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RECEIVABLES PURCHASE AGREEMENT
DATED AS OF MAY 30, 2001
AMONG
ACTUANT RECEIVABLES CORPORATION, AS SELLER,
ACTUANT CORPORATION, AS INITIAL SERVICER,
BLUE RIDGE ASSET FUNDING CORPORATION
AND
WACHOVIA BANK, N.A., AS AGENT
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TABLE OF CONTENTS
PAGE
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ARTICLE I. PURCHASE ARRANGEMENTS............................................................................. 1
SECTION 1.1 Purchase Facility.......................................................................... 1
SECTION 1.2 Incremental Purchases...................................................................... 2
SECTION 1.3 Decreases.................................................................................. 2
SECTION 1.4 Deemed Collections; Purchase Limit......................................................... 2
SECTION 1.5 Payment Requirements and Computations...................................................... 3
ARTICLE II. PAYMENTS AND COLLECTIONS......................................................................... 4
SECTION 2.1 Payments of Recourse Obligations........................................................... 4
SECTION 2.2 Collections Prior to the Facility Termination Date; Repayment of Certain Demand Advances... 4
SECTION 2.3 Repayment of Demand Advances on the Facility Termination Date; Collections................. 5
SECTION 2.4 Payment Recission.......................................................................... 6
SECTION 2.5 Clean Up Call.............................................................................. 6
ARTICLE III. COMMERCIAL PAPER FUNDING........................................................................ 6
SECTION 3.1 CP Costs................................................................................... 6
SECTION 3.2 Calculation of CP Costs.................................................................... 6
SECTION 3.3 CP Costs Payments.......................................................................... 7
SECTION 3.4 Default Rate............................................................................... 7
ARTICLE IV. LIQUIDITY FUNDINGS............................................................................... 7
SECTION 4.1 Liquidity Fundings......................................................................... 7
SECTION 4.2 Yield Payments............................................................................. 7
SECTION 4.3 Selection and Continuation of Interest Periods............................................. 7
SECTION 4.4 Liquidity Funding Yield Rates.............................................................. 8
SECTION 4.5 Suspension of the LIBO Rate................................................................ 8
SECTION 4.6 Default Rate............................................................................... 8
ARTICLE V. REPRESENTATIONS AND WARRANTIES.................................................................... 8
SECTION 5.1 Representations and Warranties of the Seller Parties....................................... 8
(a) Organization; Powers............................................................................. 9
(b) Authorization.................................................................................... 9
(c) No Conflict...................................................................................... 9
(d) Governmental Approvals........................................................................... 9
(e) Litigation....................................................................................... 9
(f) Enforceability................................................................................... 10
(g) Accuracy of Information.......................................................................... 10
(h) Use of Proceeds.................................................................................. 10
(i) Good Title....................................................................................... 10
(j) Perfection....................................................................................... 10
(k) Places of Business and Locations of Records...................................................... 11
(l) Collections...................................................................................... 11
(m) Material Adverse Effect.......................................................................... 11
(n) Names............................................................................................ 11
(o) Ownership of Seller.............................................................................. 11
(p) Not a Holding Company or an Investment Company................................................... 11
(q) Compliance with Law.............................................................................. 12
(r) Compliance with Credit and Collection Policy..................................................... 12
(s) Payments to Applicable Originator................................................................ 12
(t) Enforceability of Contracts...................................................................... 12
(u) Eligible Receivables............................................................................. 12
(v) Purchase Limit and Maximum Receivable Interests.................................................. 12
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(w) Accounting........................................................................................ 12
ARTICLE VI. CONDITIONS OF PURCHASES........................................................................... 13
SECTION 6.1 Conditions Precedent to Initial Incremental Purchase........................................ 13
SECTION 6.2 Conditions Precedent to all Purchases and Reinvestments..................................... 13
ARTICLE VII. COVENANTS........................................................................................ 14
SECTION 7.1 Affirmative Covenants of the Seller Parties................................................. 14
(a) Financial Reporting............................................................................... 14
(b) Notices........................................................................................... 15
(c) Compliance with Laws and Preservation of Corporate Existence...................................... 16
(d) Audits............................................................................................ 16
(e) Keeping and Marking of Records and Books.......................................................... 17
(f) Compliance with Contracts and Credit and Collection Policy........................................ 17
(g) Performance and Enforcement of Receivables Sale Agreement......................................... 17
(h) Ownership......................................................................................... 17
(i) Reliance.......................................................................................... 18
(j) Collections....................................................................................... 20
(k) Taxes............................................................................................. 21
(l) Payment to Applicable Originator.................................................................. 21
SECTION 7.2 Negative Covenants of the Seller Parties.................................................... 21
(a) Name Change, Offices and Records.................................................................. 21
(b) Change in Payment Instructions to Obligors........................................................ 21
(c) Modifications to Contracts and Credit and Collection Policy....................................... 22
(d) Sales, Liens...................................................................................... 22
(e) Use of Proceeds................................................................................... 22
(f) Termination Date Determination.................................................................... 22
(g) Restricted Junior Payments........................................................................ 22
(h) Seller Indebtedness............................................................................... 22
(i) Prohibition on Additional Negative Pledges........................................................ 22
ARTICLE VIII. ADMINISTRATION AND COLLECTION................................................................... 23
SECTION 8.1 Designation of Servicer..................................................................... 23
SECTION 8.2 Duties of Servicer.......................................................................... 23
SECTION 8.3 Collection Notices.......................................................................... 25
SECTION 8.4 Responsibilities of Seller.................................................................. 25
SECTION 8.5 Monthly Reports............................................................................. 26
SECTION 8.6 Servicing Fee............................................................................... 26
ARTICLE IX. AMORTIZATION EVENTS............................................................................... 26
SECTION 9.1 Amortization Events......................................................................... 26
SECTION 9.2 Remedies.................................................................................... 28
ARTICLE X. INDEMNIFICATION.................................................................................... 29
SECTION 10.1 Indemnities by the Seller Parties........................................................... 29
SECTION 10.2 Increased Cost and Reduced Return........................................................... 31
SECTION 10.3 Expenses.................................................................................... 31
ARTICLE XI. THE AGENT......................................................................................... 32
SECTION 11.1 Authorization and Action.................................................................... 32
ARTICLE XII. ASSIGNMENTS AND PARTICIPATIONS................................................................... 32
SECTION 12.1 Assignments and Participations by Blue Ridge................................................ 32
SECTION 12.2 Prohibition on Assignments by Seller Parties................................................ 32
ARTICLE XIII. MISCELLANEOUS................................................................................... 33
SECTION 13.1 Waivers and Amendments...................................................................... 33
SECTION 13.2 Notices..................................................................................... 33
SECTION 13.3 Protection of Agent's Security Interest..................................................... 34
SECTION 13.4 Confidentiality............................................................................. 35
SECTION 13.5 Bankruptcy Petition......................................................................... 35
SECTION 13.6 Limitation of Liability..................................................................... 35
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SECTION 13.7 CHOICE OF LAW.............................................................................. 36
SECTION 13.8 CONSENT TO JURISDICTION.................................................................... 36
SECTION 13.9 WAIVER OF JURY TRIAL....................................................................... 36
SECTION 13.10 Integration; Binding Effect; Survival of Terms............................................. 37
SECTION 13.11 Counterparts; Severability; Section References............................................. 37
SECTION 13.12 Characterization........................................................................... 37
Exhibits and Schedules
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties; Locations of
Records; Federal Employer Identification Numbers
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Credit and Collection Policies
Exhibit VIII Form of Monthly Report
Exhibit IX Form of Performance Undertaking
Schedule A Closing Documents
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RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of May 30, 2001 is
entered into by and among:
(a) Actuant Receivables Corporation, a Nevada corporation ("Seller"),
(b) Actuant Corporation, a Wisconsin corporation ("Parent"), as
initial Servicer,
(c) Blue Ridge Asset Funding Corporation, a Delaware corporation
("Blue Ridge"), and
(d) Wachovia Bank, N.A., as agent for Blue Ridge and its assigns under
the Transaction Documents and under the Liquidity Agreement (together with
its successors and assigns in such capacity, the "Agent").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Receivable Interests from time
to time.
Blue Ridge shall purchase Receivable Interests from Seller from time
to time either by issuing its Commercial Paper or by availing itself of a
Liquidity Funding to the extent available.
Wachovia Bank, N.A. has been requested and is willing to act as Agent
on behalf of Blue Ridge and its assigns in accordance with the terms
hereof.
ARTICLE I.
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
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(a) Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article VI), from time to time prior to the
Facility Termination Date, Seller may request that Blue Ridge purchase from
Seller undivided ownership interests in the Receivables and the associated
Related Security and Collections, and Blue Ridge shall make such Purchase;
provided that no Purchase shall be made by Blue Ridge if, after giving effect
thereto, either (i) the Aggregate Invested Amount would exceed the Purchase
Limit, or (ii) the aggregate of the Receivable Interests would exceed 100%. It
is the intent of Blue Ridge to fund the Purchases by the issuance of Commercial
Paper. If for any reason Blue Ridge is unable, or determines that it is
undesirable, to issue Commercial Paper to fund or maintain its investment in the
Receivable Interests, or is unable for any reason to repay such Commercial Paper
upon the
maturity thereof, Blue Ridge will avail itself of a Liquidity Funding to the
extent available. If Blue Ridge funds or refinances its investment in a
Receivable Interest through a Liquidity Funding, in lieu of paying CP Costs on
the Invested Amount pursuant to Article III hereof, Seller will pay Yield
thereon at the Alternate Base Rate or the LIBO Rate, selected in accordance with
Article IV hereof. Nothing herein shall be deemed to constitute a commitment of
Blue Ridge to issue Commercial Paper.
(b) Seller may, upon at least 10 Business Days' notice to the Agent,
terminate in whole or reduce in part, the unused portion of the Purchase Limit;
provided that each partial reduction of the Purchase Limit shall be in an amount
equal to $2,000,000 (or a larger integral multiple of $1,000,000 if in excess
thereof).
Section 1.2 Incremental Purchases. Seller shall provide the Agent with at
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least two (2) Business Days' prior written notice in a form set forth as Exhibit
II hereto of each Incremental Purchase (each, a "Purchase Notice"). Each
Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth
below, shall be irrevocable and shall specify the requested Purchase Price
(which shall not be less than $1,000,000 or a larger integral multiple of
$100,000) and the Purchase Date (which, in the case of any Incremental Purchase
after the initial Purchase hereunder, shall only be on a Settlement Date).
Following receipt of a Purchase Notice, the Agent will determine whether Blue
Ridge will fund the requested Incremental Purchase through the issuance of
Commercial Paper or through a Liquidity Funding. If Blue Ridge determines to
fund an Incremental Purchase through a Liquidity Funding, Seller may cancel the
Purchase Notice or, in the absence of such a cancellation, the Incremental
Purchase will be funded through a Liquidity Funding. On each Purchase Date, upon
satisfaction of the applicable conditions precedent set forth in Article VI,
Blue Ridge shall deposit to the Facility Account, in immediately available
funds, no later than 2:00 p.m. (New York time), an amount equal to the requested
Purchase Price.
Section 1.3 Decreases. Seller shall provide the Agent with prior written
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notice in conformity with the Required Notice Period (a "Reduction Notice") of
any proposed reduction of Aggregate Invested Amount. Such Reduction Notice shall
designate (i) the date (the "Proposed Reduction Date") upon which any such
reduction of Aggregate Invested Amount shall occur (which date shall give effect
to the applicable Required Notice Period), and (ii) the amount of Aggregate
Invested Amount to be reduced which shall be applied ratably to all Receivable
Interests in accordance with the respective Invested Amounts thereof (the
"Aggregate Reduction"). Only one (1) Reduction Notice shall be outstanding at
any time.
Section 1.4 Deemed Collections; Purchase Limit.
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(a) If on any day:
(i) the Outstanding Balance of any Receivable is reduced or
cancelled as a result of any defective or rejected goods or services, any
Contractual Dilution or other cash discount or adjustment by any Originator
or any Affiliate thereof, or as a result of any governmental or regulatory
action, or
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(ii) the Outstanding Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the Obligor
thereof (whether such claim arises out of the same or a related or an
unrelated transaction), or
(iii) the Outstanding Balance of any Receivable is reduced on account
of the obligation of any Originator or any Affiliate thereof to pay to the
related Obligor any rebate or refund, or
(iv) the Outstanding Balance of any Receivable is less than the
amount included in calculating the Net Pool Balance for purposes of any
Monthly Report (for any reason other than receipt of Collections or such
Receivable becoming a Defaulted Receivable), or
(v) any of the representations or warranties of Seller set forth in
Section 5.1(g), (i), (j), (r), (s), (t) or (u) were not true when made with
respect to any Receivable,
then, on such day, Seller shall be deemed to have received a Collection of such
Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and, not later than 2 Business Days
thereafter shall pay to the Agent's Account the amount of any such Collection
deemed to have been received in the same manner as actual cash collections are
distributed under the terms of this Agreement.
(b) Seller shall ensure that the Aggregate Invested Amount at no
time exceeds the Purchase Limit. If at any time the Aggregate Invested Amount
exceeds the Purchase Limit, Seller shall pay to the Agent immediately an amount
to be applied to reduce the Aggregate Invested Amount (as allocated by the
Agent), such that after giving effect to such payment the Aggregate Invested
Amount is less than or equal to the Purchase Limit.
(c) Seller shall also ensure that the Receivable Interests shall at
no time exceed in the aggregate 100%. If the aggregate of the Receivable
Interests exceeds 100%, Seller shall pay to the Agent on or before the next
succeeding Settlement Date (or, if such excess is discovered on a Settlement
Date, on such Settlement Date) an amount to be applied to reduce the Aggregate
Invested Amount (as allocated by the Agent), such that after giving effect to
such payment the aggregate of the Receivable Interests equals or is less than
100%.
Section 1.5 Payment Requirements and Computations. All amounts to be paid
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or deposited by any Seller Party pursuant to any provision of this Agreement
shall be paid or deposited in accordance with the terms hereof no later than
12:00 noon (New York time) on the day when due in immediately available funds,
and if not received before 12:00 noon (New York time) shall be deemed to be
received on the next succeeding Business Day. If such amounts are payable to the
Agent for the account of Blue Ridge, they shall be paid to the Agent's Account,
for the account of Blue Ridge until otherwise notified by the Agent. All
computations of CP Costs, Yield, per annum fees calculated as part of any CP
Costs, per annum fees hereunder and per annum fees under the Fee Letter shall be
made on the basis of a year of 360 days for the
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actual number of days elapsed. If any amount hereunder shall be payable on a day
which is not a Business Day, such amount shall be payable on the next succeeding
Business Day.
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1 Payments of Recourse Obligations. Seller hereby promises to
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pay the following (collectively, the "Recourse Obligations"):
(a) all amounts due and owing under Section 1.3 or 1.4 on the
dates specified therein;
(b) the fees set forth in the Fee Letter on the dates specified
therein;
(c) all accrued and unpaid Yield on the Receivable Interests
accruing Yield at the Alternate Base Rate or the Default Rate on each
Settlement Date applicable thereto;
(d) all accrued and unpaid Yield on the Receivable Interests
accruing Yield at the LIBO Rate on the last day of each Interest Period
applicable thereto;
(e) all accrued and unpaid CP Costs on the Receivable Interests
funded with Commercial Paper on each Settlement Date; and
(f) all Broken Funding Costs and Indemnified Amounts upon demand.
Section 2.2 Collections Prior to the Facility Termination Date; Repayment
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of Certain Demand Advances.
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(a) Prior to the Facility Termination Date, any Deemed Collections
received by the Servicer and Blue Ridge's Portion of any Collections received by
the Servicer shall be set aside and held in trust by the Servicer for the
payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as
provided in this Section 2.2. If at any time any Collections are received by
the Servicer prior to the Facility Termination Date, Seller hereby requests and
Blue Ridge hereby agrees to make, simultaneously with such receipt, a
reinvestment (each, a "Reinvestment") with Blue Ridge's Portion of the balance
of each and every Collection received by the Servicer such that after giving
effect to such Reinvestment, the Invested Amount of such Receivable Interest
immediately after such receipt and corresponding Reinvestment shall be equal to
the amount of Invested Amount immediately prior to such receipt.
(b) On each Settlement Date prior to the Facility Termination
Date, the Servicer shall remit to the Agent's Account the amounts set aside
during the preceding Settlement Period that have not been subject to a
Reinvestment and (after deduction of its Servicing Fee) apply such amounts (if
not previously paid in accordance with Section 2.1) to the Aggregate Unpaids in
the order specified:
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first, ratably to the payment of all accrued and unpaid CP Costs,
Yield and Broken Funding Costs (if any) that are then due and owing,
second, ratably to the payment of all accrued and unpaid fees under
the Fee Letter (if any) that are then due and owing,
third, if required under Section 1.3 or 1.4, to the ratable reduction
of Aggregate Invested Amount,
fourth, for the ratable payment of all other unpaid Recourse
Obligations, if any, that are then due and owing, and
fifth, the balance, if any, to Seller or otherwise in accordance with
Seller's instructions.
(c) If the Collections are insufficient to pay the Servicing Fee
and the Aggregate Unpaids specified above on any Settlement Date, Seller shall
make demand upon Parent for repayment of any outstanding Demand Advances in an
aggregate amount equal to the lesser of (i) the amount of such shortfall in
Collections, and (ii) the aggregate outstanding principal balance of the Demand
Advances, together with all accrued and unpaid interest thereon, and Parent
hereby agrees to pay such amount to the Agent's Account on such Settlement Date.
Section 2.3 Repayment of Demand Advances on the Facility Termination Date;
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Collections.
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(a) On the Facility Termination Date, Parent hereby agrees to
repay the aggregate outstanding principal balance of all Demand Advances,
together with all accrued and unpaid interest thereon, to the Agent's Account,
without demand or notice of any kind, all of which are hereby expressly waived
by Parent.
(b) On the Facility Termination Date and on each day thereafter,
the Servicer shall set aside and hold in trust, for the Secured Parties, all
Collections received on each such day. On and after the Facility Termination
Date, the Servicer shall, on each Settlement Date and on each other Business Day
specified by the Agent (after deduction of any accrued and unpaid Servicing Fee
as of such date): (i) remit to the Agent's Account the amounts set aside
pursuant to the preceding two sentences, and (ii) apply such amounts to reduce
the Aggregate Unpaids as follows:
first, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
second, ratably to the payment of all accrued and unpaid CP Costs,
Yield and Broken Funding Costs,
third, ratably to the payment of all accrued and unpaid fees under the
Fee Letter,
fourth, to the ratable reduction of Aggregate Invested Amount,
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fifth, for the ratable payment of all other Aggregate Unpaids, and
sixth, after the Final Payout Date, to Seller.
Payment Recission. payment of any of the Aggregate Unpaids shall be
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considered paid or applied hereunder to the extent that, at any time, all or any
portion of such payment or application is rescinded by application of law or
judicial authority, or must otherwise be returned or refunded for any reason.
Seller shall remain obligated for the amount of any payment or application so
rescinded, returned or refunded, and shall promptly pay to the Agent (for
application to the Person or Persons who suffered such recission, return or
refund) the full amount thereof, plus interest thereon at the Default Rate from
the date of any such recission, return or refunding.
Clean Up Call. addition to Seller's rights pursuant to Section 1.3,
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Seller shall have the right (after providing written notice to the Agent in
accordance with the Required Notice Period), at any time following the reduction
of the Aggregate Invested Amount to a level that is less than 10.0% of the
original Purchase Limit, to repurchase all, but not less than all, of the then
outstanding Receivable Interests. The purchase price in respect thereof shall
be an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds to the Agent's Account. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against Blue Ridge or the Agent.
ARTICLE III.
COMMERCIAL PAPER FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
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Invested Amount of all Receivable Interests funded through the issuance of
Commercial Paper. Each Receivable Interest that is funded substantially with
Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based
upon the percentage share that the Invested Amount in respect of such Receivable
Interest represents in relation to all assets held by Blue Ridge and funded
substantially with related Pooled Commercial Paper.
Section 3.2 Calculation of CP Costs. Not later than the 3/rd/ Business Day
immediately preceding each Monthly Reporting Date, Blue Ridge shall calculate
the aggregate amount of CP Costs applicable to its Receivable Interests for the
Calculation Period then most recently ended and shall notify Seller of such
aggregate amount.
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Section 3.3 CP Costs Payments. On each Settlement Date, Seller shall pay
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to the Agent (for the benefit of Blue Ridge) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Invested Amount of all Receivable
Interests funded with Commercial Paper for the Calculation Period then most
recently ended in accordance with Article II.
Section 3.4 Default Rate. From and after the occurrence of an
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Amortization Event, all Receivable Interests shall accrue Yield at the Default
Rate.
ARTICLE IV.
LIQUIDITY FUNDINGS
Section 4.1 Liquidity Fundings. Prior to the occurrence of an
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Amortization Event, the outstanding Invested Amount of each Receivable Interest
funded with a Liquidity Funding shall accrue Yield for each day during its
Interest Period at either the LIBO Rate or the Alternate Base Rate in accordance
with the terms and conditions hereof. Until Seller gives the required notice to
the Agent of another Yield Rate in accordance with Section 4.4, the initial
Yield Rate for any Receivable Interest funded with a Liquidity Funding shall be
the Alternate Base Rate (unless the Default Rate is then applicable). If any
undivided interest in a Receivable Interest initially funded with Commercial
Paper is sold to the Liquidity Banks pursuant to the Liquidity Agreement, such
undivided interest in such Receivable Interest shall be deemed to have a
Interest Period commencing on the date of such sale.
Section 4.2 Yield Payments. On the Settlement Date for each Receivable
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Interest that is funded with a Liquidity Funding, Seller shall pay to the Agent
(for the benefit of the Liquidity Banks) an aggregate amount equal to the
accrued and unpaid Yield thereon for the entire Interest Period of each such
Liquidity Funding in accordance with Article II.
Section 4.3 Selection and Continuation of Interest Periods.
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(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Interest Periods for the Receivable Interests
funded with Liquidity Fundings, provided that if at any time any Liquidity
Funding is outstanding, Seller shall always request Interest Periods such that
at least one Interest Period shall end on the date specified in clause (A) of
the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of a Interest Period
(the "Terminating Tranche") for any Liquidity Funding, may, effective on the
last day of the Terminating Tranche: (i) divide any such Liquidity Funding into
multiple Liquidity Fundings, (ii) combine any such Liquidity Funding with one or
more other Liquidity Fundings that have a Terminating Tranche ending on the same
day as such Terminating Tranche or (iii) combine any such Liquidity Funding with
a new Liquidity Funding to be made by the Liquidity Banks on the day such
Terminating Tranche ends.
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Section 4.4 Liquidity Funding Yield Rates. Seller may select the LIBO
-----------------------------
Rate (subject to Section 4.5 below) or the Alternate Base Rate for each
Liquidity Funding. Seller shall by 12:00 noon (New York time): (i) at least
three (3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Yield Rate and (ii)
at least one (1) Business Day prior to the expiration of any Terminating Tranche
with respect to which the Alternate Base Rate is being requested as a new Yield
Rate, give the Agent irrevocable notice of the new Yield Rate for the Liquidity
Funding associated with such Terminating Tranche. Until Seller gives notice to
the Agent of another Yield Rate, the initial Yield Rate for any Receivable
Interest assigned or participated to the Liquidity Banks pursuant to the
Liquidity Agreement shall be the Alternate Base Rate (unless the Default Rate is
then applicable).
Section 4.5 Suspension of the LIBO Rate.
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(a) If any Liquidity Bank notifies the Agent that it has
determined that funding its ratable share of the Liquidity Fundings at a LIBO
Rate would violate any applicable law, rule, regulation, or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to match fund its Liquidity
Funding at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Liquidity Funding at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Alternate Base Rate for any Liquidity Funding
accruing Yield at such LIBO Rate.
(b) If less than all of the Liquidity Banks give a notice to the
Agent pursuant to Section 4.5(a), each Liquidity Bank which gave such a notice
shall be obliged, at the request of Seller, Blue Ridge or the Agent, to assign
all of its rights and obligations hereunder to (i) another Liquidity Bank or
(ii) another funding entity nominated by Seller or the Agent that is an Eligible
Assignee willing to participate in the Liquidity Agreement through the Liquidity
Termination Date in the place of such notifying Liquidity Bank; provided that
(i) the notifying Liquidity Bank receives payment in full of all Aggregate
Unpaids owing to it (whether due or accrued), and (ii) the replacement Liquidity
Bank otherwise satisfies the requirements of the Liquidity Agreement.
Section 4.6 Default Rate. From and after the occurrence of an
------------
Amortization Event, all Liquidity Fundings shall accrue Yield at the Default
Rate.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each
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Seller Party hereby represents and warrants to the Agent and Blue Ridge, as to
itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
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(a) Organization; Powers. Such Seller Party (a) is duly organized,
--------------------
validly existing and in good standing or active status under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its Property and to carry on its business as now conducted and as proposed
to be conducted, (c) is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required, except where the
failure so to qualify could not reasonably be expected to result in a Material
Adverse Effect, and (d) has the power and authority to execute, deliver and
perform its obligations under each of the Transaction Documents and each other
agreement or instrument contemplated hereby to which it is or will be a party.
(b) Authorization. The execution, delivery and performance by such
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Seller Party of each of the Transaction Documents to which it is a party (a)
have been duly authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of incorporation
or other constitutive documents or by-laws of such Seller Party, (B) any order
of any Governmental Authority or (C) any provision of any indenture, agreement
or other instrument to which such Seller Party is a party or by which any of
them or any of their Property is or may be bound, (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Adverse Claim upon or with respect to any Property now owned or hereafter
acquired by such Seller Party (other than any Adverse Claim created hereunder or
under the other Transaction Documents).
(c) No Conflict. The execution and delivery by such Seller Party of
-----------
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except
as created under the Transaction Documents) except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(d) Governmental Approvals. Other than the filing of the financing
----------------------
statements required hereunder, no action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is or will be
required in connection with the transactions contemplated hereby.
(e) Litigation. Except as set forth on Schedule 5.1(e), there are
----------
not any actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of such Seller Party,
threatened against or affecting such Seller Party or any of its Subsidiaries or
any business, Property or rights of any such Person (i) that
9
involve any Transaction Document or the transactions contemplated thereby or
(ii) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect
(f) Enforceability. This Agreement has been duly executed and
--------------
delivered by such Seller Party and constitutes, and each other Transaction
Document to which such Seller Party is a party when executed and delivered by
the such Seller Party will constitute, a legal, valid and binding obligation of
such Seller Party enforceable against such Seller Party in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or limiting
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(g) Accuracy of Information. No information, report, financial
-----------------------
statement, exhibit or schedule furnished by or on behalf of such Seller Party to
the Buyer or the Agent in connection with the negotiation of any Transaction
Document or included therein or delivered pursuant thereto contained, contains
or will contain any material misstatement of fact or omitted, omits or will omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
misleading as of the date such information is dated or certified; provided that
to the extent any such information, report, financial statement, exhibit or
schedule was based upon or constitutes a forecast or projection, such Seller
Party represents only that it acted in good faith and utilized reasonable
assumptions and due care in the preparation of such information, report,
financial statement, exhibit or schedule.
(h) Use of Proceeds. No portion of the proceeds of any purchase
---------------
hereunder will be used for a purpose that violates, or would be inconsistent
with, any law, rule or regulation applicable to such Seller Party including,
without limitation, Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(i) Good Title. Seller is the legal and beneficial owner of the
----------
Receivables and Related Security with respect thereto, free and clear of any
Adverse Claim, except as created by the Transaction Documents. There have been
duly filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Seller's ownership interest in each Receivable, its Collections and
the Related Security.
(j) Perfection. This Agreement is effective to create a valid
----------
security interest in favor of the Agent for the benefit of the Secured Parties
in the Purchased Assets to secure payment of the Aggregate Unpaids, free and
clear of any Adverse Claim except as created by the Transactions Documents.
There have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Agent's (on behalf of the Secured Parties) security
interest in the Purchased Assets. Such Seller Party's jurisdiction of
organization is a jurisdiction whose law
10
generally requires information concerning the existence of a nonpossessory
security interest to be made generally available in a filing, record or
registration system as a condition or result of such a security interest's
obtaining priority over the rights of a lien creditor which respect to
collateral.
(k) Places of Business and Locations of Records. The principal
-------------------------------------------
places of business and chief executive office of such Seller Party and the
offices where it keeps all of its Records are located at the address(es) listed
on Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action required by
Section 13.3(a) has been taken and completed. Seller's Federal Employer
Identification Number is correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
-----------
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names, addresses and jurisdictions of organization of all
Collection Banks, together with the account numbers of the Collection Accounts
of Seller at each Collection Bank and the post office box number of each Lock-
Box, are listed on Exhibit IV. Seller has not granted any Person, other than the
Agent as contemplated by this Agreement, dominion and control of any Lock-Box or
Collection Account, or the right to take dominion and control of any such Lock-
Box or Collection Account at a future time or upon the occurrence of a future
event.
(m) Material Adverse Effect. (i) The initial Servicer represents
-----------------------
and warrants that since August 31, 2000, no event has occurred that would have a
material adverse effect on the financial condition or operations of the initial
Servicer and its Subsidiaries or the ability of the initial Servicer to perform
its obligations under this Agreement, and (ii) Seller represents and warrants
that since the date of this Agreement, no event has occurred that would have a
material adverse effect on (A) the financial condition or operations of Seller,
(B) the ability of Seller to perform its obligations under the Transaction
Documents, or (C) the collectibility of the Receivables generally or any
material portion of the Receivables.
(n) Names. The name in which Seller has executed this Agreement is
-----
identical to the name of Seller as indicated on the public record of its state
of organization which shows Seller to have been organized. In the past five (5)
years, Seller has not used any corporate names, trade names or assumed names
other than the name in which it has executed this Agreement.
(o) Ownership of Seller. Parent owns, directly or indirectly, 100%
-------------------
of the issued and outstanding Equity Interests of Seller, free and clear of any
Adverse Claim. Such Equity Interests are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller
----------------------------------------------
Party is not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
11
(q) Compliance with Law. Such Seller Party has complied with all
-------------------
applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Each
Receivable, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Seller Party
--------------------------------------------
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any
material change to such Credit and Collection Policy, except such material
change as to which the Agent has been notified in accordance with Section
7.1(a)(vii).
(s) Payments to Applicable Originator. With respect to each
---------------------------------
Receivable transferred to Seller under the Receivables Sale Agreement, Seller
has given reasonably equivalent value to the applicable Originator in
consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by any Originator of any Receivable under the
Receivables Sale Agreement is or may be voidable under any section of the
Bankruptcy Reform Act of 1978 (11 U.S.C. (S)(S) 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to each
---------------------------
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net Pool
--------------------
Balance as an Eligible Receivable on the date of any Monthly Report was an
Eligible Receivable on such date.
(v) Purchase Limit and Maximum Receivable Interests. Immediately
-----------------------------------------------
after giving effect to each Incremental Purchase hereunder, the Aggregate
Invested Amount is less than or equal to the Purchase Limit and the aggregate of
the Receivable Interests does not exceed 100%.
(w) Accounting. The manner in which such Seller Party accounts for
----------
the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.
12
ARTICLE VI.
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
----------------------------------------------------
initial Incremental Purchase of a Receivable Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such Purchase those documents listed on Schedule A and (b)
the Agent shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
-------------------------------------------------------
Each Incremental Purchase and each Reinvestment shall be subject to the further
conditions precedent that (a) in the case of each such Purchase: (i) the
Servicer shall have delivered to the Agent on or prior to the date of such
Purchase, in form and substance satisfactory to the Agent, all Monthly Reports
as and when due under Section 8.5 and (ii) upon the Agent's request, the
Servicer shall have delivered to the Agent at least three (3) Business Days
prior to such Purchase an interim Monthly Report showing the amount of Eligible
Receivables; (b) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request and (c) on each Purchase Date, the
following statements shall be true (and acceptance of the proceeds of such
Incremental Purchase or Reinvestment shall be deemed a representation and
warranty by Seller that such statements are then true):
(i) the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such Incremental
Purchase or Reinvestment as though made on and as of such Purchase Date;
(ii) no event has occurred and is continuing, or would
result from such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event, and no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that would constitute an
Unmatured Amortization Event; and
(iii) the Aggregate Invested Amount does not exceed the
Purchase Limit and the aggregate Receivable Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or Blue Ridge, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent's Account,
for the benefit of Blue Ridge, an amount equal to the Collections prior to the
Facility Termination Date that shall have been applied to the affected
Reinvestment.
13
ARTICLE VII.
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties. Until the date
-------------------------------------------
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
Financial Reporting. Seller Party will maintain, for itself and
-------------------
each of its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish or cause to be furnished to the Agent:
(i) Annual Reporting. Within 90 days after the end of
----------------
each fiscal year of Parent: (A) Parent's balance sheet and related
statements of income and cash flows showing the financial condition of
Parent and its consolidated Subsidiaries as of the close of such fiscal
year and the results of their operations during such year, all in
reasonable detail and audited by PricewaterhouseCoopers LLP or other
independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such consolidated
financial statements fairly present in all material respects the
financial condition and results of operations of Parent and its
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, setting forth in each case in comparative form the corresponding
statements for the preceding fiscal year; and (B) comparable unaudited
financial statements for Seller.
(ii) Quarterly Reporting. Within 45 days after the end of
-------------------
each of the first three fiscal quarters of each fiscal year of Parent:
(A) Parent's consolidated balance sheet and related statements of income
and cash flows showing the financial condition of Parent and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of their operations during such fiscal quarter and the then
elapsed portion of the fiscal year, all in reasonable detail and
certified by one of its Financial Officers as fairly presenting in all
material respects the financial condition and results of operations of
Parent and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments, setting forth in each case in comparative form the
corresponding statements for the corresponding period in the preceding
fiscal year, and (B) comparable unaudited financial statements for
Seller.
(iii) Compliance Certificate. Together with the financial
----------------------
statements required hereunder, a compliance certificate in substantially
the form of Exhibit V signed by a Financial Officer of such Seller Party
and dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon
-----------------------------------
the furnishing thereof to the shareholders of Parent, copies of all
financial statements, reports and proxy statements so furnished.
14
(v) S.E.C. Filings. Promptly after the same become
--------------
publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by Parent or any Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any
national securities exchange, or distributed to holders of its
Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor), as
the case may be.
(vi) Copies of Notices. Promptly upon its receipt of any
-----------------
notice, request for consent, financial statements, certification, report
or other communication under or in connection with any Transaction
Document from any Person other than the Agent or Blue Ridge, copies of
the same.
(vii) Change in Credit and Collection Policy. At least
--------------------------------------
thirty (30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice (A) indicating
such proposed change or amendment, and (B) if such proposed change or
amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting the Agent's consent thereto.
(viii) Other Information. Promptly, from time to time,
-----------------
such other information, documents, records or reports relating to the
Receivables originated by such Originator or the condition or operations,
financial or otherwise, of such Originator as Buyer (or its assigns) may
from time to time reasonably request in order to protect the interests of
Buyer (and its assigns) under or as contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in writing
-------
of any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Unmatured Amortization
---------------------------------------------
Events. The occurrence of each Amortization Event and each Unmatured
------
Amortization Event, by a statement of a Financial Officer of such Seller
Party.
(ii) Material Adverse Effect. The occurrence of any
-----------------------
event or condition that has had, or could reasonably be expected to have,
a Material Adverse Effect.
(iii) Termination Date. The occurrence of the
----------------
"Termination Date" under and as defined in the Receivables Sale
Agreement.
(iv) Defaults Under Other Agreements. The occurrence of
-------------------------------
an event of default (as to which any notice period or cure period has
expired without cure) under any other financing arrangement pursuant to
which such Seller Party is a debtor or an obligor which, in the case of a
Seller Party other than Seller, involves a line of credit or
Indebtedness, in each case, of $1 million or more.
15
(v) Notices under Receivables Sale Agreement. Copies of
----------------------------------------
all notices delivered under the Receivables Sale Agreement.
Downgrade of Servicer. downgrade in the rating of any Indebtedness
---------------------
of Servicer by S&P or Moody's, setting forth the Indebtedness affected
and the nature of such change.
(vi) ERISA Events. The occurrence of any ERISA Event.
------------
(vii) Change in Credit and Collection Policy. At least
--------------------------------------
thirty (30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice (A) indicating
such change or amendment, and (B) if such proposed change or amendment
would be reasonably likely to adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting the Agent's consent thereto.
(c) Compliance with Laws and Preservation of Corporate
--------------------------------------------------
Existence. Such Seller Party will comply in all respects with all applicable
- ---------
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Such Seller Party
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
its business is conducted, except where the failure to so preserve and maintain
or qualify could not reasonably be expected to have a Material Adverse Effect.
Audits. Seller Party will furnish to the Agent from time to time
------
such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Seller Party, permit the Agent, or its agents or representatives
(and shall cause each Originator to permit the Agent or its agents or
representatives): (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Purchased Assets, including, without limitation, the related Contracts, and (ii)
to visit the offices and properties of such Person for the purpose of examining
such materials described in clause (i) above, and to discuss matters relating to
such Person's financial condition or the Purchased Assets or any Person's
performance under any of the Transaction Documents or any Person's performance
under the Contracts and, in each case, with any of the officers or employees of
Seller or the Servicer having knowledge of such matters (each of the foregoing
examinations and visits, a "Review"); provided, however, that, so long as no
Amortization Event has occurred and is continuing, (A) the Seller Parties shall
only be responsible for the costs and expenses of one (1) Review in any one
calendar year, and (B) the Agent will not request more than four (4) Reviews in
any one calendar year.
16
(d) Keeping and Marking of Records and Books.
----------------------------------------
(i) The Servicer will (and will cause each Originator to) maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of each
new Receivable and all Collections of and adjustments to each existing
Receivable). The Servicer will (and will cause each Originator to) give the
Agent notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) Such Seller Party will (and will cause each Originator to): (A)
on or prior to the date hereof, mark its standard monthly accounts
receivable aging reports regarding the Receivables with a legend,
acceptable to the Agent, describing the Agent's security interest in the
Purchased Assets and (B) upon the request of the Agent following the
occurrence and during the continuance of an Amortization Event: (x) mark
each Contract with a legend describing the Agent's security interest and
(y) deliver to the Agent all Contracts (including, without limitation, all
multiple originals of any such Contract constituting an instrument, a
certificated security or chattel paper) relating to the Receivables.
(e) Compliance with Contracts and Credit and Collection Policy.
----------------------------------------------------------
Such Seller Party will (and will cause each Originator to) timely and fully (i)
perform and comply with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Receivables, and (ii)
comply in all respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(f) Performance and Enforcement of Receivables Sale Agreement.
---------------------------------------------------------
Seller will, and will require each Originator to, perform each of their
respective obligations and undertakings under and pursuant to the Receivables
Sale Agreement, will purchase Receivables thereunder in strict compliance with
the terms thereof and will vigorously enforce the rights and remedies accorded
to Seller under the Receivables Sale Agreement. Seller will take all actions to
perfect and enforce its rights and interests (and the rights and interests of
the Agent, as Seller's assignee) under the Receivables Sale Agreement as the
Agent may from time to time reasonably request, including, without limitation,
making claims to which it may be entitled under any indemnity, reimbursement or
similar provision contained in the Receivables Sale Agreement.
(g) Ownership. Seller will (or will cause each Originator to) take
---------
all necessary action to (i) vest legal and equitable title to the Purchased
Assets purchased under the Receivables Sale Agreement irrevocably in Seller,
free and clear of any Adverse Claims (other than Adverse Claims in favor of the
Agent, for the benefit of the Secured Parties) including, without limitation,
the filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to
17
perfect Seller's interest in such Purchased Assets and such other action to
perfect, protect or more fully evidence the interest of Seller therein as the
Agent may reasonably request), and (ii) establish and maintain, in favor of the
Agent, for the benefit of the Secured Parties, a valid and perfected first
priority security interest in all Purchased Assets, free and clear of any
Adverse Claims, including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect the Agent's (for
the benefit of the Secured Parties) security interest in the Purchased Assets
and such other action to perfect, protect or more fully evidence the interest of
the Agent for the benefit of the Secured Parties as the Agent may reasonably
request.
(h) Reliance. Seller acknowledges that the Agent and Blue Ridge are
--------
entering into the transactions contemplated by this Agreement in reliance upon
Seller's identity as a legal entity that is separate from each Originator.
Therefore, from and after the date of execution and delivery of this Agreement,
Seller shall take all reasonable steps, including, without limitation, all steps
that the Agent or Blue Ridge may from time to time reasonably request, to
maintain Seller's identity as a separate legal entity and to make it manifest to
third parties that Seller is an entity with assets and liabilities distinct from
those of each Originator and any Affiliates thereof (other than Seller) and not
just a division of any Originator or any such Affiliate. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:
(A) conduct its own business in its own name and
require that all full-time employees of Seller, if any, identify themselves as
such and not as employees of any Originator (including, without limitation, by
means of providing appropriate employees with business or identification cards
identifying such employees as Seller's employees);
(B) compensate all employees, consultants and agents
directly, from Seller's own funds, for services provided to Seller by such
employees, consultants and agents and, to the extent any employee, consultant or
agent of Seller is also an employee, consultant or agent of any Originator or
any Affiliate thereof, allocate the compensation of such employee, consultant or
agent between Seller and such Originator or such Affiliate, as applicable, on a
basis that reflects the services rendered to Seller and such Originator or such
Affiliate, as applicable;
(C) clearly identify its offices (by signage or
otherwise) as its offices and, if such office is located in the offices of any
Originator, Seller shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be
answered only in its name and separate stationery and checks in its own name;
(E) conduct all transactions with each Originator and
the Servicer (including, without limitation, any delegation of its obligations
hereunder as Servicer) strictly on an arm's-length basis, allocate all overhead
expenses (including, without limitation, telephone and other utility charges)
for items shared between Seller and such Originator on the
18
basis of actual use to the extent practicable and, to the extent such allocation
is not practicable, on a basis reasonably related to actual use;
(F) at all times have a Board of Directors consisting
of three members, at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the dissolution or
liquidation of Seller or (C) the initiation of, participation in, acquiescence
in or consent to any bankruptcy, insolvency, reorganization or similar
proceeding involving Seller, are duly authorized by unanimous vote of its Board
of Directors (including the Independent Director);
(H) maintain Seller's books and records separate from
those of each Originator and any Affiliate thereof and otherwise readily
identifiable as its own assets rather than assets of any Originator or any
Affiliate thereof;
(I) prepare its financial statements separately from
those of each Originator and insure that any consolidated financial statements
of any Originator or any Affiliate thereof that include Seller and that are
filed with the Securities and Exchange Commission or any other governmental
agency have notes clearly stating that Seller is a separate corporate entity and
that its assets will be available first and foremost to satisfy the claims of
the creditors of Seller;
(J) except as herein specifically otherwise provided,
to the maximum extent within Seller's control, maintain the funds or other
assets of Seller separate from, and not commingled with, those of any Originator
or any Affiliate thereof and only maintain bank accounts or other depository
accounts to which Seller alone is the account party, into which Seller alone
makes deposits and from which Seller alone (or the Agent hereunder) has the
power to make withdrawals;
(K) pay all of Seller's operating expenses from
Seller's own assets (except for certain payments by any Originator or other
Persons pursuant to allocation arrangements that comply with the requirements of
this Section 7.1(i));
(L) operate its business and activities such that: it
does not engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract, lease or
other undertaking, other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to the applicable Originator
thereunder for the purchase of Receivables from such Originator under the
19
Receivables Sale Agreement, and (4) the incurrence of operating expenses in the
ordinary course of business of the type otherwise contemplated by this
Agreement;
(M) maintain its corporate charter in conformity with
this Agreement, such that it does not amend, restate, supplement or otherwise
modify its Organizational Documents in any respect that would impair its ability
to comply with the terms or provisions of any of the Transaction Documents,
including, without limitation, Section 7.1(i) of this Agreement;
(N) maintain the effectiveness of, and continue to
perform under the Receivables Sale Agreement and the Performance Undertaking,
such that it does not amend, restate, supplement, cancel, terminate or otherwise
modify the Receivables Sale Agreement or the Performance Undertaking, or give
any consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Receivables Sale Agreement or the
Performance Undertaking or otherwise grant any indulgence thereunder, without
(in each case) the prior written consent of the Agent;
(O) maintain its corporate separateness such that it
does not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions,
and except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, nor at any time create, have,
acquire, maintain or hold any interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount
(as defined in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness which would cause the Required Capital Amount to cease
to be so maintained; and
(Q) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in the opinion issued by
Quarles & Brady LLP, as counsel for Seller, in connection with the closing or
initial Purchase under this Agreement and relating to substantive consolidation
issues, and in the certificates accompanying such opinion, remain true and
correct in all material respects at all times.
(i) Collections. Such Seller Party will cause (1) all proceeds
-----------
from all Lock-Boxes to be directly deposited by a Collection Bank into a
Collection Account and (2) each Lock-Box and Collection Account to be subject at
all times to a Collection Account Agreement that is in full force and effect;
provided, however, that unless otherwise requested by the Agent assignee), no
Collection Account Agreement will be required with respect to any Lock-Box or
Collection Account at Bank of America, N.A. so long as the existing Lock-Box and
Collection Account at such bank are closed by September 15, 2001. In the event
any payments relating to the Purchased Assets are remitted directly to Seller or
any Affiliate of Seller, Seller will remit (or will cause all such payments to
be remitted) directly to a Collection Bank and deposited into a Collection
Account within two (2) Business Days following receipt thereof, and, at all
times prior to such remittance, Seller will itself hold or, if applicable, will
cause such payments to be
20
held in trust for the exclusive benefit of the Agent and Blue Ridge.
Seller will maintain exclusive ownership, dominion and control (subject to the
terms of this Agreement) of each Lock-Box and Collection Account and shall not
grant the right to take dominion and control of any Lock-Box or Collection
Account at a future time or upon the occurrence of a future event to any Person,
except to the Agent as contemplated by this Agreement.
(j) Taxes. Such Seller Party will file all tax returns and reports
-----
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of the Agent or Blue Ridge.
(k) Payment to Applicable Originator. With respect to any
--------------------------------
Receivable purchased by Seller from any Originator, such sale shall be effected
under, and in strict compliance with the terms of, the Receivables Sale
Agreement, including, without limitation, the terms relating to the amount and
timing of payments to be made to such Originator in respect of the purchase
price for such Receivable.
Section 7.2 Negative Covenants of the Seller Parties. Until the date on
----------------------------------------
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
--------------------------------
change its name, identity or structure (within the meaning of any applicable
enactment of the UCC), relocate its chief executive office at any time while the
location of its chief executive office is relevant to perfection of the Agent's
security interest, for the benefit of the Secured Parties, in the Receivables,
Related Security and Collections, or change any office where Records are kept
unless it shall have: (i) given the Agent at least forty-five (45) days' prior
written notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
------------------------------------------
required by the Agent pursuant to Section 8.2(b), such Seller Party will not add
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and evidence reasonably satisfactory to the
Agent that all Adverse Claims to such Lock-Box or Collection Account have been
released and (ii) with respect to the addition of a Collection Bank or a
Collection Account or Lock-Box, an executed Collection Account Agreement with
respect to the new Collection Account or Lock-Box; provided, however, that the
Servicer may make changes in instructions to Obligors regarding payments if such
new instructions require such Obligor to make payments to another existing
Collection Account.
21
(c) Modifications to Contracts and Credit and Collection Policy. Such
-----------------------------------------------------------
Seller Party will not, and will not permit any Originator to, make any material
change to the Credit and Collection Policy that could materially adversely
affect the collectibility of the Receivables or decrease the credit quality of
any newly created Receivables. Except as provided in Section 8.2(d), the
Servicer will not, and will not permit any Originator to, extend, amend or
otherwise modify the terms of any Receivable or any Contract related thereto
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law
------------
or otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any of the Purchased
Assets, or assign any right to receive income with respect thereto (other than,
in each case, the creation of a security interest therein in favor of the Agent
as provided for herein), and Seller will defend the right, title and interest of
the Secured Parties in, to and under any of the foregoing property, against all
claims of third parties claiming through or under Seller or any Originator.
(e) Use of Proceeds. Seller will not use the proceeds of the
---------------
Purchases for any purpose other than (i) paying for Receivables and Related
Security under and in accordance with the Receivables Sale Agreement, including
without limitation, making payments on the Subordinated Notes to the extent
permitted thereunder and under the Receivables Sale Agreement, (ii) making
Demand Advances to Parent at any time prior to the Facility Termination Date
while it is acting as Servicer and no Amortization Event or Unmatured
Amortization Event exists and is continuing, (iii) paying its ordinary and
necessary operating expenses when and as due, and (iv) making Restricted Junior
Payments to the extent permitted under this Agreement.
(f) Termination Date Determination. Seller will not designate the
------------------------------
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to any Originator in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. Seller will not make any Restricted
--------------------------
Junior Payment if after giving effect thereto, Seller's Net Worth (as defined in
the Receivables Sale Agreement) would be less than the Required Capital Amount
(as defined in the Receivables Sale Agreement).
(h) Seller Indebtedness. Seller will not incur or permit to exist any
-------------------
Indebtedness or liability on account of deposits except: (i) the Aggregate
Unpaids, (ii) the Subordinated Loans, and (iii) other current accounts payable
arising in the ordinary course of business and not overdue.
(i) Prohibition on Additional Negative Pledges. No Seller Party will
------------------------------------------
enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any Adverse
Claim upon the Purchased Assets except as contemplated by the Transaction
Documents, or otherwise prohibiting or restricting any
22
transaction contemplated hereby or by the other Transaction Documents, and no
Seller Party will enter into or assume any agreement creating any Adverse Claim
upon the Subordinated Notes.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
-----------------------
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "Servicer") so designated
from time to time in accordance with this Section 8.1. Parent is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms of this Agreement. The Agent may at any time
following the occurrence and during the continuance of an Amortization Event,
designate as Servicer any Person to succeed Parent or any successor Servicer;
provided that the Rating Agency Condition is satisfied.
(b) Parent may delegate, and Parent hereby advises the Agent and
Blue Ridge that it has delegated, to the other Originators, as sub-servicers of
the Servicer, certain of its duties and responsibilities as Servicer hereunder
in respect of the Receivables originated by such other Originator. Without the
prior written consent of the Agent and the Required Liquidity Banks, Parent
shall not be permitted to delegate any of its duties or responsibilities as
Servicer to any Person other than (i) the other Originators, and (ii) with
respect to certain Defaulted Receivables, outside collection agencies in
accordance with its customary practices (each other Originator and outside
collection agency, when acting as such a delegate, a "Permitted Sub-Servicer").
No Permitted Sub-Servicer shall be permitted to further delegate to any other
Person any of the duties or responsibilities of the Servicer delegated to it by
Parent. If at any time the Agent shall designate as Servicer any Person other
than Parent, all duties and responsibilities theretofore delegated by Parent to
the other Originators may, at the discretion of the Agent, be terminated
forthwith on notice given by the Agent to Parent and to Seller and the other
Originators.
(c) Notwithstanding the foregoing subsection (b): (i) Parent shall
be and remain primarily liable to the Agent and Blue Ridge for the full and
prompt performance of all duties and responsibilities of the Servicer hereunder
and (ii) the Agent and Blue Ridge shall be entitled to deal exclusively with
Parent in matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Agent and Blue Ridge shall not be required to
give notice, demand or other communication to any Person other than Parent in
order for communication to the Servicer and its sub-servicer or other delegate
with respect thereto to be accomplished. Parent, at all times that it is the
Servicer, shall be responsible for providing any sub-servicer or other delegate
of the Servicer with any notice given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer.
------------------
(a) The Servicer shall take or cause to be taken all such actions
as may be necessary or advisable to collect each Receivable from time to time,
all in accordance with
23
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all Collections
directly to a Lock-Box or Collection Account. The Servicer shall effect a
Collection Account Agreement substantially in the form of the agreement
contained in Exhibit VI (or in a form otherwise acceptable to the Agent) with
each bank party to a Collection Account at any time; provided, however, that
unless otherwise requested by the Agent, no Collection Account Agreement will be
required with respect to any Lock-Box or Collection Account at Bank of America,
N.A. so long as the existing Lock-Box and Collection Account at such bank are
closed by September 15, 2001. In the case of any remittances received in any
Lock-Box or Collection Account that shall have been identified, to the
satisfaction of the Servicer, to not constitute Collections or other proceeds of
the Receivables or the Related Security, the Servicer shall promptly remit such
items to the Person identified to it as being the owner of such remittances.
From and after the date the Agent delivers to any Collection Bank a Collection
Notice pursuant to Section 8.3, the Agent may request that the Servicer, and the
Servicer thereupon promptly shall instruct all Obligors with respect to the
Receivables, to remit all payments thereon to a new depositary account specified
by the Agent and, at all times thereafter, Seller and the Servicer shall not
deposit or otherwise credit, and shall not permit any other Person to deposit or
otherwise credit to such new depositary account any cash or payment item other
than Collections.
(c) The Servicer shall administer the Collections in accordance with
the procedures described herein and in Article II. The Servicer shall set aside
and hold in trust for the account of Seller and Blue Ridge their respective
shares of the Collections in accordance with Article II. The Servicer shall,
upon the request of the Agent, segregate, in a manner acceptable to the Agent,
all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior
to the remittance thereof in accordance with Article II. If the Servicer shall
be required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for Blue Ridge on the
first Business Day following receipt by the Servicer of such Collections, duly
endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Servicer determines to be appropriate to maximize
Collections thereof; provided, however, that such extension or adjustment shall
not alter the status of such Receivable as a Delinquent Receivable or Defaulted
Receivable or limit the rights of the Agent or Blue Ridge under this Agreement.
Notwithstanding anything to the contrary contained herein, following the
occurrence and during the continuance of an Amortization Event, the Agent shall
have the absolute and unlimited right to direct the Servicer to commence or
settle any legal action with respect to any Receivable or to foreclose upon or
repossess any Related Security.
(e) The Servicer shall hold in trust for Seller and the Agent and
Blue Ridge all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security
24
or (ii) are otherwise necessary or desirable to collect the Receivables and
shall, as soon as practicable upon demand of the Agent, deliver or make
available to the Agent all such Records, at a place selected by the Agent. The
Servicer shall, as soon as practicable following receipt thereof turn over to
rightful owner or its designee any cash collections or other cash proceeds
received with respect to Indebtedness not constituting Receivables. The Servicer
shall, from time to time at the request of the Agent or Blue Ridge, furnish to
Blue Ridge (promptly after any such request) a calculation of the amounts set
aside for Blue Ridge pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed
by it to Originator or Seller shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise instructed
by the Agent, be applied as a Collection of any Receivable of such Obligor
(starting with the oldest such Receivable) to the extent of any amounts then due
and payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized at any time to
------------------
date and to deliver to the Collection Banks the Collection Notices. Seller
hereby transfers to the Agent for the benefit of Blue Ridge, effective when the
Agent delivers such notice, the exclusive ownership and control of each Lock-Box
and the Collection Accounts. In case any authorized signatory of Seller whose
signature appears on a Collection Account Agreement shall cease to have such
authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Agent, and agrees that the Agent shall be entitled (i) at any
time after delivery of the Collection Notices, to endorse Seller's name on
checks and other instruments representing Collections, (ii) at any time after
the occurrence of an Amortization Event, to enforce the Receivables, the related
Contracts and the Related Security, and (iii) at any time after the occurrence
of an Amortization Event, to take such action as shall be necessary or desirable
to cause all cash, checks and other instruments constituting Collections of
Receivables to come into the possession of the Agent rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the contrary
--------------------------
notwithstanding, the exercise by the Agent, on behalf of Blue Ridge, of the
Agent's rights hereunder shall not release the Servicer, any Originator or
Seller from any of their duties or obligations with respect to any Receivables
or under the related Contracts. The Agent and Blue Ridge shall have no
obligation or liability with respect to any Receivables or related Contracts,
nor shall any of them be obligated to perform the obligations of Seller or any
Originator thereunder.
25
Section 8.5 Monthly Reports. The Servicer shall prepare and forward to the
---------------
Agent (i) on each Monthly Reporting Date, a Monthly Report and an electronic
file of the data contained therein and (ii) at such times as the Agent shall
request, a listing by Obligor of all Receivables together with an aging of such
Receivables; provided, however, that if an Amortization Event exists and is
continuing, the Agent may request that the Servicer deliver a Monthly Report
more frequently than monthly.
Section 8.6 Servicing Fee. As compensation for the Servicer's servicing
-------------
activities on their behalf, the Servicer shall be paid the Servicing Fee in
arrears on each Settlement Date out of Collections.
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of the
-------------------
following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail to make any payment or deposit
required to be made by it under the Transaction Documents when due and, for any
such payment or deposit which is not in respect of principal or CP Costs, such
failure continues for 5 consecutive Business Days.
(b) Any representation, warranty, certification or statement made
by any Seller Party in any Transaction Document to which it is a party or in any
other document delivered pursuant thereto shall prove to have been incorrect
when made or deemed made.
(c) Any Seller Party shall fail to perform or observe any covenant
contained in Section 7.2 or 8.5 when due.
(d) Any Seller Party shall fail to perform or observe any other
covenant or agreement under any Transaction Documents and such failure shall
continue for ten (10) consecutive Business Days.
(e) Failure of Seller to pay any Indebtedness (other than the
Aggregate Unpaids) when due or the default by Seller in the performance of any
term, provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of Seller
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled payment) prior to the date of maturity thereof.
(f) Parent or any Subsidiary (other than Seller) shall (i) fail to
pay any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $5,000,000, when and as the same
shall become due and payable, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any
26
agreement or instrument evidencing or governing any such Indebtedness if the
effect of any failure referred to in this clause (ii) is to cause, or to permit
the holder or holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity.
(g) An Event of Bankruptcy shall occur with respect to any Seller
Party.
(h) As at the end of any Calculation Period:
(i) the three-month rolling average Delinquency Ratio shall
exceed 2.90%,
(ii) the three-month rolling average Default Trigger Ratio shall
exceed 9.75%, or
(iii) the three-month rolling average Dilution Ratio shall
exceed 7.10%.
(i) A Change in Control shall occur.
(j) (i) One or more final judgments for the payment of money in an
aggregate amount of $10,750 or more shall be entered against Seller or (ii) one
or more judgments for the payment of money in an aggregate amount in excess of
$5,000,000 shall be rendered against Parent, any Subsidiary of Parent (Other
than Seller) or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of Parent or any Subsidiary to enforce any
such judgment.
(k) The "Termination Date" under and as defined in the Receivables
Sale Agreement shall occur under the Receivables Sale Agreement or any
Originator shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
Seller under the Receivables Sale Agreement.
(l) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or any Obligor shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of Blue Ridge
shall cease to have a valid and perfected first priority security interest in
the Purchased Assets.
(m) On any Settlement Date, after giving effect to the turnover of
Collections by the Servicer on such date and the application thereof to the
Aggregate Unpaids in accordance with this Agreement, the Aggregate Invested
Amount shall exceed the Purchase Limit.
(n) The Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Performance Guarantor,
or Performance
27
Guarantor shall directly or indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability of its obligations thereunder.
(o) An ERISA Event shall have occurred that, when taken together with
all other such ERISA Events, could reasonably be expected to result in liability
of Parent and its ERISA Affiliates in an aggregate amount exceeding $1,000,000.
(p) The Internal Revenue Service shall file notice of a lien pursuant
to Section 6323 of the Tax Code with regard to any of the Purchased Assets and
such lien shall not have been released within seven (7) days, or the PBGC shall,
or shall indicate its intention to, file notice of a lien pursuant to Section
4068 of ERISA with regard to any of the Purchased Assets.
(q) Any event shall occur which (i) materially and adversely impairs
the ability of the Originators to originate Receivables of a credit quality that
is at least equal to the credit quality of the Receivables sold or contributed
to Seller on the date of this Agreement or (ii) has, or could be reasonably
expected to have a Material Adverse Effect.
(r) The Net Pool Balance shall, on any date, be less than an amount
equal to the sum of (i) the Aggregate Invested Amount plus (ii) the Required
Reserve (after giving effect to any turnover of Collections by the Servicer on
such date and the application thereof to the Aggregate Unpaids in accordance
with this Agreement).
(s) The Performance Guarantor shall breach any of the covenants
contained in Sections 6.08, 6.09, 6.10 or 6.11 of the that certain Credit
Agreement dated as of July 31, 2000 by and among Applied Power Inc. (doing
business as Actuant Corporation), the lenders named therein, Credit Suisse First
Boston, as Lead Arranger, Collateral Agent and Administrative Agent, First Union
National Bank, as Syndication Agent, and ING (U.S.) Capital LLC, as
Documentation Agent, as amended and in effect on the date of this Agreement or
as hereafter amended or modified pursuant to any written amendment to which the
Agent hereunder gives its express written consent.
Section 9.2 Remedies. Upon the occurrence and during the continuation of an
--------
Amortization Event, the Agent may, or upon the direction of the Required
Liquidity Banks shall, take any of the following actions: (i) replace the Person
then acting as Servicer if the Agent has not already done so, (ii) declare the
Facility Termination Date to have occurred, whereupon Reinvestments shall
immediately terminate and the Facility Termination Date shall forthwith occur,
all without demand, protest or further notice of any kind, all of which are
hereby expressly waived by each Seller Party; provided, however, that upon the
occurrence of an Event of Bankruptcy with respect to any Seller Party, the
Facility Termination Date shall automatically occur, without demand, protest or
any notice of any kind, all of which are hereby expressly waived by each Seller
Party, (iii) deliver the Collection Notices to the Collection Banks, (iv)
exercise all rights and remedies of a secured party upon default under the UCC
and other applicable laws, and (v) notify Obligors of the Agent's security
interest in the Receivables and other Purchased Assets. The aforementioned
rights and remedies shall be without limitation, and shall be in addition to all
other rights and remedies of the Agent and Blue Ridge otherwise available under
any other provision of this Agreement, by operation of law, at equity or
28
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.
ARTICLE X.
INDEMNIFICATION
Section 10.1 Indemnities by the Seller Parties. Without limiting any other
---------------------------------
rights that the Agent or Blue Ridge may have hereunder or under applicable law,
(A) Seller hereby agrees to indemnify (and pay upon demand to) the Agent, Blue
Ridge, each of the Liquidity Banks and each of the respective assigns, officers,
directors, agents and employees of the foregoing (each, an "Indemnified Party")
from and against any and all damages, losses, claims, Other Taxes, Indemnified
Taxes, liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of the Agent or
another Indemnified Party) and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by any of them arising out of or as a result of this Agreement or the
acquisition, either directly or indirectly, by Blue Ridge or any of its
Liquidity Banks of an interest in the Receivables, and (B) the Servicer hereby
agrees to indemnify (and pay upon demand to) each Indemnified Party for
Indemnified Amounts awarded against or incurred by any of them arising out of
the Servicer's activities as Servicer hereunder excluding, however, in all of
the foregoing instances under the preceding clauses (A) and (B):
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) Excluded Taxes;
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of Blue Ridge to any Seller
Party for amounts otherwise specifically provided to be paid by such Seller
Party under the terms of this Agreement. Without limiting the generality of the
foregoing indemnification, Seller shall indemnify the Agent and Blue Ridge for
Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party
or any Originator (or any officers of any such Person) under or in connection
with this Agreement, any other Transaction Document or any other information or
report delivered by any such Person pursuant hereto or thereto, which shall have
been false or incorrect when made or deemed made;
29
(ii) the failure by Seller, the Servicer or any Originator to
comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any Receivable
or Contract included therein with any such applicable law, rule or regulation or
any failure of any Originator to keep or perform any of its obligations, express
or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer or any Originator to
perform its duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such Receivable
or the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the transactions
contemplated hereby, the use of the proceeds of any Purchase, the Purchased
Assets or any other investigation, litigation or proceeding relating to Seller,
the Servicer or any Originator in which any Indemnified Party becomes involved
as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor
in respect of any Receivable as a result of such Obligor being immune from civil
and commercial law and suit on the grounds of sovereignty or otherwise from any
legal action, suit or proceeding;
(ix) any Amortization Event of the type described in Section
9.1(g);
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any of the Purchased Assets from the
applicable Originator, free and clear of any Adverse Claim (other than as
created hereunder); or any failure of Seller to give reasonably equivalent value
to any Originator under the Receivables Sale Agreement in consideration of the
transfer by such Originator of any Receivable, or any attempt by any Person to
void such transfer under statutory provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent for
the benefit of Blue Ridge, or to transfer to the Agent for the benefit of the
Secured Parties, a valid first
30
priority perfected security interests in the Purchased Assets, free and clear of
any Adverse Claim (except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Purchased Assets, and the proceeds thereof, whether at the time of any Purchase
or at any subsequent time;
(xiii) any action or omission by any Seller Party which
reduces or impairs the rights of the Agent or Blue Ridge with respect to any
Purchased Assets or the value of any Purchased Assets;
(xiv) any attempt by any Person to void any Purchase or the
Agent's security interest in the Purchased Assets under statutory provisions or
common law or equitable action; and
(xv) the failure of any Receivable included in the
calculation of the Net Pool Balance as an Eligible Receivable to be an Eligible
Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after the date hereof,
---------------------------------
any Funding Source shall be charged any fee, expense or increased cost on
account of the adoption of any applicable law, rule or regulation (including any
applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "Regulatory Change"): (i) that subjects any
Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source's obligations under a Funding Agreement, or on or
with respect to the Receivables, or changes the basis of taxation of payments to
any Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 Expenses. Seller shall pay to the Agent and Blue Ridge on
--------
demand all costs and out-of-pocket expenses in connection with the preparation,
execution, delivery and
31
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder, including without limitation, the
cost of Blue Ridge's auditors auditing the books, records and procedures of
Seller, reasonable fees and out-of-pocket expenses of legal counsel for Blue
Ridge and the Agent (which such counsel may be employees of Blue Ridge or the
Agent) with respect thereto and with respect to advising Blue Ridge and the
Agent as to their respective rights and remedies under this Agreement. Seller
shall pay to the Agent on demand any and all costs and expenses of the Agent and
Blue Ridge, if any, including reasonable counsel fees and expenses in connection
with the enforcement of this Agreement and the other documents delivered
hereunder and in connection with any restructuring or workout of this Agreement
or such documents, or the administration of this Agreement following an
Amortization Event.
ARTICLE XI.
THE AGENT
Section 11.1 Authorization and Action. Blue Ridge, on behalf of itself and
------------------------
its assigns, hereby designates and appoints Wachovia to act as its agent under
the Liquidity Agreement, this Agreement and under each other Transaction
Document, and authorizes the Agent to take such actions as agent on its behalf
and to exercise such powers as are delegated to the Agent by the terms of the
Liquidity Agreement, this Agreement and the other Transaction Documents together
with such powers as are reasonably incidental thereto, including, without
limitation, the power to perfect all security interests granted under the
Transaction Documents. The provisions of Articles 6 and 7 of the Liquidity
Agreement are hereby incorporated by this reference with the same force and
effect as if fully set forth herein, and shall govern the relationship between
the Agent, on the one hand, and Blue Ridge, on the other.
ARTICLE XII.
ASSIGNMENTS AND PARTICIPATIONS
Section 12.1 Assignments and Participations by Blue Ridge. Each of the
--------------------------------------------
parties hereto, on behalf of its successors and assigns, hereby agrees and
consents to the complete or partial sale by Blue Ridge of all or any portion of
its rights under, interest in, title to and obligations under this Agreement to
the Liquidity Banks pursuant to the Liquidity Agreement, regardless of whether
such sale constitutes an assignment or the sale of a participation in such
rights and obligations.
Section 12.2 Prohibition on Assignments by Seller Parties. No Seller Party
--------------------------------------------
may assign any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each of Blue Ridge and without satisfying
the Rating Agency Condition.
32
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Waivers and Amendments.
----------------------
(a) No failure or delay on the part of the Agent or Blue Ridge in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 13.1(b). Blue Ridge, Seller and the Agent, at the direction of the
Required Liquidity Banks, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of Blue Ridge and each affected
Liquidity Bank, (A) extend the Liquidity Termination Date or the date of any
payment or deposit of Collections by Seller or the Servicer, (B) reduce the rate
or extend the time of payment of Yield or any CP Costs (or any component of
Yield or CP Costs), (C) reduce any fee payable to the Agent for the benefit of
Blue Ridge, (D) change the Invested Amount of any Receivable Interest, (E)
amend, modify or waive any provision of the definition of Required Liquidity
Banks or this Section 13.1(b), (F) consent to or permit the assignment or
transfer by Seller of any of its rights and obligations under this Agreement,
(G) change the definition of "Eligible Receivable," "Loss Reserve," "Dilution
Reserve," "Yield Reserve," "Servicing Reserve," "Servicing Fee Rate," "Required
Reserve" or "Required Reserve Factor Floor" or (H) amend or modify any defined
term (or any defined term used directly or indirectly in such defined term) used
in clauses (A) through (G) above in a manner that would circumvent the intention
of the restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of such Agent,
and any material amendment, waiver or other modification of this Agreement shall
require satisfaction of the Rating Agency Condition.
Section 13.2 Notices. Except as provided in this Section 13.2, all
-------
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to
33
each of the other parties hereto. Each such notice or other communication shall
be effective (i) if given by telecopy, upon the receipt thereof, (ii) if given
by mail, three (3) Business Days after the time such communication is deposited
in the mail with first class postage prepaid or (iii) if given by any other
means, when received at the address specified in this Section 13.2. Seller
hereby authorizes the Agent to effect Purchases and Interest Period and Yield
Rate selections based on telephonic notices made by any Person whom the Agent in
good faith believes to be acting on behalf of Seller. The Seller Parties agree
to deliver promptly to the Agent a written confirmation of each telephonic
notice signed by a Financial Officer of a Seller Party; provided, however, the
absence of such confirmation shall not affect the validity of such notice. If
the written confirmation differs from the action taken by the Agent, the records
of the Agent shall govern absent manifest error.
Section 13.3 Protection of Agent's Security Interest.
---------------------------------------
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Agent's security interest in the
Purchased Assets, or to enable the Agent or Blue Ridge to exercise and enforce
their rights and remedies hereunder. At any time, the Agent may, or the Agent
may direct Seller or the Servicer to, notify the Obligors of Receivables, at
Seller's expense, of the ownership or security interests of Blue Ridge under
this Agreement and may also direct that payments of all amounts due or that
become due under any or all Receivables be made directly to the Agent or its
designee. Seller or the Servicer (as applicable) shall, at the Agent's request,
withhold the identities of the Agent and Blue Ridge in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or Blue Ridge may (but shall not be required to) perform,
or cause performance of, such obligations, and the Agent's or Blue Ridge's costs
and expenses incurred in connection therewith shall be payable by Seller as
provided in Section 10.3. Each Seller Party irrevocably authorizes the Agent at
any time and from time to time in the sole discretion of the Agent, and appoints
the Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to
execute on behalf of Seller as debtor and to file financing statements necessary
or desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of Blue Ridge in the Receivables and
(ii) to file a carbon, photographic or other reproduction of this Agreement or
any financing statement with respect to the Receivables as a financing statement
in such offices as the Agent in its sole discretion deems necessary or desirable
to perfect and to maintain the perfection and priority of the Agent's security
interest in the Purchased Assets, for the benefit of the Secured Parties. This
appointment is coupled with an interest and is irrevocable. From and after July
1, 2001: (A) each of the Seller Parties hereby authorizes the Agent to file
financing statements and other filing or recording documents with respect to the
Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or other
authorization of such Seller Party, in such form and in such offices as the
Agent reasonably determines appropriate to perfect or maintain the perfection of
the security interest of the Agent hereunder, (B) each of the Seller Parties
acknowledges and agrees that it is not authorized to, and will not, file
financing statements or other filing or recording
34
documents with respect to the Receivables or Related Security (including any
amendments thereto, or continuation or termination statements thereof), without
the express prior written approval by the Agent, consenting to the form and
substance of such filing or recording document, and (C) each of the Seller
Parties approves, authorizes and ratifies any filings or recordings made by or
on behalf of the Agent in connection with the perfection of the security
interests in favor of Seller or the Agent.
Section 13.4 Confidentiality.
---------------
(a) Each of the Seller Parties shall maintain and shall cause
each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
the Agent and Blue Ridge and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that such Seller Party and its officers
and employees may disclose such information to such Seller Party's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller
Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Liquidity Banks or Blue Ridge by each other,
(ii) by the Agent or Blue Ridge to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Blue Ridge or any entity organized for the purpose of purchasing,
or making loans secured by, financial assets for which Wachovia acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided that each such
Person is informed of the confidential nature of such information. In addition,
Blue Ridge and the Agent may disclose any such nonpublic information pursuant to
any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
Section 13.5 Bankruptcy Petition. Seller, the Servicer, the Agent and each
-------------------
Liquidity Bank hereby covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding senior
indebtedness of Blue Ridge, it will not institute against, or join any other
Person in instituting against, Blue Ridge any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
Section 13.6 Limitation of Liability. Except with respect to any claim
-----------------------
arising out of the willful misconduct or gross negligence of Blue Ridge, the
Agent or any Liquidity Bank, no claim may be made by any Seller Party or any
other Person against Blue Ridge, the Agent or any Liquidity Bank or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each
35
Seller Party hereby waives, releases, and agrees not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
Section 13.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW (EXCEPT IN THE CASE OF THE OTHER TRANSACTION DOCUMENTS, TO THE
EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE OWNERSHIP INTEREST OF SELLER OR THE SECURITY INTEREST OF THE
AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
Section 13.8 CONSENT TO JURISDICTION.EACH PARTY TO THIS AGREEMENT HEREBY
-----------------------
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 13.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL
--------------------
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
36
Section 13.10 Integration; Binding Effect; Survival of Terms.
----------------------------------------------
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). 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 terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 13.4 and 13.5 shall be continuing and shall survive any
termination of this Agreement.
(c) Each of the Seller Parties, Blue Ridge and the Agent hereby
acknowledges and agrees that the Liquidity Banks are hereby made express third
party beneficiaries of this Agreement and each of the other Transaction
Documents.
Section 13.11 Counterparts; Severability; Section References. This
----------------------------------------------
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of a signature page to this Agreement. Any provisions of
this Agreement which are prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 13.12 Characterization.
----------------
(a) It is the intention of the parties hereto that each Purchase
hereunder shall constitute and be treated as an absolute and irrevocable sale,
which Purchase shall provide the Blue Ridge with the full benefits of ownership
of the applicable Receivable Interest. Except as specifically provided in this
Agreement, each sale of a Receivable Interest hereunder is made without recourse
to Seller; provided, however, that (i) Seller shall be liable to Blue Ridge and
the Agent for all representations, warranties, covenants and indemnities made by
Seller pursuant to the terms of this Agreement, and (ii) such sale does not
constitute and is not intended to result in an assumption by Blue Ridge or the
Agent or any assignee thereof of any obligation of Seller or any Originator or
any other person arising in connection with the Receivables, the Related
Security, or the related Contracts, or any other obligations of Seller or any
Originator.
37
(b) In addition to any ownership interest which the Agent or
Blue Ridge may from time to time acquire pursuant hereto, Seller hereby grants
to the Agent for the ratable benefit of Blue Ridge a valid and perfected
security interest in all of Seller's right, title and interest in, to and under
all Receivables now existing or hereafter arising, the Collections, each Lock-
Box, each Collection Account, all Related Security, all other rights and
payments relating to such Receivables, and all proceeds of any thereof prior to
all other liens on and security interests therein to secure the prompt and
complete payment of the Aggregate Unpaids. The Agent, on behalf of Blue Ridge,
shall have, in addition to the rights and remedies that it may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other applicable law, which rights and remedies shall be cumulative.
*signature pages follow*
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers or attorneys-in-fact
as of the date hereof.
ACTUANT RECEIVABLES CORPORATION
By: /s/ Patrick C. Dorn
-----------------------
Name: Patrick C. Dorn
Title: President
Address: 3993 Howard Hughes Pkwy.
Suite 100
Las Vegas, Nevada 89109
Attn: Pat Dorn
Phone: (702) 735-1811
Fax: (702) 735-1785
ACTUANT CORPORATION
By: /s/ Terence M. Braatz
-----------------------
Name: Terence M. Braatz
Title: Treasurer
Address: 6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
39
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By: /s/ David Goodson
-----------------------
Name: David Goodson
Title: Vice President
Address:
Blue Ridge Asset Funding Corporation
c/o Wachovia Bank, N.A.
100 North Main Street
Winston-Salem, NC 27150
Attention: John Dillon
Telephone: (336) 732-2690
Facsimile: (336) 732-5021
With a copy to:
Blue Ridge Asset Funding Corporation
c/o AMACAR Group, L.L.C.
6525 Morrison Blvd., Suite 318
Charlotte, North Carolina 28211
Attention: Douglas K. Johnson
Telephone: (704) 365-0569
Facsimile: (704) 365-1362
40
WACHOVIA BANK, N.A., as a Liquidity Bank and as Agent
By: /s/ Kenny Karpowicz
--------------------------
Name: Kenny Karpowicz
Title: Vice President
Address:
Wachovia Bank, N.A.
191 Peachtree Street, Mail Stop GA423
Atlanta, Georgia 30303
Attention: Elizabeth R. Wagner
Telephone: (404) 332-1398
Facsimile: (404) 332-5152
with a copy to:
Wachovia Bank, N.A.
100 North Main Street, NC37031
Winston-Salem, NC 27150-3099
Attention: John Dillon
Telephone: (336) 732-2690
Facsimile: (336) 732-5021
41
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Adjusted Dilution Ratio" means, at any time, the rolling average of
the Non-Contractual Dilution Ratio for the 12 Calculation Periods then most
recently ended.
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 5% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Agent's Account" means account #8735-098787 at Wachovia Bank, N.A.,
ABA #053100494.
"Aggregate Invested Amount" means, on any date of determination, the
aggregate Invested Amount of all Receivable Interests outstanding on such date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the Aggregate Invested Amount, plus (ii) all Recourse Obligations (whether
due or accrued) at such time.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
"Alternate Base Rate" means for any day, the rate per annum equal to
the higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent
(0.50%) above the Federal Funds Rate. For purposes of determining the Alternate
Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall
be effective on the date of each such change.
"Amortization Date" means the earliest to occur of (i) May 26, 2006,
(ii) the day on which any of the conditions precedent set forth in Section 6.2
are not satisfied, (iii) the
42
Business Day immediately prior to the occurrence of an Event of Bankruptcy with
respect to any Seller Party, (iv) the Business Day specified in a written notice
from the Agent following the occurrence and during the continuance of any other
Amortization Event, and (v) the date which is not less than 10 Business Days
after the Agent's receipt of written notice from Seller that it wishes to
terminate the facility evidenced by this Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Blue Ridge" has the meaning set forth in the preamble to this
Agreement.
"Blue Ridge's Portion" means, on any date of determination, the sum of
the percentages represented by the Receivable Interests.
"Broken Funding Costs" means for any Receivable Interest which: (i)
has its Invested Amount reduced without compliance by Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is assigned by Blue
Ridge to the Liquidity Banks under the Liquidity Agreement or terminated prior
to the date on which it was originally scheduled to end; an amount equal to the
excess, if any, of (A) the CP Costs or Yield (as applicable) that would have
accrued during the remainder of the Interest Periods or the tranche periods for
Commercial Paper determined by the Agent to relate to such Receivable Interest
(as applicable) subsequent to the date of such reduction, assignment or
termination (or in respect of clause (ii) above, the date such Aggregate
Reduction was designated to occur pursuant to the Reduction Notice) of the
Invested Amount of such Receivable Interest if such reduction, assignment or
termination had not occurred or such Reduction Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Invested Amount
is allocated to another Receivable Interest, the amount of CP Costs or Yield
actually accrued during the remainder of such period on such Invested Amount for
the new Receivable Interest, and (y) to the extent such Invested Amount is not
allocated to another Receivable Interest, the income, if any, actually received
during the remainder of such period by the holder of such Receivable Interest
from investing the portion of such Invested Amount not so allocated. All Broken
Funding Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Atlanta, Georgia, and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Calculation Period" means a fiscal month.
"Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit IV.
43
"Collection Account Agreement" means an agreement substantially in the
form of Exhibit VI (or as otherwise approved by the Agent) among an Originator,
Seller, the Agent and a Collection Bank.
"Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.
"Collection Notice" means a notice, in substantially the form attached
to any of the agreements contained in Exhibit VI, from the Agent to a Collection
Bank.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Security with respect to such
Receivable.
"Commercial Paper" means promissory notes of Blue Ridge issued by Blue
Ridge in the commercial paper market.
"Contingent Obligation" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable including, without
limitation, all "contracts" as, when and if such term is defined in the UCC, of
the applicable Originator (or Seller, as its assignee), and in any event, shall
include, without limitation, all sale, service, performance and equipment or
property lease contracts, agreements and grants (whether written or oral, or
third party or intercompany), and any other documents (whether written or oral)
between the applicable Originator and third parties, and all assignments,
amendments, restatements, supplements, extensions, renewals, replacements or
modifications thereof.
"Contractual Dilution" means, with respect to any Receivable, any
reduction in the Outstanding Balance of such Receivable due to a quantity
discount, discount for prompt payment or similar incentive, in each of the
foregoing cases, which discount is readily discernable and quantifiable from the
face of the invoice evidencing such Receivable.
"Contractual Dilution Ratio" means, as of any Cut-Off Date, a ratio
(expressed as a percentage), computed by dividing (i) the total amount of
decreases in Outstanding Balances due to Contractual Dilutions during the
Calculation Period ending on such Cut-Off Date, by (ii) the aggregate sales
generated by the Originators during the Calculation Period prior to the
Calculation Period ending on such Cut-Off Date.
44
"CP Costs" means, for each day, the sum of (i) discount or interest
accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued
commissions in respect of placement agents and Commercial Paper dealers, and
issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or odd-
lot amounts with respect to all receivable purchase or financing facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any investment of Blue Ridge pursuant to the terms of any
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Seller shall request
any Purchase during any period of time determined by the Agent in its sole
discretion to result in incrementally higher CP Costs applicable to such
Purchase, the principal associated with any such Purchase shall, during such
period, be deemed to be funded by Blue Ridge in a special pool (which may
include capital associated with other receivable purchase or financing
facilities) for purposes of determining such additional CP Costs applicable only
to such special pool and charged each day during such period against such
principal.
"Credit and Collection Policy" means Seller's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit VII hereto, as modified from time to time
in accordance with this Agreement.
"Cut-Off Date" means the last day of a Calculation Period.
"Days Sales Outstanding" means, as of any day, an amount equal to the
product of (x) 91, multiplied by (y) the amount obtained by dividing (i) the
aggregate outstanding balance of Receivables as of the most recent Cut-Off Date,
by (ii) the aggregate amount of Receivables created during the three (3)
Calculation Periods including and immediately preceding such Cut-Off Date.
"Deemed Collections" means Collections deemed received by Seller under
Section 1.4(a).
"Default Horizon Ratio" means, as of any Cut-Off Date, the ratio
(expressed as a decimal) computed by dividing (i) the aggregate sales generated
by the Originators during the 3 Calculation Periods ending on such Cut-Off Date,
by (ii) the Net Pool Balance as of such Cut-off Date.
"Default Rate" means a rate per annum equal to the sum of (i) the
Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate Base
Rate changes.
"Default Ratio" means, as of any Cut-Off Date, the ratio (expressed as
a percentage) computed by dividing (x) the total amount of Receivables which
became Defaulted Receivables during the Calculation Period that includes such
Cut-Off Date, by (y) the aggregate
45
sales generated by the Originators during the Calculation Period occurring 4
months prior to the Calculation Period ending on such Cut-Off Date.
"Default Trigger Ratio" means , as of any Cut-Off Date, the ratio
(expressed as a percentage) computed by dividing (x) the total Outstanding
Balance of all Defaulted Receivables as of such date, by (y) the total
Outstanding Balance of all Receivables as of such date.
"Defaulted Receivable" means a Receivable: (i) as to which the
Obligor thereof has suffered an Event of Bankruptcy; (ii) which, consistent with
the Credit and Collection Policy, would be written off Seller's books as
uncollectible; or (iii) as to which any payment, or part thereof, remains unpaid
for 91 days or more from the original due date for such payment.
"Delinquency Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 61-90 days from the original due date for such
payment.
"Demand Advance" means any advance made by Seller to Parent at any
time while it is acting as the Servicer, which advance (a) is payable upon
demand, (b) is not evidenced by an instrument, chattel paper or a certificated
security, (c) bears interest at a market rate determined by Seller and the
Servicer from time to time, (d) is not subordinated to any other Indebtedness or
obligation of the Servicer, and (e) may not be offset by Parent against amounts
due and owing from Seller to it under its Subordinated Note; provided, however,
that no Demand Advance may be made after the Facility Termination Date or on any
date prior to the Facility Termination Date on which an Amortization Event or an
Unmatured Amortization Event exists and is continuing.
"Dilution" means the amount of any reduction or cancellation of the
Outstanding Balance of a Receivable as described in Section 1.4(a).
"Dilution Horizon Ratio" means, as of any Cut-off Date, a ratio
(expressed as a decimal), computed by dividing (i) the aggregate sales generated
by the Originators during the 2 Calculation Periods ending on such Cut-Off Date,
by (ii) the Net Pool Balance as of such Cut-Off Date.
"Dilution Ratio" means, as of any Cut-Off Date, a ratio (expressed as
a percentage), computed by adding the Contractual Dilution Ratio and the Non-
Contractual Dilution Ratio as of such Cut-Off Date.
"Dilution Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of:
46
(a) the sum of (i) two (2) times the Adjusted Dilution Ratio as of
the immediately preceding Cut-Off Date, plus (ii) the Dilution Volatility
Component as of the immediately preceding Cut-Off Date, times
(b) the Dilution Horizon Ratio as of the immediately preceding Cut-
Off Date.
"Dilution Volatility Component" means the product (expressed as a
percentage) of (i) the difference between (a) the highest three (3)-month
rolling average Non-Contractual Dilution Ratio over the past 12 Calculation
Periods and (b) the Adjusted Dilution Ratio, and (ii) a fraction, the numerator
of which is equal to the amount calculated in (i)(a) of this definition and the
denominator of which is equal to the amount calculated in (i)(b) of this
definition.
"Downgraded Liquidity Bank" means a Liquidity Bank which has been the
subject of a Downgrading Event.
"Downgrading Event" with respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below (i)
A-1 by S&P, or (ii) P-1 by Moody's.
"Eligible Assignee" means a commercial bank having a combined capital
and surplus of at least $250,000,000 with a rating of its (or its parent holding
company's) short-term securities equal to or higher than (i) A-1 by S&P and (ii)
P-1 by Moody's.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any political
subdivision thereof and has its chief executive office in the United States; (b)
is not an Affiliate of any of the parties hereto; and (c) is not a government or
a governmental subdivision or agency;
(ii) which was not a Defaulted Receivable on the date on which
it was acquired by Seller from the applicable Originator,
(iii) which by its terms is due and payable within 60 days of
the original billing date therefor and has not had its payment terms extended
more than once; provided, however, that if such Receivable is a Trade Show
Receivable, up to 2% of total Eligible Receivables may consist of Trade Show
Receivables which, by their terms, are due and payable within 180 days of the
original billing date therefor and have not have their payment terms extended
more than once;
(iv) which is an "account" within the meaning of Article 9 of
the UCC of all applicable jurisdictions,
(v) which is denominated and payable only in United States
dollars in the United States,
47
(vi) which arises under a Contract which, together with such
Receivable, is in full force and effect and constitutes the legal, valid and
binding obligation of the related Obligor enforceable against such Obligor in
accordance with its terms,
(vii) which arises under a Contract which (A) does not require
the Obligor under such Contract to consent to the transfer, sale, pledge or
assignment of the rights and duties of the applicable Originator or any of its
assignees under such Contract and (B) does not contain a confidentiality
provision that purports to restrict the ability of Blue Ridge to exercise its
rights under this Agreement, including, without limitation, its right to review
the Contract,
(viii) which arises under a Contract that contains an obligation
to pay a specified sum of money, contingent only upon the sale of goods or the
provision of services by the applicable Originator,
(ix) which, together with the Contract related thereto, does
not contravene any law, rule or regulation applicable thereto (including,
without limitation, any law, rule and regulation relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or regulation,
(x) which satisfies all applicable requirements of the Credit
and Collection Policy,
(xi) which was generated in the ordinary course of the
applicable Originator's business,
(xii) which arises solely from the sale of goods or the
provision of services to the related Obligor by the applicable Originator, and
not by any other Person (in whole or in part),
(xiii) which is not subject to any dispute, counterclaim, right
of rescission, set-off, counterclaim or any other defense (including defenses
arising out of violations of usury laws) of the applicable Obligor against the
applicable Originator or any other Adverse Claim, and the Obligor thereon holds
no right as against such Originator to cause such Originator to repurchase the
goods or merchandise the sale of which shall have given rise to such Receivable
(except with respect to sale discounts effected pursuant to the Contract, or
defective goods returned in accordance with the terms of the Contract);
provided, however, that if such dispute, offset, counterclaim or defense affects
only a portion of the Outstanding Balance of such Receivable, then such
Receivable may be deemed an Eligible Receivable to the extent of the portion of
such Outstanding Balance which is not so affected, and provided, further, that
Receivables of any Obligor which has any accounts payable by the applicable
Originator or by a wholly-owned Subsidiary of such Originator (thus giving rise
to a potential offset against such Receivables) may be treated as Eligible
Receivables to the extent that the Obligor of such Receivables has agreed
pursuant to a written agreement in form and substance satisfactory to the Agent,
that such Receivables shall not be subject to such offset,
48
(xiv) as to which the applicable Originator has satisfied and
fully performed all obligations on its part with respect to such Receivable
required to be fulfilled by it, and no further action is required to be
performed by any Person with respect thereto other than payment thereon by the
applicable Obligor,
(xv) as to which each of the representations and warranties
contained in Sections 5.1(g), (i), (j), (r), (s), (t) and (u) is true and
correct, and
(xvi) all right, title and interest to and in which has been
validly transferred by the applicable Originator directly to Seller under and in
accordance with the Receivables Sale Agreement, and Seller has good and
marketable title thereto free and clear of any Adverse Claim.
"Excluded Taxes" means "Excluded Taxes" under and as defined in the
Receivables Sale Agreement to the extent that such taxes are consistent with the
transactions under this Agreement being treated, for tax purposes, as though the
Agent and the Purchasers made a loan to Seller secured by the Receivables and
Related Security.
"Facility Account" means Seller's account no. 10-87832 at Bank One,
NA, in Chicago, Illinois, ABA No. 071000013.
"Facility Termination Date" means the earlier of (i) the Liquidity
Termination Date and (ii) the Amortization Date.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (ii) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 11:30 a.m. (New York time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" means that certain letter agreement dated as of May 30,
2001 among Seller, Parent and the Agent, as it may be amended, restated or
otherwise modified and in effect from time to time.
"Final Payout Date" means the date on which all Aggregate Unpaids have
been paid in full and the Purchase Limit has been reduced to zero.
49
"Funding Agreement" means (i) this Agreement, (ii) the Liquidity
Agreement and (iii) any other agreement or instrument executed by any Funding
Source with or for the benefit of Blue Ridge.
"Funding Source" means (i) any Liquidity Bank or (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to Blue Ridge.
"Incremental Purchase" means a purchase of one or more Receivable
Interests which increases the total outstanding Aggregate Invested Amount
hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Indemnified Amounts" has the meaning specified in Section 10.1.
"Indemnified Party" has the meaning specified in Section 10.1.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Independent Director" shall mean a member of the Board of Directors
of Seller who is not at such time, and has not been at any time during the
preceding five (5) years: (A) a director, officer, employee or affiliate of
Performance Guarantor, any Originator or any of their respective Subsidiaries or
Affiliates (other than Seller), or (B) the beneficial owner (at the time of such
individual's appointment as an Independent Director or at any time thereafter
while serving as an Independent Director) of any of the outstanding common
shares of Seller, any Originator, or any of their respective Subsidiaries or
Affiliates, having general voting rights.
"Interest Period" means, with respect to any Receivable Interest
funded through a Liquidity Funding:
(a) if Yield for such Receivable Interest is calculated on the basis
of the LIBO Rate, a period of one, two, three or six months, or such other
period as may be mutually agreeable to the Agent and Seller, commencing on
a Business Day selected by Seller or the Agent pursuant to this Agreement.
Such Interest Period shall end on the day in the applicable succeeding
calendar month which corresponds numerically to the beginning day of such
Interest Period, provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Interest Period shall end
on the last Business Day of such succeeding month; or
50
(b) if Yield for such Receivable Interest is calculated on the basis
of the Alternate Base Rate, a period commencing on a Business Day selected
by Seller and agreed to by the Agent, provided that no such period shall
exceed one month.
If any Interest Period would end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that in the case of Interest Periods corresponding to the LIBO Rate, if
such next succeeding Business Day falls in a new month, such Interest Period
shall end on the immediately preceding Business Day. In the case of any
Interest Period which commences before the Facility Termination Date and would
otherwise end on a date occurring after the Facility Termination Date, such
Interest Period shall end on the Facility Termination Date. The duration of
each Interest Period which commences after the Facility Termination Date shall
be of such duration as selected by the Agent.
"Invested Amount" of any Receivable Interest means, at any time, (A)
the Purchase Price of such Receivable Interest, minus (B) the sum of the
aggregate amount of Collections and other payments received by the Agent which
in each case are applied to reduce such Invested Amount in accordance with the
terms and conditions of this Agreement; provided that such Invested Amount shall
be restored (in accordance with Section 2.5) in the amount of any Collections or
other payments so received and applied if at any time the distribution of such
Collections or payments are rescinded, returned or refunded for any reason.
"LIBO Rate" means, for any Interest Period, the rate per annum
determined on the basis of the offered rate for deposits in U.S. dollars of
amounts equal or comparable to the Invested Amount offered for a term comparable
to such Interest Period, which rates appear on a Bloomberg L.P. terminal,
displayed under the address "US0001M (Index) Q (Go)" effective as of 11:00 A.M.,
London time, two Business Days prior to the first day of such Interest Period,
provided that if no such offered rates appear on such page, the LIBO Rate for
such Interest Period will be the arithmetic average (rounded upwards, if
necessary, to the next higher 1/100th of 1%) of rates quoted by not less than
two major banks in New York, New York, selected by the Agent, at approximately
10:00 a.m.(New York time), two Business Days prior to the first day of such
Interest Period, for deposits in U.S. dollars offered by leading European banks
for a period comparable to such Interest Period in an amount comparable to the
Invested Amount, divided by (b) one minus the maximum aggregate reserve
requirement (including all basic, supplemental, marginal or other reserves)
which is imposed against the Agent in respect of Eurocurrency liabilities, as
defined in Regulation D of the Board of Governors of the Federal Reserve System
as in effect from time to time (expressed as a decimal), applicable to such
Interest Period plus (ii) 1.75% per annum. The LIBO Rate shall be rounded, if
necessary, to the next higher 1/16 of 1%.
"Liquidity Agreement" means that certain Liquidity Asset Purchase
Agreement dated as of May 30, 2001, by and among Blue Ridge, the Agent and the
banks from time to time party thereto, as the same may be amended, restated
and/or otherwise modified from time to time in accordance with the terms
thereof.
"Liquidity Bank" means each bank from time to time party to the
Liquidity Agreement (other than the Agent acting in its capacity as the Agent
thereunder).
51
"Liquidity Commitment" means, as to each Liquidity Bank, its
commitment under the Liquidity Agreement. The Liquidity Commitments, in the
aggregate, shall equal 102% of the Purchase Limit hereunder.
"Liquidity Funding" means a purchase by any Liquidity Bank pursuant to
its Liquidity Commitment of all or any portion of, or any undivided interest in,
a Receivable Interest.
"Liquidity Termination Date" means the earlier to occur of the
following:
(a) the date on which the Liquidity Banks' Liquidity Commitments
expire, cease to be available to Blue Ridge or otherwise cease to be in
full force and effect; or
(b) the date on which a Downgrading Event with respect to a Liquidity
Bank shall have occurred and been continuing for not less than 30 days, and
either (i) the Downgraded Liquidity Bank shall not have been replaced by an
Eligible Assignee pursuant to the Liquidity Agreement, or (ii) the
Liquidity Commitment of such Downgraded Liquidity Bank shall not have been
funded or collateralized in such a manner that will avoid a reduction in or
withdrawal of the credit rating applied to the Commercial Paper to which
such Liquidity Agreement applies by any of the rating agencies then rating
such Commercial Paper.
"Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.
"Loss Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of (a) 2.0, times (b) the highest three-month
rolling average Default Ratio during the 12 Calculation Periods ending on the
immediately preceding Cut-Off Date, times (c) the Default Horizon Ratio as of
the immediately preceding Cut-Off Date.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries taken
as a whole, (ii) the ability of any Seller Party to perform its obligations
under this Agreement or the Performance Guarantor to perform its obligations
under the Performance Undertaking, (iii) the legality, validity or
enforceability of this Agreement or any other Transaction Document, (iv) the
Agent's security interest, for the benefit of the Secured Parties, in the
Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"Monthly Report" means a report, in substantially the form of Exhibit
VIII hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.
"Monthly Reporting Date" means the 17/th/ day of each month after the
date of this Agreement (or if any such day is not a Business Day, the next
succeeding Business Day
52
thereafter) or such other days of any month as Agent may request in connection
with Section 8.5 hereof.
"Moody's" means Moody's Investors Service, Inc.
"Net Pool Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by (a) the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor and its Affiliates exceeds the Obligor Concentration Limit for such
Obligor, and (b) the total amount of Contractual Dilutions during the
Calculation Period then most recently ended.
"Non-Contractual Dilution" means a Dilution which does not constitute
a Contractual Dilution.
"Non-Contractual Dilution Ratio" means, as of any Cut-Off Date, a
ratio (expressed as a percentage), computed by dividing (i) the total amount of
decreases in Outstanding Balances due to Non-Contractual Dilutions during the
Calculation Period ending on such Cut-Off Date, by (ii) the aggregate sales
generated by the Originators during the Calculation Period prior to the
Calculation Period ending on such Cut-Off Date.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
"Obligor Concentration Limit" means, at any time, in relation to the
aggregate Outstanding Balance of Receivables owed by any single Obligor and its
Affiliates (if any), the applicable concentration limit shall be determined as
follows for Obligors who have short term unsecured debt ratings currently
assigned to them by S&P and Moody's (or in the absence thereof, the equivalent
long term unsecured senior debt ratings), the applicable concentration limit
shall be determined according to the following table:
- --------------------------------------------------------------------------------
Allowable % of Eligible
S&P Rating Moody's Rating Receivables
- --------------------------------------------------------------------------------
A-1+ P-1 10%
- --------------------------------------------------------------------------------
A-1 P-1 8%
- --------------------------------------------------------------------------------
A-2 P-2 6%
- --------------------------------------------------------------------------------
A-3 P-3 3.5%
- --------------------------------------------------------------------------------
Below A-3 or Not Rated Below P-3 or Not
by either S&P or Rated by either S&P or 3.5%
Moody's Moody's
- --------------------------------------------------------------------------------
; provided, however, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is not rated by either
S&P or Moody's, the applicable Obligor Concentration Limit shall be the one set
forth in the last line of the table above, and (c) subject to satisfaction of
the Rating Agency Condition and/or an increase in the percentage set forth in
clause (a)(i) of the definition of "Required Reserve," upon Seller's request
from time to time, the Agent may agree to a higher percentage of Eligible
Receivables for a particular Obligor
53
and its Affiliates (each such higher percentage, a "Special Concentration
Limit"), it being understood that any Special Concentration Limit may be
cancelled by the Agent upon not less than five (5) Business Days' written notice
to the Seller Parties.
"Originator" means each of Parent, Del City Wire Co., Inc., an
Oklahoma corporation, GB Tools and Supplies, Inc., a Wisconsin corporation,
Versa Technologies, Inc., a Delaware corporation, Engineered Solutions, L.P., an
Indiana limited partnership, and VT Holdings, Inc., a Nevada corporation, in its
capacity as a seller under the Receivables Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Parent" has the meaning set forth in the preamble to this Agreement.
"Performance Guarantor" means Parent.
"Performance Undertaking" means that certain Performance Undertaking,
dated as of May 30, 2001 by Performance Guarantor in favor of Seller,
substantially in the form of Exhibit IX, as the same may be amended, restated or
otherwise modified from time to time.
"Permitted Sub-Servicer" has the meaning set forth in Section 8.1(b).
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Pooled Commercial Paper" means Commercial Paper notes of Blue Ridge
subject to any particular pooling arrangement by Blue Ridge, but excluding
Commercial Paper issued by Blue Ridge for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Blue Ridge.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Wachovia (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Purchase" means an Incremental Purchase or a Reinvestment.
"Purchase Date" means each Business Day on which a Purchase is made
hereunder.
"Purchase Limit" means $33,000,000.
"Purchase Notice" has the meaning set forth in Section 1.2.
54
"Purchase Price" means, with respect to any Incremental Purchase of a
Receivable Interest, the amount paid to Seller for such Receivable Interest
which shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Pool Balance
(less the Required Reserve) on the applicable purchase date over the aggregate
outstanding amount of Aggregate Invested Amount determined as of the date of the
most recent Monthly Report, taking into account such proposed Incremental
Purchase.
"Purchased Assets" means all of Seller's right, title and interest,
whether now owned and existing or hereafter arising in and to all of the
Receivables, the Related Security, the Collections and all proceeds of the
foregoing.
"Rating Agency Condition" means that Blue Ridge has received written
notice from S&P and Moody's that an amendment, a change or a waiver will not
result in a withdrawal or downgrade of the then current ratings on Blue Ridge's
Commercial Paper.
"Receivable" means any "Receivable" (under and as defined in the
Receivables Sale Agreement) in which the Seller now has or hereafter acquires
any right or interest.
"Receivable Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Invested Amount, selected pursuant to the terms and conditions hereof
in (i) each Receivable arising prior to the time of the most recent computation
or recomputation of such undivided interest, (ii) all Related Security with
respect to each such Receivable, and (iii) all Collections with respect to, and
other proceeds of, each such Receivable. Each such undivided percentage
interest shall equal:
IA + RR
-----------------
NPB
where:
IA = the Invested Amount of such Receivable Interest.
NPB = the Net Pool Balance.
RR = the Required Reserve.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Facility Termination Date, each
Receivable Interest shall be automatically recomputed (or deemed to be
recomputed) on each day prior to the Facility Termination Date. The variable
percentage represented by any Receivable Interest as computed (or deemed
recomputed) as of the close of the business day immediately preceding the
Facility Termination Date shall remain constant at all times thereafter.
"Receivables Sale Agreement" means that certain Receivables Sale
Agreement, dated as of May 30, 2001, among the Originators and Seller, as the
same may be amended, restated or otherwise modified from time to time.
55
"Records" has the meaning specified in the Receivables Sale Agreement.
"Recourse Obligations" has the meaning set forth in Section 2.1.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Regulatory Change" has the meaning set forth in Section 10.2(a).
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Security" means, with respect to any Receivable, all of
Seller's right, title and interest in, to and under:
(i) all "Related Security" (under and as defined in the Receivables
Sale Agreement) in which the Seller now has or hereafter acquires any right
or interest,
(ii) the Receivables Sale Agreement and the Performance Undertaking,
(iii) the Demand Advances, and
(iv) all proceeds of any of the foregoing.
"Required Liquidity Banks" means, at any time, Liquidity Banks with
Liquidity Commitments in excess of 50% of the aggregate amount of all Liquidity
Commitments.
"Required Notice Period" means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:
------------------------------------------------------------------------
Required Notice Aggregate Reduction
--------------- -------------------
Period
------
------------------------------------------------------------------------
2 Business Days less than 25% of the
Purchase Limit
------------------------------------------------------------------------
5 Business Days greater than 25% but less
than 50% of the Purchase
Limit
------------------------------------------------------------------------
10 Business Days greater than 50% of the
Purchase Limit
------------------------------------------------------------------------
"Required Reserve" means, on any day during a Calculation Period, the
product of (a) the greater of (i) the Required Reserve Factor Floor and (ii) the
sum of the Loss Reserve, the Yield Reserve, the Dilution Reserve and the
Servicing Reserve, times (b) the Net Pool Balance as of the Cut-Off Date
immediately preceding such Calculation Period.
56
"Required Reserve Factor Floor" means, for any Calculation Period, the
sum (expressed as a percentage) of (a) 16% plus (b) the product of the Adjusted
Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the
immediately preceding Cut-Off Date.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to the Subordinated Loans (as defined in the Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to any Originator or its Affiliates in reimbursement
of actual management services performed).
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Secured Parties" means the Indemnified Parties.
"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Parties" means, collectively, Seller and, so long as it is
acting as Servicer and/or Performance Guarantor, Parent.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicing Fee" means, for each day in a Calculation Period:
(a) an amount equal to (i) the Servicing Fee Rate (or, at any time
while Parent or one of its Affiliates is the Servicer, such lesser
percentage as may be agreed between Seller and the Servicer on an arms'
length basis based on then prevailing market terms for similar services),
times (ii) the aggregate Outstanding Balance of all Receivables at the
close of business on the Cut-Off Date immediately preceding such
Calculation Period, times (iii) 1/360; or
(b) on and after the Servicer's reasonable request made at any time
when Parent or one of its Affiliates is no longer acting as Servicer
hereunder, an alternative amount specified by the successor Servicer not
exceeding (i) 110% of such Servicer's reasonable costs and expenses of
performing its obligations under this Agreement during the
57
preceding Calculation Period, divided by (ii) the number of days in the
current Calculation Period.
"Servicing Fee Rate" means 1.0% per annum.
"Servicing Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of (a) the Servicing Fee Rate, times (b) a fraction,
the numerator of which is the highest Days Sales Outstanding for the most recent
12 Calculation Periods and the denominator of which is 360.
"Settlement Date" means (A) the 2/nd/ Business Day after each Monthly
Reporting Date, and (B) the last day of the relevant Interest Period in respect
of each Receivable Interests funded through a Liquidity Funding.
"Settlement Period" means (A) in respect of each Receivable Interest
funded through the issuance of Commercial Paper, the immediately preceding
Calculation Period, and (B) in respect of each Receivable Interest funded
through a Liquidity Funding, the entire Interest Period of such Liquidity
Funding.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Trade Show Receivable" means any Receivable created as a result of
participation in a trade show within the 45 days prior to the creation thereof.
"Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, each Collection Account
Agreement, the Performance Undertaking, the Fee Letter, each Subordinated Note
(as defined in the Receivables Sale Agreement) and all other instruments,
documents and agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Unmatured Amortization Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
58
"Wachovia" means Wachovia Bank, N.A. in its individual capacity and
its successors.
"Yield" means for each Interest Period relating to a Receivable
Interest funded through a Liquidity Funding, an amount equal to the product of
the applicable Yield Rate for such Receivable Interest multiplied by the
Invested Amount of such Receivable Interest for each day elapsed during such
Interest Period, annualized on a 360 day basis.
"Yield Rate" means, with respect to each Receivable Interest funded
through a Liquidity Funding, the LIBO Rate, the Alternate Base Rate or the
Default Rate, as applicable.
"Yield Reserve" means, for any Calculation Period, the product
(expressed as a percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of
-----
the immediately preceding Cut-Off Date times (iii) a fraction the numerator of
-----
which is the highest Days Sales Outstanding for the most recent 12 Calculation
Periods and the denominator of which is 360.
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in
the State of Illinois, and not specifically defined herein, are used herein as
defined in such Article 9.
59
EXHIBIT II
FORM OF PURCHASE NOTICE
---
Actuant Receivables Corporation
PURCHASE NOTICE
dated ______________, 20__
for Purchase on ________________, 20__
Wachovia Bank, N.A., as Agent
191 Peachtree Street, N.E., GA-423
Atlanta, Georgia 30303
Attention: Elizabeth R. Wagner, Fax No. (404) 332-5152
Ladies and Gentlemen:
Reference is made to the Receivables Purchase Agreement dated as of
May 30, 2001 (as amended, supplemented or otherwise modified from time to time,
the "Receivables Purchase Agreement") among Actuant Receivables Corporation (the
"Seller"), Actuant Corporation, as initial Servicer, Blue Ridge Asset Funding
Corporation, and Wachovia Bank N.A., as Agent. Capitalized terms defined in the
Receivables Purchase Agreement are used herein with the same meanings.
1. The [Servicer, on behalf of the] Seller hereby certifies,
represents and warrants to the Agent and Blue Ridge that on and as of the
Purchase Date (as hereinafter defined):
(a) all applicable conditions precedent set forth in Article VI of
the Receivables Purchase Agreement have been satisfied;
(b) each of its representations and warranties contained in Section
5.1 of the Receivables Purchase Agreement will be true and correct, in all
material respects, as if made on and as of the Purchase Date;
(c) no event will have occurred and is continuing, or would result
from the requested Purchase, that constitutes an Amortization Event or
Unmatured Amortization Event;
(d) the Facility Termination Date has not occurred; and
60
(e) after giving effect to the Purchase requested below, the
Aggregate Invested Amount will not exceed the Purchase Limit and the
aggregate Receivable Interests will not exceed 100%.
2. The [Servicer, on behalf of the] Seller hereby requests
that Blue Ridge make a Purchase on ___________, 20__ (the "Purchase Date") as
follows:
(a) Purchase Price: $_____________
(b) If the Purchase is funded with a Liquidity Funding,
[Servicer on behalf of the] Seller requests that the Invested Amount
(which will initially accrue Yield at the Alternate Base Rate) begin to
accrued Yield at a LIBO Rate for a Interest Period of _____ months on
the third Business Day after the Purchase Date).
3. Please disburse the proceeds of the Purchase as follows:
[Apply $________ to payment of Aggregate Unpaids due on the
Purchase Date]. [Wire transfer $________ to account no. ________ at
___________ Bank, in [city, state], ABA No. __________, Reference:____
___].
IN WITNESS WHEREOF, the [Servicer, on behalf of the] Seller
has caused this Purchase Request to be executed and delivered as of this ____
day of ___________, _____.
[Actuant Corporation, as Servicer, on behalf of:] Actuant
Receivables Corporation, as Seller
By: _________________________________
Name:
Title:
61
EXHIBIT III
PLACES OF BUSINESS OF THE SELLER PARTIES; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBERS
Chief Executive Office:
Seller:
3993 Howard Hughes Parkway
Suite 100
Las Vegas, Nevada 89109
Servicer:
6100 North Baker Road
Glendale, WI 53209
Locations of Records:
3993 Howard Hughes Parkway
Suite 100
Las Vegas, Nevada 89109
6100 North Baker Road
Glendale, WI 53209
Federal Employer Identification Number for Each Seller Party:
Actuant Corporation: 39-0168610
Actuant Receivables Corporation: 88-0497173
Legal, Trade and Assumed Names for Each Seller Party:
Actuant Corporation: Applied Power Inc. (1/11/01)
Actuant Receivables Corporation: n/a
62
- ------------------------------------------------------------------------------------------------------------------
Exhibit IV
---------
Lock-boxes; Collection Accounts; Collection Banks
-------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
LEGAL ENTITY BUSINESS UNIT EXISTING EXISTING EXISTING REVISED
BANK LOCKBOX # DDA # BANK
- ------------------------------------------------------------------------------------------------------------------
Actuant Receivables (new "SPE") n/a n/a n/a Bank One
Corporation
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Tools & Supplies
- ----------------
- ------------------------------------------------------------------------------------------------------------------
Actuant Corporation Enerpac Bank of 98093 8765-0-60760 Bank One
America
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
GB Tools & Supplies, Inc. Gardner Bender (GB) Marshall & 88397 122-2546 Bank One
Ilsley
- ------------------------------------------------------------------------------------------------------------------
" Calterm Bank of n/a 8765-9-60398 Bank One
America
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
" Ancor Products Bank of n/a 8765-0-01091 Bank One
America
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Del City Wire Co. Inc. Del City Bank of n/a 8765-0-01092 Bank One
America
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Engineered Solutions
- --------------------
- ------------------------------------------------------------------------------------------------------------------
Actuant Corporation Power Packer Bank of 98093 8765-0-60760 Bank One
America
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Versa Technologies, Inc. Power Gear Marshall & 10199 486-6114 Bank One
Ilsley
- ------------------------------------------------------------------------------------------------------------------
Engineered Solutions LP Engineered Solutions Bank One 22626 10-81348 Bank One
Americas
- ------------------------------------------------------------------------------------------------------------------
(sub of VT Holdings, Inc.) (i.e., currently Dewald only)
- ------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
LEGAL ENTITY REVISED REVISED CONCENTRATION
LOCKBOX # DDA # EFFECTIVE
5/31/01
- ---------------------------------------------------------------------------
Actuant Receivables n/a 10-87832 ZBA to 10-61597
Corporation
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Tools & Supplies
- ----------------
- ---------------------------------------------------------------------------
Actuant Corporation 22730 10-87766 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
GB Tools & Supplies, Inc. 22732 10-87774 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
" 22732 10-87774 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
" n/a 10-87782 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Del City Wire Co. Inc. 22736 10-87790 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Engineered Solutions
- --------------------
- ---------------------------------------------------------------------------
Actuant Corporation 22738 10-87808 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Versa Technologies, Inc. 22742 10-87816 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
Engineered Solutions LP 22626 10-81348 ZBA to new SPE
a/c
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
63
EXHIBIT V
[FORM OF] COMPLIANCE CERTIFICATE
To: Wachovia Bank, N.A., as Agent
This Compliance Certificate is furnished pursuant to that
certain Receivables Purchase Agreement dated as of May 30, 2001 among Actuant
Receivables Corporation (the "Seller"), Actuant Corporation (the "Servicer"),
Blue Ridge Asset Funding Corporation and Wachovia Bank, N.A., as agent (the
"Agreement").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of Seller.
2. I have reviewed the terms of the Agreement and I have
made, or have caused to be made under my supervision, a detailed review of the
transactions and conditions of Seller and its Subsidiaries during the accounting
period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Amortization Event or Unmatured Amortization Event, as each
such term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate[, except as set forth in paragraph 5 below].
4. Schedule I attached hereto sets forth financial data
and computations evidencing the compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
[5. Described below are the exceptions, if any, to
paragraph 3 by listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which Seller has taken, is
taking, or proposes to take with respect to each such condition or event:
____________________]
64
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered as of ______________, 20__.
By:___________________________
Name:
Title:
65
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of [Date] with Sections ___
of the Agreement. Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended: _______________
66
EXHIBIT VI
[FORM OF] COLLECTION ACCOUNT AGREEMENT
May 30, 2001
Bank One, NA and
Banc One National Processing Corporation
1 Bank One Plaza
Chicago, IL 60670-0935
Attention: Loretta McCarthy
Fax No.: (312) 928-0338
Re: Actuant Corporation and Subsidiaries/Actuant Receivables
Corporation
Ladies and Gentlemen:
Reference is hereby made to the postal boxes identified on
Schedule I hereto in (the "Lock-Boxes") of which one or more of you has
- ---------- ----------
exclusive control for the purpose of receiving mail and processing payments
therefrom pursuant to your agreement with Actuant Corporation, a Wisconsin
corporation (the "Parent"), Del City Wire Co., Inc., an Oklahoma corporation, GB
------
Tools and Supplies, Inc., a Wisconsin corporation, Versa Technologies, Inc., a
Delaware corporation, and Engineered Solutions, L.P., an Indiana limited
partnership (each of the foregoing, including Parent, an "Originator" and
collectively, the "Originators"), pursuant to lock-box service agreements with
-----------
one of the Originators (the "Services Agreements"). You hereby confirm your
-------------------
agreement to perform the services described therein. Among the services you have
agreed to perform therein, is to endorse all checks and other evidences of
payment, and credit such payments to the Originators' respective accounts with
you as identified on Schedule I hereto (the "Lock-Box Accounts"). We understand
-----------------
that Bank One, NA (the "Collection Bank") and Banc One National Processing
---------------
Corporation ("BONPC") work together to provide services with respect to certain
-----
of the Lock-Boxes and Lock-Box Accounts. Reference is also made to the deposit
accounts identified on Schedule I hereto (together with the Lock-Box Accounts,
the "Accounts"). All references herein to "you" and "your" shall mean the
--------
Collection Bank and BONPC, as applicable.
Each of the Originators hereby informs you that (i) pursuant
to that certain Receivables Sale Agreement, dated as of May 30, 2001 among the
Originators, as sellers, and Actuant Receivables Corporation, a Delaware
corporation ("SPV"), as purchaser, such Originator has transferred to SPV all of
---
such Originator's right, title and interest in and to the items from time to
time deposited into each Lock-Box and Accounts, and (ii) pursuant to that
certain Receivables Purchase Agreement, dated as of May 30, 2001 among SPV, as
borrower, Actuant
67
Corporation, as initial servicer, Blue Ridge Asset Funding Corporation and
Wachovia Bank, N.A., individually and as agent (in such latter capacity, the
"Agent"), SPV has granted to the Agent a security interest in all of its right,
-----
title and interest in and to the items from time to time deposited in each Lock-
Box and each Account.
Each of the Originators and SPV hereby irrevocably instructs
you, and you hereby agree, that upon receiving notice from the Agent in the form
attached hereto as Annex A (a "Control Notice"): (i) the name of each Account
------- --------------
will be changed to "Wachovia Bank, N.A., as Agent" (or any designee of the
Agent) and the Agent will have exclusive ownership of and access to the
Lock-Boxes and the Accounts, and none of the Originators, SPV, nor any of their
respective affiliates will have any control of the Lock-Boxes or the Accounts or
any access thereto, (ii) you will either continue to send the funds from the
Lock-Boxes to the Lock-Box Accounts, or will redirect such funds as the Agent
may otherwise request, (iii) you will transfer monies on deposit in the
Accounts, at any time, to the following account:
Bank Name: Wachovia Bank, N.A.
Location: Winston-Salem, NC
ABA Routing No.: ABA # 053100494
Credit Account No.: For credit to Blue Ridge Asset Funding Account
#8735-098787
Reference: Blue Ridge/Actuant Receivables Corporation
Attention: John Dillon, tel. (336) 732-2690
or as otherwise directed by the Agent, (iv) all services to be performed by you
under the Services Agreements will be performed on behalf of the Agent, and (v)
all correspondence or other mail which you have agreed to send to any of the
Originators or SPV will be sent to the Agent at the following address:
Wachovia Bank, N.A., as Agent
191 Peachtree Street
Mail Stop GA-423
Atlanta, GA 30303
Attn: Elizabeth K. Wagner,
Asset-Backed Finance
Fax: (404) 332- 5152
Moreover, upon such Control Notice, the Agent will have all rights and remedies
given to the Originators (and the SPV, as the Originators' assignee) under the
Services Agreements. Each of the Originators agrees, however, to continue to pay
all fees and other assessments due thereunder at any time.
The Originators, SPV and the Agent, as the case may be, are
responsible for, and you may rely upon, the contents of any notice or
instructions that you believe in good faith to be from the Originators, SPV or
the Agent, as the case may be, without any independent investigation. You shall
have no duty to inquire into the authority of the person in giving such
68
notice or instruction. In the event that you receive conflicting notices or
instructions, you may refuse to act.
You shall not be deemed to have any knowledge (imputed or
otherwise) of: (a) any of the terms or conditions of any financing arrangement
or any document referred to therein between the Originators, SPV, and the Agent,
or any breach thereof, or (b) any occurrence or existence of a default. You have
no obligation to inform any person of such breach or to take any action in
connection with any of the foregoing, except such actions regarding the
Lockboxes and the Accounts as are specified in this Letter Agreement. You are
not responsible for the enforceability or validity of the security interest in
the Lockboxes or the Accounts.
You hereby acknowledge that monies deposited in the Accounts or
any other account established with you by the Agent for the purpose of receiving
funds from the Lock-Boxes are subject to the liens of the Agent, and will not be
subject to deduction, set-off, banker's lien or any other right you or any other
party may have against the Originators or SPV, except that you may debit the
Accounts for (a) any items, including, without limitation, any automated
clearinghouse transactions which are returned for any reason and any
adjustments; and (b) any amount then due from the Originators, SPV or the Agent
to you under this Letter Agreement or related to the items, the Accounts or any
items deposited therein that are otherwise not collected and for all charges,
fees, commissions and expenses incurred by you in providing services hereunder,
all in accordance with your customary practices for the charge back of returned
items and expenses. Subject to the terms of this Letter Agreement, you agree
that the security interest is superior to any right of set-off, security
interest or other lien which you might otherwise have in the items, the
Lockboxes or the Accounts.
You will be liable only for direct damages in the event you fail
to exercise ordinary care. You shall be deemed to have exercised ordinary care
if your action or failure to act is in conformity with general banking usages or
is otherwise a commercially reasonable practice of the banking industry. You
shall not be liable for any special, indirect or consequential damages, even if
you have been advised of the possibility of these damages.
Each of the Originators, SPV and, from and after delivery of a
Control Notice, the Agent jointly and severally agree to indemnify you for, and
hold you harmless from, all claims, damages, losses, liabilities and expenses,
including legal fees and expenses, resulting from or with respect to this Letter
Agreement and the administration and maintenance of the Accounts and the
services provided hereunder, including, without limitation: (a) any action
taken, or not taken, by you in regard thereto in accordance with the terms of
this Letter Agreement, (b) the breach of any representation or warranty made by
the Originators or SPV pursuant to this Letter Agreement, (c) any item,
including, without limitation, any automated clearinghouse transaction, which is
returned for any reason, and any adjustments, and (d) any failure of an
Originator or SPV to pay any invoice or charge to you for services in respect to
this Letter Agreement and the Accounts or any amount owing to you from any of
the Originators or SPV with respect thereto or to the service provided
hereunder.
69
None of the Originators, SPV, the Agent or you will be liable for
any failure to perform its obligations when the failure arises out of causes
beyond its control, including, without limitation, an act of a governmental
regulatory/authority, an act of God, accident, equipment failure, labor disputes
or system failure, provided it has exercised such diligence as the circumstances
require.
None of the Originators, SPV, the Agent or you may assign or
transfer any of its or your rights or obligations under the this Letter
Agreement, except that you may assign or transfer your rights and obligations to
any subsidiary of Banc One Corporation or any successor thereto. The Letter
Agreement shall bind the respective successors and assigns of the parties and
shall inure to the benefit of their respective successors and assigns.
This Letter Agreement and the rights and obligations of the
parties hereunder will be governed by and construed and interpreted in
accordance with internal laws (and not the law of conflicts) of the State of
Illinois and applicable federal laws. This Letter Agreement may be executed in
any number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument. All references herein to "we"
or "us" refer to the Originators and SPV.
This Letter Agreement and the services provided under the
Services Agreements may be terminated by the Agent or you at any time by giving
each of the other parties hereto sixty (60) calendar days' prior written notice
of such termination.
This Letter Agreement contains the entire agreement among the
parties with respect to the subject matter hereof, and may not be altered,
modified, terminated or amended in any respect, nor may any right, power or
privilege of any party hereunder be waived or released or discharged, except
upon execution by all parties hereto of a written instrument so providing. In
the event that any provision in this Letter Agreement is in conflict with, or
inconsistent with, any provision of any of the Service Agreements, this Letter
Agreement will exclusively govern and control. Each party agrees to take all
actions reasonably requested by any other party to carry out the purposes of
this Letter Agreement or to preserve and protect the rights of each party
hereunder.
Any notices given pursuant to this Letter Agreement shall be
given by any commercially reasonable means and all notices shall be effective
when received. Each written notice shall be addressed to the relevant address
appearing below or at another address specified in a written notice by one party
to the other.
If to any of the Originators
c/o Actuant Corporation
6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
70
If to SPV:
Same as above
If to Bank One:
Bank One, NA
1 Bank One Plaza
Chicago, IL 60670-0935
Attn: Loretta McCarthy
Phone: (312) 627-5883
Fax: (312) 928-0338
If to Agent
Wachovia Bank, N.A., as Agent
191 Peachtree Street
Mail Stop GA-423
Atlanta, GA 30303
Attn: Elizabeth K. Wagner
Asset-Backed Finance
Phone: (404) 332-1398
Fax: (404) 332-5152
Please indicate your agreement to the terms of this Letter Agreement
by signing in the space provided below. This Letter Agreement will become
effective immediately upon execution of a counterpart of this Letter Agreement
by all parties hereto.
Very truly yours,
ACTUANT CORPORATION,
DEL CITY WIRE CO., INC.,
GB TOOLS AND SUPPLIES, INC. &
VERSA TECHNOLOGIES, INC.
By:________________________________________
Name: Terry M. Braatz
Title: Vice President and/or Treasurer
71
ENGINEERED SOLUTIONS, L.P.
BY: VERSA TECHNOLOGIES, INC., ITS GENERAL
PARTNER
By:_________________________________________
Name: Terry M. Braatz
Title: Vice President
ACTUANT RECEIVABLES CORPORATION
By:_________________________________________
Name:
Title:
Acknowledged and agreed to
as of the date first above written:
BANK ONE, NA and BANC ONE NATIONAL PROCESSING CORPORATION
By: ___________________________________
Name: Loretta McCarthy
Title: Officer
By: ___________________________________
Name:
Title:
WACHOVIA BANK, N.A., as Agent
By: ___________________________________
Name:
Title:
72
ANNEX A
FORM OF NOTICE
[On letterhead of the Agent]
[Date]
Bank One, NA and
Banc One National Processing Corporation
1 Bank One Plaza
Chicago, IL 60670
Attention: Loretta McCarthy
Fax No.: (312) 928-0338
Re: Actuant Receivables Corporation
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to
that certain letter agreement dated May 30, 2001 (the "Letter Agreement") among
----------------
Actuant Corporation, Del City Wire Co., Inc., GB Tools and Supplies, Inc., Versa
Technologies, Inc., Engineered Solutions, L.P., Actuant Receivables Corporation,
you and us, to have the name of, and to have exclusive ownership and control of,
the lock-box and other accounts identified in the Letter Agreement (the
"Accounts") maintained with you, transferred to us. The Accounts will henceforth
--------
be zero-balance accounts, and funds deposited in the Accounts should be sent at
the end of each day to:
Bank Name: Wachovia Bank, N.A.
Location: Winston-Salem, N.C.
ABA Routing No.: ABA # 053100494
Credit Account No.: For credit to Blue Ridge Asset Funding Account
#8735-098787
Reference: Blue Ridge/Actuant Receivables Corporation
Attention: John Dillon, tel. (336) 732-2690
or as otherwise directed by the Agent. You have further agreed to perform all
other services you are performing under the "Services Agreements" (as defined in
the Letter Agreement) on our behalf.
73
We appreciate your cooperation in this matter.
Very truly yours,
WACHOVIA BANK, N.A., as Agent
By:__________________________
Name:
Title:
74
SCHEDULE I
LOCK-BOXES AND ACCOUNTS
Name of Originator Lock-Box Account Other Account No.
- ------------------ ---------------- -----------------
Actuant Receivables No Lockbox account DDA# 10-87832
Corporation
[new "SPE"]
Tools & Supplies:
- -----------------
Actuant Corporation 22730 DDA# 10-87766
[Enerpac]
GB Tools & Supplies 22732 DDA# 10-87774
[Gardner Bender (GB)]
GB Tools & Supplies 22732 DDA# 10-87774
[Calterm]
GB Tools & Supplies No Lockbox account DDA# 10-87782
[Ancor Products]
Del City Wire Co. Inc 22738 DDA# 10-87790
[Del City]
Engineered Solutions:
- ---------------------
Actuant Corporation 22738 DDA# 10-87808
[Power Packer]
Versa Technologies 22742 DDA# 10-87816
[Power Gear]
Engineered Solutions LP 22626 DDA# 10-81348
[Engineered Solutions Americas]
75
SCHEDULE I
LOCK-BOXES AND ACCOUNTS
Name of Originator Lock-Box Account Other Account No.
- ------------------ ----------------- -----------------
Actuant Receivables No Lockbox account DDA# 10-87832
Corporation
[new "SPE"]
Tools & Supplies:
- -----------------
Actuant Corporation 22730 DDA# 10-87766
[Enerpac]
GB Tools & Supplies 22732 DDA# 10-87774
[Gardner Bender (GB)]
GB Tools & Supplies 22732 DDA# 10-87774
[Calterm]
GB Tools & Supplies No Lockbox account DDA# 10-87782
[Ancor Products]
Del City Wire Co. Inc. 22738 DDA# 10-87790
[Del City]
Engineered Solutions:
- ---------------------
Actuant Corporation 22738 DDA# 10-87808
[Power Packer]
Versa Technologies 22742 DDA# 10-87816
[Power Gear]
Versa Technologies 22740 DDA# 10-87824
[Milwaukee Cylinder]
Engineered Solutions LP 22626 DDA# 10-81348
[Engineered Solutions Americas]
76
EXHIBIT VII
CREDIT AND COLLECTION POLICY
See Exhibit V to Receivables Sale Agreement
77
EXHIBIT VIII
FORM OF MONTHLY REPORT
- --------------------------------------------------------------------------------
Actuant Receivable Corporation Monthly Report
For the Month Ended: ___
(Page 1)
($ in Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWING AVAILABILITY: ___
- ------------------------------------------------------------------------------------------------------------------------------------
I . Portfolio Information
- ------------------------------------------------------------------------------------------------------------------------------------
1. Beginning of Month Balance: (Total A/R Outstanding) ___
- ------------------------------------------------------------------------------------------------------------------------------------
2. Gross Sales (Domestic & Foreign): ___
- ------------------------------------------------------------------------------------------------------------------------------------
3. Deduct:
- ------------------------------------------------------------------------------------------------------------------------------------
a. Total Collections: ___
- ------------------------------------------------------------------------------------------------------------------------------------
b. Dilution (Total) ___
- ------------------------------------------------------------------------------------------------------------------------------------
c. Write Offs ___
- ------------------------------------------------------------------------------------------------------------------------------------
Add:
- ------------------------------------------------------------------------------------------------------------------------------------
d. Recoveries ___
- ------------------------------------------------------------------------------------------------------------------------------------
4.
- ------------------------------------------------------------------------------------------------------------------------------------
a. Calculated Ending A/R Balance [(1) + (2) - (3 a,b,c)+(3d)]: ___
- ------------------------------------------------------------------------------------------------------------------------------------
b. Reported Ending A/R Balance ___
- ------------------------------------------------------------------------------------------------------------------------------------
c. Difference (If any) ___
- ------------------------------------------------------------------------------------------------------------------------------------
5. Deduct:
- ------------------------------------------------------------------------------------------------------------------------------------
a. Delinquent & Defaulted Receivables ___
- ------------------------------------------------------------------------------------------------------------------------------------
b. Foreign Receivables: ___
- ------------------------------------------------------------------------------------------------------------------------------------
c. Other Receivables not Considered Eligible ___
- ------------------------------------------------------------------------------------------------------------------------------------
d. Dilutive credits ineligible for funding ___
- ------------------------------------------------------------------------------------------------------------------------------------
e. Total Ineligibles ___
- ------------------------------------------------------------------------------------------------------------------------------------
6. Eligible Receivables [(4 b) - (5.c.)]: ___
- ------------------------------------------------------------------------------------------------------------------------------------
7. Deduct: Excess Concentration: ___
- ------------------------------------------------------------------------------------------------------------------------------------
8. Net Pool Balance [(6) -(7)]: ___
- ------------------------------------------------------------------------------------------------------------------------------------
9. Two Three
Aging Current One Month Months Months
Schedule: Month % Prior Prior Prior
- ------------------------------------------------------------------------------------------------------------------------------------
a. Current ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
b. 1-30 Days Past Due ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
c. 31-60 Days Past Due ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
d. 61-90 Days Past Due ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
e. 91-120 Days Past Due ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
f. 121+ Days Past Due ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
g. Total: ___ ___ ___ ___ ___
- ------------------------------------------------------------------------------------------------------------------------------------
78
- ------------------------------------------------------------------------------------------------------------------------------------
Actuant Receivable Corporation Monthly Report
For the Month Ended: ___
(Page 2)
($ in Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
II. Calculations Reflecting Current Activity
- ------------------------------------------------------------------------------------------------------------------------------------
10. Face Value CP Outstanding $0
- ------------------------------------------------------------------------------------------------------------------------------------
11. Required Reserve % #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
12. Required Reserve [(8) x (11)]: #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
III. Compliance
- ------------------------------------------------------------------------------------------------------------------------------------
13. Asset Interest [(10) + (12) / (8)] * 100% : #VALUE! #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
14. 3M Avg. Delinquency Ratio *2.90% #VALUE! #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
Current Mo. Delinquency Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
1 Mo. Prior Delinquency Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
2 Mo. Prior Delinquency Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
15. 3M Avg. Default Trigger Ratio *9.75% #VALUE! #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
Current Mo. Default Trigger Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
1 Mo. Prior Default Trigger Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
2 Mo. Prior Default Trigger Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
16. 3M Avg. Dilution Ratio *7.10% #VALUE! #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
Current Mo. Dilution Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
1 Mo. Prior Dilution Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
2 Mo. Prior Dilution Ratio #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
17. Facility Limit [(12)*= $33,000,000 In Compliance
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
18. Minimum Required Capital Amount #VALUE!
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
* means less than
79
- --------------------------------------------------------------------------------
Actuant Receivable Corporation Monthly Report
For the Month Ended: ___
(Page 3)
($ in Thousands)
- --------------------------------------------------------------------------------
IV. Excess Concentration: (Calculation)
- --------------------------------------------------------------------------------
Eligible Receivables #VALUE!
- --------------------------------------------------------------------------------
Allowable Max. Credit Rating
Percentage -------------
Allowable
Balance)
- --------------------------------------------------------------------------------
3.5% $0 NR/NR
- --------------------------------------------------------------------------------
3.5% $0 A3/P3
- --------------------------------------------------------------------------------
6.0% $0 A2/P2
- --------------------------------------------------------------------------------
8.0% $0 A1/P1
- --------------------------------------------------------------------------------
10.0% $0 A1+/P1
- --------------------------------------------------------------------------------
LARGEST SHORT-TERM ALLOWABLE TOTAL ALLOWABLE EXCESS
OBLIGORS DEBT RATING PERCENTAGE RECEIVABLES RECEIVABLES RECEIVABLES
- --------------------------------------------------------------------------------------------------
1 Lowes NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
2 Home Depot NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
3 Ace Hardware NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
4 EDN NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
5 CSK Auto NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
6 TruServe NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
7 Advance Auto NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
8 West Marine
Products NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
9 WW Grainger NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
10 Fleetwood NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
11 Sears NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
12 Orchard NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
13 0 NR/NR 0.00% $0 $0 $0
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Total $0 $0 $0
- --------------------------------------------------------------------------------------------------
The undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting with respect to outstanding Receivables as of
_______________ accordance with the Receivables Purchase Agreement dated May 30,
2001 and that all representations and warranties related to such Agreement are
restated and reaffirmed.
- --------------------------------------------------------------------------------
Signed: Date: _______________________
__________________________________
- --------------------------------------------------------------------------------
Title: __________________________________
- --------------------------------------------------------------------------------
80
EXHIBIT IX
FORM OF PERFORMANCE UNDERTAKING
This Performance Undertaking (this "Undertaking"), dated as of May 30,
2001, is executed by Actuant Corporation, a Wisconsin corporation (the
"Performance Guarantor") in favor of Actuant Receivables Corporation, a Nevada
corporation (together with its successors and assigns, "Recipient").
RECITALS
1. Del City Wire Co., Inc., an Oklahoma corporation, GB Tools and
Supplies, Inc., a Wisconsin corporation, Versa Technologies, Inc., a Delaware
corporation, Engineered Solutions, L.P., an Indiana limited partnership, and VT
Holdings, Inc., a Nevada corporation (collectively, the "Other Originators"),
Performance Guarantor and Recipient have entered into a Receivables Sale
Agreement, dated as of May 30, 2001 (as amended, restated or otherwise modified
from time to time, the "Sale Agreement"), pursuant to which Performance
Guarantor and Other Originators, subject to the terms and conditions contained
therein, are selling and/or contributing their respective right, title and
interest in their accounts receivable to Recipient.
2. Performance Guarantor owns one hundred percent (100%) of the
capital stock of each of the Other Originators and Recipient, and each of the
Other Originators, and accordingly, Performance Guarantor, is expected to
receive substantial direct and indirect benefits from their sale or contribution
of receivables to Recipient pursuant to the Sale Agreement (which benefits are
hereby acknowledged).
3. As an inducement for Recipient to acquire Other Originators'
accounts receivable pursuant to the Sale Agreement, Performance Guarantor has
agreed to guaranty the due and punctual performance by Other Originators of
their obligations under the Sale Agreement, as well as each of the Other
Originator's Servicing Related Obligations (as hereinafter defined).
4. Performance Guarantor wishes to guaranty the due and punctual
performance by Other Originators of their obligations to Recipient under or in
respect of the Sale Agreement and each of the Other Originator's Servicing
Related Obligations (as hereinafter defined), as provided herein.
AGREEMENT
NOW, THEREFORE, Performance Guarantor hereby agrees as follows:
Section 1. Definitions. Capitalized terms used herein and not defined
-----------
herein shall the respective meanings assigned thereto in the Sale Agreement or
the Receivables Purchase Agreement (as hereinafter defined). In addition:
81
"Guaranteed Obligations" means, collectively: (a) all
covenants, agreements, terms, conditions and indemnities to be performed and
observed by any Other Originator under and pursuant to the Sale Agreement and
each other document executed and delivered by any Other Originator pursuant to
the Sale Agreement, including, without limitation, the due and punctual payment
of all sums which are or may become due and owing by any Other Originator under
the Sale Agreement, whether for fees, expenses (including counsel fees),
indemnified amounts or otherwise, whether upon any termination or for any other
reason and (b) all obligations of each of the Other Originators (i) as a
Permitted Sub-Servicer under the Receivables Purchase Agreement, dated as of May
30, 2001 by and among Recipient, as Seller, Performance Guarantor, as initial
Servicer, Blue Ridge Asset Funding Corporation, and Wachovia Bank, N.A., as
Agent (as amended, restated or otherwise modified, the "Receivables Purchase
Agreement" and, together with the Sale Agreement, the "Agreements") or (ii)
which arise pursuant to Sections 8.2, 8.3 or 13.3(a) of the Receivables Purchase
Agreement as a result of its termination as Servicer (all such obligations under
this clause (b), collectively, the "Servicing Related Obligations").
Section 2. Guaranty of Performance of Guaranteed Obligations.
-------------------------------------------------
Performance Guarantor hereby guarantees to Recipient, the full and punctual
payment and performance by each Other Originator of its respective Guaranteed
Obligations. This Undertaking is an absolute, unconditional and continuing
guaranty of the full and punctual performance of all Guaranteed Obligations of
each Other Originator under the Agreements and each other document executed and
delivered by any Other Originator pursuant to the Agreements and is in no way
conditioned upon any requirement that Recipient first attempt to collect any
amounts owing by any Other Originator to Recipient, the Agent or Blue Ridge from
any other Person or resort to any collateral security, any balance of any
deposit account or credit on the books of Recipient, the Agent or Blue Ridge in
favor of any Other Originator or any other Person or other means of obtaining
payment. Should any Other Originator default in the payment or performance of
any of its Guaranteed Obligations, Recipient (or its assigns) may cause the
immediate performance by Performance Guarantor of the Guaranteed Obligations and
cause any payment Guaranteed Obligations to become forthwith due and payable to
Recipient (or its assigns), without demand or notice of any nature (other than
as expressly provided herein), all of which are hereby expressly waived by
Performance Guarantor. Notwithstanding the foregoing, this Undertaking is not a
guarantee of the collection of any of the Receivables and Performance Guarantor
shall not be responsible for any Guaranteed Obligations to the extent the
failure to perform such Guaranteed Obligations by any Other Originator results
from Receivables being uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; provided that nothing herein
shall relieve any Other Originator from performing in full its Guaranteed
Obligations under the Agreements or Performance Guarantor of its undertaking
hereunder with respect to the full performance of such duties.
Section 3. Performance Guarantor's Further Agreements to Pay.
-------------------------------------------------
Performance Guarantor further agrees, as the principal obligor and not as a
guarantor only, to pay to Recipient (and its assigns), forthwith upon demand in
funds immediately available to Recipient, all reasonable costs and expenses
(including court costs and reasonable legal expenses) incurred or expended by
Recipient in connection with the Guaranteed Obligations, this Undertaking and
the
82
enforcement thereof, together with interest on amounts recoverable under this
Undertaking from the time when such amounts become due until payment, at a rate
of interest (computed for the actual number of days elapsed based on a 360 day
year) equal to the Prime Rate plus 2% per annum, such rate of interest changing
when and as the Prime Rate changes.
Section 4. Waivers by Performance Guarantor. Performance
--------------------------------
Guarantor waives notice of acceptance of this Undertaking, notice of any action
taken or omitted by Recipient (or its assigns) in reliance on this Undertaking,
and any requirement that Recipient (or its assigns) be diligent or prompt in
making demands under this Undertaking, giving notice of any Termination Event,
Amortization Event, other default or omission by any Other Originator or
asserting any other rights of Recipient under this Undertaking. Performance
Guarantor warrants that it has adequate means to obtain from each Other
Originator, on a continuing basis, information concerning the financial
condition of such Other Originator, and that it is not relying on Recipient to
provide such information, now or in the future. Performance Guarantor also
irrevocably waives all defenses (i) that at any time may be available in respect
of the Guaranteed Obligations by virtue of any statute of limitations,
valuation, stay, moratorium law or other similar law now or hereafter in effect
or (ii) that arise under the law of suretyship, including impairment of
collateral. Recipient (and its assigns) shall be at liberty, without giving
notice to or obtaining the assent of Performance Guarantor and without relieving
Performance Guarantor of any liability under this Undertaking, to deal with each
Other Originator and with each other party who now is or after the date hereof
becomes liable in any manner for any of the Guaranteed Obligations, in such
manner as Recipient in its sole discretion deems fit, and to this end
Performance Guarantor agrees that the validity and enforceability of this
Undertaking, including without limitation, the provisions of Section 7 hereof,
shall not be impaired or affected by any of the following: (a) any extension,
modification or renewal of, or indulgence with respect to, or substitutions for,
the Guaranteed Obligations or any part thereof or any agreement relating thereto
at any time; (b) any failure or omission to enforce any right, power or remedy
with respect to the Guaranteed Obligations or any part thereof or any agreement
relating thereto, or any collateral securing the Guaranteed Obligations or any
part thereof; (c) any waiver of any right, power or remedy or of any Termination
Event, Amortization Event, or default with respect to the Guaranteed Obligations
or any part thereof or any agreement relating thereto; (d) any release,
surrender, compromise, settlement, waiver, subordination or modification, with
or without consideration, of any other obligation of any person or entity with
respect to the Guaranteed Obligations or any part thereof; (e) the
enforceability or validity of the Guaranteed Obligations or any part thereof or
the genuineness, enforceability or validity of any agreement relating thereto or
with respect to the Guaranteed Obligations or any part thereof; (f) the
application of payments received from any source to the payment of any payment
obligations of any Other Originator or any part thereof or amounts which are not
covered by this Undertaking even though Recipient (or its assigns) might
lawfully have elected to apply such payments to any part or all of the payment
obligations of such Other Originator or to amounts which are not covered by this
Undertaking; (g) the existence of any claim, setoff or other rights which
Performance Guarantor may have at any time against any Other Originator in
connection herewith or any unrelated transaction; (h) any assignment or transfer
of the Guaranteed Obligations or any part thereof; or (i) any failure on the
part of any Other Originator to perform or comply with any term of the
Agreements or any other document executed in connection
83
therewith or delivered thereunder, all whether or not Performance Guarantor
shall have had notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (i) of this Section 4.
Section 5. Unenforceability of Guaranteed Obligations Against
--------------------------------------------------
Other Originators. Notwithstanding (a) any change of ownership of any Other
- -----------------
Originator or the insolvency, bankruptcy or any other change in the legal status
of any Other Originator; (b) the change in or the imposition of any law, decree,
regulation or other governmental act which does or might impair, delay or in any
way affect the validity, enforceability or the payment when due of the
Guaranteed Obligations; (c) the failure of any Other Originator or Performance
Guarantor to maintain in full force, validity or effect or to obtain or renew
when required all governmental and other approvals, licenses or consents
required in connection with the Guaranteed Obligations or this Undertaking, or
to take any other action required in connection with the performance of all
obligations pursuant to the Guaranteed Obligations or this Undertaking; or (d)
if any of the moneys included in the Guaranteed Obligations have become
irrecoverable from any Other Originator for any other reason other than final
payment in full of the payment obligations in accordance with their terms, this
Undertaking shall nevertheless be binding on Performance Guarantor. This
Undertaking shall be in addition to any other guaranty or other security for the
Guaranteed Obligations, and it shall not be rendered unenforceable by the
invalidity of any such other guaranty or security. In the event that
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Other Originator
or for any other reason with respect to any Other Originator, all such amounts
then due and owing with respect to the Guaranteed Obligations under the terms of
the Agreements, or any other agreement evidencing, securing or otherwise
executed in connection with the Guaranteed Obligations, shall be immediately due
and payable by Performance Guarantor.
Section 6. Representations and Warranties. Performance Guarantor
------------------------------
hereby represents and warrants to Recipient that:
(a) Organization; Powers. Performance Guarantor (i) is duly
--------------------
organized, validly existing and in good standing or active status under the laws
of the jurisdiction of its organization, (ii) has all requisite power and
authority to own its Property and to carry on its business as now conducted and
as proposed to be conducted, (iii) is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where the failure so to qualify could not reasonably be expected to
result in a Material Adverse Effect, and (iv) has the power and authority to
execute, deliver and perform its obligations under this Undertaking.
(b) Authorization. The execution, delivery and performance by
-------------
Performance Guarantor of this Undertaking (i) have been duly authorized by all
requisite corporate and, if required, stockholder action and (ii) will not (A)
violate (1) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or by-
laws of Performance Guarantor, (2) any order of any Governmental Authority or
(3) any provision of any indenture, agreement or other instrument to which
Performance Guarantor is a party or by which any of them or any of their
Property is or may be bound, (B) be in conflict
84
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under, or give rise to any right to accelerate or to require
the prepayment, repurchase or redemption of any obligation under any such
indenture, agreement or other instrument or (C) result in the creation or
imposition of any Adverse Claim upon or with respect to any Property now owned
or hereafter acquired by Performance Guarantor.
(c) No Conflict. The execution and delivery by Performance Guarantor
-----------
of this Undertaking, and the performance of its obligations hereunder and
thereunder do not contravene or violate (i) its Organizational Documents, (ii)
any law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of Performance Guarantor
or its Subsidiaries (except as created hereunder) except, in any case, where
such contravention or violation could not reasonably be expected to have a
Material Adverse Effect; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(d) Governmental Approvals. No action, consent or approval of,
----------------------
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with this Undertaking.
(e) Enforceability. This Undertaking has been duly executed and
--------------
delivered by Performance Guarantor and constitutes a legal, valid and binding
obligation of Performance Guarantor enforceable against Performance Guarantor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
Section 7. Subrogation; Subordination. Notwithstanding anything to the
--------------------------
contrary contained herein, until the Guaranteed Obligations are paid in full
Performance Guarantor: (a) will not enforce or otherwise exercise any right of
subrogation to any of the rights of Recipient, the Agent or Blue Ridge against
any Other Originator, (b) hereby waives all rights of subrogation (whether
contractual, under Section 509 of the United States Bankruptcy Code, at law or
in equity or otherwise) to the claims of Recipient, the Agent and Blue Ridge
against any Other Originator and all contractual, statutory or legal or
equitable rights of contribution, reimbursement, indemnification and similar
rights and "claims" (as that term is defined in the United States Bankruptcy
Code) which Performance Guarantor might now have or hereafter acquire against
any Other Originator that arise from the existence or performance of Performance
Guarantor's obligations hereunder, (c) will not claim any setoff, recoupment or
counterclaim against any Other Originator in respect of any liability of
Performance Guarantor to such Other Originator and (d) waives any benefit of and
any right to participate in any collateral security which may be held by
Beneficiaries, the Agent or Blue Ridge. The payment of any amounts due with
respect to any indebtedness of any Other Originator now or hereafter owed to
Performance Guarantor is hereby subordinated to the prior payment in full of all
of the Guaranteed Obligations. Performance Guarantor agrees that, after the
occurrence of any default in the
85
payment or performance of any of the Guaranteed Obligations, Performance
Guarantor will not demand, sue for or otherwise attempt to collect any such
indebtedness of any Other Originator to Performance Guarantor until all of the
Guaranteed Obligations shall have been paid and performed in full. If,
notwithstanding the foregoing sentence, Performance Guarantor shall collect,
enforce or receive any amounts in respect of such indebtedness while any
obligations are still unperformed or outstanding, such amounts shall be
collected, enforced and received by Performance Guarantor as trustee for
Recipient (and its assigns) and be paid over to Recipient (or its assigns) on
account of the Guaranteed Obligations without affecting in any manner the
liability of Performance Guarantor under the other provisions of this
Undertaking. The provisions of this Section 7 shall be supplemental to and not
in derogation of any rights and remedies of Recipient under any separate
subordination agreement which Recipient may at any time and from time to time
enter into with Performance Guarantor.
Section 8. Termination of Performance Undertaking. Performance
--------------------------------------
Guarantor's obligations hereunder shall continue in full force and effect until
all Aggregate Unpaids are finally paid and satisfied in full and the Receivables
Purchase Agreement is terminated, provided that this Undertaking shall continue
to be effective or shall be reinstated, as the case may be, if at any time
payment or other satisfaction of any of the Guaranteed Obligations is rescinded
or must otherwise be restored or returned upon the bankruptcy, insolvency, or
reorganization of any Other Originator or otherwise, as though such payment had
not been made or other satisfaction occurred, whether or not Recipient (or its
assigns) is in possession of this Undertaking. No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any insolvency or
other similar law, or any law or order of any government or agency thereof
purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall
impair, affect, be a defense to or claim against the obligations of Performance
Guarantor under this Undertaking.
Section 9. Effect of Bankruptcy. This Performance Undertaking
--------------------
shall survive the insolvency of any Other Originator and the commencement of any
case or proceeding by or against any Other Originator under the federal
bankruptcy code or other federal, state or other applicable bankruptcy,
insolvency or reorganization statutes. No automatic stay under the federal
bankruptcy code with respect to any Other Originator or other federal, state or
other applicable bankruptcy, insolvency or reorganization statutes to which any
Other Originator is subject shall postpone the obligations of Performance
Guarantor under this Undertaking.
Section 10. Setoff. Regardless of the other means of obtaining
------
payment of any of the Guaranteed Obligations, Recipient (and its assigns) is
hereby authorized at any time and from time to time, without notice to
Performance Guarantor (any such notice being expressly waived by Performance
Guarantor) and to the fullest extent permitted by law, to set off and apply any
deposits and other sums against the obligations of Performance Guarantor under
this Undertaking, whether or not Recipient (or any such assign) shall have made
any demand under this Undertaking and although such obligations may be
contingent or unmatured.
Section 11. Taxes. All payments to be made by Performance
-----
Guarantor hereunder shall be made free and clear of any deduction or
withholding. If Performance
86
Guarantor is required by law to make any deduction or withholding on account of
tax or otherwise from any such payment, the sum due from it in respect of such
payment shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, Recipient receive a net sum equal to
the sum which they would have received had no deduction or withholding been
made.
Section 12. Further Assurances. Performance Guarantor agrees that
------------------
it will from time to time, at the request of Recipient (or its assigns), provide
information relating to the business and affairs of Performance Guarantor as
Recipient may reasonably request. Performance Guarantor also agrees to do all
such things and execute all such documents as Recipient (or its assigns) may
reasonably consider necessary or desirable to give full effect to this
Undertaking and to perfect and preserve the rights and powers of Recipient
hereunder.
Section 13. Successors and Assigns. This Performance Undertaking
----------------------
shall be binding upon Performance Guarantor, its successors and permitted
assigns, and shall inure to the benefit of and be enforceable by Recipient and
its successors and assigns. Performance Guarantor may not assign or transfer any
of its obligations hereunder without the prior written consent of each of
Recipient and the Agent. Without limiting the generality of the foregoing
sentence, Recipient may assign or otherwise transfer the Agreements, any other
documents executed in connection therewith or delivered thereunder or any other
agreement or note held by them evidencing, securing or otherwise executed in
connection with the Guaranteed Obligations, or sell participations in any
interest therein, to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to the Beneficiaries herein.
Section 14. Amendments and Waivers. No amendment or waiver of any
----------------------
provision of this Undertaking nor consent to any departure by Performance
Guarantor therefrom shall be effective unless the same shall be in writing and
signed by Recipient, the Agent and Performance Guarantor. No failure on the part
of Recipient to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
Section 15. Notices. All notices and other communications provided
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for hereunder shall be made in writing and shall be addressed as follows: if to
Performance Guarantor, at the address set forth beneath its signature hereto,
and if to Recipient, at the addresses set forth beneath its signature hereto, or
at such other addresses as each of Performance Guarantor or any Recipient may
designate in writing to the other. Each such notice or other communication shall
be effective (1) if given by telecopy, upon the receipt thereof, (2) if given by
mail, three (3) Business Days after the time such communication is deposited in
the mail with first class postage prepaid or (3) if given by any other means,
when received at the address specified in this Section 15.
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Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED IN
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ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS.
Section 17. CONSENT TO JURISDICTION. EACH OF PERFORMANCE GUARANTOR
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AND RECIPIENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE
AGREEMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED
THEREUNDER AND EACH OF THE PERFORMANCE GUARANTOR AND RECIPIENT HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
Section 18. Bankruptcy Petition. Performance Guarantor hereby
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covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding senior Indebtedness of Blue Ridge, it
will not institute against, or join any other Person in instituting against,
Blue Ridge any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
Section 19. Miscellaneous. This Undertaking constitutes the entire
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agreement of Performance Guarantor with respect to the matters set forth herein.
The rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Undertaking shall be
in addition to any other guaranty of or collateral security for any of the
Guaranteed Obligations. The provisions of this Undertaking are severable, and in
any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of Performance Guarantor hereunder
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of Performance Guarantor's liability under this
Undertaking, then, notwithstanding any other provision of this Undertaking to
the contrary, the amount of such liability shall, without any further action by
Performance Guarantor or Recipient, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding. Any provisions of this Undertaking which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise specified, references herein to "Section"
shall mean a reference to sections of this Undertaking.
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IN WITNESS WHEREOF, Performance Guarantor has caused this Undertaking
to be executed and delivered as of the date first above written.
ACTUANT CORPORATION
By: ______________________________
Name: ____________________________
Title: ___________________________
Address for notices:
6100 North Baker Road
Glendale, WI 53209
Attn: Terry M. Braatz
Phone: (414) 247-5446
Fax: (414) 228-6112
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SCHEDULE A
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
1. Executed copies of the Receivables Purchase Agreement, duly
executed by the parties thereto.
2. Copy of the Resolutions of the Board of Directors of each
Seller Party certified by its Secretary authorizing such Person's execution,
delivery and performance of this Agreement and the other documents to be
delivered by it hereunder.
3. Articles or Certificate of Incorporation of each Seller Party
certified by the Secretary of State of its jurisdiction of incorporation on or
within thirty (30) days prior to the initial Purchase.
4. Good Standing Certificate for each Seller Party issued by the
Secretaries of State of its state of incorporation and each jurisdiction where
it has material operations, each of which is listed below:
a. Seller:
b. Servicer:
5. A certificate of each Seller Party's Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of such
Seller Party, authorizing its execution, delivery and performance of the
Receivables Purchase Agreement and the other documents to be delivered by it
thereunder;
(b) A copy of the Organizational Documents of such Seller Party
(also certified, to the extent that such documents are filed with any
governmental authority, by the Secretary of State of the jurisdiction of
organization of such Seller Party on or within thirty (30) days prior to
closing);
(c) Good Standing Certificates for such Seller Party issued by
the Secretaries of State of its state of incorporation and each jurisdiction
where it has material operations; and
(d) The names and signatures of the officers authorized on its
behalf to execute the Receivables Purchase Agreement and any other documents to
be delivered by it thereunder.
6. Pre-filing state and federal tax lien, judgment lien and UCC
lien searches against Seller from the States of Nevada and _________ (and
applicable local filing offices).
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7. Time stamped receipt copies of proper financing statements,
duly filed under the UCC on or before the date of the initial Purchase in all
jurisdictions as may be necessary or, in the opinion of the Agent, desirable,
under the UCC of all appropriate jurisdictions or any comparable law in order to
perfect the ownership interests contemplated by this Agreement.
8. Time stamped receipt copies of proper UCC termination
statements, if any, necessary to release all security interests and other rights
of any Person in the Receivables, Contracts or Related Security previously
granted by Seller.
9. Executed copies of Collection Account Agreements for each
Lock-Box and Collection Account.
10. A favorable opinion of legal counsel for the Seller Parties
reasonably acceptable to the Agent which addresses the following matters and
such other matters as the Agent may reasonably request:
(a) Each of the Seller Parties is a corporation duly organized,
validly existing, and in good standing under the laws of the state of
______________.
(b) Each of the Seller Parties has all requisite authority to
conduct its business in each jurisdiction where failure to be so qualified would
have a material adverse effect on such entity's business.
(c) The execution and delivery by each of the Seller Parties of
the Transaction Document to which it is a party and its performance of its
obligations thereunder have been duly authorized by all necessary organizational
action and proceedings on the part of such entity and will not:
(i) require any action by or in respect of, or filing with, any
governmental body, agency or official (other than the filing of UCC
financing statements);
(ii) contravene, or constitute a default under, any provision of
applicable law or regulation or of its articles or certificate of
incorporation or bylaws or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such entity; or
(iii) result in the creation or imposition of any Adverse Claim on
assets of such entity or any of its Subsidiaries (except as contemplated by
the Transaction Documents).
(d) Each of the Transaction Documents to which each of
the Seller Parties is a party has been duly executed and delivered by such
entity and constitutes the legally valid, and binding obligation of such entity
enforceable in accordance with its terms, except to the extent the enforcement
thereof may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
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(e) The provisions of the Receivables Purchase Agreement
are effective to create valid security interests in favor of the Agent, for the
benefit of the Secured Parties, in all of Seller's right, title and interest in
and to the Receivables and Related Security described therein which constitute
"accounts" or "general intangibles" (each as defined in the UCC) (collectively,
the "Opinion Collateral"), as security for the payment of the Aggregate Unpaids.
(f) Each of the UCC-1 Financing Statements naming Seller
as debtor, and Agent, as secured party, to be filed in the [describe filing
offices], is in appropriate form for filing therein. Upon filing of such UCC-1
Financing Statements in such filing offices and payment of the required filing
fees, the security interest in favor of the Agent, for the benefit of the
Secured Parties, in the Opinion Collateral will be perfected.
(g) Based solely on our review of the [describe UCC
Search Reports], and assuming (i) the filing of the Financing Statements and
payment of the required filing fees in accordance with paragraph (f) and (ii)
the absence of any intervening filings between the date and time of the Search
Reports and the date and time of the filing of the Financing Statements, the
security interest of the Agent in the Opinion Collateral is prior to any
security interest granted in the Opinion Collateral by Seller, the priority of
which is determined solely by the filing of a financing statement in the
[describe filing offices].
(h) Neither of the Seller Parties is a "holding company"
or a "subsidiary holding company" of a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended, or an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
11. A Compliance Certificate.
12. The Fee Letter.
13. A Monthly Report as at _____________, 2001.
14. Executed copies of (i) all consents from and
authorizations by any Persons and (ii) all waivers and amendments to existing
credit facilities, that are necessary in connection with this Agreement.
15. Partial Release, duly executed by Credit Suisse First
Boston, as collateral agent under the Parent's credit agreement, with respect to
the Receivables and Related Security, together with UCC-3 partial releases
consistent therewith.
16. If applicable, a direction letter executed by each of
the Seller Parties authorizing the Agent and Blue Ridge, and directing
warehousemen to allow the Agent and Blue Ridge to inspect and make copies from
such Seller Party's books and records maintained at off-site data processing or
storage facilities.
17. The Liquidity Agreement, duly executed by each of the
parties thereto.
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18. If applicable, for each Liquidity Bank that is not
incorporated under the laws of the United States of America, or a state thereof,
two duly completed copies of United States Internal Revenue Service Form W-8BEN
or W-8ECI, as applicable, certifying in either case that such Liquidity Bank is
entitled to receive payments under the Agreement without deduction or
withholding of any United States federal income taxes.
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