to withdraw funds from the Equalization
Account and apply such funds as Daily Group Collections, so long as the Net
Invested Amount would not exceed the Base Amount after giving effect to such
transfer and application. On the first day of any Series Amortization Period or
Group Amortization Period, Servicer shall instruct Trustee to withdraw the
entire balance in the Equalization Account and apply the same as Daily Group
Collections on that day. On the first day of the Group Amortization Period,
Servicer shall instruct Trustee likewise to withdraw the entire balance in the
Principal Funding Account and apply the same as Daily Group Collections on that
day.
SECTION 4.6 Available Subordinated Amount. (a) If a Group Amortization
Period begins, Servicer shall promptly calculate the Available Subordinated
Amount as of the Group Amortization Calculation Date and report such amount in
the Daily Report for the first day in the Group Amortization Period. Servicer
shall also calculate the Available Subordinated Amount as of each Cut-Off Date
falling in the Group Amortization Period, such calculation to be reflected in
the related Monthly Report.
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(b) The Available Subordinated Amount as of the Group Amortization
Calculation Date shall equal the product of (x) the Investor Allocation
Percentage, multiplied by (y) the result of:
(i) the product of the Unpaid Balance of Receivables held by Trustee
at the opening of business on the Group Amortization Calculation Date,
multiplied by the Series Collection Allocation Percentage on that date;
minus
(ii) the sum of (A) the lesser of the Base Amount and the Net
Invested Amount and (B) the Carrying Cost Receivables Reserve at the
opening of business on the Group Amortization Calculation Date.
(c) The Available Subordinated Amount, as of any Cut-Off Date in the Group
Amortization Period, shall equal the result of:
(i) the Available Subordinated Amount as of the preceding Cut-Off
Date (or as of the Group Amortization Calculation Date, in the case of the
first Cut-Off Date falling in the Group Amortization Period); minus
(ii) the Investor Allocable Loss Amount with respect to the ASA
Measuring Period ending on that Cut-Off Date; minus
(iii) any Investor Allocable Dilution with respect to the ASA
Measuring Period ending on that Cut-Off Date; plus
(iv) subject to Sections 4.7 and 4.8, the Investor Allocable
Recoveries and Investor Allocable Dilution Adjustments with respect to the
ASA Measuring Period ending on that Cut-Off Date.
(d) Notwithstanding the foregoing, in no event shall the Available
Subordinated Amount at any time be less than zero or greater than the initial
Available Subordinated Amount calculated pursuant to subsection (b).
SECTION 4.7 Write-Offs and Recoveries. (a) In each Monthly Report required
to be delivered during the Group Amortization Period, Servicer shall calculate
the Investor Write-Offs and the Investor Allocable Recoveries for the most
recently ended ASA Measuring Period.
(b) If the Investor Write-Offs calculated in any Monthly Report exceed
zero, the Group Invested Amount shall be reduced by the amount of the Investor
Write-Offs with effect on the related Distribution Date. Any such reduction
shall be allocated to the Class Invested Amounts of all outstanding Subordinated
Classes (ratably in accordance with such Class Invested Amounts) until all such
Class Invested Amounts have been reduced to zero.
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Any remaining reduction shall be allocated to the Class Invested Amounts of all
outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts).
(c) If the Group Invested Amount has been reduced on account of any
Investor Write-Offs, then any Investor Allocable Recoveries with respect to any
Calculation Period ending after the reduction takes place shall be applied to
reinstate the Group Invested Amount, to the extent of such prior reductions that
have not previously been reinstated, with effect on the related Distribution
Date. Any such reinstatement shall be allocated to the Class Invested Amounts of
all outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts) until all prior reductions to such Class Invested Amounts on account of
Investor Write-Offs have been reinstated. Any remaining reinstatement shall be
allocated to the Class Invested Amounts of all outstanding Subordinated Classes
(ratably in accordance with such Class Invested Amounts).
(d) If Investor Allocable Recoveries are applied pursuant to subsection
(c) to reinstate the Group Invested Amount on any Distribution Date, then
Investor Allocable Recoveries shall be applied to increase the Available
Subordinated Amount on the same Distribution Date only to the extent of the
excess, if any, of the Investor Allocable Recoveries, minus the amount of
Investor Allocable Recoveries so applied.
(e) The outstanding principal amount of any Senior Class or Subordinated
Class shall be reduced by any reduction, and increased by any reinstatement, of
its Class Invested Amount pursuant to this Section 4.7 or Section 4.8, in the
amount of such reduction or reinstatement.
SECTION 4.8 Certain Dilution in a Group Amortization Period. (a) In each
Monthly Report required to be delivered during the Group Amortization Period,
Servicer shall calculate the Investor Allocable Dilution and the Series
Allocable Dilution Adjustments for the most recently ended ASA Measuring Period.
(b) If the Investor Allocable Dilution calculated in any Monthly Report is
greater than zero, and there are funds in the Holdback Account, then those funds
(up to an amount equal to the amount of the Investor Allocable Dilution) shall
be allocated (i) first, in accordance with priority first of the first paragraph
of Section 4.4, (ii) second, to the Principal Funding Account (in accordance
with clauses (1) and (2) of priority second of the first paragraph of Section
4.4) until the Net Invested Amount is reduced to zero and (iii) third, in
accordance with priorities third through fifth of the first paragraph of Section
4.4, in that priority.
(c) If the Available Subordinated Amount or the Group Invested Amount has
been reduced on account of any Investor Allocable Dilution, then (i) any Series
Allocable Dilution Adjustments with respect to any Calculation Period ending
after the reduction takes place and (ii) any additional funds deposited in the
Holdback Account (the "Investor Allocable Dilution
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Adjustments") shall be allocated (x) first, to reinstate the Group Invested
Amount (with the same allocation among Senior Classes and Subordinated Classes
as is described in subsection 4.7(c)), and (y) second, to reinstate the
Available Subordinated Amount, in each case to the extent not previously
reinstated pursuant to Section 4.7 or this Section 4.8. Any funds so allocated
on any day shall be allocated (i) first, in accordance with priority first of
the first paragraph of Section 4.4, (ii) second, to the Principal Funding
Account (in accordance with clauses (1) and (2) of priority second of the first
paragraph of Section 4.4) until the Net Invested Amount is reduced to zero and
(iii) third, in accordance with priorities third through fifth of the first
paragraph of Section 4.4, in that priority.
SECTION 4.9 Optional Early Pay Out. (a) On any Business Day falling in the
Revolving Period, Transferor may provide notice to Trustee of its intention to
accumulate funds to cause the Series 1996-1 Certificates to be prepaid in full
or (as provided in the next sentence) in part. There may be a single partial
prepayment of Class A Certificates, provided that (i) such prepayment (in the
aggregate for all Class A Certificates) shall not exceed $10,000,000, (ii) such
prepayment shall be made after the first anniversary of the date hereof, and
(iii) the amount prepaid shall reflect a reduction in the Unpaid Balance of
Receivables due to the sale of a Seller (or all or substantially all of its
assets) or the loss of a major customer by the Sellers. When amounts sufficient
for such prepayment have been accumulated, Transferor may provide notice to
Trustee (the "Prepayment Notice") of the date, at least three business days
after the date of such Prepayment Notice, when the prepayment shall occur.
Trustee shall notify the affected Holders promptly upon receiving such
Prepayment Notice. In the event of any such prepayment of the Series 1996-1
Certificates occurring at any time during the one-year period commencing on the
date hereof, the Holders of such Series 1996-1 Certificates shall be entitled to
receive a Prepayment Premium. Except as expressly provided in this subsection
4.9(a), the Series 1996-1 Certificates may not be partially prepaid. The Series
1996-1 Certificates, once prepaid, may not be reinstated.
(b) Commencing upon the date specified in the notice to the Trustee
referred to in subsection (a) (until an amount equal to the amount to be
prepaid, plus the related Prepayment Premium, if any, and other applicable
Additional Amounts have been accumulated), amounts shall be set aside for
purposes of that prepayment in accordance with Section 4.3, except that no such
amounts shall be set aside if Transferor notifies Trustee that Transferor
intends to cause the Series 1996-1 Certificates to be prepaid by causing the
portion of the Series Interest for Group I attributable to the Series 1996-1
Certificates to be conveyed to one or more Persons (who may be the Holders of a
new Series issued substantially contemporaneously with such prepayment) for a
cash purchase price in an amount equal to the sum of (i) the outstanding
principal amount of the Series 1996-1 Certificates, plus (ii) to the extent not
available in the Carrying Cost Account, accrued and unpaid interest on the
Series 1996-1 Certificates through the day of such prepayment (the "Refinancing
Date"), plus (iii) to the extent not available from funds set aside pursuant to
priority fourth of Section 4.3, the Additional Amounts, if any, owed with
respect to the
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Series 1996-1 Certificates. No such conveyance shall, however, be permitted if
as a result thereof, Transferor, Howmet or any of their Affiliates would acquire
such portion of the Series Interest or the underlying Receivables. In the case
of any such conveyance, the purchase price shall be deposited in the Principal
Funding Account and shall be distributed to the Agent, for further distribution
to the Holders, on the Refinancing Date in accordance with the terms of Section
5.2. Upon deposit of the purchase price in the Principal Funding Account, the
Series 1996-1 Holders shall have no further rights with respect to the
Transferred Assets.
(c) Any prepayment pursuant to this Section 4.9 shall be made on the later
to occur of (i) the date specified in the notice of prepayment and (ii) the date
on which sufficient funds (including funds to cover any related Additional
Amounts) have been accumulated pursuant to Section 4.3 or 4.4 or obtained by a
conveyance described in subsection 4.9(b).
(d) The Class B Certificates may not be prepaid until the Class A
Certificates have been repaid in full. In addition no Class B Certificates (or
Certificates in any other Subordinated Class) may be prepaid if any Senior Class
is outstanding and, after giving effect to that payment, the Net Invested Amount
would exceed the Base Amount.
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations. (a)
Notwithstanding clause (a) of the definition of Eligible Obligor, Persons that
are not Domestic Persons (such Persons being "Foreign Obligors") may be Eligible
Obligors.
(b) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) whether the members of the Concentration Unit are Domestic
Persons, Category One Obligors, Category Two Obligors or Category Three
Obligors.
(ii) such Concentration Unit's Basic Concentration Limit times the
Adjusted Eligible Receivables for such day (such product being such
Concentration Unit's "Total Dollar Limit").
(iii) the aggregate Unpaid Balance of Eligible Receivables owed by
Domestic Persons in such Concentration Unit.
(iv) an amount (whether positive or negative) equal to (A) the Total
Dollar Limit for such Concentration Unit minus (B) the amount determined
pursuant to clause (iii). Any such positive sum is the "First Step
Residual." The absolute value of any such negative sum is the "First Step
Excess. "
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(v) an amount (the "Category One Balance") equal to the aggregate
Unpaid Balance of Eligible Receivables owed by Category One Obligors in
such Concentration Unit.
(vi) an amount equal to 4% of the Adjusted Eligible Receivables on
such day.
(vii) the lesser of (A) the First Step Residual (or, if there is no
First Step Residual, zero) and (B) the amount determined pursuant to
clause (vi).
(viii) an amount (the "Second Step Excess") equal to (A) the
Category One Balance minus (B) the amount determined pursuant to clause
(vii); provided that if such sum is a negative number, the Second Step
Excess will be zero.
(ix) an amount (the "Second Step Residual") equal to (A) the First
Step Residual minus (B) the Category One Balance plus (C) the Second Step
Excess; provided that if such sum is a negative number, the Second Step
Residual will be zero.
(x) an amount (the "Category Two Balance") equal to the aggregate
Unpaid Balance of Eligible Receivables owed by Category Two Obligors in
such Concentration Unit.
(xi) an amount equal to 2% of Adjusted Eligible Receivables on such
day.
(xii) the lesser of (A) the Second Step Residual and (B) the amount
determined pursuant to clause (xi).
(xiii) an amount (the "Third Step Excess") equal to (A) the Category
Two Balance minus (B) the amount determined pursuant to clause (xii);
provided that if such sum is a negative number, the Third Step Excess will
be zero.
(xiv) an amount (the "Third Step Residual") equal to (A) the Second
Step Residual minus (B) the Category Two Balance plus (C) the Third Step
Excess; provided that if such sum is a negative number, the Third Step
Residual will be zero.
(xv) an amount (the "Category Three Balance") equal to the aggregate
Unpaid Balance of Eligible Receivables owed by Category Three Obligors in
such Concentration Unit.
(xvi) the lesser of (A) the Third Step Residual and (B) the amount
determined pursuant to clause (xi).
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(xvii) an amount (the "Fourth Step Excess") equal to (A) the
Category Three Balance minus (B) the amount determined pursuant to clause
(xvi); provided that if such sum is a negative number, the Fourth Step
Excess will be zero.
(xviii) the sum of the First Step Excess, the Second Step Excess,
the Third Step Excess and the Fourth Step Excess, such sum being the
"Concentration Unit Excess Concentration" for such Concentration Unit.
(c) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) an amount (the "Category One Eligibles") equal to (A) the
Category One Balance for such Concentration Unit minus (B) the Second Step
Excess (if any) for such Concentration Unit; provided that if such sum is
a negative number, the Category One Eligibles will be zero.
(ii) an amount (the "Category Two Eligibles") equal to (A) the
Category Two Balance minus (B) the Third Step Excess (if any) for such
Concentration Unit; provided that if such sum is a negative number, the
Category Two Eligibles will be zero.
(iii) an amount (the "Category Three Eligibles") equal to (A) the
Category Three Balance minus (B) the Fourth Step Excess for such
Concentration Unit; provided that if such sum is a negative number, the
Category Three Eligibles will be zero.
(d) On each Business Day, Servicer shall determine:
(i) the sum of the Category One Eligibles for all Concentration
Units.
(ii) the sum of the Category Two Eligibles for all Concentration
Units.
(iii) the sum of the Category Three Eligibles for all Concentration
Units.
(iv) an amount (the "Category Two Excess Concentration") equal to
(A) the amount determined pursuant to clause (ii) minus (B) 10% of the
Adjusted Eligible Receivables on such day; provided that if such sum is a
negative number, the Category Two Excess Concentration shall be zero.
(v) an amount (the "Category Three Excess Concentration") equal to
(A) the amount determined pursuant to clause (iii) minus (B) 5% of the
Adjusted Eligible Receivables on such day; provided that if such sum is a
negative number the Category Three Excess Concentrations shall be zero.
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(vi) the sum of the amounts in clauses (i), (ii) and (iii).
(vii) the sum of the Category Two Excess Concentration and the
Category Three Excess Concentration.
(viii) the sum of (A) the amount determined pursuant to clause (vi)
minus the amount determined pursuant to clause (vii).
(ix) an amount (the "Total Foreign Concentration Excess") equal to
(A) the amount determined pursuant to clause (viii), minus (B) 35% of the
Adjusted Eligible Receivables; provided that if such sum is a negative
number, the Total Foreign Concentration Excess shall be zero.
(e) With respect to (i) all Category One Obligors or Category Two
Obligors, and (ii) each Category Three Obligor that owes Eligible Receivables in
excess of $1,000,000 or that is located in a jurisdiction where Obligors owe an
aggregate amount of Eligible Receivables in excess of $2,000,000, Servicer and
Transferor shall, and shall cause the Sellers to, take all actions reasonably
necessary to perfect and/or protect Transferor's and/or the Trustee's interests
in such Receivables under the laws of the jurisdiction in which such Obligors
are located.
(f) Within the four weeks following each anniversary of the Closing Date,
Servicer shall (i) cause counsel satisfactory to the Required Purchasers, at the
expense of Howmet, to contact local counsel in each jurisdiction in which
Obligors referred to in clause (e) are located, for purposes of determining
whether there has been a change in the laws of such jurisdiction regarding the
assignment of Receivables and (ii) take such actions as are required under
Section 4.10(e) with respect to any such change. Nothing in this Section 4.10(f)
shall limit the obligations of Servicer and Transferor under Section 4.10(e) at
any other time.
(g) Contemporaneously with the delivery of each Monthly Report, Servicer
shall provide Trustee with a certificate, signed by an appropriate officer,
showing (i) any Obligor that is not a Domestic Person and either owes
Receivables in an aggregate amount exceeding $1,000,000 as of the most recent
Cut-Off Date or is a party to a contract with a Seller expiring more than one
year after such Cut-Off Date, and (ii) any jurisdiction outside the United
States in which Obligors owe an aggregate amount of Receivables exceeding
$2,000,000, determined as of such Cut-Off Date.
(h) All documents executed and delivered to, or for the benefit of,
Trustee pursuant to this Section shall be Transaction Documents for all purposes
(including for purposes of Section 6.1).
SECTION 4.11 Tax Opinion. If any Tax Opinion is required to be delivered
in connection with the Series 1996-1 Certificates, the term "Tax Opinion" shall
have the meaning specified below:
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"Tax Opinion" means, with respect to any action, an Opinion of Counsel to
the effect that, for Federal income tax and applicable state income and
franchise tax purposes, (a) such action will not cause the Investor Certificates
of Series 1996-1 debt or partnership interests, (b) such action will not cause
the Trust to be treated as other than an association (or publicly traded
partnership) taxable as a corporation, (c) such action should not be treated as
a taxable event to any Series 1996-1 Investor Certificateholder or Certificate
Owner.
SECTION 4.12 Reset of Benchmark Percentages and Special Concentration
Limits. Transferor may from time to time (i) increase or decrease any Benchmark
Percentage used in the definition of Concentration Limit, (ii) change the
percentages specified in the definition of Special Concentration Limit with
respect to the two Tier-5 Obligors that owe the highest aggregate Unpaid
Balances of Eligible Receivables, or (iii) designate an additional Obligor as a
"Special Obligor," in each case (other than the designation of Westinghouse
Electric Corp. as a Special Obligor) if the Approval Condition is satisfied. It
is understood and agreed that any such changes in the Benchmark Percentages or
the Special Concentration Limits or the addition of a Special Obligor may change
the calculation of the Class A Concentration Factor, the Class B Concentration
Factor, the Class A Minimum Reserve Ratio and the Class B Minimum Reserve Ratio.
ARTICLE V DISTRIBUTIONS AND REPORTS
SECTION 5.1 Distributions. On each Distribution Date and, with respect to
clause (b), on each Principal Payment Date, other than a Distribution Date that
is also a Refinancing Date, Trustee shall, in accordance with instructions set
out in the applicable Daily Report, distribute to the Holders, the following
amounts:
(a) accrued and unpaid interest on the ABR Tranches and any
additional interest payable to the Series 1996-1 Holders pursuant to
Section 4.1 or to the Holders of any other Series in Group I, to the
extent funds are available for such payment in the Carrying Cost Account
(and in the event of any shortfall, such interest shall be paid first to
each Senior Class, ratably in accordance with the total amount of interest
owed to each Senior Class, and second to each Subordinated Class, ratably
in accordance with the total amount of interest owed to each Subordinated
Class);
(b) on each Principal Payment Date, all funds deposited in each
sub-account of the Principal Funding Account on or prior to the most
recent Cut-Off Date shall be distributed in reduction of the related
Series Invested Amounts; all such amounts on deposit in the Series 1996-1
sub-account of the Principal Funding Account shall be paid to the Holders
of Class A Certificates until they have been paid or provided for in full
before any such amounts are paid to the Holders of Class B Certificates,
and no such amounts shall be paid to the Holders of any Subordinated
Certificates on any day if (i) any Senior Class will remain outstanding
after that date and (ii) the Invested
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Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day);
(c) if, on the Expected Final Payment Date or any Distribution Date
falling in a Group Amortization Period, the funds on deposit in the
Carrying Cost Account (less any Servicing Fee payable on that day to
anyone other than a Howmet Person) will be equal to or greater than the
Invested Amount (after giving effect to all distributions required by
subsections (a) and (b)), then an amount equal to such remaining Invested
Amount shall he withdrawn from the Carrying Cost Account and distributed
in reduction of the Invested Amount; and
(d) any Additional Amounts payable with respect to Certificates in
any Series in Group I to the extent that funds have been allocated for
those Additional Amounts pursuant to priority fourth of Section 4.3 or
priority third of Section 4.4 (and in the event of any shortfall,
Additional Amounts shall be paid first to each Senior Class, ratably in
accordance with the total Additional Amounts owed to each Senior Class,
and second to each Subordinated Class, ratably in accordance with the
total Additional Amounts owed to each Subordinated Class).
On each Distribution Date, Trustee shall also, in accordance with
instructions set out in the applicable Dally Report, distribute the Servicing
Fee to the Servicer to the extent that funds are available for that purpose in
the Carrying Cost Account.
On each Interest Payment Date (other than any Distribution Date, which
shall be governed by subsection (a) above), Trustee shall, in accordance with
instructions set out in the applicable Daily Report, distribute interest payable
on that date to the Holders of any Series in Group I, to the extent funds are
available for such payment in the Carrying Cost Account (and in the event of any
shortfall, any such interest shall be paid first to each Senior Class, ratably
in accordance with the total amount of interest owed to each Senior Class, and
second to each Subordinated Class, ratably in accordance with the total amount
of interest owed to each Subordinated Class).
Any amounts payable to the Holders of Class A Certificates pursuant to
this Section shall be paid to the Agent, and the Agent shall distribute such
amounts to such Holders. Amounts payable to a Holder of Class B Certificates
pursuant to this Section shall be paid to such Holder.
SECTION 5.2 Special Distributions on the Refinancing Date. On the
Refinancing Date, Trustee shall, in accordance with instructions set out in the
applicable Daily Report, distribute to the Holders the following amounts:
(a) all interest accrued on the Certificates in any Series in Group
I through the Refinancing Date, to the extent funds are available for such
payment in the Carrying
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Cost Account or have been deposited in the Principal Funding Account
pursuant to Section 4.9;
(b) all funds deposited in the Principal Funding Account pursuant to
Section 4.9, provided that no such amounts shall be paid to the Holders of
the Class B Certificates on any day if (i) any Senior Class will remain
outstanding after that date and (ii) the Net Invested Amount exceeds the
Base Amount on that day (after giving effect to all payments and
allocations made pursuant to Section 4.3 on that day); and
(c) any Additional Amounts to the extent that funds for those
Additional Amounts have been allocated pursuant to priority fourth of
Section 4.3 or priority third of Section 4.4 or deposited in the Principal
Funding Account pursuant to Section 4.9.
Amounts payable to Holders of Class A Certificates pursuant to this
Section shall be paid to the Agent, and the Agent shall distribute such amounts
to such Holders. Amounts payable to a Holder of Class B Certificates pursuant to
this Section shall be paid to such Holder. Promptly following receipt of the
amounts payable to the Holders of Certificates pursuant to this Section , such
Holders shall tender such Certificates to the Trustee.
SECTION 5.3 Payments in Respect of Transferor Certificate. On each day on
which funds are allocated for this purpose pursuant to Sections 4.3 and 4.4 (and
subject to the terms of Section 4.4 relating to the Holdback Account), Trustee
shall, in accordance with instructions set out in the applicable Daily Report,
distribute to Transferor, in respect of the Transferor Certificate, all funds
allocated for that purpose in accordance with those Sections. In addition, after
the Group Invested Amount has been repaid in full and all interest and
Additional Amounts owed to the Holders have been paid, any additional funds on
deposit in the Carrying Cost Account, the Equalization Account or the Principal
Funding Account shall similarly be paid to Transferor in respect of the
Transferor Certificate.
SECTION 5.4 Daily Reports and Monthly Reports. Each Daily Report and
Monthly Report shall be substantially in the applicable form set out in Exhibit
B or C or in such other form as may be required by any other Supplement relating
to a Series in Group I or otherwise satisfactory to Servicer and Trustee and
consistent with the terms of this Supplement, each such other Supplement and the
Pooling Agreement. Copies of each Monthly Report shall be provided free of
charge by the Trustee to purchasers of Series 1996-1 Certificates in connection
with the initial distribution thereof and may be obtained free of charge upon
request from the Trustee (and presentation of a confirmation evidencing the
purchase of such beneficial interest) by subsequent purchasers.
SECTION 5.5 Annual Tax Information. On or before February 15 of each
calendar year, beginning with calendar year 1997, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to each Person who at any time
during the preceding calendar year was
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a Holder the information for the preceding calendar year, or the applicable
portion thereof during which the Person was a Holder, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable such Holders to prepare their Federal income tax returns.
Servicer's obligations under the preceding sentence shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent to the specified Persons pursuant to the Pooling
Agreement or any requirements of the Internal Revenue Code as from time to time
in effect. Notwithstanding anything to the contrary contained in this Agreement,
Trustee shall, to the extent required by applicable law, from time to time
furnish to the appropriate Persons a Form 1099-INT within the period required by
applicable law.
SECTION 5.6 Periodic Perfection Certificate. On or before December 1 of
each calendar year, beginning with calendar year 1996, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to Trustee and the Agent an
Officer's Certificate setting forth a list of all changes in (a) the name,
identity or corporate structure of Transferor or any Seller and (b) the chief
executive office of Transferor or any Seller (or in the place of business of
Transferor or any Seller that has only one place of business) that have taken
place since the date of the Officer's Certificate most recently delivered
pursuant to this Section 5.6 (or since the Closing Date, in the case of the
first such Officer's Certificate to be delivered), or indicating that no such
events have taken place, and stating in each case what filings of UCC financing
statements, or amendments thereto, relating to the Transaction Documents have
been made in connection with each such event (identifying the date and filing
index numbers for each). Any financing statement identified in such an Officer's
Certificate delivered to Trustee shall be deemed to have been identified to
Trustee in writing for purposes of subsection 11.1(c)(v) of the Pooling
Agreement. If any such new UCC financing statements are filed, Servicer shall
cause Trustee to be named as secured party (in the case of any filing against
Transferor) or assignee of the secured party (in the case of any filing against
a Seller). Notwithstanding the foregoing, if any "Event of Default" or
"Potential Event of Default" under (and as defined in) the Howmet Credit
Agreement occurs, Servicer shall deliver an Officer's Certificate covering the
matters described above to Trustee and Agent not later than 10 days after the
occurrence of such event, and for so long as any such event remains outstanding,
Servicer shall deliver such an Officer's Certificate on the last Business Day
falling in each of March, June, September and December.
ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.1 Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event":
(a)(i) failure on the part of Transferor or Servicer to make any
payment of the principal amount of the Series 1996-1 Certificates when
due, or to make any payment of any interest on the Series 1996-1
Certificates or to make any deposit required by
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the terms of any Transaction Document on or before two Business Days after
the date such payment or deposit is required to be made, or to make any
other payment, except any payment of the Servicing Fee to a Howmet Person,
required by the terms of any Transaction Document on or before three
Business Days after the date such payment is required to be made; or (ii)
failure on the part of any Seller to duly observe or perform subsection
6.1(f), 6.1(h), 6.1(j), 6.3(a), 6.3(b), 6.3(c) or 6.3(e) of the Purchase
Agreement or Transferor to duly observe or perform subsection 7.2(c),
7.2(e), 7.2(f), 7.2(h), 7.2(i), 7.2(j) or 72{k) of the Pooling Agreement
or clause (i) or (ii) of subsection 7.2(d) of the Pooling Agreement, which
failure has a substantial likelihood of having a Material Adverse Effect
and continues unremedied for a period of five Business Days; or (iii)
failure on the part of Transferor, Servicer or any Seller duly to observe
or perform any other covenant or agreement set forth in any Transaction
Document, which failure has a substantial likelihood of having a Material
Adverse Effect and continues unremedied for a period of 30 days; or (iv)
Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in subsection
5.1(d), 5.1(k), 5.1(o) or 5.1(r) of the Purchase Agreement or by
Transferor in subsection 2.3(a)(i), 2.3(a)(ii) or 7.1(i) of the Pooling
Agreement shall prove to have been incorrect in any material respect when
made, and continues to be incorrect in any material respect for a period
of five Business Days, or any other representation or warranty made by
Transferor, Servicer or any Seller in any Transaction Document shall prove
to have been incorrect in any material respect when made, and continues to
be incorrect in any material respect for a period of 30 days; provided
that a mistake in the representation of a Receivable as an Eligible
Receivable or the breach of a representation and warranty with respect to
a Receivable shall not constitute an Early Amortization Event unless and
until the applicable Seller has failed to make the cash payments (if any)
owed under Sections 3.1 and 3.5 of the Purchase Agreement in respect of
such mistake or breach (it being understood that certain of such mistakes
or breaches may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Transferor,
Servicer, Guarantor or any Seller, or Transferor shall become unable, for
any reason, to transfer Receivables or other Transferred Assets to the
Trust in accordance with the provisions of this Agreement and the Pooling
Agreement; provided that if, at the time any event that would, with the
passage of time, become a Bankruptcy Event occurs as a result of a
bankruptcy proceeding being filed against Transferor or any Seller, then,
on and after the day on which the bankruptcy proceeding is filed until the
earlier to occur of the dismissal of the proceeding and the commencement
of an Early Amortization Period, Transferor shall not purchase Receivables
and Related Assets from the affected Seller or, if Transferor is the
subject of the proceeding, transfer Receivables and Related Transferred
Assets to the Trust;
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(d) the Trust or Transferor shall be required to be registered as an
"investment company" under and within the meaning of the Investment
Company Act of 1940, as amended;
(e) the Net Invested Amount exceeds the Base Amount for a period of
two or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have been
remedied;
(g) Howmet shall cease to own, directly or indirectly, 100% of the
issued and outstanding capital stock of Transferor;
(h) the Internal Revenue Service or the PBGC shall have filed one or
more Tax or ERISA Liens against the assets of Transferor or any Seller
(including Receivables) in an aggregate amount exceeding $250,000 unless
such amounts (i) are bonded in a manner that satisfies the Approval
Condition or (ii) relate to taxes in an aggregate amount not exceeding
$1,000,000 which are contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being maintained under
GAAP;
(i) the cessation of, or the failure to create, a valid
first-priority perfected ownership or security interest in favor of
Trustee in the Receivables or the rights of Transferor under the Purchase
Agreement, which cessation or failure has a substantial likelihood of
having a Material Adverse Effect;
(j) the Series 1996-1 Invested Amount is not paid in full on the
Expected Final Payment Date;
(k) Transferor's net worth (as calculated in accordance with GAAP)
shall at any time be less than 17% of the aggregate Unpaid Balance of the
Receivables at such time and such condition continues for five consecutive
Business Days; provided that for purposes of calculating Transferor's net
worth, any and all amounts owed to Transferor by any Howmet Person shall
be excluded from such calculation;
(l) any foreclosure or similar proceeding in respect of any adverse
claim on any Buyer Note or the Transferor's common stock shall have been
commenced; or title to any Buyer Note or Transferor's common stock shall
pass to the holders of such adverse claim, it being understood that the
grant of a security interest in the stock of Transferor or any Buyer Note
to a creditor of a Seller that is party to an Intercreditor Agreement
shall not be an Early Amortization Event;
(m) the average of the Aged Receivables Ratio for any three
consecutive Calculation Periods shall be greater than 2.50%;
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(n) the average of the Past Due Receivables Ratio for any three
consecutive Calculation Periods shall exceed 5.75%;
(o) the average of the Dilution Ratio for any three consecutive
Calculation Periods shall be greater than 6.75%; or
(p) the Intercreditor Provisions shall be amended without written
notice thereof having been provided to the Agent no later than five
Business Days prior to the effective date of such amendment.
SECTION 6.2 Early Amortization Period. Upon the occurrence and continuance
of any Early Amortization Event described in subsection 6.1(c), an Early
Amortization Period shall commence without any notice or other action on the
part of Trustee or the Series 1996-1 Holders, immediately upon the occurrence of
such Early Amortization Event, except that if an Early Amortization Event
described in subsection 6.1(c) occurs as the result of the occurrence of a
Bankruptcy Event with respect to one or more Sellers, the Receivables originated
by which made up less than 10% of the aggregate Unpaid Balance of Receivables
held by the Trust as of the date of the commencement of the proceeding that gave
rise to the first such Bankruptcy Event, then an Early Amortization Period shall
not commence unless Required Series Holders declare it to have commenced. Upon
the occurrence and continuance of any other Early Amortization Event, after the
applicable grace period, if any, and if the action or event that gave' rise to
such Early Amortization Event has not been waived by the Required Series
Holders, Trustee may (and, at the direction of the Required Series Holders,
shall) by notice then given in writing to Transferor and Servicer, declare that
an Early Amortization Period has commenced as of the date of Transferor's
receipt of the notice. In the event of any prepayment of the Series 1996-1
Certificates prior to the first anniversary of the date hereof as a result of
the occurrence of an Early Amortization Event, the Holders thereof shall be
entitled to receive a Prepayment Premium.
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES
SECTION 7.1 Optional Redemption of Investor Interests. On any Distribution
Date occurring during an Early Amortization Period with respect to the Series
1996-1 Certificates on or after the date that the Series 1996-1 Invested Amount
is reduced to 10% or less of the sum of the Stated Amounts for the Series 1996-1
Certificates, Transferor shall have the option to redeem the Series 1996-1
Series Interest. The purchase price will be an amount equal to the Invested
Amount plus accrued and unpaid interest (and accrued and unpaid interest with
respect to interest that was due but not paid on any prior Distribution Date)
through the day preceding the Distribution Date at the applicable interest rate
(as specified in Section 4.1) plus the aggregate amount by which the Invested
Amount has been reduced on account of Investor Write-Offs (and not subsequently
reinstated) plus (if such redemption occurs prior to the first anniversary of
the date hereof) the applicable Prepayment Premium. Upon the tender of the
outstanding Certificates of the Series by the Holders to Trustee,
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Trustee shall distribute the amounts, together with all funds on deposit in the
Principal Funding Account that are allocable to the Series 1996-1 Certificates,
to the Holders of the Series on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Holders. Following
any redemption, the Holders of the Series shall have no further rights with
respect to the Transferred Assets. In the event that Transferor falls for any
reason to deposit in the Principal Funding Account the aggregate purchase price
for the Series 1996-1 Certificates, payments shall continue to be made to the
Holders of the Series in accordance with the terms of the Pooling Agreement and
this Supplement.
SECTION 7.2 Termination. Notwithstanding Section 12.1 of the Pooling
Agreement, the last payment of the principal of and interest on the Certificates
of any Series in Group I shall be due and payable no later than the Final
Scheduled Payment Date for that Series. If, on the Distribution Date immediately
prior to the Final Scheduled Payment Date for any such Series, Servicer
determines that the Series Invested Amount for the Series on the applicable
Final Scheduled Payment Date (after giving effect to all changes therein on such
date) will exceed zero, Servicer shall, as soon as practicable, solicit bids for
the sale of interests in the Receivables in an amount equal to the product of
(i) the outstanding balance of Receivables, times (ii) the Series Collection
Allocation Percentage, times (iii) the Investor Allocation Percentage, times
(iv) a fraction the numerator of which is the applicable Series Invested Amount
and the denominator of which is the Group Invested Amount. Transferor shall be
entitled to participate in and to receive notice of each bid submitted in
connection with the bidding process. Upon the expiration of the period, Servicer
shall determine (x) the highest bid for such Receivables and (y) the Available
Final Distribution Amount for the Series. Servicer shall sell the interests in
the Transferred Assets on the Final Scheduled Payment Date for the applicable
Series to the bidder with the Highest Bid and shall deposit the proceeds of such
sale in the Master Collection Account for allocation to the Holders. The
priorities specified in Section 5.1 shall apply to any such distribution.
SECTION 7.3 Indemnification by Transferor. Transferor hereby agrees to
indemnify the Trust, Trustee, each Holder of a Series 1996-1 Certificate and
each of the successors, permitted transferees and assigns of any such Person and
all officers, directors, shareholders, controlling Persons, employees,
affiliates and agents of any of the foregoing (each of the foregoing Persons
individually being called a "Transferor Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims (whether on account
of settlements or otherwise, and whether or not the relevant Transferor
Indemnified Party is a party to any action or proceeding that gives rise to any
Transferor Indemnified Losses (as defined below)), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing collectively being called "Transferor
Indemnified Losses") awarded against or incurred by any of them that arise out
of or relate to this Agreement, any other Transaction Document or any of the
transactions contemplated herein or therein or the use of proceeds herefrom or
therefrom (including any Transferor Indemnified Losses (i) relating to any
Adverse Claim, without regard to whether
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217
such Adverse Claim was a Permitted Adverse Claim, or (ii) arising from any
failure to make any filing or obtain any consent as required by the Federal
Assignment of Claims Act with respect to any Receivables).
Notwithstanding the foregoing, in no event shall any Transferor
Indemnified Party be indemnified for any Transferor Indemnified Losses (a)
resulting from gross negligence or willful misconduct on the part of such
Transferor Indemnified Party (or the gross negligence or willful misconduct on
the part of any of its officers, directors, employees, affiliates or agents),
(b) to the extent they include Transferor Indemnified Losses in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Transferor for the amount of any Receivable or Related Transferred Asset not
paid by the related Obligor, (c) to the extent they are or result from lost
profits, (d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) distributions on the Series
1996-1 Certificates, (ii) franchise or withholding taxes imposed on any
Transferor Indemnified Party other than the Trust or the Trustee in its capacity
as Trustee or (iii) federal or other income taxes on or measured by the net
income of such Transferor Indemnified Party and costs and expenses in defending
against the same, (e) resulting from any breach by such Transferor Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to a Transferor Indemnified Party or is insufficient to hold a
Transferor Indemnified Party harmless, then Transferor shall contribute to the
amount paid by the Transferor Indemnified Party as a result of any loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Transferor Indemnified Party on the one hand
and Transferor on the other hand, but also the relative fault of such Transferor
Indemnified Party (if any) and Transferor and any other relevant equitable
considerations.
SECTION 7.4 Indemnification by Servicer. Servicer agrees that the Agent
and each Holder of a Series 1996-1 Certificate shall be an "Indemnified Party"
for purposes of Section 8.4 of the Pooling Agreement.
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF TIE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 8.2 Counterparts. This Supplement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
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SECTION 8.3 SEVERABILITY OF PROVISIONS. If any one or more of the
provisions or terms of this Supplement shall for any reason whatsoever be held
invalid, then the unenforceable provision(s) or term(s) shall be deemed
severable from the remaining provisions or terms of this Supplement and shall
in no way affect the validity or enforceability of the other provisions or
terms of this Supplement.
SECTION 8.4 AMENDMENT, WAIVER, ETC. This Supplement may be amended,
subject to SECTION 13.1 of the Pooling Agreement and SECTION 10.1 of each
Certificate Purchase Agreement, from time to time by Servicer, Transferor and
Trustee by a written instrument signed by each of them
SECTION 8.5 TRUSTEE. Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or suffciency of this Supplement
or for or in respect of the recitals contained herein, all of which recitals
are made solely by Transferor and Servicer.
SECTION 8.6 INSTRUCTIONS IN WRITING. All instructions given by Servicer to
Trustee pursuant to this Supplement shall be in writing, and may be included in
a Daily Report or Monthly Report.
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IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
-------------------------------
Title: Vice President
------------------------------
Address: c/o Nevada Corporate
Management, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION, as Servicer
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
-------------------------------
Title: Vice President
------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 8614746
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ Russell T. Whitley
---------------------------------
Name: Russell T. Whitley
-------------------------------
Title: ASST. VICE PRESIDENT
------------------------------
Address: One M&T Plaza, 7th Floor
Buffalo, New York 14203
Attention: Russell Whitley
Facsimile: (716) 8424474
220
EXHIBIT A - Part 1
to the Series 1996-1 Supplement
FORM OF CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND
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WILL NOT BECOME A PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. [If this representation cannot be
made, Transferor, Servicer or the Trustee may require the legend to contain
additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
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BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: Maximum Principal Amounts
$____________________
THIS CERTIFIES THAT __________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18,1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Transferor"), HOWMET
CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation, as trustee (together with its
successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-I Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class A, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been executed
by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
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223
By its acceptance of this Certificate, each Holder hereof (a) acknowledges
that it is the intent of Transferor, and agrees that it is the intent of the
Holder that, for purposes of Federal, applicable state and local income and
franchise and other taxes measured by or imposed on income, the Class A, Series
1996-1 Certificates (including this Certificate) will be treated as evidence of
indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be executed
by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:______________________________
Title: __________________________
4
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in the
Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________
Title: _______________________
Dated: ____________, 1996
5
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PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ----------- ------------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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226
EXHIBIT A - Part 2
to the Series 1996-1 Supplement
FORM OF CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
227
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot be made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
228
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B. SERIES 1996-1 CERTIFICATE
Date: $________________
THIS CERTIFIES THAT _________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and are
therefore subordinated to the Class A, Series 1996-1 Certificates, Series 1996-1
Certificates and Certificates in any other Senior Class that may be issued from
time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been executed
by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a) acknowledges
that it is the intent of Transferor, and agrees that it is the intent of the
Holder that, for purposes of Federal, applicable state and local income
3
229
and franchise and other taxes measured by or imposed on income, the Class B,
Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be executed
by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:___________________________________
Title: _______________________________
4
230
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in the
Pooling Agreement, as supplemented by the Supplement
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: ____________________________________
Title: _________________________________
Dated: ____________, 1996
5
231
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ------------ ------------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
232
EXHIBIT B
Form of Daily Report
233
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
AMOUNT PURCHASED REPAID BALANCE STATED AMOUNT
---------------- ------ ------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
234
EXHIBIT B
FORM OF DAILY REPORT
235
BLADE RECEIVABLES CORPORATION
DAILY REPORT
- --------------------------------------------------------------------------------
* Unprotected items must be hand input *
- --------------------------------------------------------------------------------
* All amounts labeled "less" must be input as negative *
- --------------------------------------------------------------------------------
* DO NOT DELETE ROWS OR COLUMNS!! *
- --------------------------------------------------------------------------------
BLADE RECEIVABLES CORPORATION DAILY REPORT
Pre-Liquidation
Daily Report Date 15-Apr-96 27-Mar-97
Preceding Daily Report Date 12-Apr-96 09:15 AM
Prepared by
-----------------
page 1
A. DAILY RECEIVABLES ACTIVITY HOWMET
TOTAL
-----
1. BEGINNING DAILY RECEIVABLES BALANCE 90,651,196
2. Plus: New Invoices 2,370,337
3. Less: Cash Collections Applied to Reduce Receivables Balance (5,875,318)
(including New Checks in the Process of Collection)
4. Less: Dilution (121,492)
5. Less: Write-offs 0
6. Less: Misc. Adjustments (Non-Dilutive) 0
7. ENDING DAILY RECEIVABLES BALANCE 87,024,723
===========
B. NET ELIGIBLE RECEIVABLES
1. ENDING DAILY RECEIVABLES BALANCE 87,024,723
Less: Accounts of Ineligible Obligors
2. Less: Bankrupt accounts (4,096)
3. Less: Federal/State Government accounts 0
4. Less: "Cash in advance" or "cash on account" customers (26,189)
5. Less: Ineligible due to notes receivable 0
6. Less: Accounts with over 50% of unpaid balance > 90 days from Due Date (826,109)
Less: Specific Ineligible Receivables
7. Less: Receivables > 90 days from due date (5,671,092)
8. Less: Receivables with original due date >120 days from date invoice is delivered 0
9. Less: Receivables otherwise not eligible (due to denomination in currency other than 0
dollars, invalid contract, change in business, breach of
warranty, consent requirement, violation of law, improper
modification, etc.)
10. Less: Balance of disputed invoices (or, if less, the aggregate amount of disputes) (2,711,217)
11. Less: Contra balances (weekly) (205,059)
12. INELIGIBLE RECEIVABLES (9,443,761)
13. ELIGIBLE RECEIVABLES 77,580,962
14. Less: Unapplied Cash (balance in MCA not applied to Receivables) 491,536
15. Plus: Aggregate Retained Balances ( balances in lockbox and concentration
accounts for which there has been a reduction in receivables balance) 0
16. ADJUSTED ELIGIBLE RECEIVABLES 77,089,426
17. Less: Excess Concentration Balances (See attached supporting calculations) 0
18. Less: Adverse Claims 0
19. NET ELIGIBLE RECEIVABLES 77,089,426
236
C. CARRYING COST RECEIVABLES RESERVE
Carrying Cost Receivables Reserve = (C.1) + (C.2) + (C.7) - (C.11)
1. Current Carrying Costs (i.e. Interest and Servicing fee due on next interest payment date 456,335
and any interest payment date ending within a week thereof)
2. ESTIMATED FUTURE INTEREST (C.3 x(C.4 x C.5) X C.6) 1,249,507
3. Invested Amount (see E.1) 60,000,000
4. Volatility Factor (GIVEN BY RATING AGENCY) 1.50
5. Certificates Rate (Benchmark rate plus spread) 5.9500%
$ Outstanding LIBOR rate ABR rate Spread Base Rate:
Series 1996-1 Certificates (LIBOR Tranche A) 47,500,000 5.4102% 0.5000% 5.9102%
Series 1996-1 Certificates (LIBOR Tranche B) 7,500,000 5.4023% 0.8000% 6.2023%
Series 1996-1 Certificates (LIBOR Tranche C) 0 5.5000% 0.5000% 0.0000%
Series 1996-1 Certificates (LIBOR Tranche D) 0 5.5000% 0.5000% 0.0000%
Series 1996-1 Certificates (ABR Tranche) 0 8.2500% 0 0.0000%
Total 55,000,000
6. (2 X Turnover days Dvd. by 360) 0.2333
Turnover Days 42
7. ESTIMATED FUTURE SERVICING ( C.8 x C.9 x C.10 x C.6) 444,733
8. Series Collection Allocation Percentage (on next preceeding distribution date (see E.9)) 100.00%
9. Aggregate unpaid balance of Receivables held by Trust on next preceeding 0
Distribution date (from monthly report) ................................... 95,300,000
10. Percentage 2.00%
11. Carrying Cost Account beginning balance (see preceding day's Daily Report K.6) 428,544
12. CARRYING COST RECEIVABLES RESERVE 1,722,031 1,722,031
237
D. NET INVESTED AMOUNT
1. Outstanding Principal Amount of Certificates (see E.1) 55,000,000
2. Less: Amount in Equalization Account (see yesterday's L.11) (9,932,393)
3. Less: Amount in Principal Funding Account (see yesterday's M.5) 0
------------
4. NET INVESTED AMOUNT 45,067,607
E. SERIES COLLECTION ALLOCATION PERCENTAGE
1. INITIAL INVESTED AMOUNT 55,000,000
2. Carrying Cost Receivables Reserve (see C.12)) 1,722,031
3. One minus Class B Reserve Ratio (see F.1) 78.99%
4. Ending Daily receivables balance (see A.7) 87,024,723
5. Net Eligibles Receivables (see B.21) 77,089,426
6. REQUIRED RECEIVABLES FOR SERIES 1996-1 ((E.1 + E.2) / E.3) x (E.4 / E.5)) 81,063,901
7. Required Receivables for all other series 0
8. REQUIRED RECEIVABLES FOR ALL SERIES (E.6 + E.7) 81,063,901
9. SERIES COLLECTION ALLOCATION PERCENTAGE (E.6 / E.8) 100.0%
F. BASE AMOUNT AND ASSET SURPLUS / SHORTFALL
1. Memo: "Class B Reserve Ratio" (see effective Settlement Statement) 21.01%
2. NET ELIGIBLE RECEIVABLES (from B.21) 77,089,426
3. Times: Series Collection Allocation Percentage (see E.9) 100.0% 77,089,426
4. Times: 100% less "Class B Reserve Ratio" 78.99% 60,892,938
------------
5. Less: Class A Subordination Deficit (see effective Settlement Statement) --
6. Less: Carrying Cost Receivables Reserve (see C.(12)) 1,722,031.18
----------
7. BASE AMOUNT 59,170,906
----------
8. Less: Net Invested Amount (see D.4) 45,067,607
9. ASSET SURPLUS/SHORTFALL 14,103,300
==========
G. CARRYING COST CASH REQUIRED AMOUNT
1. Current Carrying Costs (See C.1) 456,335
2. CARRYING COST CASH REQUIRED AMOUNT (see G.1) 456,335
3. Beginning Balance in Carrying Cost Account (see C.11) 428,544
4. Carrying Cost Account Surplus (Deficit) (G.3-G.2) (27,791)
============
238
H. DAILY CASH ALLOCATIONS
1. Amount Transferred from Concentration Account to Master Collection 2,726,390
Account
2. Plus: Funds held in Master Collection Account pursuant to 0
clause (i) of Fifth Priority (prior Day)
3. Plus: Excess funds released from Carrying Cost Account (see G.4 0
(if positive))
4. Plus: Release of funds from Equalization Account (see L.6) 9,712,788
5. Plus: Reinvestment earnings (interest in Trust Accounts) 0
-----------
6. FUNDS AVAILABLE FOR ALLOCATION 12,439,178
===========
Amounts Allocated
required funds (from
per priority H.6 above) Excess/Shortfall
------------ ---------- ----------------
First, Allocation to Carrying Cost Account 27,791 27,791 0
(until funds allocated thereto equals
CARRYING COST CASH REQUIRED AMOUNT from
G.4 above (if negative))
Second, Prior to Series Amortization Period, If 0 0 0
Net Invested Amount exceeds the Base Amount,
allocation to Equalization Account in an amount
sufficient to reduce the Net Invested Amount to
an amount equal to the Base Amount In early Series
Amortization Period, allocation to a sub-account of
the Principal Funding Account for the related series.
Third, During any Series Amortization Period, to the applicable 0 0 0
sub-account of the Principal Funding Account until the
amount on deposit in the account equals the applicable
Principal Deposit Account
Fourth, Held for payments of other amounts payable to the holders of 0 0
the Series 1995-1 Certificates on the next distribution date.
Fifth, (i) Cash set aside in MCA as requested by BRC 0 0
(ii) Payment to BRC 0 12,411,386
I. INVESTED AMOUNT
1. BEGINNING INVESTED AMOUNT (yesterday's ending amount) 55,000,000
2. Less: Principal Payments 0
3. Less: Reductions on Account of write-offs or dilution 0
------------
4. ENDING INVESTED AMOUNT 55,000,000
============
J. MASTER COLLECTION ACCOUNT (MCA)
1. BEGINNING MCA BALANCE (yesterday's (J.11) ending balance) 0
2. Plus: Cash Collections (see H.1) 2,726,390
3. Plus: Excess cash released from Carrying Cost Account (see G.4) 0
4. Plus: Excess funds reallocated to MCA from Equalization Account (see L.6) 9,712,788
5. Plus: Reinvestment earnings (seeH.5) 0
6. Less: Cash allocated to Carrying Cost Account (see First priority) (27,791)
7. Less: Cash allocated to Principal Funding Account (see Second priority) 0
8. Less: Cash allocated to Equalization Account or Principal Funding Account
(see Third priority) 0
9 Less: Payments made pursuant to Fourth priority 0
10. Less: Payment to BRC (see Fifth priority (clause II)) (12,411,386)
-----------
11. ENDING MCA BALANCE 0
===========
K. CARRYING COST ACCOUNT
1. BEGINNING CARRYING COST ACCOUNT BALANCE (yesterday's ending balance)
(see C.11) 428,544
2. Plus: Cash allocated today pursuant to First priority in Daily Cash
Allocations (see I. First priority) 27,791
3. Less: Payment of interest on Certificates (on Distribution or Interest
Payment Date) 0
4. Less: Payment of Servicing Fee and other Carrying Costs 0
5. Less: Release of any excess cash for today's daily allocation (see G.4
(if positive)) 0
-----------
6. ENDING CARRYING COST ACCOUNT BALANCE 456,335
===========
239
L. EQUALIZATION ACCOUNT
DETERMINATION OF AMOUNT REQUIRED TO BE DEPOSITED INTO EQUALIZATION ACCOUNT TODAY
1. Amount required to be deposited into Equalization Account today (F.8 (if negative)) 0
2. Cash available for deposit into Equalization Account today (H.6 minus First Priority) 12,411,386
------------
3. Amount actually deposited into Equalization Account today (minimum of L.1, L.2) 0
DETERMINATION OF SURPLUS OF FUNDS IN EQUALIZATION ACCOUNT TODAY
4. Asset Surplus [see F.8 (if positive)] 14,103,300
5. Beginning Equalization Account Balance (see L.7) 9,712,788
------------
6. EXCESS FUNDS IN EQUALIZATION ACCOUNT (if F.8>0, then the lesser of L.4 and L.5) 9,712,788
------------
EQUALIZATION ACCOUNT BALANCE
7. BEGINNING EQUALIZATION ACCOUNT BALANCE (Yesterday's ending balance (L.11)) 9,712,788
8. Plus: Today's deposit to Equalization Account (see L.3) 0
9. Less: Excess funds reallocated from Equalization Account to Master Collection Acct (see L.6) 9,712,788
10. Less: Cash reallocated from Equalization Acct to Principal Funding Acct (pursuant to 4.5 of Supplement) 0
11. ENDING EQUALIZATION ACCOUNT BALANCE (L.7 + L.8 - L.9 - L.10) 0
============
M. PRINCIPAL FUNDING ACCOUNT
1. BEGINNING PRINCIPAL FUNDING ACCOUNT BALANCE (yesterday's ending balance (M.5)) 0.00
2. Plus: Cash allocated to Principal Funding Account (see Second, and Third priorities) 0.00
3. Less: Prepayment of Certificates 0.00
4. Plus: Cash reallocated from Equalization Account to Principal Funding Account (see L.10) 0.00
5. ENDING PRINCIPAL FUNDING ACCOUNT BALANCE 0.00
============
N. NONCOMPLYING RECEIVABLES AND DILUTION ADJUSTMENTS AND SELLER ADJUSTMENTS
1. Seller Dilution Adjustments (see A.4) (121,492)
2. Seller Noncomplying Receivables Adjustments 0
3. Minus Customer payment (if any) BRC received yesterday on account of Seller 0
4. Noncomplying Receivables that have already been adjusted 0
5. Minus Previous 5 Days Noncomplying Receivables and Dilution Adjustments 0
6. NONCOMPLYING RECEIVABLES AND DILUTION ADJUSTMENTS (121,492)
O. PURCHASE PRICE
1. New Invoices (as of the close of business on the preceding business day) (from A.2) 2,370,337
2. Purchase Price Percentage (see effective Monthly Report) 98.69%
3. Purchase Price = Net New Invoices (see O.1) x Purchase Price Percentage (see O.2) 2,339,285
4. Minus Noncomplying Receivables and Dilution Adjustments (see N.5) (121,492)
5. Purchase Price Payable (O.3 - O.4) 2,217,794
6. Payment of Purchase Through Reduction of Acquisition Loan 0
7. Payment of Purchase Price through Cash consideration (see H. fifth) 12,411,386
8. Payment of Purchase Price through increase in Buyer Note (10,193,593)
9. Total Consideration for Purchase of New Receivables 2,217,794
240
P. NET WORTH TEST
YES / NO
1. Net Worth of Transferor at least 17% of Total Receivables --------
Yes
--------
Q BUYER NOTES
1. BEGINNING BUYER NOTES PRINCIPAL BALANCE 0
2. Plus: Increase in BUYER NOTE principal balance for payment of Purchase Price (see O.9) (10,193,593)
3. Less: Decrease in BUYER NOTE principal balance (but not below zero) if O.9 < 0 0
5. ENDING BUYER NOTE PRINCIPAL BALANCE (10,193,593)
SERVICER'S INSTRUCTIONS TO TRUSTEE SCHEDULE A
I. Cash Flows Summary
- ----------------------
1. Funds to be allocated to Carrying Cost Account from Master Collection Account (see J.6) 27,791
2. Payment of Carrying Costs from Carrying Cost Account (on Distribution or Interest Payment Date)
0
(a) Interest on Series 1996-1 Certificates (on Distribution or Interest Payment Date) (see II-A below) 0
3. Funds to be allocated to Principal Funding Account from Master Collection Account (see J.7) 0
4. Payments of Additional Amounts (see II-A) 0
5. Funds to be allocated to Equalization Account from Master Collection Account (see J.8) 0
6. Funds to be reallocated to Master Collection Account from Equalization Account (see L.9) 9,712,788
7. Funds to be allocated to Principal Funding Account from Equalization Account (see L.10) 0
8. Payment to Transferor from Master Collection Account (see J.10) (12,411,386)
9. Funds to be allocated to MCA from Carrying Cost Account (K.5) 0
II-A. Summary of Cash Flows to Agent
- -------------------------------------
Principal Interest Other Breakage Total
--------- -------- ----- -------- -----
1. 0 0 0 0 0
III. Summary Wire Transfer Instructions for Trustee
1. From Master Collection Acct # to Carrying Cost Acct # 27,791
2. From Master Collection Acct # to Principal Funding Acct # 0
3. From Master Collection Acct # to Equalization Acct # 0
4. From Master Collection Acct # to Transferor Acct # 12,411,386
5. From Carrying Cost Acct # to Servicer Acct # 0
6. From Carrying Cost Acct # to Agent Acct # 0
7. From Equalization Acct # to Master Collection Acct # 9,712,788
8. From Equalization Acct # to Principal Funding Acct # 0
9. From Principal Funding Acct # to Agent Acct # 0
10. Funds to be allocated to MCA from Carrying Cost Account (G.4) 0
241
EXHIBIT C
Form of Monthly Report
242
MONTHLY REPORT
- ----------------------------------------------------------------------------
* Unprotected items must be hand input *
- ----------------------------------------------------------------------------
* All amounts labeled "less" must be input as negative *
- ----------------------------------------------------------------------------
MONTHLY REPORT
Report Date 31-Mar-96 27-Mar-97
Preceding Report Date 26-Feb-96 09:17 AM
Prepared by
-------------------
A. MONTHLY RECEIVABLES ACTIVITY
TOTAL
-----
1. BEGINNING MONTHLY RECEIVABLES BALANCE 101,866
2. Plus: New Invoices 80,362
3. Less: Cash Collections (84,975)
4. Less: Total Dilution (1,953)
5. Less: Write-offs 0
6. ENDING MONTHLY RECEIVABLES BALANCE 95,300
B. TURNOVER DAYS
1. Turnover Days = ( ( a + b ) / 2 x c (days in fiscal month) ) / d
(a). Aggregate Receivables Balance as of beginning of most recent Calculation Period (see A.1) 101,866
(b). Aggregate Receivables Balance as of most recent Cut-Off Date (see A. 6) 95,300
(c). Days in Fiscal Month 35
(d). Aggregate Invoices generated during preceding Calculation Period (see A.2) 80,362
2. TURNOVER DAYS (TD) 43
C. INVESTOR CERTIFICATES
1. INVESTED AMOUNT
Series 1996-1 A Certificates $ 47,500,000
Series 1996-1 B Certificates 7,500,000
------------
Total Invested Amount $ 55,000,000
2. INTEREST RATES (AS OF MOST RECENT DISTRIBUTION DATE):
Series 1996-1 Certificates (LIBOR Tranche A)
Series 1996-1 Certificates (LIBOR Tranche B)
Series 1996-1 Certificates (ABR Tranche)
Certificate Spread for Tranche A LIBO Rate Loans 0.80%
Certificate Spread for Tranche B LIBO Rate Loans 0.50%
Certificate Spread for ABR Loans 0.00%
243
D. CLASS A LOSS RESERVE RATIO
TOTAL
-----
1. LOSS RESERVE RATIO = ( a x b x ( c / d) ) x p
where:
(a) the Applicable Ratings Factor 2.00
(b) highest 3-mon. average of the "Aged Receivables Ratio" 1.564%
for any three consecutive Calculation
Periods that occurred during the
preceding 12 calculation periods ending
on most recent Cut-Off Date (See L)
(c) Sum of total Receivables generated for the preceeding four prior Calculation Periods 273,209,000
(d) Adjusted Eligible Receivables on most recent Cut Off Date
(see line B.16 of Daily Report for most recent Cut-Off Date) 80,230,778
(p) Payment Term Multiplier (See L) 1
-----------
2. CLASS A LOSS RESERVE RATIO 10.650%
-----------
E. CLASS A DILUTION RESERVE RATIO TOTAL
-----
-----------
1. DILUTION RESERVE RAT. = = { ( a x b ) + [ ( c - b ) x ( c / b ) ] } x d 13.78%
-----------
where:
[a] = the Applicable Ratings Factor 2.00
[b] = the average of the Dilution Ratios during the 12 consecutive Calculation Periods 3.33%
ending on the related Cut-Off Date
[c] = the highest Dilution Ratio for any Calculation Period within the 12 consecutive Calculation 4.12%
Periods ending on the related Cut-Off Date, and
[d] = the Dilution Horizon Variable for such Seller Group (total Receivables generated during the 1.806
two Calculation Periods ending on a most recent Cut-Off Date divided by Adjusted Eligible
Receivables on most recent Cut-Off Date (see line B.16 of Daily Report for most recent cut-
off date))
F. CLASS A RESERVE RATIO
THE CLASS A RESERVE RATIO EQUALS THE GREATER OF (i) CLASS A MINIMUM REQUIRED
RESERVE RATIO, AND (ii) THE SUM OF THE LOSS RESERVE RATIO AND DILUTION RESERVE
RATIO.
TOTAL
-----
1. Class A Minimum Required Reserve Ratio = = a + (b x c) 26.01%
where:
(a) = the "Concentration Factor" for the Cut-Off 20.00%
Date (which equals the greatest of (i) 1.3333
times the "Benchmark Percentage" then in effect
for purposes of clause (3) of the definition of
Excess Concentration Balances, (ii) two
times the "Benchmark Percentage" for
purposes of clause (4) of that
definition, (iii) the sum of (A) all
Special Concentration Limits, then in
effect with respect to Tier-5
Obligors, plus (B) the product of the
"Benchmark Percentage" then in effect
for purposes of clause (5) of the
definition of Class A Incremental
Concentration Balance times the
excess of four over.
the number of Special Obligors.
(b) average of "Dilution Ratios" over the preceding 12 Calculation Periods 3.33%
(c) Dilution Horizon Variable (see E.1(d)) 1.806
Provided that the Minimum Required Reserve Ratio shall not be less than 20%
2. Loss Reserve Ratio + Dilution Reserve Ratio
where:
(a) Loss Reserve Ratio (from D1 above) equals 10.65%
(b) Dilution Reserve Ratio (from E1 above) equals 13.78%
3. CLASS A REQUIRED RESERVE RATIO (SUM OF RESERVE RATIOS) 24.43%
-----------
4. CLASS A RESERVE RATIO (GREATER OF F1 AND F3) 26.01%
-----------
244
G. CLASS B LOSS RESERVE RATIO
TOTAL
-----
1. LOSS RESERVE RATIO = ( a x b x ( c / d) ) x p
where:
(a) the Applicable Ratings Factor 1.50
(b) highest 3-mon. average of the "Aged Receivables Ratio" 1.564%
for any three consecutive Calculation
Periods that occurred during the
preceding 12 calculation periods ending
on most recent Cut-Off Date (See L)
(c) Sum of total Receivables generated for the preceeding four prior Calculation Periods 273,209,000
(d) Adjusted Eligible Receivables on most recent Cut Off Date
(see line B.16 of Daily Report for most recent Cut-Off Date) 80,230,778
(p) Payment Term Multiplier (See L) 1
-----------
2. CLASS B LOSS RESERVE RATIO 7.990%
-----------
H. CLASS B DILUTION RESERVE RATIO TOTAL
-----
-----------
1. DILUTION RESERVE RAT. = = { ( a x b ) + [ ( c - b ) x ( c / b ) ] } x d 10.78%
-----------
where:
[a] = the Applicable Ratings Factor 1.50
[b] = the average of the Dilution Ratios during the 12 consecutive Calculation Periods 3.33%
ending on the related Cut-Off Date
[c] = the highest Dilution Ratio for any Calculation Period within the 12 consecutive Calculation 4.12%
Periods ending on the related Cut-Off Date, and
[d] = the Dilution Horizon Variable for such Seller Group (total Receivables generated during the 1.806
two Calculation Periods ending on a most recent Cut-Off Date divided by Adjusted Eligible
Receivables on most recent Cut-Off Date (see line B.16 of Daily Report for most recent cut-
off date))
I. CLASS B RESERVE RATIO
THE CLASS B RESERVE RATIO EQUALS THE GREATER OF (i) CLASS B MINIMUM REQUIRED
RESERVE RATIO, AND (ii) THE SUM OF THE LOSS RESERVE RATIO AND DILUTION RESERVE
RATIO.
TOTAL
1. Class B Minimum Required Reserve Ratio = = a + (b x c) 21.01%
where:
(a) = the "Concentration Factor" for the Cut-Off Date
(which equals the greatest of (i) the "Benchmark Percentage" 15.00%
then in effect for purposes of clause
(c) of the definition of Excess
Concentration Balances, (ii) 1.5
times the "Benchmark Percentage" for
purposes of clause (d) of that
definition, (iii) the sum of (A) all
Special Concentration Limits, then in
effect with respect to Tier-5
Obligors, plus (B) the product of the
"Benchmark Percentage" then in effect
for purposes of clause (e) of the
definition of Excess Concentration
Balances times the excess of 2.75
over the number of Special Obligors.
(b) average of "Dilution Ratios" over the preceding 12 Calculation Periods 3.33%
(c) Dilution Horizon Variable (see H.1(d)) 1.806
Provided that the Minimum Required Reserve Ratio shall not be less than 15%
2. Loss Reserve Ratio + Dilution Reserve Ratio
where:
(a) Loss Reserve Ratio (from G1 above) equals 7.99%
(b) Dilution Reserve Ratio (from H1 above) equals 10.78%
3. CLASS B REQUIRED RESERVE RATIO (SUM OF RESERVE RATIOS) 18.77%
-----------
4. CLASS B RESERVE RATIO (GREATER OF I1 AND I3) 21.01%
-----------
245
J. CLASS A SUBORDINATION DEFICIT
THE CLASS A SUBORDINATION DEFICIT EQUALS THE POSITIVE RESULT (IF ANY) OF (a)
CLASS A REQUIRED RESERVE PLUS (b) THE CLASS A INCREMENTAL CONCENTRATION BALANCE,
MINUS THE SUM OF THE CLASS B REQUIRED RESERVE PLUS THE OUTSTANDING PRINCIPAL
AMOUNT OF ALL SUBORDINATED CLASSES.
1. Class A Reserve Ratio (See F.4.) 26.01%
2. Class A Incremental Concentration Balance 0.000%
3. Class B Reserve Ratio (See I.4.) 21.01%
4. Outstanding Principal - Subordinated Classes (See C) $ 7,500,000
Subordinated Classes (expressed as a percentage of total Invested Amount) 13.64%
5. Sum of Class B Required Reserve and Subordinated Classes (Sum J3 and J4) 34.65%
SUBORDINATION DEFICIT (J3 LESS J5 IF POSITIVE) 0.00%
K. LIQUIDATION EVENTS
1. EARLY AMORTIZATION EVENT (SEE SECTION 6.1 OF THE SERIES 1996-1 SUPPLEMENT TO
THE POOLING AND SERVICING AGREEMENT)
-------------
Triggered ? NO
-------------
If yes, explain below.
2. SERVICER DEFAULTS (SEE SECTION 10.1 OF THE POOLING AND SERVICING AGREEMENT)
-------------
Triggered ? NO
-------------
If yes, explain below.
3. RECEIVABLE PERFORMANCE TRIGGERS
-------------
3 month average "Aged Receivables Balance" > 2.50% ? NO
-------------
3 month average ratio of 61-90 days past due to -------------
Receivables Pool > 5.75% ? NO
-------------
-------------
3 month average Dilution Ratio > 6.75% ? NO
-------------
246
L. AGED RECEIVABLES RATIO
TOTAL 121 TO
- ----- 150 DAYS NET
PAST DUE WRITE-OFFS INVOICE
-------- ---------- -------
PRECEDING CUT-OFF DATE 1,158,000 0 80,362,000
2ND PREC. CUT-OFF DATE 64,518,000
3RD PREC. CUT-OFF DATE 57,076,000
4TH PREC. CUT-OFF DATE 71,253,000
5TH PREC. CUT-OFF DATE 50,239,000
AGED RECEIVABLES RATIO = Receivables 121 to 150 days past due as of the
(preceding Calculation Period) most recent Cut-Off Date plus "Write-Offs" = 1,158,000
---------------------------------------------------------------------- ----------
Invoices generated during the Calculation Period 5 months prior 50,239,000
---------------
= 2.3050%
---------------
AGED RECEIVABLES RATIO: TOTAL
- ----------------------- -----
Preceding Calculation Period (from above) 2.3050%
2nd Preceding Calculation Period (from preceding Settlement Statement) 1.3780%
3rd Preceding Calculation Period (from 2nd preceding Settlement Statement) 1.0089%
PRECEDING MONTH'S 3-MONTH ROLLING AVERAGE OF AGED RECEIVABLES RATIO 1.5640%
2nd preceding month's 3-month average of Aged Receivables Ratio 1.1918%
3rd " 1.1783%
4th " 1.2600%
5th " 1.1789%
6th " 1.2528%
7th " 1.2681%
8th " 1.4164%
9th " 1.5290%
10th " 1.4770%
11th " 1.3368%
12th " 1.2444%
----------
HIGHEST 3-MONTH AVERAGE OVER PAST 12 MONTHS 1.564%
----------
----------
PAYMENT TERM MULTIPLIER (refer to weighted average payment terms) 1
----------
Weighted Average Payment Terms Payment Term Multiplier Current Weighted Average Payment Term
- ------------------------------ ----------------------- -------------------------------------
Less Than 41 Days 1 39.43
41 to 50 Days 1.17
51-60 Days 1.25
Up to 90 Days 1.5
247
M. DILUTION RATIO SCHEDULE B
TOTAL
- -----
Dilution Ratio = Total Dilution in Calculation Period 1,948,000
-------------------------------------------------------------------
Total invoices generated during the Preceeding Calculation Period 57,076,000
---------------
= 3.413%
---------------
767,000
Rolling Avg.
1 Month 2 Month
Dilution Dilution
Dilution Ratio Ratio Ratio
- -------------- ----- -----
PRECEDING MONTH'S DILUTION RATIO (FROM ABOVE) 3.413% 3.213%
2nd preceding month's Dilution Ratio 3.013% 2.814%
3rd 2.615% 2.647%
4th 2.679% 2.222%
5th 1.765% 2.182%
6th 2.599% 3.577%
7th 4.555% 4.118%
8th 3.680% 4.036%
9th 4.391% 4.062%
10th 3.733% 3.584%
11th 3.434% 3.747%
12th 4.059% 3.839%
13th 3.618%
(a) AVERAGE DILUTION RATIO OVER THE LAST 12 MONTHS 3.328%
(b) HIGHEST 2-MO. ROLLING AVERAGE OF DILUTION RATIO OVER THE MOST RECENT 12 MONTHS 4.118%
N. PURCHASE PRICE CALCULATION
Purchase Price Percentage = 100% - (Loss Discount + Purchase Discount Reserve Ratio) 98.69%
Loss Discount = Loss to Liquidation Ratio = a / b 0.000%
a) aggregate unpaid balance of Receivables ( net of recoveries ) written
off or evidenced by promissory notes during the three preceeding Calculation Periods
b) aggregate Collections during three preceeding Calculation Periods
-------------
Loss Discount 0.000%
-------------
Net Write Offs/Promissory Notes Collections
------------------------------- -----------
Preceding Month 0 63,235,000
2nd Preceding Month 0 55,609,000
3rd Preceding Month 0 57,640,000
PURCHASE DISCOUNT RESERVE RATIO = ( TD/360 X DR ) +PD 1.313%
TD = Turnover Days for Receivables originated during the preceeding Calculation Period 42.936
DR = a fraction, the numerator of which is 12 times accrued Carrying Costs for the preceeding
Calculation Period and the denominator of which is the unpaid balance of Receivables
as of the last day of the preceeding Calculation Period 6.0%
Carrying Costs = 475,008
EOM Receivables = 95,300,000
PD = 0.60% 0.60%
248
PROJECT BLADE - TAKEOUT
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
dated as of April 18, 1996
between
HOWMET CORPORATION
and
CERTAIN SUBSIDIARIES OF HOWMET CORPORATION
as Sellers
and
BLADE RECEIVABLES CORPORATION
as Buyer
249
TABLE OF CONTENTS
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement to Purchase and Sell....................................2
SECTION 1.2 Timing of Purchase................................................3
SECTION 1.3 Consideration for Purchases.......................................3
SECTION 1.4 No Recourse.......................................................3
SECTION 1.5 No Assumption of Obligations Relating to Receivables, Related
Assets or Contracts...............................................3
SECTION 1.6 True Sales........................................................3
SECTION 1.7 Addition of Sellers...............................................4
SECTION 1.8 Termination of Status as a Seller.................................4
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price.....................................6
SECTION 2.2 Definitions and Calculations Related to Purchase Price
Percentage........................................................7
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments...........................................8
SECTION 3.2 The Buyer Notes..................................................11
SECTION 3.3 Application of Collections and Other Funds.......................11
SECTION 3.4 Servicing of Receivables and Related Assets......................12
SECTION 3.5 Adjustments for Noncomplying Receivables, Dilution and Cash
Discounts........................................................12
SECTION 3.6 Payments and Computations, Etc...................................13
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase.........................13
SECTION 4.2 Certification as to Representations and Warranties...............14
SECTION 4.3 Effect of Payment of Purchase Price..............................15
250
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Sellers ................ 15
SECTION 5.2 Representations and Warranties of Buyer ...................... 21
ARTICLE VI
GENERAL COVENANTS OF THE SELLERS
SECTION 6.1 Affirmative Covenants ........................................ 21
SECTION 6.2 Reporting Requirements ....................................... 24
SECTION 6.3 Negative Covenants ........................................... 26
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SPECIFIED ASSETS
SECTION 7.1 Rights of Buyer .............................................. 29
SECTION 7.2 Responsibilities of the Sellers .............................. 29
SECTION 7.3 Further Action Evidencing Purchases .......................... 30
SECTION 7.4 Collection of Receivables; Rights of Buyer and Its Assignees.. 31
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by the Sellers ................................... 32
SECTION 8.2 Automatic Termination ........................................ 32
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Sellers ................................... 33
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments,' Waivers, Etc .................................... 35
SECTION 10.2 Notices, Etc ................................................. 35
SECTION 10.3 Cumulative Remedies .......................................... 36
SECTION 10.4 Binding Effect; Assignability; Survival of Provisions ........ 36
SECTION 10.5 Governing Law ................................................ 36
SECTION 10.6 Costs, Expenses and Taxes .................................... 37
SECTION 10.7 Submission to Jurisdiction ................................... 37
ii
251
SECTION 10.8 Waiver of Jury Trial ......................................... 38
SECTION 10.9 Integration .................................................. 38
SECTION 10.10 Counterparts ................................................. 38
SECTION 10.11 Acknowledgment and Consent ................................... 38
SECTION 10.12 No Partnership or Joint Venture .............................. 39
SECTION 10.13 No Proceedings ............................................... 39
SECTION 10.14 Severability of Provisions ................................... 39
SECTION 10.15 Limitation on Liability of Certain Persons ................... 39
EXHIBITS
EXHIBIT A Form of Buyer Note
EXHIBIT B Form of Seller Assignment Certificate
EXHIBIT C Form of Contribution Agreement
SCHEDULES
SCHEDULE 1 Litigation and Other Proceedings
SCHEDULE 2 Changes in Financial Condition
SCHEDULE 3 Offices of the Sellers where Records are Maintained
SCHEDULE 4 Legal Names, Trade Names and Names Under which the
Companies Do Business
ii
252
This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of
April 18, 1996 (this "Agreement"), is made among HOWMET CORPORATION, a
Delaware corporation ("Howmet"), certain subsidiaries of Howmet that are listed
on the signature pages hereto or that become party hereto in accordance with the
terms hereof (together with Howmet, the "Sellers"), and BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Buyer"). Except as otherwise defined herein,
capitalized terms have the meanings assigned to them in Appendix A to the
Amended and Restated Pooling and Servicing Agreement, dated as of April 18,
1996, among Buyer, as Transferor, Howmet, as Servicer, and Manufacturers and
Traders Trust Company, as Trustee, and this Agreement shall be interpreted in
accordance with the conventions set forth in Part B of such Appendix A.
WHEREAS, the Sellers and Buyer entered into a Receivables Purchase
Agreement dated as of December 13, 1995 (the "Existing Purchase Agreement"),
pursuant to which the Sellers agreed to sell Receivables that they owned on
December 13, 1995, and from time to time thereafter owned, to Buyer, and Buyer
agreed to purchase such Receivables from the Sellers from time to time;
WHEREAS, (i) Buyer, Howmet and the Trustee entered into the Existing
Pooling Agreement pursuant to which Buyer transferred its interest in the
Receivables to the Trust and (ii) the Pooling Agreement amends and restates the
Existing Pooling Agreement in its entirety;
WHEREAS, pursuant to the Pooling Agreement, Buyer intends to transfer
its interests in the Receivables sold pursuant hereto, together with Receivables
contributed to Buyer by Howmet from time to time, to the Trust in order to,
among other things, finance its purchases of Receivables hereunder; and
WHEREAS, the Sellers and Buyer wish to amend and restate the Existing
Purchase Agreement in its entirety, effective upon the date hereof, to read as
set forth in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
253
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement to Purchase and Sell. On the terms and subject to
the conditions set forth in this Agreement (including the conditions to
purchases set forth in Article IV), each Seller agrees to sell, transfer,
assign, set over and otherwise convey to Buyer and Buyer agrees to purchase from
each Seller, at the times set forth in Section 1.2, all of such Seller's right,
title and interest in, to and under:
(a) each Receivable of such Seller that existed and were owing
to such Seller as at the closing of such Seller's business on the
Initial Cut-Off Date,
(b) each Receivable created by such Seller (other than
Contributed Receivables) that arises during the period from and
including the closing of such Seller's business on the Initial Cut-Off
Date to but excluding the earlier to occur of (i) the Purchase
Termination Date and (ii) the Termination Effective Date (if any) for
such Seller,
(c) all Related Security with respect to all Receivables
(other than Contributed Receivables) of such Seller,
(d) all proceeds of the foregoing, including all funds
received by any Person in payment of any amounts owed (including
invoice prices, finance charges, interest and all other charges, if
any) in respect of any Receivable described above (other than a
Contributed Receivable) or Related Security with respect to any such
Receivable, or otherwise applied to repay or discharge any such
Receivable (including insurance payments that a Seller or the Servicer
applies in the ordinary course of its business to amounts owed in
respect of any such Receivable (it being understood that property
insurance covering inventory is not so applied and is not included in
this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or
other collateral or property of any Obligor or any other party directly
or indirectly liable for payment of such Receivables, and
(e) all Records relating to any of the foregoing.
As used herein, (i) "Purchased Receivables" means the items listed
above in clauses (a) and (b), (ii) "Related Purchased Assets" means the items
listed above in clauses (c), (d) and (e), (iii) "Related Assets" means the
Related Purchased Assets and the Related Contributed Assets, (iv) "Purchased
Assets" means the Purchased Receivables and the Related Purchased Assets, (v)
"Specified Assets" means the Purchased Receivables, the Contributed Receivables
and the Related Assets, and (vi) "Specified Receivables" means the Purchased
Receivables and the Contributed Receivables. It is understood and agreed that
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254
Howmet may (but shall not be required to) contribute Receivables and Related
Assets to Buyer from time to time, pursuant to one or more Contribution
Agreements substantially in the form of Exhibit D hereto.
SECTION 1.2 Timing of Purchases.
(a) Initial Closing Date Purchases. All of the Purchased Assets of the
Sellers that existed at the closing of Howmet's business on the Initial Cut-Off
Date were sold automatically to Buyer on the Closing Date.
(b) Regular Purchases. Except to the extent otherwise provided in
Section 8.1, 8.2 or (with respect to any Seller) Section 1.8, after the closing
of Howmet's business on the Initial Cut-Off Date until the closing of Howmet's
business on the Business Day immediately preceding the Purchase Termination
Date, all Receivables and the Related Assets of the Sellers shall be deemed to
have been sold to Buyer pursuant hereto immediately (and without further action
by any Person) upon the creation of the Receivable, unless the Receivable and
Related Assets are contributed to Buyer at such time pursuant to a Contribution
Agreement.
SECTION 1.3 Consideration for Purchases. On the terms and subject to
the conditions set forth in this Agreement, Buyer agrees to make Purchase Price
payments to the Sellers in accordance with Article III.
SECTION 1.4 No Recourse. Except as specifically provided in this
Agreement, the sale and purchase of Purchased Assets under this Agreement shall
be without recourse to the Sellers; it being understood that (i) each Seller
shall be liable to Buyer for all representations. warranties, covenants and
indemnities made by such Seller pursuant to the terms of this Agreement, all of
which obligations are limited so as not to constitute recourse to such Seller
for the credit risk of the Obligors, and (ii) Howmet shall be liable to Buyer to
the extent specified in the Seller Guaranty.
SECTION 1.5 No Assumption of Obligations Relating to Receivables.
Related Assets or Contracts. None of Buyer, the Servicer nor the Trustee shall
have any obligation or liability to any Obligor or other customer or client of a
Seller (including any obligation to perform any of the obligations of such
Seller under any Receivable, related Contracts or any other related purchase
orders or other agreements). No such obligation or liability is intended to be
assumed by Buyer, the Servicer or the Trustee hereunder, and any assumption is
expressly disclaimed.
SECTION 1.6 True Sales. The Sellers and Buyer intend the transfers of
the Specified Assets hereunder to be true sales by the Sellers to Buyer that are
absolute and irrevocable and that provide Buyer with the full benefits of
ownership of such Specified Assets, and none of the Sellers nor Buyer intends
the transactions contemplated hereunder to be, or for any purpose to be
characterized as, loans from Buyer to any Seller.
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255
SECTION 1.7 Addition of Sellers. Any Subsidiary of Howmet may become a
Seller hereunder and sell its accounts receivable and property of the types that
constitute Related Assets hereunder to Buyer if the Modification Condition is
satisfied with respect to such addition. Howmet and its Subsidiary that is
proposed to be added as a Seller shall give to Buyer, the Trustee and the Rating
Agencies not less than 30 days' (or such shorter number of days as is acceptable
to Trustee) prior written notice of the effective date of the addition of the
Subsidiary as a Seller. Once the notice has been given, any addition of a
Subsidiary of Howmet as a Seller pursuant to this section shall become effective
on the first Business Day following the expiration of the notice period (or such
later date as may be specified in the notice) on which (i) the Modification
Condition has been satisfied, (ii) Howmet has given the notice described in
Section 3.5(e) of the Pooling Agreement to Buyer, (iii) the Servicer shall have
delivered to the Trustee a supplement to the Monthly Report then in effect as
described in Section 3.5(e) of the Pooling Agreement and Howmet shall have
confirmed in writing to the Trustee that the Seller Guaranty covers Obligations
of such Subsidiary, and (iv) such Subsidiary and the parties hereto shall have
executed and delivered the agreements, instruments and other documents and the
amendments or other modifications to the Transaction Documents, in form and
substance reasonably satisfactory to Buyer and the Trustee, that Buyer or the
Trustee reasonably determines are necessary or appropriate to effect the
addition.
SECTION 1.8 Termination of Status as a Seller. (a) At any time when
more than one Person is a Seller, a Seller may terminate its obligation to sell
its Receivables and Related Assets to Buyer if such Seller (a "Terminating
Seller") is either a Voluntary Terminating Seller or a Mandatory Terminating
Seller.
(b) A "Voluntary Terminating Seller" is a Seller that satisfies the
following requirements:
(i) such Seller shall have given Buyer, the Trustee and the
Rating Agencies not less than 30 days' (or such shorter period as is
acceptable to the Trustee) prior written notice of its intention to
terminate its obligation to sell its Receivables and Related Assets to
Buyer (the date on which such notice is given being the "Terminating
Seller Notice Date"),
(ii) an Authorized Officer of the Terminating Seller shall
have certified that the termination by the Terminating Seller of its
status as a Seller will not have a Material Adverse Effect,
(iii) both immediately before and after giving effect to the
termination by the Terminating Seller, no Early Amortization Event or
Unmatured Early Amortization Event shall have occurred and be
continuing or shall reasonably be expected to occur, and
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256
(iv) either (x) such Seller is a Permitted Terminating Seller
or (y) the Modification Condition is satisfied with respect to the
termination by such Seller.
"Permitted Terminating Seller" means a Voluntary Terminating Seller
that satisfies the following requirements:
(x) the aggregate Unpaid Balance of such Seller's Receivables
on the Cut-Off Date immediately preceding its Terminating Seller Notice
Date would not exceed 20% of the aggregate Unpaid Balance of all
Receivables (calculated as of such Cut-Off Date), and (y) the aggregate
Unpaid Balance of such Seller's Receivables on such Cut-Off Date,
together with the Previously Terminated Seller Amount in respect of the
Sellers terminated pursuant to this subsection 1.8(b) at any time
during the one-year period ending on such Cut-Off Date, would not
exceed 25 % of the sum of the Previously Terminated Seller Amount and
the aggregate Unpaid Balance of all Receivables (calculated as of such
Cut-Off Date) .
"Previously Terminated Seller Amount" means, on any day, the aggregate
Unpaid Balance of Receivables originated by all Permitted Terminating Sellers
previously terminated pursuant to this subsection 1.8(b), calculated with
respect to any Seller as of the Cut-Off Date immediately preceding its
Terminating Seller Notice Date.
(c) A "Mandatory Terminating Seller" is a Seller that has ceased to be
a Subsidiary of Howmet or that has sold all or substantially all of its assets
to any Person (other than a Howmet Person). Howmet shall give Buyer, the Trustee
and the Rating Agencies not less than 10 days' (or such shorter period as is
acceptable to the Trustee) prior written notice of circumstances that would
cause a Seller to become a Mandatory Terminating Seller.
(d) Each Terminating Seller shall have a "Termination Effective Date,"
determined as follows. The Termination Effective Date for a Voluntary
Terminating Seller shall be the first date on which the conditions specified in
subsection 1.8(b) are satisfied. The Termination Effective Date for a Mandatory
Terminating Seller shall be the date on which such Seller ceases to be a
Subsidiary of Howmet or has sold all or substantially all of its assets to any
Person (other than a Howmet Person). As of the Termination Effective Date for
any Terminating Seller, such Terminating Seller shall be relieved of its
obligation to sell, and Buyer shall be relieved to its obligation to buy,
Receivables (and Related Assets with respect thereto) originated by such
Terminating Seller on or after such date. Such Terminating Seller shall not be
relieved of its other Obligations, to the extent such Obligations relate to
Receivables (and Related Assets with respect thereto) originated prior to such
Termination Effective Date, except that (i) any Mandatory Terminating Seller
shall not be bound by subsection 6.3(d) on and after its Termination Effective
Date, and (ii) a Terminating Seller shall be released from all of its
Obligations after the aggregate Unpaid Balance of Receivables originated by such
Seller and included in the Receivables Pool is reduced to zero (whether by sale,
payment or write-off of such Receivables, provided that
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257
any write-offs are made in a manner consistent with such Seller's prior
practices and the Credit and Collection Policy). Notwithstanding such release,
the Obligations of such Terminating Seller under Section 9.1 shall be deemed to
survive for purposes of the Seller Guaranty, and Howmet shall remain liable
under the Seller Guaranty for any claims that would have arisen under Section
9.1 against such Terminating Seller but for such release.
(e) A Terminating Seller may require Buyer to exercise its rights under
Section 13.19 of the Pooling Agreement to cause the Trustee to convey all of its
right, title and interest in all (but not less than all) of the Specified
Receivables (and Related Assets with respect thereto) originated by such
Terminating Seller to a Person designated by such Terminating Seller against
receipt, in cash, of a release price (the "Release Price") of not less than the
aggregate Unpaid Balance of the released Receivables. Any such Terminating
Seller, upon receipt by the Trustee of the Release Price, shall be released from
all of its Obligations. No such release and conveyance shall, however, be
permitted if as a result thereof, any Howmet Person would acquire any of such
Terminating Seller's Specified Receivables. Notwithstanding such release, the
Obligations of such Terminating Seller under Section 9.1 shall be deemed to
survive for purposes of the Seller Guaranty, and Howmet shall remain liable
under the Seller Guaranty for any claims that would have arisen under Section
9.1 against such Terminating Seller but for such release.
(f) A Terminating Seller may (i) sell its Buyer Note to Howmet or any
other Seller for a purchase price equal to the present value of the outstanding
principal amount thereof or (ii) transfer its Buyer Note to Howmet as a
dividend.
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price. (a) On each Business Day
(including the Closing Date), the Servicer shall deliver to Buyer, the Trustee
and How met a Daily Report with respect to Buyer's purchases of Receivables from
the Sellers:
(i) that are to be made on the Closing Date (in the case of
the Daily Report to be delivered on the Closing Date) or
(ii) that were made on the immediately preceding Business Day
(in the case of each subsequent Daily Report).
(b) On each day when Receivables are purchased by Buyer from a Seller
pursuant to Article I, the "Purchase Price " to be paid to such Seller on such
day for the Purchased Receivables and Related Purchased Assets that are to be
sold by such Seller on such day shall be determined in accordance with the
following formula:
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258
PP = AUB x PPP
where:
PP = the aggregate Purchase Price for the Purchased Receivables
and Related Purchased Assets to be purchased from such Seller
on such day,
AUB = the "Aggregate Unpaid Balance" of the Purchased Receivables
that are to be purchased from such Seller on such day. For
purposes of this calculation, "Aggregate Unpaid Balance" shall
mean (i) for purposes of calculating the Purchase Price to be
paid to such Seller on the Closing Date, the sum of the Unpaid
Balance of each Purchased Receivable generated by such Seller,
as measured as at the closing of such Seller's business on the
Initial Cut-Off Date, and (ii) for purposes of calculating the
Purchase Price on each Business Day thereafter, the sum of the
Unpaid Balance of each Purchased Receivable to be purchased
from such Seller on such day, calculated at the time of such
Receivable's sale to Buyer, and
PPP = the Purchase Price Percentage applicable to the Purchased
Receivables to be purchased from such Seller on such day, as
determined pursuant to Section 2.2.
SECTION 2.2 Definitions and Calculations Related to Purchase Price
Percentage.
(a) "Purchase Price Percentage" for the Purchased Receivables to be
sold by a Seller on any day during a Distribution Period shall mean the
percentage determined in accordance with the following formula:
PPP = 100% - (LLR + PDRR)
where:
PPP = the Purchase Price Percentage in effect during such
Distribution Period,
LLR = the Loss to Liquidation Ratio (expressed as a percentage) in
effect during such Distribution Period, and
PDRR = the Purchase Discount Reserve Ratio (expressed as a
percentage) in effect during such Distribution Period, as
determined on such day pursuant to subsection (below.
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The Purchase Price Percentage, the Loss to Liquidation Ratio and the Purchase
Discount Reserve Ratio shall be recomputed by the Servicer on each Report Date,
in each case as of the then most recent Cut-Off Date, and shall become effective
on the next Distribution Date.
(b) "Purchase Discount Reserve Ratio" for the Purchased Receivables to
be sold by a Seller on any day during a Distribution Period shall mean a
percentage determined in accordance with the following formula:
PDRR = (TD/360 x DR) + PD
where:
PDRR = the Purchase Discount Reserve Ratio in effect during such
Distribution Period,
TD = the Turnover Days during the Calculation Period preceding
the first day of such Distribution Period,
DR = the Discount Rate (expressed as a percentage) in effect
during such Distribution Period as determined pursuant to
subsection (c) below, and
PD = a profit discount equal to 0.60%.
(c) "Discount Rate" for the Purchased Receivables to be sold by a
Seller on any day during a Distribution Period shall mean a fraction (expressed
as a percentage) having (i) a numerator equal to 12, multiplied by an amount
equal to the accrued Carrying Costs for the Calculation Period preceding the
first day of such Distribution Period, and (ii) a denominator equal to the
aggregate Unpaid Balance of the Purchased Receivables as of the last day of the
Calculation Period preceding the first day of such Distribution Period.
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments. (a) On the Closing Date and on the
Business Day following each day on which any Purchased Receivables and Related
Assets are purchased by Buyer pursuant to Article I, on the terms and subject to
the conditions of this Agreement, Buyer shall pay to the Sellers such Purchase
Price for such Receivables and Related Assets purchased on such day by Buyer by
(i) in the case of the Purchase Price for Purchased Receivables originated by
Howmet, by reducing the outstanding principal amount of the Acquisition Loan by
the amount of such Purchase Price, (ii) making a cash payment to
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Servicer (for the account of the Sellers) to the extent that Buyer has cash
available to make the payment pursuant to Section 3.3 and (iii) if the Purchase
Price to be paid for the Purchased Receivables and Related Assets of any Seller
exceeds the amount of any cash payment for the account of such Seller on such
day pursuant to clause (ii), by automatically increasing the principal amount
outstanding under such Seller's Buyer Note by the amount of the excess; provided
that the Purchase Price owed to each Seller (other than Howmet) on the Closing
Date shall be paid by increasing the principal amount outstanding under each
such Seller's Buyer Note by the amount of the Purchase Price for such Seller's
Receivables; and provided further, that Buyer shall not make any cash payments
in respect of Purchased Receivables originated by Howmet pursuant to clause (ii)
until the outstanding principal amount of the Acquisition Loan has been reduced
to zero.
The obligation of Buyer to pay the Purchase Price for Purchased
Receivables that has been deferred pursuant to the preceding paragraph shall be
evidenced by Buyer Notes. Howmet and each other Seller agree that, prior to the
Seller Maturity Date, Buyer shall he required to make payments in respect of the
payment obligations evidenced by the Buyer Notes only to the extent that it has
cash available under Section 3.3.
(b) Except as provided in a Supplement or PI Agreement, on each
Business Day, the "Noncomplying Receivables and Dilution Adjustment" shall be
equal to the sum of (A) the aggregate Seller Dilution Adjustments in respect of
all Sellers, if any, for the immediately preceding Business Day, as shown in the
Daily Report for such day, plus (13) the aggregate Seller Noncomplying
Receivables Adjustments in respect of all Sellers, if any, for the immediately
preceding Business Day, as shown in the Daily Report for such day, in the case
of each of clauses (A) and (B), as the amounts are determined pursuant to
Section 3.5. If the Noncomplying Receivables and Dilution Adjustment is positive
on any day, Buyer shall reduce the Purchase Price payable to each Seller on such
day pursuant to subsection (a) above by the amount of the Noncomplying
Receivables and Dilution Adjustment that is attributable to such Seller.
(c) If on any day the sum of the Seller Dilution Adjustments and the
Seller Noncomplying Receivables Adjustments attributable to any Seller (as
determined pursuant to Section 3.5) exceeds the Purchase Price payable by Buyer
to such Seller pursuant to subsection (a) above on such day, or if such day
falls on or after the earlier of (i) the Purchase Termination Date and (ii) the
Termination Effective Date (if any) for such Seller, then the principal amount
of such Seller's Buyer Note shall be reduced automatically by the amount of such
excess.
(d) If, on any day prior to the Purchase Termination Date, the
principal amount of a Seller's Buyer Note is zero and such Seller is not a
Terminating Seller, then the amount of the excess of the sum of the Seller
Dilution Adjustments and the Seller Noncomplying Receivables Adjustments
attributable to such Seller (as determined pursuant to Section 3.5) on such day
over the Purchase Price payable by Buyer to Servicer (for the account of such
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Seller) on such day pursuant to subsection (a) above (the "Purchase Price
Credit") shall be credited against the Purchase Price payable by Buyer for
subsequent Purchases of Receivables and Related Assets of such Seller by Buyer.
If any such Purchase Price Credit has not been fully applied on or prior to the
fifth Business Day after the creation of such Purchase Price Credit, then, on
the Business Day that follows the end of the five Business Day period, such
Seller shall pay to Servicer (for the account of Buyer) in cash the remaining
unapplied amount of the Purchase Price Credit (and each such payment shall be
deemed a Collection in accordance with Section 3.5).
(e) If, on any day on or after the Purchase Termination Date, or, with
respect to any Seller, the date such Seller becomes a Terminating Seller, the
principal amount of any Seller's Buyer Note has been reduced to zero, an amount
equal to the sum of any Seller Dilution Adjustments and the Seller Noncomplying
Receivables Adjustments, if any, in respect of such Seller (as determined
pursuant to Section 3.5) shall be paid by such Seller to Servicer (for the
account of Buyer) in cash on the next succeeding Business Day (and each such
payment shall be deemed a Collection in accordance with Section 3.5).
(f) Amounts received by Servicer pursuant to this Section 3.1 for the
account of Sellers shall be allocated among the Sellers in accordance with
Section 3.3. Servicer shall maintain a bookkeeping account (the "Seller
Account") for purposes of tracking:
(i) the Purchase Price payable to each Seller in respect of
Purchased Receivables sold by it to Buyer (including the extent to
which cash and non-cash payments made by Buyer should be allocated to
each Seller),
(ii) the extent to which such Purchase Price should be reduced
on account of such Seller's Seller Dilution Adjustments and the Seller
Noncomplying Receivables Adjustments (including any allocation of a
Purchase Price Credit),
(iii) the extent to which payments (whether cash or non-cash)
by Buyer in respect of a negative Noncomplying Receivables and Dilution
Adjustment should be allocated to each Seller, and
(iv) cash payments made to and by each Seller in respect of
the items described above.
Servicer shall maintain sufficient records with respect to the Seller
Account such that, on any day, it would be able to calculate each of the items
set forth above. Intercompany accounts resulting from the items described above
and any payments made by Howmet pursuant to the Seller Guaranty will be settled
in accordance with the intercompany cash management system customarily employed
by Howmet and its Subsidiaries.
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SECTION 3.2 The Buyer Notes. (a) On the date hereof, Buyer will deliver
to each Seller a promissory note, substantially in the form of Exhibit A,
payable to the order of each such Seller (each such promissory note, as the same
may be amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
herein called a "Buyer Note"), that is subordinated to all Senior Interests now
or hereafter arising under or in connection with the Pooling Agreement. Each
Buyer Note is payable in full on the date that is twelve months after the date
on which all Investor Certificates and Purchased Interests have been repaid in
full and the Revolving Periods for all Investor Certificates and Purchased
Interests have terminated (the "Seller Maturity Date"). Each Buyer Note bears
interest at a rate per annum equal to the higher of the applicable federal
mid-term rate and applicable federal short-term rate in effect under Section
1274(d) of the Internal Revenue Code (the "Applicable Federal Rate"), determined
as of each Cut-Off Date. Buyer may prepay all or part of the outstanding balance
of any Buyer Note from time to time without any premium or penalty, unless the
prepayment would result in a default in Buyer's payment of any other amount
required to be paid by it under any Transaction Document.
(b) Howmet shall make all appropriate recordkeeping entries with
respect to the Buyer Notes or otherwise to reflect the payments on and
adjustment of the Buyer Notes. Howmet's books and records shall constitute
rebuttable presumptive evidence of the principal amount of and accrued interest
on each Buyer Note at any time. Each Seller hereby irrevocably authorizes Howmet
to mark its Buyer Note "CANCELED" and return it to Buyer upon the final payment
thereof.
SECTION 3.3 Application of Collections' and Other Funds. If, on any
day, Buyer receives any distributions on account of the Transferor Certificate
pursuant to the Pooling Agreement, Buyer shall apply the funds as follows:
(a) first, to pay its existing expenses and to set aside funds
for the payment of expenses that are then accrued (including operating
expense and amounts due under its tax sharing agreement with Howmet),
(b) second, to repay amounts owed by Buyer to each Terminating
Seller under its Buyer Note,
(c) third, to pay the Purchase Price as adjusted pursuant to
Section 3.1 for Receivables and Related Assets purchased by Buyer from
the Sellers (other than Howmet) on such day (in the case of the Closing
Date) or the next preceding Business Day,
(d) fourth, to repay amounts owed by Buyer to the Sellers
(other than Terminating Sellers and Howmet) under the Buyer Notes of
such Sellers,
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(e) fifth, to pay the Purchase Price as adjusted pursuant to
Section 3.1 for Receivables and Related Assets purchased by Buyer from
Howmet on such day (in the case of the Closing Date) or the next
Business Day,
(f) sixth, to repay amounts owed by Buyer to Howmet under
Howmet's Buyer Note,
(g) seventh, to pay amounts owed pursuant to Section 3. 1(f),
and
(h) eighth, to make loans to Howmet or to declare and pay
dividends to Howmet to the extent permitted by law and the Transaction
Documents.
SECTION 3.4 Servicing of Receivables and Related Assets. Consistent
with Buyer's ownership of the Specified Receivables and the Related Assets, as
between the parties to this Agreement, Buyer shall have the sole right to
service, administer and collect the Specified Receivables, to assign the right
and to delegate the right to others. Without limiting the generality of Section
10.11, each Seller hereby acknowledges and agrees that Buyer shall assign to the
Trustee for the benefit of the Investor Certificate holders and the Purchasers
the rights and interests sold and assigned by the Sellers to Buyer hereunder and
agrees to cooperate fully with the Servicer and the Trustee in the exercise of
the rights. As more fully described in Section 7.4(b) and in the Pooling
Agreement, the Trustee may exercise the rights in the place of Buyer (as
assignee or otherwise) only after the designation of a Servicer other than
Howmet pursuant to Section 10.2 of the Pooling Agreement. At Trustee's request,
each Seller will (A) assemble all of the Records that are necessary or
appropriate to collect the Specified Receivables and Related Assets, and shall
make the same available to Trustee at one or more places selected by Trustee or
its designee, (B) segregate all cash, checks and other instruments received by
it from time to time constituting Collections in a manner acceptable to Trustee
and shall, promptly upon receipt (and in no event later than the second Business
Day following receipt), remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to a Bank Account or the
Master Collection Account and (c) permit, upon not less than two Business Days'
prior written notice, any Successor Servicer and its agents, employees and
assignees access to such Seller's facilities and Records.
SECTION 3.5 Adjustments for Noncomplying Receivables. Dilution and Cash
Discounts. (a) if at any time any of Buyer, the Servicer, the Trustee or a
Seller shall determine that any Receivable identified by the Servicer as an
Eligible Receivable on the date of Purchase thereof by Buyer or the contribution
thereof to Buyer was in fact a Seller Noncomplying Receivable on such date, or
that any of the representations and warranties made by the related Seller in
Section 5.1 (k) with respect to such Receivable was not true on such date, such
Seller shall be deemed to have received on the date of such determination a
Collection of such Receivable in an amount equal to the Unpaid Balance of such
Receivable (the sum of all such amounts for such Seller on any day being called
the "Seller
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Noncomplying Receivables Adjustment" for such Seller for such day), and such
Seller Noncomplying Receivables Adjustment shall be settled in the mariner
provided for in Section 3.1.
(b) If on any day the aggregate Unpaid Balance of any Specified
Receivable sold or contributed to Buyer on or before such date by a Seller is
reduced in any manner described in the definition of "Dilution" (the total of
the reductions being called the "Seller Dilution Adjustment" for the Seller for
such day), then such Seller shall be deemed to have received on such day a
Collection of such Receivable in the amount of the Seller Dilution Adjustment
and such Seller Dilution Adjustment shall be settled in the manner provided in
Section 3.1.
SECTION 3.6 Payments and Computations, Etc. (a) All amounts to be paid
by a Seller to Buyer hereunder shall be paid in accordance with the terms hereof
no later than 1:00 p. m., New York City time, on the day when due in Dollars in
immediately available funds to an account that Buyer shall from time to time
specify in writing. Payments received by Buyer after such time shall be deemed
to have been received on the next Business Day. In the event that any payment
becomes due on a day that is not a Business Day, then the payment shall be due
on the next Business Day. Each Seller shall, to the extent permitted by law, pay
to Buyer, on demand, interest on all amounts not paid when due hereunder at 2%
per annum above the interest rate on each such Seller's Buyer Note in effect on
the date the payment was due; provided, however, that the interest rate 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.
(b) All amounts to be paid by Buyer to a Seller hereunder shall be paid
no later than 2:00 p. m., New York City time, on the day when due in Dollars in
immediately available funds to an account that Howmet shall from time to time
specify in writing. In the event that any payment becomes due on a day that is
not a Business Day, then such payment shall be due on the next Business Day. In
the event that any payment of interest is not made by Buyer to any Seller on the
date that such payment becomes due, the amount of such Seller's Buyer Note shall
be automatically increased by the amount of such interest in lieu of such
payment.
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial
purchase hereunder is subject to the conditions precedent that (i) each of the
conditions precedent to the execution, delivery and effectiveness of each other
Transaction Document (other than a condition precedent in any other Transaction
Document relating to the effectiveness of this
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Agreement) shall have been fulfilled to the satisfaction of Buyer, (ii)
Acquisition shall have been merged into Howmet and Howmet shall have assumed all
obligations of Acquisition, and (iii) Buyer shall have received (or in the case
of subsection (f) below, shall have delivered) each of the following, on or
before the date hereof, each (unless otherwise indicated) dated the date hereof
and each in form and substance satisfactory to Buyer:
(a) Seller Assignment Certificates. A Seller Assignment
Certificate from each Seller in the form of Exhibit C, duly completed,
executed and delivered by such Seller,
(b) Resolutions. A copy of the resolutions of the Board of
Directors of each Seller approving this Agreement and the other
Transaction Documents to be delivered by it hereunder and the
transactions contemplated hereby and thereby and addressing such other
matters as may be required by Buyer, certified by its Secretary or
Assistant Secretary, each as of a recent date acceptable to Buyer,
(c) Good Standing Certificate of each Seller: Certificates as
to Foreign Qualification of each Seller. A good standing certificate
for each Seller, issued by the Secretary of State of the jurisdiction
of its incorporation and of each state in which such Seller transacts
business, is required to be in good standing and where the failure to
be in good standing would have a Material Adverse Effect,
(d) Incumbency Certificate. A certificate of the Secretary or
Assistant Secretary of each Seller certifying, as of a recent date
reasonably acceptable to Buyer, the names and true signatures of the
officers authorized on such Seller's behalf to sign the Transaction
Documents to be delivered by such Seller (on which certificate Buyer,
the Trustee and the Servicer may conclusively rely until such time as
Buyer shall receive from such Seller (with a copy to the Trustee and
the Servicer), a revised certificate meeting the requirements of this
subsection),
(e) Other Transaction Documents. Original copies, executed by
each of the parties thereto in such reasonable number as shall be
specified by Buyer, of each of the other Transaction Documents to be
executed and delivered in connection herewith,
(f) Buyer Notes. The Buyer Notes, executed by Buyer, and
(g) License Agreements. Duly executed and counterparts of a
letter agreement pertaining to the software license agreement between
Howmet and any third party vendor adding Buyer as a licensee,
permitting use of the licensed material by a substitute Servicer.
SECTION 4.2 Certification as to Representations and Warranties. Each
Seller, by accepting the Purchase Price paid for each Purchase, shall be deemed
to have certified with
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respect to the Purchased Receivables and Related Assets to be sold by it on such
day, and Howmet, upon a contribution of Receivables and Related Assets to Buyer
pursuant to a Contribution Agreement, shall be deemed to have certified with
respect to such Receivables and Related Assets to be contributed on such day,
that its representations and warranties contained in Article V (excluding, with
respect to any day alter the date hereof, Section 5.1(i)) are true and correct
on and as of such day, with the same effect as though made on and as of such
day.
SECTION 4.3 Effect of Payment of Purchase Price. Upon the payment of
the Purchase Price (whether in cash or by an increase in any Buyer Note pursuant
to Section 3.1) for any Purchase, title to the Purchased Receivables and the
Related Assets included in the Purchase shall vest in Buyer, whether or not the
conditions precedent to the Purchase were in fact satisfied; provided, however,
that Buyer shall not be deemed to have waived any claim it may have under this
Agreement for the failure by a Seller in fact to satisfy any such condition
precedent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Sellers. In order to
induce Buyer to enter into this Agreement and to make purchases hereunder, each
Seller hereby makes the representations and warranties set forth in this section
with respect to itself at the times and to the extent set forth in Section 4.2
(it being understood that only How met makes the representations and warranties
set forth below with respect to any Contribution Agreement and the Contributed
Receivables and the Related Assets relating thereto) .
(a) Organization and Good Standing. Such Seller is a
corporation duly organized and validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has full
power and authority to own its properties and to conduct its business
as the properties presently are owned and the business presently is
conducted. Such Seller had at all relevant times, and now has, all
necessary power, authority, and legal right to own and sell (and, in
the case of Howmet, contribute) its Receivables and the Related Assets.
(b) Due Qualification. Such Seller is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires qualification,
licenses or approvals and where the failure so to qualify, to obtain
the licenses and approvals or to preserve and maintain the
qualification, licenses or approvals would have a Material Adverse
Effect.
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(c) Power and Authority: Due Authorization. Such Seller has
(i) all necessary power and authority to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party,
(B) perform its obligations under this Agreement and the other
Transaction Documents to which it is a party, and (c) sell and assign
(and, in the case of Howmet, contribute) its Receivables and the
Related Assets on the terms and subject to the conditions herein and
therein provided and (ii) duly authorized by all necessary action such
sale and assignment (and, in the case of Howmet, contribution), and the
execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party and the consummation of
the transactions provided for in this Agreement and the other
Transaction Documents to which it is a party.
(d) Valid Sale: Binding Obligations. Each sale of Receivables
and Related Assets made by such Seller pursuant to this Agreement (and,
in the case of Howmet, each contribution of Receivables and Related
Assets made to Buyer pursuant to any Contribution Agreement) shall
constitute a valid sale (except in the case of Contributed
Receivables), transfer, and assignment of all of such Seller's right,
title and interest in, to and under such Receivables and the Related
Assets of such Seller to Buyer that is perfected and of first priority
under the UCC and otherwise, enforceable against creditors of, and
purchasers from, such Seller and free and clear of any Adverse Claim
(other than any Permitted Adverse Claim or any Adverse Claim arising
solely as a result of any action taken by Buyer hereunder or by the
Trustee under the Pooling Agreement); and this Agreement constitutes,
and each other Transaction Document to which such Seller is a party
when duly executed and delivered will constitute, a legal, valid and
binding obligation of such Seller, enforceable against it in accordance
with its terms, except as enforceability may he limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(e) No Conflict or Violation. The execution, delivery and
performance of, and the consummation of the transactions contemplated
by, this Agreement and the other Transaction Documents to be signed by
such Seller and the fulfillment of the terms hereof and thereof will
not (i) conflict with, violate, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, (A) its Certificate of Incorporation
or Bylaws or (B) any indenture, loan agreement, mortgage, deed of trust
or other material agreement or instrument to which such Seller is a
party or by which it or any of its properties is bound, (ii) result in
the creation or imposition of any Adverse Claim (other than a Permitted
Adverse Claim) upon any of the Receivables or Related Assets other than
pursuant to this Agreement and the other Transaction Documents, or
(iii) conflict with or violate any federal, state, local or foreign law
or any decision, decree, order, rule or regulation applicable to it or
any of its properties of any court or of any federal, state, local or
foreign regulatory body, administrative agency or other governmental
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instrumentality having jurisdiction over it or any of its properties,
which conflict, violation, breach, default or Adverse Claim,
individually or in the aggregate, would have a Material Adverse Effect.
(f) Litigation and Other Proceedings. Except as described in
Schedule 1, (i) there is no action, suit, proceeding or investigation
pending or, to the best knowledge of such Seller, threatened against it
before any court, regulatory body, arbitrator, administrative agency or
other tribunal or governmental instrumentality and (ii) it is not
subject to any order, judgment, decree, injunction, stipulation or
consent order of or with any court or other government authority that,
in the case of each of clauses (i) and (ii), (A) asserts the invalidity
of this Agreement or any other Transaction Document, (B) seeks to
prevent the sale (or, in the case of Howmet, contribution) of any
Receivables or Related Assets by such Seller to Buyer, the issuance of
the applicable Seller Assignment Certificate or the consummation of any
of the transactions contemplated by this Agreement or any other
Transaction Document, (c) seeks any determination or ruling that would
materially and adversely affect the performance by such Seller of its
obligations under this Agreement or any other Transaction Document or
the validity or enforceability of this Agreement or any other
Transaction Document, (d) seeks to affect adversely the income tax
attributes of the purchases hereunder or the applicable Seller
Assignment Certificate, in the case of each of the foregoing whether
under the United States Federal income tax system or any state income
tax system, or (e) individually or in the aggregate for all such
actions, suits, proceedings and investigations would have a Material
Adverse Effect.
(g) Government Approvals. All authorizations, consents, orders
and approvals of, or other action by, any Governmental Authority that
are required to be obtained by such Seller, and all notices to and
filings (except, in respect of enforceability against any Obligor that
is the United States government or any of its agencies or
instrumentalities, any filings under the Federal Assignment of Claims
Act and any consents required by states with respect to any Specified
Receivables arising from any state or local government agency or
instrumentality, so long as such Receivables are not reported as
Eligible Receivables), with any Governmental Authority that are
required to be made by it, in the case of each of the foregoing in
connection with the conveyance of Specified Receivables and Related
Assets or the due execution, delivery and performance by such Seller of
this Agreement, such Seller's Seller Assignment Certificate or any
other Transaction Document to which it is a party and the consummation
of the transactions contemplated by this Agreement, have been obtained
or made and are in full force and effect, except where the failure to
obtain or make any such authorization, consent, order, approval, notice
or filing, individually or in the aggregate for all such failures,
would not reasonably be expected to have a Material Adverse Effect.
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(h) Bulk Sales Act. No transaction contemplated by this
Agreement or any other Transaction Document requires compliance with,
or will be subject to avoidance under, any bulk: sales act or similar
law.
(i) Financial Condition. The Pro Forma Financial Data, copies
of which have been furnished to Buyer and the Trustee, fairly present
in all material respects the pro forma financial position, results of
operations and cash flows of Howmet and its consolidated Subsidiaries
at the dates and for the periods to which they relate and have been
prepared in accordance with GAAP applied on a consistent basis, except
as otherwise stated therein (except, in the case of quarterly financial
statements, for the omission of footnotes and ordinary year-end
adjustments, none of which, individually or in the aggregate, would be
material). Since September 30, 1995 through to the date hereof (and
except as contemplated in the Pro Forma Financial Data), there has been
no material adverse change in the condition (financial or otherwise),
or the earnings, business affairs or business prospects of Howmet and
its consolidated Subsidiaries, whether or not arising in the ordinary
course of business. "Pro Forma Financial Data" means the pro forma
consolidated financial data included in the offering memorandum, dated
November 22, 1995 with respect to the proposed offering of Senior
Subordinated Notes due 2003 to be issued by Howmet pursuant to the Note
Indenture.
(j) Margin Regulations. No use of any funds obtained by such
Seller under this Agreement will conflict with or contravene any of
Regulations G, T, U and X promulgated by the Federal Reserve Board from
time to time.
(k) Quality of Title.
(i) Immediately before each Purchase (and, in the
case of Howmet, each contribution to be made to Buyer under
any Contribution Agreement), each Receivable and Related Asset
of such Seller that is then to be transferred to Buyer, and
the related Contracts, shall be owned by such Seller free and
clear of any Adverse Claim (other than any Permitted Adverse
Claim or any Adverse Claim arising solely as the result of any
action taken by Buyer hereunder or by the Trustee under the
Pooling Agreement); provided that the existence of an Adverse
Claim that is released on the First Issuance Date (upon
application of the proceeds of the issuance of Certificates on
that date) shall not constitute a breach of this
representation and warranty; and such Seller shall have made
all filings and shall have taken all other action under
applicable law in each relevant jurisdiction in order to
protect and perfect the ownership interest of Buyer and its
successors in the Specified Receivables and Related Assets
against all creditors of, and purchasers from, such Seller.
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(ii) Whenever Buyer makes a purchase hereunder from
such Seller (or accepts a contribution from How met under any
Contribution Agreement), Buyer shall have acquired a valid and
perfected first priority ownership interest in each Specified
Asset sold by such Seller or contributed by Howmet on such
date, free and clear of any Adverse Claim (other than any
Permitted Adverse Claim or any Adverse Claim arising solely as
the result of any action taken by Buyer hereunder or by the
Trustee under the Pooling Agreement) .
(iii) No effective financing statement or other
instrument similar in effect that covers all or part of any
Receivable originated by such Seller, any interest therein or
any Related Asset with respect thereto is on file in any
recording office except (x) such as may be filed (A) in favor
of such Seller in accordance with the Contracts, (B) in favor
of Buyer pursuant to this Agreement or any Contribution
Agreement and (c) in favor of the Trustee, for the benefit of
the Certificate holders and Purchasers, in accordance with the
Pooling Agreement, (y) such as may have been identified to
Buyer prior to the Closing Date and termination statements
relating to which have been placed with LEXIS Document
Services, or a similar service, for filing on the First
Issuance Date or the first Business Day thereafter, and (z)
such as may be filed with respect to Receivables (and Related
Assets with respect thereto) that are not Specified
Receivables in favor of Persons bound by an Intercreditor
Agreement. No effective financing statement or instrument
similar in effect relating to perfection that covers any
inventory of such Seller that might give rise to Receivables
is on file in any recording office except for (so long as an
Intercreditor Agreement is in effect) financing statements or
instruments in favor of creditors of such Seller bound by such
Intercreditor Agreement.
(iv) No Purchase by Buyer from such Seller (or, in
the case of Howmet, contribution to Buyer) constitutes a
fraudulent transfer or fraudulent conveyance under the United
States Bankruptcy Code or applicable state bankruptcy or
insolvency laws or is otherwise void or voidable or subject to
subordination under similar laws or principles or for any
other reason.
(v) Each Purchase by Buyer from such Seller
constitutes a true and valid sale of Purchased Receivables and
Related Assets under applicable state law and true and valid
assignments and transfers for consideration (and not merely a
pledge of such Receivables and Related Assets for security
purposes), enforceable against the creditors of such Seller,
and none of the Specified Receivables or Related Assets
transferred to Buyer hereunder or under any Contribution
Agreement shall constitute property of such Seller.
(l) Eligible Receivables. (i) On the date of each Purchase of
Receivables hereunder from such Seller (or in the case of How met,
contribution from How met),
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each such Receivable, unless otherwise identified to Buyer and the
Trustee by the Servicer in the Daily Report for such date, is an
Eligible Receivable, and (ii) on the date of each Daily Report or
Monthly Report that identifies a Receivable originated by such Seller
as an Eligible Receivable, such Receivable is an Eligible Receivable.
(m) Accuracy of Information. All written information furnished
on and alter the Closing Date by or on behalf of such Seller to Buyer,
the Servicer or the Trustee pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein
shall not contain any untrue statement of a material fact or omit to
state material facts necessary to make the statements made not
misleading, in each case on the date the statement was made and in
light of the circumstances under which the statements were made or the
information was furnished.
(n) Offices. The principal place of business and chief
executive office of such Seller is located at the address set forth
under such Seller's signature hereto, and any other location which has
been such Seller's principal place of business or chief executive
office during the past four months or in which such Seller keeps (or
has kept during the past four months) Records, Contracts, purchase
orders and agreements related to the Specified Receivables or Related
Assets (and all original documents relating thereto) is specified in
Schedule 3 (or at such other locations, notified to the Servicer and
the Trustee in accordance with Section 6.1(f), in jurisdictions where
all action required pursuant to Section 7.3 has been taken and
completed).
(o) Account Banks and Payment Instructions. The names and
addresses of all the banks, together with the account numbers of the
accounts at the banks, into which Collections are paid have been
accurately identified to Buyer in a letter from such Seller to Buyer
dated the Closing Date or have been specified in the notices as shall
have been delivered thereafter pursuant to Section 6.3(c). Each Account
Bank has executed and delivered an Account Agreement to Buyer and the
Trustee. Such Seller has instructed all Obligors to submit all payments
on the Specified Receivables and Related Assets directly to one of the
Lockbox Accounts. Any payments not made directly to the Account Banks
will be forwarded to the Account Banks within two Business Days.
(p) Compliance with Applicable Laws. Such Seller is in
compliance with the requirements of all applicable laws, rules,
regulations and orders of all Governmental Authorities (federal, state,
local or foreign, and including environmental laws), a violation of any
of which, individually or in the aggregate for all such violations,
would have a Material Adverse Effect.
(q) Legal Names. Except as set forth in Schedule 4 or
permitted by Section 6.3(e), since November 30, 1989 such Seller (i)
has not been known by any
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legal name other than its corporate name as of the date hereof, nor has
such Seller been the subject of any merger or other corporate
reorganization since November 30, 1989 that resulted in a change of
name, identity or corporate structure, and (ii) uses no trade names
other than its actual corporate name.
(r) Investment Company Act. Such Seller is not, and is not
controlled by, an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended.
(s) Taxes. Such Seller has filed or caused to be filed all tax
returns and reports required by law to have been filed by it and has
paid all taxes, assessments and governmental charges thereby shown to
be owing, except any such taxes, assessments or charges (i) that are
being diligently contested in good faith by appropriate proceedings,
(ii) for which adequate reserves in accordance with GAAP shall have
been set aside on its books and (iii) with respect to which no Adverse
Claim, except Permitted Adverse Claims, has been imposed upon any
Receivables or Related Assets.
SECTION 5.2 Representations and Warranties of Buyer. From the date
hereof until the Purchase Termination Date, Buyer hereby represents and warrants
that (a)(i) this Agreement has been duly authorized, executed and delivered by
Buyer and (ii) constitutes the legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law, and (b) the execution, delivery and performance
of this Agreement does not violate any applicable law or any agreement to which
Buyer is a party or by which its properties are bound.
ARTICLE VI
GENERAL COVENANTS OF THE SELLERS
SECTION 6.1 Affirmative Covenants. Subject to Section 1.8, from the
Closing Date until the first day following the Purchase Termination Date on
which all Obligations of the Sellers shall have been finally and fully paid and
performed and the Invested Amount for each Series or Purchased Interest shall
have been reduced to zero, unless Buyer shall otherwise give its prior written
consent, each Seller hereby agrees that it will perform the covenants and
agreements set forth in this section.
(a) Compliance with Laws. Etc. Such Seller will comply in all
material respects with all applicable laws, rules, regulations,
judgments, decrees and orders
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(including those relating to the Specified Receivables, the Related
Assets, the related Contracts of such Seller and any other agreements
related thereto), in each case to the extent the failure to comply,
individually or in the aggregate for all such failures, would have a
Material Adverse Effect.
(b) Preservation of Corporate Existence. Such Seller will
preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and
remain qualified in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualifications would have a Material
Adverse Effect.
(c) Receivables Reviews. Such Seller shall, during regular
business hours upon not less than five Business Days' prior notice,
permit Buyer and its agents or representatives, at the expense of such
Seller, (i) to examine and make copies of and abstracts from, and to
conduct accounting reviews of, all Records in the possession or under
the control of such Seller relating to the Specified Receivables or
Related Assets generated by such Seller, and (ii) to visit the offices
and properties of such Seller for the purpose of examining the
materials described in clause (i) above, and to discuss matters
relating to any Specified Receivables or any Related Assets of such
Seller or such Seller's performance hereunder with any of the
Authorized Officers of such Seller or, with the prior consent of an
Authorized Officer of such Seller, with employees of such Seller having
knowledge of such matters (the examinations set forth in the foregoing
clauses (i) and (ii) being herein called a "Seller Receivables Review")
. Buyer and its agents or representatives shall be entitled to conduct
Seller Receivables Reviews whenever Buyer, in its reasonable judgment,
deems it appropriate; provided, that prior to the occurrence and
continuance of an Early Amortization Event, Buyer (or its agent or
representative) shall give such Seller at least five Business Days'
prior notice of any Seller Receivables Review, and Buyer shall have the
right to request a Seller Receivables Review not more than twice in any
calendar year.
(d) Keeping of Records and Books of Account. Such Seller shall
maintain and implement administrative and operating procedures
(including an ability to recreate records evidencing its Specified
Receivables and Related Assets in the event of the destruction of the
originals thereof), and shall keep and maintain all documents, books,
records and other information that, in the reasonable determination of
Buyer and the Trustee, are necessary or advisable in accordance with
prudent industry practice and custom for transactions of this type for
the collection of all Specified Receivables and the Related Assets.
Upon the reasonable request of Buyer made at any time after the
occurrence and continuance of a Servicer Default, such Seller will
deliver copies of all books and records maintained with respect to its
Specified Assets pursuant to this subsection (d) to the Trustee. Such
Seller shall maintain at all times
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accurate and complete books, records and accounts relating to the
Specified Receivables, Related Assets and Contracts and all Collections
thereon in which timely entries shall be made. Such books and records
shall be marked to indicate the sales (and, in the case of Howmet,
contributions) of all Specified Receivables and Related Assets
hereunder (and, in the case of any contribution, under the related
Contribution Agreement) and shall include (i) all payments received and
all credits and extensions granted with respect to the Specified
Receivables and (ii) the return, rejection, repossession, or stoppage
in transit of any merchandise, the sale of which has given rise to a
Specified Receivable.
(e) Performance and Compliance with Receivables and Contracts.
Such Seller will, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be
observed by it under the Contracts of such Seller related to the
Specified Receivables and Related Assets, in each case to the extent
that failure to perform or comply would have a Material Adverse Effect.
(f) Location of Records and Offices. Such Seller will keep its
principal place of business and chief executive office, and the offices
where it keeps all Records related to the Specified Receivables and the
Related Assets (and all original documents relating thereto), at the
addresses referred to in Schedule 3 or, upon not less than 30 days'
prior written notice given by such Seller to Buyer, the Trustee and the
Rating Agencies, at such other locations in jurisdictions where all
action required by Section 7.3 shall have been taken and completed.
(g) Credit and Collection Policies. Such Seller will comply in
all material respects with its Credit and Collection Policy in regard
to each Specified Receivable of such Seller and the Related Assets and
the Contracts related to each such Receivable, where the failure so to
comply, individually or in the aggregate for all such failures, would
have a Material Adverse Effect.
(h) Separate Corporate Existence of Buyer. Such Seller hereby
acknowledges that the Trustee, on behalf of the Trust, is entering into
the transactions contemplated by the Transaction Documents in reliance
upon Buyer's identity as a legal entity separate from such Seller and
the other Howmet Persons. Therefore, from and after the date hereof
until the first day following the Purchase Termination Date on which
all Obligations shall have been fully paid and performed and the
Invested Amount for each Series or Purchased Interest shall have been
reduced to zero, such Seller will take all reasonable steps to continue
its identity as a separate legal entity from Buyer and to make it
apparent to third Persons that such Seller is an entity with assets and
liabilities distinct from those of Buyer and that Buyer is not a
division of such Seller.
(i) Payment Instructions to Obligors. Such Seller will
instruct all Obligors to submit all payments in respect of Specified
Receivables either (i) to one of the
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lockboxes maintained at the Lockbox Banks for deposit in a Lockbox
Account or to a Concentration Account or (ii) directly to one of the
Lockbox Accounts.
(j) Segregation of Collections. Such Seller shall use
reasonable efforts to minimize the deposit of any funds other than
Collections into any of the Lockbox Accounts and, to the extent that
any such funds nevertheless are deposited into any of the Lockbox
Accounts, shall promptly identify any such funds, or shall cause the
funds to be so identified, to Buyer, the Servicer and the Trustee
(following which notice, Buyer shall cause the Servicer to return all
the funds to such Seller).
(k) Identification of Eligible Receivables. Such Seller will
(i) establish and maintain such procedures as are necessary for
determining no less frequently than each Business Day whether each
Receivable qualifies as an Eligible Receivable, and for identifying, on
any Business Day, all Receivables to be sold (or, in the case of
Howmet, contributed) on that date that are not Eligible Receivables,
and (ii) except as permitted in Section 3.5(c) of the Pooling
Agreement, notify Buyer prior to the occurrence of a Purchase (and, in
the case of Howmet, prior to a contribution of Receivables and Related
Assets) if a Receivable to be sold hereunder (or, in the case of
Howmet, contributed under the related Contribution Agreement) will, to
such Seller's knowledge, not be an Eligible Receivable as of the date
of such Purchase or contribution.
(l) Accuracy of Information. All written information furnished
on and after the Closing Date by or on behalf of such Seller to Buyer,
the Servicer or the Trustee pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein
shall not contain any untrue statement of a material fact or omit to
state material facts necessary to make the statements made not
misleading, in each case on the date the statement was made and in
light of the circumstances under which the statements were made or the
information was furnished.
(m) Taxes. File or cause to be filed, and cause each Person
with whom it shares consolidated tax liability to file, all Federal,
state and local tax returns that are required to be filed by it (except
where the failure to file such returns does not have a substantial
likelihood of having a Material Adverse Effect) and pay or cause to be
paid all taxes shown to be due and payable on taxes or assessments
(except only such taxes or assessments the validity of which are being
contested in good faith by appropriate proceedings and with respect to
which such Seller shall have set aside adequate reserves on its books
in accordance with GAAP and which proceedings do not have a substantial
likelihood of having a Material Adverse Effect).
SECTION 6.2 Reporting Requirements. Subject to Section 1.8, from the
Closing Date until the first day following the Purchase Termination Date on
which all Obligations of
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the Sellers shall have been finally and fully paid and performed and the
Invested Amount for each Series or Purchased Interest shall have been reduced to
zero, such Seller agrees that it will, unless Buyer and the Trustee shall
otherwise give prior written consent, and (with respect to the notices described
below in subsections (c) and (d)) unless the Modification Condition has been
satisfied), furnish to Buyer and the Trustee (and, in the case of the notices
described below in subsections (c), (d) and (f), to the Rating Agencies):
(a) Quarterly Financial Statements. Within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of
Howmet, copies of the unaudited consolidated balance sheets of Howmet
and its consolidated Subsidiaries as at the end of the fiscal quarter
and the related unaudited statements of earnings and cash flows, in
each case for the fiscal quarter and for the period from the beginning
of the fiscal year through the end of such fiscal quarter, prepared in
accordance with GAAP consistently applied throughout the periods
reflected therein and certified (subject to year end adjustments and
the omission of footnotes) by the chief financial officer or chief
accounting officer of Howmet.
(b) Annual Financial Statements. As soon as possible and in
any event within 90 days after the end of each fiscal year of Howmet, a
copy of the consolidated balance sheet of Howmet and its consolidated
Subsidiaries as at the end of the fiscal year and the related
statements of earnings, stockholders' equity and cash flows of Howmet
and its consolidated Subsidiaries for the fiscal year, setting forth in
each case in comparative form the corresponding figures for the
preceding fiscal year and prepared in accordance with GAAP consistently
applied throughout the periods reflected therein, certified, without
Impermissible Qualification, by Ernst & Young, Price Waterhouse L.L.P.
or any other independent certified public accountants of a nationally
recognized standing in the United States of America as shall be
selected by Howmet.
(c) Early Amortization Events. As soon as possible, and in any
event within five Business Days after an Authorized Officer of such
Seller has obtained knowledge of the occurrence of any Early
Amortization Event or any Unmatured Early Amortization Event, a written
statement of an Authorized Officer of such Seller describing the event
and the action that such Seller proposes to take with respect thereto,
in each case in reasonable detail.
(d) Material Adverse Effect. As soon as possible and in any
event within five Business Days after an Authorized Officer of such
Seller has knowledge thereof, written notice that describes in
reasonable detail any event or occurrence that, individually or in the
aggregate for all such events or occurrences, has had, or that would
have a substantial likelihood of having, a Material Adverse Effect.
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(e) Proceedings. As soon as possible and in any event within
five Business Days after an Authorized Officer of such Seller has
knowledge thereof, written notice of (i) any litigation, investigation
or proceeding of the type described in Section 5.1(f) not previously
disclosed to Buyer and (ii) any judgment, settlement or other final
disposition with respect to any such previously disclosed litigation,
investigation or proceeding.
(f) Other. Promptly, from time to time, (i) such other
information, documents, records or reports respecting the Specified
Receivables or the Related Assets or (ii) such other publicly available
information respecting the condition or operations, financial or
otherwise, of such Seller, in each case as Buyer may from time to time
reasonably request in order to protect the interests of Buyer, the
Trustee or the Certificate holders under or as contemplated by this
Agreement.
SECTION 6.3 Negative Covenants. Subject to Section 1.8, from the
Closing Date until the first day following the Purchase Termination Date on
which ail Obligations of the Sellers shall have been finally and fully paid and
performed and the Invested Amount for each Series or Purchased Interest shall
have been reduced to zero, unless Buyer shall otherwise give its prior written
consent, each Seller hereby agrees that it will perform the covenants and
agreements set forth in this section.
(a) Sales. Liens. Etc. Except as otherwise provided herein or
in the Pooling Agreement, such Seller will not (i)(A) sell, assign (by
operation of law or otherwise) or otherwise transfer to any Person, (B)
pledge any interest in, (C) grant, create, incur, assume or permit to
exist any Adverse Claim (other than Permitted Adverse Claims) to or in
favor of any Person upon or with respect to, or (D) cause to be filed
any financing statement or equivalent document relating to perfection
with respect to any of its Specified Assets or any Contract related to
any Specified Receivable, or upon or with respect to any lockbox or
account to which any Collections of any such Receivable or any Related
Assets are sent or any interest therein, or (ii) assign to any Person
any right to receive income from or in respect of any of the foregoing.
In the event that such Seller falls to keep any of its Specified Assets
free and clear of any Adverse Claim (other than a Permitted Adverse
Claim, any Adverse Claims arising hereunder, and other Adverse Claims
permitted by any other Transaction Document), Buyer may (without
limiting its other rights with respect to such Seller's breach of its
obligations hereunder) make reasonable expenditures necessary to
release the Adverse Claim. Buyer shall be entitled to indemnification
for any such expenditures pursuant to the indemnification provisions of
Article IX. Alternatively, Buyer may deduct such expenditures as an
offset to the Purchase Price owed to such Seller hereunder.
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Such Seller will not pledge or grant any security interest in its
inventory, any Buyer Note or the capital stock of Buyer unless prior to any
pledge or grant such Seller, Buyer, the Trustee and the person for whose
benefits the pledge or grant is being made have entered into an Intercreditor
Agreement.
(b) Extension or Amendment of Receivables: Change in Credit and
Collection Policy or Contracts. Such Seller will not, (i) without the prior
written consent of Buyer and the Trustee, which consent will not be unreasonably
withheld, extend, amend or otherwise modify the terms of any Specified
Receivable or Contract in a manner that would have a Material Adverse Effect or
(ii) change the terms and provisions of the Credit and Collection Policy with
respect to its Specified Assets in any material respect unless (x) with respect
to collection policies, the change is made with the prior written approval of
the Trustee, Buyer and each Agent and the Modification Condition is satisfied
with respect thereto, (y) with respect to collection procedures, the change is
made with prior written notice to the Trustee, Buyer and each Agent and no
Material Adverse Effect would result and (z) with respect to accounting policies
relating to Specified Receivables that have become Write-Offs, the change is
made in accordance with GAAP; provided that such Seller may change the terms and
the provisions of a Contract on a prospective basis, and a Seller may enter into
a new Contract, so long as such change or new Contract does not have a material
adverse affect on the validity, enforceability or collectibility of any then
outstanding Specified Receivable.
(c) Change in Payment Instructions to Obligors. Such Seller will not
(i) add or terminate any bank as an Account Bank from those listed in the letter
referred to in Section 5.1(o) unless, prior to any such addition or termination,
Buyer, the Trustee and the Rating Agencies shall have received not less than ten
Business Days' prior written notice of the addition or termination and, not less
than ten Business Days prior to the effective date of any such proposed addition
or termination, Buyer and the Trustee shall have received (A) counterparts of
the applicable type of Account Agreement with each new Account Bank, duly
executed by such new Account Bank and all other parties thereto and (B) copies
of all other agreements and documents signed by the Account Bank and such other
parties with respect to any new Bank Account, all of which agreements and
documents shall be reasonably satisfactory in form and substance to Buyer and
the Trustee, or (ii) make any change in its instructions to Obligors, given in
accordance with Section 5.1(o), regarding payments to be made to such Seller or
payments to be made to any Account Bank in respect of Specified Receivables,
other than changes in the instructions that direct Obligors to make payments to
another Bank Account at such Account Bank or another Account Bank or to the
Master Collection Account.
(d) Mergers. Acquisitions. Sales. etc. Except for (i) mergers or
consolidations in which such Seller is the surviving Person, (ii) mergers or
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consolidations of a subsidiary of Howmet into such Seller or (iii) mergers or
consolidations in which the surviving Person expressly assumes the performance
of this Agreement and the Modification Condition shall have been satisfied with
respect to the consolidation or merger, the Seller will not be a constituent
corporation to any merger or consolidation. Such Seller will give the Trustee
and the Rating Agencies notice of any such permitted merger or consolidation
promptly following completion thereof. Unless the Modification Condition is
satisfied, such Seller will not, directly or indirectly, transfer, assign,
convey or lease, whether in one transaction or in a series of transactions, all
or substantially all of its assets or sell or assign, with or without recourse,
any Receivables or Related Assets, in each case other than pursuant to this
Agreement or any Contribution Agreement.
(e) Change in Name. Such Seller will not (i) change its corporate name
or (ii) change the name under or by which it does business in any manner that
would or may make any financing statement filed by such Seller in accordance
herewith seriously misleading within the meaning of Section 9-402(7) of an
applicable enactment of the UCC, in each case unless such Seller shall have
given Buyer, the Servicer and the Trustee (and, if any outstanding Investor
Certificates are rated, the Rating Agencies) 30 days' prior written notice
thereof and unless, prior to any change in name, such Seller shall have taken
and completed all action required by Section 7.3.
(f) Articles of Incorporation. Such Seller will not cause Buyer to
amend Article SIXTH, NINTH, TENTH(a), TENTH(d) or THIRTEENTH(b) of its Articles
of Incorporation without the Trustee's prior written consent, which consent will
not be unreasonably withheld or delayed.
(g) Amendments to Transaction Documents. Such Seller will not amend or
otherwise modify or supplement any Transaction Document to which it is a party
unless (i) Buyer shall have given its prior written consent to each amendment,
modification or supplement and (ii) the Modification Condition shall have been
satisfied.
(h) Accounting for Purchases. Such Seller shall prepare its financial
statements in accordance with GAAP, and any financial statements that are made
publicly available and which are consolidated to include Buyer will contain
footnotes stating that such Seller has sold or contributed its Receivables to
Buyer and that the assets of Buyer will not be available to How met and its
subsidiaries unless Buyer's liabilities have been paid in full. Unless required
by GAAP, such Seller shall not prepare any financial statements that account for
the transactions contemplated in this Agreement in any manner other than as a
sale of the Purchased Assets by such Seller to Buyer, or in any other respect
account for or treat the transactions contemplated in this Agreement (including
but not limited to accounting and, where taxes are not
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consolidated, for tax reporting purposes) in any manner other than as a sale of
the Purchased Assets by such Seller to Buyer.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SPECIFIED ASSETS
SECTION 7.1 Rights of Buyer. (a) Subject to Section 7.4(b), each Seller
hereby authorizes Buyer, the Servicer and/or their respective designees to take
any and all steps in such Seller's name and on behalf of such Seller that Buyer,
the Servicer and/or their respective designees determine are reasonably
necessary or appropriate to collect all amounts due under any and all Specified
Assets, including endorsing the name of such Seller on checks and other
instruments representing Collections and enforcing such Seller's rights under
such Specified Assets.
(b) Except as set forth in Section 3.1 with respect to Seller
Noncomplying Receivables, Buyer shall have no obligation to account for any
Specified Asset to any Seller. Buyer shall have no obligation to account for, or
to return Collections, or any interest or other finance charge collected with
respect to the Specified Assets, to any Seller, irrespective of whether such
Collections and charges are in excess of the Purchase Price for the Purchased
Assets.
(c) Buyer shall have the unrestricted right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with the Specified
Assets, and all of Buyer's right, title and interest in, to and under this
Agreement and any Contribution Agreement, on whatever terms Buyer shall
determine, pursuant to the Pooling Agreement or otherwise.
(d) Buyer shall have the sole right to retain any gains or profits
created by buying, selling or holding the Specified Assets and shall have the
sole risk of and responsibility for losses or damages created by such buying,
selling or holding.
SECTION 7.2 Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding, each Seller hereby agrees:
(a) to deliver directly to the Servicer (for Buyer's account),
within two Business Days after receipt thereof, any Collections that it
receives, in the form so received, and agrees that all such Collections
shall be deemed to be received in trust for Buyer and shall be
maintained and segregated separate and apart from all other funds and
moneys of such Seller until delivery of such Collections to the
Servicer,
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(b) to perform all of its obligations hereunder and under the
Contracts related to the Specified Receivables and Related Assets to
the same extent as if the Specified Receivables had not been sold
hereunder, and the exercise by Buyer or its designee or assignee of
Buyer's rights hereunder or in connection herewith shall not relieve
such Seller from any of its obligations under the Contracts or Related
Assets related to the Specified Receivables,
(c) that such Seller hereby grants to Buyer an irrevocable
power of attorney, with full power of substitution, coupled with an
interest, to take in the name of such Seller all steps necessary or
advisable to endorse, negotiate or otherwise realize on any writing or
other right of any kind held or transmitted by such Seller or
transmitted or received by Buyer (whether or not from such Seller) in
connection with any Specified Asset, and
(d) to the extent that such Seller does not own the computer
software that such Seller uses to account for Specified Receivables,
such Seller shall use reasonable efforts to provide Buyer and the
Trustee with such licenses, sublicenses and/or assignments of contracts
as Buyer or the Trustee shall require with regard to all services and
computer hardware or software used by such Seller that relate to the
servicing of the Specified Assets.
SECTION 7.3 Further Action Evidencing Purchases. Subject to Section
1.8, each Seller agrees that from time to time, at its expense, it will
promptly, upon reasonable request by Buyer, Servicer or Trustee, execute and
deliver all further instruments and documents, and take all further action, in
order to perfect, protect or more fully evidence the purchase by Buyer or
contribution to Buyer of the Specified Receivables and the Related Assets under
this Agreement or any Contribution Agreement (as applicable), or to enable Buyer
to exercise or enforce any of its rights under any Transaction Document. Each
Seller further agrees that from time to time, at its expense, it will promptly
take all action that Buyer, the Servicer or the Trustee may reasonably request
in order to perfect, protect or more fully evidence the purchase or contribution
of the Specified Receivables and the Related Assets or to enable Buyer or the
Trustee (as the assignee of Buyer) to exercise or enforce any of its rights
hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of Buyer, each Seller will:
(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as Buyer or the Trustee may reasonably
determine to be necessary or appropriate, and
(b) mark the master data processing records evidencing the
Receivables with the following legend:
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"CERTAIN RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO BLADE
RECEIVABLES CORPORATION ("BRC") PURSUANT TO A RECEIVABLES
PURCHASE AGREEMENT, DATED AS OF DECEMBER 13, 1995, AND AMENDED
AND RESTATED AS OF APRIL 18, 1996, AMONG HOWMET CORPORATION
("HOWMET"), CERTAIN OF ITS SUBSIDIARIES AND BRC; AND SUCH
RECEIVABLES HAVE BEEN TRANSFERRED TO THE BLADE RECEIVABLES
MASTER TRUST PURSUANT TO A POOLING AND SERVICING AGREEMENT,
DATED AS OF DECEMBER 13,1995, AND AMENDED AND RESTATED AS OF
APRIL 18, 1996, AMONG BRC, AS TRANSFEROR, HOWMET, AS THE
INITIAL SERVICER, AND MANUFACTURERS AND TRADERS TRUST COMPANY,
AS TRUSTEE."
Each Seller hereby authorizes Buyer or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Related Assets of such
Seller, in each case whether now existing or hereafter generated by such Seller.
Except for material performance obligations of such Seller to any Obligor
hereunder or under any of the Contracts for the Specified Receivables, if (i)
such Seller falls to perform any of its agreements or obligations under this
Agreement and does not remedy the failure within the applicable cure period, if
any, and (ii) Buyer in good faith reasonably believes that the performance of
such agreements and obligations is necessary or appropriate to protect its
interests under this Agreement, then Buyer or its designee may (but shall not be
required to) perform, or cause performance of, such agreement or obligation and
the reasonable expenses of Buyer or its designee or assignee incurred in
connection with such performance shall be payable by such Seller as provided in
Section 9.1.
SECTION 7.4 Collection of Receivables; Rights of Buyer and Its
Assignees. (a) Each Seller hereby transfers to the Trustee (as transferee of
Buyer's interest in the Specified Assets) the ownership of, and the exclusive
dominion and control over, each of the Bank Accounts and all related Iockboxes
owned by such Seller, and such Seller hereby agrees to take any further action
that Buyer or the Trustee may reasonably request in order to effect or complete
the transfer. Each Seller further agrees to use reasonable efforts to prevent
funds other than proceeds of the Specified Assets from being deposited in any
Bank Account.
(b) Buyer may, at any time after an Early Amortization Event or
Servicer Default, direct the Obligors of Specified Receivables, or any of them,
to pay all amounts payable under any Specified Asset directly to the Trustee or
its designees. Furthermore, each Seller shall, at the request of Buyer and at
such Seller's expense, promptly give notice of the Trust's interest in the
Specified Receivables of the Obligor and the Related Assets to each such Obligor
and direct that payments be made directly to the Trustee or its designee, which
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283
notice shall be acceptable in form and substance to Buyer. In addition, each
Seller hereby authorizes Buyer to lake any and all steps in such Seller's name
and on its behalf that are necessary or desirable, in the reasonable
determination of Buyer, to collect all amounts due under any and all Specified
Assets, including endorsing such Seller's name on checks and other instruments
representing Collections and enforcing the Specified Assets and the Contracts
related to the Specified Receivables. The Trustee may exercise any of the
foregoing rights in the place of Buyer (as assignee or otherwise) at any time
following the designation of a Servicer other than Howmet pursuant to Section
10.2 of the Pooling Agreement.
(c) At any time when (i) an Early Amortization Event shall have
occurred and remain continuing or (ii) a Servicer other than Howmet has been
designated pursuant to Section 10.2 of the Pooling Agreement, each Seller shall,
at Buyer's request, assemble all of the Records that evidence the Specified
Receivables and Related Assets originated by such Seller and the Contracts
related to such Receivables, or that are otherwise necessary or desirable to
collect the Specified Receivables or Related Assets, and make the same available
to Buyer or the Trustee at a place selected by the Trustee or its designee.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by the Sellers. Prior to the commencement of an
Amortization Period or an Early Amortization Period in respect of any Series or
Purchased Interest, the Sellers may terminate all of their agreements to sell
Receivables hereunder to Buyer by giving Buyer and the Trustee not less than 30
days' prior written notice (or such shorter time as is acceptable to the
Trustee) of their election not to continue to sell Receiveable to Buyer;
provided that such notice must be given as to all Sellers; and provided further,
that such notice shall specify the effective date of such termination. The
Trustee shall notify the Certificate holders of all Series within five Business
Days of receiving any such termination notice. The Amortization Period for each
Series of Investor Certificates and Purchased Interest shall commence on the
effective date specified in such termination notice.
SECTION 8.2 Automatic Termination. Unless otherwise agreed to by the
Sellers and Buyer in writing, the agreement of each Seller to sell Receivables
hereunder, and the agreement of Buyer to purchase Receivables from such Seller
hereunder, shall terminate automatically upon the commencement of an
Amortization Period or an Early Amortization Period in respect of the last
Series or Purchased Interest (as the case may be) to remain outstanding out of
all Series and Purchased Interests; provided, however, that, notwithstanding
anything to the contrary m this Agreement, if at any time prior to the
commencement of any such Amortization Period or Early Amortization Period, any
event
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that would, with the passage of time, become a Bankruptcy Event occurs as a
result of a bankruptcy proceeding being filed against a Seller, then on and
after the date on which such bankruptcy proceeding is filed until the dismissal
of the proceeding Buyer shall not purchase Receivables and Related Purchased
Assets from such Seller.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Sellers. Without limiting any other
rights that any RPA Indemnified Party (as defined below) may have hereunder or
under applicable law, each Seller agrees to indemnify Buyer, each of its
successors, permitted transferees and assigns, and all officers, directors,
shareholders, controlling Persons, employees and agents of any of the foregoing
(each of the foregoing Persons being individually called a "RPA Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims (whether on account of settlements or otherwise), judgments, liabilities
and related reasonable costs and expenses (including reasonable attorneys' fees
and disbursements) awarded against or incurred by any of them arising out of or
as a result of any of the following (all of the foregoing being collectively
called "RPA Indemnified Losses"):
(a) any representation or warranty made in writing by such
Seller (or any of its Authorized Officers) under any of the Transaction
Documents, any Monthly Report, any Daily Report or any other
information or report delivered by or on behalf of such Seller or the
Servicer with respect to such Seller or the Receivables or Related
Assets originated by such Seller (including without limitation any
representation, warranty, information or report relied upon by Buyer in
connection with the offering or sale of any Certificate or Purchased
Interest), that contained any untrue statement of a material fact or
omitted to state material facts necessary to make the statements not
misleading when made,
(b) the failure by such Seller to comply with any applicable
law, rule or regulation with respect to any Specified Receivable or any
Related Asset or to comply with any Contract related thereto, or the
nonconformity of any Specified Receivable, the related Contract or any
Related Assets with any such applicable law, rule or regulation,
(c) the failure to vest and maintain vested in Buyer a first
priority perfected ownership interest in the Specified Receivables
originated by such Seller, the Related Assets, the related Collections
and the proceeds of each of the foregoing, free and clear of any
Adverse Claim (other than an Adverse Claim created in favor of Buyer
pursuant to this Agreement or in favor of the Trustee pursuant to the
Pooling Agreement), whether existing at the time of the sale of such
Receivable or at any time
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thereafter and without regard to whether such Adverse Claim was a
Permitted Adverse Claim,
(d) any failure of such Seller to perform its duties or
obligations in accordance with the provisions of the Transaction
Documents,
(e) any products liability claim, personal injury or property
damage suit, environmental liability claim or any other claim or action
by a party other than Buyer of whatever sort, whether sounding in tort,
contract or any other legal theory, arising out of or in connection
with the goods or services that are the subject of any Specified Assets
with respect thereto or Collections thereof,
(f) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Specified Assets or Collections originated by or otherwise
attributable to such Seller, whether at the time of any sale or at any
subsequent time,
(g) any dispute, claim, offset or defense (other than the
discharge in bankruptcy) of an Obligor to the payment of any Specified
Receivable originated by such Seller or Related Asset, or purported
Specified Receivable or Related Asset, including a defense based on
such Receivable's or the related Contract's not being a legal, valid
and binding obligation of the Obligor enforceable against it in
accordance with its terms, and
(h) any tax or governmental fee or charge (other than
franchise taxes and taxes on or measured by the net income of Buyer or
any of its assignees), all interest and penalties thereon or with
respect thereto, and all reasonable out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in defending
against the same, that may arise by reason of the purchase or ownership
of the Specified Receivables originated by such Seller or any Related
Asset connected with any such Receivables.
Notwithstanding the foregoing (and with respect to clause (ii) below, without
prejudice to the rights that Buyer may have pursuant to the other provisions of
this Agreement or the provisions of any of the other Transaction Documents), in
no event shall any RPA Indemnified Party be indemnified for any RPA Indemnified
Losses (i) resulting from gross negligence or willful misconduct on the part of
the RPA Indemnified Party, (ii) to the extent the same includes losses in
respect of Receivables and reimbursement therefor that would constitute credit
recourse to such Seller for the amount of any Receivable or Related Asset not
paid by the related Obligor, (iii) resulting from the action or omission of the
Servicer (unless the Servicer is a Howmet Person), (iv) to the extent the same
are or result from lost profits, (v) to the extent the same are or result from
taxes on or measured by the net income
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of the RPA Indemnified Party, (vi) resulting from any breach by such RPA
Indemnified Party of its representations, warranties and covenants in the
Transaction Documents, and (vii) to the extent the same constitute
consequential, special or punitive damages.
If for any reason the indemnification provided above in this section is
unavailable to a RPA Indemnified Party or is insufficient to hold a RPA
Indemnified Party harmless, then such Seller shall contribute to the maximum
amount payable or paid to the RPA Indemnified Party as a result of the loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the RPA Indemnified Party on the one hand
and such Seller on the other hand, but also the relative fault of the RPA
Indemnified Party (if any) and such Seller and any other relevant equitable
considerations.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments; Waivers, Etc. (a) The provisions of this
Agreement may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and signed by Buyer and each
Seller (with respect to an amendment) or by Buyer (with respect to a waiver or
consent by it) and, in the case of any amendment, modification or waiver, to the
extent provided in Section 7. 2(j) of the Pooling Agreement, by the Trustee, and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. If any outstanding Investor
Certificates have been rated, this Agreement shall not be amended unless Buyer
shall have delivered the proposed amendment to the Rating Agencies at least ten
Business Days (or such shorter period as shall be acceptable to each of them)
prior to the execution and delivery thereof and the Modification Condition has
been satisfied with respect to such amendment.
(b) No failure or delay on the part of Buyer, any RPA Indemnified
Party, or the Trustee or any other third party beneficiary referred to in
Section 10.11(a) in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on any Seller in any case shall
entitle it to any notice or demand in similar or other circumstances. No waiver
or approval by Buyer or the Trustee under this Agreement shall, except as may
otherwise be stated in the waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mall, postage prepaid,
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by facsimile or by overnight courier, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall he designated by
the party in a written notice to the other parties hereto given in accordance
with this section. Copies of ail notices and other communications provided for
hereunder shall he delivered to the Trustee and to each Rating Agency at its
address for notices set forth in the Pooling Agreement. All notices and
communications provided for hereunder shall be effective, (a) if personally
delivered, when received, (b) if sent by certified mall, four Business Days
after having been deposited in the mall, postage prepaid and properly addressed,
(c) if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means and (d) if sent by overnight courier, two Business Days after
having been given to the courier unless sooner received by the addressee.
SECTION 10.3 Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, each Seller hereby authorizes Buyer, at any time and from time to
time, to the fullest extent permitted by law, to set-off, against any
Obligations of any Seller to Buyer that are then due and payable or that are not
then due and payable from a Seller to Buyer but have then accrued, any and all
indebtedness or other obligations at any time owing to any Seller by Buyer to or
for the credit or the account of any Seller or that are not then due and payable
from Buyer to a Seller but have then accrued.
SECTION 10.4 Binding Effect; Assignability; Survival of Provisions.
Subject to Section 1.8, this Agreement shall be binding upon and inure to the
benefit of Buyer and the Sellers and their respective successors and permitted
assigns. No Seller may assign any of its rights hereunder or any interest herein
without the prior written consent of Buyer, the Trustee and the Rating Agencies;
provided, however, that a Terminating Seller may assign its Buyer Note as
provided in Section 1.8. Except as provided in Section 1.8, this Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
first date following the Purchase Termination Date, but not later than the date
on which the Trust is terminated pursuant to Section 12.1 of the Pooling
Agreement, on which all Obligations shall have been finally and fully paid and
performed or such other time as the parties hereto shall agree and as to which
the Trustee (at the direction of the Majority Investors) shall have given its
prior written consent, which consent shall not be unreasonably withheld or
delayed. The rights and remedies with respect to any breach of any
representation and warranty made by a Seller pursuant to Article V and the
indemnification and payment provisions of Article IX and Section 10.6 shall be
continuing and shall survive any termination of this Agreement.
SECTION 10.5 Governing Law. "THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF
BUYER IN THE
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RECEIVABLES AND THE RELATED ASSETS ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
SECTION 10.6 Costs, Expenses and Taxes. Subject to Section 1.8, in
addition to the obligations of the Sellers under Article IX, the Sellers agree
jointly and severally to pay on demand:
(a) all reasonable out-of-pocket and other costs and expenses
in connection with the enforcement of this Agreement, the Seller
Assignment Certificates or the other Transaction Documents by Buyer or
any successor in interest to Buyer, and
(b) all stamp and other taxes and fees payable or determined
to be payable in connection with the execution and delivery, and the
filing and recording, of this Agreement or the other Transaction
Documents, and agrees to indemnify each RPA Indemnified Party against
any liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.
SECTION 10.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW
YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION
DOCUMENTS, AND HEREBY (A) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF THE
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN THE STATE OR FEDERAL COURT,
(B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF THE ACTION OR PROCEEDING,
AND (C) BUYER, IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS AGENT"),
WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK 10019,
ATTENTION: FRIEDA DAWSON, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS
PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS
THAT MAY BE SERVED IN ANY ACTION OR PROCEEDING. THE SERVICE MAY BE MADE BY
MAILING OR DELIVERING A COPY OF THE PROCESS TO BUYER OR THE APPLICABLE SELLER IN
CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND BUYER AND
EACH SELLER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO
ACCEPT THE SERVICE ON ITS BEHALF.
AS AN ALTERNATIVE METHOD OF SERVICE, BUYER AND EACH SELLER ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF THE PROCESS TO BUYER OR A SELLER (AS
APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS SECTION SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY ACTION OR
PROCEEDING AGAINST THE OTHER PARTY OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY
OTHER JURISDICTION.
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SECTION 10.8 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THE TRANSACTION DOCUMENTS OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO
OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THE TRANSACTION DOCUMENTS,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 10.9 Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
SECTION 10.10 Counterparts. 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 together shall constitute one and the same agreement.
SECTION 10.11 Acknowledgment and Consent. (a) The Sellers acknowledge
that, contemporaneously herewith, Buyer is selling, transferring, assigning,
setting over and otherwise conveying to the Trust all of Buyer's right, title
and interest in, to and under the Specified Assets, this Agreement and all of
the other Transaction Documents pursuant to Sections 2.1 and 2.4 of the Pooling
Agreement. The Sellers hereby consent to the sale, transfer, assignment, set
over and conveyance to the Trust by Buyer of all right, title and interest of
Buyer in, to and under the Specified Assets, this Agreement and the other
Transaction Documents, and all of Buyer's rights, remedies, powers and
privileges, and all claims of Buyer against the Sellers, under or with respect
to this Agreement and the other Transaction Documents (whether arising pursuant
to the terms of this Agreement or otherwise available at law or in equity),
including (i) the right of Buyer, at any time, to enforce this Agreement against
the Sellers and the obligations of the Sellers hereunder, (ii) the right to
appoint a successor to the Servicer at the times and upon the conditions set
forth in the Pooling Agreement, and (iii) the right, at any time, to give or
withhold any and all consents, requests, notices, directions, approvals,
demands, extensions or waivers under or with respect to this Agreement, any
other Transaction Document or the obligations in respect of the Sellers
thereunder to the same extent as Buyer may do. Each of the parties hereto
acknowledges and agrees that the Trustee and the Trust are third party
beneficiaries of the rights of Buyer arising hereunder and under the other
Transaction Documents to which any Seller is a party. Each Seller hereby
acknowledges and agrees that it has no claim to or interest in any of the Bank
Accounts or the Trust Accounts.
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(b) The Sellers hereby agree to execute all agreements, instruments and
documents, and to take all other action, that Buyer or the Trustee reasonably
determines is necessary or appropriate to evidence its consent described in
subsection (a) above. To the extent that Buyer, individually or through the
Servicer, has granted or grants powers of attorney to the Trustee under the
Pooling Agreement, the Sellers hereby grant a corresponding power of attorney on
the same terms to Buyer. The Sellers hereby acknowledge and agree that Buyer, in
all of its capacities, shall assign to the Trustee for the benefit of the
Certificate holders the powers of attorney and other rights and interests
granted by the Sellers to Buyer hereunder and agrees to cooperate fully with the
Trustee in the exercise of the rights.
SECTION 10.12 No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
SECTION 10.13 No Proceedings. Each Seller hereby agrees that it will
not institute against Buyer or the Trust, or join any other Person in
instituting against Buyer or the Trust, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of Event of Bankruptcy) so
long as any Investor Certificates issued by the Trust shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such Investor Certificates shall have been outstanding. The foregoing shall
not limit the right of a Seller to file any claim in or otherwise take any
action with respect to any insolvency proceeding that was instituted against
Buyer or the Trust by any Person other than a Seller or any other Howmet Person
(provided that no such action may be taken by a Seller until such proceeding has
continued undismissed, unstayed and in effect for a period of 10 days).
SECTION 10.14 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement
or any of the other Transaction Documents.
SECTION 10.15 Limitation on Liability of Certain Persons. No recourse
under or upon any obligation or covenant of this Agreement or any other
Transaction Document, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of Buyer or any Seller or of any
successor corporation, either directly or through Buyer or any such Seller,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Agreement, all other relevant Transaction Documents and the
obligations incurred hereunder or thereunder are solely corporate obligations,
and that no such personal liability whatsoever
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shall attach to, or is or shall be incurred by the incorporators, shareholders,
officers or directors, as such, of Buyer or any Seller or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement or any other Transaction Documents, or
implied therefrom; and that any and all such personal liability of, either at
common law or in equity or by constitution or statute, and any and all such
rights and claims against, every such incorporator, shareholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or covenants contained in
this Agreement or any other Transaction Documents, or implied therefrom, are
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Agreement. Buyer and each Seller and any director,
officer, employee or agent of Buyer and any such Seller may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The provisions of this section
shall survive the termination of this Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
HOWMET CORPORATION,
as Seller
By: ________________________________________
Title: _____________________________________
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
HOWMET CERCAST (U.S.A.), INC.,
as Seller
By:_________________________________________
Title: _____________________________________
Address c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
HOWMET REFURBISHMENT, INC.,
as Seller
By:_________________________________________
Title: _____________________________________
Address: c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
293
HOWMET-TEMPCRAFT, INC.,
as Seller
By:_________________________________________
Title: _____________________________________
Address. c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
TURBINE COMPONENTS CORPORATION,
as Seller
By: ________________________________________
Title:______________________________________
Address c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
BLADE RECEIVABLES CORPORATION,
as the Buyer
By:_________________________________________
Title: _____________________________________
Address: c/o Nevada Corporate Management,
Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Telephone: (702) 892-3772
Facsimile: (702) 892-3906
294
EXHIBIT A
to Purchase Agreement
FORM OF BUYER NOTE
____________, 1996
FOR VALUE RECEIVED, the undersigned, BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Buyer"), promises to pay to
________________________, a ______________ corporation ("Seller," and together
with its successors and assigns, the "Holder"), on the terms and subject to the
conditions set forth in this promissory note (this "Note") and in the Amended
and Restated Receivables Purchase Agreement of even date herewith (the
"Agreement") between Buyer, Howmet Corporation, a Delaware corporation
("Howmet"), and certain other subsidiaries of Howmet, an amount equal to the
aggregate deferred Purchase Price for Receivables owed by Buyer to the Seller
pursuant to Article m of the Agreement. Such amount, as shown in the records of
Servicer, will be rebuttable presumptive evidence of the principal amount and
interest owing under this Note.
1. Purchase Agreement. This Note is a Buyer Note described in, and is
subject to the terms and conditions set forth in, the Agreement. Reference is
hereby made to the Agreement for a statement of certain other rights and
obligations of Buyer and the Seller.
2. Rules of Construction; Definitions. Certain rules of construction
governing the interpretation of this Note are set forth in Appendix A to the
Pooling Agreement (as defined in the Agreement) and, except as otherwise
specifically provided herein, capitalized terms used but not defined herein have
the meanings ascribed to them in such Appendix A. In addition, as used herein,
the following terms have the following meanings:
"Bankruptcy Proceedings" means any dissolution, winding up,
liquidation, readjustment, reorganization or other similar" event
relating to Buyer, whether voluntary or involuntary, partial or
complete, and whether in bankruptcy, insolvency, receivership or other
similar proceedings, or upon an assignment for the benefit of
creditors, or any other marshalling of the assets and liabilities of
Buyer or any sale of all or substantially all of the assets of Buyer;
provided, however, that none of the following shall constitute a
"Bankruptcy Proceeding" so long as no Bankruptcy Event shall have
occurred with respect to Buyer and is continuing: (i) the commencement
of an amortization period, accumulation period or early amortization
period, (ii) the allocation and distribution of Collections and other
amounts during an amortization period, accumulation period or early
amortization period in accordance with the terms of the Pooling
Agreement and (iii) the liquidation, dissolution and winding up of
Buyer during an amortization period, accumulation period or early
amortization period in accordance with the Pooling Agreement after the
termination of the Pooling Agreement in accordance with Section 12.1
thereof.
295
"Final Maturity Date" means the date occurring one year and
one day after the Final Scheduled Payment Date of the latest maturing
Series or Purchased Interest from time to time outstanding.
"Highest Lawful Rate" has the meaning set forth in paragraph
9.
"Junior Liabilities" means all obligations of Buyer to the
Holder under this Note.
"Reference Rate" means, with respect to any day occurring in a
Calculation Period, the Applicable Federal Rate in effect on such day.
"Senior Interests" means all obligations of Buyer to the
Trustee, the Investor Certificate holders or the Purchasers under or in
connection with the Transaction Documents, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become
due, including without limitation interest or other amounts due or to
become due after an Event of Bankruptcy.
"Subordination Provisions" means, collectively, the provisions
of paragraph 7.
3. Interest. Subject to the Subordination Provisions, Buyer promises to
pay interest on the aggregate unpaid principal amount of this Note outstanding
on each day at an adjustable rate per annum equal to the Reference Rate in
effect on such day.
4. Interest Payment Dates. (a) Subject to the Subordination Provisions,
Buyer shall pay accrued interest on this Note on each Distribution Date and on
the Final Maturity Date. Buyer also shall pay accrued interest on the principal
amount of each prepayment hereof on the date of such prepayment.
(b) Notwithstanding the provisions of paragraph 4(a), in the event that
on the date an interest payment is due hereunder the amount of funds available
therefor pursuant to Section 3.3 of the Agreement is insufficient to pay any
amount due pursuant to paragraph 4(a), then interest shall be payable only to
the extent that funds are available therefor in accordance with Section 3.3 of
the Agreement. In the event that any interest on this Note is not paid when due,
the principal amount of this Note shall automatically be increased by the amount
of such interest in lieu of such payment.
5. Basis of Computation. Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions,
any unpaid principal of this Note shall only become due and payable on the Final
Maturity Date.
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296
Subject to the Subordination Provisions, the principal amount of and accrued
interest on this Mote may be prepaid on any Business Day without premium or
penalty; provided, that no prepayment shall be made by Buyer to the extent that
such prepayment would result in a default in the payment of any other amount
required to be paid by Buyer under any Transaction Document.
7. Subordination Provisions. Buyer covenants and agrees, and the
Holder, by its acceptance of this Note, likewise covenants and agrees, that the
payment of all Junior Liabilities is hereby expressly subordinated in right of
payment to the payment and performance of the Senior Interests to the extent and
in the manner set forth in this paragraph:
(a) In the event of any Bankruptcy Proceeding, the Senior
Interests shall first be paid and performed in full and in cash before
the Holder shall be entitled to receive and to retain any payment or
distribution in respect of the Junior Liabilities. In order to
implement the foregoing: (i) all payments and distributions of any kind
or character in respect of the Junior Liabilities to which the Holder
would be entitled except for this clause (a) shall be made directly to
the Trustee (for the benefit of itself, the Investor Certificate
holders and the Purchasers), and (ii) if a Bankruptcy Proceeding has
been commenced, the Holder shall promptly file a claim or claims, in
the form required in any Bankruptcy Proceedings, for the full
outstanding amount of the Junior Liabilities, and shall use
commercially reasonable efforts to cause said claim or claims to be
approved and all payments and other distributions in respect thereof to
be made directly to the Trustee (for the benefit of itself, the
Investor Certificate holders and the Purchasers) until the Senior
Interests shall have been paid and performed in full and in cash.
(b) In the event that the Holder receives any payment or other
distribution of any kind or character from Buyer or from any other
source whatsoever, in payment of the Junior Liabilities, after the
commencement of any Bankruptcy Proceeding, such payment or other
distribution shall be received in trust for the Trustee, the Investor
Certificate holders and the Purchasers and shall be turned over by the
Holder to the Trustee forthwith.
(c) Upon the date which is a year and a day after the final
payment in full and in cash of all Senior Interests, the Holder shall
be subrogated to the rights of the Trustee, the Investor Certificate
holders and the Purchasers to receive payments or distributions from
Buyer that are applicable to the Senior Interests until the Junior
Liabilities are paid in full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Holder, on the one hand,
and the Trustee, the Investor Certificate holders and the Purchasers on
the other hand. Nothing contained
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297
in these Subordination Provisions or elsewhere in this Note is intended
to or shall impair, as between Buyer, its creditors (other than the
Trustee, the Investor Certificate holders and the Purchasers) and the
Holder, Buyer's obligation, which is unconditional and absolute, to pay
the Junior Liabilities as and when the same shall become due and
payable in accordance with the terms hereof and of the Agreement or to
affect the relative rights of the Holder and creditors of Buyer (other
than the Trustee, the Investor Certificate holders and the Purchasers).
(e) Except as otherwise permitted in Sections 1.8 and 10.4 of
the Agreement, the Holder shall not, until the Senior Interests have
been finally paid and performed in full and in cash, (i) cancel, waive,
forgive, transfer or assign, or commence legal proceedings to enforce
or collect, or subordinate to any obligation of Buyer (other than to
the Senior Interests), howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or now or hereafter
existing, or due or to become due, the Junior Liabilities or any rights
in respect hereof or (ii) convert the Junior Liabilities into an equity
interest in Buyer, unless, in the case of each of clauses (i) and (ii),
the Holder shall have received the prior written consent of the Trustee
in each case.
(f) The Holder shall not, without the advance written consent
of the Trustee, commence, or join with any other Person in commencing,
any Bankruptcy Proceedings with respect to Buyer until at least one
year and one day shall have passed after the Senior Interests shall
have been finally paid and performed in full and in cash; provided,
however, that the Holder shall at all times have the right to file any
claim in or otherwise take any action with respect to any insolvency
proceeding instituted against Buyer by any Person other than the Holder
or any other Howmet Person (provided that no such action may be taken
by the Holder until such proceeding has continued undismissed, unstayed
and in effect for a period of 10 days).
(g) If, at any time, any payment (in whole or in part) made
with respect to any Senior Interest is rescinded or must be restored or
returned by a Certificate holder or Purchaser (whether in connection
with any Bankruptcy Proceedings or otherwise), these Subordination
Provisions shall continue to be effective or shall be reinstated, as
the case may be, as though such payment had not been made.
(h) Each of the Trustee, the Investor Certificate holders and
the Purchasers may, from time to time, in its sole discretion, without
notice to the Holder, and without waiving any of its rights under these
Subordination Provisions, take any or all of the following actions: (i)
retain or obtain an interest in any property to secure any of the
Senior Interests, (ii) retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to any of the
Senior Interests, (iii) extend or renew for one or more periods
(whether or not longer than the original period),
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298
alter, increase or exchange any of the Senior Interests, or release or
compromise any obligation of any nature with respect to any of the
Senior Interests, (iv) amend, supplement, amend and restate, or
otherwise modify any Transaction Document to which it is a party, and
(v) release its security interest in, or surrender, release or permit
any substitution or exchange for all or any part of any rights or
property securing any of the Senior Interests, or extend or renew for
one or more periods (whether or not longer than the original period),
or release, compromise, alter or exchange any obligations of any nature
of any obligor with respect to any such rights or property.
(i) The Holder hereby waives: (i) notice of acceptance of
these Subordination Provisions by the Trustee or any of the Investor
Certificate holders or Purchasers, (ii) notice of the existence,
creation, non-payment or non-performance of all or any of the Senior
Interests, and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Interests, or any
thereof. or any security therefor.
(j) These Subordination Provisions constitute a continuing
offer from Buyer to all Persons who become the holders of, or who
continue to hold, Senior Interests, and these Subordination Provisions
are made for the benefit of the Trustee, the Investor Certificate
holders and the Purchasers, and the Trustee may proceed to enforce such
provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Holder in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Note shall in any event be effective unless (a) the same shall be in
writing and signed and delivered by Buyer and the Seller, and (b) all consents
required for such actions under the Transaction Documents shall have been
received by the appropriate Persons.
9. Limitation on Interest. Notwithstanding anything in this Note to the
contrary, Buyer shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the
"Highest Lawful Rate"). If the effective rate of interest that would otherwise
be payable under this Note would exceed the Highest lawful Rate, or the Holder
shall receive any unearned interest or shall receive monies that are deemed to
constitute interest that would increase the effective rate of interest payable
by Buyer under this Note to a rate in excess of the Highest lawful Rate, then
(a) the amount of interest that would otherwise be payable by Buyer under this
Note shall be reduced to the amount allowed by applicable law, and (b) any
unearned interest paid by Buyer or any interest paid by Buyer in excess of the
Highest
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299
Lawful Rate shall be refunded to Buyer. Without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received by the
Holder under this Note that are made for the purpose of determining whether such
rate exceeds the Highest Lawful Rate shall be made, to the extent permitted by
applicable usury laws (now or hereafter enacted), by amortizing, prorating and
spreading in equal parts during the actual period during which any amount has
been outstanding hereunder all interest at any time contracted for, charged or
received by the Seller in connection herewith. If at any time and from time to
time (i) the amount of interest payable to the Holder on any date shall be
computed at the Highest Lawful Rate pursuant to the provisions of the foregoing
sentence, and (ii) in respect of any subsequent interest computation period the
amount of interest otherwise payable to the Holder would be less than the amount
of interest payable to the Holder computed at the Highest Lawful Rate, then the
amount of interest payable to the Holder in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
until the total amount of interest payable to the Holder shall equal the total
amount of interest that would have been payable to the Holder if the total
amount of interest had been computed without giving effect to the provisions of
the foregoing sentence.
10. No Negotiation. This Note is not negotiable.
11. Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
12. Security Interest. The Seller may grant a security interest in or
otherwise pledge this Note as security, and any Person to whom such security
interest is granted or to whom this Note is pledged shall be bound by, and for
all purposes takes this Note subject to, the restrictions and other provisions
(including the Subordination Provisions) set forth herein.
13. Captions. Paragraph captions used in this Note are provided solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Note.
14. Restatement. This Note amends and restates in its entirety the
Buyer Note dated December 13, 1995 and issued by Buyer to Seller pursuant to the
Existing Purchase Agreement.
BLADE RECEIVABLES CORPORATION
By: ___________________________________
Title: ________________________________
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300
EXHIBIT B
to Purchase Agreement
FORM OF
SELLER ASSIGNMENT CERTIFICATE
Reference is made to the Amended and Restated Receivables Purchase
Agreement of even date herewith (as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time, the "Agreement")
between ____________________, ____________________ and _________________
("Buyer"). Unless otherwise defined herein, capitalized terms used herein have
the meanings provided in Appendix A to the Agreement.
The undersigned (the "Seller") hereby sells, transfers, assigns, sets
over and conveys unto Buyer and its successors and assigns all right, tide and
interest of the Seller in, to and under:
(a) each Receivable of the Seller (other thin Contributed
Receivables) that existed and was owing to the Seller as at the closing
of the Seller's business on the Initial Cut-Off Date,
(b) each Receivable created by the Seller (other than
Contributed Receivables) that arises during the period from and
including the closing of the Seller's business on the Initial Cut-Off
Date to but excluding the earlier to occur of (i) the Purchase
Termination Date and (ii) the Termination Effective Date (if any) with
respect to such Seller,
(c) all Related Security with respect to all Receivables
(other thin Contributed Receivables) of the Seller,
(d) all proceeds of the foregoing, including all fluids
received by any Person in payment of any amounts owed (including
invoice prices, finance charges, interest and all other charges, if
any) in respect of any Receivable described above (other thin a
Contributed Receivable) or Related Security with respect to any such
Receivable, or otherwise applied to repay or discharge any such
Receivable (including insurance payments that the Seller or the
Servicer applies in the ordinary course of its business to amounts owed
in respect of any such Receivable (it being understood that property
insurance covering inventory is not so applied and is not included in
this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or
other collateral or property of any Obligor or any other party directly
or indirectly liable for payment of such Receivables), and
(e) all Records relating to any of the foregoing.
301
This Seller Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents to
which the Seller is a party. The Seller acknowledges and agrees that Buyer is
accepting this Seller Assignment Certificate in reliance on the representations,
warranties and covenants of the Seller contained in the Transaction Documents to
which the Seller is a party.
THIS SELLER ASSIGNMENT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the undersigned has caused this Seller Assignment
Certificate to be duly executed and delivered by its duly Authorized Officer
this _____ day of _______________, 1996.
[SELLER FULL NAME]
By: ___________________________________
Title: ________________________________
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302
EXHIBIT C
to Purchase Agreement
FORM OF CONTRIBUTION AGREEMENT
303
FORM OF CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT, dated as of ,(the "Agreement"), between
HOWMET CORPORATION, a Delaware corporation ("Howmet"), and BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("BRC").
In consideration of the mutual agreements contained herein, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used and not otherwise
defined herein will have the meanings given to them in the Receivables Purchase
Agreement, dated as of December __, 1995 (the "RPA"), by and among BRC, Howmet
and certain subsidiaries of Howmet listed on the signature pages thereto.
ARTICLE II
CONTRIBUTION TO BRC
Section 2.01. Capital Contribution to BRC. Howmet hereby agrees to
transfer, assign, set over and otherwise convey to BRC all of Howmet's right,
tide and interest in, to and under:
(a) each Receivable of Howmet listed or described on Schedule A
attached hereto, which may include Receivables originated after the date hereof
(collectively, the "Contributed Receivables") ,
(b) all Related Security with respect to the Contributed Receivables,
(c) all proceeds of the foregoing, including all fund's received by any
Person in payment of any amounts owed (including invoice prices, finance
charges, interest and all other charges, if any) in respect of any Contributed
Receivable or Related Security with respect to any Contributed Receivable, or
otherwise applied to repay or discharge any Contributed Receivable (including
insurance payments that Howmet or the Servicer applies in the ordinary course of
its business to amounts owed in respect of any Contributed Receivable (it being
understood that property insurance covering inventory is not so applied and is
not included in this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any Contributed Receivable) or other
collateral or property of any Obligor or any other party directory or indirectly
liable for payment of Contributed Receivables, and
(d) all Records relating to any of the foregoing.
304
The property described in clauses (b) through (d) above is collectively
called the "Related Contributed Assets."
Section 2.02. Acceptance by BRC. BRC hereby acknowledges its acceptance
of all right, title and interest in and to the property contributed to BRC by
Howmet pursuant to Section 2.01.
Section 2.03. Absolute Transfer: Assumption of Obligations. Howmet and
BRC hereby agree and acknowledge that the contribution of the Contributed
Receivables and Related Contributed Assets to BRC pursuant to Section 2.01 is an
absolute and irrevocable transfer of such property , and is not intended to be a
transfer for purposes of security. Howmet represents and warranties that all of
its representations and warranties in the RPA with respect to the Contributed
Receivables and Related Contributed Assets are true and correct on the date such
Receivables are contributed to BRC.
ARTICLE III
MISCELLANEOUS
Section 3.01. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall constitute but one and the same instrument.
Section 3.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
2
305
IN WITNESS WHEREOF, Howmet and BRC have caused this Agreement to be
duly executed as of the date of this Agreement.
HOWMET CORPORATION
By: ___________________________________
Name:__________________________________
Title:_________________________________
BLADE RECEIVABLES CORPORATION
By: ___________________________________
Name:__________________________________
Title:_________________________________
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306
Schedule 1
Litigation and Other Proceedings
CERCLA Matters
Howmet Corporation ("Howmet") and its subsidiaries, as the case may be, have
either received requests for information or been notified that they are or may
be potentially responsible parties under
CERCLA
or are otherwise involved in proceedings relating to the following locations:
- - In connection with a long standing investigation by the Michigan
Department of Natural Resources, groundwater monitoring at Howmet's
Whitehall facilities is continuing, an air sparging system has been
installed and is operating, and other remedial steps have been taken.
The cost of future remedial measures, including operating the sparging
system for three years and continued monitoring, will be approximately
$175,000.
- - On May 20, 1991, Howmet entered into an Administrative Consent Order
with the New Jersey Department of Environmental Protection and Energy
(the "NJDEP") providing for the further investigation and remediation
of the environmental condition at Howmet's two Dover, New Jersey
facilities. The areas of particular interest include a former disposal
area, two former holding ponds and a drainage ditch. Howmet's remedial
investigation work plan was approved by the NJDEP several years ago,
and Howmet and its consultants are continuing to proceed under it. A
reasonable estimate of further costs is $540,000.
- - In 1988 AT&T Technologies, Inc. ("AT&T") commenced a lawsuit against
Ceramet, Inc., now an operating unit of Howmet-Cercast (U.S.A.), Inc.
("Cercast"), and others for contribution in connection with remedial
costs incurred by AT&T in responding to requests for remedial action by
the United States Environmental Protection Agency (the "EPA") at the
Heleva Landfill in Pennsylvania. In 1993 the EPA issued orders under
CERCLA Section 106 to require AT&T, Cercast and other parties to remedy
the site and reimburse the government's past costs. Subsequently the
government sued these parties in federal court. Cercast has now entered
into a settlement with AT&T and the EPA under which Cercast will pay
$750,000 to settle its potential liability in this lawsuit. The
settlement is pending final drafting and execution of a settlement
agreement or consent decree.
- - In connection with the EPA's long outstanding proceeding involving the
Conservation Chemical Superfund Site, the EPA is performing an
emergency action to remove stored chemicals and contaminated soils from
the site. A settlement has been proposed by the EPA. Howmet's share of
the response costs will be less than $33,000.
- - On November 13, 1992, Howmet was named as a third party defendant,
along with many others, in connection with a lawsuit brought by the EPA
for environmental claims at the Metcoa environmental site in Pulaski,
Pennsylvania. The material Howmet sent to the site was of a
non-radiation nature. Howmet has joined with other defendants in
seeking de minimis status in this case.
- - Howmet's Winsted Machining Center has been named by the EPA as a
Potentially Responsible Party ("PRP") for contamination at the
Barkhamsted, Connecticut, hazardous waste site, along with
approximately forty other parties. Howmet's estimated maximum liability
is now less than $150,000. Under a bonding authorization approved by
the Connecticut General Assembly in
307
1995 specifically directed to this site, the State of Connecticut, may
incur a substantial portion of the liability which Howmet would
otherwise be expected to bear.
- - Howmet's Dover, New Jersey, Alloy Division facility has been identified
by the NJDEP as one of twenty PRP's relating to contamination at the
Combe Fill (New Jersey) South sanitary landfill. This case has been
under study for more than six years by the NJDEP and involves the
closing of several drinking water wells in the vicinity. Howmet has now
entered into a potential settlement with the NJDEP and the other named
generators which will allocate to Howmet a 6% portion of the cleanup
costs. This will require payments by Howmet estimated at $2.4 million.
The presently identified generators, including Howmet, are taking steps
to file a lawsuit against a substantial number of other likely
generators to spread the burden of cleanup costs.
- - On August 10, 1994 the NJDEP informed Howmet that it was a PRP in
connection with the remediation of hazardous substances at the PJP
Landfill Superfund Site in Jersey City, New Jersey, on the basis of
waste disposal activities of its Dover, New Jersey facility. On July
24, 1995, the NJDEP commenced a lawsuit against Howmet and
approximately 45 other defendants for the NJDEP's costs of clean-up and
removal of the environmental hazard at the site. No specific amount of
liability on the part of Howmet has yet been demanded. It is difficult
at this stage to predict the amount of an ultimate liability, if any.
- - The EPA has named the New England Aircraft Products Company, a former
subsidiary of Howmet, as one of 1,294 parties the EPA plans to hold
responsible for the environmental cleanup of the polluted Solvents
Recovery Service property situated in Southington, Connecticut. The EPA
now claims that the Howmet subsidiary should be charged with
responsibility for 20,790 gallons. This would take it out of the de
minimis group. The exposure to Howmet could reach a maximum in the
$100,000 range.
- - On August 15, 1995, Howmet received a notice from the Texas Natural
Resource Conservation Commission seeking information whether Howmet may
be a PRP with respect to a site in Ovalo, Texas known as the Wichita
Falls, Texas 76703 Site. Howmet has responded indicating that it has no
information linking it to the site. It believes that it has no
involvement at this site.
- - On September 29, 1995, the EPA notified Howmet that it may be a PRP
with respect to the Spectron Superfund Site, in Elktron, Maryland. No
specific amount has been demanded from Howmet, nor does Howmet believe
it has had any involvement at this site.
- - On August 4, 1995, the EPA informed Howmet that it might be a PRP with
respect to the PCB Treatment Inc. Superfund Sites in Kansas City,
Missouri. On October 2, 1995, Howmet responded indicating that 44.77
gallons of its PCBs may have been involved, but believes that all of
that volume was destroyed.
- - In September 1995 the EPA informed Cercast that its Sigma Casting
Division was a PRP with respect to the discharge of hazardous
substances at the Omega Chemical Corporation in Whittier. California.
The division has so far incurred a cost of $22,000 to cover
investigation and surface water cleanup. If groundwater cleanup is also
required, an estimated additional $80,000 may be incurred.
2
308
- - On January 23, 1996 Dermody Properties, Inc. ("Dermody"), the owner of
Silver Lake Business Center near the facility formerly owned by Howmet
in Reno, Nevada, sent Howmet a letter informing it that it might become
involved in an ongoing lawsuit brought in July, 1994 by Dermody.
Dermody claims that Howmet, along with six other property owners, may
be the source of contamination to Dermody's property from chlorinated
solvents and petroleum products. Dermody invited Howmet to participate
in a mediation process under way in connection with the lawsuit.
Howmet, however, did not use chlorinated solvents or petroleum products
in its production processes at its site in Reno, and has so informed
Dermody.
- - Since 1987 under a consent administrative order entered into with the
EPA, a group of approximately 100 PRPs has been conducting a remedial
investigation/feasibility study at the Thermo Chem site in Muskegon
County, Michigan. In 1991, the EPA expanded the site to include not
only the former Thermo Chem facility but also a former bulk storage
facility of Thomas Solvent Company, and the site was divided into two
operable units. A settlement agreement in 1995 fixed Howmet's liability
at approximately $260,000.
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309
Schedule 2
Changes in Financial Condition
NONE
310
Schedule 3
Offices of Seller Where Records are Maintained
Howmet Corporation
475 Steamboat Road
Greenwich, CT 06836-1960
Howmet Refurbishment, Inc.
475 Steamboat Road
Greenwich, CT 06836-1960
Howmet-Tempcraft, Inc.
475 Steamboat Road
Greenwich, CT 06836-1960
Turbine Components Corporation
475 Steamboat Road
Greenwich, CT 06836-1960
Howmet Cercast (U.S.A.), Inc.
475 Steamboat Road
Greenwich, CT 06836-1960
311
Schedule 4
Legal Names, Trade Names and Names
Under Which the Companies Do Business
Howmet Corporation
(formerly Howmet Turbine Components Corporation)
Howmet Refurbishment, Inc.
Howmet-Tempcraft, Inc.
(formerly Tempcraft, Inc.)
Turbine Components Corporation
Howmet Cercast (U.S.A.), Inc.
(formerly HTC Factors, Inc.)
312
PROJECT BLADE - TAKEOUT
CERTIFICATE PURCHASE AGREEMENT
(Series 1996-1, Class A)
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
HOWMET CORPORATION,
THE PURCHASERS DESCRIBED HEREIN,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
313
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions ..................................... 1
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase ........................................ 2
SECTION 2.2 Closing ......................................... 2
SECTION 2.3 Certificates .................................... 2
ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates ....... 3
SECTION 3.2 Notice to Purchasers ............................ 3
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches ........................................ 3
SECTION 4.2 Fees ............................................ 4
SECTION 4.3 Yield Protection ................................ 4
SECTION 4.4 Illegality; Unavailability ...................... 6
SECTION 4.5 Indemnity ....................................... 7
SECTION 4.6 Taxes ........................................... 8
ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment ...................... 10
SECTION 5.2 Pro Rata Treatment; Percentages ................. 10
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor ...................................... 11
SECTION 6.2 Howmet .......................................... 11
SECTION 6.3 Purchasers ...................................... 12
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase .......................... 13
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ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants ........................... 16
SECTION 8.2 Negative Covenants .............................. 17
SECTION 8.3 Transfers ....................................... 17
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment ..................................... 17
SECTION 9.2 Nature of Duties ................................ 17
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors 18
SECTION 9.4 Certain Rights of Agent ......................... 18
SECTION 9.5 Reliance ........................................ 18
SECTION 9.6 Indemnification ................................. 19
SECTION 9.7 Agent in Its Individual Capacity ................ 19
SECTION 9.8 Resignation by Agent ............................ 19
SECTION 9.9 Required Purchasers ............................. 20
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments ...................................... 20
SECTION 10.2 No Waiver; Remedies ............................. 21
SECTION 10.3 Successors and Assigns; Assignments ............. 21
SECTION 10.4 Survival of Agreement ........................... 26
SECTION 10.5 Expenses; Indemnification ....................... 26
SECTION 10.6 Entire Agreement ................................ 28
SECTION 10.7 Notices ......................................... 28
SECTION 10.8 No Third-Party Beneficiaries .................... 28
SECTION 10.9 Severability of Provisions ...................... 28
SECTION 10.10 Counterparts .................................... 28
SECTION 10.11 Governing Law ................................... 28
SECTION 10.12 Tax Characterization ............................ 29
SECTION 10.13 No Proceedings .................................. 29
SECTION 10.14 Reference Bank .................................. 29
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SCHEDULE
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBITS
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX
APPENDIX X Index of Additional Defined Terms
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This CERTIFICATE PURCHASE AGREEMENT, dated as of April 18, 1996 (this
"Agreement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada corporation
("Transferor"), HOWMET CORPORATION, a Delaware corporation ("Servicer" or
"Howmet"), the purchasers named on the signatures pages of this Agreement
(together with their respective permitted assigns, the "Purchasers"), and THE
FIRST NATIONAL BANK OF CHICAGO, as administrative and syndication and
documentation agent for the Purchasers (in that capacity, together with any
successors in that capacity, "Agent").
BACKGROUND
1. Transferor (a) is a party to a Pooling and Servicing Agreement dated
as of December 13, 1995, as amended and restated in its entirety by an Amended
and Restated Pooling and Servicing Agreement dated as of April 18, 1996 (the
"Pooling Agreement"), with Howmet, as initial Servicer, and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (in that
capacity, together with any successors in that capacity, the "Trustee"), (b) is
a party to a Receivables Purchase Agreement dated as of December 13, 1995, as
amended and restated in its entirety by an Amended and Restated Receivables
Purchase Agreement dated as of April 18, 1996, and (c) will enter into a Series
1996-1 Supplement to the Pooling Agreement substantially in the form of Exhibit
A (the "Supplement"). Pursuant to the Pooling Agreement and the Supplement,
Transferor will obtain the Series 1996-1, Class A Certificates (the
"Certificates"), which will represent fractional undivided beneficial interests
in the assets of the Blade Receivables Master Trust (the "Trust"), a trust
organized pursuant to the Pooling Agreement.
2. Transferor wishes to obtain the commitment of each Purchaser to
purchase fractional undivided beneficial interests in the assets of the Trust
(each a "Trust Interest") that will be evidenced by its Certificate. Subject to
the terms and conditions of this Agreement, each Purchaser is willing to
purchase a Certificate. Howmet has joined in this Agreement to confirm certain
representations, warranties and covenants for the benefit of the Purchasers and
the Agent.
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used and not otherwise
defined herein have the meanings assigned to them in the Supplement or, if not
317
defined in the Supplement, in Appendix A to the Pooling Agreement. An index of
terms defined directly in this Agreement is attached as Appendix X.
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase. The Transferor will sell to each Purchaser and,
subject to the terms and conditions of this Agreement, the Pooling Agreement and
the Supplement, each Purchaser will purchase (each such purchase being a
"Purchase") from the Transferor, at the time and place provided for in Section
2.2, a Certificate for a purchase price equal to 100 % of the Stated Amount of
such Certificate. The Stated Amount of each initial Purchaser's Certificate is
set forth opposite its name in Schedule I.
SECTION 2.2 Closing. The sale of each Certificate shall take place at
the offices of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois
60603 at noon, Chicago time, on April 18, 1996 (the "Effective Date"). On the
Effective Date, the Transferor will deliver to each Purchaser a Certificate,
dated as of the Effective Date and registered in the name of each such
Purchaser, against delivery by each such Purchaser to the Transferor or its
order of immediately available funds in the amount of the purchase price
therefor to Manufacturers & Traders Trust Company, Corporate Trust Department,
One M&T Plaza, 7th floor, Buffalo, New York 14203-2399, Attention: Russell
Whitley.
SECTION 2.3 Certificates. The outstanding amounts of the Purchase made
by each Purchaser shall be evidenced by its Certificate, and to be issued on the
Effective Date substantially in the form of Exhibit A (Part 1) to the
Supplement. Each Purchaser shall and is hereby authorized to record on the grid
attached to its Certificate (or at its option, in its internal books and
records) the date and amount of the Purchase made by it, the amount of each
repayment of the principal amount represented by its Certificate and the
portions of its Purchase that are from time to time allocated to the ABR Tranche
and a Eurodollar Tranche (which shall be conclusive absent demonstrable error);
provided, that failure to make any recordation on the grid or records or any
error in the grid or records shall not adversely affect the Purchaser's rights
with respect to its interest in the assets of the Trust and its right to receive
interest in respect of the outstanding principal amount of the Purchase made by
the Purchaser.
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ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates. Transferor may,
in accordance with Section 4.9 of the Supplement, prepay the Certificates in
full or in part upon at least three Business Days' prior notice by Transferor to
Trustee. In the event of any such prepayment of the Certificates occurring at
any time during the one-year period commencing on the Effective Date, the
Holders of such Certificates shall be entitled to receive a Prepayment Premium.
The Certificates may not be partially prepaid and the Certificates, once
prepaid, may not be reinstated.
SECTION 3.2 Notice to Purchasers. Trustee shall promptly advise the
Purchasers of any notice received by Trustee pursuant to Section 3.1.
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches (a) Subject to the terms and conditions set forth
in this section and Section 4.4, Transferor shall have the option: (x) on any
Business Day, to convert all or part of the ABR Tranche to a Eurodollar Tranche
and (y) on the last day of any Interest Period of a Eurodollar Tranche, to
convert all or any part of that Eurodollar Tranche to form a part of the ABR
Tranche and/or to continue all or any part of that Eurodollar Tranche as a new
Eurodollar Tranche, the Interest Period for which shall commence on the first
day after the prior Interest Period; provided, that:
(i) subject to Section 4.4, each conversion or continuation
shall be made ratably among the Purchasers in accordance with their
respective amounts of the Purchases comprising the converted or
continued Tranche;
(ii) if less than all of the outstanding amount of any Tranche
shall be converted or continued, the aggregate amount of the Tranche
converted or continued shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $2,000,000;
(iii)any Interest Period for a Eurodollar Tranche that
commences after the commencement of the Amortization Period must begin
on a Distribution Date and end on the next Distribution Date; and
(iv) there shall not be more than four separate Eurodollar
Tranches outstanding at any one time.
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(b) If Transferor wishes to convert and/or continue a Tranche under
this section, Transferor shall notify the Agent in writing (i) in the case of a
conversion to or continuation of a Eurodollar Tranche, not later than 2:00 p.m.,
New York City time, three Business Days prior to the date of the proposed
conversion or continuation date and (ii) otherwise, not later than noon, New
York City time, one Business Day prior to the date of the proposed conversion or
continuation. Each notice shall be irrevocable and shall refer to this Agreement
and specify (x) the identity and amount of the Tranche that Transferor wishes to
convert or continue, (y) whether all or part of the Tranche is to be converted
into or continued as a Eurodollar Tranche and (z) the date of the proposed
conversion or continuation (which shall be a Business Day). If Transferor shall
not have delivered a timely notice in accordance with this section with respect
to any Tranche, the Tranche shall, at the end of the Interest Period applicable
to it (unless repaid pursuant to the terms hereof), automatically be converted
into or continued as an ABR Tranche. The Agent shall promptly advise the
Purchasers of any notice given pursuant to this section and of each Purchaser's
portion of any converted or continued Tranche.
(c) In accordance with Section 4.1 of the Supplement, each Purchaser
and the Agent will be entitled to receive additional interest (at the rate
specified therein) on amounts that are not paid when due under this Agreement or
under its Certificate.
SECTION 4.2 Fees. On the Effective Date, Howmet shall pay to the Agent
the fees specified in the fee letter, dated October 20, 1995, delivered by
Servicer to the Agent, for the account of the Persons specified in such letter.
SECTION 4.3 Yield Protection. (a) Notwithstanding any other
provision herein, if, after the date hereof, either:
(i) the adoption of any law, rule or regulation (including any
imposition or increase of reserve requirements) or any change after the
date hereof in the interpretation or administration of any law, rule or
regulation by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
(ii) the compliance by a Purchaser with any new or revised
guideline or request from any central bank or other Governmental
Authority or quasi-governmental authority exercising control over banks
or financial institutions generally (whether or not having the force of
law),
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shall subject a Purchaser to the imposition or modification of any reserve
(including any imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar requirement that
takes the form of a tax) against assets of, deposits with or for the account of,
or credit extended by, the Purchaser or the office from time to time that it
designates to the Agent as the office through which it makes and maintains its
Purchases comprising part of a Eurodollar Tranche (as to each Purchaser, its
"LIBOR Office") or impose any other condition on a Purchaser affecting its
Eurodollar Tranche or its obligations hereunder, and as a result of either of
the foregoing there shall be any increase in the cost to the Purchaser of
agreeing to make or making, funding or maintaining Purchases as Eurodollar
Tranches (except to the extent already included in the determination of the
Reserve Adjusted Eurodollar Rate), or there shall be a reduction in the amount
received or receivable by the Purchaser or its LIBOR Office, then, upon written
notice from the Purchaser to Transferor and Servicer (with a copy to the Agent),
signed by an officer of the Purchaser with knowledge of and responsibility for
such matters, and setting forth in reasonable detail the calculation used to
arrive at the amounts, additional amounts sufficient to indemnity that Purchaser
against the increased cost or reduction in amounts received or receivable shall
constitute "Additional Amounts" for purposes of the Supplement, and the
Purchaser shall be entitled to receive these additional amounts, solely from
amounts allocated thereto and paid pursuant to the Supplement.
(b) If a Purchaser shall reasonably determine that the adoption after
the date hereof of any law, rule or regulation regarding capital adequacy or
capital maintenance, or any change after the date hereof in any of the foregoing
or in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Purchaser, any of its lending
offices or its holding company with any new or revised request or directive
regarding capital adequacy or capital maintenance (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Purchaser's capital or the capital of its holding company as a consequence of
this Agreement, the Purchase made by the Purchaser pursuant hereto to a level
below what the Purchaser or its holding company could have achieved but for the
adoption, change or compliance (taking into consideration the Purchaser's
policies, and the policies of its holding company, with respect to capital
adequacy), then, upon written notice from the Purchaser to Transferor and
Servicer (with a copy to the Agent), signed by an officer of the Purchaser with
knowledge of and responsibility for such matters, and setting forth in
reasonable detail the calculation used to arrive at the amounts, any additional
amounts as will compensate the Purchaser or its holding company for the
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reduction shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) A Purchaser will act reasonably and in good faith (and use
reasonable attribution methods) in determining any additional amounts due
pursuant to subsection (a) or (b), as the case may be, and shall promptly notify
Transferor, Servicer and the Agent in writing of any event of which it has
knowledge occurring alter the date hereof that will entitle it to compensation
pursuant to this section. A certificate of the Purchaser, signed by an officer
of the Purchaser with knowledge of and responsibility for such matters, and
setting forth in reasonable detail the calculation used to arrive at the amounts
necessary to compensate the Purchaser or its holding company as specified in
subsection (a) or (b), as the case may be, shall be delivered to Transferor and
Servicer and shall be conclusive absent demonstrable error.
(d) Failure on the part of a Purchaser to demand compensation for any
amounts as specified in subsection (a) or (b) with respect to any period shall
not constitute a waiver of its right to demand compensation with respect to that
period or any other period. The protection of this section shall be available to
the Purchasers regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed.
(e) Promptly alter giving any notice to Transferor pursuant to this
section, a Purchaser will seek to designate one of its offices located at an
address other than that previously designated pursuant to this Agreement as the
office from which its Purchase will be maintained alter the designation if it
will avoid the need for, or materially reduce the amount of, any payment to
which the Purchaser would otherwise be entitled pursuant to this section and
will not, in the reasonable discretion of the Purchaser, be otherwise
disadvantageous to the Purchaser.
SECTION 4.4 Illegality; Unavailability. (a) In the event that on any
date any Purchaser shall have reasonably determined (which determination shall
be final and conclusive and binding upon all parties) that the continuation of
its Purchase as Eurodollar Tranches has become unlawful by compliance by the
Purchaser in good faith with any law, governmental rule, regulation or order or
has become impossible as a result of a contingency occurring alter the date
hereof that materially and adversely affects its interbank eurodollar market,
then, and in any such event, that Purchaser shall promptly give notice (by
telephone confirmed in writing) to Transferor, Servicer and the Agent (which
notice the Agent shall promptly transmit to each Purchaser) of that
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determination. The obligation of the affected Purchaser to maintain its Purchase
as Eurodollar Tranches during any such period shall be terminated at the earlier
of the termination of the Interest Period then in effect for such Eurodollar
Tranches or when required by law, and Transferor shall, no later than the time
specified for the termination, convert the portion of the Purchase of the
affected Purchaser that constitutes part of any Eurodollar Tranche into a part
of the ABR Tranche.
(b) If, prior to the beginning of any Interest Period, the Agent shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that: (i) Dollar deposits in the relevant amount
and for the Interest Period are not available in the relevant interbank
eurodollar market or (ii) by reason of circumstances affecting the interbank
eurodollar market, that adequate and fair means do not exist for ascertaining
the Reserve Adjusted Eurodollar Rate applicable to a Eurodollar Tranche, then
the Agent shall promptly give notice of this determination to Transferor and to
each Purchaser. Thereafter, and continuing until the Agent shall notify
Transferor that the circumstances giving rise to this determination no longer
exist, (x) each Eurodollar Tranche will, on the last day of the applicable
Interest Period, convert into a part of the ABR Tranche and (y) the right of
Transferor to request Eurodollar Tranches shall be suspended.
SECTION 4.5 Indemnity. If a Purchaser shall incur any losses, expenses
or liabilities (including any interest paid to lenders of funds borrowed by it
to fund its Purchase of its Certificate as a Eurodollar Tranche and any loss
sustained in connection with the re-deployment of such funds) as a result of (a)
the failure of such Purchase to be made on the Effective Date (other than any
such failure resulting from the Purchaser's default in the performance of its
obligations hereunder) or (b) any repayment, including under Section 3.1, of any
part of the Invested Amount allocated to a Eurodollar Tranche on a date that is
not the last day of the Interest Period applicable to that part of the Invested
Amount or that is any date other than the date specified in a notice of
repayment given by Trustee, then, upon written notice (which notice shall be
signed by an officer of the Purchaser with knowledge of and responsibility for
such matters and shall set forth in reasonable detail the basis for requesting
the amounts) from the Purchaser to Transferor and Servicer, additional amounts
sufficient to indemnity the Purchaser against the losses, expenses and
liabilities, but not for any lost profits associated therewith, shall constitute
"Additional Amounts" for purposes of the Supplement, and the Purchaser shall be
entitled to receive these additional amounts, solely from amounts allocated
thereto and paid pursuant to the Supplement.
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SECTION 4.6 Taxes. (a) Any and all payments made to each Purchaser
under its Certificate shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or assessed,
excluding taxes imposed by the jurisdiction in which that Purchaser's principal
office (and/or the office where it books its investment in its Certificate) is
located on all or part of the net income, profits or gains of that Purchaser
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise)
(all the nonexcluded taxes, levies, imposts, charges, deductions, withholdings
and liabilities being hereinafter referred to as "Taxes"), except to the extent
required by law. if Trustee or the Agent is required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder or under any
Certificate to a Purchaser, then the sum payable shall be increased by the
amount necessary to yield to such Purchaser (after payment of all Taxes) an
amount equal to the sum it would have received had no such deductions or
withholdings been made, and the additional amount shall constitute "Additional
Amounts" for purposes of the Supplement, and the Purchaser shall be entitled to
receive these additional amounts, solely from amounts allocated thereto and paid
pursuant to the Supplement.
(b) Whenever any Taxes are paid by Trustee pursuant to subsection (a),
as promptly as possible thereafter Servicer shall send to the relevant Purchaser
the original or a certified copy of an original official receipt showing payment
thereof (if any) or any other evidence of the payment as may be available to
Servicer through the exercise of its reasonable efforts. If Trustee falls to pay
any Taxes when due to the appropriate taxing authority or falls to remit to the
Purchaser the required receipts or other required documentary evidence, the
Purchaser shall be entitled to receive, solely from amounts allocated with
respect thereto and paid pursuant to the Supplement, additional amounts
necessary to indemnity it for any incremental taxes, interest or penalties that
may become payable by the Purchaser as a result of any such failure, and the
amounts shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) On or before the date it becomes a party to this Agreement (or, in
the case of an Affected Party, on or before the date it becomes a Support Bank)
and, so long as it may properly do so, periodically thereafter, to keep forms up
to date, each Purchaser (including any Assignee) and Affected Party that is not
a United States person (as defined in section 7701(a)(30) of the Internal
Revenue Code), shall deliver to Trustee any certificates, documents or
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other evidence that shall be required by the Internal Revenue Code or Treasury
Regulations issued pursuant thereto to establish that, assuming the Certificates
are properly characterized as indebtedness for Federal income tax purposes, it
is exempt from existing United States Federal withholding (including backup
withholding) requirements, including (i) two original copies of Internal Revenue
Service Form 4224 or successor applicable form, properly completed and duly
executed by the Purchaser or Affected Party certifying that it is entitled to
receive payments under this Agreement or any Certificate without deduction or
withholding of any United States Federal income taxes, and (ii) an original copy
of Internal Revenue Service Form W-8 or W-9 or applicable successor form,
properly completed and duly executed, establishing that it is entitled to an
exemption from a backup withholding; provided, that if any Purchaser or Affected
Party fails to comply with this subsection 4.6(c) (it being understood that a
Purchaser's or Affected Party's inability to properly provide the documents
described herein after the date it becomes a party hereto, in the case of a
Purchaser, or the date it becomes a Support Bank, in the case of an Affected
Party, shall not constitute failure to comply with this subsection 4.6(c)),
amounts payable to such Purchaser or Affected Party (as the case may be) under
this Section 4.6 shall be limited to amounts that would have been payable under
this section if such Purchaser had so complied. Each Purchaser, including any
Assignee, shall notify Trustee of any change in circumstances or lapse in time
which renders any form provided by such Purchaser pursuant to this subsection
4.6(c) obsolete to the extent that such Purchaser is no longer exempt from
existing United States Federal withholding (including backup withholding)
requirements.
(d) On or before the date it becomes a party to this Agreement (and, so
long as it may properly do so, periodically thereafter, to keep forms up to
date), each Purchaser, including any Assignee, (other than any such Purchaser or
Assignee organized as a corporation under the laws of any state of the United
States) that is a United States person (as defined in Section 7701(a)(30) of the
Internal Revenue Code), shall deliver to Trustee an original copy of Internal
Revenue Service Form W-9 or applicable successor form, properly completed and
duly executed, certifying its exemption from backup withholding.
(e) If any Additional Amount under this Section 4.6 is paid to a
Purchaser and such Purchaser determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its tax liabilities in or with respect to the
taxable year in which the Additional Amount is paid, such Purchaser shall pay to
the Transferor an amount that such Purchaser shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by such
Purchaser in such year as a consequence of such refund, reduction or credit.
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ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment. (a) All amounts payable to any
Purchaser hereunder or with respect to its Certificate shall be made to the
Agent for the account of the Purchaser by wire transfer of immediately available
funds in Dollars not later than 2:00 p.m., New York City time, on the date due.
Any funds received after that time will be deemed to have been received on the
next Business Day. The Agent shall distribute all payments to the Purchasers, in
accordance with their respective interests, prior to the close of business on
the Business Day on which any payment is deemed received.
(b) On any date on which a payment to one or more Purchasers hereunder
or under the Certificates is due and payable, the Agent may (but in no event
shall be required to) assume that the payment has been made available to the
Agent on the date of the payment in accordance with this section, and the Agent
may (but in no event shall be required to), in reliance upon this assumption,
make payment of a corresponding amount to the Purchasers. If and to the extent
any amounts shall not have so been made available to the Agent, each Purchaser
irrevocably and unconditionally agrees to repay to the Agent forthwith on demand
the amount of payment it received together with interest thereon, for each day
from the date payment is made by the Agent until the date the amount is repaid
to the Agent, (i) for the first three days following the date the payment is
made, at a rate per annum equal to the Federal Funds Rate and (ii) thereafter,
at a rate per annum equal to the Federal Funds Rate plus 1%.
SECTION 5.2 Pro Rata Treatment; Percentages. (a) Each repayment of the
principal of the Certificates, each payment of interest thereon and each
conversion or continuation of any Tranche (except as otherwise required by
Section 4.4(a) with respect to conversions) shall be allocated pro rata among
the Purchasers on the date of payment or reduction, in accordance with their
respective Class Percentages.
(b) For purposes of this Agreement, (i) "Class Percentage" means, with
respect to each Purchaser, the percentage equivalent (carried out to twelve
decimal places) of a fraction, the numerator of which is the Stated Amount of
such Purchaser's Certificate and the denominator of which is the sum of the
Stated Amounts of all of the Purchasers' Certificates, and (ii) "Series
Percentage" means, with respect to each Purchaser, the percentage equivalent
(carried out to twelve decimal places) of a fraction, the numerator of which is
the Stated Amount of such Purchaser's Certificate and the denominator of which
is the sum of the Stated Amounts for all of the Series 1996-1 Certificates. The
initial Class Percentages and Series Percentages of the initial Purchasers are
set forth opposite their names in Schedule 1
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ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor. As of the Effective Date, Transferor represents
and warrants to the Purchasers that each of its representations and warranties
in the Pooling Agreement and Purchase Agreement is true and correct, as if made
on the Effective Date, and further represents and warrants that:
(a) no Early Amortization Event or Unmatured Early
Amortization Event exists;
(b) assuming the accuracy of the Purchaser's representations
set out in Section 6.3 and that no Purchaser (and no Person acting on
any Purchaser's behalf) has made a general solicitation or general
advertising within the meaning of the Securities Act, the offer and
sale of the Certificates in the manner contemplated by this Agreement
is a transaction exempt from the registration requirements of the
Securities Act, and the Pooling Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended;
(c) except for First Chicago Capital Markets, Inc. and BT
Securities Corporation (collectively, the "Financial Advisors"),
Transferor has not dealt with any financial advisor, or other Person
who may be entitled to any commission or compensation in connection
with the sale of the Certificates; and the fees of the Financial
Advisors shall not be an obligation of the Purchasers; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.2 Howmet. As of the Effective Date, Howmet represents and
warrants to the Purchasers that:
(a) each of its representations and warranties in the Pooling
Agreement (in its capacity as Servicer) and the Purchase Agreement (in
its capacity as a Seller) is true and correct, as if made on the
Effective Date with the same effect as if made on that date (unless
specifically stated to relate to an earlier date);
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(b) the Pro Forma Financial Data present fairly in all
material respects the pro forma financial position, results of
operations and cash flows of Howmet and its consolidated Subsidiaries
at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein
(except, in the case of quarterly financial statements, for the
omission of footnotes and ordinary year-end adjustments, none of which,
individually or in the aggregate, would be material);
(c) since September 30, 1995 through to the Effective Date
(and except as contemplated in the Pro Forma Financial Data), (i) there
has been no material adverse change in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
Transferor or Howmet, whether or not arising in the ordinary course of
business, and (ii) there have been no transactions (except the
execution and delivery of Transaction Documents, the Howmet Credit
Agreement and the Note Indenture, and the consummation of the
transactions and refinancings contemplated thereby) entered into by
Transferor or Howmet that are material with respect to the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of Transferor or Howmet; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.3 Purchasers. As of the Effective Date (or such later date on
which it acquires its Certificate in accordance with Section 10.3), each
Purchaser represents and warrants (and each Assignee shall be deemed to
represent and warrant as of the date that its assignment becomes effective)
that:
(a) it is a "qualified institutional buyer" as that term is
defined under Rule 144A of the Securities Act and it is not purchasing
its Certificate with a view to making a distribution thereof (within
the meaning of the Securities Act);
(b) it has all necessary corporate power and authority, and
has taken all action necessary, to execute and deliver this Agreement
and the other Transaction Documents to which it is a party, to fulfill
its
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obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby;
(c) it is not a pension, profit sharing or other employee
benefit plan subject to ERISA, and the assets being used to purchase
its Certificate do not constitute the assets of any "benefit plan
investor" (as defined under ERISA);
(d) such Purchaser's making and performance of this Agreement
and the other Transaction Documents to which it is a party do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other law or regulation applicable to it;
(e) this Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by it and
constitute its legal, valid and binding obligation, enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law; and
(f) all approvals, authorizations or other actions by, or
filing with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement and the other
Transaction Documents to which it is a party have been obtained.
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase. The obligation of each Purchaser to
Purchase its Certificate shall be subject to the satisfaction of the conditions
precedent that (x) the Agent shall have received, for the account of such
Purchaser, a duly executed and authenticated Certificate registered in its name
and in a Stated Amount equal to the amount set out opposite its name on the
signature pages of this Agreement, (y) the Agent shall have received certain
fees and reimbursement of any expenses referred to in Section 10.5 for which
invoices have been presented and (z) the Agent shall have received, for the
account of such Purchaser, an original (except as indicated below) counterpart
of the following (each of which, if not in a form attached to this Agreement,
shall be in form and substance satisfactory to the Agent):
(a) certified copies of the Pooling Agreement, the Purchase
Agreement and the Guaranty, each of which shall be in full force and
effect, and evidence that all actions required to be taken under those
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documents in connection with the issuance of the Certificates shall
have been taken;
(b) photocopies of each Account Agreement:
(c) a certificate of the Secretary, or an Assistant Secretary,
of each of Transferor, Servicer, Guarantor and each Seller with respect
to:
(i) attached copies of resolutions of its Board of
Directors then in full force and effect authorizing the
execution, delivery and performance of the Transaction
Documents;
(ii) the incumbency and signatures of those of its
officers authorized to act with respect to the Transaction
Documents; and
(iii) attached copies of its certificate of
incorporation and by-laws;
(d) a certificate of an Authorized Officer of each of
Transferor, Servicer, Guarantor and each Seller stating that, as of the
Effective Date, before and after giving effect to the Purchases and to
the application of any proceeds therefrom, the following statements
shall be true:
(i) the representations and warranties of Transferor,
Servicer, Guarantor and each Seller set out in this Agreement
and the other Transaction Documents are true and accurate as
of the Effective Date (unless specifically stated to relate to
an earlier date); and
(ii) no Early Amortization Event or Unmatured Early
Amortization Event has occurred and is continuing;
(e) a certificate of an appropriate officer of Trustee stating
that the Pooling Agreement has been duly authorized, executed and
delivered by Trustee and the Certificates have been duly authenticated
by Trustee in accordance with the Pooling Agreement, and an opinion of
counsel to Trustee as to related matters;
(f) results of recent searches of the UCC filing records and
tax and ERISA and judgment lien records, updating each of the searches
performed in connection with the issuance by Transferor of the Series
1995-1 Certificates, showing no filings of record that cover any of the
Receivables or the Related Transferred Assets, other than the financing
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statements filed in connection with the issuance of the Series 1995-1
Certificates;
(g) the following opinions addressed to the Agent, the
Purchasers and Trustee, and in each case as to the matters and in such
form and substance as shall be satisfactory to the Agent, the
Purchasers and Trustee:
(i) opinions of Latham & Watkins as to certain
corporate and securities matters, Federal and state tax and
UCC matters, true sale and non-consolidation;
(ii) opinions of (A) Paul, Hastings, Janofsky &
Walker, (B) Kummer Kaempfer Bonner & Renshaw and (C) Vorys,
Sater, Seymour and Pease as to certain corporate, state tax
and UCC matters; and
(iii) the opinion of Roland Paul, General Counsel to
Servicer, as to certain corporate matters;
(h) the Daily Report for the Effective Date;
(i) evidence, reasonably satisfactory to the Agent
and the Purchasers, of the payment of all taxes, fees and
other governmental charges, if any, incidental to the issuance
of the Certificates and to the consummation of the
transactions contemplated hereunder and under the Pooling
Agreement;
(j) a certificate of the Secretary of Howmet to the
effect that there is not, nor has there at any time been, any
matured or unmatured "Event of Default" or "Potential Event of
Default" under (and as defined in) the Howmet Credit Agreement
other than as a result of Howmet's failure to deliver 1995
audited financial statements;
(k) copies of any management or other agreements with
regard to the administration of Transferor's business,
certified by an Authorized Officer of Transferor;
(l) a pro-forma balance sheet of Transferor as of the
Effective Date, after giving effect to the transactions
contemplated by the Supplement, certified by an appropriate
officer of Transferor; and
(m) any other information, certificates, opinions and
documents as the Agent or Credit Suisse may have reasonably
requested.
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ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants. Transferor and Howmet each severally
covenant and agree that, until the Certificates have been paid in full, it will:
(a) duly and timely perform all of its covenants and
obligations under each Transaction Document to which it is a party;
(b) with reasonable promptness deliver to each Purchaser such
information, documents, records or reports respecting the Program or
the Receivables as the Purchaser may from time to time reasonably
request; and
(c) at the same time any report (including any Daily Report,
Monthly Report or annual auditors' report), notice or other document is
provided, or caused to be provided, by Transferor or Servicer to
Trustee under the Pooling Agreement, provide the Agent and each Holder
of a Class B Certificate with a copy of the report.
In addition, it is understood and agreed that so long as the
Certificates remain outstanding, Servicer and Transferor shall (and Servicer
shall cause each Seller to) during regular business hours and (so long as no
Early Amortization Event has occurred and is continuing) upon two Business Days
prior written notice, permit Trustee, the Agent or the Majority Class B
Purchasers (or such other Person as Trustee, the Agent or the Majority Class B
Purchasers may designate from time to time), or their respective agents or
representatives (including certified public accountants or other auditors), as
an expense of Servicer paid out of the Servicing Fee, (i) to examine and make
copies of and abstracts from, and to conduct accounting reviews of, all Records
in the possession or under the control of Servicer, Transferor or any Seller,
including the related Contracts and purchase orders, invoices and other
agreements related thereto, and (ii) to visit the offices and properties of
Servicer, Transferor or any Seller for the purpose of examining such materials
described in clause (i), and to discuss matters relating to the Receivables or
the Related Transferred Assets or the performance by Servicer, Transferor or any
Seller of their respective obligations under any Transaction Document with any
officer, employee or representative of Servicer, Transferor or any Seller.
Trustee, the Agent or the Majority Class B Purchasers may (but shall not be
obligated to) conduct, or cause their respective agents or representatives to
conduct, reviews of the types described in this paragraph (each such review, a
"Receivables Review") whenever Trustee, the Agent or the Majority Class B
Purchasers, in its or their reasonable judgment, deem any such review
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appropriate; provided that, unless an Early Amortization Event or an Unmatured
Early Amortization Event shall exist, (x) no more than two Receivables Reviews
shall be conducted by or at the request of the Agent in any calendar year, and
(y) no more than two Receivables Reviews shall be conducted by or at the request
of the Majority Class B Purchasers in any calendar year; and provided further,
this Section 8.1 shall limit the powers of Trustee under Section 3.5(b) of the
Pooling Agreement.
SECTION 8.2 Negative Covenants. Notwithstanding Section 1.7 of the
Purchase Agreement, Howmet shall not cause or permit any of its Subsidiaries to
become a new Seller without satisfying the Approval Condition unless the
Required Purchasers have consented in writing to that addition.
SECTION 8.3 Transfers. Each Purchaser agrees that it will not transfer
its Certificate (or any portion thereof) to any Person unless such Person shall
have provided the Trustee and Transferor with a certificate to the effect that
such Person: (a) is a "qualified institutional buyer," as that term is defined
under Rule 144A of the Securities Act and is not purchasing its Certificate with
a view to making a distribution thereof (within the meaning of the Securities
Act), and (b) is not a pension, profit sharing or other employee benefit plan
subject to ERISA.
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment. The Purchasers hereby designate The First
National Bank of Chicago as Agent. Each Purchaser hereby irrevocably authorizes
the Agent to take action on its behalf under the provisions of the Transaction
Documents and any other instruments and agreements referred to therein and to
exercise the powers and perform the duties hereunder and thereunder that are
specifically delegated to or required of the Agent by the terms hereof and
thereof, and any other powers as are reasonably incidental thereto. The Agent
may perform any of its duties by or through its respective officers, directors,
agents or employees.
SECTION 9.2 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement. Neither the
Agent nor any of its officers, directors, agents or employees shall be liable
for any action taken or omitted by it or them under any Transaction Document or
in connection herewith or therewith, unless caused by their gross negligence or
willful misconduct. The duties of the Agent shall be mechanical and
administrative in nature, the Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Purchaser, and nothing in any
Transaction Document, expressed or implied, is intended to or shall be
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construed as to impose upon the Agent any obligations in respect of any
Transaction Document except as expressly set forth herein.
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors.
Independently and without reliance upon the Agent or the Financial Advisors,
each Purchaser, to the extent it deems appropriate, has made and shall continue
to make (a) its own independent investigation of the financial condition and
affairs of Transferor, the Seller, Servicer and the Trust in connection with the
making and the continuation of each Purchase and the taking or not taking of any
action in connection herewith and (b) its own appraisal of the creditworthiness
of Transferor, the Seller and Servicer and the merits and risks of an investment
in the Certificates, and, except as expressly provided in this Agreement, the
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Purchaser with any credit or other information
with respect thereto, whether coming into its possession before the making of a
Purchase or at any time or times thereafter. The Agent shall not be responsible
to any Purchaser for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Transaction Documents or the financial condition of Transferor, the Sellers,
Servicer or the Trust or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of any
Transaction Document, or the financial condition of Transferor, the Sellers,
Servicer or the Trust or the existence or possible existence of any Early
Amortization Event or Unmatured Early Amortization Event.
SECTION 9.4 Certain Rights of Agent. If the Agent shall request
instructions from the Required Purchasers with respect to any act or action
(including failure to act) in connection with any Transaction Document, the
Agent shall be entitled to refrain from acting or taking the action unless and
until the Agent shall have received instructions from the Required Purchasers,
and the Agent shall not incur liability to any person by reason of so
refraining. Without limiting the foregoing, no Purchaser shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under any Transaction Document in accordance with the
instructions of the Required Purchasers as for refraining to act in the absence
of instruction.
SECTION 9.5 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or
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made by any person that the Agent believed to be the proper person. The Agent
may consult with legal counsel (including counsel for any Howmet Person),
independent public accountants and other experts selected by the Agent and shall
not be liable for any action taken or omitted to be taken in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.6 Indemnification. To the extent the Agent is not reimbursed
and indemnified by Transferor or Servicer, the Purchasers will reimburse and
indemnify the Agent (or cause the Agent to be reimbursed and indemnified)
ratably in accordance with their respective Series Percentages from and against
any and all liabilities, obligations, losses, damages, penalties. claims,
actions, judgments, suits, costs, expenses or disbursements of whatsoever kind
or nature that may be imposed on, asserted against or incurred or suffered by
the Agent (including fees and expenses of legal counsel, accountants and
experts) in performing its duties or as a result of any action taken or omitted
to be taken by the Agent under any Transaction Document or in any way relating
to or arising out of any Transaction Document; provided that no Purchaser shall
be liable for any portion of these liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable order).
SECTION 9.7 Agent in Its Individual Capacity. The Agent and its
respective Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with Transferor or
Servicer or any Howmet Person as if the Agent was not performing the duties
specified herein, and may accept fees and other consideration from Transferor or
Servicer for services in connection with this Agreement and otherwise without
having to account for the same to the Purchasers. Each of the parties hereto
acknowledges that the Agent will be acting both as agent and as a lender under
the Howmet Credit Agreement.
SECTION 9.8 Resignation by Agent. (a) The Agent may resign at any time
by giving notice to Transferor, the Purchasers and any other Agent, if any. Such
resignation shall be effective immediately unless the resigning Agent is the
only Agent, in which event the resignation of such Agent shall take effect upon
the appointment of a successor Agent pursuant to subsections (b) and (c) below
or as otherwise provided below.
(b) In the event that there is only one Agent, upon any notice of
resignation of such Agent, the Required Purchasers shall appoint a successor
Agent hereunder who shall be a commercial bank or trust company reasonably
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acceptable to Transferor (it being understood and agreed that any Purchaser is
deemed to be acceptable to Transferor).
(c) If a successor Agent is not appointed pursuant to subsection (b)
within 30 days after the delivery of the notice referred to in subsection (a),
the resigning Agent, with the consent of Transferor, shall then appoint a
successor Agent who shall serve as Agent hereunder until the time, if any, that
the Required Purchasers appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to subsection (b)
or (c) above by the 6Oth day after the date notice of resignation was given by
the resigning Agent, such Agent's resignation shall become effective and the
Purchasers shall thereafter perform all the duties of the Agent under the
Transaction Documents until the time, if any, that the Purchasers appoint a
successor Agent as provided above.
SECTION 9.9 Required Purchasers. "Required Purchasers" means:
(i) for purposes of instructing the Trustee to declare that
the Early Amortization Period has commenced pursuant to Section 6.2 of
the Supplement, either (x) Holders of Certificates whose aggregate
Class Percentages exceed 50% or (y) Holders of Class B Certificates
whose aggregate Class Percentages (as defined in the Class B
Certificate Purchase Agreement) exceed 50%; and
(ii) for all other purposes, both (x) Holders of Certificates
whose aggregate Class Percentages exceed 50% and (y) Holders of Class B
Certificates whose aggregate Class Percentages (as defined in the Class
B Certificate Purchase Agreement) exceed 50%.
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments. Except as provided in Section 13.1(a) or (b)
of the Pooling Agreement, neither Transferor nor Howmet shall amend, waive or
otherwise modify any provision of any Transaction Document to which it is a
party, consent to any departure therefrom, or grant any consent thereunder,
unless the same shall have been consented to in writing by the Required
Purchasers prior to the effectiveness of the same; provided, however, that no
amendment shall (a) decrease in any manner the amount of, or delay the timing
of, any allocation, payment or distribution in respect of any Certificate
without the prior written consent of each Purchaser affected thereby, (b) amend,
modify or waive any provision of this Agreement that requires the approval or
consent of a specified percentage of Purchasers
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without the prior written consent of that percentage of Purchasers, (c) amend,
modify or waive the provisions of this section with respect to the rights of any
Purchaser without the consent of that Purchaser, (d) waive any Early
Amortization Event arising from a Bankruptcy Event with respect to Transferor or
any Seller without the consent of each Purchaser, (e) amend or modify the Series
Percentage or Class Percentage of any Purchaser without its prior written
consent, (f) waive any of the requirements hereunder that the interests of
Trustee in the Receivables and the other Transferred Assets be perfected by
appropriate UCC filings without the prior written consent of each Purchaser or
(g) amend, modify or otherwise affect the rights or duties of the Agent
hereunder without the prior written consent of the Agent; provided further that
neither the execution and delivery of a Supplement relating to a refinancing of
the Certificates as contemplated by Section 4.9 of the Supplement relating to
the Certificates, nor any other amendment to the Transaction Documents in
connection with such a refinancing, shall require any consent from any
Purchaser, so long as the prior or contemporaneous repayment in full of the
Certificates in accordance with Section 5.2 of the Supplement relating to the
Certificates is a condition to the issuance of the refinancing certificates, and
of the effectiveness of such related amendment. Each Purchaser shall be bound by
any modification, waiver or consent authorized by this section, whether or not
its Certificate shall have been marked to indicate the modification, waiver or
consent.
SECTION 10.2 No Waiver; Remedies. Any waiver, consent or approval given
by any party hereto shall be effective only in the specific instance and for the
specific purpose for which given, and no waiver by a party of any breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. No failure on the part of any party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce the right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other right. No notice
to or demand on any party hereto in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.3 Successors and Assigns; Assignments. (a) This Agreement
shall be binding upon, and inure to the benefit of, Transferor, Servicer, the
Agent, the Purchasers and their respective successors and assigns; provided that
neither Transferor nor Servicer may assign its rights or obligations hereunder
or in connection herewith or any interest herein (voluntarily, by operation of
law or otherwise) without the prior written
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consent of all the Purchasers, except that the Servicer may be terminated in
accordance with Sections 10.1 and 10.2 of the Pooling Agreement; and provided
further, that no Purchaser or Participant may transfer, pledge, assign, sell
participations in or otherwise encumber its rights or obligations hereunder or
any interest herein except as permitted under this Section 10.3.
(b) Subject to the terms of Section 10.3(f), each Purchaser may at any
time sell to one or more banks or other entities ("Participants") participating
interests in all or any portion of its Certificate and its obligations hereunder
(its "Credit Exposure"); provided that such Participant shall have certified to
the selling Purchaser that such Participant is a "qualified institutional buyer"
(as defined under Rule 144A of the Securities Act) or that such sale is not
required to be registered under the Securities Act or any other applicable
securities laws. In the event of any sale by a Purchaser of participating
interests to a Participant, the Purchaser shall notify Transferor of the
identity of the Participant upon a request by Transferor, the Purchaser's
obligations under this Agreement shall remain unchanged, the Purchaser shall
remain solely responsible for the performance thereof, and the Purchaser shall
remain the holder of its rights under its Certificate and this Agreement for all
purposes under this Agreement, and the other parties to the Transaction
Documents shall continue to deal solely and directly with the Purchaser in
connection with such rights and obligations under this Agreement. Other than in
the case of a sale, transfer, assignment or conveyance of a participating
interest by Falcon Asset Securitization Corporation to a Permitted Transferee,
prior to any rights of a proposed Participant being recognized hereunder or
under any other Transaction Document or Certificates, the Purchaser shall
provide, or shall cause such Participant to provide, to Transferor such
information as Transferor reasonably requests to make the determination required
by Section 10.3(f). Transferor agrees that each Participant shall be entitled to
the benefits of Sections 4.3, 4.5, 4.6 and 10.5 with respect to its
participation in the Certificate. The Purchasers agree that any agreement
between them and any Participant in respect of a participating interest shall
require the Participant to comply with the terms of Section 10.13 and shall not
restrict the Purchasers' right to agree to any amendment, supplement or
modification of the Transaction Documents except to (i) extend the final
maturity of any obligation, (ii) reduce the rate or extend the time of payment
of interest thereon or any fees owed to the Purchasers under the Transaction
Documents, (iii) reduce the principal amount of any obligation, (iv) release or
direct the release of all or substantially all of the Transferred Assets or
Trustee's claim to the Transferred Assets, (v) reduce substantially the amount
of any reserve included in the calculation of the Base Amount, (vi) increase the
amount of the participation from the amount thereof then in effect, or (vii)
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permit assignment or transfer by Transferor or any Seller of its rights or
obligations under the Transaction Documents.
(c) Subject to the terms of Section 10.3(f), any Purchaser may at any
time assign to any Permitted Transferee or to one or more banks or other
financial institutions (each, an "Assignee") all or any part of its Credit
Exposure; provided that (i) unless assigned to an Affiliate of the Purchaser or
to a Permitted Transferee, it assigns all of its Credit Exposure or a portion of
its Credit Exposure in an amount not less than $5,000,000, (ii) such Assignee,
other than an existing Purchaser, an Affiliate of the Purchaser or a Permitted
Transferee, must be reasonably acceptable to the Agent and Transferor, which
acceptance shall not be delayed or withheld unreasonably (it being understood
that acceptance may be withheld due to failure to satisfy Section 10.3(f)),
(iii) if such Assignee is not a United States person (as defined in section
7701(a)(30) of the Internal Revenue Code), such Assignee shall satisfy the
requirements of Section 4.6(c), provided, that if such Assignee thereafter fails
to comply with the requirements of Section 4.6(c), amounts payable to it under
Section 4.6 shall be limited to amounts that would be payable if such Assignee
had complied with Section 4.6(c), (iv) such Assignee shall have certified to the
assigning Purchaser that such Assignee is a "qualified institutional buyer" (as
defined under Rule 144A of the Securities Act) or that such sale is not required
to be registered under the Securities Act or any other applicable securities
laws, and (v) such Assignee makes the representations and warranties set forth
in Section 6.3 to the Transferor as of the effective date of the assignment. For
purposes of this Section 10.3, a "Permitted Transferee" means The First National
Bank of Chicago or any other Person that is at all relevant times a C
corporation within the meaning of section 1361(a)(2) of the Internal Revenue
Code listed on the letter from The First National Bank of Chicago to Transferor
and the Agent dated the Effective Date, as such list may be augmented from time
to time with the consent of Transferor and the Agent; provided, however, that
the aggregate number of actual assignments to Permitted Transferees outstanding
at any time shall not exceed four. In the event of any assignment, the Purchaser
(x) shall comply with Article VI of the Pooling Agreement, provided that no
Opinion of Counsel shall be required to be delivered pursuant to subsection
6.3(e) of the Pooling Agreement with respect to any transfer to a Permitted
Transferee, and (y) shall give notice to Transferor and the Agent and shall
deliver to the Agent, for acceptance and recording in its records, an assignment
agreement substantially in the form of Exhibit B together with a processing and
recordation fee of, in the case of assignments to a Purchaser or an Affiliate of
a Purchaser, $1,500 and, in cases of any other assignment, $3,500; provided that
no processing and recordation fee shall be payable in connection with any
assignment by Falcon Asset Securitization Corporation to a Permitted Transferee.
Within five Business
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Days of receipt thereof, the Agent shall, if the assignment agreement has been
fully executed by the Assignee, the assignor Purchaser and Transferor, is
completed and is in substantially the form of Exhibit B, execute the assignment
agreement and record the information contained therein in its records. Upon the
earlier of the expiration of the five Business Day period or the date of the
recording, the assignment will become effective; provided that any assignment by
Falcon Asset Securitization Corporation to a Permitted Transferee shall not
require acceptance or recording by the Agent or Transferor prior to
effectiveness and shall become effective immediately upon receipt by the Agent
of an assignment agreement appropriately completed in substantially the form of
Exhibit B and executed by Falcon Asset Securitization Corporation and the
applicable Permitted Transferee. Transferor, the Agent and the Purchasers agree
to extend the rights and benefits with respect to Transferor under this
Agreement to the Assignee to the extent the Assignee would have had if it were a
Purchaser that was an original signatory to this Agreement; provided, that
Transferor shall be entitled to continue to deal solely and directly with the
assignor Purchaser in connection with the interests so assigned to the Assignee
until the assignment agreement and any required fee, as described above, shall
have been delivered to Transferor and the Agent by the Purchaser and the
Assignee and the assignment shall have become effective; provided, further, that
notwithstanding anything herein or in the assignment agreement, the Transaction
Documents or any Certificate to the contrary, an assignment (other than an
assignment by Falcon Asset Securitization Corporation to a Permitted Transferee)
shall not become effective, an Assignee (other than a Permitted Transferee)
shall not be recognized as a Purchaser and no other rights of an Assignee
hereunder or under any other Transaction Document or Certificate shall be
recognized unless and until the assigning Purchaser shall have provided, or
caused the Assignee to provide, to Transferor such information as Transferor
reasonably requests to make the determinations required by Section 10.3(f). If
the Transferor has accepted an assignment pursuant to clause (ii) of the first
sentence of Section 10.3(c), the assigning Purchaser shall be deemed to have
provided or caused to be provided such information. Upon the effective
assignment of its Credit Exposure, the Purchaser shall be relieved of its
obligations hereunder to the extent of the assignment.
(d) The sale or assignment of any Credit Exposure to any Assignee or
Participant (each, a "Transferee") shall not be effective until it has agreed to
be bound by the provisions of Section 10.13. Transferor and Howmet each
authorize the Purchasers to disclose to any Transferee and any prospective
Transferee any and all information in their possession concerning Transferor,
Howmet or any other Seller that has been delivered to them by Transferor,
Howmet, any other Seller or Trustee in connection with their credit evaluation
of the Program prior to entering into this Agreement; provided, however, that
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340
each such Transferee and/or prospective Transferee shall agree to treat all such
information that is non-public as confidential information in accordance with
customary banking practices, except that each such Transferee and/or prospective
Transferee may share any such non-public information with any of its Affiliates
if such Affiliates agree to treat such information as confidential information
in accordance with customary banking practices.
(e) Notwithstanding any other provisions set forth in this Agreement,
the Purchasers may at any time create a security interest in all or any portion
of their rights under this Agreement and the Certificates in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
(f) No transfer, assignment or other conveyance of, or sale of a
participation interest in, a Certificate (other than in the case of a transfer,
assignment, conveyance or sale by Falcon Asset Securitization Corporation to a
Permitted Transferee) shall be made unless (i) the aggregate outstanding
principal amount of all Certificates transferred, or in which a participation
interest is sold, pursuant to such transfer or sale is equal to a principal
amount of Certificates that would represent at least 2.1% of the total interests
in partnership capital or profits, within the meaning of Treasury Regulation
Section 1.7704-1 assuming the Trust were classified as a partnership for Federal
income tax purposes, and (ii) after giving effect thereto, there shall be no
more than eight Private Holders in respect of the Certificates, as reasonably
determined by Transferor. No Certificate may be subdivided into an aggregate
principal amount that would represent less than 2.1% of the total interests in
partnership capital or profits as determined pursuant to the preceding sentence.
Any attempted transfer, assignment, conveyance, participation or subdivision in
contravention of the preceding restrictions, as reasonably determined by the
Transferor, shall be void ab initio and the purported transferor, seller or
subdivider of such Certificate shall continue to be treated as the
Certificateholder of any such Certificate for all purposes of this Agreement.
(g) Each Affected Party with respect to each Purchaser shall be
entitled to receive additional payments pursuant to Sections 4.3, 4.5, 4.6 and
10.5 as though it were a Purchaser under such Sections applied to its interest
in a Certificate; provided that such Affected Party shall not be entitled to
additional payments pursuant to Section 4.6 attributable to its failure or
inability, as of the date it becomes a Support Bank (and, so long as it may
properly do so, periodically thereafter, to keep forms up to date), to satisfy
the requirements of subsection 4.6(c) or 4.6(d) as if it were an Assignee.
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341
(h) Each Affected Party claiming increased amounts described in
Sections 4.3, 4.5, 4.6 or 10.5 shall furnish, through its related Purchaser, to
the Trustee, the Agent, Servicer and Transferor a certificate setting forth in
reasonable detail the basis and amount of each request by such Affected Party
for any such amounts referred to in such Section, which certificate shall be
prepared in accordance with the requirements of such Section (if any). Each
Affected Party shall promptly notify, through its related Purchaser, the
Trustee, the Agent, Servicer and Transferor of the occurrence of any event of
which such Affected Party is aware that would be likely to result in a demand
for compensation pursuant to Sections 4.3, 4.5, 4.6 or 10.5.
(i) In connection with any proposal that a bank or other financial
institution become a Support Bank for a Purchaser which is a Structured Lender,
such Purchaser, at its sole discretion, shall be entitled to distribute to any
proposed Support Bank on a confidential basis any information furnished to such
Purchaser by the Agent pursuant to the Transaction Documents. Each Purchaser
which is a Structured Lender shall promptly notify the Agent (who shall promptly
notify Transferor) in writing of the identity and interest of each Support Bank
for such Purchaser promptly upon the obtaining of such Support Bank. Such
Purchaser shall provide to the Agent (who shall, upon request, provide copies of
the same to Transferor, Servicer and the Trustee), with respect to each Support
Bank, such forms as would be required to be furnished by such Support Bank
pursuant to subsections 4.6(c) or 4.6(d) if such Support Bank were an Assignee.
SECTION 10.4 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the Certificates delivered
pursuant hereto shall survive the making and the repayment of the Purchases and
the execution and delivery of this Agreement and the Certificates and shall
continue in full force and effect until all obligations have been paid in full.
In addition, the obligations of Transferor under Sections 4.3, 4.4, 4.5, 4.6 and
10.5 and the obligations of the Purchasers under Section 9.6 shall survive the
termination of this Agreement.
SECTION 10.5 Expenses; Indemnification. Transferor and Howmet jointly
and severally shall pay on demand (a) all reasonable out-of-pocket fees and
expenses (including reasonable attorneys' fees and expenses) of the Agent
incurred in connection with the preparation, execution, delivery,
administration, amendment, modification and waiver of the Transaction Documents
and the making and repayment of the Purchases, including any Servicer or
collection agent fees paid to any third party for services rendered to the
Purchasers and the Agent in collecting the Receivables and (b) all reasonable
out-of-pocket fees and expenses of the Purchasers and the Agent
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342
(including reasonable attorneys' fees and expenses of their counsel) incurred in
connection with the enforcement of the Transaction Documents against Transferor,
Servicer and the Sellers and in connection with any workout or restructuring of
the Transaction Documents. In addition, Transferor will pay any and all stamp
and other taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing, recording or enforcement of this Agreement or
any payment made under the Transaction Documents, and hereby indemnifies and
saves the Agent and the Purchasers harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay the taxes and fees. Transferor and Howmet jointly and severally agree to
reimburse and indemnify the Agent and each Purchaser and their respective
officers, directors, shareholders, controlling Persons, employees and agents
(collectively, the "Indemnitees") from and against any and all actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred or suffered by the Agent or the
Purchasers (including fees and expenses of legal counsel, accountants and
experts) in any way relating to or arising out of any Transaction Document.
Notwithstanding the foregoing (and with respect to clause (y) below,
without prejudice to the rights that an Indemnitee may have pursuant to the
other provisions of the Transaction Documents), in no event shall any Indemnitee
be indemnified against any amounts (v) resulting from gross negligence or
willful misconduct by it or on the part of any of its officers, directors,
employees or agents, (w) to the extent they include amounts in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Servicer for the amount of any Receivable or Related Transferred Asset not paid
by the related Obligor, (x) to the extent they are or result from lost profits,
(y) resulting from any breach by such Indemnitee of its representations,
warranties or covenants in the Transaction Documents or (z) to the extent they
would constitute consequential, special or punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnitee or is insufficient to hold it harmless, then
Transferor and Howmet jointly and severally shall contribute to the amount paid
by the Indemnitee as a result of any loss, claim, damage or liabIlity in a
proportion that is appropriate to reflect not only the relative benefits
received by the Indemnitee on the one hand and Transferor and Howmet on the
other hand, but also the relative fault of the Indemnitee (if any), Transferor
and Howmet and any other relevant equitable considerations; provided that
Transferor's obligations under this section shall be paid by Transferor only to
the extent that funds are available to make the payments alter all amounts to be
paid to Holders pursuant to Section 4.1 shall have been paid, and there shall
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343
be no recourse to Transferor for all or any part of any amounts payable pursuant
to this section if the funds are at any time insufficient to make all or part of
any such payments.
SECTION 10.6 Entire Agreement. This Agreement, together with the
documents delivered pursuant to Section 7.1 and the other Transaction Documents,
including the exhibits and schedules thereto, contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all
previous oral statements and other writings with respect thereto.
SECTION 10.7 Notices. All communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by
overnight courier or mailed by registered mall, postage prepaid and return
receipt requested, or transmitted by facsimile transmission and confirmed by a
similar mailed writing to any party at the address for that party set forth (a)
on the signature page to this Agreement or (b) to another address as that party
may designate in writing to the Agent and Transferor.
SECTION 10.8 No Third-Party Beneficiaries. Nothing expressed herein is
intended or shall be construed to give any Person (other than the parties hereto
and the Participants and Assignees described in Section 10.3 and, solely to the
extent provided in Section 10.3, the other Affected Parties) any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.9 Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
SECTION 10.10 Counterparts. This Agreement may be executed in any
number of counterparts (which may include facsimile) and by the different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original, and all of which together shall constitute one and the
same instrument.
SECTION 10.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
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344
SECTION 10.12 Tax Characterization. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
purposes of Federal, applicable state and local income and franchise and other
taxes measured by or imposed on income, the Certificates will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust will
not be characterized as an association (or publicly traded partnership) taxable
as a corporation, (b) agrees that the provisions of the Transaction Documents be
construed to further that intent, and (c) agrees to treat the Certificates, for
purposes of Federal, state and local income and franchise and other taxes
measured by or imposed on income, as indebtedness.
SECTION 10.13 No Proceedings. (a) Each of Servicer, the Agent (solely
in its capacity as such) and each Purchaser (solely in its capacity as such)
hereby agrees that it will not institute against Transferor, or join any other
Person in instituting against Transferor, any insolvency proceeding (namely, any
proceeding of the type refereed to in the definition of "Bankruptcy Event") so
long as any Certificates shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any Certificates shall have
been outstanding. The foregoing shall not limit the right of Servicer, the Agent
or any Purchaser to file any claim in or otherwise take any action with respect
to any insolvency proceeding that was instituted against Transferor by any other
Person.
(b) Each of Servicer, Howmet, Transferor, the Agent (solely in its
capacity as such) and each Purchaser (solely in its capacity as such) hereby
agrees that it will not institute against any Structured Lender, or join any
other Person in instituting against any Structured Lender, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition of
"Bankruptcy Event") for one year plus one day alter the latest maturing
commercial paper note, medium term note or other debt security issued by such
Structured Lender is paid. The foregoing shall not limit the right of Servicer,
the Agent or any Purchaser to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted against such
Structured Lender by any other Person.
(c) Obligations arising under this Section 10.13 shall survive any
termination of this Agreement.
SECTION 10.14 Reference Bank. By its execution of this Agreement, the
Agent, identified as a "Reference Bank" in the Supplement, agrees to act as a
Reference Bank for purposes of the Supplement. The Agent shall notify Servicer
of the Reserve-Adjusted Eurodollar Rate applicable to each Interest Period and
of each change in the Alternate Base Rate.
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345
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
-------------------------------------------
Name: Roland Paul
-----------------------------------------
Title: Vice President
----------------------------------------
Address: c/o Nevada Corporate Management,
Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION
By: /s/ Roland Paul
-------------------------------------------
Name: Roland Paul
-----------------------------------------
Title: Vice President
----------------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
346
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: W.E. Covington
--------------------------------------
Title: Authorized Signer
----------------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attention: W. Edward Covington
Telephone: (312) 732-5768
Facsimile: (312) 732-4487
FALCON ASSET SECURITIZATION
CORPORATION,
as a Purchaser
By: W.E. Covington
--------------------------------------
Title: Authorized Signer
----------------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attention: W. Edward Covington
Telephone: (312) 732-5768
Facsimile: (312) 732-4487
347
SCHEDULE I
to Certificate Purchase
Agreement Series 1996-1, Class A
AMOUNT OF EACH INITIAL PURCHASER'S CERTIFICATE
Stated Amount of Certificate
Falcon Asset Securitization $ 47,500,000.00
Corporation
Class Percentage
Falcon Asset Securitization 100%
Corporation
Series Percentage
Falcon Asset Securitization 86%
Corporation
348
EXHIBIT A
to Certificate Purchase
Agreement Series 1996-1, Class A
FORM OF SERIES 1996-1 SUPPLEMENT
349
PROJECT BLADE - TAKE OUT
SERIES 1996-1 SUPPLEMENT
to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
350
TABLE OF CONTENTS
Page
ARTICLE I DEFINITlONS; INCORPORATION OF TERMS .............................. 1
SECTION 1.1 Definitions ..................................... 1
SECTION 1.2 Modification Condition .......................... 22
SECTION 1.3 Incorporation of Terms .......................... 22
ARTICLE II DESIGNATION ..................................................... 23
SECTION 2.1 Designation ..................................... 23
SECTION 2.2 Group I ......................................... 23
SECTION 2.3 Investor Ownership Percentage ................... 23
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS ........................ 24
SECTION 3.1 Conditions to Issuance .......................... 24
SECTION 3.2 Use of Proceeds ................................. 24
ARTICLE IV PAYMENTS AND ALLOCATIONS ........................................ 24
SECTION 4.1 Interest; Additional Amounts .................... 24
SECTION 4.2 Daily Calculations and Group Allocations ........ 25
SECTION 4.3 Allocations of Daily Group Collections
(Other Than in a Group Amortization Period) ... 25
SECTION 4.4 Allocations of Daily Group Collections
During a Group Amortization Period ............ 27
SECTION 4.5 Withdrawals from the Equalization Account
and Principal Funding Account ................. 29
SECTION 4.6 Available Subordinated Amount ................... 29
SECTION 4.7 Write-Offs and Recoveries ....................... 30
SECTION 4.8 Certain Dilution in a Group Amortization Period . 31
SECTION 4.9 Optional Early Pay Out .......................... 32
SECTION 4.10 Foreign Obligors; Calculation of Excess
Concentrations ................................ 33
SECTION 4.11 Tax Opinion ..................................... 36
SECTION 4.12 Reset of Benchmark Percentages and
Special Concentration Limits .................. 37
ARTICLE V DISTRIBUTIONS AND REPORTS ........................................ 37
SECTION 5.1 Distributions ................................... 37
SECTION 5.2 Special Distributions on the Refinancing
Date .......................................... 38
SECTION 5.3 Payments in Respect of Transferor
Certificate ................................... 39
SECTION 5.4 Daily Reports and Monthly Reports ............... 39
SECTION 5.5 Annual Tax Information .......................... 39
351
Page
SECTION 5.6 Periodic Perfection Certificate ................. 40
ARTICLE VI EARLY AMORTIZATION EVENTS ....................................... 40
SECTION 6.1 Early Amortization Events ....................... 40
SECTION 6.2 Early Amortization Period ....................... 43
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES .................. 43
SECTION 7.1 Optional Redemption of Investor Interests ....... 43
SECTION 7.2 Termination ..................................... 44
SECTION 7.3 Indemnification by Transferor ................... 44
SECTION 7.4 Indemnification by Servicer ..................... 45
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law ................................... 45
SECTION 8.2 Counterparts .................................... 45
SECTION 8.3 Severability of Provisions ...................... 46
SECTION 8.4 Amendment, Waiver, Etc. ......................... 46
SECTION 8.5 Trustee ......................................... 46
SECTION 8.6 Instructions in Writing ......................... 46
EXHIBITS
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
ii
352
This SERIES 1996-1 SUPPLEMENT, dated as of April 18, 1996 (this
"Supplement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada
corporation, as Transferor, HOWMET CORPORATION, a Delaware corporation
("Howmet"), as Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of December
13, 1995, as amended and restated in its entirety by the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18, 1996 (as the same may be
further amended, supplemented or otherwise modified from time to time, and as
supplemented hereby, the "Pooling Agreement"), among Transferor, Servicer and
Trustee, Transferor may from time to time direct Trustee to issue and
authenticate, on behalf of the Trust, one or more Series of Certificates in one
or more Groups of Series representing undivided interests in the Transferred
Assets. Certain terms applicable to a Series are to be set forth in a
Supplement. This Supplement is a "Supplement" as that term is defined in the
Pooling Agreement.
Pursuant to this Supplement, Transferor and Trustee shall create a
Series of Certificates and specify certain of their terms.
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS
SECTION 1.1 Definitions. (a) Capitalized terms used and not otherwise
defined herein are used as defined in Appendix A to the Pooling Agreement. This
Supplement shall be interpreted in accordance with the conventions set forth in
Part B of that Appendix A.
(b) Each reference in this Supplement to funds on deposit in the
Carrying Cost Account, the Equalization Account or the Principal Funding Account
(or similar phrase) refers only to funds in the administrative sub-accounts of
those Accounts that are allocated to the Series in Group I. Unless the context
otherwise requires, in this Supplement: (i) each reference to a "Daily Report"
or "Monthly Report" refers to a Daily Report or Monthly Report for Group I; (ii)
each reference to the "Servicing Fee" refers to the Servicing Fee allocable to
Group I; (iii) each reference to the "Series Collection Allocation Percentage"
or the "Series Loss Allocation Percentage" refers to Group I's Series Collection
Allocation Percentage or Series Loss Allocation Percentage, and (iv) each
reference to the Transaction Documents shall include a reference to the
Certificate Purchase Agreements.
(c) Each capitalized term defined below relates only to the Series
1996-1 Certificates and to no other Series of Certificates (except to the extent
that certain of such terms are explicitly used as defined herein in any
Supplement relating to another Series in Group F). Whenever used in this
Supplement, the following words and phrases shall have the following meanings:
353
"ABR Tranche" means, at any time, the portion of the Series 1996-1
Invested Amount that is designated by Transferor in accordance with a
Certificate Purchase Agreement to accrue interest based on the Alternate Base
Rate.
"Acquisition Amount" is defined in Section 2.3.
"Additional Amounts" means (a) as to the Series 1996-1 Certificates,
the Prepayment Premium and other amounts payable pursuant to Sections 4.3, 4.5,
4.6 and 10.5 of the Class A Certificate Purchase Agreement and amounts payable
pursuant to Sections 4.3, 4.5, 4.6 and 10.5 of the Class B Certificate Purchase
Agreement, and (b) as to any other Series in Group I, any amounts identified as
"Additional Amounts" in the related Supplement.
"Adjusted Eligible Receivables" means, on any Business Day, the result
of (a) the aggregate Unpaid Balance of Eligible Receivables held by the Trust on
that day, minus (b) the Unapplied Cash held by the Trust on that day, plus (c)
the Aggregate Retained Balances, in each case as shown in the Daily Report for
such day.
"Affected Party" shall mean, with respect to any Structured Lender, any
Support Bank: of such Structured Lender.
"Aged Receivables Ratio" means, as calculated in each Monthly Report as
of the Cut-Off Date for the related Calculation Period, a fraction (expressed as
a percentage) having (a) a numerator that is the sum of (i) the aggregate Unpaid
Balance of Receivables that remained outstanding 121 to 150 days after their
respective due dates, as determined as of the Cut-Off Date for such Calculation
Period, plus (ii) the aggregate Unpaid Balance of Receivables that were written
off as uncollectible during the most recently ended Calculation Period and that,
if not so written off, would have been outstanding not more than 120 days after
their respective due dates, as determined as of that Cut-Off Date, and (b) a
denominator that is the aggregate amount payable pursuant to invoices giving
rise to Receivables that were generated during the Calculation Period that
occurred five Calculation Periods prior to the most recently ended Calculation
Period, as determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means The First National Bank: of Chicago, in its capacity as
Agent under (and as defined in) the Certificate Purchase Agreements, together
with its respective successors in such capacity. The Agent is an "Agent" for
purposes of the Pooling Agreement.
"Aggregate Retained Balances" means, on any Business Day, the aggregate
of the balances retained in Lockbox Accounts or Concentration Accounts for items
in the process of collection but for which funds have not been made available by
the related Lockbox Bank: or Concentration Account Bank:, provided that (i) no
notice of insufficient funds or similar
2
354
situation shall exist with respect thereto and (ii) the Unpaid Balance of
Receivables shall have been reduced by an amount equal to such balances.
"Alternate Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest announced, from time to time, by
Agent as its prime commercial rate for United States dollar loans made
in the United States for any day, and
(b) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime commercial
rate announced by the Agent shall become effective without prior notice to
Transferor or the Servicer as of 12:01 a.m., New York City time, on the Business
Day on which each change in the prime commercial rate is announced by the Agent.
The prime commercial rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged by the Agent to any customer. The Agent
may make commercial loans or other loans at rates of interest at, above or below
the prime commercial rate.
"Amortization Period" means the period (x) beginning on the earlier of
(i) the date on which a termination notice is given by the Sellers pursuant to
Section & 1 of the Purchase Agreement and (ii) the first day of the Calculation
Period that begins on June 1, 2000, and (y) ending on the earlier of (i) the
Expected Final Payment Date and (ii) the date, if any, on which an Early
Amortization Period begins; provided that there will be no Amortization Period
if an Early Amortization Period commences on or prior to the date specified
above for the beginning of the Amortization Period.
"Applicable Ratings Factor" means the Class A Ratings Factor or the
Class B Ratings Factor, as specified in each calculation where the Applicable
Ratings Factor is used.
"Approval Condition" means, with respect to any event or change in the
terms applicable to this Supplement or the Series 1996-1 Certificates, such
event or change shall have been approved in writing, prior to becoming
effective, by the Agent and the Majority Class B Purchasers.
"ASA Measuring Period" means, for any Cut-Off Date falling in a Group
Amortization Period, the Calculation Period ending on that Cut-Off Date (or the
portion thereof falling alter the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization Period).
"Available Subordinated Amount" means, at any time during a Group
Amortization Period, the amount calculated pursuant to Section 4.6.
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355
"Base Amount" means, on any Business Day, the result of the following
formula:
[NER x SCAP x (100%-CBRR)]-CASD-CCRR
where:
NER = the Net Eligible Receivables as reported in the Daily Report
for that Business Day;
SCAP = the Series Collection Allocation Percentage for that Business
Day;
CBRR = the Class B Reserve Ratio in effect for that Business Day;
CASD = the Class A Subordination Deficit for that Business Day; and
CCRR = the Carrying Cost Receivables Reserve as reported in the Daily
Report for such day.
"Basic Concentration Limit" means, with respect to a Concentration Unit
on any day, (i) if such Concentration Unit includes a Special Obligor, the
Special Concentration Limit for such Special Obligor, and (ii) otherwise, the
Concentration Limit applicable to the Parent for such Concentration Unit.
"Carrying Cost Receivables Reserve" means, on any Business Day, the
result of:
(a) the Current Carrying Costs; plus
(b) the product of (i) the Class A Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on Class A
Certificates, multiplied by (iii) a fraction the numerator of which is
the product of two and the number of Turnover Days and the denominator
of which is 360; plus
(c) the product of (i) the Class B Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on the
Class B Certificates, multiplied by (iii) a fraction the numerator of
which is the product of two and the number of Turnover Days and the
denominator of which is 360; plus
(d) the product of (i) the Series Collection Allocation
Percentage on the next preceding Distribution Date, multiplied by (ii)
the aggregate Unpaid Balance of Receivables on the next preceding
Distribution Date, multiplied by (iii) 2%, multiplied by (iv) a
fraction the numerator of which is the product of two and the number of
Turnover Days and the denominator of which is 360; plus
(e) if there is any Series in Group I in addition to the
Series 1996-1 Certificates, the Carrying Cost Receivables Reserve
Increments for each such other Series in Group I (as defined, and
calculated as provided, in the related Supplement); minus
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356
(f) the balance on deposit in the Carrying Cost Account at the
beginning of that Business Day.
"Category One Balance" is defined in Section 4.10.
"Category One Eligibles" is defined in Section 4.10.
"Category One Obligors" means the following persons: Alfa Romeo Avio
S.p.A., ABB Power Generation Ltd., Boeing Canada Technology Ltd., Fiat Avio
S.p.A., General Electric Canada Inc., Hitachi Ltd., KLM Royal Dutch Airlines,
Mitsubishi Heavy Industries America, Inc., Mitsui & Co. USA, Inc., Motoren-Und
Turbinen-Union Munchen GmbH, Pratt & Whitney Canada Inc., Rolls-Royce PLC,
Siemens A.G. KWU, and Walbar of Canada Inc.
"Category Three Balance" is defined in Section 4.10.
"Category Three Eligibles" is defined in Section 4.10.
"Category Three Excess Concentration" is defined in Section 4.10.
"Category Three Obligors" means Foreign Obligors that are not Category
One Obligors or Category Two Obligors.
"Category Two Balance" is defined in Section 4.10.
"Category Two Eligibles" is defined in Section 4.10.
"Category Two Excess Concentration" is defined in Section 4.10.
"Category Two Obligors" means Foreign Obligors (other than Category One
Obligors) with principal places of business in Canada, Germany, Italy,
Netherlands, Switzerland, England or Sweden.
"Certificate Purchase Agreements" means the Class A Certificate
Purchase Agreement and the Class B Certificate Purchase Agreement.
"Certificate Rate" means, at any time, the weighted average of the
interest rates on all outstanding Series 1996-1 Certificates at that time.
"Certificate Spread" means:
(a) with respect to the Class A Certificates, (i) .50% per
annum in the case of Eurodollar Tranches, and (ii) 0% per annum in the
case of the ABR Tranche; and
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(b) with respect to the Class B Certificates, (i) .80% per
annum in the case of the Eurodollar Tranche, and (ii) 0% per annum in
the case of the ABR Tranche.
"Class A Certificate" is defined in Section 2.1. Each Class A
Certificate shall be substantially in the form of Part 1 of Exhibit A.
"Class A Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class A) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class A Certificates and the Agent.
"Class A Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) 1.333 times the "Benchmark Percentage" for purposes of
clause (c) of the definition of "Concentration Limit,"
(ii) two times the "Benchmark Percentage" for purposes of
clause (d) of that definition, and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (13) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times (y) the
excess of four over the number of Special Obligors.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made pursuant to the Class A Certificate
Purchase Agreement at or prior to that time, reduced (but not below zero) by (a)
the aggregate amount of all distributions that have been made to the Holders of
the Class A Certificates on account of principal, and (13) the amount of all
Investor Write-Offs that have been applied to reduce the Class A Invested Amount
(net of Investor Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the Class A Invested Amount).
"Class A Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class A Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date.
"Class A Purchases" means Purchases made in respect of Class A
Certificates.
"Class A Ratings Factor" means 2.0.
"Class A Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class A Ratings Factor.
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"Class A Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class A Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class A Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class A Minimum Reserve Ratio and (b) the Class A Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period;
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class A Reserve Ratio shall be 26.01%.
"Class A Subordination Deficit" means, on any Business Day, the
positive result (if any) of (a) the Class A Required Reserves, minus (b) the sum
of (i) the Class B Required Reserves plus (ii) the outstanding principal amount
of all Subordinated Classes (all calculated as of the beginning of that Business
Day); provided that at any time when no Senior Class is outstanding the Class A
Subordination Deficit shall equal zero.
"Class B Certificate" is defined in Section 2.1. Each Class B
Certificate shall be substantially in the form of Part 2 of Exhibit A.
"Class B Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class B) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class B Certificates and the Agent.
"Class B Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) the "Benchmark Percentage" for purposes of clause (c) of
the definition of "Concentration Limit,"
(ii) 1.5 times the "Benchmark Percentage" for purposes of
clause (d) of the definition of "Concentration Limit," and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (B) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times the excess
(if any) of 2.75 over the number of Special Obligors.
"Class B Invested Amount" means, at any time, the sum of the purchase
prices paid for Class B Purchases made pursuant to (and as defined in) the Class
B Certificate Purchase Agreement at or prior to that time, reduced (but not
below zero) by (a) the aggregate amount of all distributions that have been made
to the Holders of the Class B Certificates on account of principal, and (b) the
amount of all Investor Write-Offs that have been applied to reduce
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the Class B Invested Amount (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to reinstate the Class B
Invested Amount).
"Class B Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class B Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date; provided that in no event shall the
Class B Minimum Reserve Ratio be less than 15%.
"Class B Purchases" means Purchases made in respect of Class B
Certificates.
"Class B Ratings Factor" means 1.5.
"Class B Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class B Ratings Factor.
"Class B Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class B Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class B Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class B Minimum Reserve Ratio and (b) the Class B Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period,
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class B Reserve Ratio shall be 21.01%.
"Class Invested Amount" means (a) with respect to Class A, the Class A
Invested Amount, (b) with respect to Class B, the Class B Invested Amount and
(c) with respect to any other Senior Class or Subordinated Class of
Certificates, the amount identified as its "Class Invested Amount" in the
Supplement for such Senior Class or Subordinated Class of Certificates.
"Concentration Limit" means:
(a) 100% for any Tier-1 Obligor;
(b) 100% for any Tier-2 Obligor;
(c) 15% for any Tier-3 Obligor;
(d) 10% for any Tier-4 Obligor; and
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(e) 4% for any Tier-5 Obligor.
Each of the percentages above is called a "Benchmark Percentage".
"Concentration Unit Excess Concentration" is defined in Section 4.10.
"Concentration Unit" means, on any day, each Obligor and its
Affiliates, if any, that are Obligors; it being understood that each Obligor
shall belong to only one Concentration Unit, and that a single Obligor can be a
Concentration Unit.
"Current Carrying Costs" means, during any Distribution Period, the sum
of (i) the amount of interest on the Series 1996-1 Certificates that will be
payable on the next Interest Payment Date and any other Interest Payment Date
falling not later than one week after such Interest Payment Date, (ii) the
amount of the Servicing Fee that will be payable on or before the next
Distribution Date plus (iii) the Current Carrying Costs Increments for each
other Series in Group I (as defined, and calculated as provided in, the
Supplement for each such Series.)
"Daily Group Collections" is defined in Section 4.2.
"Deferred Portion" means, on any day with respect to Group I, the
portion of the Acquisition Amount for the Series of Certificates in Group I as
to which payment has been deferred, which portion shall equal the product of (a)
the Series Collection Allocation Percentage times (b) the sum of the following
amounts (as shown in the Dally Report for such day): (i) the Excess
Concentration Balances, plus (ii) the aggregate unpaid balance of Receivables
that are not Eligible Receivables (including any such Receivables that are
ineligible due to the attachment of Adverse Claims), plus (iii) the Carrying
Cost Receivables Reserve, plus (iv) the Class B Reserve Ratio times the Net
Eligible Receivables, plus (v) the Class A Subordination Deficit (it being
understood that the Deferred Portion may vary from day to day); provided that
the Deferred Portion shall be fixed as of the Group Amortization Calculation
Date.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
giving rise to Receivables and generated during the two Calculation Periods
ending on the most recent Cut-Off Date (as of that Cut-Off Date) and (b) a
denominator equal to the Adjusted Eligible Receivables as of the most recent
Cut-Off Date.
"Dilution Ratio" means, as calculated in each Monthly Report as of the
most recent Cut-Off Date, a fraction (expressed as a percentage) having (a) a
numerator equal to the aggregate amount of Dilution on the Receivables occurring
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated during the second preceding Calculation
Period (so that, for example, if the Calculation Period
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specified in clause (a) corresponded to the March fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the January fiscal
month).
"Dilution Reserve Ratio" means as calculated in each Monthly Report,
the result (expressed as a percentage) calculated in accordance with the
following formula:
{(ARF x ADR) + [(HDR-ADR) x (HDR/ADR)]} x DHV
where:
ADR = the average of the Dilution Ratios during the period of 12
consecutive Calculation Periods ending on the related Cut-Off
Date;
ARF = the Applicable Ratings Factor;
DHV = the Dilution Horizon Variable; and
HDR = the highest average of the Dilution Ratios for any two
consecutive Calculation Periods within the 12 consecutive
Calculation Periods ending on the related Cut-Off Date.
"Distribution Period" means a period from and including a Distribution
Date to but excluding the next Distribution Date.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 6.2 and ending on the day on which the Series Invested
Amount has been reduced to zero. The term "Early Amortization Period" means each
of the Early Amortization Period and any period identified as an "Early
Amortization Period" in the Supplement for any other Series in Group I.
"Eurodollar Tranche" means, during any Interest Period, any portion of
the Series 1996-1 Invested Amount that is designated by Transferor in accordance
with a Certificate Purchase Agreement to accrue interest based on the
Reserve-Adjusted Eurodollar Rate.
"Excess Concentration Balances" means, on any day, the sum of (i) the
sum of the Concentration Unit Excess Concentrations for all Groups, plus (ii)
the Category Two Excess Concentration, plus (iii) the Category Three Excess
Concentration, plus (iv) the Total Foreign Concentration Excess.
"Excess Foreign Obligor Balances" is defined in Section 4.10.
"Expected Final Payment Date" means December 15, 2000.
"Federal Funds Rate" means (a) the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the day (or, if the day is
not a Business Day, the immediately
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preceding Business Day) by the Federal Reserve Bank of New York; provided that
if the rate is not so published for any Business Day, the rate for purposes of
this clause will be the average of the quotations for the day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it, plus (b) 100 basis points.
"Final Scheduled Payment Date" means December 15, 2001.
"First Step Excess" is defined in Section 4.10.
"First Step Residual" is defined in Section 4.10.
"Foreign Obligor" is defined in Section 4.10.
"Fourth Step Excess" is defined in Section 4.10.
"Fully Funded Date" means the first date falling in a Group
Amortization Period or when all Series in Group I are in a Series Amortization
Period and on which there are funds on deposit in the Carrying Cost Account and
the Principal Funding Account that, in the aggregate, equal or exceed the
Investor Repayment Amount and any Servicing Fee payable to anyone other than a
Howmet Person on the first Distribution Date falling after that date.
"Group Amortization Calculation Date" means the day before a Group
Amortization Period begins.
"Group Amortization Period" means the period (if any) commencing on the
first day on which all outstanding Series in Group I are in Early Amortization
Periods.
"Group Initial Invested Amount" means, at any time, the sum of the
Series Initial Invested Amounts of each Series in Group I at that time.
"Group Invested Amount" means, at any time, the sum of the Series
Invested Amounts of each Series in Group I at that time.
"Group I" means a group of Series, including Series 1996-1 and each
other Series that is identified in its Supplement as belonging to Group I.
"Guarantor" means How met, in its capacity as the guarantor under the
Seller Guaranty.
"Holdback Account Termination Date" is defined in Section 4.4.
"Holder" means a Holder (as defined in the Pooling Agreement) of a
Certificate in any Series in Group I.
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"Howmet" is defined in the preamble.
"Howmet Credit Agreement" means the Credit Agreement dated as of
December 13, 1995 among Blade Acquisition Corp., Howmet Holdings Acquisition
Corp., Howmet Acquisition Corp., the financial institutions named therein and
The First National Bank of Chicago, as Administrative Agent and a Managing
Agent, Bankers Trust Company, as Syndication Agent and a Managing Agent, and
Citicorp USA, Inc., as Documentation Agent and a Managing Agent, as the same may
from time to time be amended or supplemented.
"Intercreditor Provisions" means the following provisions of the Howmet
Credit Agreement (as such Agreement was in effect on the Closing Date): Section
9.12 and the definitions of Intercreditor Agreement, Investor Certificates,
Purchased Interest, Receivables Amendment Conditions, Receivables Bridge
Facility, Receivables Documents, Receivables Facility, Receivables Facility
Assets, Receivables Maximum Funded Amount, Receivables Pooling Agreement,
Receivables Purchasers, Receivables Stated Amount and Receivables Subsidiary.
"Interest Payment Date" means (a) as to the Series 199&l Certificates,
any date upon which interest is payable with respect to the ABR Tranche or any
Eurodollar Tranche, as specified in Section 4.1, and (b) as to any interest
payable on any other Series in Group I, the date specified as the "Interest
Payment Date" in the related Supplement.
"Interest Period" means
(a) for Class A Certificates, (i) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to each Eurodollar Tranche
(if any) from time to time, each period from the date upon which that
Eurodollar Tranche was first designated as such pursuant to the Class A
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for the Eurodollar Tranche, if there has been one) to
the date that is one month, two months or three months, at the option
of Transferor, thereafter; and if any Interest Period for a Eurodollar
Tranche would otherwise end on a day that is not a Business Day, the
Eurodollar Tranche shall instead end on the next Business Day (or, if
the next Business Day falls in the next calendar month, then on the
next preceding Business Day); and
(b) for Class B Certificates, (i) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to the Eurodollar Tranche
(if any) from time to time, each period from the date upon which the
Eurodollar Tranche was first designated as such pursuant to the Class B
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for
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the Eurodollar Tranche, if there has been one) to the date that is one
month, two months or three months, at the option of Transferor,
thereafter; and if any Interest Period for the Eurodollar Tranche would
otherwise end on a day that is not a Business Day, the Eurodollar
Tranche shall instead end on the next Business Day (or, if the next
Business Day falls in the next calendar month. then on the next
preceding Business Day).
"Invested Amount" means, at any time:
(a) for purposes of calculating the Series Loss Allocation
Percentage for Group I, the Group Invested Amount; and
(b) for purposes of the application of Sections 6.13 and 12.4
of the Pooling Agreement to the Series 1996-1 Certificates, the Series
1996-1 Invested Amount.
"Investor Allocable Dilution" means, for any ASA Measuring Period, the
product of the aggregate amount of Dilution for that ASA Measuring Period as to
which neither the applicable Seller nor the Guarantor has made any payment
required by Section 3.1 of the Purchase Agreement or the Seller Guaranty on
account of Seller Dilution Adjustments, multiplied by the Series Loss Allocation
Percentage as of the beginning of that ASA Measuring Period, multiplied by the
Investor Allocation Percentage as of the first Business Day of that ASA
Measuring Period.
"Investor Allocable Dilution Adjustments" is defined in Section 4.8.
"Investor Allocable Loss Amount" means, for any ASA Measuring Period,
the product of the Loss Amount for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the beginning of
that ASA Measuring Period.
"Investor Allocable Recoveries" means, for any ASA Measuring Period,
the product of the Net Recoveries for that ASA Measuring Period, multiplied by
the Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the first
Business Day of that ASA Measuring Period.
"Investor Allocation Percentage" means:
(x) on any Business Day that does not fall in a Series
Amortization Period, a fraction (expressed as a percentage, which in
any event may not exceed 100%) (a) the numerator of which is the Net
Invested Amount as of that Business Day, and (1)) the denominator of
which is the Base Amount as of that Business Day;
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(y) on any Business Day falling in any Series Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the beginning of the Series Amortization Period, and (1)) the
denominator of which is the Base Amount as of that Business Day; and
(z) on any Business Day falling in the Group Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the Group Amortization Calculation Date, and (b) the denominator
of which is the Base Amount as of the Group Amortization Calculation
Date.
"Investor Ownership Percentage" means, on any day with respect to Group
I, a fraction (expressed as a percentage, which in any event may not exceed
100%), (x) the numerator of which is the Acquisition Amount on such day and (y)
the denominator of which is the product of (a) the Series Collection Allocation
Percentage times (b) the excess of (i) the Unpaid Balance of Receivables on such
day over (ii) the Unapplied Cash on such day; provided that the Investor
Ownership Percentage shall be fixed as of the Group Amortization Calculation
Date; and provided further that if the Investor Ownership Percentage is being
calculated on any day when a Series in Group I is in an accumulation,
amortization or early amortization period, the Investor Ownership Percentage
shall not be less than the Investor Ownership Percentage immediately prior to
the commencement of such period.
"Investor Repayment Amount" means, on any Business Day, the sum of (a)
the principal amount of the Series 1996-1 Certificates and all other Series in
Group I then outstanding, plus (b) the interest and any Additional Amounts known
to be payable on the Series 1996-1 Certificates and all other Series in Group I
on or before the first Distribution Date falling after that date.
"Investor Write-Offs" means, as calculated in any Monthly Report
relating to a Calculation Period falling completely or partially in a Group
Amortization Period:
(a) if the Available Subordinated Amount is greater than zero
at the end of the related ASA Measuring Period, zero; and
(b) if the Available Subordinated Amount is zero at the end of
the related ASA Measuring Period (taking into account any reduction in
the Available Subordinated Amount shown in such Monthly Report), the
excess (if any) of (x) the sum of the Investor Allocable Loss Amount
and the Investor Allocable Dilution minus Investor Allocable Recoveries
for the related ASA Measuring Period, over (y) the Available
Subordinated Amount as of the beginning of that ASA Measuring Period.
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"Loss Amount" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of
Receivables held by Trust that became Write-Offs during that ASA Measuring
Period, minus (b) the amount of Recoveries received during that ASA Measuring
Period.
"Loss Reserve Ratio" means, as calculated in each Monthly Report, the
result (expressed as a percentage) of (a) the Applicable Ratings Factor
multiplied by (b) the highest average of the Aged Receivables Ratio for any
three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
multiplied by (c) a fraction having (i) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise to Receivables
generated during the four Calculation Periods preceding or ending on the most
recent Cut-Off Date, and (ii) a denominator equal to the Adjusted Eligible
Receivables, as of the most recent Cut-Off Date, multiplied by (d) the Payment
Term Multiplier.
"Majority Class B Purchasers" is defined in Section 8.1 of the Class B
Certificate Purchase Agreement.
"Net Eligible Receivables" means, at any time, (a) the Adjusted
Eligible Receivables, minus (b) the Excess Concentration Balances; it being
understood that the amount of Eligible Receivables will be reduced by Adverse
Claims that attach to Receivables otherwise satisfying the requirements of the
definition of Eligible Receivable.
"Net Invested Amount" means, on any Business Day, the Group Invested
Amount, minus the balance on deposit in the Equalization Account and the
Principal Funding Account with respect to Series in Group I.
"Net Recoveries" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of Recoveries
received in that ASA Measuring Period minus (b) the amount of Receivables that
became Write-Offs in that ASA Measuring Period.
"Note Indenture" means the Indenture dated as of December 13, 1995 by
and between How met, as successor to the obligations thereunder of How met
Acquisition Corp., and Marine Midland Bank, as Trustee, under and pursuant to
which certain senior subordinated notes have been issued, as the same may at any
time be amended or supplemented.
"Parent" means, with respect to any Concentration Unit, the Domestic
Person in such Concentration Unit that owns or controls (directly or indirectly)
the largest number of other Obligors in such Concentration Unit; provided that
if there is no Domestic Person in such Concentration Unit, "Parent" shall mean
the Obligor in such Concentration Unit that owns or controls (directly or
indirectly) the largest number of other Obligors in such Concentration Unit.
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"Past Due Receivables Ratio" means, as calculated in each Monthly
Report as of the Cut-Off Date, a faction (expressed as a percentage) having (a)
a numerator that is the aggregate Unpaid Balance of Receivables that remain
outstanding 61 to 91 days after their respective due dates, as determined as of
such Cut-Off Date, and (b) a denominator that is the aggregate Unpaid Balance of
Receivables as of such Cut-Off Date.
"Payment Term" shall mean, with respect to any Receivable, the number
of days between its invoice date and its due date.
"Payment Term Multiplier" shall mean (a) 1.0, if the Payment Term
Variable is less than 41, (b) 1.17, if the Payment Term Variable is equal to or
more than 41 but less than 51, (c) 1.25, if the Payment Term Variable is equal
to or more than 51 but less than 61, and (d) 1.5, if the Payment Term Variable
is equal to or more than 61 but less than 91; provided, however, that if the
Payment Term Variable equals or exceeds 91, the Payment Term Multiplier for such
Receivable shall be determined by calculating the sum of (x) 1.5, and (y) 0.05,
for each 5-day increment by which the Payment Term Variable exceeds 91, it being
understood that the same number shall apply for all Payment Term Variables that
fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each Monthly
Report as of the most recently ended Cut-Off Date, the quotient of:
(x) the sum of (1) the product of the Outstanding Balance of
each Receivable as of such Cut-Off Date times (2) the Payment Term with
respect to such Receivable; divided by
(y) the aggregate Outstanding Balance of all Receivables as of
such Cut-Off Date.
"Prepayment Accumulation Period" means a period beginning on the day
that Transferor gives a Prepayment Notice to Trustee of a prepayment of the
Series 1996-1 Certificates pursuant to Section 4.9 (and does not notify Trustee
that it intends to cause the Series Interest to be conveyed as described in
subsection 4.9(b)) and ending on the earlier to occur of (a) the day when
amounts sufficient for that prepayment have been accumulated pursuant to Section
4.3 and (b) the end of the Revolving Period for the Series 1996-1 Certificates.
"Prepayment Notice" is defined in Section 4.9.
"Prepayment Premium" means, with respect to any prepayment pursuant to
Section 4.9 or 7.1 or as a result of an Early Amortization Event, the net
present value (as of the date of such prepayment) of the amount of interest that
would have accrued on the amount of principal prepaid from the date of
prepayment through the one year anniversary of the date
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hereof at an interest rate equal to the applicable Certificate Spread in respect
of the Eurodollar Tranche(s), discounted to such prepayment date at a rate per
annum, compounded monthly, equal to the Reserve Adjusted Eurodollar Rate in
effect on the date on which notice of prepayment is given to the Holders of the
Series 1996-1 Certificates being prepaid.
"Principal Deposit Amount" means, with respect to any Series in any
Calculation Period falling in a Series Amortization Period, the amount
determined in accordance with the Supplement for that Series. The Principal
Deposit Amounts for the Series Amortization Periods that may apply to the Series
1996-1 Certificates are:
(a) for any Calculation Period falling in the Amortization
Period or the Early Amortization Period for the Series 1996-1
Certificates, the Series 1996-1 Invested Amount; and
(b) for any Calculation Period falling in a Prepayment
Accumulation Period for the Series 1996-1 Certificates, the amount of
principal to be prepaid.
"Principal Payment Date" means (a) for the Series 1996-1 Certificates,
(i) any date on which any prepayment is to be made pursuant to Section 4.9, (ii)
the end of each Interest Period in respect of the next maturing Eurodollar
Tranche and/or ABR Tranche, in such order as the Agent shall select so as to
minimize "breakage costs," (iii) each Distribution Date falling in an Early
Amortization Period (beginning with the Distribution Date falling in the
Calculation Period after the Calculation Period in which the Early Amortization
Period begins) and (iv) any Distribution Date falling after the commencement of
the Amortization Period, and (b) for any other Series in Group I, each date
specified as a "Principal Payment Date" in the related Supplement. The
Refinancing Date is not a Principal Payment Date.
"Purchase" means any Purchase as defined in either of the Certificate
Purchase Agreements.
"Reference Bank" means The First National Bank of Chicago.
"Refinancing Date" is defined in subsection 4.9(b).
"Required Purchasers" is defined in Section 9.9 of the Certificate
Purchase Agreements.
"Required Receivables" means, on any Business Day, collectively for all
Series in Group I:
(a) So long as a Group Amortization Period has not commenced,
the result of the following formula:
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GIIA + CCRR R
------------ -----
(1 - CARR) x NER
where:
CARR = the Class A Reserve Ratio in effect for that
Business Day;
CCRR = the Carrying Cost Receivables Reserve as reported in
the Daily Report for that Business Day;
GIIA = the Group Initial Invested Amount;
NER = the Net Eligible Receivables as reported in the
Daily Report for that Business Day; and
R = the aggregate Unpaid Balance of Receivables held by
Trustee as reported in the Daily Report for that
Business Day.
(b) If a Group Amortization Period has commenced, the result
of the following formula:
AGIIA + ASA + UCCRR
where:
AGIIA = the adjusted Group Initial Invested Amount on that
Business Day (which shall equal the Group Initial
Invested Amount, reduced (but not below zero) by the
amount of all Investor Write-Offs (net of Investor
Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the
Group Invested
Amount));
UCCRR = the Unfunded Carrying Cost Receivables Reserve on
that Business Day; and
ASA = the Available Subordinated Amount on that
Business Day.
"Required Series Holders" means the Required Purchasers.
"Reserve-Adjusted Eurodollar Rate" means for any Interest Period, the
rate per annum obtained by dividing (i) the arithmetic average (rounded upward
to the nearest 1/100 of one percent) of the offered quotation, if any, to first
class banks in the interbank Eurodollar market by the Reference Bank for U.S.
dollar deposits of amounts in same day funds comparable to the principal amount
of the Investor Certificate of the Reference Bank with maturities comparable to
such Interest Period as of approximately 10:00 a.m. (New York time) on the
second Business Day prior to the first day of that Interest Period by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on
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such second preceding Business Day to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D of
the Federal Reserve Board (or any successor category of liabilities under
Regulation D).
"Revolving Period" means, with respect to any Series in Group I, the
period beginning on the Closing Date and ending on the day before the first day
of an accumulation period, an amortization period or an early amortization
period (other than a prepayment accumulation period with respect to a partial
prepayment of such Series) for such Series; provided that the Revolving Period
for such Series shall be suspended during a prepayment accumulation period with
respect to a partial prepayment of such Series.
"Second Step Excess" is defined in Section 4.10.
"Second Step Residual" is defined in Section 4.10.
"Senior Class" means each of Class A and each class of any other Series
in Group I that is identified in its Supplement as a Senior Class.
"Series Allocable Dilution Adjustments" means, for any ASA Measuring
Period, the product of the aggregate amount of payments pursuant to Section 3.1
of the Purchase Agreement or pursuant to the Seller Guaranty on account of
Seller Dilution Adjustments received during that ASA Measuring Period relating
to Dilution that occurred prior to that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period.
"Series Amortization Period" means (a) as to Series 1996-1, the
Amortization Period, any Prepayment Accumulation Period and any Early
Amortization Period and (b) as to any other Series in Group I any period
identified in the related Supplement as a "Series Amortization Period."
"Series Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Invested Amount, and (b) as to any other Series
in Group I, the amount determined as such in accordance with the Supplement for
that Series.
"Series Initial Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Initial Invested Amount, and (b) as to any other
Series in Group I, the amount determined as such in accordance with the
Supplement for that Series; provided that from and after the date on which the
Series Invested Amount for any Series is reduced to zero, the Series Initial
Invested Amount for that Series will also equal zero.
"Series 1996-1 Certificates" means the Class A Certificates and the
Class B Certificates.
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"Series 1996-1 Holder" means a Holder of a Series 1996-1 Certificate.
"Series 1996-1 Initial Invested Amount" means (i) during the Revolving
Period for the Series 1996-1 Certificates, the Series 1996-1 Invested Amount,
and (ii) thereafter, the Series 1996-1 Invested Amount as of the last day of the
Revolving Period; provided that after the principal amount of the Series 1996-1
Certificates and interest and any Additional Amounts known to be payable in
respect of such Series are reduced to zero, the Series 1996-1 Initial Invested
Amount will equal zero.
"Series 1996-1 Invested Amount" means, at any time, the sum of the
Class A Invested Amount plus the Class B Invested Amount.
"Special Concentration Limit" means:
(i) with respect to the Tier-5 Obligor that owes the highest
aggregate Unpaid Balance of Eligible Receivables, 7%; and
(ii) with respect to the Tier-5 Obligor that owes the second
highest aggregate Unpaid Balance of Eligible Receivables, 5%.
"Special Obligor" means, at any time, the two Tier-5 Obligors that owe
the highest aggregate Unpaid Balances of Receivables and are designated in the
most recent Monthly Report as "Special Obligors"; provided that in the case of
any Obligor (other than Westinghouse Electric Corp.), the Approval Condition
shall have been satisfied with request to such designation.
"Specified Rating Agency" means S&P.
"Stated Amount" means as to any Certificate, the maximum principal
amount that may be required to be funded by the Holder of such Certificate.
"Structured Lender" shall mean Falcon Asset Securitization Corporation,
Alpine Securitization Corp. and any other Holder of a Certificate (x) whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and (y) which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement similar to that set forth in Section 13.9 of the
Pooling Agreement in order to maintain such rating.
"Subordinated Class" means each of Class B and each class of any other
Series in Group I that is identified in its Supplement as a Subordinated Class.
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"Support Bank" shall mean any bank or other financial institution
extending or having a commitment to extend funds to or for the account of any
Structured lender (including by agreement to purchase an assignment of, or
participation in, the Certificate held by such Person) under a liquidity or
credit support agreement which relates to the Certificate purchased by such
Structured lender.
"Third Step Excess" is defined in Section 4.10.
"Third Step Residual" is defined in Section 4.10.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper
rating from the Specified Rating Agency of at least "A-1+" (or its equivalent)
or (b) a senior actual or implied debt rating from the Specified Rating Agency
of at least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-1 Obligor) that
has (a) a commercial paper rating from the Specified Rating Agency of at least
"A-1" (or its equivalent) or (b) a senior actual or implied debt rating from the
Specified Rating Agency of at least "A+"(or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a
Tier-2 Obligor) that has (a) a commercial paper rating from the Specified Rating
Agency of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Specified Rating Agency of at least "BBB+" (or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a
Tier-2 Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from
the Specified Rating Agency of at least "A-3" (or its equivalent) or (b) a
senior actual or implied debt rating from the Specified Rating Agency of at
least "BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a
Tier-2 Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Total Dollar Limit" is defined in Section 4.10.
"Total Foreign Concentration Excess" is defined in Section 4.10.
"Tranche" means each of the ABR Tranche and each Eurodollar Tranche.
"Transferor Indemnified Losses" is defined in Section 7.3.
"Transferor Indemnified Party" is defined in Section 7.3.
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"Transferor Payment Percentage" means, on any Business Day, the
difference of 100% minus the Investor Allocation Percentage on that Business
Day.
"Unapplied Cash" means, on any Business Day, available funds received
in the Master Collection Account and reflected in the Daily Report for that
Business Day that have not been applied as Collections on a particular
Receivable on or prior to the time as of which that Daily Report is prepared.
"Unfunded Carrying Cost Receivables Reserve" means, on any Business Day
falling in a Group Amortization Period, the difference (but not less than zero)
of (a) the Carrying Cost Receivables Reserve as of the Group Amortization
Calculation Date, minus (b) the aggregate Collections deposited into the
Carrying Cost Account during the portion of the Group Amortization Period up to
and including that Business Day.
"Unmatured Early Amortization Event" means an event that, with the
giving of notice or lapse of time (or both) will constitute an Early
Amortization Event.
SECTION 1.2 Modification Condition. (a) For so long as the Series
1996-1 Certificates remain outstanding, for purposes of the Transaction
Documents the definition of the term "Modification Condition" shall be as
follows:
"Modification Condition" means, with respect to any action,
that (i) each Rating Agency has confirmed in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Purchased Interest that was rated by such Rating
Agency, and (ii) if any Series or Purchased Interest has not been
rated, the Required Series Holders for that Series or the Agent for
such Purchased Interest (as the case may be) shall have consented in
writing to such action.
(b) For so long as the Series 1996-1 Certificates remain outstanding,
for purposes of the Transaction Documents the term "Required Investors" shall be
as follows:
"Required Investors" means the Required Series Holders for
each Series and the Agent for each Purchased Interest."
SECTION 1.3 Incorporation of Terms. The terms of the Pooling Agreement
are incorporated in this Supplement as if set forth in full herein. As
supplemented by this Supplement, the Pooling Agreement is in all respects
ratified and confirmed and both together shall be read, taken and construed as
one and the same agreement. If the terms of this Supplement and the terms of the
Pooling Agreement conflict, the terms of this Supplement shall control with
respect to the Series 1996-1 Certificates.
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ARTICLE II DESIGNATION
SECTION 2.1 Designation. There is hereby created a Series to be known
as the "Series 1996-1 Certificates," consisting of two classes: the $47,500,000
Variable Rate Class A, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class A Certificates), which shall be a Senior Class; and the $7,500,000
Variable Rate Class B, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class B Certificates"), which shall be a Subordinated Class. Subject to the
conditions set forth in Article III, Trustee shall authenticate and deliver the
Class A Certificates and the Class B Certificates, to or upon the order of
Transferor in the aggregate principal amount indicated for each above.
Notwithstanding the terms of Section 6.1 of the Pooling Agreement, the Class A
Certificates will be issued in minimum denominations of $5,000,000 and in
integral multiples of $1,000,000 and the Class B Certificates will be issued in
minimum denominations of $2,500,000 and in integral multiples of $500,000.
SECTION 2.2 Group I. The Series 1996-1 Certificates are included in
Group I. Consequently, the Series 1996-1 Certificates will share a single Series
Collection Allocation Percentage (determined using the Required Receivables as
defined herein), a single Series Loss Allocation Percentage (determined using
the Invested Amount as defined herein), and if a Group Amortization Period
occurs, a single Available Subordinated Amount (determined as provided herein)
with the other Series in Group I. Collections, Investor Allocable Dilution,
Investor Allocable Loss Amounts and Investor Write-Offs will be allocated
collectively to Group I in accordance with such shared Series Collection
Allocation Percentage and Series Loss Allocation Percentage, as applicable, and
will be further allocated among Series included in Group I (and the various
Senior Classes and Subordinated Classes) in accordance with this Supplement. The
Servicing Fee with respect to all Series in Group I shall be paid in accordance
with this Supplement and shall be determined in accordance with Section 3.4 of
the Pooling Agreement using the collective Series Collection Allocation
Percentage for Group I. The Series in Group I share a collective Series
Interest, the amount of which equals the shared Series Collection Allocation
Percentage for Group I.
Subsection 12.1 (b) of the Pooling Agreement shall not apply to any
Series in Group I and shall be superseded for all such Series by Section 7.2 of
this Supplement. All terms of this Supplement applying generally to Group I
shall survive the repayment in full or other termination of the Series 1996-1
Certificates until such time as all Series in Group I have been repaid in full
and any revolving purchase commitments made by the Holders relating to
Certificates in any such Series have been terminated (or, if earlier, on the
Final Scheduled Payment Date for the last Series in Group I). Such terms of
general applicability include all of Article IV (excluding Sections 4.1 and
4.9), Article V, Section 7.2 and Article VIII and all related definitions.
SECTION 2.3 Investor Ownership Percentage. The Investor Certificates in
Group I represent an undivided interest in the portion of the Transferred Assets
allocable to Group I,
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which undivided interest (expressed as a percentage) shall equal the Investor
Ownership Percentage. The amount payable on any day by the Holders of such
Investor Certificates for the acquisition of such undivided interest (the
"Acquisition Amount") shall equal the Group Invested Amount plus the Deferred
Portion (it being understood that the Acquisition Amount may vary from day to
day); provided that Acquisition Amount shall be fixed as of the Group
Amortization Calculation Date.
The Deferred Portion of the Acquisition Amount shall be subject to a
holdback and shall be paid to the extent (and only to the extent) Daily Group
Collections are not required to pay amounts described in clauses first through
fourth of Section 4.3 or Section 4.4 (as applicable), it being understood that
the Holders of Series 1996-1 Certificates shall not be liable to pay any portion
of the Deferred Portion not paid out of Daily Series Collections.
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS
SECTION 3.1 Conditions to Issuance. Trustee will not authenticate the
Series 1996-1 Certificates unless all conditions to the issuance of the Series
1996-1 Certificates under Section 6.10 of the Pooling Agreement shall have been
satisfied or waived by the Purchasers.
SECTION 3.2 Use of Proceeds. The proceeds from the issuance of the
Series 1996-1 Certificates shall be used first to repay the Series 1995-1
Certificates in full and second for general corporate purposes of Transferor
(including, but not limited to, purchasing Receivables, repaying indebtedness
and/or making distributions to Howmet).
ARTICLE IV PAYMENTS AND ALLOCATIONS
SECTION 4.1 Interest; Additional Amounts.
(a) Subject to Section 4.1 of the Class A Certificate Purchase
Agreement, Transferor may from time to time allocate the outstanding
principal amount under the Class A Certificates to an ABR Tranche and
up to four Eurodollar Tranches. Subject to Section 4.1 of the Class B
Certificate Purchase Agreement, Transferor may from time to time
allocate the outstanding principal amount under the Class B
Certificates to an ABR Tranche and a Eurodollar Tranche. Interest on an
ABR Tranche shall be payable on each Distribution Date, and interest on
a Eurodollar Tranche shall be payable at the end of the applicable
Interest Period, except that interest on the amount of any principal
repaid on any other date shall be payable on the date of the repayment.
If any such day is not a Business Day, interest shall instead be due on
the next Business Day (or, if the next Business Day falls in the next
calendar month, then on the next preceding Business Day).
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(b) Interest on a Eurodollar Tranche shall accrue during any
Interest Period at a rate per annum equal to the Reserve Adjusted
Eurodollar Rate plus the applicable Certificate Spread and shall be
calculated on the basis of actual days over a year of 360 days.
(c) Interest on an ABR Tranche shall accrue at the Alternate
Base Rate in effect from time to time plus the applicable Certificate
Spread and shall be calculated on the basis of actual days over a year
of 365 or 366 days, as the case may be.
(d) Interest with respect to the Series 1996-1 Certificates
due but not paid on any Distribution Date or the last day of an
Interest Period, as the case may be, will bear additional interest on
the amount at 2% per annum above the Alternate Base Rate to the extent
permitted by law, which additional interest shall be due on demand.
(e) Additional Amounts shall also be payable with respect to
the Series 1996-1 Certificates as specified in the Certificate Purchase
Agreements and to the extent (but only to the extent) that funds become
available for payment of such Additional Amounts in accordance with
Sections 4.2, 4.3 and 4.4.
SECTION 4.2 Daily Calculations and Group Allocations. On each Business
Day, Servicer shall calculate the Series Collection Allocation Percentage for
Group I (and, if necessary for that calculation, the Required Receivables), the
Current Carrying Costs and, prior to the Group Amortization Period, the Base
Amount. On each Business Day prior to the Group Amortization Period, Servicer
shall also determine whether the Net Invested Amount is greater than, equal to
or less than the Base Amount.
Pursuant to Section 4.3 of the Pooling Agreement, Servicer shall
allocate the Series Collection Allocation Percentage of available funds received
in the Master Collection Account (other than any Shared Investor Collections)
since the preceding Business Day's allocation to the shared Series Interest of
Group I. The portion of funds so allocated, together with any funds released
from the Equalization Account or any Principal Funding Account in accordance
with Section 4.5 on that Business Day, are called the "Daily Group Collections."
SECTION 4.3 Allocations of Daily Group Collections (Other Than in a
Group Amortization Period). On each Business Day (other than an Exempt Holiday
or a Business Day falling in a Group Amortization Period or after the Fully
Funded Date), Servicer shall allocate the Daily Group Collections (or, if less,
the aggregate amount of Daily Group Collections required to fund the items
described in priorities first through fourth below) to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account until the amount allocated
to the Carrying Cost Account equals the Current Carrying Costs;
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377
second, if the Net Invested Amount is greater than the Base
Amount, to the Equalization Account in an amount sufficient to reduce
the Net Invested Amount to an amount equal to the Base Amount; provided
that during a Series Amortization Period in respect of any Series,
funds that would otherwise be required to be deposited in the
Equalization Account pursuant to this priority second shall instead be
deposited in the sub-account of the Principal Funding Account for such
Series (and, if there is more than one such Series, shall be divided
ratably between such sub-accounts, on the basis of the respective
Principal Deposit Amounts of each such Series), but the amount
deposited in any such sub-account shall in no event cause the balance
therein to exceed the applicable Principal Deposit Amount (and any
remaining amount not deposited in any sub-account of the Principal
Funding Account because of this limitation shall be shared among the
other sub-accounts for such Series in Group I (ratably as described
above), in each case to the extent that it will not cause the balance
therein to exceed the applicable Principal Deposit Amount, and any
remaining amount shall be deposited in the Equalization Account); and
provided further that no deposit shall be made to a sub-account of the
Principal Funding Account pursuant to the immediately preceding proviso
(and such proviso shall not apply notwithstanding the existence of a
Series Amortization Period) unless, after giving effect thereto, the
Net Invested Amount would equal the Base Amount;
third, during any Series Amortization Period, to the
applicable sub-account of the Principal Funding Account until the
amount on deposit in that sub-account equals the applicable Principal
Deposit Amount; provided that
(i) the amount allocated to all Investor Certificates
in the aggregate pursuant to this priority third on any
Business Day shall not exceed the product of (x) the Investor
Ownership Percentage, multiplied by (y) the excess of the
Dally Group Collections over the amounts allocated on that
Business Day pursuant to priorities first and second, and
(ii) if more than one Series in Group I is in a
Series Amortization Period, the amount so allocated shall be
divided ratably between such subaccounts, on the basis of the
respective Principal Deposit Amounts of each such Series, but
the amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the applicable Principal
Deposit Amount for any such Series (and any remaining amount
not deposited in any sub-account of the Principal Funding
Account because of this limitation shall be shared among the
other sub-accounts for Series in Group I (ratably as described
above), in each case to the extent that it will not cause the
balance therein to exceed the Principal Deposit Amount for any
such other Series); and
fourth, to hold in the Master Collection Account the amount,
if any, necessary to pay on the next Distribution Date all Additional
Amounts payable to the Holders.
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On such Business Day, Servicer shall allocate and pay the remainder of
Daily Group Collections to make current and/or deferred transfer payments to
Transferor in respect of the Transferor Certificate, provided that Transferor
may, from time to time, direct Servicer to direct Trustee to hold all or part of
the funds to be paid pursuant to this sentence in the Master Collection Account
to be applied as Daily Group Collections on the following Business Day.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in priorities second through fourth, and in the
preceding paragraph, in the order of priority set forth therein.
In addition, if, on any day, funds on deposit in the Master Collection
Account and available (as described in the first paragraph of this Section) for
allocation under priority fourth are less than the amount of the obligations
described therein, then the available Collections shall be allocated by Servicer
to the holders of such obligations pro rata according to the respective amounts
of such obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor as deferred transfer payments.
SECTION 4.4 Allocations of Daily Group Collections During a Group
Amortization Period. On each Business Day (other than an Exempt Holiday) falling
in a Group Amortization Period and prior to or on the Fully Funded Date,
Servicer shall allocate the Daily Group Collections to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account to the extent that the
balance therein is less than the amount of Current Carrying Costs
(other than any Servicing Fee payable to any Howmet Person) payable on
the Distribution Date relating to the Calculation Period during which
such Business Day falls;
second, to the Principal Funding Account and to Transferor
(or, prior to the Holdback Account Termination Date, to the Holdback
Account) in the following amounts:
(a) the amount to be transferred to the Principal
Funding Account shall equal the product of (i) the Investor
Allocation Percentage, multiplied by (ii) the excess of the
Daily Group Collections over the amount allocated on that
Business Day pursuant to priority first, provided that the
aggregate amount so deposited shall in no event exceed the
lesser of (x) the Group Invested Amount
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and (y) the Investor Ownership Percentage times the aggregate
Unpaid Balance of Receivables as of the Group Amortization
Calculation Date; and
(b) the amount to be transferred to Transferor (or,
prior to the Holdback Account Termination Date, to the
Holdback Account) shall equal the product of (i) the
Transferor Payment Percentage, multiplied by (ii) the excess
of the Daily Group Collections over the amount allocated on
that Business Day pursuant to priority first;
the amount allocated to the Principal Funding Account pursuant to
clause (a) of this priority second shall be divided among the
sub-accounts for each Series in Group I as follows:
(1) first such amount shall be divided among the
sub-accounts for each Series that has an outstanding Senior
Class, on the basis of the respective Principal Deposit
Amounts of each such Senior Class, but the amount deposited in
any such sub-account shall in no event cause the balance
therein to exceed the Principal Deposit Amount of any such
Senior Class; and
(2) any remaining amount shall be divided among the
sub-accounts for each Series that has an outstanding
Subordinated Class, on the basis of the respective Principal
Deposit Amounts of each such Subordinated Class, but the
amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the Principal Deposit
Amount of any such Subordinated Class;
third, to hold in the Master Collection Account the amount
necessary to pay on the next Distribution Date all Additional Amounts
payable to the Holders;
fourth, to pay any Servicing Fee payable to any Howmet Person
on the Distribution Date relating to the Calculation Period during
which such Business Day falls; and
fifth, the balance to Transferor, provided that prior to the
Holdback Account Termination Date, amounts payable to Transferor
pursuant to this priority fifth shall be deposited into the Holdback
Account and held as provided below.
The "Holdback Account Termination Date" shall be the earlier to occur
of (i) the date that falls twelve months alter the beginning of the Group
Amortization Period and (ii) the Fully Funded Date. If at any time prior to the
Holdback Account Termination Date, the amount of funds on deposit in the
Holdback Account exceeds the difference of (1) the Investor Repayment Amount
minus (2) the amount of funds then held in the Carrying Cost Account and the
Principal Funding Account that are available to pay the Investor Repayment
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Amount, then the amount of such excess funds shall be released from the Holdback
Account and paid to Transferor as deferred transfer payments. On each Business
Day in a Group Amortization Period prior to the Holdback Account Termination
Date, Servicer shall calculate the aggregate Investor Allocable Dilution for the
Group Amortization Period as to which no Series Allocable Dilution Adjustments
have been received. Such amount (or, if less, the aggregate amount of funds in
the Holdback Account) shall be transferred to the Master Collection Account and
applied to the items listed in the first paragraph of this Section as priorities
first through fifth, in that order (except that no such funds shall be allocated
to Transferor or the Holdback Account pursuant to priority second and the amount
allocable to the Principal Funding Account shall not be limited by application
of the Investor Allocation Percentage). On the Holdback Account Termination
Date, all remaining funds in the Holdback Account shall be paid to Transferor.
If, on any day, funds on deposit in the Master Collection Account and
available (as described in the first paragraph of this Section, for allocation
under priority third are less than the amount of the obligations described
therein, then the available Collections shall be allocated by Servicer to the
holders of such obligations pro rata according to the respective amounts of such
obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor in respect of the Transferor
Certificate as deferred transfer payments.
SECTION 4.5 Withdrawals from the Equalization Account and Principal
Funding Account. On any Business Day (other than an Exempt Holiday) prior to the
Group Amortization Period on which no Early Amortization Event or Unmatured
Early Amortization Event has occurred with respect to any Series in Group I,
Servicer may instruct Trustee in writing to withdraw funds from the Equalization
Account and apply such funds as Daily Group Collections, so long as the Net
Invested Amount would not exceed the Base Amount after giving effect to such
transfer and application. On the first day of any Series Amortization Period or
Group Amortization Period, Servicer shall instruct Trustee to withdraw the
entire balance in the Equalization Account and apply the same as Daily Group
Collections on that day. On the first day of the Group Amortization Period,
Servicer shall instruct Trustee likewise to withdraw the entire balance in the
Principal Funding Account and apply the same as Daily Group Collections on that
day.
SECTION 4.6 Available Subordinated Amount. (a) If a Group Amortization
Period begins, Servicer shall promptly calculate the Available Subordinated
Amount as of the Group Amortization Calculation Date and report such amount in
the Daily Report for the first day in the Group Amortization Period. Servicer
shall also calculate the Available Subordinated Amount as of each Cut-Off Date
falling in the Group Amortization Period, such calculation to be reflected in
the related Monthly Report.
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(b) The Available Subordinated Amount as of the Group Amortization
Calculation Date shall equal the product of (x) the Investor Allocation
Percentage, multiplied by (y) the result of:
(i) the product of the Unpaid Balance of Receivables held by
Trustee at the opening of business on the Group Amortization
Calculation Date, multiplied by the Series Collection Allocation
Percentage on that date; minus
(ii) the sum of (A) the lesser of the Base Amount and the Net
Invested Amount and (B) the Carrying Cost Receivables Reserve at the
opening of business on the Group Amortization Calculation Date.
(c) The Available Subordinated Amount, as of any Cut-Off Date in the
Group Amortization Period, shall equal the result of:
(i) the Available Subordinated Amount as of the preceding
Cut-Off Date (or as of the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization
Period); minus
(ii) the Investor Allocable Loss Amount with respect to the
ASA Measuring Period ending on that Cut-Off Date; minus
(iii) any Investor Allocable Dilution with respect to the ASA
Measuring Period ending on that Cut-Off Date; plus
(iv) subject to Sections 4.7 and 4.8, the Investor Allocable
Recoveries and Investor Allocable Dilution Adjustments with respect to
the ASA Measuring Period ending on that Cut-Off Date.
(d) Notwithstanding the foregoing, in no event shall the Available
Subordinated Amount at any time be less than zero or greater than the initial
Available Subordinated Amount calculated pursuant to subsection (b).
SECTION 4.7 Write-Offs and Recoveries. (a) In each Monthly Report
required to be delivered during the Group Amortization Period, Servicer shall
calculate the Investor WriteOffs and the Investor Allocable Recoveries for the
most recently ended ASA Measuring Period.
(b) If the Investor Write-Offs calculated in any Monthly Report exceed
zero, the Group Invested Amount shall be reduced by the amount of the Investor
Write-Offs with effect on the related Distribution Date. Any such reduction
shall be allocated to the Class Invested Amounts of all outstanding Subordinated
Classes (ratably in accordance with such Class Invested Amounts) until all such
Class Invested Amounts have been reduced to zero.
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Any remaining reduction shall be allocated to the Class Invested Amounts of all
outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts).
(c) If the Group Invested Amount has been reduced on account of any
Investor Write-Offs, then any Investor Allocable Recoveries with respect to any
Calculation Period ending after the reduction takes place shall be applied to
reinstate the Group Invested Amount, to the extent of such prior reductions that
have not previously been reinstated, with effect on the related Distribution
Date. Any such reinstatement shall be allocated to the Class Invested Amounts of
all outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts) until all prior reductions to such Class Invested Amounts on account of
Investor Write-Offs have been reinstated. Any remaining reinstatement shall be
allocated to the Class Invested Amounts of all outstanding Subordinated Classes
(ratably in accordance with such Class Invested Amounts).
(d) If Investor Allocable Recoveries are applied pursuant to subsection
(c) to reinstate the Group Invested Amount on any Distribution Date, then
Investor Allocable Recoveries shall be applied to increase the Available
Subordinated Amount on the same Distribution Date only to the extent of the
excess, if any, of the Investor Allocable Recoveries, minus the amount of
Investor Allocable Recoveries so applied.
(e) The outstanding principal amount of any Senior Class or
Subordinated Class shall be reduced by any reduction, and increased by any
reinstatement, of its Class Invested Amount pursuant to this Section 4.7 or
Section 4.8, in the amount of such reduction or reinstatement.
SECTION 4.8 Certain Dilution in a Group Amortization Period. (a) In
each Monthly Report required to be delivered during the Group Amortization
Period, Servicer shall calculate the Investor Allocable Dilution and the Series
Allocable Dilution Adjustments for the most recently ended ASA Measuring Period.
(b) If the Investor Allocable Dilution calculated in any Monthly Report
is greater than zero, and there are funds in the Holdback Account, then those
funds (up to an amount equal to the amount of the Investor Allocable Dilution)
shall be allocated (i) first, in accordance with priority first of the first
paragraph of Section 4.4, (ii) second, to the Principal Funding Account (in
accordance with clauses (1) and (2) of priority second of the first paragraph of
Section 4.4) until the Net Invested Amount is reduced to zero and (iii) third,
in accordance with priorities third through fifth of the first paragraph of
Section 4.4, in that priority.
(c) If the Available Subordinated Amount or the Group Invested Amount
has been reduced on account of any Investor Allocable Dilution, then (i) any
Series Allocable Dilution Adjustments with respect to any Calculation Period
ending after the reduction takes place and (ii) any additional funds deposited
in the Holdback Account (the "Investor Allocable Dilution
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Adjustments") shall be allocated (x) first, to reinstate the Group Invested
Amount (with the same allocation among Senior Classes and Subordinated Classes
as is described in subsection 4.7(c)), and (y) second, to reinstate the
Available Subordinated Amount, m each case to the extent not previously
reinstated pursuant to Section 4.7 or this Section 4.8. Any funds so allocated
on any day shall be allocated (i) first, in accordance with priority first of
the first paragraph of Section 4.4, (ii) second, to the Principal Funding
Account (in accordance with clauses (1) and (2) of priority second of the first
paragraph of Section 4.4) until the Net Invested Amount is reduced to zero and
(iii) third, in accordance with priorities third through fifth of the first
paragraph of Section 4.4, in that priority.
SECTION 4.9 Optional Early Pay Out. (a) On any Business Day falling in
the Revolving Period, Transferor may provide notice to Trustee of its intention
to accumulate funds to cause the Series 1996-1 Certificates to be prepaid in
full or (as provided in the next sentence) in part. There may be a single
partial prepayment of Class A Certificates, provided that (i) such prepayment
(in the aggregate for all Class A Certificates) shall not exceed $10,000,000,
(ii) such prepayment shall be made after the first anniversary of the date
hereof, and (iii) the amount prepaid shall reflect a reduction in the Unpaid
Balance of Receivables due to the sale of a Seller (or all or substantially all
of its assets) or the 1055 of a major customer by the Sellers. When amounts
sufficient for such prepayment have been accumulated, Transferor may provide
notice to Trustee (the "Prepayment Notice") of the date, at least three business
days after the date of such Prepayment Notice, when the prepayment shall occur.
Trustee shall notify the affected Holders promptly upon receiving such
Prepayment Notice. In the event of any such prepayment of the Series 1996-1
Certificates occurring at any time during the one-year period commencing on the
date hereof, the Holders of such Series 1996-1 Certificates shall be entitled to
receive a Prepayment Premium. Except as expressly provided in this subsection
4.9(a), the Series 1996-1 Certificates may not be partially prepaid. The Series
1996-1 Certificates, once prepaid, may not be reinstated.
(b) Commencing upon the date specified in the notice to the Trustee
referred to in subsection (a) (until an amount equal to the amount to be
prepaid, plus the related Prepayment Premium, if any, and other applicable
Additional Amounts have been accumulated), amounts shall be set aside for
purposes of that prepayment in accordance with Section 4.3, except that no such
amounts shall be set aside if Transferor notifies Trustee that Transferor
intends to cause the Series 1996-1 Certificates to be prepaid by causing the
portion of the Series Interest for Group I attributable to the Series 1996-1
Certificates to be conveyed to one or more Persons (who may be the Holders of a
new Series issued substantially contemporaneously with such prepayment) for a
cash purchase price in an amount equal to the sum of (i) the outstanding
principal amount of the Series 1996-1 Certificates, plus (ii) to the extent not
available in the Carrying Cost Account, accrued and unpaid interest on the
Series 1996-1 Certificates through the day of such prepayment (the "Refinancing
Date"), plus (iii) to the extent not available from funds set aside pursuant to
priority fourth of Section 4.3, the Additional Amounts, if any, owed with
respect to the
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Series 1996-1 Certificates. No such conveyance shall, however, be permitted if
as a result thereof, Transferor, Howmet or any of their Affiliates would acquire
such portion of the Series Interest or the underlying Receivables. In the case
of any such conveyance, the purchase price shall be deposited in the Principal
Funding Account and shall be distributed to the Agent, for further distribution
to the Holders, on the Refinancing Date in accordance with the terms of Section
5.2. Upon deposit of the purchase price in the Principal Funding Account, the
Series 1996-1 Holders shall have no further rights with respect to the
Transferred Assets.
(c) Any prepayment pursuant to this Section 4.9 shall be made on the
later to occur of (i) the date specified in the notice of prepayment and (ii)
the date on which sufficient funds (including funds to cover any related
Additional Amounts) have been accumulated pursuant to Section 4.3 or 4.4 or
obtained by a conveyance described in subsection 4.9(b).
(d) The Class B Certificates may not be prepaid until the Class A
Certificates have been repaid in full. In addition no Class B Certificates (or
Certificates in any other Subordinated Class) may be prepaid if any Senior Class
is outstanding and, alter giving effect to that payment, the Net Invested Amount
would exceed the Base Amount.
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations.
(a) Notwithstanding clause (a) of the definition of Eligible Obligor, Persons
that are not Domestic Persons (such Persons being "Foreign Obligors") may be
Eligible Obligors.
(b) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) whether the members of the Concentration Unit are Domestic
Persons, Category One Obligors, Category Two Obligors or Category Three
Obligors.
(ii) such Concentration Unit's Basic Concentration Limit times
the Adjusted Eligible Receivables for such day (such product being such
Concentration Unit's "Total Dollar Limit").
(iii) the aggregate Unpaid Balance of Eligible Receivables
owed by Domestic Persons in such Concentration Unit.
(iv) an amount (whether positive or negative) equal to (A) the
Total Dollar Limit for such Concentration Unit minus (B) the amount
determined pursuant to clause (iii). Any such positive sum is the
"First Step Residual." The absolute value of any such negative sum is
the "First Step Excess."
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(v) an amount (the "Category One Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category One
Obligors in such Concentration Unit.
(vi) an amount equal to 4% of the Adjusted Eligible
Receivables on such day.
(vii) the lesser of (A) the First Step Residual (or, if there
is no First Step Residual, zero) and (B) the amount determined pursuant
to clause (vi).
(viii) an amount (the "Second Step Excess") equal to (A) the
Category One Balance minus (B) the amount determined pursuant to clause
(vii); provided that if such sum is a negative number, the Second Step
Excess will be zero.
(ix) an amount (the "Second Step Residual") equal to (A) the
First Step Residual minus (B) the Category One Balance plus (C) the
Second Step Excess; provided that if such sum is a negative number, the
Second Step Residual will be zero.
(x) an amount (the "Category Two Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Two
Obligors in such Concentration Unit.
(xi) an amount equal to 2% of Adjusted Eligible Receivables on
such day.
(xii) the lesser of (A) the Second Step Residual and (B) the
amount determined pursuant to clause (xi).
(xiii) an amount (the "Third Step Excess") equal to (A) the
Category Two Balance minus (B) the amount determined pursuant to clause
(xii); provided that if such sum is a negative number, the Third Step
Excess will be zero.
(xiv) an amount (the "Third Step Residual") equal to (A) the
Second Step Residual minus (B) the Category Two Balance plus (C) the
Third Step Excess; provided that if such sum is a negative number, the
ThIrd Step Residual will be zero.
(xv) an amount (the "Category Three Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Three
Obligors in such Concentration Unit.
(xvi) the lesser of (A) the Third Step Residual and (B) the
amount determined pursuant to clause (xi).
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(xvii) an amount (the "Fourth Step Excess") equal to (A) the
Category Three Balance minus (B) the amount determined pursuant to
clause (xvi); provided that if such sum is a negative number, the
Fourth Step Excess will be zero.
(xviii) the sum of the First Step Excess, the Second Step
Excess, the Third Step Excess and the Fourth Step Excess, such sum
being the "Concentration Unit Excess Concentration" for such
Concentration Unit.
(c) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) an amount (the "Category One Eligibles") equal to (A) the
Category One Balance for such Concentration Unit minus (B) the Second
Step Excess (if any) for such Concentration Unit; provided that if such
sum is a negative number, the Category One Eligibles will be zero.
(ii) an amount (the "Category Two Eligibles") equal to (A) the
Category Two Balance minus (B) the Third Step Excess (if any) for such
Concentration Unit; provided that if such sum is a negative number, the
Category Two Eligibles will be zero.
(iii) an amount (the "Category Three Eligibles") equal to (A)
the Category Three Balance minus (B) the Fourth Step Excess for such
Concentration Unit; provided that if such sum is a negative number, the
Category Three Eligibles will be zero.
(d) On each Business Day, Servicer shall determine:
(i) the sum of the Category One Eligibles for all
Concentration Units.
(ii) the sum of the Category Two Eligibles for all
Concentration Units.
(iii) the sum of the Category Three Eligibles for all
Concentration Units.
(iv) an amount (the "Category Two Excess Concentration") equal
to (A) the amount determined pursuant to clause (ii) minus (B) 10% of
the Adjusted Eligible Receivables on such day; provided that if such
sum is a negative number, the Category Two Excess Concentration shall
be zero.
(v) an amount (the "Category Three Excess Concentration")
equal to (A) the amount determined pursuant to clause (iii) minus (B)
5% of the Adjusted Eligible Receivables on such day; provided that if
such sum is a negative number the Category Three Excess Concentrations
shall be zero.
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(vi) the sum of the amounts in clauses (i), (ii) and (iii).
(vii) the sum of the Category Two Excess Concentration and the
Category Three Excess Concentration.
(viii) the sum of (A) the amount determined pursuant to clause
(vi) minus the amount determined pursuant to clause (vii).
(ix) an amount (the "Total Foreign Concentration Excess")
equal to (A) the amount determined pursuant to clause (viii), minus (B)
35% of the Adjusted Eligible Receivables; provided that if such sum is
a negative number, the Total Foreign Concentration Excess shall be
zero.
(e) With respect to (i) all Category One Obligors or Category Two
Obligors, and (ii) each Category Three Obligor that owes Eligible Receivables in
excess of $1,000,000 or that is located in a jurisdiction where Obligors owe an
aggregate amount of Eligible Receivables in excess of $2,000,000, Servicer and
Transferor shall, and shall cause the Sellers to, take all actions reasonably
necessary to perfect and/or protect Transferor's and/or the Trustee's interests
in such Receivables under the laws of the jurisdiction in which such Obligors
are located.
(f) Within the four weeks following each anniversary of the Closing
Date, Servicer shall (i) cause counsel satisfactory to the Required Purchasers,
at the expense of Howmet, to contact local counsel in each jurisdiction in which
Obligors referred to in clause (e) are located, for purposes of determining
whether there has been a change in the laws of such jurisdiction regarding the
assignment of Receivables and (ii) take such actions as are required under
Section 4.10(e) with respect to any such change. Nothing in this Section 4.10(f)
shall limit the obligations of Servicer and Transferor under Section 4.10(e) at
any other time.
(g) Contemporaneously with the delivery of each Monthly Report,
Servicer shall provide Trustee with a certificate, signed by an appropriate
officer, showing (i) any Obligor that is not a Domestic Person and either owes
Receivables in an aggregate amount exceeding $1,000,000 as of the most recent
Cut-Off Date or is a party to a contract with a Seller expiring more than one
year after such Cut-Off Date, and (ii) any jurisdiction outside the United
States in which Obligors owe an aggregate amount of Receivables exceeding
$2,000,000, determined as of such Cut-Off Date.
(h) All documents executed and delivered to, or for the benefit of,
Trustee pursuant to this Section shall be Transaction Documents for all purposes
(including for purposes of Section 6.1).
SECTION 4.11 Tax Opinion. If any Tax Opinion is required to be
delivered in connection with the Series 1996-1 Certificates, the term "Tax
Opinion" shall have the meaning specified below:
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"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax and applicable state income and
franchise tax purposes, (a) such action will not cause the Investor Certificates
of Series 1996-1 debt or partnership interests, (b) such action will not cause
the Trust to be treated as other than an association (or publicly traded
partnership) taxable as a corporation, (c) such action should not be treated as
a taxable event to any Series 1996-1 Investor Certificateholder or Certificate
Owner.
SECTION 4.12 Reset of Benchmark Percentages and Special Concentration
Limits. Transferor may from time to time (i) increase or decrease any Benchmark
Percentage used in the definition of Concentration Limit, (ii) change the
percentages specified in the definition of Special Concentration Limit with
respect to the two Tier-5 Obligors that owe the highest aggregate Unpaid
Balances of Eligible Receivables, or (iii) designate an additional Obligor as a
"Special Obligor," in each case (other than the designation of Westinghouse
Electric Corp. as a Special Obligor) if the Approval Condition is satisfied. It
is understood and agreed that any such changes in the Benchmark Percentages or
the Special Concentration Limits or the addition of a Special Obligor may change
the calculation of the Class A Concentration Factor, the Class B Concentration
Factor, the Class A Minimum Reserve Ratio and the Class B Minimum Reserve Ratio.
ARTICLE V DISTRIBUTIONS AND REPORTS
SECTION 5.1 Distributions. On each Distribution Date and, with respect
to clause (b), on each Principal Payment Date, other than a Distribution Date
that is also a Refinancing Date, Trustee shall, in accordance with instructions
set out in the applicable Daily Report, distribute to the Holders, the following
amounts:
(a) accrued and unpaid interest on the ABR Tranches and any
additional interest payable to the Series 1996-1 Holders pursuant to
Section 4.1 or to the Holders of any other Series in Group I, to the
extent funds are available for such payment in the Carrying Cost
Account (and in the event of any shortfall, such interest shall be paid
first to each Senior Class, ratably in accordance with the total amount
of interest owed to each Senior Class, and second to each Subordinated
Class, ratably in accordance with the total amount of interest owed to
each Subordinated Class);
(b) on each Principal Payment Date, all funds deposited in
each sub-account of the Principal Funding Account on or prior to the
most recent Cut-Off Date shall be distributed in reduction of the
related Series Invested Amounts; all such amounts on deposit in the
Series 1996-1 sub-account of the Principal Funding Account shall be
paid to the Holders of Class A Certificates until they have been paid
or provided for in full before any such amounts are paid to the Holders
of Class B Certificates, and no such amounts shall be paid to the
Holders of any Subordinated Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Invested
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Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day);
(c) if, on the Expected Final Payment Date or any Distribution
Date falling in a Group Amortization Period, the funds on deposit in
the Carrying Cost Account (less any Servicing Fee payable on that day
to anyone other than a Howmet Person) will be equal to or greater than
the Invested Amount (after giving effect to all distributions required
by subsections (a) and (b)), then an amount equal to such remaining
Invested Amount shall be withdrawn from the Carrying Cost Account and
distributed in reduction of the Invested Amount: and
(d) any Additional Amounts payable with respect to
Certificates in any Series in Group I to the extent that funds have
been allocated for those Additional Amounts pursuant to priority fourth
of Section 4.3 or priority third of Section 4.4 (and in the event of
any shortfall, Additional Amounts shall be paid first to each Senior
Class, ratably in accordance with the total Additional Amounts owed to
each Senior Class, and second to each Subordinated Class, ratably in
accordance with the total Additional Amounts owed to each Subordinated
Class).
On each Distribution Date, Trustee shall also, in accordance with
instructions set out in the applicable Daily Report, distribute the Servicing
Fee to the Servicer to the extent that funds are available for that purpose in
the Carrying Cost Account.
On each Interest Payment Date (other than any Distribution Date, which
shall be governed by subsection (a) above), Trustee shall, in accordance with
instructions set out in the applicable Daily Report, distribute interest payable
on that date to the Holders of any Series in Group I, to the extent funds are
available for such payment in the Carrying Cost Account (and in the event of any
shortfall, any such interest shall be paid first to each Senior Class, ratably
in accordance with the total amount of interest owed to each Senior Class, and
second to each Subordinated Class, ratably in accordance with the total amount
of interest owed to each Subordinated Class).
Any amounts payable to the Holders of Class A Certificates pursuant to
this Section shall be paid to the Agent, and the Agent shall distribute such
amounts to such Holders. Amounts payable to a Holder of Class B Certificates
pursuant to this Section shall be paid to such Holder.
SECTION 5.2 Special Distributions on the Refinancing Date. On the
Refinancing Date, Trustee shall, in accordance with instructions set out in the
applicable Daily Report, distribute to the Holders the following amounts:
(a) all interest accrued on the Certificates in any Series in
Group I through the Refinancing Date, to the extent funds are available
for such payment in the Carrying
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Cost Account or have been deposited in the Principal Funding Account
pursuant to Section 4.9;
(b) all funds deposited in the Principal Funding Account
pursuant to Section 4.9, provided that no such amounts shall be paid to
the Holders of the Class B Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Net Invested
Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day); and
(c) any Additional Amounts to the extent that funds for those
Additional Amounts have been allocated pursuant to priority fourth of
Section 4.3 or priority third of Section 4.4 or deposited in the
Principal Funding Account pursuant to Section 4.9.
Amounts payable to Holders of Class A Certificates pursuant to this
Section shall be paid to the Agent, and the Agent shall distribute such amounts
to such Holders. Amounts payable to a Holder of Class B Certificates pursuant to
this Section shall be paid to such Holder. Promptly following receipt of the
amounts payable to the Holders of Certificates pursuant to this Section, such
Holders shall tender such Certificates to the Trustee.
SECTION 5.3 Payments in Respect of Transferor Certificate. On each day
on which funds are allocated for this purpose pursuant to Sections 4.3 and 4.4
(and subject to the terms of Section 4.4 relating to the Holdback Account),
Trustee shall, in accordance with instructions set out in the applicable Dally
Report, distribute to Transferor, in respect of the Transferor Certificate, all
funds allocated for that purpose in accordance with those Sections. In addition,
after the Group Invested Amount has been repaid in full and all interest and
Additional Amounts owed to the Holders have been paid, any additional funds on
deposit in the Carrying Cost Account, the Equalization Account or the Principal
Funding Account shall similarly be paid to Transferor in respect of the
Transferor Certificate.
SECTION 5.4 Daily Reports and Monthly Reports. Each Dally Report and
Monthly Report shall be substantially in the applicable form set out in Exhibit
B or C or in such other form as may be required by any other Supplement relating
to a Series in Group I or otherwise satisfactory to Servicer and Trustee and
consistent with the terms of this Supplement, each such other Supplement and the
Pooling Agreement. Copies of each Monthly Report shall be provided free of
charge by the Trustee to purchasers of Series 1996-1 Certificates in connection
with the initial distribution thereof and may be obtained free of charge upon
request from the Trustee (and presentation of a confirmation evidencing the
purchase of such beneficial interest) by subsequent purchasers.
SECTION 5.5 Annual Tax Information. On or before February 15 of each
calendar year, beginning with calendar year 1997, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to each Person who at any time
during the preceding calendar year was
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a Holder the information for the preceding calendar year, or the applicable
portion thereof during which the Person was a Holder, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable such Holders to prepare their Federal income tax returns.
Servicer's obligations under the preceding sentence shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent to the specified Persons pursuant to the Pooling
Agreement or any requirements of the Internal Revenue Code as from time to time
in effect. Notwithstanding anything to the contrary contained in this Agreement,
Trustee shall, to the extent required by applicable law, from time to time
furnish to the appropriate Persons a Form 1099-INT within the period required by
applicable law.
SECTION 5.6 Periodic Perfection Certificate. On or before December 1 of
each calendar year, beginning with calendar year 1996, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to Trustee and the Agent an
Officer's Certificate setting forth a list of all changes in (a) the name,
identity or corporate structure of Transferor or any Seller and (b) the chief
executive office of Transferor or any Seller (or in the place of business of
Transferor or any Seller that has only one place of business) that have taken
place since the date of the Officer's Certificate most recently delivered
pursuant to this Section 5.6 (or since the Closing Date, in the case of the
first such Officer's Certificate to be delivered), or indicating that no such
events have taken place, and stating in each case what filings of UCC financing
statements, or amendments thereto, relating to the Transaction Documents have
been made in connection with each such event (identifying the date and filing
index numbers for each). Any financing statement identified in such an Officer's
Certificate delivered to Trustee shall be deemed to have been identified to
Trustee in writing for purposes of subsection 11.1(c)(v) of the Pooling
Agreement. If any such new UCC financing statements are filed, Servicer shall
cause Trustee to be named as secured party (in the case of any filing against
Transferor) or assignee of the secured party (in the case of any filing against
a Seller). Notwithstanding the foregoing, if any "Event of Default" or
"Potential Event of Default" under (and as defined in) the Howmet Credit
Agreement occurs, Servicer shall deliver an Officer's Certificate covering the
matters described above to Trustee and Agent not later than 10 days after the
occurrence of such event, and for so long as any such event remains outstanding,
Servicer shall deliver such an Officer's Certificate on the last Business Day
falling in each of March, June, September and December.
ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.1 Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event":
(a)(i) failure on the part of Transferor or Servicer to make
any payment of the principal amount of the Series 1996-1 Certificates
when due, or to make any payment of any interest on the Series 1996-1
Certificates or to make any deposit required by
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the terms of any Transaction Document on or before two Business Days
after the date such payment or deposit is required to be made, or to
make any other payment, except any payment of the Servicing Fee to a
Howmet Person, required by the terms of any Transaction Document on or
before three Business Days after the date such payment is required to
be made; or (ii) failure on the part of any Seller to duly observe or
perform subsection 6.1(f), 6.1(h), 6.1(j), 6.3(a), 6.3(b), 6.3(c) or
6.3(e) of the Purchase Agreement or Transferor to duly observe or
perform subsection 72(c), 7.2(e), 7.2(f), 7.2(h), 72(i), 72(j) or
7.2(k) of the Pooling Agreement or clause (i) or (ii) of subsection
7.2(d) of the Pooling Agreement, which failure has a substantial
likelihood of having a Material Adverse Effect and continues unremedied
for a period of five Business Days; or (iii) failure on the part of
Transferor, Servicer or any Seller duly to observe or perform any other
covenant or agreement set forth in any Transaction Document, which
failure has a substantial likelihood of having a Material Adverse
Effect and continues unremedied for a period of 30 days; or (iv)
Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in
subsection 5.1(d), 5.1(k), 5.1(o) or 5.1(r) of the Purchase Agreement
or by Transferor in subsection 2.3(a)(i), 2.3(a) (ii) or 7.1(i) of the
Pooling Agreement shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material
respect for a period of five Business Days, or any other representation
or warranty made by Transferor, Servicer or any Seller in any
Transaction Document shall prove to have been incorrect in any material
respect when made, and continues to be incorrect m any material respect
for a period of 30 days; provided that a mistake in the representation
of a Receivable as an Eligible Receivable or the breach of a
representation and warranty with respect to a Receivable shall not
constitute an Early Amortization Event unless and until the applicable
Seller has failed to make the cash payments (if any) owed under
Sections 3.1 and 3.5 of the Purchase Agreement in respect of such
mistake or breach (it being understood that certain of such mistakes or
breaches may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Transferor,
Servicer, Guarantor or any Seller, or Transferor shall become unable,
for any reason, to transfer Receivables or other Transferred Assets to
the Trust in accordance with the provisions of this Agreement and the
Pooling Agreement; provided that if, at the time any event that would,
with the passage of time, become a Bankruptcy Event occurs as a result
of a bankruptcy proceeding being filed against Transferor or any
Seller, then, on and after the day on which the bankruptcy proceeding
is filed until the earlier to occur of the dismissal of the proceeding
and the commencement of an Early Amortization Period, Transferor shall
not purchase Receivables and Related Assets from the affected Seller
or, if Transferor is the subject of the proceeding, transfer
Receivables and Related Transferred Assets to the Trust;
41
393
(d) the Trust or Transferor shall be required to be registered
as an "investment company" under and within the meaning of the
Investment Company Act of 1940, as amended;
(e) the Net Invested Amount exceeds the Base Amount for a
period of two or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have
been remedied;
(g) Howmet shall cease to own, directly or indirectly, 100% of
the issued and outstanding capital stock of Transferor;
(h) the Internal Revenue Service or the PBGC shall have filed
one or more Tax or ERISA Liens against the assets of Transferor or any
Seller (including Receivables) in an aggregate amount exceeding
$250,000 unless such amounts (i) are bonded in a manner that satisfies
the Approval Condition or (ii) relate to taxes in an aggregate amount
not exceeding $1,000,000 which are contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained under GAAP;
(i) the cessation of, or the failure to create, a valid
first-priority perfected ownership or security interest in favor of
Trustee in the Receivables or the rights of Transferor under the
Purchase Agreement, which cessation or failure has a substantial
likelihood of having a Material Adverse Effect;
(j) the Series 1996-1 Invested Amount is not paid in full on
the Expected Final Payment Date;
(k) Transferor's net worth (as calculated in accordance with
GAAP) shall at any time be less than 17% of the aggregate Unpaid
Balance of the Receivables at such time and such condition continues
for five consecutive Business Days; provided that for purposes of
calculating Transferor's net worth, any and all amounts owed to
Transferor by any Howmet Person shall be excluded from such
calculation;
(l) any foreclosure or similar proceeding in respect of any
adverse claim on any Buyer Note or the Transferor's common stock shall
have been commenced; or tide to any Buyer Note or Transferor's common
stock shall pass to the holders of such adverse claim, it being
understood that the grant of a security interest in the stock of
Transferor or any Buyer Note to a creditor of a Seller that is party to
an Intercreditor Agreement shall not be an Early Amortization Event;
(m) the average of the Aged Receivables Ratio for any three
consecutive Calculation Periods shall be greater than 2.50%;
42
394
(n) the average of the Past Due Receivables Ratio for any
three consecutive Calculation Periods shall exceed 5.75%;
(o) the average of the Dilution Ratio for any three
consecutive Calculation Periods shall be greater than 6.75%; or
(p) the Intercreditor Provisions shall be amended without
written notice thereof having been provided to the Agent no later than
five Business Days prior to the effective date of such amendment.
SECTION 6.2 Early Amortization Period. Upon the occurrence and
continuance of any Early Amortization Event described in subsection 6.1(c), an
Early Amortization Period shall commence without any notice or other action on
the part of Trustee or the Series 1996-1 Holders, immediately upon the
occurrence of such Early Amortization Event, except that if an Early
Amortization Event described in subsection 6.1(c) occurs as the result of the
occurrence of a Bankruptcy Event with respect to one or more Sellers, the
Receivables originated by which made up less than 10% of the aggregate Unpaid
Balance of Receivables held by the Trust as of the date of the commencement of
the proceeding that gave rise to the first such Bankruptcy Event, then an Early
Amortization Period shall not commence unless Required Series Holders declare it
to have commenced. Upon the occurrence and continuance of any other Early
Amortization Event, after the applicable grace period, if any, and if the action
or event that gave rise to such Early Amortization Event has not been waived by
the Required Series Holders, Trustee may (and, at the direction of the Required
Series Holders, shall) by notice then given in writing to Transferor and
Servicer, declare that an Early Amortization Period has commenced as of the date
of Transferor's receipt of the notice. In the event of any prepayment of the
Series 1996-1 Certificates prior to the first anniversary of the date hereof as
a result of the occurrence of an Early Amortization Event, the Holders thereof
shall be entitled to receive a Prepayment Premium.
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES
SECTION 7.1 Optional Redemption of Investor Interests. On any
Distribution Date occurring during an Early Amortization Period with respect to
the Series 1996-1 Certificates on or after the date that the Series 1996-1
Invested Amount is reduced to 10% or less of the sum of the Stated Amounts for
the Series 1996-1 Certificates, Transferor shall have the option to redeem the
Series 1996-1 Series Interest. The purchase price will be an amount equal to the
Invested Amount plus accrued and unpaid interest (and accrued and unpaid
interest with respect to interest that was due but not paid on any prior
Distribution Date) through the day preceding the Distribution Date at the
applicable interest rate (as specified in Section 4.1) plus the aggregate amount
by which the Invested Amount has been reduced on account of Investor Write-Offs
(and not subsequently reinstated) plus (if such redemption occurs prior to the
first anniversary of the date hereof) the applicable Prepayment Premium. Upon
the tender of the outstanding Certificates of the Series by the Holders to
Trustee,
43
395
Trustee shall distribute the amounts, together with all funds on deposit in the
Principal Funding Account that are allocable to the Series 1996-1 Certificates,
to the Holders of the Series on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Holders. Following
any redemption, the Holders of the Series shall have no further rights with
respect to the Transferred Assets. In the event that Transferor falls for any
reason to deposit in the Principal Funding Account the aggregate purchase price
for the Series 1996-1 Certificates, payments shall continue to be made to the
Holders of the Series in accordance with the terms of the Pooling Agreement and
this Supplement.
SECTION 7.2 Termination. Notwithstanding Section 12.1 of the Pooling
Agreement, the last payment of the principal of and interest on the Certificates
of any Series in Group I shall be due and payable no later than the Final
Scheduled Payment Date for that Series. If, on the Distribution Date immediately
prior to the Final Scheduled Payment Date for any such Series, Servicer
determines that the Series Invested Amount for the Series on the applicable
Final Scheduled Payment Date (after giving effect to all changes therein on such
date) will exceed zero, Servicer shall, as soon as practicable, solicit bids for
the sale of interests in the Receivables in an amount equal to the product of
(i) the outstanding balance of Receivables, times (ii) the Series Collection
Allocation Percentage, times (iii) the Investor Allocation Percentage, times
(iv) a fraction the numerator of which is the applicable Series Invested Amount
and the denominator of which is the Group Invested Amount. Transferor shall be
entitled to participate in and to receive notice of each bid submitted in
connection with the bidding process. Upon the expiration of the period, Servicer
shall determine (x) the highest bid for such Receivables and (y) the Available
Final Distribution Amount for the Series. Servicer shall sell the interests in
the Transferred Assets on the Final Scheduled Payment Date for the applicable
Series to the bidder with the Highest Bid and shall deposit the proceeds of such
sale in the Master Collection Account for allocation to the Holders. The
priorities specified in Section 5.1 shall apply to any such distribution.
SECTION 7.3 Indemnification by Transferor. Transferor hereby agrees to
indemnify the Trust, Trustee, each Holder of a Series 1996-1 Certificate and
each of the successors, permitted transferees and assigns of any such Person and
all officers, directors, shareholders, controlling Persons, employees,
affiliates and agents of any of the foregoing (each of the foregoing Persons
individually being called a "Transferor Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims (whether on account
of settlements or otherwise, and whether or not the relevant Transferor
Indemnified Party is a party to any action or proceeding that gives rise to any
Transferor Indemnified Losses (as defined below)), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing collectively being called "Transferor
Indemnified Losses") awarded against or incurred by any of them that arise out
of or relate to this Agreement, any other Transaction Document or any of the
transactions contemplated herein or therein or the use of proceeds herefrom or
therefrom (including any Transferor Indemnified Losses (i) relating to any
Adverse Claim, without regard to whether
44
396
such Adverse Claim was a Permitted Adverse Claim, or (ii) arising from any
failure to make any filing or obtain any consent as required by the Federal
Assignment of Claims Act with respect to any Receivables).
Notwithstanding the foregoing, in no event shall any Transferor
Indemnified Party be indemnified for any Transferor Indemnified Losses (a)
resulting from gross negligence or willful misconduct on the part of such
Transferor Indemnified Party (or the gross negligence or willful misconduct on
the part of any of its officers, directors, employees, affiliates or agents),
(b) to the extent they include Transferor Indemnified Losses in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Transferor for the amount of any Receivable or Related Transferred Asset not
paid by the related Obligor, (c) to the extent they are or result from lost
profits, (d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) distributions on the Series
1996-1 Certificates, (ii) franchise or withholding taxes imposed on any
Transferor Indemnified Party other than the Trust or the Trustee in its capacity
as Trustee or (iii) federal or other income taxes on or measured by the net
income of such Transferor Indemnified Party and costs and expenses m defending
against the same, (e) resulting from any breach by such Transferor Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to a Transferor Indemnified Party or is insufficient to hold a
Transferor Indemnified Party harmless, then Transferor shall contribute to the
amount paid by the Transferor Indemnified Party as a result of any loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Transferor Indemnified Party on the one hand
and Transferor on the other hand, but also the relative fault of such Transferor
Indemnified Party (if any) and Transferor and any other relevant equitable
considerations.
SECTION 7.4 Indemnification by Servicer. Servicer agrees that the Agent
and each Holder of a Series 1996-1 Certificate shall be an "Indemnified Party"
for purposes of Section 8.4 of the Pooling Agreement.
ARTICLE VI[l MISCELLANEOUS
SECTION 8.1 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 8.2 Counterparts. This Supplement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
45
397
SECTION 8.3 Severability of Provisions. If any one or more of the
provisions or terms of this Supplement shall for any reason whatsoever be held
invalid, then the unenforceable provision(s) or term(s) shall be deemed
severable from the remaining provisions or terms of this Supplement and shall in
no way affect the validity or enforceability of the other provisions or terms of
this Supplement.
SECTION 8.4 Amendment, Waiver, Etc. This Supplement may be amended,
subject to Section 13.1 of the Pooling Agreement and Section 10.1 of each
Certificate Purchase Agreement, from time to time by Servicer, Transferor and
Trustee by a written instrument signed by each of them.
SECTION 8.5 Trustee. Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplement
or for or in respect of the recitals contained herein, all of which recitals are
made solely by Transferor and Servicer.
SECTION 8.6 Instructions in Writing. All instructions given by Servicer
to Trustee pursuant to this Supplement shall be in writing, and may be included
in a Dally Report or Monthly Report.
46
398
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By:________________________________
Name:______________________________
Title:_____________________________
Address: c/o Nevada Corporate
Management, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION, as Servicer
By:________________________________
Name:______________________________
Title:_____________________________
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________
Name:______________________________
Title:_____________________________
Address: One M&T Plaza, 7th Floor
Buffalo, New York 14203
Attention: Russell Whitley
Facsimile: (716) 842-4474
399
EXHIBIT A - Part 1
to the Series 1996-1 Supplement
FORM OF CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND
400
WILL NOT BECOME A PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES.
[If this representation cannot be made, Transferor, Servicer or the Trustee may
require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
401
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: Maximum Principal Amounts
$___________________
THIS CERTIFIES THAT _________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Transferor"), HOWMET
CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation, as trustee (together with its
successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class A, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
3
402
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
A, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:________________________
Title: ____________________
4
403
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: _______________________________
Title: __________________________
Dated: ____________, 1996
5
404
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ------ ------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
6
405
EXHIBIT A - Part 2
to the Series 1996-1 Supplement
FORM OF CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIRE'S OF RULE 144A,
(B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
406
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot be made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
407
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B, SERIES 1996-1 CERTIFICATE
Date: $________________
THIS CERTIFIES THAT ______________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and
are therefore subordinated to the Class A, Series 1996-1 Certificates, Series
1996-1 Certificates and Certificates in any other Senior Class that may be
issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income
3
408
and franchise and other taxes measured by or imposed on income, the Class B,
Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:____________________________
Title: ________________________
4
409
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:____________________________________
Title: ________________________________
Dated: ____________, 1996
5
410
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ------ ------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
6
411
EXHIBIT B
to Certificate Purchase
Agreement Series 1996-1, Class A
FORM OF ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of________ (this "Agreement"), is
made between ______________________ ("Assignor"), and ______________________
("Assignee"). Except as otherwise defined herein, capitalized terms have the
meanings assigned to them in the Certificate Purchase Agreement (as defined
below).
BACKGROUND
1. Assignor is a party to the Certificate Purchase Agreement, dated as
of April 18, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Certificate Purchase Agreement"), among BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Transferor"), HOWMET CORPORATION, a Delaware
corporation, the Purchasers party thereto (including Assignor), and The First
National Bank of Chicago, as Agent.
2. Assignor wishes to assign, and Assignee wishes to be so assigned,
Assignor's rights and obligations arising on and after the Effective Date (as
defined below) under the Certificate Purchase Agreement and its Certificate,
including its outstanding Purchase (the "Purchase").
3. Assignor and Assignee also wish (a) Assignee to assume the
obligations of Assignor under the Certificate Purchase Agreement with respect to
Assignee's Share (as defined below) to the extent of the rights assigned and
(b)Assignor to be released from the obligations assumed by Assignee.
4. Transferor, by its execution hereof, is providing its written
consent to the assignment accomplished by this Agreement.
SECTION 1. Assignment. Effective on the Effective Date (as defined
below) and upon payment of the amount specified in Section 3(a), Assignor hereby
assigns and transfers to Assignee, without recourse, representation or
412
warranty of any kind, express or implied (except as provided in Sections 6(a)
and (b)), and subject to Section 4(b), Assignee's Share (as specified in Annex I
hereto) (the "Assignee's Share") of all of Assignor's rights, title and interest
arising under (a) the Certificate Purchase Agreement relating to Assignor's
Credit Exposure including all rights and obligations with respect to the
Purchase attributable to Assignee's Share and (b) Assignor's Certificate with
respect to Assignee's Share as will result in Assignee having from and after the
Effective Date the Class Percentage and the Series Percentage specified in Annex
I.
SECTION 2. Assumption. Effective on the Effective Date, Assignee hereby
irrevocably purchases, assumes and takes from Assignor, and Assignor is hereby
expressly and absolutely released from, all of Assignor's obligations arising
under the Certificate Purchase Agreement relating to Assignee's Share and the
Purchase attributable to Assignee's Share.
SECTION 3. Payment. In consideration of the assignment by Assignor to
Assignee as set forth above, Assignee agrees to pay to Assignor, in Dollars and
in immediately available funds, (a) on or prior to the Effective Date, an amount
specified by Assignor in writing on or prior to the Effective Date that
represents Assignee's Share attributable to the principal amount of the Purchase
made pursuant to the Certificate Purchase Agreement and outstanding on the
Effective Date, and (b) from time to time thereafter, other amounts (if any)
that Assignee has agreed in writing to pay to Assignor after the Effective Date.
In consideration of the assumption by Assignee, Assignor agrees to pay to
Assignee within two Business Days of the Effective Date, an assignment fee (if
any) that previously has been agreed to in writing by both parties.
Notwithstanding anything to the contrary in this Agreement, if and when
Assignee receives or collects (x) any payment of principal or interest relating
to the Purchase or (y) any payment of fees that are required to be paid to
Assignor pursuant to this Agreement, then Assignee shall forward the payment to
Assignor.
To the extent payment of funds to Assignee or Assignor are not made
within two Business Days, each, as the case may be, shall be entitled to recover
the due amount, together with interest thereon at the Federal Funds Rate per
annum accruing from the date of payment or the date of receipt of the funds by
the other party.
SECTION 4. Effectiveness. (a)(i) This Agreement shall become effective
on the date (the "Effective Date") on which it shall have been duly executed by
all parties and the Agent shall have recorded the information
page 2
413
contained herein in its records (or automatically if not so recorded within five
Business Days from the Agent's receipt of this Agreement signed by Assignor,
Assignee and Transferor)[; provided, however, that, notwithstanding anything
herein to the contrary, as a condition to the effectiveness of the Assignment,
and prior to any rights of Assignee being recognized hereunder or under any
Transaction Document or Certificate, in accordance with Section 10.3(c) of the
Certificate Purchase Agreement, the assigning Purchaser shall provide, or shall
cause Assignee to provide, to Transferor such information as Transferor
reasonably requests to make the determinations required by Section 10.3(f) of
Revolving Certificate Purchase Agreement. If the Transferor has acknowledged in
writing the terms and conditions of this agreement, the assigning Purchaser
shall be deemed to have provided or caused to be provided such information.] 1/
Assignor hereby notifies the Agent of the assignment, effective as of the
Effective Date, of Assignee's Share and the Purchase attributable to the
Assignee's Share, and directs the Agent to pay Assignee any payment of principal
of, or interest on, the Purchase attributable to the Assignee's Share. No (x)
failure of either Assignee or Assignor to settle any amount owed to the other
(except with respect to the payment of the processing and recordation fee to the
Agent and the payment due under Section 3(a)), (y) dispute respecting any other
settlement, including in respect of Transferor, or (z) bankruptcy, insolvency or
other condition whatsoever respecting any Person, shall in any way impair,
reduce or otherwise affect the effectiveness of this Agreement.
(ii) Assignor, Assignee and the Agent each acknowledges and agrees that
from and after the Effective Date, the Agent shall make all payments under the
Certificate Purchase Agreement in respect of Assignee's Share (including all
payments of principal and interest with respect thereto, whether or not the
payments shall have accrued prior to or after the Effective Date) to Assignee
only. Assignor and Assignee hereby agree further to make all appropriate
adjustments in payments to either of them under the Certificate Purchase
Agreement for periods prior to the Effective Date directly between themselves.
(b) With respect to the Purchase attributable to Assignee's Share, if
and when Assignor receives or collects any payment of principal, interest, or
Additional Amounts with respect to Assignee's Share for any period commencing on
or after the Effective Date, Assignor shall distribute to Assignee the portion
attributable to Assignee's Share, but only to the extent it accrued on or after
the Effective Date and was not theretofore paid to Assignee by Transferor or
otherwise. Any principal, interest and Additional
- ----------
1/ Bracketed language should be deleted in the case of a Permitted
Transferee.
page 3
414
Amounts paid prior to the Effective Date shall be retained by Assignor. Any
principal, interest, and Additional Amounts received by Assignee that accrued
prior to the Effective Date shall be forwarded promptly, in the form received,
to Assignor. Assignee recognizes and agrees that (i) it shall receive no payment
on account of any Agent's fees or other amounts or expenses (including counsel
fees) payable to the Agent (in such capacity and for its own account), (ii) this
Agreement shall not operate to assign any rights or delegate any obligations of
the Agent (in such capacity), and (iii) notwithstanding anything to the contrary
m this Agreement, Assignor shall retain all of its rights to indemnification
under the Certificate Purchase Agreement for any events, acts or omissions
occurring prior to the Effective Date.
(c) The Agent, by its execution hereof, acknowledges the assignment and
agrees to make payments in respect of principal, interest, fees and Additional
Amounts as described in clause (a).
SECTION 5. Rights as Purchaser under Certificate Purchase Agreement. In
accordance with Section 10.3 of the Certificate Purchase Agreement, (a) as of
the Effective Date, Assignee will be a Purchaser under, and party to, the
Certificate Purchase Agreement and shall have (i) all of the rights and
obligations of a Purchaser (to the extent of the assignment and assumption of
Assignee's Share effected by this Agreement) and (ii) the addresses for (A)
notice purposes and (B) LIBOR Office as set forth in items 2 and 3,
respectively, of Annex I hereto and (b)promptly on or after the Effective Date,
Transferor will execute and deliver any documents and instruments that Assignor
or Assignee reasonably may require.
SECTION 6. Representations and Warranties. (a) Each of Assignor and
Assignee represents and warrants to the other as follows:
(i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, to fulfill the
obligations hereunder and to consummate the transactions contemplated
hereby;
(ii) the making and performance of this Agreement and all
documents required to be executed and delivered hereunder do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other applicable law or regulation;
(iii) this Agreement has been duly executed and delivered and
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
page 4
415
(iv) all approvals, authorizations or other actions by, or filing
with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained.
(b) Assignor represents and warrants to Assignee that Assignee's Share
and the Purchase attributable to Assignee's Share is not subject to any liens or
security interests created by Assignor.
(c) Except as set forth in subsections (a) and (b), Assignor makes no
representations or warranties, express or implied, to Assignee and shall not be
responsible to Assignee for (i) the execution, effectiveness, genuineness,
legality, validity, enforceability, collectibility, regulatory status or
sufficiency of the Certificate Purchase Agreement or any of the other
Transaction Documents, (ii) the perfection, priority, value or adequacy of any
collateral security or guaranty, (iii) the taking of any action, or the failure
to take any action, with respect to any of the Transaction Documents, (iv) any
representations, warranties, recitals or statements made in any of the
Transaction Documents or in any written or oral financial or other statements,
instruments, reports, certificates or documents made or furnished by Assignor to
Assignee or by or on behalf of Transferor or any of its Affiliates to Assignor
or Assignee in connection with the Transaction Documents and the transactions
contemplated thereby, (v) the financial or other condition of Transferor or any
other Person or (vi) any other matter having any relation to any of the
foregoing. Assignor shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Transaction Documents or the existence or
possible existence of any Unmatured Early Amortization Event, Early Amortization
Event or Servicer Default. Additionally, Assignor shall not have any duty or
responsibility either initially or on a continuing basis to make any
investigation or any appraisal on Assignee's behalf or to provide Assignee with
any credit or other information with respect thereto, whether coming into
Assignor's possession before the execution of the Certificate Purchase Agreement
or at any time thereafter. Assignor shall have no responsibility with respect to
the accuracy of, or the completeness of, any information provided to Assignee,
whether by Assignor or by or on behalf of Transferor or any other Person
obligated under the Certificate Purchase Agreement or any related instrument or
document.
(d) Assignee represents and warrants that it has made its own
independent investigation of each of the foregoing matters, including the
financial condition and affairs of Transferor and its Affiliates, in connection
with the making of the Purchase and the execution of this Agreement
page 5
416
(including the solvency of Transferor and its Affiliates, their ability to pay
their respective debts as they mature and the capital of Transferor and its
Affiliates remaining after the closing under the Transaction Documents and the
consummation of the transactions contemplated thereby) and has made and shall
continue to make its own appraisal of the creditworthiness of Transferor and its
Affiliates. Assignee (i) confirms that it has received copies of the Transaction
Documents together with copies of certain other closing documents delivered in
connection with the Certificate Purchase Agreement, financial statements and any
other documents and information that it has requested or deemed appropriate to
make its own credit analysis and decision to enter into this Agreement and (ii)
agrees that it will, independently and without reliance upon the Agent, Assignor
or any other Purchaser and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Transaction Documents.
(e) Assignee represents and warrants to Transferor that the
representations and warranties in Section 6.3 of the Certificate Purchase
Agreement are true and correct in respect of such Assignee as of the date
hereof.
SECTION 7. No Proceedings. Assignee hereby agrees to be bound by the
provisions of Section 10.13 of the Certificate Purchase Agreement.
SECTION 8. Withholding Taxes. [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee agrees to execute and deliver to the
Agent, for delivery to Transferor, on or before the Effective Date, (a) two
original copies of Internal Revenue Service Form 4224 or successor applicable
form, properly completed and duly executed by the Assignee certifying that it is
entitled to receive payments under the Certificate Purchase Agreement and any
Certificate without deduction or withholding of any United States Federal income
taxes, and (b) an original copy of Internal Revenue Service Form W-8 or W-9 or
applicable successor form, properly completed and duly executed, certifying its
exemption from backup withholding. Assignee represents and warrants to
Transferor and Assignor that, as of the Effective Date, it shall be entitled to
receive payments under its Certificate, the Certificate Purchase Agreement and
hereunder without deduction for or on account of any taxes imposed by the United
States of America or any political subdivision thereof. In the event that, after
delivering the applicable form, Assignee shall cease to be exempt from
withholding and/or deduction of taxes, then the Agent may withhold and/or deduct
the applicable amount from any payments of principal, interest and any fees to
which Assignee otherwise would be entitled, and the Agent shall have no
liability whatsoever to Assignee for any such withholding
page 6
417
or deduction. Assignee shall indemnify Transferor and the Agent from and
against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs or expenses that result from Assignee's breach of
such representation and warranty.]2/ [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee (unless organized as a corporation
under the laws of any state of the United States) agrees to execute and
deliver to the Agent, for delivery to Transferor, on or before the
Effective Date, an original copy of Internal Revenue Service Form W-9 or
applicable successor form, properly completed and duly executed, certifying
its exemption from backup withholding.]3/
SECTION 9. Miscellaneous. (a) Each of the parties hereto agrees
to take any action and execute and deliver any documents that any
party hereto reasonably may request from time to time in order to
implement more fully the purposes of this Agreement. Without limiting
the generality of the foregoing, Assignor and Assignee will cooperate
in obtaining for Assignee a Certificate (as well as a replacement
Certificate for Assignor representing any retained interest of
Assignor).
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WIThOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
(c) Except as otherwise set forth herein, this Agreement sets
forth the entire agreement between the parties relating to the subject
matter hereof, and no term or provision of this Agreement may be
amended, changed, waived, discharged or terminated orally or
otherwise, except in a writing signed by Assignor and Assignee.
(d) This Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
(e) Each of the parties hereto agrees that each party shall bear
its own expenses in connection with the preparation and execution of
this Agreement
- ----------
2/ If the Assignee is not a U.S. person within the meaning of Section
7701(a)(30) of the Internal Revenue Code.
3/ If the Assignee is a U.S. person within the meaning of Section
7701(a)(30) of the Internal Revenue Code.
page 7
418
and the consummation of the Assignment described herein. Assignee further agrees
that it shall send a check in the amount of $[1,500] [3,500] to the Agent on or
prior to the Effective Date, as payment of the processing and recordation fee
described in Section 10.3(c) of the Certificate Purchase Agreement. [Select
correct amount in accordance with that Section.]
(f) All representations and warranties made, and indemnities provided
for, herein shall survive the consummation of the transactions contemplated
hereby. Assignor and Assignee acknowledge and agree that Transferor is a
third-party beneficiary of Section 6(e) of this Agreement.
(g) Assignor may at any time or from time to time grant assignments and
participations in its rights and obligations under the Certificate Purchase
Agreement and its Certificate to other Persons, but not in the portions thereof
assigned to Assignee.
(h) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither Assignor
nor Assignee may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party. The preceding
sentence shall not limit the right of Assignee to assign all or part of
Assignee's Share in the manner contemplated by the Certificate Purchase
Agreement.
(i) Assignee acknowledges that all obligations of the Agent are subject
to Article IX of the Certificate Purchase Agreement.
page 8
419
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
______________________________________
as Assignor
By:___________________________________
Title: _______________________________
as Assignee
By:___________________________________
Title: _______________________________
The undersigned hereby acknowledges the terms and provisions of this
Agreement, and agrees to make payments in respect of principal, interest and
fees as described in Section 4(a).4/
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:___________________________________
Title: _______________________________
BLADE RECEIVABLES CORPORATION
By:___________________________________
Title: _______________________________
4/ Acknowledgement not required for certain Assignees, as provided in
Section 10.3 of the Certificate Purchase Agreement.
page 9
420
ANNEX I
to Assignment Agreement
Item 1. Assignee's Share:
(a) Assignee's Stated Amount $_____________
(b) Assignee's Class Percentage _____________%
(c) Assignee's Series Percentage _____________%
Item 2. Address of Assignee for notice purposes:
______________________________
______________________________
______________________________
Attention: __________________
Telephone: __________________
Facsimile: __________________
Item 3. LIBOR Office of Assignee:
______________________________
______________________________
______________________________
421
APPENDIX X
to Certificate Purchase
Agreement Series 1996-1
INDEX OF ADDITIONAL DEFINED TERMS
Agent .................................................................. 1
Agreement .............................................................. 1
Assignee ............................................................... 23
Certificates ........................................................... 1
Class Percentage ....................................................... 10
Credit Exposure ........................................................ 22
Effective Date ......................................................... 2
Financial Advisors ..................................................... 11
Howmet ................................................................. 1
Indemnitees ............................................................ 27
LIBOR Office ........................................................... 5
Participants ........................................................... 22
Pooling Agreement ...................................................... 1
Purchase ............................................................... 2
Purchasers ............................................................. 1
Receivables Review ..................................................... 16
Required Purchasers .................................................... 20
Series Percentage ...................................................... 10
Servicer ............................................................... 1
Supplement ............................................................. 1
Taxes .................................................................. 8
Transferee ............................................................. 24
Transferor ............................................................. 1
Trust .................................................................. 1
Trust Interest ......................................................... 1
Trustee ................................................................ 1
422
PROJECT BLADE - TAKEOUT
- --------------------------------------------------------------------------------
CERTIFICATE PURCHASE AGREEMENT
(Series 1996-1, Class B)
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
HOWMET CORPORATION,
THE PURCHASERS DESCRIBED HERE[N,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
- --------------------------------------------------------------------------------
423
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions ........................................... 1
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase .............................................. 2
SECTION 2.2 Closing ............................................... 2
SECTION 2.3 Certificates .......................................... 2
ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates ............. 2
SECTION 3.2 Notice to Purchasers .................................. 3
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches .............................................. 3
SECTION 4.2 Fees .................................................. 4
SECTION 4.3 Yield Protection ...................................... 4
SECTION 4.4 Illegality; Unavailability ............................ 6
SECTION 4.5 Indemnity ............................................. 7
SECTION 4.6 Taxes ................................................. 7
ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment ............................ 9
SECTION 5.2 Pro Rata Treatment; Percentages ....................... 10
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor ............................................ 10
SECTION 6.2 Howmet ................................................ 11
SECTION 6.3 Purchasers ............................................ 12
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase ................................ 13
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424
ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants ................................. 16
SECTION 8.2 Negative Covenants .................................... 17
SECTION 8.3 Transfers ............................................. 17
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment ........................................... 17
SECTION 9.2 Nature of Duties ...................................... 17
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors ...... 18
SECTION 9.4 Certain Rights of Agent ............................... 18
SECTION 9.5 Reliance .............................................. 18
SECTION 9.6 Indemnification ....................................... 19
SECTION 9.7 Agent in Its Individual Capacity ...................... 19
SECTION 9.8 Resignation by Agent .................................. 19
SECTION 9.9 Required Purchasers ................................... 20
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments ........................................... 20
SECTION 10.2 No Waiver; Remedies .................................. 21
SECTION 10.3 Successors and Assigns; Assignments .................. 21
SECTION 10.4 Survival of Agreement ................................ 26
SECTION 10.5 Expenses; Indemnification ............................ 26
SECTION 10.6 Entire Agreement ..................................... 28
SECTION 10.7 Notices .............................................. 28
SECTION 10.8 No Third-Party Beneficiaries ......................... 28
SECTION 10.9 Severability of Provisions ........................... 28
SECTION 10.10 Counterparts ........................................ 28
SECTION 10.11 Governing Law ....................................... 28
SECTION 10.12 Tax Characterization ................................ 29
SECTION 10.13 No Proceedings ...................................... 29
SECTION 10.14 Reference Bank ...................................... 29
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425
SCHEDULE
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBITS
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX
APPENDIX X Index of Additional Defined Terms
iii
426
This CERTIFICATE PURCHASE AGREEMENT, dated as of April 18, 1996 (this
"Agreement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada corporation
("Transferor"), HOWMET CORPORATION, a Delaware corporation ("Servicer" or
"Howmet"), the purchasers named on the signatures pages of this Agreement
(together with their respective permitted assigns, the "Purchasers"), and THE
FIRST NATIONAL BANK OF CHICAGO, as administrative and syndication and
documentation agent for the Purchasers (in that capacity, together with any
successors in that capacity, "Agent").
BACKGROUND
1. Transferor (a) is a party to a Pooling and Servicing Agreement dated
as of December 13, 1995, as amended and restated in its entirety by an ,Amended
and Restated Pooling and Servicing Agreement dated as of April 18, 1996 (the
"Pooling Agreement") , with Howmet, as initial Servicer, and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (in that
capacity, together with any successors in that capacity, the "Trustee"), (b) is
a party to a Receivables Purchase Agreement dated as of December 13, 1995, as
amended and restated in its entirety by an Amended and Restated Receivables
Purchase Agreement dated as of April 18, 1996, and (c) will enter into a Series
1996-1 Supplement to the Pooling Agreement substantially in the form of Exhibit
A (the "Supplement"). Pursuant to the Pooling Agreement and the Supplement,
Transferor will obtain the Series 1996-1, Class B Certificates (the
"Certificates"), which will represent fractional undivided beneficial interests
in the assets of the Blade Receivables Master Trust (the "Trust"), a trust
organized pursuant to the Pooling Agreement.
2. Transferor wishes to obtain the commitment of each Purchaser to
purchase fractional undivided beneficial interests in the assets of the Trust
(each a "Trust Interest") that will be evidenced by its Certificate. Subject to
the terms and conditions of this Agreement, each Purchaser is willing to
purchase a Certificate. Howmet has joined in this Agreement to confirm certain
representations, warranties and covenants for the benefit of the Purchasers and
the Agent.
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used and not otherwise
defined herein have the meanings assigned to them in the Supplement or, if not
427
defined in the Supplement, in Appendix A to the Pooling Agreement. An index of
terms defined directly in this Agreement is attached as Appendix X.
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase. The Transferor will sell to each Purchaser and,
subject to the terms and conditions of this Agreement, the Pooling Agreement and
the Supplement, each Purchaser will purchase (each such purchase being a
"Purchase") from the Transferor, at the time and place provided for in Section
2.2, a Certificate for a purchase price equal to 100% of the Stated Amount of
such Certificate. The Stated Amount of each initial Purchaser's Certificate is
set forth opposite its name in Schedule I.
SECTION 2.2 Closing. The sale of each Certificate shall take place at
the offices of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois
60603 at noon, Chicago time, on April 18, 1996 (the "Effective Date"). On the
Effective Date, the Transferor will deliver to each Purchaser a Certificate,
dated as of the Effective Date and registered in the name of each such
Purchaser, against delivery by each such Purchaser to the Transferor or its
order of immediately available funds in the amount of the purchase price
therefor to Manufacturers & Traders Trust Company, Corporate Trust Department,
One M&T Plaza, 7th Floor, Buffalo, New York 14203-2399, Attention: Russell
Whitley.
SECTION 2.3 Certificates. The outstanding amounts of the Purchase made
by each Purchaser shall be evidenced by its Certificate, and to be issued on the
Effective Date substantially in the form of Exhibit A (Part 2) to the
Supplement. Each Purchaser shall and is hereby authorized to record on the grid
attached to its Certificate (or at its option, in its internal books and
records) the date and amount of the Purchase made by it, the amount of each
repayment of the principal amount represented by its Certificate and the
portions of its Purchase that are from time to time allocated to the ABR Tranche
and the Eurodollar Tranche (which shall be conclusive absent demonstrable
error); provided, that failure to make any recordation on the grid or records or
any error in the grid or records shall not adversely affect the Purchaser's
rights with respect to its interest in the assets of the Trust and its right to
receive interest in respect of the outstanding principal amount of the Purchase
made by the Purchaser.
ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates. Transferor may,
m accordance with Section 4.9 of the Supplement, prepay the Certificates in full
upon at least three Business Days' prior notice by Transferor to
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Trustee. No Certificates may be prepaid until the Class A Certificates have been
prepaid in full. In addition, no Certificates may be prepaid if any Senior Class
is outstanding and, after giving effect to that payment, the Net Invested Amount
would exceed the Base Amount. In the event of any such prepayment of the
Certificates occurring at any time during the one-year period commencing on the
Effective Date, the Holders of such Certificates shall be entitled to receive a
Prepayment Premium. The Certificates may not be partially prepaid and the
Certificates, once prepaid, may not be reinstated.
SECTION 3.2 Notice to Purchasers. Trustee shall promptly advise the
Purchasers of any notice received by Trustee pursuant to Section 3.1.
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches. (a) Subject to the terms and conditions set forth
in this section and Section 4.4, Transferor shall have the option: (x) on any
Business Day, to convert all or part of the ABR Tranche to the Eurodollar
Tranche and (y) on the last day of any Interest Period of the Eurodollar
Tranche, to convert all or any part of the Eurodollar Tranche to form a part of
the ABR Tranche and/or to continue all or any part of the Eurodollar Tranche as
a new Eurodollar Tranche, the Interest Period for which shall commence on the
first day after the prior Interest Period; provided, that:
(i) subject to Section 4.4, each conversion or continuation
shall be made ratably among the Purchasers in accordance with their
respective amounts of the Purchases comprising the converted or
continued Tranche;
(ii) if less than all of the outstanding amount of any Tranche
shall be converted or continued, the aggregate amount of the Tranche
converted or continued shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $2,000,000;
(iii) any Interest Period for the Eurodollar Tranche that
commences after the commencement of the Amortization Period must begin
on a Distribution Date and end on the next Distribution Date; and
(iv) there shall not be more than one Eurodollar Tranche
outstanding at any one time.
(b) If Transferor wishes to convert and/or continue a Tranche under
this section, Transferor shall notify the Agent in writing (i) in the case of a
conversion to or continuation of the Eurodollar Tranche, not later than
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2:00 p.m., New York City time, three Business Days prior to the date of the
proposed conversion or continuation date and (ii) otherwise, not later than
noon, New York City time, one Business Day prior to the date of the proposed
conversion or continuation. Each notice shall be irrevocable and shall refer to
this Agreement and specify (x) the identity and amount of the Tranche that
Transferor wishes to convert or continue, (y) whether all or part of the Tranche
is to be converted into or continued as a Eurodollar Tranche and (z) the date of
the proposed conversion or continuation (which shall be a Business Day). If
Transferor shall not have delivered a timely notice in accordance with this
section with respect to any Tranche, the Tranche shall, at the end of the
Interest Period applicable to it (unless repaid pursuant to the terms hereof),
automatically be converted into or continued as an ABR Tranche. The Agent shall
promptly advise the Purchasers of any notice given pursuant to this section and
of each Purchaser's portion of any converted or continued Tranche.
(c) In accordance with Section 4.1 of the Supplement, each Purchaser
and the Agent will be entitled to receive additional interest (at the rate
specified therein) on amounts that are not paid when due under this Agreement or
under its Certificate.
SECTION 4.2 Fees. On the Effective Date, Howmet shall pay to the Agent
the fees specified in the fee letter, dated October 20, 1995, delivered by
Servicer to the Agent, for the account of the Persons specified in such letter.
SECTION 4.3 Yield Protection. (a) Notwithstanding any other provision
herein, if, after the date hereof, either:
(i) the adoption of any law, rule or regulation (including any
imposition or increase of reserve requirements) or any change after the
date hereof in the interpretation or administration of any law, rule or
regulation by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
(ii) the compliance by a Purchaser with any new or revised
guideline or request from any central bank or other Governmental
Authority or quasi-governmental authority exercising control over banks
or financial institutions generally (whether or not having the force of
law),
shall subject a Purchaser to the imposition or modification of any reserve
(including any imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar requirement that
takes the form of a tax) against assets of, deposits with or for the account
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of, or credit extended by, the Purchaser or the office from time to time that it
designates to the Agent as the office through which it makes and maintains its
Purchases comprising part of the Eurodollar Tranche (as to each Purchaser, its
"LIBOR Office") or impose any other condition on a Purchaser affecting its
Eurodollar Tranche or its obligations hereunder, and as a result of either of
the foregoing there shall be any increase in the cost to the Purchaser of
agreeing to make or making, funding or maintaining Purchases as a Eurodollar
Tranche (except to the extent already included in the determination of the
Reserve Adjusted Eurodollar Rate), or there shall be a reduction in the amount
received or receivable by the Purchaser or its LIBOR Office, then, upon written
notice from the Purchaser to Transferor and Servicer (with a copy to the Agent)
, signed by an officer of the Purchaser with knowledge of and responsibility for
such matters, and setting forth in reasonable detail the calculation used to
arrive at the amounts, additional amounts sufficient to indemnify that Purchaser
against the increased cost or reduction in amounts received or receivable shall
constitute "Additional Amounts" for purposes of the Supplement, and the
Purchaser shall be entitled to receive these additional amounts, solely from
amounts allocated thereto and paid pursuant to the Supplement.
(b) If a Purchaser shall reasonably determine that the adoption after
the date hereof of any law, rule or regulation regarding capital adequacy or
capital maintenance, or any change after the date hereof in any of the foregoing
or in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Purchaser, any of its lending
offices or its holding company with any new or revised request or directive
regarding capital adequacy or capital maintenance (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Purchaser's capital or the capital of its holding company as a consequence of
this Agreement, the Purchase made by the Purchaser pursuant hereto to a level
below what the Purchaser or its holding company could have achieved but for the
adoption, change or compliance (taking into consideration the Purchaser's
policies, and the policies of its holding company, with respect to capital
adequacy), then, upon written notice from the Purchaser to Transferor and
Servicer (with a copy to the Agent), signed by an officer of the Purchaser with
knowledge of and responsibility for such matters, and setting forth in
reasonable detail the calculation used to arrive at the amounts, any additional
amounts as will compensate the Purchaser or its holding company for the
reduction shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
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(c) A Purchaser will act reasonably and in good faith (and use
reasonable attribution methods) in determining any additional amounts due
pursuant to subsection (a) or (b), as the case may be, and shall promptly notify
Transferor, Servicer and the Agent in writing of any event of which it has
knowledge occurring after the date hereof that will entitle it to compensation
pursuant to this section. A certificate of the Purchaser, signed by an officer
of the Purchaser with knowledge of and responsibility for such matters, and
setting forth in reasonable detail the calculation used to arrive at the amounts
necessary to compensate the Purchaser or its holding company as specified in
subsection (a) or (, as the case may be, shall be delivered to Transferor and
Servicer and shall be conclusive absent demonstrable error.
(d) Failure on the part of a Purchaser to demand compensation for any
amounts as specified in subsection (a) or (b) with respect to any period shall
not constitute a waiver of its right to demand compensation with respect to that
period or any other period. The protection of this section shall be available to
the Purchasers regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed.
(e) Promptly after giving any notice to Transferor pursuant to this
section, a Purchaser will seek to designate one of its offices located at an
address other than that previously designated pursuant to this Agreement as the
office from which its Purchase will be maintained after the designation if it
will avoid the need for, or materially reduce the amount of, any payment to
which the Purchaser would otherwise be entitled pursuant to this section and
will not, in the reasonable discretion of the Purchaser, be otherwise
disadvantageous to the Purchaser.
SECTION 4.4 Illegality; Unavailability. (a) In the event that on any
date any Purchaser shall have reasonably determined (which determination shall
be final and conclusive and binding upon all parties) that the continuation of
its Purchase as a Eurodollar Tranche has become unlawful by compliance by the
Purchaser in good faith with any law, governmental rule, regulation or order or
has become impossible as a result of a contingency occurring after the date
hereof that materially and adversely affects its interbank eurodollar market,
then, and in any such event, that Purchaser shall promptly give notice (by
telephone confirmed in writing) to Transferor, Servicer and the Agent (which
notice the Agent shall promptly transmit to each Purchaser) of that
determination. The obligation of the affected Purchaser to maintain its Purchase
as a Eurodollar Tranche during any such period shall be terminated at the
earlier of the termination of the Interest Period then in effect for such
Eurodollar Tranche or when required by law, and Transferor shall, no later than
the time specified for the termination, convert the portion of the Purchase
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of the affected Purchaser that constitutes part of the Eurodollar Tranche into a
part of the ABR Tranche.
(b) If, prior to the beginning of any Interest Period, the Agent shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that: (i) Dollar deposits in the relevant amount
and for the Interest Period are not available in the relevant interbank
eurodollar market or (ii) by reason of circumstances affecting the interbank
eurodollar market, that adequate and fair means do not exist for ascertaining
the Reserve Adjusted Eurodollar Rate applicable to the Eurodollar Tranche, then
the Agent shall promptly give notice of this determination to Transferor and to
each Purchaser. Thereafter, and continuing until the Agent shall notify
Transferor that the circumstances giving rise to this determination no longer
exist, (x) the Eurodollar Tranche will, on the last day of the applicable
Interest Period, convert into a part of the ABR Tranche and (y) the right of
Transferor to request a Eurodollar Tranche shall be suspended.
SECTION 4.5 Indemnity. If a Purchaser shall incur any losses, expenses
or liabilities (including any interest paid to lenders of funds borrowed by it
to fund its Purchase of its Certificate as a Eurodollar Tranche and any loss
sustained in connection with the re-deployment of such funds) as a result of (a)
the failure of such Purchase to be made on the Effective Date (other than any
such failure resulting from the Purchaser's default in the performance of its
obligations hereunder) or (b) any repayment, including under Section 3.1, of any
part of the Invested Amount allocated to the Eurodollar Tranche on a date that
is not the last day of the Interest Period applicable to that part of the
Invested Amount or that is any date other than the date specified in a notice of
repayment given by Trustee, then, upon written notice (which notice shall be
signed by an officer of the Purchaser with knowledge of and responsibility for
such matters and shall set forth in reasonable detail the basis for requesting
the amounts) from the Purchaser to Transferor and Servicer, additional amounts
sufficient to indemnify the Purchaser against the losses, expenses and
liabilities, but not for any lost profits associated therewith, shall constitute
"Additional Amounts" for purposes of the Supplement, and the Purchaser shall be
entitled to receive these additional amounts, solely from amounts allocated
thereto and paid pursuant to the Supplement.
SECTION 4.6 Taxes. (a) Any and all payments made to each Purchaser
under its Certificate shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or assessed,
excluding taxes imposed by the jurisdiction in which that
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Purchaser's principal office (and/or the office where it books its investment in
its Certificate) is located on all or part of the net income, profits or gains
of that Purchaser (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise) (all the nonexcluded taxes, levies, imposts, charges, deductions,
withholdings and liabilities being hereinafter referred to as "Taxes"), except
to the extent required by law. If Trustee or the Agent is required by law to
deduct or withhold any Taxes from or in respect of any sum payable hereunder or
under any Certificate to a Purchaser, then the sum payable shall be increased by
the amount necessary to yield to such Purchaser (after payment of all Taxes) an
amount equal to the sum it would have received had no such deductions or
withholdings been made, and the additional amount shall constitute "Additional
Amounts" for purposes of the Supplement, and the Purchaser shall be entitled to
receive these additional amounts, solely from amounts allocated thereto and paid
pursuant to the Supplement.
(b) Whenever any Taxes are paid by Trustee pursuant to subsection (a),
as promptly as possible thereafter Servicer shall send to the relevant Purchaser
the original or a certified copy of an original official receipt showing payment
thereof (if any) or any other evidence of the payment as may be available to
Servicer through the exercise of its reasonable efforts. If Trustee falls to pay
any Taxes when due to the appropriate taxing authority or falls to remit to the
Purchaser the required receipts or other required documentary evidence, the
Purchaser shall be entitled to receive, solely from amounts allocated with
respect thereto and paid pursuant to the Supplement, additional amounts
necessary to indemnify it for any incremental taxes, interest or penalties that
may become payable by the Purchaser as a result of any such failure, and the
amounts shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) On or before the date it becomes a party to this Agreement (or, in
the case of an Affected Party, on or before the date it becomes a Support Bank)
and, so long as it may properly do so, periodically thereafter, to keep forms up
to date, each Purchaser (including any Assignee) and Affected Party that is not
a United States person (as defined in section 7701(a)(30) of the Internal
Revenue Code), shall deliver to Trustee any certificates, documents or other
evidence that shall be required by the Internal Revenue Code or Treasury
Regulations issued pursuant thereto to establish that, assuming the Certificates
are properly characterized as indebtedness for Federal income tax purposes, it
is exempt from existing United States Federal withholding (including backup
withholding) requirements, including (i) two original copies of Internal Revenue
Service Form 4224 or successor applicable form, properly completed
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and duly executed by the Purchaser or Affected Party certifying that it is
entitled to receive payments under this Agreement or any Certificate without
deduction or withholding of any United States Federal income taxes, and (ii) an
original copy of Internal Revenue Service Form W-8 or W-9 or applicable
successor form, properly completed and duly executed, establishing that it is
entitled to an exemption from a backup withholding; provided, that if any
Purchaser or Affected Party fails to comply with this subsection 4.6(c) (it
being understood that a Purchaser's or Affected Party's inability to properly
provide the documents described herein after the date it becomes a party hereto,
in the case of a Purchaser, or the date it becomes a Support Bank, in the case
of an Affected Party, shall not constitute failure to comply with this
subsection 4.6(c)), amounts payable to such Purchaser or such Affected Party (as
the case may be) under this Section 4.6 shall be limited to amounts that would
have been payable under this section if such Purchaser had so complied. Each
Purchaser, including any Assignee, shall notify Trustee of any change in
circumstances or lapse in time which renders any form provided by such Purchaser
pursuant to this subsection 4.6(c) obsolete to the extent that such Purchaser is
no longer exempt from existing United States Federal withholding (including
backup withholding) requirements.
(d) On or before the date it becomes a party to this Agreement (and, so
long as it may properly do so, periodically thereafter, to keep forms up to
date), each Purchaser, including any Assignee, (other than any such Purchaser or
Assignee organized as a corporation under the laws of any state of the United
States) that is a United States person (as defined in Section 7701(a)(30) of the
Internal Revenue Code), shall deliver to Trustee an original copy of Internal
Revenue Service Form W-9 or applicable successor form, properly completed and
duly executed, certifying its exemption from backup withholding.
(e) If any Additional Amount under this Section 4.6 is paid to a
Purchaser and such Purchaser determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its tax liabilities in or with respect to the
taxable year in which the Additional Amount is paid, such Purchaser shall pay to
the Transferor an amount that such Purchaser shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by such
Purchaser in such year as a consequence of such refund, reduction or credit.
ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment. (a) All amounts payable to any
Purchaser hereunder or with respect to its Certificate shall be made to the
Agent for the account of the Purchaser by wire transfer of immediately
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available funds in Dollars not later than 2:00 p.m., New York City time, on the
date due. Any funds received after that time will be deemed to have been
received on the next Business Day. The Agent shall distribute all payments to
the Purchasers, in accordance with their respective interests, prior to the
close of business on the Business Day on which any payment is deemed received.
(b) On any date on which a payment to one or more Purchasers hereunder
or under the Certificates is due and payable, the Agent may (but in no event
shall be required to) assume that the payment has been made available to the
Agent on the date of the payment in accordance with this section, and the Agent
may (but in no event shall be required to), in reliance upon this assumption,
make payment of a corresponding amount to the Purchasers. If and to the extent
any amounts shall not have so been made available to the Agent, each Purchaser
irrevocably and unconditionally agrees to repay to the Agent forthwith on demand
the amount of payment it received together with interest thereon, for each day
from the date payment is made by the Agent until the date the amount is repaid
to the Agent, (i) for the first three days following the date the payment is
made, at a rate per annum equal to the Federal Funds Rate and (ii) thereafter,
at a rate per annum equal to the Federal Funds Rate plus 1%.
SECTION 5.2 Pro Rata Treatment; Percentages. (a) Each repayment of the
principal of the Certificates, each payment of interest thereon and each
conversion or continuation of any Tranche (except as otherwise required by
Section 4.4(a) with respect to conversions) shall be allocated pro rata among
the Purchasers on the date of payment or reduction, in accordance with their
respective Class Percentages.
(b) For purposes of this Agreement, (i) "Class Percentage" means, with
respect to each Purchaser, the percentage equivalent (carried out to twelve
decimal places) of a fraction, the numerator of which is the Stated Amount of
such Purchaser's Certificate and the denominator of which is the sum of the
Stated Amounts of all of the Purchasers' Certificates, and (ii) "Series
Percentage" means, with respect to each Purchaser, the percentage equivalent
(carried out to twelve decimal places) of a fraction, the numerator of which is
the Stated Amount of such Purchaser's Certificate and the denominator of which
is the sum of the Stated Amounts for all of the Series 1996-1 Certificates. The
initial Class Percentages and Series Percentages of the initial Purchasers are
set forth opposite their names in Schedule L
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor. As of the Effective Date, Transferor represents
and warrants to the Purchasers that each of its representations and
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warranties in the Pooling Agreement and Purchase Agreement is true and correct,
as if made on the Effective Date, and further represents and warrants that:
(a) no Early Amortization Event or Unmatured Early
Amortization Event exists;
(b) assuming the accuracy of the Purchaser's representations
set out in Section 6.3 and that no Purchaser (and no Person acting on
any Purchaser's behalf) has made a general solicitation or general
advertising within the meaning of the Securities Act, the offer and
sale of the Certificates in the manner contemplated by this Agreement
is a transaction exempt from the registration requirements of the
Securities Act, and the Pooling Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended;
(c) except for First Chicago Capital Markets, Inc. and BT
Securities Corporation (collectively, the "Financial Advisors"),
Transferor has not dealt with any financial advisor, or other Person
who may be entitled to any commission or compensation in connection
with the sale of the Certificates; and the fees of the Financial
Advisors shall not be an obligation of the Purchasers; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.2 Howmet. As of the Effective Date, Howmet represents and
warrants to the Purchasers that:
(a) each of its representations and warranties in the Pooling
Agreement (in its capacity as Servicer) and the Purchase Agreement (in
its capacity as a Seller) is true and correct, as if made on the
Effective Date with the same effect as if made on that date (unless
specifically stated to relate to an earlier date);
(b) the Pro Forma Financial Data present fairly in all
material respects the pro forma financial position, results of
operations and cash flows of Howmet and its consolidated Subsidiaries
at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent
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basis, except as otherwise stated therein (except, in the case of quarterly
financial statements, for the omission of footnotes and ordinary year-end
adjustments, none of which, individually or in the aggregate, would be
material);
(c) since September 30, 1995 through to the Effective Date
(and except as contemplated in the Pro Forma Financial Data), (i) there
has been no material adverse change in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
Transferor or Howmet, whether or not arising in the ordinary course of
business, and (ii) there have been no transactions (except the
execution and delivery of Transaction Documents, the Howmet Credit
Agreement and the Note Indenture, and the consummation of the
transactions and refinancings contemplated thereby) entered into by
Transferor or Howmet that are material with respect to the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of Transferor or Howmet; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.3 Purchasers. As of the Effective Date (or such later date on
which it acquires its Certificate in accordance with Section 10.3), each
Purchaser represents and warrants (and each Assignee shall be deemed to
represent and warrant as of the date that its assignment becomes effective)
that:
(a) it is a "qualified institutional buyer" as that term is
defined under Rule 144A of the Securities Act and it is not purchasing
its Certificate with a view to making a distribution thereof (within
the meaning of the Securities Act);
(b) it has all necessary corporate power and authority, and
has taken all action necessary, to execute and deliver this Agreement
and the other Transaction Documents to which it is a party, to fulfill
its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby;
(c) it is not a pension, profit sharing or other employee
benefit plan subject to ERISA, and the assets being used to purchase
its
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Certificate do not constitute the assets of any "benefit plan investor" (as
defined under ERISA);
(d) such Purchaser's making and performance of this Agreement
and the other Transaction Documents to which it is a party do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other law or regulation applicable to it;
(e) this Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by it and
constitute its legal, valid and binding obligation, enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law; and
(f) all approvals, authorizations or other actions by, or
filing with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement and the other
Transaction Documents to which it is a party have been obtained.
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase. The obligation of each Purchaser to
Purchase its Certificate shall be subject to the satisfaction of the conditions
precedent that (x) the Agent shall have received, for the account of such
Purchaser, a duly executed and authenticated Certificate registered in its name
and in a Stated Amount equal to the amount set out opposite its name on the
signature pages of this Agreement, (y) the Agent shall have received certain
fees and reimbursement of any expenses referred to in Section 10.5 for which
invoices have been presented and (z) the Agent shall have received, for the
account of such Purchaser, an original (except as indicated below) counterpart
of the following (each of which, if not in a form attached to this Agreement,
shall be in form and substance satisfactory to the Agent):
(a) certified copies of the Pooling Agreement, the Purchase
Agreement and the Guaranty, each of which shall be in full force and
effect, and evidence that all actions required to be taken under those
documents in connection with the issuance of the Certificates shall
have been taken;
(b) photocopies of each Account Agreement;
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(c) a certificate of the Secretary, or an Assistant Secretary,
of each of Transferor, Servicer, Guarantor and each Seller with respect
to:
(i) attached copies of resolutions of its Board of
Directors then in full force and effect authorizing the
execution, delivery and performance of the Transaction
Documents;
(ii) the incumbency and signatures of those of its
officers authorized to act with respect to the Transaction
Documents; and
(iii) attached copies of its certificate of
incorporation and by-laws;
(d) a certificate of an Authorized Officer of each of
Transferor, Servicer, Guarantor and each Seller stating that, as of the
Effective Date, before and after giving effect to the Purchases and to
the application of any proceeds therefrom, the following statements
shall be true:
(i) the representations and warranties of Transferor,
Servicer, Guarantor and each Seller set out in this Agreement
and the other Transaction Documents are true and accurate as
of the Effective Date (unless specifically stated to relate to
an earlier date); and
(ii) no Early Amortization Event or Unmatured Early
Amortization Event has occurred and is continuing;
(e) a certificate of an appropriate officer of Trustee stating
that the Pooling Agreement has been duly authorized, executed and
delivered by Trustee and the Certificates have been duly authenticated
by Trustee in accordance with the Pooling Agreement, and an opinion of
counsel to Trustee as to related matters;
(f) results of recent searches of the UCC filing records and
tax and ERISA and judgment lien records, updating each of the searches
performed in connection with the issuance by Transferor of the Series
1995-1 Certificates, showing no filings of record that cover any of the
Receivables or the Related Transferred Assets, other than the financing
statements filed in connection with the issuance of the Series 1995-1
Certificates;
(g) the following opinions addressed to the Agent, the
Purchasers and Trustee, and in each case as to the matters and in such
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form and substance as shall be satisfactory to the Agent, the Purchasers
and Trustee:
(i) opinions of Latham & Watkins as to certain
corporate and securities matters, Federal and state tax and
UCC matters, true sale and non-consolidation;
(ii) opinions of (A) Paul, Hastings, Janofsky &
Walker, (B) Kummer Kaempfer Bonner & Renshaw and (C) Vorys,
Sater, Seymour and Pease as to certain corporate, state tax
and UCC matters; and
(iii) the opinion of Roland Paul, General Counsel to
Servicer, as to certain corporate matters;
(h) the Daily Report for the Effective Date;
(i) evidence, reasonably satisfactory to the Agent
and the Purchasers, of the payment of all taxes, fees and
other governmental charges, if any, incidental to the issuance
of the Certificates and to the consummation of the
transactions contemplated hereunder and under the Pooling
Agreement;
(j) a certificate of the Secretary of Howmet to the effect
that there is not, nor has there at any time been, any matured or
unmatured "Event of Default" or "Potential Event of Default" under (and
as defined in) the Howmet Credit Agreement, other than as a result of
failure to provide 1995 audited financial statements;
(k) copies of any management or other agreements with regard
to the administration of Transferor's business, certified by an
Authorized Officer of Transferor;
(l) a pro-forma balance sheet of Transferor as of the
Effective Date, after giving effect to the transactions contemplated by
the Supplement, certified by an appropriate officer of Transferor; and
(m) any other information, certificates, opinions and
documents as the Agent or Credit Suisse may have reasonably requested.
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ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants. Transferor and Howmet each severally
covenant and agree that, until the Certificates have been paid in full, it will:
(a) duly and timely perform all of its covenants and
obligations under each Transaction Document to which it is a party;
(b) with reasonable promptness deliver to each Purchaser such
information, documents, records or reports respecting the Program or
the Receivables as the Purchaser may from time to time reasonably
request; and
(c) at the same time any report (including any Dally Report,
Monthly Report or annual auditors' report), notice or other document is
provided, or caused to be provided, by Transferor or Servicer to
Trustee under the Pooling Agreement, provide the Agent and each
Purchaser with a copy of the report.
In addition, it is understood and agreed that so long as the
Certificates remain outstanding, Servicer and Transferor shall (and Servicer
shall cause each Seller to) during regular business hours and (so long as no
Early Amortization Event has occurred and is continuing) upon two Business Days
prior written notice, permit Trustee, the Agent or the Purchasers whose
aggregate Class Percentages exceed 50% (the "Majority Class B Purchasers") or
such other Person as Trustee, the Agent or the Majority Class B Purchasers may
designate from time to time), or their respective agents or representatives
(including certified public accountants or other auditors), as an expense of
Servicer paid out of the Servicing Fee, (i) to examine and make copies of and
abstracts from, and to conduct accounting reviews of, all Records in the
possession or under the control of Servicer, Transferor or any Seller, including
the related Contracts and purchase orders, invoices and other agreements related
thereto, and (ii) to visit the offices and properties of Servicer, Transferor or
any Seller for the purpose of examining such materials described in clause (i),
and to discuss matters relating to the Receivables or the Related Transferred
Assets or the performance by Servicer, Transferor or any Seller of their
respective obligations under any Transaction Document with any officer, employee
or representative of Servicer, Transferor or any Seller. Trustee, the Agent or
the Majority Class B Purchasers may (but shall not be obligated to) conduct, or
cause their respective agents or representatives to conduct, reviews of the
types described in this paragraph (each such review, a "Receivables Review")
whenever Trustee, the Agent or the Majority Class B Purchasers, in
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its or their reasonable judgment, deem any such review appropriate; provided
that, unless an Early Amortization Event or an Unmatured Early Amortization
Event shall exist, (x) no more than two Receivables Reviews shall be conducted
by or at the request of the Agent in any calendar year, and (y) no more than two
Receivables Reviews shall be conducted by or at the request of the Majority
Class B Purchasers in any calendar year; and provided further, this Section 8.1
shall limit the powers of Trustee under Section 3.5(b) of the Pooling Agreement.
SECTION 8.2 Negative Covenants. Notwithstanding Section 1.7 of the
Purchase Agreement, Howmet shall not cause or permit any of its Subsidiaries to
become a new Seller without satisfying the Approval Condition unless the
Required Purchasers have consented in writing to that addition.
SECTION 8.3 Transfers. Each Purchaser agrees that it will not transfer
its Certificate (or any portion thereof) to any Person unless such Person shall
have provided the Trustee and Transferor with a certificate to the effect that
such Person: (a) is a "qualified institutional buyer," as that term is defined
under Rule 144A of the Securities Act and is not purchasing its Certificate with
a view to making a distribution thereof (within the meaning of the Securities
Act), and (b) is not a pension, profit sharing or other employee benefit plan
subject to ERISA.
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment. The Purchasers hereby designate The First
National Bank of Chicago as Agent. Each Purchaser hereby irrevocably authorizes
the Agent to take action on its behalf under the provisions of the Transaction
Documents and any other instruments and agreements referred to therein and to
exercise the powers and perform the duties hereunder and thereunder that are
specifically delegated to or required of the Agent by the terms hereof and
thereof, and any other powers as are reasonably incidental thereto. The Agent
may perform any of its duties by or through its respective officers, directors,
agents or employees.
SECTION 9.2 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement. Neither the
Agent nor any of its officers, directors, agents or employees shall be liable
for any action taken or omitted by it or them under any Transaction Document or
in connection herewith or therewith, unless caused by their gross negligence or
willful misconduct. The duties of the Agent shall be mechanical and
administrative in nature, the Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Purchaser, and nothing in any
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Transaction Document, expressed or implied, is intended to or shall be construed
as to impose upon the Agent any obligations in respect of any Transaction
Document except as expressly set forth herein.
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors.
Independently and without reliance upon the Agent or the Financial Advisors,
each Purchaser, to the extent it deems appropriate, has made and shall continue
to make (a) its own independent investigation of the financial condition and
affairs of Transferor, the Seller, Servicer and the Trust in connection with the
making and the continuation of each Purchase and the taking or not taking of any
action in connection herewith and (b) its own appraisal of the creditworthiness
of Transferor, the Seller and Servicer and the merits and risks of an investment
in the Certificates, and, except as expressly provided in this Agreement, the
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Purchaser with any credit or other information
with respect thereto, whether coming into its possession before the making of a
Purchase or at any time or times thereafter. The Agent shall not be responsible
to any Purchaser for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Transaction Documents or the financial condition of Transferor, the Sellers,
Servicer or the Trust or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of any
Transaction Document, or the financial condition of Transferor, the Sellers,
Servicer or the Trust or the existence or possible existence of any Early
Amortization Event or Unmatured Early Amortization Event.
SECTION 9.4 Certain Rights of Agent. If the Agent shall request
instructions from the Required Purchasers with respect to any act or action
(including failure to act) in connection with any Transaction Document, the
Agent shall be entitled to refrain from acting or taking the action unless and
until the Agent shall have received instructions from the Required Purchasers,
and the Agent shall not incur liability to any person by reason of so
refraining. Without limiting the foregoing, no Purchaser shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under any Transaction Document in accordance with the
instructions of the Required Purchasers as for refraining to act in the absence
of instruction.
SECTION 9.5 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
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radiogram, order or other document or telephone message signed, sent or made by
any person that the Agent believed to be the proper person. The Agent may
consult with legal counsel (including counsel for any Howmet Person),
independent public accountants and other experts selected by the Agent and shall
not be liable for any action taken or omitted to be taken in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.6 Indemnification. To the extent the Agent is not reimbursed
and indemnified by Transferor or Servicer, the Purchasers will reimburse and
indemnify the Agent (or cause the Agent to be reimbursed and indemnified)
ratably in accordance with their respective Series Percentages from and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements of whatsoever kind
or nature that may be imposed on, asserted against or incurred or suffered by
the Agent (including fees and expenses of legal counsel, accountants and
experts) in performing its duties or as a result of any action taken or omitted
to be taken by the Agent under any Transaction Document or in any way relating
to or arising out of any Transaction Document; provided that no Purchaser shall
be liable for any portion of these liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable order).
SECTION 9.7 Agent in Its Individual Capacity. The Agent and its
respective Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with Transferor or
Servicer or any Howmet Person as if the Agent was not performing the duties
specified herein, and may accept fees and other consideration from Transferor or
Servicer for services in connection with this Agreement and otherwise without
having to account for the same to the Purchasers. Each of the parties hereto
acknowledges that the Agent will be acting both as agent and as a lender under
the Howmet Credit Agreement.
SECTION 9.8 Resignation by Agent. (a) The Agent may resign at any time
by giving notice to Transferor, the Purchasers and any other Agent, if any. Such
resignation shall be effective immediately unless the resigning Agent is the
only Agent, in which event the resignation of such Agent shall take effect upon
the appointment of a successor Agent pursuant to subsections ( and (c) below or
as otherwise provided below.
(b) In the event that there is only one Agent, upon any notice of
resignation of such Agent, the Required Purchasers shall appoint a successor
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Agent hereunder who shall be a commercial bank or trust company reasonably
acceptable to Transferor (it being understood and agreed that any Purchaser is
deemed to be acceptable to Transferor).
(c) If a successor Agent is not appointed pursuant to subsection (
within 30 days after the delivery of the notice referred to in subsection (a),
the resigning Agent, with the consent of Transferor, shall then appoint a
successor Agent who shall serve as Agent hereunder until the time, if any, that
the Required Purchasers appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to subsection (
or (c) above by the 60th day after the date notice of resignation was given by
the resigning Agent, such Agent's resignation shall become effective and the
Purchasers shall thereafter perform all the duties of the Agent under the
Transaction Documents until the time, if any, that the Purchasers appoint a
successor Agent as provided above.
SECTION 9.9 Required Purchasers. "Required Purchasers" means:
(i) for purposes of instructing the Trustee to declare that
the Early Amortization Period has commenced pursuant to Section 6.2 of
the Supplement, either (x) Holders of Certificates whose aggregate
Class Percentages exceed 50% or (y) Holders of Class A Certificates
whose aggregate Class Percentages (as defined in the Class A
Certificate Purchase Agreement) exceed 50%; and
(ii) for all other purposes, both (x) Holders of Certificates
whose aggregate Class Percentages exceed 50% and (y) Holders of Class A
Certificates whose aggregate Class Percentages (as defined in the Class
A Certificate Purchase Agreement) exceed 50%.
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments. Except as provided in Section 13.1(a) or (b)of
the Pooling Agreement, neither Transferor nor Howmet shall amend, waive or
otherwise modify any provision of any Transaction Document to which it is a
party, consent to any departure therefrom, or grant any consent thereunder,
unless the same shall have been consented to in writing by the Required
Purchasers prior to the effectiveness of the same; provided, however, that no
amendment shall (a) decrease in any manner the amount of, or delay the timing
of, any allocation, payment or distribution in respect of any Certificate
without the prior written consent of each Purchaser affected thereby, (b)amend,
modify or waive any provision of this Agreement that
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requires the approval or consent of a specified percentage of Purchasers without
the prior written consent of that percentage of Purchasers, (c) amend, modify or
waive the provisions of this section with respect to the rights of any Purchaser
without the consent of that Purchaser, (d) waive any Early Amortization Event
arising from a Bankruptcy Event with respect to Transferor or any Seller without
the consent of each Purchaser, (e) amend or modify the Series Percentage or
Class Percentage of any Purchaser without its prior written consent, (f) waive
any of the requirements hereunder that the interests of Trustee in the
Receivables and the other Transferred Assets be perfected by appropriate UCC
filings without the prior written consent of each Purchaser or (g) amend, modify
or otherwise affect the rights or duties of the Agent hereunder without the
prior written consent of the Agent; provided further that neither the execution
and delivery of a Supplement relating to a refinancing of the Certificates as
contemplated by Section 4.9 of the Supplement relating to the Certificates, nor
any other amendment to the Transaction Documents in connection with such a
refinancing, shall require any consent from any Purchaser, so long as the prior
or contemporaneous repayment in full of the Certificates in accordance with
Section 5.2 of the Supplement relating to the Certificates is a condition to the
issuance of the refinancing certificates, and of the effectiveness of such
related amendment. Each Purchaser shall be bound by any modification, waiver or
consent authorized by this section, whether or not its Certificate shall have
been marked to indicate the modification, waiver or consent.
SECTION 10.2 No Waiver; Remedies. Any waiver, consent or approval given
by any party hereto shall be effective only in the specific instance and for the
specific purpose for which given, and no waiver by a party of any breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. No failure on the part of any party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce the right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other right. No notice
to or demand on any party hereto in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.3 Successors and Assigns; Assignments. (a) This Agreement
shall be binding upon, and inure to the benefit of, Transferor, Servicer, the
Agent, the Purchasers and their respective successors and assigns; provided that
neither Transferor nor Servicer may assign its rights or obligations hereunder
or in connection herewith or any interest herein
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(voluntarily, by operation of law or otherwise) without the prior written
consent of all the Purchasers, except that the Servicer may be terminated in
accordance with Sections 10.1 and 10.2 of the Pooling Agreement; and provided
further, that no Purchaser or Participant may transfer, pledge, assign, sell
participations in or otherwise encumber its rights or obligations hereunder or
any interest herein except as permitted under this Section 10.3.
(b) Subject to the terms of Section 10.3(f), each Purchaser may at any
time sell to one or more banks or other entities ("Participants") participating
interests in all or any portion of its Certificate and its obligations hereunder
(its "Credit Exposure"); provided that such Participant shall have certified to
the selling Purchaser that such Participant is a "qualified institutional buyer"
(as defined under Rule 144A of the Securities Act) or that such sale is not
required to be registered under the Securities Act or any other applicable
securities laws. In the event of any sale by a Purchaser of participating
interests to a Participant, the Purchaser shall notify Transferor of the
identity of the Participant upon a request by Transferor, the Purchaser's
obligations under this Agreement shall remain unchanged, the Purchaser shall
remain solely responsible for the performance thereof, and the Purchaser shall
remain the holder of its rights under its Certificate and this Agreement for all
purposes under this Agreement, and the other parties to the Transaction
Documents shall continue to deal solely and directly with the Purchaser in
connection with such rights and obligations under this Agreement. Other than in
the case of a sale, transfer, assignment or conveyance of a participating
interest by Alpine Securitization Corp. to a Permitted Transferee prior to any
rights of a proposed Participant being recognized hereunder or under any other
Transaction Document or Certificates, the Purchaser shall provide, or shall
cause such Participant to provide, to Transferor such information as Transferor
reasonably requests to make the determination required by Section 10.3(f).
Transferor agrees that each Participant shall be entitled to the benefits of
Sections 4.3, 4.5, 4.6 and 10.5 with respect to its participation in the
Certificate. The Purchasers agree that any agreement between them and any
Participant in respect of a participating interest shall require the Participant
to comply with the terms of Section 10.13 and shall not restrict the Purchasers'
right to agree to any amendment, supplement or modification of the Transaction
Documents except to (i) extend the final maturity of any obligation, (ii) reduce
the rate or extend the time of payment of interest thereon or any fees owed to
the Purchasers under the Transaction Documents, (iii) reduce the principal
amount of any obligation, (iv) release or direct the release of all or
substantially all of the Transferred Assets or Trustee's claim to the
Transferred Assets, (v) reduce substantially the amount of any reserve included
in the calculation of the Base Amount, (vi) increase the amount of the
participation from the amount thereof then in effect, or (vii) permit assignment
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or transfer by Transferor or any Seller of its rights or obligations under the
Transaction Documents.
(c) Subject to the terms of Section 10.3(f), any Purchaser may at any
time assign to any Permitted Transferee or to one or more banks or other
financial institutions (each, an "Assignee") all or any part of its Credit
Exposure; provided that (i) unless assigned to an Affiliate of the Purchaser or
to a Permitted Transferee, it assigns all of its Credit Exposure or a portion of
its Credit Exposure in an amount not less than $2,500,000, (ii) such Assignee,
other than an existing Purchaser, an Affiliate of the Purchaser or a Permitted
Transferee, must be reasonably acceptable to the Agent and Transferor, which
acceptance shall not be delayed or withheld unreasonably (it being understood
that acceptance may be withheld due to the failure to satisfy Section 10.3(f)),
(iii) if such Assignee is not a United States person (as defined in section
7701(a)(30) of the Internal Revenue Code), such Assignee shall satisfy the
requirements of Section 4.6(c), provided, that if such Assignee thereafter fails
to comply with the requirements of Section 4.6(c), amounts payable to it under
Section 4.6 shall be limited to amounts that would be payable if such Assignee
had complied with Section 4.6(c), (iv) such Assignee shall have certified to the
assigning Purchaser that such Assignee is a "qualified institutional buyer" (as
defined under Rule 144A of the Securities Act) or that such sale is not required
to be registered under the Securities Act or any other applicable securities
laws, and (v) such Assignee makes the representations and warranties set forth
in Section 6.3 to the Transferor as of the effective date of the assignment. For
purposes of this Section 10.3, a "Permitted Transferee" means Credit Suisse or
any other Person that is at all relevant times a C corporation within the
meaning of section 1361(a)(2) of the Internal Revenue Code listed on the letter
from Credit Suisse to Transferor and the Agent dated the Effective Date, as such
list may be augmented from time to time with the consent of Transferor and the
Agent; provided, however, that the aggregate number of actual assignments to
Permitted Transferees at any time outstanding shall not exceed four. In the
event of any assignment, the Purchaser (x) shall comply with Article VI of the
Pooling Agreement, provided that no Opinion of Counsel shall be required to be
delivered pursuant to subsection 6.3(e) of the Pooling Agreement with respect to
any transfer to a Permitted Transferee, and (y) shall give notice to Transferor
and the Agent and shall deliver to the Agent, for acceptance and recording in
its records, an assignment agreement substantially in the form of Exhibit B
together with a processing and recordation fee of, in the case of assignments to
a Purchaser or an Affiliate of a Purchaser, $1,500 and, in cases of any other
assignment, $3,500; provided that no processing and recordation fee shall be
payable in connection with any assignment by Alpine Securitization Corp. to a
Permitted Transferee. Within five Business Days of receipt thereof, the Agent
shall, if the assignment
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agreement has been fully executed by the Assignee, the assignor Purchaser and
Transferor, is completed and is in substantially the form of Exhibit B, execute
the assignment agreement and record the information contained therein in its
records. Upon the earlier of the expiration of the five Business Day period or
the date of the recording, the assignment will become effective; provided that
any assignment by Alpine Securitization Corp. to a Permitted Transferee shall
not require acceptance or recording by the Agent or Transferor prior to
effectiveness and shall become effective immediately upon receipt by the Agent
of an assignment agreement appropriately completed in substantially the form of
Exhibit B and executed by Alpine Securitization Corp. and the applicable
Permitted Transferee. Transferor, the Agent and the Purchasers agree to extend
the rights and benefits with respect to Transferor under this Agreement to the
Assignee to the extent the Assignee would have had if it were a Purchaser that
was an original signatory to this Agreement; provided, that Transferor shall be
entitled to continue to deal solely and directly with the assignor Purchaser in
connection with the interests so assigned to the Assignee until the assignment
agreement and any requIred fee, as described above, shall have been delivered to
Transferor and the Agent by the Purchaser and the Assignee and the assignment
shall have become effective; provided, further, that notwithstanding anything
herein or in the assignment agreement, the Transaction Documents or any
Certificate to the contrary, an assignment (other than an assignment by Alpine
Securitization Corp. to a Permitted Transferee) shall not become effective, an
Assignee (other than a Permitted Transferee) shall not be recognized as a
Purchaser and no other rights of an Assignee hereunder or under any other
Transaction Document or Certificate shall be recognized unless and until the
assigning Purchaser shall have provided, or caused the Assignee to provide, to
Transferor such information as Transferor reasonably requests to make the
determinations required by Section 10.3(f). If the Transferor has accepted an
assignment pursuant to clause (ii) of the first sentence of Section 10.3(c), the
assigning Purchaser shall be deemed to have provided or caused to be provided
such information. Upon the effective assignment of its Credit Exposure, the
Purchaser shall be relieved of its obligations hereunder to the extent of the
assignment.
(d) The sale or assignment of any Credit Exposure to any Assignee or
Participant (each, a "Transferee") shall not be effective until it has agreed to
be bound by the provisions of Section 10.13. Transferor and Howmet each
authorize the Purchasers to disclose to any Transferee and any prospective
Transferee any and all information in their possession concerning Transferor,
Howmet or any other Seller that has been delivered to them by Transferor,
Howmet, any other Seller or Trustee in connection with their credit evaluation
of the Program prior to entering into this Agreement; provided, however, that
each such Transferee and/or prospective Transferee shall agree to treat all such
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information that is non-public as confidential information in accordance with
customary banking practices, except that each such Transferee and/or prospective
Transferee may share any such non-public information with any of its Affiliates
if such Affiliates agree to treat such information as confidential information
in accordance with customary banking practices.
(e) Notwithstanding any other provisions set forth in this Agreement,
the Purchasers may at any time create a security interest in all or any portion
of their rights under this Agreement and the Certificates in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
(f) No transfer, assignment or other conveyance of, or sale of a
participation interest in, a Certificate (other than in the case of a transfer,
assignment, conveyance or sale by Alpine Securitization Corp. to a Permitted
Transferee) shall be made unless (i) the aggregate outstanding principal amount
of all Certificates transferred, or in which a participation interest is sold,
pursuant to such transfer or sale is equal to a principal amount of Certificates
that would represent at least 2.1% of the total interests in partnership capital
or profits, within the meaning of Treasury Regulation Section 1.7704-1 assuming
the Trust were classified as a partnership for Federal income tax purposes, and
(ii) after giving effect thereto, there shall be no more than three Private
Holders in respect of the Certificates, as reasonably determined by Transferor.
No Certificate may be subdivided into an aggregate principal amount that would
represent less than 2.1% of the total interests in partnership capital or
profits as determined pursuant to the preceding sentence. Any attempted
transfer, assignment, conveyance, participation or subdivision in contravention
of the preceding restrictions, as reasonably determined by the Transferor, shall
be void ab initio and the purported transferor, seller or subdivider of such
Certificate shall continue to be treated as the Certificateholder of any such
Certificate for all purposes of this Agreement.
(g) Each Affected Party with respect to each Purchaser shall be
entitled to receive additional payments pursuant to Sections 4.3, 4.5, 4.6 and
10.5 as though it were a Purchaser under such Sections applied to its interest
in a Certificate; provided that such Affected Party shall not be entitled to
additional payments pursuant to Section 4.6 attributable to its failure or
inability, as of the date it becomes a Support Bank (and, so long as it may
properly do so, periodically thereafter, to keep forms up to date), to satisfy
the requirements of subsection 4.6(c) or 4.6(d) as if it were an Assignee.
(h) Each Affected Party claiming increased amounts described in
Sections 4.3, 4.5, 4.6 or 10.5 shall furnish, through its related Purchaser, to
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the Trustee, the Agent, Servicer and Transferor a certificate setting forth in
reasonable detail the basis and amount of each request by such Affected Party
for any such amounts referred to in such Section, which certificate shall be
prepared in accordance with the requirements of such Section (if any). Each
Affected Party shall promptly notify, through its related Purchaser, the
Trustee, the Agent, Servicer and Transferor of the occurrence of any event of
which such Affected Party is aware that would be likely to result in a demand
for compensation pursuant to Sections 4.3, 4.5, 4.6 or 10.5.
(i) In connection with any proposal that a bank or other financial
institution become a Support Bank for a Purchaser which is a Structured lender,
such Purchaser, at its sole discretion, shall be entitled to distribute to any
proposed Support Bank on a confidential basis any information furnished to such
Purchaser by the Agent pursuant to the Transaction Documents. Each Purchaser
which is a Structured lender shall promptly notify the Agent (who shall promptly
notify Transferor) in writing of the identity and interest of each Support Bank
for such Purchaser promptly upon the obtaining of such Support Bank. Such
Purchaser shall provide to the Agent (who shall, upon request, provide copies of
the same to Transferor, Servicer and the Trustee), with respect to each Support
Bank, such forms as would be required to be furnished by such Support Bank
pursuant to subsections 4.6(c) or 4.6(d) if such Support Bank were an Assignee.
SECTION 10.4 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the Certificates delivered
pursuant hereto shall survive the making and the repayment of the Purchases and
the execution and delivery of this Agreement and the Certificates and shall
continue in full force and effect until all obligations have been paid in full.
In addition, the obligations of Transferor under Sections 4.3, 4.4, 4.5, 4.6 and
10.5 and the obligations of the Purchasers under Section 9.6 shall survive the
termination of this Agreement.
SECTION 10.5 Expenses; Indemnification. Transferor and Howmet jointly
and severally shall pay on demand (a) all reasonable out-of-pocket fees and
expenses (including reasonable attorneys' fees and expenses) of the Agent
incurred in connection with the preparation, execution, delivery,
administration, amendment, modification and waiver of the Transaction Documents
and the making and repayment of the Purchases, including any Servicer or
collection agent fees paid to any third party for services rendered to the
Purchasers and the Agent in collecting the Receivables and (b) all reasonable
out-of-pocket fees and expenses of the Purchasers and the Agent (including
reasonable attorneys' fees and expenses of their counsel) incurred in connection
with the enforcement of the Transaction Documents against
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Transferor, Servicer and the Sellers and in connection with any workout or
restructuring of the Transaction Documents. In addition, Transferor will pay any
and all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, recording or enforcement of
this Agreement or any payment made under the Transaction Documents, and hereby
indemnifies and saves the Agent and the Purchasers harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay the taxes and fees. Transferor and Howmet jointly and severally
agree to reimburse and indemnify the Agent and each Purchaser and their
respective officers, directors, shareholders, controlling Persons, employees and
agents (collectively, the "Indemnitees") from and against any and all actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred or suffered by the Agent or the
Purchasers (including fees and expenses of legal counsel, accountants and
experts) in any way relating to or arising out of any Transaction Document.
Notwithstanding the foregoing (and with respect to clause (y) below,
without prejudice to the rights that an Indemmtee may have pursuant to the other
provisions of the Transaction Documents), in no event shall any Indemnitee be
indemnified against any amounts (v) resulting from gross negligence or willful
misconduct by it or on the part of any of its officers, directors, employees or
agents, (w) to the extent they include amounts in respect of Receivables and
reimbursement therefor that would constitute credit recourse to Servicer for the
amount of any Receivable or Related Transferred Asset not paid by the related
Obligor, (x) to the extent they are or result from lost profits, (y) resulting
from any breach by such Indemnitee of its representations, warranties or
covenants in the Transaction Documents or (z) to the extent they would
constitute consequential, special or punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnitee or is insufficient to hold it harmless, then
Transferor and Howmet jointly and severally shall contribute to the amount paid
by the Indemnitee as a result of any loss, claim, damage or liability in a
proportion that is appropriate to reflect not only the relative benefits
received by the Indemnitee on the one hand and Transferor and Howmet on the
other hand, but also the relative fault of the Indemnitee (if any), Transferor
and Howmet and any other relevant equitable considerations; provided that
Transferor's obligations under this section shall be paid by Transferor only to
the extent that funds are available to make the payments alter all amounts to be
paid to Holders pursuant to Section 4.1 shall have been paid, and there shall be
no recourse to Transferor for all or any part of any amounts payable
page 27
453
pursuant to this section if the funds are at any time insufficient to make all
or part of any such payments.
SECTION 10.6 Entire Agreement. This Agreement, together with the
documents delivered pursuant to Section 7.1 and the other Transaction Documents,
including the exhibits and schedules thereto, contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all
previous oral statements and other writings with respect thereto.
SECTION 10.7 Notices. All communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by
overnight courier or mailed by registered mall, postage prepaid and return
receipt requested, or transmitted by facsimile transmission and confirmed by a
similar mailed writing to any party at the address for that party set forth (a)
on the signature page to this Agreement or (b) to another address as that party
may designate in writing to the Agent and Transferor.
SECTION 10.8 No Third-Party Beneficiaries. Nothing expressed herein is
intended or shall be construed to give any Person (other than the parties hereto
and the Participants and Assignees described in Section 10.3 and, solely to the
extent provided in Section 10.3, the other Affected Parties) any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.9 Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
SECTION 10.10 Counterparts. This Agreement may be executed in any
number of counterparts (which may include facsimile) and by the different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original, and all of which together shall constitute one and the
same instrument.
SECTION 10.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
page 28
454
SECTION 10.12 Tax Characterization. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
purposes of Federal, applicable state and local income and franchise and other
taxes measured by or imposed on income, the Certificates will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust will
not be characterized as an association (or publicly traded partnership) taxable
as a corporation, (b) agrees that the provisions of the Transaction Documents be
construed to further that intent, and (c) agrees to treat the Certificates, for
purposes of Federal, state and local income and franchise and other taxes
measured by or imposed on income, as indebtedness.
SECTION 10.13 No Proceedings. (a) Each of Servicer, the Agent (solely
in its capacity as such) and each Purchaser (solely in its capacity as such)
hereby agrees that it will not institute against Transferor, or join any other
Person in instituting against Transferor, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of "Bankruptcy Event") so
long as any Certificates shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any Certificates shall have
been outstanding. The foregoing shall not limit the right of Servicer, the Agent
or any Purchaser to file any claim in or otherwise take any action with respect
to any insolvency proceeding that was instituted against Transferor by any other
Person.
(b) Each of Servicer, Howmet, Transferor, the Agent (solely in its
capacity as such) and each Purchaser (solely in its capacity as such) hereby
agrees that it will not institute against any Structured Lender, or join any
other Person in instituting against any Structured Lender, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition of
"Bankruptcy Event") for one year plus one day alter the latest maturing
commercial paper note, medium term note or other debt security issued by such
Structured Lender is paid. The foregoing shall not limit the right of Servicer,
the Agent or any Purchaser to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted against such
Structured Lender by any other Person.
(c) Obligations arising under this Section 10.13 shall survive any
termination of this Agreement.
SECTION 10.14 Reference Bank. By its execution of this Agreement, the
Agent, identified as a "Reference Bank" in the Supplement, agrees to act as a
Reference Bank for purposes of the Supplement. The Agent shall notify Servicer
of the Reserve-Adjusted Eurodollar Rate applicable to each Interest Period and
of each change in the Alternate Base Rate.
page 29
455
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------------
Name: Roland Paul
------------------------------
Title: Vice president
-----------------------------
Address: c/o Nevada Corporate Management,
Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION
By: /s/ Roland Paul
--------------------------------
Name: Roland Paul
------------------------------
Title: Vice president
-----------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
456
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: /s/ W. E. Covington
-------------------------------
Title: Authorized Signer
----------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attention: W. Edward Covington
Telephone: (312) 732-5768
Facsimile: (312) 7324487
ALPINE SECURITIZATION CORP.,
as a Purchaser
By: Credit Suisse, New York Branch,
attorney-in-fact
By: /s/ Carl Jackson
--------------------------------
Title: Member of Senior Management
-----------------------------
By: /s/ Roger W. Saylor
--------------------------------
Title: Associate
-----------------------------
Address: 12 E. 49th Street
42nd Floor
New York, New York 10017
Attention: Carl Jackson
Telephone: (212) 238-5370
Facsimile: (212) 238-5332
457
SCHEDULE I
to Certificate Purchase
Agreement Series 1996-1, Class B
AMOUNT OF EACH INITIAL PURCHASER'S CERTIFICATE
----------------------------------------------
Stated Amount of Certificate
Alpine Securitization Corp. $ 7,500,000.00
Class Percentage
Alpine Securitization Corp. 100%
Series Percentage
Alpine Securitization Corp. 14%
458
EXHIBIT A
to Certificate Purchase
Agreement Series 1996-I, Class B
FORM OF SERIES 1996-1 SUPPLEMENT
459
PROJECT BLADE - TAKE OUT
- --------------------------------------------------------------------------------
SERIES 1996-1 SUPPLEMENT
to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TAADERS TRUST COMPANY,
as Trustee
- --------------------------------------------------------------------------------
460
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS .............................. 1
SECTION 1.1 Definitions ........................................... 1
SECTION 1.2 Modification Condition ................................ 22
SECTION 1.3 Incorporation of Terms ................................ 22
ARTICLE II DESIGNATION ..................................................... 23
SECTION 2.1 Designation ........................................... 23
SECTION 2.2 Group I ............................................... 23
SECTION 2.3 Investor Ownership Percentage ......................... 23
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS ........................ 24
SECTION 3.1 Conditions to Issuance ................................ 24
SECTION 3.2 Use of Proceeds ....................................... 24
ARTICLE IV PAYMENTS AND ALLOCATIONS ........................................ 24
SECTION 4.1 Interest; Additional Amounts .......................... 24
SECTION 4.2 Daily Calculations and Group Allocations .............. 25
SECTION 4.3 Allocations of Daily Group Collections
(Other Than in a Group Amortization Period) ......... 25
SECTION 4.4 Allocations of Daily Group Collections
During a Group Amortization Period .................. 27
SECTION 4.5 Withdrawals from the Equalization Account
and Principal Funding Account ....................... 29
SECTION 4.6 Available Subordinated Amount ......................... 29
SECTION 4.7 Write-Offs and Recoveries ............................. 30
SECTION 4.8 Certain Dilution in a Group Amortization Period ....... 31
SECTION 4.9 Optional Early Pay Out ................................ 32
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations 33
SECTION 4.11 Tax Opinion .......................................... 36
SECTION 4.12 Reset of Benchmark Percentages and
Special Concentration Limits ....................... 37
ARTICLE V DISTRIBUTIONS AND REPORTS ........................................ 37
SECTION 5.1 Distributions ......................................... 37
SECTION 5.2 Special Distributions on the Refinancing
Date ................................................ 38
SECTION 5.3 Payments in Respect of Transferor
Certificate ......................................... 39
SECTION 5.4 Daily Reports and Monthly Reports ..................... 39
SECTION 5.5 Annual Tax Information ................................ 39
461
Page
SECTION 5.6 Periodic Perfection Certificate ....................... 40
ARTICLE VI EARLY AMORTIZATION EVENTS ....................................... 40
SECTION 6.1 Early Amortization Events ............................. 40
SECTION 6.2 Early Amortization Period ............................. 43
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES .................. 43
SECTION 7.1 Optional Redemption of Investor Interests ............. 43
SECTION 7.2 Termination ........................................... 44
SECTION 7.3 Indemnification by Transferor ......................... 44
SECTION 7.4 Indemnification by Servicer ........................... 45
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law ......................................... 45
SECTION 8.2 Counterparts .......................................... 45
SECTION 8.3 Severability of Provisions ............................ 46
SECTION 8.4 Amendment, Waiver, Etc ................................ 46
SECTION 8.5 Trustee ............................................... 46
SECTION 8.6 Instructions in Writing ............................... 46
EXHIBITS
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
ii
462
This SERIES 1996-1 SUPPLEMENT, dated as of April 18, 1996 (this
"Supplement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada
corporation, as Transferor, HOWMET CORPORATION, a Delaware corporation
("Howmet"), as Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of December
13,1995, as amended and restated in its entirety by the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18,1996 (as the same may be
further amended, supplemented or otherwise modified from time to time, and as
supplemented hereby, the "Pooling Agreement"), among Transferor, Servicer and
Trustee, Transferor may from time to time direct Trustee to issue and
authenticate, on behalf of the Trust, one or more Series of Certificates in one
or more Groups of Series representing undivided interests in the Transferred
Assets. Certain terms applicable to a Series are to be set forth in a
Supplement. This Supplement is a "Supplement" as that term is defined in the
Pooling Agreement.
Pursuant to this Supplement, Transferor and Trustee shall create a
Series of Certificates and specify certain of their terms.
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS
SECTION 1.1 Definitions. (a) Capitalized terms used and not otherwise
defined herein are used as defined in Appendix A to the Pooling Agreement. This
Supplement shall be interpreted in accordance with the conventions set forth in
Part B of that Appendix A.
(b) Each reference in this Supplement to funds on deposit in the
Carrying Cost Account, the Equalization Account or the Principal Funding Account
(or similar phrase) refers only to funds in the administrative sub-accounts of
those Accounts that are allocated to the Series in Group I. Unless the context
otherwise requires, in this Supplement: (i) each reference to a "Daily Report"
or "Monthly Report" refers to a Daily Report or Monthly Report for Group I; (ii)
each reference to the "Servicing Fee" refers to the Servicing Fee allocable to
Group I; (iii) each reference to the "Series Collection Allocation Percentage"
or the "Series Loss Allocation Percentage" refers to Group I's Series Collection
Allocation Percentage or Series loss Allocation Percentage, and (iv) each
reference to the Transaction Documents shall include a reference to the
Certificate Purchase Agreements.
(c) Each capitalized term defined below relates only to the Series
1996-1 Certificates and to no other Series of Certificates (except to the extent
that certain of such terms are explicitly used as defined herein in any
Supplement relating to another Series in Group I). Whenever used in this
Supplement, the following words and phrases shall have the following meanings:
463
"ABR Tranche" means, at any time, the portion of the Series 1996-1
Invested Amount that is designated by Transferor in accordance with a
Certificate Purchase Agreement to accrue interest based on the Alternate Base
Rate.
"Acquisition Amount" is defined in Section 2.3.
"Additional Amounts" means (a) as to the Series 1996-1 Certificates,
the Prepayment Premium and other amounts payable pursuant to Sections 4.3, 4.5,
4.6 and 10.5 of the Class A Certificate Purchase Agreement and amounts payable
pursuant to Sections 4.3, 4.5, 4.6 and 10.5 of the Class B Certificate Purchase
Agreement, and (b) as to any other Series in Group I, any amounts identified as
"Additional Amounts" in the related Supplement.
"Adjusted Eligible Receivables" means, on any Business Day, the result
of (a) the aggregate Unpaid Balance of Eligible Receivables held by the Trust on
that day, minus (b) the Unapplied Cash held by the Trust on that day, plus (c)
the Aggregate Retained Balances, in each case as shown in the Daily Report for
such day.
"Affected Party" shall mean, with respect to any Structured Lender, any
Support Bank of such Structured Lender.
"Aged Receivables Ratio" means, as calculated in each Monthly Report as
of the Cut-Off Date for the related Calculation Period, a fraction (expressed as
a percentage) having (a) a numerator that is the sum of (i) the aggregate Unpaid
Balance of Receivables that remained outstanding 121 to 150 days after their
respective due dates, as determined as of the Cut-Off Date for such Calculation
Period, plus (ii) the aggregate Unpaid Balance of Receivables that were written
off as uncollectible during the most recently ended Calculation Period and that,
if not so written off, would have been outstanding not more than 120 days after
their respective due dates, as determined as of that Cut-Off Date, and (b) a
denominator that is the aggregate amount payable pursuant to invoices giving
rise to Receivables that were generated during the Calculation Period that
occurred five Calculation Periods prior to the most recently ended Calculation
Period, as determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means The Firs:t National Bank of Chicago, in its capacity as
Agent under (and as defined in) the Certificate Purchase Agreements, together
with its respective successors in such capacity. The Agent is an "Agent" for
purposes of the Pooling Agreement.
"Aggregate Retained Balances" means, on any Business Day, the aggregate
of the balances retained in Lockbox Accounts or Concentration Accounts for items
in the process of collection but for which funds have not been made available by
the related Lockbox Bank or Concentration Account Bank, provided that (i) no
notice of insufficient funds or similar
2
464
situation shall exist with respect thereto and (ii) the Unpaid Balance of
Receivables shall have been reduced by an amount equal to such balances.
"Alternate Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest announced, from time to time, by Agent as
its prime commercial rate for United States dollar loans made
in the United States for any day, and
(b) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime commercial
rate announced by the Agent shall become effective without prior notice to
Transferor or the Servicer as of 12:01 a.m., New York City time, on the Business
Day on which each change in the prime commercial rate is announced by the Agent.
The prime commercial rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged by the Agent to any customer. The Agent
may make commercial loans or other loans at rates of interest at, above or below
the prime commercial rate.
"Amortization Period" means the period (x) beginning on the earlier of
(i) the date on which a termination notice is given by the Sellers pursuant to
Section 8.1 of the Purchase Agreement and (ii) the first day of the Calculation
Period that begins on June 1, 2000, and (y) ending on the earlier of (i) the
Expected Final Payment Date and (ii) the date, if any, on which an Early
Amortization Period begins; provided that there will be no Amortization Period
if an Early Amortization Period commences on or prior to the date specified
above for the beginning of the Amortization Period.
"Applicable Ratings Factor" means the Class A Ratings Factor or the
Class B Ratings Factor, as specified in each calculation where the Applicable
Ratings Factor is used.
"Approval Condition" means, with respect to any event or change in the
terms applicable to this Supplement or the Series 1996-1 Certificates, such
event or change shall have been approved in writing, prior to becoming
effective, by the Agent and the Majority Class B Purchasers.
"ASA Measuring Period" means, for any Cut-Off Date falling in a Group
Amortization Period, the Calculation Period ending on that Cut-Off Date (or the
portion thereof falling after the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization Period).
"Available Subordinated Amount" means, at any time during a Group
Amortization Period, the amount calculated pursuant to Section 4.6.
3
465
"Base Amount" means, on any Business Day, the result of the following
formula:
[NER x SCAP x (100%-CBRR)]-CASD-CCRR
where:
NER = the Net Eligible Receivables as reported in the Daily Report
for that Business Day;
SCAP = the Series Collection Allocation Percentage for that Business
Day;
CBRR = the Class B Reserve Ratio in effect for that Business Day;
CASD = the Class A Subordination Deficit for that Business Day; and
CCRR = the Carrying Cost Receivables Reserve as reported in the
Daily Report for such day.
"Basic Concentration Limit" means, with respect to a Concentration Unit
on any day, (i) if such Concentration Unit includes a Special Obligor, the
Special Concentration Limit for such Special Obligor, and (ii) otherwise, the
Concentration Limit applicable to the Parent for such Concentration Unit.
"Carrying Cost Receivables Reserve" means, on any Business Day, the
result of:
(a) the Current Carrying Costs; plus
(b) the product of (i) the Class A Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on Class A
Certificates, multiplied by (iii) a fraction the numerator of which is
the product of two and the number of Turnover Days and the denominator
of which is 360; plus
(c) the product of (i) the Class B Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on the
Class B Certificates, multiplied by (iii) a fraction the numerator of
which is the product of two and the number of Turnover Days and the
denominator of which is 360; plus
(d) the product of (i) the Series Collection Allocation
Percentage on the next preceding Distribution Date, multiplied by (ii)
the aggregate Unpaid Balance of Receivables on the next preceding
Distribution Date, multiplied by (iii) 2%, multiplied by (iv) a
fraction the numerator of which is the product of two and the number of
Turnover Days and the denominator of which is 360; plus
(e) if there is any Series in Group I in addition to the
Series 1996-1 Certificates, the Carrying Cost Receivables Reserve
Increments for each such other Series in Group I (as defined, and
calculated as provided, in the related Supplement); minus
4
466
(f) the balance on deposit in the Carrying Cost Account at the
beginning of that Business Day.
"Category One Balance" is defined in Section 4.10.
"Category One Eligibles" is defined in Section 4.10.
"Category One Obligors" means the following persons: Alfa Romeo Avio
S.p. A., ABB Power Generation Ltd., Boeing Canada Technology Ltd., Fiat Avio
S.p.A., General Electric Canada Inc., Hitachi Ltd., KLM Royal Dutch Airlines,
Mitsubishi Heavy Industries America, Inc., Mitsui & Co. USA, Inc., Motoren-Und
Turbinen-Union Munchen GmbH, Pratt & Whitney Canada Inc., Rolls-Royce PLC,
Siemens A.G. KWU, and Walbar of Canada Inc.
"Category Three Balance" is defined in Section 4.10.
"Category Three Eligibles" is defined in Section 4.10.
"Category Three Excess Concentration" is defined in Section 4.10.
"Category Three Obligors" means Foreign Obligors that are not Category
One Obligors or Category Two Obligors.
"Category Two Balance" is defined in Section 4.10.
"Category Two Eligibles" is defined in Section 4.10.
"Category Two Excess Concentration" is defined in Section 4.10.
"Category Two Obligors" means Foreign Obligors (other than Category One
Obligors) with principal places of business in Canada, Germany, Italy,
Netherlands, Switzerland, England or Sweden.
"Certificate Purchase Agreements" means the Class A Certificate
Purchase Agreement and the Class B Certificate Purchase Agreement.
"Certificate Rate" means, at any time, the weighted average of the
interest rates on all outstanding Series 1996-1 Certificates at that time.
"Certificate Spread" means:
(a) with respect to the Class A Certificates, (i).50% per
annum in the case of Eurodollar Tranches, and (ii) 0% per annum in the
case of the ABR Tranche; and
5
467
(b) with respect to the Class B Certificates, (i).80% per
annum in the case of the Eurodollar Tranche, and (ii) 0% per annum in
the case of the ABR Tranche.
"Class A Certificate" is defined in Section 2.1. Each Class A
Certificate shall be substantially in the form of Part 1 of Exhibit A.
"Class A Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class A) dated as of April 18,1996 among Transferor,
Servicer, the Purchasers of Class A Certificates and the Agent.
"Class A Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) 1.333 times the "Benchmark Percentage" for purposes of
clause (c) of the definition of "Concentration Limit,"
(ii) two times the "Benchmark Percentage" for purposes of
clause (d) of that definition, and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (B) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times (y) the
excess of four over the number of Special Obligors.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made pursuant to the Class A Certificate
Purchase Agreement at or prior to that time, reduced (but not below zero) by (a)
the aggregate amount of all distributions that have been made to the Holders of
the Class A Certificates on account of principal, and (b)the amount of all
Investor Write-Offs that have been applied to reduce the Class A Invested Amount
(net of Investor Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the Class A Invested Amount).
"Class A Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class A Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date.
"Class A Purchases" means Purchases made in respect of Class A
Certificates.
"Class A Ratings Factor" means 2.0.
"Class A Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class A Ratings Factor.
6
468
"Class A Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class A Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class A Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class A Minimum Reserve Ratio and (b)the Class A Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period;
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class A Reserve Ratio shall be 26.01%.
"Class A Subordination Deficit" means, on any Business Day, the
positive result (if any) of (a) the Class A Required Reserves, minus (b) the sum
of (i) the Class B Required Reserves plus (ii) the outstanding principal amount
of all Subordinated Classes (all calculated as of the beginning of that Business
Day); provided that at any time when no Senior Class is outstanding the Class A
Subordination Deficit shall equal zero.
"Class B Certificate" is defined in Section 2.1. Each Class B
Certificate shall be substantially in the form of Part 2 of Exhibit A.
"Class B Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class B) dated as of April 18,1996 among Transferor,
Servicer, the Purchasers of Class B Certificates and the Agent.
"Class B Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) the "Benchmark Percentage" for purposes of clause (c) of
the definition of "Concentration Limit,"
(ii) 1.5 times the "Benchmark Percentage" for purposes of
clause (d) of the definition of "Concentration Limit," and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (B) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times the excess
(if any) of 2.75 over the number of Special Obligors.
"Class B Invested Amount" means, at any time, the sum of the purchase
prices paid for Class B Purchases made pursuant to (and as defined in) the Class
B Certificate Purchase Agreement at or prior to that time, reduced (but not
below zero) by (a) the aggregate amount of all distributions that have been made
to the Holders of the Class B Certificates on account of principal, and (b) the
amount of all Investor Write-Offs that have been applied to reduce
7
469
the Class B Invested Amount (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to reinstate the Class B
Invested Amount).
"Class B Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class B Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date; provided that in no event shall the
Class B Minimum Reserve Ratio be less than 15%.
"Class B Purchases" means Purchases made in respect of Class B
Certificates.
"Class B Ratings Factor" means 1.5.
"Class B Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class B Ratings Factor.
"Class B Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class B Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class B Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class B Minimum Reserve Ratio and (b) the Class B Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period,
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class B Reserve Ratio shall be 21.01%.
"Class Invested Amount" means (a) with respect to Class A, the Class A
Invested Amount, (b)with respect to Class B, the Class B Invested Amount and (c)
with respect to any other Senior Class or Subordinated Class of Certificates,
the amount identified as its "Class Invested Amount" in the Supplement for such
Senior Class or Subordinated Class of Certificates.
"Concentration Limit" means:
(a) 100% for any Tier-1 Obligor;
(b) 100% for any Tier-2 Obligor;
(c) 15% for any Tier-3 Obligor;
(d) 10% for any Tier-4 Obligor; and
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(e) 4% for any Tier-5 Obligor.
Each of the percentages above is called a "Benchmark Percentage".
"Concentration Unit Excess Concentration" is defined in Section 4.10.
"Concentration Unit" means, on any day, each Obligor and its
Affiliates, if any, that are Obligors; it being understood that each Obligor
shall belong to only one Concentration Unit, and that a single Obligor can be a
Concentration Unit.
"Current Carrying Costs" means, during any Distribution Period, the sum
of (i) the amount of interest on the Series 1996-1 Certificates that will be
payable on the next Interest Payment Date and any other Interest Payment Date
falling not later than one week after such Interest Payment Date, (ii) the
amount of the Servicing Fee that will be payable on or before the next
Distribution Date plus (iii) the Current Carrying Costs Increments for each
other Series in Group I (as defined, and calculated as provided in, the
Supplement for each such Series.)
"Daily Group Collections" is defined in Section 4.2.
"Deferred Portion" means, on any day with respect to Group I, the
portion of the Acquisition Amount for the Series of Certificates in Group I as
to which payment has been deferred, which portion shall equal the product of (a)
the Series Collection Allocation Percentage times (b) the sum of the following
amounts (as shown in the Daily Report for such day): (i) the Excess
Concentration Balances, plus (ii) the aggregate unpaid balance of Receivables
that are not Eligible Receivables (including any such Receivables that are
ineligible due to the attachment of Adverse Claims), plus (iii) the Carrying
Cost Receivables Reserve, plus (iv) the Class B Reserve Ratio times the Net
Eligible Receivables, plus (v) the Class A Subordination Deficit (it being
understood that the Deferred Portion may vary from day to day); provided that
the Deferred Portion shall be fixed as of the Group Amortization Calculation
Date.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
giving rise to Receivables and generated during the two Calculation Periods
ending on the most recent Cut-Off Date (as of that Cut-Off Date) and (b) a
denominator equal to the Adjusted Eligible Receivables as of the most recent
Cut-Off Date.
"Dilution Ratio" means, as calculated in each Monthly Report as of the
most recent Cut-Off Date, a fraction (expressed as a percentage) having (a) a
numerator equal to the aggregate amount of Dilution on the Receivables occurring
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated during the second preceding Calculation
Period (so that, for example, if the Calculation Period
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471
specified in clause (a) corresponded to the March fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the January fiscal
month).
"Dilution Reserve Ratio" means as calculated in each Monthly Report,
the result (expressed as a percentage) calculated in accordance with the
following formula:
{(ARF x ADR) + [(HDR-ADR) x (HDR/ADR)]} x DHV
where:
ADR = the average of the Dilution Ratios during the period of 12
consecutive Calculation Periods ending on the related Cut-Off
Date;
ARF = the Applicable Ratings Factor;
DHV = the Dilution Horizon Variable; and
HDR = the highest average of the Dilution Ratios for any two
consecutive Calculation Periods within the 12 consecutive
Calculation Periods ending on the related Cut-Off Date.
"Distribution Period" means a period from and including a Distribution
Date to but excluding the next Distribution Date.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 6.2 and ending on the day on which the Series Invested
Amount has been reduced to zero. The term "Early Amortization Period" means each
of the Early Amortization Period and any period identified as an "Early
Amortization Period" in the Supplement for any other Series in Group I.
"Eurodollar Tranche" means, during any Interest Period, any portion of
the Series 1996-1 Invested Amount that is designated by Transferor in accordance
with a Certificate Purchase Agreement to accrue interest based on the
Reserve-Adjusted Eurodollar Rate.
"Excess Concentration Balances" means, on any day, the sum of (i) the
sum of the Concentration Unit Excess Concentrations for all Groups, plus (ii)
the Category Two Excess Concentration, plus (iii) the Category Three Excess
Concentration, plus (iv) the Total Foreign Concentration Excess.
"Excess Foreign Obligor Balances" is defined in Section 4.10.
"Expected Final Payment Date" means December 15, 2000.
"Federal Funds Rate" means (a) the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the day (or, if the day is
not a Business Day, the immediately
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472
preceding Business Day) by the Federal Reserve Bank of New York; provided that
if the rate is not so published for any Business Day, the rate for purposes of
this clause will be the average of the quotations for the day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it, plus (b) 100 basis points.
"Final Scheduled Payment Date" means December 15, 2001.
"First Step Excess" is defined in Section 4.10.
"First Step Residual" is defined in Section 4.10.
"Foreign Obligor" is defined in Section 4.10.
"Fourth Step Excess" is defined in Section 4.10.
"Fully Funded Date" means the first date falling in a Group
Amortization Period or when all Series in Group I are in a Series Amortization
Period and on which there are funds on deposit in the Carrying Cost Account and
the Principal Funding Account that, in the aggregate, equal or exceed the
Investor Repayment Amount and any Servicing Fee payable to anyone other than a
Howmet Person on the first Distribution Date falling after that date.
"Group Amortization Calculation Date" means the day before a Group
Amortization Period begins.
"Group Amortization Period" means the period (if any) commencing on the
first day on which all outstanding Series in Group I are in Early Amortization
Periods.
"Group Initial Invested Amount" means, at any time, the sum of the
Series Initial Invested Amounts of each Series in Group I at that time.
"Group Invested Amount" means, at any time, the sum of the Series
Invested Amounts of each Series in Group I at that time.
"Group I" means a group of Series, including Series 1996-1 and each
other Series that is identified in its Supplement as belonging to Group I.
"Guarantor" means Howmet, in its capacity as the guarantor under the
Seller Guaranty.
"Holdback Account Termination Date" is defined in Section 4.4.
"Holder" means a Holder (as defined in the Pooling Agreement) of a
Certificate in any Series in Group I.
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"Howmet" is defined in the preamble.
"Howmet Credit Agreement" means the Credit Agreement dated as of
December 13, 1995 among Blade Acquisition Corp., Howmet Holdings Acquisition
Corp., Howmet Acquisition Corp., the financial institutions named therein and
The First National Bank of Chicago, as Administrative Agent and a Managing
Agent, Bankers Trust Company, as Syndication Agent and a Managing Agent, and
Citicorp USA, Inc., as Documentation Agent and a Managing Agent, as the same may
from time to time be amended or supplemented.
"Intercreditor Provisions" means the following provisions of the Howmet
Credit Agreement (as such Agreement was in effect on the Closing Date): Section
9.12 and the definitions of Intercreditor Agreement, Investor Certificates,
Purchased Interest, Receivables Amendment Conditions, Receivables Bridge
Facility, Receivables Documents, Receivables Facility, Receivables Facility
Assets, Receivables Maximum Funded Amount, Receivables Pooling Agreement.
Receivables Purchasers, Receivables Stated Amount and Receivables Subsidiary.
"Interest Payment Date" means (a) as to the Series 1996-1 Certificates,
any date upon which interest is payable with respect to the ABR Tranche or any
Eurodollar Tranche, as specified in Section 4.1, and (b)as to any interest
payable on any other Series in Group I, the date specified as the "Interest
Payment Date" in the related Supplement.
"Interest Period" means
(a) for Class A Certificates, (1) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to each Eurodollar Tranche
(if any) from time to time, each period from the date upon which that
Eurodollar Tranche was first designated as such pursuant to the Class A
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for the Eurodollar Tranche, if there has been one) to
the date that is one month, two months or three months, at the option
of Transferor, thereafter; and if any Interest Period for a Eurodollar
Tranche would otherwise end on a day that is not a Business Day, the
Eurodollar Tranche shall instead end on the next Business Day (or, if
the next Business Day falls in the next calendar month, then on the
next preceding Business Day); and
(b) for Class B Certificates, (i) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to the Eurodollar Tranche
(if any) from time to time, each period from the date upon which the
Eurodollar Tranche was first designated as such pursuant to the Class B
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for
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474
the Eurodollar Tranche, if there has been one) to the date that is one
month, two months or three months, at the option of Transferor,
thereafter; and if any Interest Period for the Eurodollar Tranche would
otherwise end on a day that is not a Business Day, the Eurodollar
Tranche shall instead end on the next Business Day (or, if the next
Business Day falls in the next calendar month, then on the next
preceding Business Day).
"Invested Amount" means, at any time:
(a) for purposes of calculating the Series Loss Allocation
Percentage for Group I, the Group Invested Amount; and
(b) for purposes of the application of Sections 6.13 and 12.4
of the Pooling Agreement to the Series 1996-1 Certificates, the Series
1996-1 Invested Amount.
"Investor Allocable Dilution" means, for any ASA Measuring Period, the
product of the aggregate amount of Dilution for that ASA Measuring Period as to
which neither the applicable Seller nor the Guarantor has made any payment
required by Section 3.1 of the Purchase Agreement or the Seller Guaranty on
account of Seller Dilution Adjustments, multiplied by the Series Loss Allocation
Percentage as of the beginning of that ASA Measuring Period, multiplied by the
Investor Allocation Percentage as of the first Business Day of that ASA
Measuring Period.
"Investor Allocable Dilution Adjustments" is defined in Section 4.8.
"Investor Allocable Loss Amount" means, for any ASA Measuring Period,
the product of the Loss Amount for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the beginning of
that ASA Measuring Period.
"Investor Allocable Recoveries" means, for any ASA Measuring Period,
the product of the Net Recoveries for that ASA Measuring Period, multiplied by
the Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the first
Business Day of that ASA Measuring Period.
"Investor Allocation Percentage" means:
(x) on any Business Day that does not fall in a Series
Amortization Period, a fraction (expressed as a percentage, which in
any event may not exceed 100%) (a) the numerator of which is the Net
Invested Amount as of that Business Day, and (b) the denominator of
which is the Base Amount as of that Business Day;
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475
(y) on any Business Day falling in any Series Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the beginning of the Series Amortization Period, and (b) the
denominator of which is the Base Amount as of that Business Day; and
(z) on any Business Day falling in the Group Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the Group Amortization Calculation Date, and (b) the denominator
of which is the Base Amount as of the Group Amortization Calculation
Date.
"Investor Ownership Percentage" means, on any day with respect to Group
I, a fraction (expressed as a percentage, which in any event may not exceed
100%), (x) the numerator of which is the Acquisition Amount on such day and (y)
the denominator of which is the product of (a) the Series Collection Allocation
Percentage times (b) the excess of (i) the Unpaid Balance of Receivables on such
day over (ii) the Unapplied Cash on such day; provided that the Investor
Ownership Percentage shall be fixed as of the Group Amortization Calculation
Date; and provided further that if the Investor Ownership Percentage is being
calculated on any day when a Series in Group I is in an accumulation,
amortization or early amortization period, the Investor Ownership Percentage
shall not be less than the Investor Ownership Percentage immediately prior to
the commencement of such period.
"Investor Repayment Amount" means, on any Business Day, the sum of (a)
the principal amount of the Series 1996-1 Certificates and all other Series in
Group I then outstanding, plus (b) the interest and any Additional Amounts known
to be payable on the Series 1996-1 Certificates and all other Series in Group I
on or before the first Distribution Date falling after that date.
"Investor Write-Offs" means, as calculated in any Monthly Report
relating to a Calculation Period falling completely or partially in a Group
Amortization Period:
(a) if the Available Subordinated Amount is greater than zero
at the end of the related ASA Measuring Period, zero; and
(b) if the Available Subordinated Amount is zero at the end of
the related ASA Measuring Period (taking into account any reduction in
the Available Subordinated Amount shown in such Monthly Report), the
excess (if any) of (x) the sum of the Investor Allocable Loss Amount
and the Investor Allocable Dilution minus Investor Allocable Recoveries
for the related ASA Measuring Period, over (y) the Available
Subordinated Amount as of the beginning of that ASA Measuring Period.
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476
"Loss Amount" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of
Receivables held by Trust that became Write-Offs during that ASA Measuring
Period, minus (b) the amount of Recoveries received during that ASA Measuring
Period.
"Loss Reserve Ratio" means, as calculated in each Monthly Report, the
result (expressed as a percentage) of (a) the Applicable Ratings Factor
multiplied by (b) the highest average of the Aged Receivables Ratio for any
three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
multiplied by (c) a fraction having (i) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise to Receivables
generated during the four Calculation Periods preceding or ending on the most
recent Cut-Off Date, and (ii) a denominator equal to the Adjusted Eligible
Receivables, as of the most recent Cut-Off Date, multiplied by (d) the Payment
Term Multiplier.
"Majority Class B Purchasers" is defined in Section 8.1 of the Class B
Certificate Purchase Agreement.
"Net Eligible Receivables" means, at any time, (a) the Adjusted
Eligible Receivables, minus (b) the Excess Concentration Balances; it being
understood that the amount of Eligible Receivables will be reduced by Adverse
Claims that attach to Receivables otherwise satisfying the requirements of the
definition of Eligible Receivable.
"Net Invested Amount" means, on any Business Day, the Group Invested
Amount, minus the balance on deposit in the Equalization Account and the
Principal Funding Account with respect to Series in Group I.
"Net Recoveries" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of Recoveries
received in that ASA Measuring Period minus (b) the amount of Receivables that
became Write-Offs in that ASA Measuring Period.
"Note Indenture" means the Indenture dated as of December 13, 1995 by
and between Howmet, as successor to the obligations thereunder of Howmet
Acquisition Corp., and Marine Midland Bank, as Trustee, under and pursuant to
which certain senior subordinated notes have been issued, as the same may at any
time be amended or supplemented.
"Parent" means, with respect to any Concentration Unit, the Domestic
Person in such Concentration Unit that owns or controls (directly or indirectly)
the largest number of other Obligors in such Concentration Unit; provided that
if there is no Domestic Person in such Concentration Unit, "Parent" shall mean
the Obligor in such Concentration Unit that owns or controls (directly or
indirectly) the largest number of other Obligors in such Concentration Unit.
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477
"Past Due Receivables Ratio" means, as calculated in each Monthly
Report as of the Cut-Off Date, a faction (expressed as a percentage) having (a)
a numerator that is the aggregate Unpaid Balance of Receivables that remain
outstanding 61 to 91 days after their respective due dates, as determined as of
such Cut-Off Date, and (b) a denominator that is the aggregate Unpaid Balance of
Receivables as of such Cut-Off Date.
"Payment Term" shall mean, with respect to any Receivable, the number
of days between its invoice date and its due date.
"Payment Term Multiplier" shall mean (a) 1.0, if the Payment Term
Variable is less than 41, (b) 1.17, if the Payment Term Variable is equal to or
more than 41 but less than 51, (c) 1.25, if the Payment Term Variable is equal
to or more than 51 but less than 61, and (d) 1.5, if the Payment Term Variable
is equal to or more than 61 but less than 91; provided, however, that if the
Payment Term Variable equals or exceeds 91, the Payment Term Multiplier for such
Receivable shall be determined by calculating the sum of (x) 1.5, and (y) 0.05,
for each 5-day increment by which the Payment Term Variable exceeds 91, it being
understood that the same number shall apply for all Payment Term Variables that
fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each Monthly
Report as of the most recently ended Cut-Off Date, the quotient of:
(x) the sum of (1) the product of the Outstanding Balance of
each Receivable as of such Cut-Off Date times (2) the Payment Term with
respect to such Receivable; divided by
(y) the aggregate Outstanding Balance of all Receivables as of
such Cut-Off Date.
"Prepayment Accumulation Period" means a period beginning on the day
that Transferor gives a Prepayment Notice to Trustee of a prepayment of the
Series 1996-1 Certificates pursuant to Section 4.9 (and does not notify Trustee
that it intends to cause the Series Interest to be conveyed as described in
subsection 4.9(b)) and ending on the earlier to occur of (a) the day when
amounts sufficient for that prepayment have been accumulated pursuant to Section
4.3 and (b) the end of the Revolving Period for the Series 1996-1 Certificates.
"Prepayment Notice" is defined in Section 4.9.
"Prepayment Premium" means, with respect to any prepayment pursuant to
Section 4.9 or 7.1 or as a result of an Early Amortization Event, the net
present value (as of the date of such prepayment) of the amount of interest that
would have accrued on the amount of principal prepaid from the date of
prepayment through the one year anniversary of the date
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478
hereof at an interest rate equal to the applicable Certificate Spread in respect
of the Eurodollar Tranche(s), discounted to such prepayment date at a rate per
annum, compounded monthly, equal to the Reserve Adjusted Eurodollar Rate in
effect on the date on which notice of prepayment is given to the Holders of the
Series 1996-1 Certificates being prepaid.
"Principal Deposit Amount" means, with respect to any Series in any
Calculation Period falling in a Series Amortization Period, the amount
determined in accordance with the Supplement for that Series. The Principal
Deposit Amounts for the Series Amortization Periods that may apply to the Series
1996-1 Certificates are:
(a) for any Calculation Period falling in the Amortization
Period or the Early Amortization Period for the Series 1996-1
Certificates, the Series 1996-1 Invested Amount; and
(b) for any Calculation Period falling in a Prepayment
Accumulation Period for the Series 1996-1 Certificates, the amount of
principal to be prepaid.
"Principal Payment Date" means (a) for the Series 1996-1 Certificates,
(i) any date on which any prepayment is to be made pursuant to Section 4.9, (ii)
the end of each Interest Period in respect of the next maturing Eurodollar
Tranche and/or ABR Tranche, in such order as the Agent shall select so as to
minimize "breakage costs," (iii) each Distribution Date falling in an Early
Amortization Period (beginning with the Distribution Date falling in the
Calculation Period after the Calculation Period in which the Early Amortization
Period begins) and (iv) any Distribution Date falling after the commencement of
the Amortization Period, and (b) for any other Series in Group I, each date
specified as a "Principal Payment Date" in the related Supplement. The
Refinancing Date is not a Principal Payment Date.
"Purchase" means any Purchase as defined in either of the Certificate
Purchase Agreements.
"Reference Bank" means The First National Bank of Chicago.
"Refinancing Date" is defined in subsection 4.9(b).
"Required Purchasers N is defined in Section 9.9 of the Certificate
Purchase Agreements.
"Required Receivables" means, on any Business Day, collectively for all
Series in Group I:
(a) So long as a Group Amortization Period has not commenced,
the result of the following formula:
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479
GIIA + CCRR R
----------- -----
(1 - CARR) X NER
where:
CARR = the Class A Reserve Ratio in effect for that Business
Day;
CCRR = the Carrying Cost Receivables Reserve as reported in
the Daily Report for that Business Day;
GIIA = the Group Initial Invested Amount;
NER = the Net Eligible Receivables as reported in the
Daily Report for that Business Day; and
R = the aggregate Unpaid Balance of Receivables held by
Trustee as reported in the Daily Report for that
Business Day.
(b) If a Group Amortization Period has commenced, the result
of the following formula:
AGIIA + ASA + UCCRR
where:
AGIIA = the adjusted Group Initial Invested Amount on that
Business Day (which shall equal the Group Initial
Invested Amount, reduced (but not below zero) by the
amount of all Investor Write-Offs (net of Investor
Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the
Group Invested
Amount));
UCCRR = the Unfunded Carrying Cost Receivables Reserve on
that Business Day; and
ASA = the Available Subordinated Amount on that Business
Day.
"Required Series Holders" means the Required Purchasers.
"Reserve-Adjusted Eurodollar Rate" means for any Interest Period, the
rate per annum obtained by dividing (i) the arithmetic average (rounded upward
to the nearest 1/100 of one percent) of the offered quotation, if any, to first
class banks in the interbank Eurodollar market by the Reference Bank for U.S.
dollar deposits of amounts in same day funds comparable to the principal amount
of the Investor Certificate of the Reference Bank with maturities comparable to
such Interest Period as of approximately 10:00 a.m. (New York time) on the
second Business Day prior to the first day of that Interest Period by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on
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480
such second preceding Business Day to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D of
the Federal Reserve Board (or any successor category of liabilities under
Regulation D).
"Revolving Period" means, with respect to any Series in Group I, the
period beginning on the Closing Date and ending on the day before the first day
of an accumulation period, an amortization period or an early amortization
period (other than a prepayment accumulation period with respect to a partial
prepayment of such Series) for such Series; provided that the Revolving Period
for such Series shall be suspended during a prepayment accumulation period with
respect to a partial prepayment of such Series.
"Second Step Excess" is defined in Section 4.10.
"Second Step Residual" is defined in Section 4.10.
"Senior Class" means each of Class A and each class of any other Series
in Group I that is identified in its Supplement as a Senior Class.
"Series Allocable Dilution Adjustments" means, for any ASA Measuring
Period, the product of the aggregate amount of payments pursuant to Section 3.1
of the Purchase Agreement or pursuant to the Seller Guaranty on account of
Seller Dilution Adjustments received during that ASA Measuring Period relating
to Dilution that occurred prior to that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period.
"Series Amortization Period" means (a) as to Series 1996-1, the
Amortization Period, any Prepayment Accumulation Period and any Early
Amortization Period and (b)as to any other Series in Group I any period
identified in the related Supplement as a "Series Amortization Period."
"Series Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Invested Amount, and (b) as to any other Series
in Group I, the amount determined as such in accordance with the Supplement for
that Series.
"Series Initial Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Initial Invested Amount, and (b) as to any other
Series in Group I, the amount determined as such in accordance with the
Supplement for that Series; provided that from and after the date on which the
Series Invested Amount for any Series is reduced to zero, the Series Initial
Invested Amount for that Series will also equal zero.
"Series 1996-1 Certificates" means the Class A Certificates and the
Class B Certificates.
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481
"Series 1996-1 Holder" means a Holder of a Series 1996-1 Certificate.
"Series 1996-1 Initial Invested Amount" means (i) during the Revolving
Period for the Series 1996-1 Certificates, the Series 1996-1 Invested Amount,
and (ii) thereafter, the Series 1996-1 Invested Amount as of the last day of the
Revolving Period; provided that after the principal amount of the Series 1996-1
Certificates and interest and any Additional Amounts known to be payable in
respect of such Series are reduced to zero, the Series 1996-1 Initial Invested
Amount will equal zero.
"Series 1996-1 Invested Amount" means, at any time, the sum of the
Class A Invested Amount plus the Class B Invested Amount.
"Special Concentration Limit" means:
(i) with respect to the Tier-5 Obligor that owes the highest
aggregate Unpaid Balance of Eligible Receivables, 7%; and
(ii) with respect to the Tier-5 Obligor that owes the second
highest aggregate Unpaid Balance of Eligible Receivables, 5%.
"Special Obligor" means, at any time, the two Tier-5 Obligors that owe
the highest aggregate Unpaid Balances of Receivables and are designated in the
most recent Monthly Report as "Special Obligors"; provided that in the case of
any Obligor (other than Westinghouse Electric Corp.), the Approval Condition
shall have been satisfied with request to such designation.
"Specified Rating Agency" means S&P.
"Stated Amount" means as to any Certificate, the maximum principal
amount that may be required to be funded by the Holder of such Certificate.
"Structured Lender" shall mean Falcon Asset Securitization Corporation,
Alpine Securitization Corp. and any other Holder of a Certificate (x) whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and (y) which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement similar to that set forth in Section 13.9 of the
Pooling Agreement in order to maintain such rating.
"Subordinated Class" means each of Class B and each class of any other
Series in Group I that is identified in its Supplement as a Subordinated Class.
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"Support Bank" shall mean any bank or other financial institution
extending or having a commitment to extend funds to or for the account of any
Structured Lender (including by agreement to purchase an assignment of, or
participation in, the Certificate held by such Person) under a liquidity or
credit support agreement which relates to the Certificate purchased by such
Structured Lender.
"Third Step Excess" is defined in Section 4. 10.
"Third Step Residual" is defined in Section 4.10.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper
rating from the Specified Rating Agency of at least "A-1+" (or its equivalent)
or (b) a senior actual or implied debt rating from the Specified Rating Agency
of at least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-1 Obligor) that
has (a) a commercial paper rating from the Specified Rating Agency of at least
"A-1" (or its equivalent) or (b) a senior actual or implied debt rating from the
Specified Rating Agency of at least "A+" (or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a
Tier-2 Obligor) that has (a) a commercial paper rating from the Specified Rating
Agency of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Specified Rating Agency of at least "BBB+" (or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a
Tier-2 Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from
the Specified Rating Agency of at least "A-3" (or its equivalent) or (b) a
senior actual or implied debt rating from the Specified Rating Agency of at
least "BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a
Tier-2 Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Total Dollar Limit" is defined in Section 4.10.
"Total Foreign Concentration Excess" is defined in Section 4.10.
"Tranche" means each of the ABR Tranche and each Eurodollar Tranche,
"Transferor Indemnified Losses" is defined in Section 7.3.
"Transferor Indemnified Party" is defined in Section 7.3.
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"Transferor Payment Percentage" means, on any Business Day, the
difference of 100% minus the Investor Allocation Percentage on that Business
Day.
"Unapplied Cash" means, on any Business Day, available funds received
in the Master Collection Account and reflected in the Daily Report for that
Business Day that have not been applied as Collections on a particular
Receivable on or prior to the time as of which that Daily Report is prepared.
"Unfunded Carrying Cost Receivables Reserve" means, on any Business Day
falling in a Group Amortization Period, the difference (but not less than zero)
of (a) the Carrying Cost Receivables Reserve as of the Group Amortization
Calculation Date, minus (b) the aggregate Collections deposited into the
Carrying Cost Account during the portion of the Group Amortization Period up to
and including that Business Day.
"Unmatured Early Amortization Event" means an event that, with the
giving of notice or lapse of time (or both) will constitute an Early
Amortization Event.
SECTION 1.2 Modification Condition. (a) For so long as the Series
1996-1 Certificates remain outstanding, for purposes of the Transaction
Documents the definition of the term "Modification Condition" shall be as
follows:
"Modification Condition" means, with respect to any action,
that (i) each Rating Agency has confirmed in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Purchased Interest that was rated by such Rating
Agency, and (ii) if any Series or Purchased Interest has not been
rated, the Required Series Holders for that Series or the Agent for
such Purchased Interest (as the case may be) shall have consented in
writing to such action.
(b) For so long as the Series 1996-1 Certificates remain outstanding,
for purposes of the Transaction Documents the term "Required Investors" shall be
as follows:
"Required Investors" means the Required Series Holders for
each Series and the Agent for each Purchased Interest."
SECTION 1.3 Incorporation of Terms. The terms of the Pooling Agreement
are incorporated in this Supplement as if set forth in full herein. As
supplemented by this Supplement, the Pooling Agreement is in all respects
ratified and confirmed and both together shall be read, taken and construed as
one and the same agreement. If the terms of this Supplement and the terms of the
Pooling Agreement conflict, the terms of this Supplement shall control with
respect to the Series 1996-1 Certificates.
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ARTICLE II DESIGNATION
SECTION 2.1 Designation. There is hereby created a Series to be known
as the "Series 1996-1 Certificates," consisting of two classes: the $47,500,000
Variable Rate Class A, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class A Certificates), which shall be a Senior Class; and the $7,500,000
Variable Rate Class B, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class B Certificates"), which shall be a Subordinated Class. Subject to the
conditions set forth in Article III, Trustee shall authenticate and deliver the
Class A Certificates and the Class B Certificates, to or upon the order of
Transferor in the aggregate principal amount indicated for each above.
Notwithstanding the terms of Section 6.1 of the Pooling Agreement, the Class A
Certificates will be issued in minimum denominations of $5,000,000 and in
integral multiples of $1,000,000 and the Class B Certificates will be issued in
minimum denominations of $2,500,000 and in integral multiples of $500,000.
SECTION 2.2 Group I. The Series 1996-1 Certificates are included in
Group I. Consequently, the Series 1996-1 Certificates will share a single Series
Collection Allocation Percentage (determined using the Required Receivables as
defined herein), a single Series Loss Allocation Percentage (determined using
the Invested Amount as defined herein), and if a Group Amortization Period
occurs, a single Available Subordinated Amount (determined as provided herein)
with the other Series in Group I. Collections, Investor Allocable Dilution,
Investor Allocable Loss Amounts and Investor Write-Offs will be allocated
collectively to Group I in accordance with such shared Series Collection
Allocation Percentage and Series Loss Allocation Percentage, as applicable, and
will be further allocated among Series included in Group I (and the various
Senior Classes and Subordinated Classes) in accordance with this Supplement. The
Servicing Fee with respect to all Series in Group I shall be paid in accordance
with this Supplement and shall be determined in accordance with Section 3.4 of
the Pooling Agreement using the collective Series Collection Allocation
Percentage for Group I. The Series in Group I share a collective Series
Interest, the amount of which equals the shared Series Collection Allocation
Percentage for Group I.
Subsection 12.1(b) of the Pooling Agreement shall not apply to any
Series in Group I and shall be superseded for all such Series by Section 7.2 of
this Supplement. All terms of this Supplement applying generally to Group I
shall survive the repayment in full or other termination of the Series 1996-1
Certificates until such time as all Series in Group I have been repaid in full
and any revolving purchase commitments made by the Holders relating to
Certificates in any such Series have been terminated (or, if earlier, on the
Final Scheduled Payment Date for the last Series in Group I). Such terms of
general applicability include all of Article IV (excluding Sections 4.1 and
4.9), Article V, Section 7.2 and Article VIII and all related definitions.
SECTION 2.3 Investor Ownership Percentage. The Investor Certificates in
Group I represent an undivided interest in the portion of the Transferred Assets
allocable to Group I,
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which undivided interest (expressed as a percentage) shall equal the Investor
Ownership Percentage. The amount payable on any day by the Holders of such
Investor Certificates for the acquisition of such undivided interest (the
"Acquisition Amount") shall equal the Group Invested Amount plus the Deferred
Portion (it being understood that the Acquisition Amount may vary from day to
day); provided that Acquisition Amount shall be fixed as of the Group
Amortization Calculation Date.
The Deferred Portion of the Acquisition Amount shall be subject to a
holdback and shall be paid to the extent (and only to the extent) Daily Group
Collections are not required to pay amounts described in clauses first through
fourth of Section 4.3 or Section 4.4 (as applicable), it being understood that
the Holders of Series 1996-1 Certificates shall not be liable to pay any portion
of the Deferred Portion not paid out of Daily Series Collections.
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS
SECTION 3.1 Conditions to Issuance. Trustee will not authenticate the
Series 1996-1 Certificates unless all conditions to the issuance of the Series
1996-1 Certificates under Section 6.10 of the Pooling Agreement shall have been
satisfied or waived by the Purchasers.
SECTION 3.2 Use of Proceeds. The proceeds from the issuance of the
Series 1996-1 Certificates shall be used first to repay the Series 1995-1
Certificates in full and second for general corporate purposes of Transferor
(including, but not limited to, purchasing Receivables, repaying indebtedness
and/or making distributions to Howmet).
ARTICLE IV PAYMENTS AND ALLOCATIONS
SECTION 4.1 Interest; Additional Amounts.
(a) Subject to Section 4.1 of the Class A Certificate Purchase
Agreement, Transferor may from time to time allocate the outstanding
principal amount under the Class A Certificates to an ABR Tranche and
up to four Eurodollar Tranches. Subject to Section 4.1 of the Class B
Certificate Purchase Agreement, Transferor may from time to time
allocate the outstanding principal amount under the Class B
Certificates to an ABR Tranche and a Eurodollar Tranche. Interest on an
ABR Tranche shall be payable on each Distribution Date, and interest on
a Eurodollar Tranche shall be payable at the end of the applicable
Interest Period, except that interest on the amount of any principal
repaid on any other date shall be payable on the date of the repayment.
If any such day is not a Business Day, interest shall instead be due on
the next Business Day (or, if the next Business Day falls in the next
calendar month, then on the next preceding Business Day).
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486
(b) Interest on a Eurodollar Tranche shall accrue during any
Interest Period at a rate per annum equal to the Reserve Adjusted
Eurodollar Rate plus the applicable Certificate Spread and shall be
calculated on the basis of actual days over a year of 360 days.
(c) Interest on an ABR Tranche shall accrue at the Alternate
Base Rate in effect from time to time plus the applicable Certificate
Spread and shall be calculated on the basis of actual days over a year
of 365 or 366 days, as the case may be.
(d) Interest with respect to the Series 1996-1 Certificates
due but not paid on any Distribution Date or the last day of an
Interest Period, as the case may be, will bear additional interest on
the amount at 2% per annum above the Alternate Base Rate to the extent
permitted by law, which additional interest shall be due on demand.
(e) Additional Amounts shall also be payable with respect to
the Series 1996-1 Certificates as specified in the Certificate Purchase
Agreements and to the extent (but only to the extent) that funds become
available for payment of such Additional Amounts in accordance with
Sections 4.2, 4.3 and 4.4.
SECTION 4.2 Daily Calculations and Group Allocations. On each Business
Day, Servicer shall calculate the Series Collection Allocation Percentage for
Group I (and, if necessary for that calculation, the Required Receivables), the
Current Carrying Costs and, prior to the Group Amortization Period, the Base
Amount. On each Business Day prior to the Group Amortization Period, Servicer
shall also determine whether the Net Invested Amount is greater than, equal to
or less than the Base Amount.
Pursuant to Section 4.3 of the Pooling Agreement, Servicer shall
allocate the Series Collection Allocation Percentage of available funds received
in the Master Collection Account (other than any Shared Investor Collections)
since the preceding Business Day's allocation to the shared Series Interest of
Group I. The portion of funds so allocated, together with any funds released
from the Equalization Account or any Principal Funding Account in accordance
with Section 4.5 on that Business Day, are called the "Daily Group Collections."
SECTION 4.3 Allocations of Daily Group Collections (Other Than in a
Group Amortization Period). On each Business Day (other than an Exempt Holiday
or a Business Day falling in a Group Amortization Period or after the Fully
Funded Date), Servicer shall allocate the Daily Group Collections (or, if less,
the aggregate amount of Daily Group Collections required to fund the items
described in priorities first through fourth below) to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account until the amount allocated
to the Carrying Cost Account equals the Current Carrying Costs;
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487
second, if the Net Invested Amount is greater than the Base
Amount, to the Equalization Account in an amount sufficient to reduce
the Net Invested Amount to an amount equal to the Base Amount; provided
that during a Series Amortization Period in respect of any Series,
funds that would otherwise be required to be deposited in the
Equalization Account pursuant to this priority second shall instead be
deposited in the sub-account of the Principal Funding Account for such
Series (and, if there is more than one such Series, shall be divided
ratably between such sub-accounts, on the basis of the respective
Principal Deposit Amounts of each such Series), but the amount
deposited in any such sub-account shall in no event cause the balance
therein to exceed the applicable Principal Deposit Amount (and any
remaining amount not deposited in any sub-account of the Principal
Funding Account because of this limitation shall be shared among the
other sub-accounts for such Series in Group I (ratably as described
above), in each case to the extent that it will not cause the balance
therein to exceed the applicable Principal Deposit Amount, and any
remaining amount shall be deposited in the Equalization Account); and
provided further that no deposit shall be made to a sub-account of the
Principal Funding Account pursuant to the immediately preceding proviso
(and such proviso shall not apply notwithstanding the existence of a
Series Amortization Period) unless, after giving effect thereto, the
Net Invested Amount would equal the Base Amount;
third, during any Series Amortization Period, to the
applicable sub-account of the Principal Funding Account until the
amount on deposit in that sub-account equals the applicable Principal
Deposit Amount; provided that
(i) the amount allocated to all Investor Certificates
in the aggregate pursuant to this priority third on any
Business Day shall not exceed the product of (x) the Investor
Ownership Percentage, multiplied by (y) the excess of the
Daily Group Collections over the amounts allocated on that
Business Day pursuant to priorities first and second, and
(ii) if more than one Series in Group I is in a
Series Amortization Period, the amount so allocated shall be
divided ratably between such subaccounts, on the basis of the
respective Principal Deposit Amounts of each such Series, but
the amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the applicable Principal
Deposit Amount for any such Series (and any remaining amount
not deposited in any sub-account of the Principal Funding
Account because of this limitation shall be shared among the
other sub-accounts for Series in Group I (ratably as described
above), in each case to the extent that it will not cause the
balance therein to exceed the Principal Deposit Amount for any
such other Series); and
fourth, to hold in the Master Collection Account the amount,
if any, necessary to pay on the next Distribution Date all Additional
Amounts payable to the Holders.
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On such Business Day, Servicer shall allocate and pay the remainder of
Daily Group Collections to make current and/or deferred transfer payments to
Transferor in respect of the Transferor Certificate, provided that Transferor
may, from time to time, direct Servicer to direct Trustee to hold all or part of
the funds to be paid pursuant to this sentence m the Master Collection Account
to be applied as Daily Group Collections on the following Business Day.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in priorities second through fourth, and in the
preceding paragraph, in the order of priority set forth therein.
In addition, if, on any day, funds on deposit in the Master Collection
Account and available (as described in the first paragraph of this Section) for
allocation under priority fourth are less than the amount of the obligations
described therein, then the available Collections shall be allocated by Servicer
to the holders of such obligations pro rata according to the respective amounts
of such obligations held by them.
On any Business Day failing after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor as deferred transfer payments.
SECTION 4.4 Allocations of Daily Group Collections During a Group
Amortization Period. On each Business Day (other than an Exempt Holiday) failing
in a Group Amortization Period and prior to or on the Fully Funded Date,
Servicer shall allocate the Daily Group Collections to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account to the extent that the
balance therein is less than the amount of Current Carrying Costs
(other than any Servicing Fee payable to any Howmet Person) payable on
the Distribution Date relating to the Calculation Period during which
such Business Day falls;
second, to the Principal Funding Account and to Transferor
(or, prior to the Holdback Account Termination Date, to the Holdback
Account) in the following amounts:
(a) the amount to be transferred to the Principal
Funding Account shall equal the product of (i) the Investor
Allocation Percentage, multiplied by (ii) the excess of the
Daily Group Collections over the amount allocated on that
Business Day pursuant to priority first, provided that the
aggregate amount so deposited shall in no event exceed the
lesser of (x) the Group Invested Amount
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489
and (y) the Investor Ownership Percentage times the aggregate
Unpaid Balance of Receivables as of the Group Amortization
Calculation Date; and
(b) the amount to be transferred to Transferor (or,
prior to the Holdback Account Termination Date, to the
Holdback Account) shall equal the product of (i) the
Transferor Payment Percentage, multiplied by (ii) the excess
of the Daily Group Collections over the amount allocated on
that Business Day pursuant to priority first;
the amount allocated to the Principal Funding Account pursuant to clause (a) of
this priority second shall be divided among the sub-accounts for each Series in
Group I as follows:
(1) first such amount shall be divided among the
sub-accounts for each Series that has an outstanding Senior
Class, on the basis of the respective Principal Deposit
Amounts of each such Senior Class, but the amount deposited in
any such sub-account shall in no event cause the balance
therein to exceed the Principal Deposit Amount of any such
Senior Class; and
(2) any remaining amount shall be divided among the
sub-accounts for each Series that has an outstanding
Subordinated Class, on the basis of the respective Principal
Deposit Amounts of each such Subordinated Class, but the
amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the Principal Deposit
Amount of any such Subordinated Class;
third, to hold in the Master Collection Account the amount
necessary to pay on the next Distribution Date all Additional Amounts
payable to the Holders;
fourth, to pay any Servicing Fee payable to any Howmet Person
on the Distribution Date relating to the Calculation Period during
which such Business Day falls; and
fifth, the balance to Transferor, provided that prior to the
Holdback Account Termination Date, amounts payable to Transferor
pursuant to this priority fifth shall be deposited into the Holdback
Account and held as provided below.
The "Holdback Account Termination Date" shall be the earlier to occur
of (i) the date that falls twelve months alter the beginning of the Group
Amortization Period and (ii) the Fully Funded Date. If at any time prior to the
Holdback Account Termination Date, the amount of funds on deposit in the
Holdback Account exceeds the difference of (1) the Investor Repayment Amount
minus (2) the amount of funds then held in the Carrying Cost Account and the
Principal Funding Account that are available to pay the Investor Repayment
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490
Amount, then the amount of such excess funds shall be released from the Holdback
Account and paid to Transferor as deferred transfer payments. On each Business
Day in a Group Amortization Period prior to the Holdback Account Termination
Date, Servicer shall calculate the aggregate Investor Allocable Dilution for the
Group Amortization Period as to which no Series Allocable Dilution Adjustments
have been received. Such amount (or, if less, the aggregate amount of funds in
the Holdback Account) shall be transferred to the Master Collection Account and
applied to the items listed in the first paragraph of this Section as priorities
first through fifth, in that order (except that no such funds shall be allocated
to Transferor or the Holdback Account pursuant to priority second and the amount
allocable to the Principal Funding Account shall not be limited by application
of the Investor Allocation Percentage). On the Holdback Account Termination
Date, all remaining funds in the Holdback Account shall be paid to Transferor.
If, on any day, funds on deposit in the Master Collection Account and
available (as described in the first paragraph of this Section, for allocation
under priority third are less than the amount of the obligations described
therein, then the available Collections shall be allocated by Servicer to the
holders of such obligations pro rata according to the respective amounts of such
obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor in respect of the Transferor
Certificate as deferred transfer payments.
SECTION 4.5 Withdrawals from the Equalization Account and Principal
Funding Account. On any Business Day (other than an Exempt Holiday) prior to the
Group Amortization Period on which no Early Amortization Event or Unmatured
Early Amortization Event has occurred with respect to any Series in Group I,
Servicer may instruct Trustee in writing to withdraw funds from the Equalization
Account and apply such funds as Daily Group Collections, so long as the Net
Invested Amount would not exceed the Base Amount after giving effect to such
transfer and application. On the first day of any Series Amortization Period or
Group Amortization Period, Servicer shall instruct Trustee to withdraw the
entire balance in the Equalization Account and apply the same as Daily Group
Collections on that day. On the first day of the Group Amortization Period,
Servicer shall instruct Trustee likewise to withdraw the entire balance in the
Principal Funding Account and apply the same as Daily Group Collections on that
day.
SECTION 4.6 Available Subordinated Amount. (a) If a Group Amortization
Period begins, Servicer shall promptly calculate the Available Subordinated
Amount as of the Group Amortization Calculation Date and report such amount in
the Daily Report for the first day in the Group Amortization Period. Servicer
shall also calculate the Available Subordinated Amount as of each Cut-Off Date
falling in the Group Amortization Period, such calculation to be reflected in
the related Monthly Report.
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491
(b) The Available Subordinated Amount as of the Group Amortization
Calculation Date shall equal the product of (x) the Investor Allocation
Percentage, multiplied by (y) the result of:
(i) the product of the Unpaid Balance of Receivables held by
Trustee at the opening of business on the Group Amortization
Calculation Date, multiplied by the Series Collection Allocation
Percentage on that date; minus
(ii) the sum of (A) the lesser of the Base Amount and the Net
Invested Amount and (B) the Carrying Cost Receivables Reserve at the
opening of business on the Group Amortization Calculation Date.
(c) The Available Subordinated Amount, as of any Cut-Off Date in the
Group Amortization Period, shall equal the result of:
(i) the Available Subordinated Amount as of the preceding
Cut-Off Date (or as of the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization
Period); minus
(ii) the Investor Allocable loss Amount with respect to the
ASA Measuring Period ending on that Cut-Off Date; minus
(iii) any Investor Allocable Dilution with respect to the ASA
Measuring Period ending on that Cut-Off Date; plus
(iv) subject to Sections 4.7 and 4.8, the Investor Allocable
Recoveries and Investor Allocable Dilution Adjustments with respect to
the ASA Measuring Period ending on that Cut-Off Date.
(d) Notwithstanding the foregoing, in no event shall the Available
Subordinated Amount at any time be less than zero or greater than the initial
Available Subordinated Amount calculated pursuant to subsection (b).
SECTION 4.7 Write-Offs and Recoveries. (a) In each Monthly Report
required to be delivered during the Group Amortization Period, Servicer shall
calculate the Investor WriteOffs and the Investor Allocable Recoveries for the
most recently ended ASA Measuring Period.
(b) If the Investor Write-Offs calculated in any Monthly Report exceed
zero, the Group Invested Amount shall be reduced by the amount of the Investor
Write-Offs with effect on the related Distribution Date. Any such reduction
shall be allocated to the Class Invested Amounts of all outstanding Subordinated
Classes (ratably in accordance with such Class Invested Amounts) until all such
Class Invested Amounts have been reduced to zero.
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492
Any remaining reduction shall be allocated to the Class Invested Amounts of all
outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts).
(c) If the Group Invested Amount has been reduced on account of any
Investor Write-Offs, then any Investor Allocable Recoveries with respect to any
Calculation Period ending after the reduction takes place shall be applied to
reinstate the Group Invested Amount, to the extent of such prior reductions that
have not previously been reinstated, with effect on the related Distribution
Date. Any such reinstatement shall be allocated to the Class Invested Amounts of
all outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts) until all prior reductions to such Class Invested Amounts on account of
Investor Write-Offs have been reinstated. Any remaining reinstatement shall be
allocated to the Class Invested Amounts of all outstanding Subordinated Classes
(ratably in accordance with such Class Invested Amounts).
(d) If Investor Allocable Recoveries are applied pursuant to subsection
(c) to reinstate the Group Invested Amount on any Distribution Date, then
Investor Allocable Recoveries shall be applied to increase the Available
Subordinated Amount on the same Distribution Date only to the extent of the
excess, if any, of the Investor Allocable Recoveries, minus the amount of
Investor Allocable Recoveries so applied.
(e) The outstanding principal amount of any Senior Class or
Subordinated Class shall be reduced by any reduction, and increased by any
reinstatement, of its Class Invested Amount pursuant to this Section 4.7 or
Section 4.8, in the amount of such reduction or reinstatement.
SECTION 4.8 Certain Dilution in a Group Amortization Period. (a) In
each Monthly Report required to be delivered during the Group Amortization
Period, Servicer shall calculate the Investor Allocable Dilution and the Series
Allocable Dilution Adjustments for the most recently ended ASA Measuring Period.
(b) If the Investor Allocable Dilution calculated in any Monthly Report
is greater than zero, and there are funds in the Holdback Account, then those
funds (up to an amount equal to the amount of the Investor Allocable Dilution)
shall be allocated (i) first, in accordance with priority first of the first
paragraph of Section 4.4, (ii) second, to the Principal Funding Account (in
accordance with clauses (1) and (2) of priority second of the first paragraph of
Section 4.4) until the Net Invested Amount is reduced to zero and (iii) third,
in accordance with priorities third through fifth of the first paragraph of
Section 4.4, in that priority.
(c) If the Available Subordinated Amount or the Group Invested Amount
has been reduced on account of any Investor Allocable Dilution, then (i) any
Series Allocable Dilution Adjustments with respect to any Calculation Period
ending after the reduction takes place and (ii) any additional funds deposited
in the Holdback Account (the "Investor Allocable Dilution
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493
Adjustments") shall be allocated (x) first, to reinstate the Group Invested
Amount (with the same allocation among Senior Classes and Subordinated Classes
as is described in subsection 4.7(c)), and (y) second, to reinstate the
Available Subordinated Amount, in each case to the extent not previously
reinstated pursuant to Section 4.7 or this Section 4.8. Any funds so allocated
on any day shall be allocated (i) first, in accordance with priority first of
the first paragraph of Section 4.4, (ii) second, to the Principal Funding
Account (in accordance with clauses (1) and (2) of priority second of the first
paragraph of Section 4.4) until the Net Invested Amount is reduced to zero and
(iii) third, in accordance with priorities third through fifth of the first
paragraph of Section 4.4, in that priority.
SECTION 4.9 Optional Early Pay Out. (a) On any Business Day falling in
the Revolving Period, Transferor may provide notice to Trustee of its intention
to accumulate funds to cause the Series 1996-1 Certificates to be prepaid in
full or (as provided in the next sentence) in part. There may be a single
partial prepayment of Class A Certificates, provided that (i) such prepayment
(in the aggregate for all Class A Certificates) shall not exceed $10,000,000,
(ii) such prepayment shall be made after the first anniversary of the date
hereof, and (iii) the amount prepaid shall reflect a reduction in the Unpaid
Balance of Receivables due to the sale of a Seller (or all or substantially all
of its assets) or the loss of a major customer by the Sellers. When amounts
sufficient for such prepayment have been accumulated, Transferor may provide
notice to Trustee (the "Prepayment Notice") of the date, at least three business
days after the date of such Prepayment Notice, when the prepayment shall occur.
Trustee shall notify the affected Holders promptly upon receiving such
Prepayment Notice. In the event of any such prepayment of the Series 1996-1
Certificates occurring at any time during the one-year period commencing on the
date hereof, the Holders of such Series 1996-1 Certificates shall be entitled to
receive a Prepayment Premium. Except as expressly provided in this subsection
4.9(a), the Series 1996-1 Certificates may not be partially prepaid. The Series
1996-1 Certificates, once prepaid, may not be reinstated.
(b) Commencing upon the date specified in the notice to the Trustee
referred to in subsection (a) (until an amount equal to the amount to be
prepaid, plus the related Prepayment Premium, if any, and other applicable
Additional Amounts have been accumulated), amounts shall be set aside for
purposes of that prepayment in accordance with Section 4.3, except that no such
amounts shall be set aside if Transferor notifies Trustee that Transferor
intends to cause the Series 1996-1 Certificates to be prepaid by causing the
portion of the Series Interest for Group I attributable to the Series 1996-1
Certificates to be conveyed to one or more Persons (who may be the Holders of a
new Series issued substantially contemporaneously with such prepayment) for a
cash purchase price in an amount equal to the sum of (i) the outstanding
principal amount of the Series 1996-1 Certificates, plus (ii) to the extent not
available in the Carrying Cost Account, accrued and unpaid interest on the
Series 1996-1 Certificates through the day of such prepayment (the "Refinancing
Date"), plus (iii) to the extent not available from funds set aside pursuant to
priority fourth of Section 4.3, the Additional Amounts, if any, owed with
respect to the
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Series 1996-1 Certificates. No such conveyance shall, however, be permitted if
as a result thereof, Transferor, Howmet or any of their Affiliates would acquire
such portion of the Series Interest or the underlying Receivables. In the case
of any such conveyance, the purchase price shall be deposited in the Principal
Funding Account and shall be distributed to the Agent, for further distribution
to the Holders, on the Refinancing Date in accordance with the terms of Section
5.2. Upon deposit of the purchase price in the Principal Funding Account, the
Series 1996-1 Holders shall have no further rights with respect to the
Transferred Assets.
(c) Any prepayment pursuant to this Section 4.9 shall be made on the
later to occur of (i) the date specified in the notice of prepayment and (ii)
the date on which sufficient funds (including funds to cover any related
Additional Amounts) have been accumulated pursuant to Section 4.3 or 4.4 or
obtained by a conveyance described in subsection 4.9(b).
(d) The Class B Certificates may not be prepaid until the Class A
Certificates have been repaid in full. In addition no Class B Certificates (or
Certificates in any other Subordinated Class) may be prepaid if any Senior Class
is outstanding and, after giving effect to that payment, the Net Invested Amount
would exceed the Base Amount.
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations.
(a) Notwithstanding clause (a) of the definition of Eligible Obligor, Persons
that are not Domestic Persons (such Persons being "Foreign Obligors") may be
Eligible Obligors.
(b) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) whether the members of the Concentration Unit are Domestic
Persons, Category One Obligors, Category Two Obligors or Category Three
Obligors.
(ii) such Concentration Unit's Basic Concentration Limit times
the Adjusted Eligible Receivables for such day (such product being such
Concentration Unit's "Total Dollar Limit").
(iii) the aggregate Unpaid Balance of Eligible Receivables
owed by Domestic Persons in such Concentration Unit.
(iv) an amount (whether positive or negative) equal to (A) the
Total Dollar Limit for such Concentration Unit minus (B) the amount
determined pursuant to clause (iii). Any such positive sum is the
"First Step Residual." The absolute value of any such negative sum is
the "First Step Excess."
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(v) an amount (the "Category One Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category One
Obligors in such Concentration Unit.
(vi) an amount equal to 4% of the Adjusted Eligible
Receivables on such day.
(vii) the lesser of (A) the First Step Residual (or, if there
is no First Step Residual, zero) and (B) the amount determined pursuant
to clause (vi).
(viii) an amount (the "Second Step Excess") equal to (A) the
Category One Balance minus (B) the amount determined pursuant to clause
(vii); provided that if such sum is a negative number, the Second Step
Excess will be zero.
(ix) an amount (the "Second Step Residual") equal to (A) the
First Step Residual minus (B) the Category One Balance plus (C) the
Second Step Excess; provided that if such sum is a negative number, the
Second Step Residual will be zero.
(x) an amount (the "Category Two Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Two
Obligors in such Concentration Unit.
(xi) an amount equal to 2 % of Adjusted Eligible Receivables
on such day.
(xii) the lesser of (A) the Second Step Residual and (B) the
amount determined pursuant to clause (xi).
(xiii) an amount (the "Third Step Excess") equal to (A) the
Category Two Balance minus (B) the amount determined pursuant to clause
(xii); provided that if such sum is a negative number, the Third Step
Excess will be zero.
(xiv) an amount (the "Third Step Residual") equal to (A) the
Second Step Residual minus (B) the Category Two Balance plus (C) the
Third Step Excess; provided that if such sum is a negative number, the
Third Step Residual will be zero.
(xv) an amount (the "Category Three Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Three
Obligors in such Concentration Unit.
(xvi) the lesser of (A) the Third Step Residual and (B) the
amount determined pursuant to clause (xi).
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(xvii) an amount (the "Fourth Step Excess") equal to (A) the
Category Three Balance minus (B) the amount determined pursuant to
clause (xvi); provided that if such sum is a negative number, the
Fourth Step Excess will be zero.
(xviii) the sum of the First Step Excess, the Second Step
Excess, the Third Step Excess and the Fourth Step Excess, such sum
being the "Concentration Unit Excess Concentration" for such
Concentration Unit.
(c) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) an amount (the "Category One Eligibles") equal to (A) the
Category One Balance for such Concentration Unit minus (B) the Second
Step Excess (if any) for such Concentration Unit; provided that if such
sum is a negative number, the Category One Eligibles will be zero.
(ii) an amount (the "Category Two Eligibles") equal to (A) the
Category Two Balance minus (B) the Third Step Excess (if any) for such
Concentration Unit; provided that if such sum is a negative number, the
Category Two Eligibles will be zero.
(iii) an amount (the "Category Three Eligibles") equal to (A)
the Category Three Balance minus (B) the Fourth Step Excess for such
Concentration Unit; provided that if such sum is a negative number, the
Category Three Eligibles will be zero.
(d) On each Business Day, Servicer shall determine:
(i) the sum of the Category One Eligibles for all
Concentration Units.
(ii) the sum of the Category Two Eligibles for all
Concentration Units.
(iii) the sum of the Category Three Eligibles for all
Concentration Units.
(iv) an amount (the "Category Two Excess Concentration") equal
to (A) the amount determined pursuant to clause (ii) minus (B) 10% of
the Adjusted Eligible Receivables on such day; provided that if such
sum is a negative number, the Category Two Excess Concentration shall
be zero.
(v) an amount (the "Category Three Excess Concentration")
equal to (A) the amount determined pursuant to clause (iii) minus (B)
5% of the Adjusted Eligible Receivables on such day; provided that if
such sum is a negative number the Category Three Excess Concentrations
shall be zero.
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(vi) the sum of the amounts in clauses (i), (ii) and (iii).
(vii) the sum of the Category Two Excess Concentration and the
Category Three Excess Concentration.
(viii) the sum of (A) the amount determined pursuant to clause
(vi) minus the amount determined pursuant to clause (vii).
(ix) an amount (the "Total Foreign Concentration Excess")
equal to (A) the amount determined pursuant to clause (viii), minus (B)
35% of the Adjusted Eligible Receivables; provided that if such sum is
a negative number, the Total Foreign Concentration Excess shall be
zero.
(e) With respect to (i) all Category One Obligors or Category Two
Obligors, and (ii) each Category Three Obligor that owes Eligible Receivables in
excess of $1,000,000 or that is located in a jurisdiction where Obligors owe an
aggregate amount of Eligible Receivables in excess of $2,000,000, Servicer and
Transferor shall, and shall cause the Sellers to, take all actions reasonably
necessary to perfect and/or protect Transferor's and/or the Trustee's interests
in such Receivables under the laws of the jurisdiction in which such Obligors
are located.
(f) Within the four weeks following each anniversary of the Closing
Date, Servicer shall (i) cause counsel satisfactory to the Required Purchasers,
at the expense of Howmet, to contact local counsel in each jurisdiction in which
Obligors referred to in clause (e) are located, for purposes of determining
whether there has been a change in the laws of such jurisdiction regarding the
assignment of Receivables and (ii) take such actions as are required under
Section 4.10(e) with respect to any such change. Nothing in this Section 4.10(f)
shall limit the obligations of Servicer and Transferor under Section 4.10(e) at
any other time.
(g) Contemporaneously with the delivery of each Monthly Report,
Servicer shall provide Trustee with a certificate, signed by an appropriate
officer, showing (i) any Obligor that is not a Domestic Person and either owes
Receivables in an aggregate amount exceeding $1,000,000 as of the most recent
Cut-Off Date or is a party to a contract with a Seller expiring more than one
year after such Cut-Off Date, and (ii) any jurisdiction outside the United
States in which Obligors owe an aggregate amount of Receivables exceeding
$2,000,000, determined as of such Cut-Off Date.
(h) All documents executed and delivered to, or for the benefit of,
Trustee pursuant to this Section shall be Transaction Documents for all purposes
(including for purposes of Section 6.1).
SECTION 4.11 Tax Opinion. if any Tax Opinion is required to be
delivered in connection with the Series 1996-1 Certificates, the term "Tax
Opinion" shall have the meaning specified below:
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"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax and applicable state income and
franchise tax purposes, (a) such action will not cause the Investor Certificates
of Series 1996-1 debt or partnership interests, (b) such action will not cause
the Trust to be treated as other than an association (or publicly traded
partnership) taxable as a corporation, (c) such action should not be treated as
a taxable event to any Series 1996-1 Investor Certificateholder or Certificate
Owner.
SECTION 4.12 Reset of Benchmark Percentages and Special Concentration
Limits. Transferor may from time to time (i) increase or decrease any Benchmark
Percentage used in the definition of Concentration Limit, (ii) change the
percentages specified in the definition of Special Concentration Limit with
respect to the two Tier-5 Obligors that owe the highest aggregate Unpaid
Balances of Eligible Receivables, or (iii) designate an additional Obligor as a
"Special Obligor," in each case (other than the designation of Westinghouse
Electric Corp. as a Special Obligor) if the Approval Condition is satisfied. It
is understood and agreed that any such changes in the Benchmark Percentages or
the Special Concentration Limits or the addition of a Special Obligor may change
the calculation of the Class A Concentration Factor, the Class B Concentration
Factor, the Class A Minimum Reserve Ratio and the Class B Minimum Reserve Ratio.
ARTICLE V DISTRIBUTIONS AND REPORTS
SECTION 5.1 Distributions. On each Distribution Date and, with respect
to clause (b), on each Principal Payment Date, other than a Distribution Date
that is also a Refinancing Date, Trustee shall, in accordance with instructions
set out in the applicable Daily Report, distribute to the Holders, the following
amounts:
(a) accrued and unpaid interest on the ABR Tranches and any
additional interest payable to the Series 1996-1 Holders pursuant to
Section 4.1 or to the Holders of any other Series in Group I, to the
extent funds are available for such payment in the Carrying Cost
Account (and in the event of any shortfall, such interest shall be paid
first to each Senior Class, ratably in accordance with the total amount
of interest owed to each Senior Class, and second to each Subordinated
Class, ratably in accordance with the total amount of interest owed to
each Subordinated Class);
(b) on each Principal Payment Date, all funds deposited in
each sub-account of the Principal Funding Account on or prior to the
most recent Cut-Off Date shall be distributed in reduction of the
related Series Invested Amounts; all such amounts on deposit in the
Series 1996-1 sub-account of the Principal Funding Account shall be
paid to the Holders of Class A Certificates until they have been paid
or provided for in full before any such amounts are paid to the Holders
of Class B Certificates, and no such amounts shall be paid to the
Holders of any Subordinated Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Invested
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Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day);
(c) if, on the Expected Final Payment Date or any Distribution
Date failing in a Group Amortization Period, the funds on deposit in
the Carrying Cost Account (less any Servicing Fee payable on that day
to anyone other than a Howmet Person) will be equal to or greater than
the Invested Amount (after giving effect to all distributions required
by subsections (a) and (b)), then an amount equal to such remaining
Invested Amount shall be withdrawn from the Carrying Cost Account and
distributed in reduction of the Invested Amount; and
(d) any Additional Amounts payable with respect to
Certificates in any Series in Group I to the extent that funds have
been allocated for those Additional Amounts pursuant to priority fourth
of Section 4.3 or priority third of Section 4.4 (and in the event of
any shortfall, Additional Amounts shall be paid first to each Senior
Class, ratably in accordance with the total Additional Amounts owed to
each Senior Class, and second to each Subordinated Class, ratably in
accordance with the total Additional Amounts owed to each Subordinated
Class).
On each Distribution Date, Trustee shall also, in accordance with
instructions set out in the applicable Daily Report, distribute the Servicing
Fee to the Servicer to the extent that funds are available for that purpose in
the Carrying Cost Account.
On each Interest Payment Date (other than any Distribution Date, which
shall be governed by subsection (a) above), Trustee shall, in accordance with
instructions set out in the applicable Daily Report, distribute interest payable
on that date to the Holders of any Series in Group I, to the extent funds are
available for such payment in the Carrying Cost Account (and in the event of any
shortfall, any such interest shall be paid first to each Senior Class, ratably
in accordance with the total amount of interest owed to each Senior Class, and
second to each Subordinated Class, ratably in accordance with the total amount
of interest owed to each Subordinated Class).
Any amounts payable to the Holders of Class A Certificates pursuant to
this Section shall be paid to the Agent, and the Agent shall distribute such
amounts to such Holders. Amounts payable to a Holder of Class B Certificates
pursuant to this Section shall be paid to such Holder.
SECTION 5.2 Special Distributions on the Refinancing Date. On the
Refinancing Date, Trustee shall, in accordance with instructions set out in the
applicable Daily Report, distribute to the Holders the following amounts:
(a) all interest accrued on the Certificates in any Series in
Group I through the Refinancing Date, to the extent funds are available
for such payment in the Carrying
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500
Cost Account or have been deposited in the Principal Funding Account
pursuant to Section 4.9;
(b) all funds deposited in the Principal Funding Account
pursuant to Section 4.9, provided that no such amounts shall he paid to
the Holders of the Class B Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Net Invested
Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day); and
(c) any Additional Amounts to the extent that funds for those
Additional Amounts have been allocated pursuant to priority fourth of
Section 4.3 or priority third of Section 4.4 or deposited in the
Principal Funding Account pursuant to Section 4.9.
Amounts payable to Holders of Class A Certificates pursuant to this
Section shall he paid to the Agent, and the Agent shall distribute such amounts
to such Holders. Amounts payable to a Holder of Class B Certificates pursuant to
this Section shall he paid to such Holder. Promptly following receipt of the
amounts payable to the Holders of Certificates pursuant to this Section, such
Holders shall tender such Certificates to the Trustee.
SECTION 5.3 Payments in Respect of Transferor Certificate. On each day
on which funds are allocated for this purpose pursuant to Sections 4.3 and 4.4
(and subject to the terms of Section 4.4 relating to the Holdback Account),
Trustee shall, in accordance with instructions set out in the applicable Dally
Report, distribute to Transferor, in respect of the Transferor Certificate, all
funds allocated for that purpose in accordance with those Sections. In addition,
after the Group Invested Amount has been repaid in full and all interest and
Additional Amounts owed to the Holders have been paid, any additional funds on
deposit in the Carrying Cost Account, the Equalization Account or the Principal
Funding Account shall similarly he paid to Transferor in respect of the
Transferor Certificate.
SECTION 5.4 Daily Reports and Monthly Reports. Each Daily Report and
Monthly Report shall he substantially in the applicable form set out in Exhibit
B or C or in such other form as may he required by any other Supplement relating
to a Series in Group I or otherwise satisfactory to Servicer and Trustee and
consistent with the terms of this Supplement, each such other Supplement and the
Pooling Agreement. Copies of each Monthly Report shall be provided free of
charge by the Trustee to purchasers of Series 1996-1 Certificates in connection
with the initial distribution thereof and may be obtained free of charge upon
request from the Trustee (and presentation of a confirmation evidencing the
purchase of such beneficial interest) by subsequent purchasers.
SECTION 5.5 Annual Tax Information. On or before February 15 of each
calendar year, beginning with calendar year 1997, Servicer, on behalf of
Trustee, shall furnish or cause to he furnished to each Person who at any time
during the preceding calendar year was
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501
a Holder the information for the preceding calendar year, or the applicable
portion thereof during which the Person was a Holder, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable such Holders to prepare their Federal income tax returns.
Servicer's obligations under the preceding sentence shall be deemed to have been
satisfied to the extent that substantially comparable information shall he
provided by the Paying Agent to the specified Persons pursuant to the Pooling
Agreement or any requirements of the Internal Revenue Code as from time to time
in effect. Notwithstanding anything to the contrary contained in this Agreement,
Trustee shall, to the extent required by applicable law, from time to time
furnish to the appropriate Persons a Form 1099-INT within the period required by
applicable law.
SECTION 5.6 Periodic Perfection Certificate. On or before December 1 of
each calendar year, beginning with calendar year 1996, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to Trustee and the Agent an
Officer's Certificate setting forth a list of all changes in (a) the name,
identity or corporate structure of Transferor or any Seller and (b) the chief
executive office of Transferor or any Seller (or in the place of business of
Transferor or any Seller that has only one place of business) that have taken
place since the date of the Officer's Certificate most recently delivered
pursuant to this Section 5.6 (or since the Closing Date, in the case of the
first such Officer's Certificate to he delivered), or indicating that no such
events have taken place, and stating in each case what filings of UCC financing
statements, or amendments thereto, relating to the Transaction Documents have
been made in connection with each such event (identifying the date and filing
index numbers for each). Any financing statement identified in such an Officer's
Certificate delivered to Trustee shall be deemed to have been identified to
Trustee in writing for purposes of subsection 11.1(c)(v) of the Pooling
Agreement. If any such new UCC financing statements are filed, Servicer shall
cause Trustee to be named as secured party (in the case of any filing against
Transferor) or assignee of the secured party (in the case of any filing against
a Seller). Notwithstanding the foregoing, if any "Event of Default" or
"Potential Event of Default" under (and as defined in) the Howmet Credit
Agreement occurs, Servicer shall deliver an Officer's Certificate covering the
matters described above to Trustee and Agent not later than 10 days after the
occurrence of such event, and for so long as any such event remains outstanding,
Servicer shall deliver such an Officer's Certificate on the last Business Day
falling in each of March, June, September and December.
ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.1 Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event":
(a)(i) failure on the part of Transferor or Servicer to make
any payment of the principal amount of the Series 1996-1 Certificates
when due, or to make any payment of any interest on the Series 1996-1
Certificates or to make any deposit required by
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502
the terms of any Transaction Document on or before two Business Days
after the date such payment or deposit is required to be made, or to
make any other payment, except any payment of the Servicing Fee to a
Howmet Person, required by the terms of any Transaction Document on or
before three Business Days after the date such payment is required to
be made; or (ii) failure on the part of any Seller to duly observe or
perform subsection 6.1(f), 6.1(h), 6.1(j), 6.3(a), 6.3(b), 6.3(c) or
6.3(e) of the Purchase Agreement or Transferor to duly observe or
perform subsection 7.2(c), 7.2(e), 7.2(f), 7.2(h), 7.2(i), 7.2(j) or
7.2(k) of the Pooling Agreement or clause (i) or (ii) of subsection
7.2(d) of the Pooling Agreement, which failure has a substantial
likelihood of having a Material Adverse Effect and continues unremedied
for a period of five Business Days; or (iii) failure on the part of
Transferor, Servicer or any Seller duly to observe or perform any other
covenant or agreement set forth in any Transaction Document, which
failure has a substantial likelihood of having a Material Adverse
Effect and continues unremedied for a period of 30 days; or (iv)
Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in
subsection 5.1(d), 5.1(k), 5.1(o) or 5.1(r) of the Purchase Agreement
or by Transferor in subsection 2.3(a) (i), 2.3(a) (ii) or 7.1(i) of the
Pooling Agreement shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material
respect for a period of five Business Days, or any other representation
or warranty made by Transferor, Servicer or any Seller in any
Transaction Document shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material
respect for a period of 30 days; provided that a mistake in the
representation of a Receivable as an Eligible Receivable or the breach
of a representation and warranty with respect to a Receivable shall not
constitute an Early Amortization Event unless and until the applicable
Seller has failed to make the cash payments (if any) owed under
Sections 3.1 and 3.5 of the Purchase Agreement in respect of such
mistake or breach (it being understood that certain of such mistakes or
breaches may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Transferor,
Servicer, Guarantor or any Seller, or Transferor shall become unable,
for any reason, to transfer Receivables or other Transferred Assets to
the Trust in accordance with the provisions of this Agreement and the
Pooling Agreement; provided that if, at the time any event that would,
with the passage of time, become a Bankruptcy Event occurs as a result
of a bankruptcy proceeding being filed against Transferor or any
Seller, then, on and after the day on which the bankruptcy proceeding
is filed until the earlier to occur of the dismissal of the proceeding
and the commencement of an Early Amortization Period, Transferor shall
not purchase Receivables and Related Assets from the affected Seller
or, if Transferor is the subject of the proceeding, transfer
Receivables and Related Transferred Assets to the Trust;
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503
(d) the Trust or Transferor shall be required to be registered
as an "investment company" under and within the meaning of the
Investment Company Act of 1940, as amended;
(e) the Net Invested Amount exceeds the Base Amount for a
period of two or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have
been remedied;
(g) Howmet shall cease to own, directly or indirectly, 100% of
the issued and outstanding capital stock of Transferor;
(h) the Internal Revenue Service or the PBGC shall have filed
one or more Tax or ERISA Liens against the assets of Transferor or any
Seller (including Receivables) in an aggregate amount exceeding
$250,000 unless such amounts (i) are bonded in a manner that satisfies
the Approval Condition or (ii) relate to taxes in an aggregate amount
not exceeding $1,000,000 which are contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained under GAAP;
(i) the cessation of, or the failure to create, a valid
first-priority perfected ownership or security interest in favor of
Trustee in the Receivables or the rights of Transferor under the
Purchase Agreement, which cessation or failure has a substantial
likelihood of having a Material Adverse Effect;
(j) the Series 1996-1 Invested Amount is not paid in full on
the Expected Final Payment Date;
(k) Transferor's net worth (as calculated in accordance with
GAAP) shall at any time be less than 17% of the aggregate Unpaid
Balance of the Receivables at such time and such condition continues
for five consecutive Business Days; provided that for purposes of
calculating Transferor's net worth, any and all amounts owed to
Transferor by any Howmet Person shall be excluded from such
calculation;
(l) any foreclosure or similar proceeding in respect of any
adverse claim on any Buyer Note or the Transferor's common stock shall
have been commenced; or title to any Buyer Note or Transferor's common
stock shall pass to the holders of such adverse claim, it being
understood that the grant of a security interest in the stock of
Transferor or any Buyer Note to a creditor of a Seller that is party to
an Intercreditor Agreement shall not be an Early Amortization Event;
(m) the average of the Aged Receivables Ratio for any three
consecutive Calculation Periods shall be greater than 2.50%;
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504
(n) the average of the Past Due Receivables Ratio for any
three consecutive Calculation Periods shall exceed 5.75%;
(o) the average of the Dilution Ratio for any three
consecutive Calculation Periods shall be greater than 6.75%; or
(p) the Intercreditor Provisions shall be amended without
written notice thereof having been provided to the Agent no later than
five Business Days prior to the effective date of such amendment.
SECTION 6.2 Early Amortization Period. Upon the occurrence and
continuance of any Early Amortization Event described in subsection 6.1(c), an
Early Amortization Period shall commence without any notice or other action on
the part of Trustee or the Series 1996-1 Holders, immediately upon the
occurrence of such Early Amortization Event, except that if an Early
Amortization Event described in subsection 6.1(c) occurs as the result of the
occurrence of a Bankruptcy Event with respect to one or more Sellers, the
Receivables originated by which made up less than 10% of the aggregate Unpaid
Balance of Receivables held by the Trust as of the date of the commencement of
the proceeding that gave rise to the first such Bankruptcy Event, then an Early
Amortization Period shall not commence unless Required Series Holders declare it
to have commenced. Upon the occurrence and continuance of any other Early
Amortization Event, alter the applicable grace period, if any, and if the action
or event that gave rise to such Early Amortization Event has not been waived by
the Required Series Holders, Trustee may (and, at the direction of the Required
Series Holders, shall) by notice then given in writing to Transferor and
Servicer, declare that an Early Amortization Period has commenced as of the date
of Transferor's receipt of the notice. In the event of any prepayment of the
Series 1996-1 Certificates prior to the first anniversary of the date hereof as
a result of the occurrence of an Early Amortization Event, the Holders thereof
shall be entitled to receive a Prepayment Premium.
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES
SECTION 7.1 Optional Redemption of Investor Interests. On any
Distribution Date occurring during an Early Amortization Period with respect to
the Series 1996-1 Certificates on or alter the date that the Series 1996-1
Invested Amount is reduced to 10% or less of the sum of the Stated Amounts for
the Series 1996-1 Certificates, Transferor shall have the option to redeem the
Series 1996-1 Series Interest. The purchase price will be an amount equal to the
Invested Amount plus accrued and unpaid interest (and accrued and unpaid
interest with respect to interest that was due but not paid on any prior
Distribution Date) through the day preceding the Distribution Date at the
applicable interest rate (as specified in Section 4.1) plus the aggregate amount
by which the Invested Amount has been reduced on account of Investor Write-Offs
(and not subsequently reinstated) plus (if such redemption occurs prior to the
first anniversary of the date hereof) the applicable Prepayment Premium. Upon
the tender of the outstanding Certificates of the Series by the Holders to
Trustee,
43
505
Trustee shall distribute the amounts, together with all funds on deposit in the
Principal Funding Account that are allocable to the Series 1996-1 Certificates,
to the Holders of the Series on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Holders. Following
any redemption, the Holders of the Series shall have no further rights with
respect to the Transferred Assets. In the event that Transferor falls for any
reason to deposit in the Principal Funding Account the aggregate purchase price
for the Series 1996-1 Certificates, payments shall continue to be made to the
Holders of the Series in accordance with the terms of the Pooling Agreement and
this Supplement.
SECTION 7.2 Termination. Notwithstanding Section 12.1 of the Pooling
Agreement, the last payment of the principal of and interest on the Certificates
of any Series in Group I shall be due and payable no later than the Final
Scheduled Payment Date for that Series. If, on the Distribution Date immediately
prior to the Final Scheduled Payment Date for any such Series, Servicer
determines that the Series Invested Amount for the Series on the applicable
Final Scheduled Payment Date (after giving effect to all changes therein on such
date) will exceed zero, Servicer shall, as soon as practicable, solicit bids for
the sale of interests in the Receivables in an amount equal to the product of
(i) the outstanding balance of Receivables, times (ii) the Series Collection
Allocation Percentage, times (iii) the Investor Allocation Percentage, times
(iv) a fraction the numerator of which is the applicable Series Invested Amount
and the denominator of which is the Group Invested Amount. Transferor shall be
entitled to participate in and to receive notice of each bid submitted in
connection with the bidding process. Upon the expiration of the period, Servicer
shall determine (x) the highest bid for such Receivables and (y) the Available
Final Distribution Amount for the Series. Servicer shall sell the interests in
the Transferred Assets on the Final Scheduled Payment Date for the applicable
Series to the bidder with the Highest Bid and shall deposit the proceeds of such
sale in the Master Collection Account for allocation to the Holders. The
priorities specified in Section 5.1 shall apply to any such distribution.
SECTION 7.3 Indemnification by Transferor. Transferor hereby agrees to
indemnify the Trust, Trustee, each Holder of a Series 1996-1 Certificate and
each of the successors, permitted transferees and assigns of any such Person and
all officers, directors, shareholders, controlling Persons, employees,
affiliates and agents of any of the foregoing (each of the foregoing Persons
individually being called a "Transferor Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims (whether on account
of settlements or otherwise, and whether or not the relevant Transferor
Indemnified Party is a party to any action or proceeding that gives rise to any
Transferor Indemnified Losses (as defined below)), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing collectively being called "Transferor
Indemnified Losses") awarded against or incurred by any of them that arise out
of or relate to this Agreement, any other Transaction Document or any of the
transactions contemplated herein or therein or the use of proceeds herefrom or
therefrom (including any Transferor Indemnified Losses (i) relating to any
Adverse Claim, without regard to whether
44
506
such Adverse Claim was a Permitted Adverse Claim, or (ii) arising from any
failure to make any filing or obtain any consent as required by the Federal
Assignment of Claims Act with respect to any Receivables).
Notwithstanding the foregoing, in no event shall any Transferor
Indemnified Party be indemnified for any Transferor Indemnified Losses (a)
resulting from gross negligence or willful misconduct on the part of such
Transferor Indemnified Party (or the gross negligence or willful misconduct on
the part of any of its officers, directors, employees, affiliates or agents),
(b) to the extent they include Transferor Indemnified Losses in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Transferor for the amount of any Receivable or Related Transferred Asset not
paid by the related Obligor, (c) to the extent they are or result from lost
profits, (d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) distributions on the Series
1996-1 Certificates, (ii) franchise or withholding taxes imposed on any
Transferor Indemnified Party other than the Trust or the Trustee in its capacity
as Trustee or (iii) federal or other income taxes on or measured by the net
income of such Transferor Indemnified Party and costs and expenses in defending
against the same, (e) resulting from any breach by such Transferor Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to a Transferor Indemnified Party or is insufficient to hold a
Transferor Indemnified Party harmless, then Transferor shall contribute to the
amount paid by the Transferor Indemnified Party as a result of any loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Transferor Indemnified Party on the one hand
and Transferor on the other hand, but also the relative fault of such Transferor
Indemnified Party (if any) and Transferor and any other relevant equitable
considerations.
SECTION 7.4 Indemnification by Servicer. Servicer agrees that the Agent
and each Holder of a Series 1996-1 Certificate shall be an "Indemnified Party"
for purposes of Section 8.4 of the Pooling Agreement.
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 8.2 Counterparts. This Supplement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
45
507
SECTION 8.3 Severability of Provisions. If any one or more of the
provisions or terms of this Supplement shall for any reason whatsoever be held
invalid, then the unenforceable provision(s) or term(s) shall be deemed
severable from the remaining provisions or terms of this Supplement and shall in
no way affect the validity or enforceability of the other provisions or terms of
this Supplement.
SECTION 8.4 Amendment, Waiver, Etc. This Supplement may be amended,
subject to Section 13.1 of the Pooling Agreement and Section 10.1 of each
Certificate Purchase Agreement, from time to time by Servicer, Transferor and
Trustee by a written instrument signed by each of them.
SECTION 8.5 Trustee. Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplement
or for or in respect of the recitals contained herein, all of which recitals are
made solely by Transferor and Servicer.
SECTION 8.6 Instructions in Writing. All instructions given by Servicer
to Trustee pursuant to this Supplement shall be in writing, and may be included
in a Daily Report or Monthly Report.
46
508
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address: c/o Nevada Corporate
Management, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION, as Servicer
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 8614746
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address: One M&T Plaza, 7th Floor
Buffalo, New York 14203
Attention: Russell Whitley
Facsimile: (716) 842-4474
509
EXHIBIT A - Part 1
to the Series 1996-1 Supplement
FORM OF CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIvE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND
510
WILL NOT BECOME A PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. (If this representation cannot be
made, Transferor, Servicer or the Trustee may require the legend to contain
additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
511
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: Maximum Principal Amounts
$________________
ThiS CERTIFIES THAT _________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Transferor"), HOWMET
CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation, as trustee (together with its
successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class A, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
3
512
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
A, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b)agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WiTNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:_________________________
Title: _____________________
4
513
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________
Title:____________________________
Dated:____________,1996
5
514
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- --------- ----------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
515
EXHIBIT A - Part 2
to the Series 1996-1 Supplement
FORM OF CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTh IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTh IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
516
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot be made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
517
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B, SERIES 1996-1 CERTIFICATE
Date: $________________
THIS CERTIFIES THAT___________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banning corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b)the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and
are therefore subordinated to the Class A, Series 1996-1 Certificates, Series
1996-1 Certificates and Certificates in any other Senior Class that may be
issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income
3
518
and franchise and other taxes measured by or imposed on income, the Class B,
Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:__________________________
Title:_______________________
4
519
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:____________________________
Title:_________________________
Dated:___________, 1996
5
520
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- --------- ----------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
521
EXHIBIT B
to Certificate Purchase
Agreement Series 1996-1, Class B
FORM OF ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of _________ (this "Agreement"), is
made between _____________________ ("Assignor"), and ____________________
("Assignee"). Except as otherwise defined herein, capitalized terms have the
meanings assigned to them in the Certificate Purchase Agreement (as defined
below).
BACKGROUND
1. Assignor is a party to the Certificate Purchase Agreement, dated as
of April 18, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Certificate Purchase Agreement"), among BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Transferor"), HOWMET CORPORATION, a Delaware
corporation, the Purchasers party thereto (including Assignor), and The First
National Bank of Chicago, as Agent.
2. Assignor wishes to assign, and Assignee wishes to be so assigned,
Assignor's rights and obligations arising on and after the Effective Date (as
defined below) under the Certificate Purchase Agreement and its Certificate,
including its outstanding Purchase (the "Purchase").
3. Assignor and Assignee also wish (a) Assignee to assume the
obligations of Assignor under the Certificate Purchase Agreement with respect to
Assignee's Share (as defined below) to the extent of the rights assigned and (b)
Assignor to be released from the obligations assumed by Assignee.
4. Transferor, by its execution hereof, is providing its written
consent to the assignment accomplished by this Agreement.
SECTION 1. Assignment. Effective on the Effective Date (as defined
below) and upon payment of the amount specified in Section 3(a), Assignor hereby
assigns and transfers to Assignee, without recourse, representation or
522
warranty of any kind, express or implied (except as provided in Sections 6(a)
and (b)), and subject to Section 4(b), Assignee's Share (as specified in Annex I
hereto) (the "Assignee's Share") of all of Assignor's rights, title and interest
arising under (a) the Certificate Purchase Agreement relating to Assignor's
Credit Exposure including all rights and obligations with respect to the
Purchase attributable to Assignee's Share and (b) Assignor's Certificate with
respect to Assignee's Share as will result in Assignee having from and after the
Effective Date the Class Percentage and the Series Percentage specified in Annex
I.
SECTION 2. Assumption. Effective on the Effective Date, Assignee hereby
irrevocably purchases, assumes and takes from Assignor, and Assignor is hereby
expressly and absolutely released from, all of Assignor's obligations arising
under the Certificate Purchase Agreement relating to Assignee's Share and the
Purchase attributable to Assignee's Share.
SECTION 3. Payment. In consideration of the assignment by Assignor to
Assignee as set forth above, Assignee agrees to pay to Assignor, in Dollars and
in immediately available funds, (a) on or prior to the Effective Date, an amount
specified by Assignor in writing on or prior to the Effective Date that
represents Assignee's Share attributable to the principal amount of the Purchase
made pursuant to the Certificate Purchase Agreement and outstanding on the
Effective Date, and (b) from time to time thereafter, other amounts (if any)
that Assignee has agreed in writing to pay to Assignor after the Effective Date.
In consideration of the assumption by Assignee, Assignor agrees to pay to
Assignee within two Business Days of the Effective Date, an assignment fee (if
any) that previously has been agreed to in writing by both parties.
Notwithstanding anything to the contrary in this Agreement, if and when
Assignee receives or collects (x) any payment of principal or interest relating
to the Purchase or (y) any payment of fees that are required to be paid to
Assignor pursuant to this Agreement, then Assignee shall forward the payment to
Assignor.
To the extent payment of funds to Assignee or Assignor are not made
within two Business Days, each, as the case may be, shall be entitled to recover
the due amount, together with interest thereon at the Federal Funds Rate per
annum accruing from the date of payment or the date of receipt of the funds by
the other party.
SECTION 4. Effectiveness. (a)(i) This Agreement shall become effective
on the date (the "Effective Date") on which it shall have been duly executed by
all parties and the Agent shall have recorded the information
page 2
523
contained herein in its records (or automatically if not so recorded within five
Business Days from the Agent's receipt of this Agreement signed by Assignor,
Assignee and Transferor)[; provided, however, that, notwithstanding anything
herein to the contrary, as a condition to the effectiveness of the assignment,
and prior to any rights of Assignee being recognized hereunder or under any
Transaction Document or Certificate, in accordance with Section 10.3(c) of the
Certificate Purchase Agreement, the assigning Purchaser shall provide, or shall
cause Assignee to provide, to Transferor such information as Transferor
reasonably requests to make the determinations required by Section 10. 3(f) of
the Certificate Purchase Agreement. If the Transferor has acknowledged in
writing the terms and conditions of this agreement, the assigning Purchaser
shall be deemed to have provided or caused to be provided such information.]1/
Assignor hereby notifies the Agent of the assignment, effective as of the
Effective Date, of Assignee's Share and the Purchase attributable to the
Assignee's Share, and directs the Agent to pay Assignee any payment of principal
of, or interest on, the Purchase attributable to the Assignee's Share. No (x)
failure of either Assignee or Assignor to settle any amount owed to the other
(except with respect to the payment of the processing and recordation fee to the
Agent and the payment due under Section 3(a)), (y) dispute respecting any other
settlement, including in respect of Transferor, or (z) bankruptcy, insolvency or
other condition whatsoever respecting any Person, shall in any way impair,
reduce or otherwise affect the effectiveness of this Agreement.
(ii) Assignor, Assignee and the Agent each acknowledges and agrees that
from and after the Effective Date, the Agent shall make all payments under the
Certificate Purchase Agreement in respect of Assignee's Share (including all
payments of principal and interest with respect thereto, whether or not the
payments shall have accrued prior to or after the Effective Date) to Assignee
only. Assignor and Assignee hereby agree further to make all appropriate
adjustments in payments to either of them under the Certificate Purchase
Agreement for periods prior to the Effective Date directly between themselves.
(b) With respect to the Purchase attributable to Assignee's Share, if
and when Assignor receives or collects any payment of principal, interest, or
Additional Amounts with respect to Assignee's Share for any period commencing on
or after the Effective Date, Assignor shall distribute to Assignee the portion
attributable to Assignee's Share, but only to the extent it accrued on or after
the Effective Date and was not theretofore paid to Assignee by Transferor or
otherwise. Any principal, interest and Additional
- ----------
1/ Bracketed language should be deleted in the case of a Permitted Transferee.
page 3
524
Amounts paid prior to the Effective Date shall be retained by Assignor. Any
principal, interest, and Additional Amounts received by Assignee that accrued
prior to the Effective Date shall be forwarded promptly, in the form received,
to Assignor. Assignee recognizes and agrees that (i) it shall receive no payment
on account of any Agent's fees or other amounts or expenses (including counsel
fees) payable to the Agent (in such capacity and for its own account), (ii) this
Agreement shall not operate to assign any rights or delegate any obligations of
the Agent (in such capacity), and (iii) notwithstanding anything to the contrary
in this Agreement, Assignor shall retain all of its rights to indemnification
under the Certificate Purchase Agreement for any events, acts or omissions
occurring prior to the Effective Date.
(c) The Agent, by its execution hereof, acknowledges the assignment and
agrees to make payments in respect of principal, interest, fees and Additional
Amounts as described in clause (a).
SECTION 5. Rights as Purchaser under Certificate Purchase Agreement. In
accordance with Section 10.3 of the Certificate Purchase Agreement, (a) as of
the Effective Date, Assignee will be a Purchaser under, and party to, the
Certificate Purchase Agreement and shall have (i) all of the rights and
obligations of a Purchaser (to the extent of the assignment and assumption of
Assignee's Share effected by this Agreement) and (ii) the addresses for (A)
notice purposes and (B) LIBOR Office as set forth in items 2 and 3,
respectively, of Annex I hereto and (b) promptly on or after the Effective Date,
Transferor will execute and deliver any documents and instruments that Assignor
or Assignee reasonably may require.
SECTION 6. Representations and Warranties. (a) Each of Assignor and
Assignee represents and warrants to the other as follows:
(i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, to fulfill the
obligations hereunder and to consummate the transactions contemplated
hereby;
(ii) the making and performance of this Agreement and all
documents required to be executed and delivered hereunder do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other applicable law or regulation;
(iii) this Agreement has been duly executed and delivered and
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
page 4
525
(iv) all approvals, authorizations or other actions by, or
filing with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained.
(b) Assignor represents and warrants to Assignee that Assignee's Share
and the Purchase attributable to Assignee's Share is not subject to any liens or
security interests created by Assignor.
(c) Except as set forth in subsections (a) and (b), Assignor makes no
representations or warranties, express or implied, to Assignee and shall not be
responsible to Assignee for (i) the execution, effectiveness, genuineness,
legality, validity, enforceability, collectibility, regulatory status or
sufficiency of the Certificate Purchase Agreement or any of the other
Transaction Documents, (ii) the perfection, priority, value or adequacy of any
collateral security or guaranty, (iii) the taking of any action, or the failure
to take any action, with respect to any of the Transaction Documents, (iv) any
representations, warranties, recitals or statements made in any of the
Transaction Documents or in any written or oral financial or other statements,
instruments, reports, certificates or documents made or furnished by Assignor to
Assignee or by or on behalf of Transferor or any of its Affiliates to Assignor
or Assignee in connection with the Transaction Documents and the transactions
contemplated thereby, (v) the financial or other condition of Transferor or any
other Person or (vi) any other matter having any relation to any of the
foregoing. Assignor shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Transaction Documents or the existence or
possible existence of any Unmatured Early Amortization Event, Early Amortization
Event or Servicer Default. Additionally, Assignor shall not have any duty or
responsibility either initially or on a continuing basis to make any
investigation or any appraisal on Assignee's behalf or to provide Assignee with
any credit or other information with respect thereto, whether coming into
Assignor's possession before the execution of the Certificate Purchase Agreement
or at any time thereafter. Assignor shall have no responsibility with respect to
the accuracy of, or the completeness of, any information provided to Assignee,
whether by Assignor or by or on behalf of Transferor or any other Person
obligated under the Certificate Purchase Agreement or any related instrument or
document.
(d) Assignee represents and warrants that it has made its own
independent investigation of each of the foregoing matters, including the
financial condition and affairs of Transferor and its Affiliates, in connection
with the making of the Purchase and the execution of this Agreement
page 5
526
(including the solvency of Transferor and its Affiliates, their ability to pay
their respective debts as they mature and the capital of Transferor and its
Affiliates remaining after the closing under the Transaction Documents and the
consummation of the transactions contemplated thereby) and has made and shall
continue to make its own appraisal of the creditworthiness of Transferor and its
Affiliates. Assignee (i) confirms that it has received copies of the Transaction
Documents together with copies of certain other closing documents delivered in
connection with the Certificate Purchase Agreement, financial statements and any
other documents and information that it has requested or deemed appropriate to
make its own credit analysis and decision to enter into this Agreement and (ii)
agrees that it will, independently and without reliance upon the Agent, Assignor
or any other Purchaser and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Transaction Documents.
(e) Assignee represents and warrants to Transferor that the
representations and warranties in Section 6.3 of the Certificate Purchase
Agreement are true and correct in respect of such Assignee as of the date
hereof.
SECTION 7. No Proceedings. Assignee hereby agrees to be bound by the
provisions of Section 10.13 of the Certificate Purchase Agreement.
SECTION 8. Withholding Taxes. [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee agrees to execute and deliver to the
Agent, for delivery to Transferor, on or before the Effective Date, (a) two
original copies of Internal Revenue Service Form 4224 or successor applicable
form, properly completed and duly executed by the Assignee certifying that it is
entitled to receive payments under the Certificate Purchase Agreement and any
Certificate without deduction or withholding of any United States Federal income
taxes, and (b) an original copy of Internal Revenue Service Form W-8 or W-9 or
applicable successor form, properly completed and duly executed, certifying its
exemption from backup withholding. Assignee represents and warrants to
Transferor and Assignor that, as of the Effective Date, it shall be entitled to
receive payments under its Certificate, the Certificate Purchase Agreement and
hereunder without deduction for or on account of any taxes imposed by the United
States of America or any political subdivision thereof. In the event that, after
delivering the applicable form, Assignee shall cease to be exempt from
withholding and/or deduction of taxes, then the Agent may withhold and/or deduct
the applicable amount from any payments of principal, interest and any fees to
which Assignee otherwise would be entitled, and the Agent shall have no
liability whatsoever to Assignee for any such withholding
page 6
527
or deduction. Assignee shall indemnify Transferor and the Agent from and against
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs or expenses that result from Assignee's breach of such
representation and warranty.]2/ [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee (unless organized as a corporation
under the laws of any state of the United States) agrees to execute and deliver
to the Agent, for delivery to Transferor, on or before the Effective Date, an
original copy of Internal Revenue Service Form W-9 or applicable successor form,
properly completed and duly executed, certifying its exemption from backup
withholding.]3/
SECTION 9. Miscellaneous. (a) Each of the parties hereto agrees to take
any action and execute and deliver any documents that any party hereto
reasonably may request from time to time in order to implement more fully the
purposes of this Agreement. Without limiting the generality of the foregoing,
Assignor and Assignee will cooperate in obtaining for Assignee a Certificate (as
well as a replacement Certificate for Assignor representing any retained
interest of Assignor).
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
(c) Except as otherwise set forth herein, this Agreement sets forth the
entire agreement between the parties relating to the subject matter hereof, and
no term or provision of this Agreement may be amended, changed, waived,
discharged or terminated orally or otherwise, except in a writing signed by
Assignor and Assignee.
(d) This Agreement may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
(e) Each of the parties hereto agrees that each party shall bear its
own expenses in connection with the preparation and execution of this Agreement
- ----------
2/ If the Assignee is not a U.S. person within the meaning of Section 7701
(a)(30) of the Internal Revenue Code.
3/ If the Assignee is a U.S. person within the meaning of Section 7701(a)
(30) of the Internal Revenue Code.
page 7
528
and the consummation of the Assignment described herein. Assignee further agrees
that it shall send a check in the amount of $[1,500] [3,500] to the Agent on or
prior to the Effective Date, as payment of the processing and recordation fee
described in Section 10.3(c) of the Certificate Purchase Agreement. [Select
correct amount in accordance with that Section.]
(f) All representations and warranties made, and indemnities provided
for, herein shall survive the consummation of the transactions contemplated
hereby. Assignor and Assignee acknowledge and agree that Transferor is a
third-party beneficiary of Section 6(e) of this Agreement.
(g) Assignor may at any time or from time to time grant assignments and
participations in its rights and obligations under the Certificate Purchase
Agreement and its Certificate to other Persons, but not in the portions thereof
assigned to Assignee.
(h) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither Assignor
nor Assignee may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party. The preceding
sentence shall not limit the right of Assignee to assign all or part of
Assignee's Share in the manner contemplated by the Certificate Purchase
Agreement.
(i) Assignee acknowledges that all obligations of the Agent are subject
to Article IX of the Certificate Purchase Agreement.
page 8
529
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
___________________________________
as Assignor
By:________________________________
Title: ___________________________
___________________________________
as Assignee
By:________________________________
Title: ___________________________
The undersigned hereby acknowledges the terms and provisions of this
Agreement, and agrees to make payments in respect of principal, interest and
fees as described in Section 4(a).4/
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:___________________________
Title: ______________________
BLADE RECEIVABLES CORPORATION
By:___________________________
Title: ______________________
- ----------
4/ Acknowledgement not required for certain Assignees, as provided in
Section 10.3 of the Certificate Purchase Agreement.
page 9
530
ANNEX I
to Assignment Agreement
Item 1. Assignee's Share:
(a) Assignee's Stated Amount $______________
(b) Assignee's Class Percentage _____________%
(c) Assignee's Series Percentage _____________%
Item 2. Address of Assignee for notice purposes:
____________________________________
____________________________________
____________________________________
Attention:__________________________
Telephone:__________________________
Facsimile:__________________________
Item 3. LIBOR Office of Assignee:
____________________________________
____________________________________
____________________________________
531
APPENDIX X
to Certificate Purchase
Agreement Series 1996-1
INDEX OF ADDITIONAL DEFINED TERMS
Agent ...................................................................... 1
Agreement .................................................................. 1
Assignee ................................................................... 23
Certificates ............................................................... 1
Class Percentage ........................................................... 10
Credit Exposure ............................................................ 22
Effective Date ............................................................. 2
Financial Advisors ......................................................... 11
Howmet ..................................................................... 1
Indemnitees ................................................................ 27
LIBOR Office ............................................................... 5
Majority Class B Purchasers ................................................ 16
Participants ............................................................... 22
Pooling Agreement .......................................................... 1
Purchase ................................................................... 2
Purchasers ................................................................. 1
Receivables Review ......................................................... 16
Required Purchasers ........................................................ 20
Series Percentage .......................................................... 10
Servicer ................................................................... 1
Supplement ................................................................. 1
Taxes ...................................................................... 8
Transferee ................................................................. 24
Transferor ................................................................. 1
Trust ...................................................................... 1
Trust Interest ............................................................. 1
Trustee .................................................................... 1
532
CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
533
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot he made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) APTER GIVING EFFECT ThERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
page 2
534
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: April 18, 1996 Maximum Principal Amount:
$47,500,000
THIS CERTIFIES ThAT FALCON ASSET SECURITIZATION CORPORATION is the
registered owner of a nonassessable, fully-paid, fractional undivided interest
in the Blade Receivables Master Trust (the "Trust") that was created pursuant to
(a) the Pooling and Servicing Agreement, dated as of December 13, 1995, as
amended and restated in its entirety by the Amended and Restated Pooling and
Servicing Agreement, dated as of April 18, 1996 (as the same may be further
amended, supplemented or otherwise modified from time to time, the "Pooling
Agreement"), among BLADE RECEIVABLES CORPORATION, a Nevada corporation
("Transferor"), HOWMET CORPORATION, a Delaware corporation ("Servicer"), and
MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as
trustee (together with its successors and assigns in such capacity, "Trustee"),
and (b) the Supplement dated as of April 18, 1996 relating to the Series 1996-1
Certificates (the "Supplement"). This Certificate is one of the duly authorized
Class A, Series 1996-1 Certificates designated and issued under the Pooling
Agreement and the Supplement. Except as otherwise defined herein, capitalized
terms have the meanings that the Supplement and the Pooling Agreement assign to
them. This Certificate is subject to the terms, provisions and conditions of,
and is entitled to the benefits afforded by, the Pooling Agreement and the
Supplement, to which terms, provisions and conditions the Holder of this
Certificate by virtue of the acceptance hereof assents and by which the Holder
is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
page 3
535
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
A, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b)agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
[Remainder of Page Intentionally Left Blank]
page 4
536
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------
Title: Vice President
-----------------------
537
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ illegible
----------------------------
Title: ASST. VICE PRESIDENT
-------------------------
Dated: April 18, 1996
538
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- --------- ----------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
539
CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIvE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
540
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot he made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
page 2
541
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B, SERIES 199&1 CERTIFICATE
Date: April 18, 1996 $7,500,000
THIS CERTIFIES ThAT ALPINE SECURITIZATION CORP. is the registered owner
of a nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and
are therefore subordinated to the Class A, Series 1996-1 Certificates, Series
1996-1 Certificates and Certificates in any other Senior Class that may be
issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
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542
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
B, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b)agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
[Remainder of Page Intentionally Left Blank]
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543
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------
Title: Vice President
-----------------------
544
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ illegible
----------------------------
Title: ASST. VICE PRESIDENT
------------------------
Dated: April 18, 1996
545
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
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Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
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546
GUARANTY
THIS GUARANTY, dated as of December 13, 1995 (this "Guaranty"), is
issued by HOWMET CORPORATION, a Delaware corporation ("Guarantor"), for the
benefit of BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Purchaser"),
and its successors and assigns.
Guarantor agrees as follows:
SECTION 1 . Definitions. Capitalized terms used in this Guaranty,
unless otherwise defined herein, shall have the meaning set forth in Appendix A
to the Pooling and Servicing Agreement, dated as of December 13, 1995 (as it may
be amended, supplemented or otherwise modified from time to time, the "Pooling
Agreement") among Purchaser, Guarantor, as Servicer, and Manufacturers and
Traders Trust Company, as Trustee.
SECTION 2. Guaranty. FOR VALUE RECEIVED, Guarantor hereby
unconditionally guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, and the full and prompt
performance, of each of the Sellers' (each, a "Guaranteed Party") obligations,
howsoever created, arising or evidenced, whether direct or indirect, primary or
secondary, absolute or contingent, joint or several, now or hereafter existing
or due or to become due, which arise out of or in connection with any Seller
Transaction Document (all of such obligations being hereinafter collectively
called the "Liabilities"); provided that nothing contained herein shall be
deemed to constitute recourse liability for the payment of any losses in respect
of Receivables and reimbursement therefor that would constitute credit recourse
to the Guarantor or any Seller for the amount of any Receivable or Related
Transferred Asset not paid by the related Obligor. Guarantor further agrees to
pay all expenses (including reasonable attorneys' fees and legal expenses) paid
or incurred by Purchaser or its assigns in endeavoring to collect the
Liabilities, or any part thereof, and in enforcing this Guaranty.
SECTION 3. Continuing Guaranty. This Guaranty shall in all respects be
a continuing, absolute and unconditional guaranty, and shall remain in full
force and effect (notwithstanding, without limitation, that at any time or from
time to time all Liabilities may have been paid in full), subject to
discontinuance only upon actual receipt by Trustee of written notice from
Guarantor of the discontinuance hereof; provided, however, that no such notice
of discontinuance hereof shall affect or impair any of the agreements and
obligations of Guarantor (i) hereunder with respect to any and all Liabilities
existing prior to the time of
547
actual receipt of such notice by Trustee, any and all Liabilities created or
acquired thereafter pursuant to any commitments and agreements made by Purchaser
under and with respect to the Purchase Agreement, and any and all extensions or
renewals thereof, and (ii) any and all expenses paid or incurred by Purchaser or
its assigns in endeavoring to collect any of the foregoing and in enforcing this
Guaranty; and all of the agreements and obligations under this Guaranty shall,
notwithstanding any such notice of discontinuance, remain fully in effect until
all such Liabilities (including any extensions or renewals of any thereof) and
all such other obligations and expenses finally shall have been paid in full.
SECTION 4. Rescission. Guarantor further agrees that, if at any time
all or any part of any payment theretofore applied by Purchaser to any of the
Liabilities is or must be rescinded or returned by Purchaser for any reason
whatsoever, such Liabilities shall, for the purposes of this Guaranty, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by Purchaser, and this
Guaranty shall continue to be effective or be reinstated, as the case may be, as
to such Liabilities, all as though such application by Purchaser had not been
made.
SECTION 5. Certain Actions. Purchaser may, from time to time at its
sole discretion and without notice to Guarantor, take any or all of the
following actions without affecting the obligations of Guarantor hereunder: (a)
retain or obtain a lien upon or a security interest in any property to secure
any of the Liabilities or any obligation hereunder; (b) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to
Guarantor, with respect to any of the Liabilities or any obligation hereunder;
(c) extend or renew for one or more periods (regardless of whether longer than
the original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of Guarantor hereunder or any obligation of any nature
of any other obligor (including any Guaranteed Party) with respect to any of the
Liabilities; (d) release or fail to perfect its lien upon or security interest
in, or impair, surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Liabilities or any
obligation hereunder, or extend or renew for one or more periods (regardless of
whether longer than the original period) or release, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any such
property; and (e) resort to Guarantor for payment of any of the Liabilities,
regardless of whether Purchaser shall have resorted to any property securing any
of the Liabilities or any obligation hereunder or shall have proceeded against
any other obligor primarily or secondarily obligated with respect to any of the
Liabilities.
SECTION 6. Subrogation. Any amounts received by Purchaser from
whatsoever source on account of the Liabilities may be applied by it toward the
payment of such of the Liabilities, and in such order of application, as
Purchaser or its assigns may from time to time elect. Until such time as
Purchaser shall have received payment of the full amount of all Liabilities and
performance of all of Guarantor's obligations hereunder, no payment made by or
for the account of Guarantor pursuant to this Guaranty shall entitle Guarantor
by subrogation, indemnity or otherwise to any payment by any Guaranteed Party or
from or out of any property of any Guaranteed Party and Guarantor shall not
exercise any right or
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548
remedy against any Guaranteed Party or any property of any Guaranteed Party by
reason of any performance by Guarantor of this Guaranty.
SECTION 7. Waiver. Guarantor hereby expressly waives: (a) notice of
Purchaser's acceptance of this Guaranty; (b) notice of the existence or creation
or non-payment of all or any of the Liabilities; (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever (provided that nothing
contained in this clause (c) shall affect any obligations to give notice or make
demand as set forth in the Purchase Agreement or the Pooling Agreement); and (d)
all diligence in collection or protection of or realization upon the Liabilities
or any thereof, any obligation hereunder, or any security for or guaranty of any
of the foregoing.
SECTION 8. Unconditional Nature of Guaranty. No delay on Purchaser's
part in the exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by Purchaser of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy; nor shall any modification or waiver of any of the provisions of this
Guaranty be binding upon Purchaser except as expressly set forth in a writing
duly signed by Purchaser. No action of Purchaser permitted hereunder shall in
any way affect or impair Purchaser's rights or Guarantor's obligations under
this Guaranty. For the purposes of this Guaranty, Liabilities shall include all
of each Guaranteed Party's obligations under the Seller Transaction Documents,
notwithstanding any right or power of such Guaranteed Party or anyone else to
assert any claim or defense as to the invalidity or unenforceability of any such
obligation, and no such claim or defense shall affect or impair the obligations
of Guarantor hereunder. Guarantor's obligations under this Guaranty shall be
absolute and unconditional irrespective of any circumstance whatsoever which
might constitute a legal or equitable discharge or defense of Guarantor.
Guarantor hereby acknowledges that there are no conditions to the effectiveness
of this Guaranty.
SECTION 9. Information. Guarantor has and will continue to have
independent means of obtaining information concerning each Guaranteed Party's
affairs, financial condition and business. Purchaser shall not have any duty or
responsibility to provide Guarantor with any credit or other information
concerning any Guaranteed Party's affairs, financial condition or business which
may come into Purchaser's possession.
SECTION 10. Representations and Warranties. Guarantor represents and
warrants as follows:
(a) Organization and Good Standing. It has been duly organized
and is validly existing as a corporation in good standing under the
laws of its state of incorporation, with corporate power and authority
to own its properties and to conduct its business as such properties
are presently owned and such business is presently conducted.
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549
(b) Due Qualification. It is duly licensed or qualified to do
business as a foreign corporation in good standing in each jurisdiction
in which (i) the ownership or lease of its property or the conduct of
its business requires such licensing or qualification, and (ii) the
failure to be so licensed or qualified would have a substantial
likelihood of having a Material Adverse Effect.
(c) Power and Authority; Due Authorization. It has (i) all
necessary power, authority and legal right to execute, deliver and
perform its obligations under this Guaranty and (ii) duly authorized by
all necessary corporate action such execution, delivery and performance
of this Guaranty.
(d) Binding Obligations. This Guaranty constitutes the legal,
valid and binding obligation of Guarantor, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance of
this Guaranty will not (i) conflict with, or result in any breach of
any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under (A) the certificate of
incorporation or by-laws of Guarantor or (B) any indenture, loan
agreement, receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument to which Guarantor is a party or by which
it or its property is bound, (ii) results in or requires the creation
or imposition of any Adverse Claim (other than a Permitted Adverse
Claim) upon any of its properties pursuant to the terms of any such
indenture, loan agreement, receivables purchase agreement, mortgage,
deed of trust, or other agreement or instrument or (iii) violate any
law or any order, rule, regulation applicable to Guarantor of any court
or of any federal, state or foreign regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
Guarantor or any of its properties, which conflict, violation, breach,
default or Adverse Claim (other than a Permitted Adverse Claim),
individually or in the aggregate, would have a substantial likelihood
of having a Material Adverse Effect.
SECTION 11. Successors and Assigns. (a) This Guaranty shall be binding
upon Guarantor and upon Guarantor's successors and assigns and all references
herein to Guarantor or any Guaranteed Party shall be deemed to include any
successor or successors, whether immediate or remote, to such person or entity.
Guarantor shall not assign any of its obligations hereunder without the prior
written consent of Purchaser.
(b) This Guaranty shall inure to the benefit of Purchaser and its
successors and assigns. Guarantor acknowledges and agrees that Purchaser's
rights to receive payment and pursue remedies under this Guaranty are being
assigned to Trustee, for the benefit of the
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550
Certificateholders and the Purchasers, pursuant to the Pooling Agreement, as
supplemented from time to time (including by the Series 1995-1 Supplement to the
Pooling Agreement, of even date with this Guaranty).
SECTION 12. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 13. Consent to Jurisdiction; Waiver of Jury Trial. Purchaser
may enforce any claim arising out of this Guaranty in any state or federal court
having subject matter jurisdiction and located in New York, New York and with
respect to any such claim, Guarantor hereby irrevocably submits to the
jurisdiction of such courts. Guarantor irrevocably consents to the service of
process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to Guarantor, and agrees that such service, to the fullest
extent permitted by law, (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii) shall be
taken and held to be valid personal service upon and personal delivery to it.
Nothing herein contained shall preclude Purchaser from bringing an action or
proceeding in respect hereof in any other country, state or place having
jurisdiction over such action. Guarantor irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court located in New York, New York and any claim that any such suit, action or
proceeding brought in such court has been brought in an inconvenient forum.
GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 14. Notices. All notices hereunder shall be given in the manner
set forth in Section 13.6 of the Pooling Agreement.
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551
IN WITNESS WHEREOF, this Guaranty has been executed and delivered by
Guarantor's duly authorized officer as of the date first written above.
HOWMET CORPORATION
By: /s/ Roland Paul
----------------------------------------
Name: Roland Paul
--------------------------------------
Title: Vice President
-------------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Facsimile No.: (203) 8614746
552
PROJECT BLADE
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of December 13, 1995 (this
"Agreement"), is executed and delivered by THE FIRST NATIONAL BANK OF CHICAGO as
Collateral Agent under the Security Agreement referred to hereinbelow (in such
capacity, together with its successors in such capacity, the "Collateral
Agent"), and MANUFACTURERS AND TRADERS TRUST COMPANY, as trustee under the
Pooling and Servicing Agreement referred to hereinbelow (in such capacity, the
"Trustee").
BACKGROUND
A. Howmet Corporation ("Howmet") and certain of its subsidiaries
(collectively with Howmet, the "Operating Companies") and the Collateral Agent,
are parties to that certain Security Agreement dated as of December 13, 1995 (as
amended, modified or supplemented and in effect from time to time, the "Security
Agreement") for the benefit of certain creditors of Operating Companies
("Operating Company Creditors") party to the credit agreement referred to
therein (the "Credit Agreement").
B. The Operating Companies are entering into that certain Receivables
Purchase Agreement (as amended, modified or supplemented and in effect from time
to time, the "Purchase Agreement"), dated as of December 13, 1995, by and
between the Operating Companies and Blade Receivables Corporation ("Finco"),
pursuant to which each of the Operating Companies will sell to Finco
substantially all Receivables that it now owns and from time to time hereafter
will own, and Howmet may from time to time enter into one or more Contribution
Agreements (each, a "Contribution Agreement") with Finco, pursuant to which
Howmet will contribute to Finco some or all of its Receivables.
C. Contemporaneously with the sale or contribution of Receivables to
Finco pursuant to the Purchase Agreement and any Contribution Agreement, Finco
will transfer the Receivables and the other Specified Assets (as defined below)
to the Trustee pursuant to that certain Pooling and Servicing Agreement (as
amended, supplemented, amended and restated, or otherwise modified and in effect
from time to time, the "Pooling and Servicing Agreement") dated as of December
13, 1995 among Finco, Howmet, as initial Servicer, and the Trustee.
D. Contemporaneously with the execution and delivery of the Purchase
Agreement and the Pooling and Servicing Agreement, and from time to time
thereafter, securities ("Certificates") representing beneficial interests in, or
obligations secured by, such
553
Specified Assets will he issued. Certain of the Certificates may be sold by
Finco to investors ("Investors") and/or pledged to secure loans or other
extensions of credit made to Finco by lenders (the "Lenders"), all as further
provided by the Transaction Documents (as defined below).
E. To induce Finco and the Trustee to enter into the Transaction
Documents to which it is a party, to induce any Lenders to extend credit
thereunder and to induce any Investors to purchase Certificates, the requisite
parties to the Credit Agreement have authorized the Collateral Agent to execute
and deliver this Agreement.
F. The execution and delivery of this Agreement is a condition
precedent to the effectiveness of the Purchase Agreement, the Pooling and
Servicing Agreement and the other Transaction Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows;
1. Definitions. (a) Capitalized terms not defined herein that are
defined in Appendix A to the Pooling and Servicing Agreement shall for the
purposes of this Agreement (including the recitals hereof) have the meanings
ascribed to such terms in such Appendix A; provided that the term "Transaction
Documents" shall include all supplements to the Pooling and Servicing Agreement
and all credit agreements and all other agreements pursuant to which loans or
other extensions of credit evidenced or secured by Certificates are from time to
time made.
(b) In addition, the following terms shall have the meanings specified
below:
"Bank Collateral" means all property and interests in property
(other than Specified Assets) now or hereafter acquired by any
Operating Company in or upon which a security interest, lien or
mortgage is granted by such Operating Company to the Collateral Agent
under the Security Agreement or any other collateral document executed
in connection with the Credit Agreement.
"Specified Assets" means the Purchased Receivables, the
Contributed Receivables and the Related Assets, as more fully described
in Section 1.1 of the Purchase Agreement.
2. Authorization. The Collateral Agent confirms that the terms of the
Credit Agreement (i) authorize the Collateral Agent to execute, deliver and
perform this Agreement, and (ii) provide for all of the parties to the Credit
Agreement to be bound by this Agreement.
3. Release of Transferred Assets Collateral. The Collateral Agent
hereby releases all liens and security interests of any kind whatsoever which
the Collateral Agent (or any trustee or agent acting on its behalf) holds in
Specified Assets, to the extent that such
554
Specified Assets would otherwise constitute Bank Collateral. It is understood
and agreed that the Collateral Agent shall have no rights to or in any such
proceeds that are Specified Assets. The Collateral Agent agrees, upon the
reasonable request of the Trustee, to execute and deliver to the Trustee such
UCC partial release statements and other documents and instruments, and do such
other acts and things, as the Trustee may reasonably request in order to
evidence the release provided for in this Section 3; provided, however, that
failure to execute and deliver any such partial release statements, documents or
instruments, or to do such acts and things, shall not affect or impair the
release provided for in this Section 3.
4. Separation of Collateral. (a) The Trustee hereby agrees promptly to
return to Howmet (for the benefit of itself and the other Operating Companies)
funds or other property other than Specified Assets (or proceeds thereof) which
constitute Bank Collateral (or proceeds thereof); provided, that Howmet or the
Collateral Agent shall have identified such Bank Collateral or proceeds in
writing to the Trustee or an Authorized Officer of the Trustee otherwise has
actual knowledge of the identity of such Bank Collateral or proceeds; and
provided further that if the Collateral Agent shall so request in a written
notice to the Trustee, the Trustee shall return such funds and property to the
Collateral Agent instead of to Howmet. For purposes of maintaining the
perfection of the Collateral Agent's lien thereon, the Collateral Agent hereby
appoints the Trustee as its agent in respect of such funds or other property.
(b) The Collateral Agent hereby agrees to promptly return to the
Trustee any funds or other property which constitute Specified Assets (or
proceeds thereof), provided, that the Trustee shall have identified such
Specified Assets or proceeds in writing to the Collateral Agent or an authorized
officer of the Collateral Agent otherwise has actual knowledge of the identity
of such Specified Assets or proceeds. For purposes of maintaining the perfection
of the Trustee's interests therein, the Trustee hereby appoints the Collateral
Agent as its agent with respect to such Specified Assets and proceeds.
(c) All payments made by an Obligor that is obligated to make payment
with respect to both Specified Assets and other Receivables shall be applied
against the specified Receivables, if any, that are designated by such Obligor.
In the absence of such designation, such payment shall be applied against the
oldest outstanding Receivables owed by such Obligor.
(d) Unless the Trustee and Collateral Agent agree otherwise, neither
the Trustee nor the Collateral Agent shall send any notice to an Obligor
directing it to remit payments in respect of any Receivable to any account other
than the Lockbox Accounts or the Concentration Accounts.
(e) In the event that any of the Specified Assets (or proceeds thereof)
become commingled with any Bank Collateral (or proceeds thereof), then the
Collateral Agent and the Trustee shall, in good faith, cooperate with each other
to separate the Specified Assets (and proceeds thereof) from such Bank
Collateral (and proceeds thereof); provided, however,
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555
that in the case of any assets, if such separation is not possible, the parties
hereto agree to share the proceeds of such property proportionately according to
the interests of the Collateral Agent and the Trustee therein; provided,
further, that the out-of-pocket costs and expenses incurred by the parties
hereto to effect such separation and/or sharing (including without limitation
fees and expenses of auditors and attorneys) shall be shared by the parties
hereto proportionately according to the benefit of such separation and/or
sharing to the Collateral Agent and the Trustee (and the parties for which each
of them acts) to the extent that such costs and expenses are not reimbursed or
otherwise borne by the Operating Companies (it being understood that nothing in
this Agreement shall limit the obligation of the Operating Companies to make
such reimbursement or hear such costs and expenses in accordance with the terms
of the Credit Agreement, the Security Agreement and the Transaction Documents);
and provided, further, that this Section 4(e) shall not require any party to
this Agreement to take any action which it believes, in good faith, may
prejudice its ability to realize the value of, or to otherwise protect, its
interests (and the interests of the parties for which it acts).
5. Additional Agreements with Seller Parties. The Collateral Agent
agrees, represents and warrants, on behalf of itself and the other parties to
the Credit Agreement (excluding the Operating Companies; the Collateral Agent
and such parties being herein called the "Seller Parties") as follows:
(a) The Seller Parties shall not (i) challenge the transfers
of Specified Assets from any Operating Company to Finco, whether on the
grounds that such transfers were disguised financings or fraudulent
conveyances or otherwise, so long as such transfers are carried out in
all material respects in accordance with the Transaction Documents, or
(ii) assert that any Operating Company and Finco should be
substantively consolidated.
(b) Notwithstanding any prior termination of this Agreement,
the Seller Parties shall not, with respect to Finco, institute or join
any other Person in instituting a proceeding of the type referred in
the definition of "Event of Bankruptcy", so long as any Security or any
obligation to a Lender shall be outstanding or there shall not have
lapsed one year plus one day since the last day on any such Security or
obligation shall have been outstanding. The foregoing will not limit
the rights of Seller Parties to file any claim or otherwise take any
action with respect to any such insolvency proceedings that may be
instituted against Finco by a Person other than a Seller Party.
(c) No Seller Party shall assign its rights or obligations
under the Credit Agreement to any other Person unless such Person shall
have agreed in writing to be bound by the terms of this Agreement as if
it were a party hereto.
(d) Subject to any applicable restrictions in the Transaction
Documents, the Trustee may (but shall not be required to) enter into
one or more premises of any
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556
Operating Company, whether leased or owned, at any time during
reasonable business hours, without force or process of law and without
obligation to pay rent or compensation to such Operating Company, Finco
or the Seller Parties and may use any equipment located thereon
relating to Records and may have access and use of such Records and any
other property to which such access and use are granted under the
Transaction Documents, in each case provided that such uses are for the
purposes of enforcing the Trustee's rights with respect to the
Specified Assets.
6. Additional Agreements of Trustee. The Trustee agrees, represents and
warrants as follows:
(a) The Trustee shall not (i) challenge the transfers of the
Bank Collateral (other than Specified Assets) from any Operating
Company to the Collateral Agent, whether on the grounds that such
transfers were disguised financings or fraudulent conveyances or
otherwise, so long as such transfers are carried out in all material
respects in accordance with the Credit Agreement, the Security
Agreement and related documents, or (ii) assert that any Operating
Company and Finco should be substantively consolidated.
(b) The Trustee shall not assign its rights or obligations
under the Transaction Documents to any other Person unless such Person
shall have agreed in writing to be bound by the terms of this Agreement
as if it were a party hereto.
(c) The Trustee does not have any security or other interest
in any portion of the Bank Collateral (including, without limitation,
Receivables) that do not constitute Specified Assets.
7. Reliance. Each of Finco, the Trustee, all lenders, all Investors and
all Seller Parties may rely on this Agreement as if such Person were a party
hereto. This Agreement shall remain in effect until the termination of the Trust
in accordance with the terms of the Pooling Agreement.
8. Miscellaneous. (a) No delay upon the part of any party to this
Agreement and the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any such party of
any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No waiver, amendment or other
modification, or consent with respect to, any provision of this Agreement shall
be effective unless the same shall be in writing and shall be signed by the
Collateral Agent and the Trustee.
(b) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of one which so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
- 5 -
557
(c) This Agreement shall be governed by and construed in accordance
with the internal laws (as opposed to conflicts of law provisions) of the State
of New York.
(d) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors and assigns.
(e) All notices and other communications for hereunder shall, unless
otherwise stated herein, be in writing (including telecommunications and
communications by facsimile copy) and mailed, transmitted or delivered, as to
each party hereto at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective upon receipt or (i) in the case of notice by mall, three
business days after being deposited in the malls, postage prepaid, and (ii) in
the case of notice by facsimile copy, upon the earlier to occur of (A)
completion of transmission and telephone confirmation of receipt or (B) the
recipient's close of business on the date of transmission.
- 6 -
558
IN WITNESS WHEREOF, the Collateral Agent and the Trustee have caused
this Agreement to be executed and delivered as of the day first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Collateral Agent
By: /s/ David G. Dixon
--------------------------------
Name David G. Dixon
--------------------------------
Title: Authorized Agent
--------------------------------
One First National Plaza
Chicago, Illinois 60670
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ illegible
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
One M&T Plaza
7th Floor
Buffalo, New York 14203
ACKNOWLEDGED AND AGREED:
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------------
Name: Roland Paul
--------------------------------
Title: Vice President
--------------------------------
559
HOWMET CORPORATION
By: /s/ ROLAND PAUL
---------------
Name: Roland A. Paul
---------------
Title: Vice President
HOWMET CERCAST (U.S.A.), INC., as Seller
By: /s/ROLAND PAUL
---------------
Name: Roland A. Paul
---------------
Title: Vice President
HOWMET REFURBISHMENT, INC., as Seller
By: /s/ROLAND PAUL
--------------
Name: Roland A. Paul
--------------
Title: Vice President
HOWMET-TEMPCRAFT, INC., as Seller
By: /s/ ROLAND PAUL
--------------
Name: Roland A. Paul
--------------
Title: Vice President
TURBINE COMPONENTS CORPORATION, as Seller
By: /s/ ROLAND PAUL
--------------
Name: Roland A. Paul
--------------
Title: Vice President