RECEIVABLES PURCHASE AGREEMENT
Dated as of November 15, 1994,
as amended and restated as of December 29, 1995
INTERCO RECEIVABLES CORP., a Delaware corporation (the
"Seller"), ATLANTIC ASSET SECURITIZATION CORP., a Delaware
corporation (the "Issuer"), and CREDIT LYONNAIS NEW YORK BRANCH,
a branch of Credit Lyonnais, a French banking corporation, duly
licensed under the laws of the State of New York ("CL-NY"), as
agent (the "Agent") for the Investors (as defined in Exhibit I
hereto), agree as follows:
PRELIMINARY STATEMENTS. Certain terms that are
capitalized and used throughout this Agreement are defined in
Exhibit I to this Agreement. References in the Exhibits to "the
Agreement" refer to this Agreement, as further amended, modified
or supplemented from time to time.
The Seller has acquired Receivables from the
Originators pursuant to the Originator Purchase Agreement, either
by purchase or by contribution to the capital of the Seller, as
determined from time to time by the Seller and each Originator.
The Seller, the Issuer and the Agent entered into a Receivables
Purchase Agreement, dated as of November 15, 1994, as amended as
of March 1, 1995 (the Original Agreement ), pursuant to which
the Seller sold undivided fractional ownership interests
(referred to herein as Receivable Interests ) in the Receivables
to the Issuer and the Issuer purchased such Receivable Interests
from the Seller. The parties desire to further amend the
Receivables Purchase Agreement to reflect certain changes
resulting from the addition to the Originator Purchase Agreement
of Thomasville as an Originator and certain other changes, and to
restate the Agreement. Accordingly, the Original Agreement is
hereby amended and restated in its entirety, effective as of the
Effective Date, and the parties agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.01. Purchase Facility. (a) On the terms
and conditions hereinafter set forth, the Issuer may, in its sole
discretion, purchase Receivable Interests from the Seller from
time to time during the period from the Initial Purchase Date to
the Facility Termination Date. Under no circumstances shall the
Issuer make any such purchase if after giving effect to such
purchase the aggregate outstanding Invested Amount of Receivable
Interests, together with the aggregate outstanding "Invested
Amount" of "Receivable Interests" under the Alternate Receivables
Purchase Agreement, would exceed the Purchase Limit.
Notwithstanding anything to the contrary contained herein, the
Issuer is not obligated to purchase Receivable Interests from the
Seller.
(b) The Seller may, upon at least 30 days' notice to
the Agent, terminate this purchase facility in whole or, from
time to time, reduce in part the unused portion of the Purchase
Limit; provided that each partial reduction shall be in the
amount of at least $5,000,000 or an integral multiple thereof.
(c) Until the Agent gives the Seller the notice
provided in Section 3(b)(v) of Exhibit II to this Agreement, the
Agent, on behalf of the Investors which own Receivable Interests,
shall have the proceeds of Collections attributable to such
Receivable Interests automatically reinvested pursuant to Section
1.04(b)(ii) in additional undivided percentage interests in the
Pool Receivables by making an appropriate readjustment of such
Receivable Interest.
SECTION 1.02. Making Purchases. (a) Each purchase of
a Receivable Interest shall be made (x) in the case of a purchase
of $20,000,000 or less, on at least one Business Day's notice
from the Seller to the Agent, and (y) in the case of a purchase
in excess of $20,000,000, on at least three Business Days' notice
from the Seller to the Agent; provided, however, that no such
notice shall be applicable to reinvestments pursuant to Section
1.04. Each such notice of a purchase shall specify (i) the
amount requested to be paid to the Seller (such amount, which
shall not be less than $1,000,000, being referred to herein as
the initial "Invested Amount" of each Receivable Interest then
being purchased) and (ii) the date of such purchase (which shall
be a Business Day). The Agent shall promptly thereafter notify
the Seller whether the Issuer has determined to make a purchase
and, if so, whether all of the terms specified by the Seller are
acceptable to the Issuer.
(b) Prior to 2:00 P.M., New York City time, on the
date of each such purchase of a Receivable Interest, the Issuer
shall, upon satisfaction of the applicable conditions set forth
in Exhibit II hereto, make available to the Seller in same day
funds, at Account No. 00-196-146 at Bankers Trust Company, ABA
No. 021-001-033, or at such other account in the United States as
the Seller may specify to the Agent in writing, an amount equal
to the initial Invested Amount of such Receivable Interest.
(c) Effective on the date of each purchase pursuant to
this Section 1.02 and each reinvestment pursuant to Section 1.04,
the Seller hereby sells and assigns to the Agent, for the benefit
of the Investors, an undivided percentage ownership interest, to
the extent of the Receivable Interest then being purchased, in
each Pool Receivable then existing and in the Related Security
and Collections with respect thereto.
SECTION 1.03. Receivable Interest Computation. Each
Receivable Interest shall be initially computed on its date of
purchase. Thereafter until the Termination Date for such
Receivable Interest, such Receivable Interest shall be auto-
matically recomputed (or deemed to be recomputed) on each day
other than a Liquidation Day. Any Receivable Interest, as com-
puted (or deemed recomputed) as of the day immediately preceding
the Termination Date for such Receivable Interest, shall there-
after remain constant. Such Receivable Interest shall become
zero when the Invested Amount thereof and Yield thereon shall
have been paid in full, all other amounts owed by the Seller
hereunder to the Investors or the Agent are paid in full and the
Servicer shall have received the accrued Servicer Fee thereon.
SECTION 1.04. Settlement Procedures. (a) Collection
of the Pool Receivables shall be administered by a Servicer, in
accordance with the terms of this Agreement and the Servicer
Agreement. The Seller shall provide to the Servicer (if other
than the Seller) on a timely basis all information needed for
such administration, including notice of the occurrence of any
Liquidation Day and current computations of each Receivable
Interest.
(b) Subject to the provisions of paragraph (l) of
Exhibit IV, the Servicer shall, on each day on which Collections
of Pool Receivables are received by it with respect to any
Receivable Interest:
(i) set aside and hold in trust for the Investors
(but the Servicer shall not be required to segregate
into a separate account, unless the Agent shall so
specifically request or a Daily Settlement Trigger has
occurred), out of the percentage of such Collections
represented by such Receivable Interest, an amount
equal to the Yield and Servicer Fee accrued through
such day for such Receivable Interest and not
previously set aside;
(ii) if such day is not a Liquidation Day,
reinvest with the Seller, on behalf of the Investors,
the remainder of such percentage of Collections, to the
extent representing a return of Invested Amount, by
recomputation of such Receivable Interest pursuant to
Section 1.03;
(iii) if such day is a Liquidation Day, set
aside and hold in trust for the Investors (but the
Servicer shall not be required to segregate into a
separate account, unless the Agent shall so
specifically request) the entire remainder of such per-
centage of Collections; provided that if amounts are
set aside and held in trust on any Liquidation Day, and
thereafter during such Settlement Period the conditions
set forth in Paragraph 3 of Exhibit II are satisfied or
are waived by the Agent, such previously set aside
amounts shall, to the extent representing a return of
Invested Amount, be reinvested in accordance with the
preceding paragraph (ii) on the day of such subsequent
satisfaction or waiver of conditions; and
(iv) during such times as amounts are required
to be reinvested in accordance with the foregoing
paragraph (ii) or the proviso to paragraph (iii),
release to the Seller for its own account any
Collections in excess of such amounts and the amounts
that are required to be set aside pursuant to
paragraph (i) above.
(c) The Servicer shall deposit into the Agent's
Account, on the last day of each Settlement Period for a
Receivable Interest, Collections held for the Investors that
relate to such Receivable Interest pursuant to Section 1.04(b).
(d) Upon receipt of funds deposited into the Agent's
Account, the Agent shall distribute them as follows:
(i) if such distribution occurs on a day that is
not a Liquidation Day, first to the Investors in
payment in full of all accrued Yield and then to the
Servicer in payment in full of all accrued Servicer
Fee.
(ii) if such distribution occurs on a
Liquidation Day, first to the Investors in payment in
full of all accrued Yield, second to the Investors in
reduction to zero of all Invested Amount, third to the
Investors or the Agent in payment of any other amounts
owed by the Seller hereunder, and fourth to the
Servicer in payment in full of all accrued Servicer
Fee.
After the Invested Amount and Yield and Servicer Fee
with respect to a Receivable Interest, and any other amounts
payable by the Seller to the Investors or the Agent hereunder,
have been paid in full, all additional Collections with respect
to such Receivable Interest shall be paid first, to CL-NY in an
amount equal to the aggregate payments, if any, that shall have
been made to the Purchasers under the LAPA from funds on deposit
in the Special CCA and that shall not yet have been repaid,
together with interest thereon at a rate equal to the Assignee
Rate in effect from time to time, second, to the CCA Depositors
(as defined in the LAPA) pro rata in an amount equal to the
aggregate payments, if any, that shall have been made to the
Purchasers under the LAPA from funds on deposit in the July CCA
and that shall not yet have been repaid, together with interest
thereon at a rate equal to the Assignee Rate in effect from time
to time, then, to the Lenders under the Subordinated Loan
Agreement pro rata in an amount equal to the principal (if any)
and interest then due and payable thereunder, and the remainder
to the Seller for its own account.
(e) For the purposes of this Section 1.04:
(i) if on any day the Outstanding Balance of any
Pool Receivable is reduced or adjusted as a result of
any defective, rejected, returned, repossessed or
foreclosed merchandise or services or any cash
discount, credit memo, rebate, cooperative advertising,
chargeback or other adjustment made by the Seller or
the relevant Originator, or any setoff or dispute
between the Seller and an Obligor due to a claim
arising out of the same or any other transaction, the
Seller shall be deemed to have received on such day a
Collection of such Pool Receivable in the amount of
such reduction or adjustment;
(ii) if on any day (x) any of the
representations or warranties in paragraph (h) of
Exhibit III is no longer true with respect to any Pool
Receivable, or (y) the Seller or the Agent determines
that any Pool Receivable which purports to be part of
the Net Receivables Pool Balance was a Defaulted
Receivable on the date of the initial creation of an
undivided ownership interest therein under this
Agreement, the Seller shall be deemed to have received
on such day a Collection of such Pool Receivable in
full equal to the Outstanding Balance thereof;
(iii) except as provided in paragraph (i) or
(ii) of this Section 1.04(e), or as otherwise required
by applicable law or the relevant Contract, all Collec-
tions received from an Obligor of any Receivables shall
be applied to the Receivables of such Obligor in the
order of the age of such Receivables, starting with the
oldest such Receivable, unless such Obligor designates
its payment for application to specific Receivables;
and
(iv) if and to the extent the Agent or the
Investors shall be required for any reason to pay over
to an Obligor any amount received on its behalf
hereunder, such amount shall be deemed not to have been
so received but rather to have been retained by the
Seller and, accordingly, the Agent or the Investors, as
the case may be, shall have a claim against the Seller
for such amount, payable when and to the extent that
any distribution from or on behalf of such Obligor is
made in respect thereof.
SECTION 1.05. Fees. The Seller shall pay to the Agent
certain fees in the amounts and on the dates set forth in a
separate fee agreement of even date between the Seller and the
Agent, as amended or restated from time to time (the "Fee
Agreement").
SECTION 1.06. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Seller or the
Servicer hereunder or under the Servicer Agreement shall be paid
or deposited no later than 11:00 A.M. (New York City time) on the
day when due in same day funds in United States dollars to the
Agent's Account.
(b) The Seller shall, to the extent permitted by law,
pay interest on any amount not paid or deposited by the Seller
(whether as Servicer or otherwise) when due hereunder, at an
interest rate per annum equal to 1.50% per annum above the CP
Rate, payable on demand.
(c) All computations of interest under subsection (b)
above and all computations of Yield, fees, and other amounts
hereunder shall be made on the basis of a year of 360 days for
the actual number of days elapsed. Whenever any payment or
deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be
included in the computation of such payment or deposit.
SECTION 1.07. Dividing or Combining Receivable
Interests. The Agent, on notice to the Seller on or prior to the
last day of any Fixed Period, may either (i) divide any
Receivable Interest into two or more Receivable Interests having
aggregate Invested Amount equal to the Invested Amount of such
divided Receivable Interest, or (ii) combine any two or more
Receivable Interests originating on such last day or having Fixed
Periods ending on such last day into a single Receivable Interest
having Invested Amount equal to the aggregate of the Invested
Amount of such Receivable Interests.
SECTION 1.08. Increased Costs. (a) If the Agent, an
Investor, any entity which enters into a commitment to purchase
Receivable Interests or interests therein, any entity which
enters into a commitment to lend against Receivable Interests or
interests therein, or any entity which provides credit
enhancement (each an "Affected Person"), or any of their
respective Affiliates, determines that compliance with any law or
regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or
expected to be maintained by such Affected Person or its
Affiliate and such Affected Person or its Affiliate determines
that the amount of such capital is increased by or based upon the
existence of any commitment to make purchases of or to lend
against or otherwise to maintain the investment in Pool
Receivables or interests therein related to this Agreement or to
the funding thereof or any related liquidity facility or credit
enhancement facility (or any participation therein) and other
commitments of the same type, then, upon demand by such Affected
Person (with a copy to the Agent), the Seller shall immediately
pay to the Agent, for the account of such Affected Person (as a
third-party beneficiary), from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such
Affected Person or its Affiliate in the light of such
circumstances, to the extent that such Affected Person or its
Affiliate reasonably determines such increase in capital to be
allocable to the existence of any of such commitments. A
certificate as to such amounts submitted to the Seller and the
Agent by such Affected Person shall be conclusive and binding for
all purposes, absent manifest error.
(b) Subject to Section 4.04(f), if the
introduction of or any change in (other than by way of imposition
or increase of reserve requirements referred to in Section 1.10)
or in the interpretation of any law, regulation or applicable
accounting principle by any court or government authority charged
with the interpretation or administration of any United States
federal or state law or foreign law applicable to an Affected
Person or by any fiscal, monetary or other authority having
jurisdiction over such Affected Person shall (i) subject any
Affected Person to any charge or withholding on or with respect
to this Agreement or an Affected Person's obligations with
respect to Receivable Interests, or change the basis of taxation
of payments to any Affected Person or any amounts payable under
this Agreement (except for changes in the rate of tax on the
overall net income of an Affected Person) or (ii) impose any
other condition the result of which is to (x) increase the cost
to an Affected Person of agreeing to purchase or purchasing or to
lend against or to maintain the ownership of Receivable Interests
or (y) reduce the amount of any sum received or receivable by an
Affected Person under this Agreement, then, upon demand by such
Affected Person (with a copy to the Agent), the Seller shall pay
to the Agent for the account of such Affected Person (as a third-
party beneficiary), on each Settlement Date following such
demand, additional amounts sufficient to compensate such Affected
Person for such increased costs or reduction of amounts received,
as the case may be. A certificate as to such amounts submitted
to the Seller and the Agent by such Affected Person shall be
conclusive and binding for all purposes, absent manifest error.
Such Affected Person shall use reasonable efforts consistent with
its internal policy and legal and regulatory restrictions
(including, without limitation, by changing the office from which
it agrees to purchase, purchases or maintains its investment in
Receivable Interests to another office of such Affected Person
regularly available for such purpose) to mitigate the amounts
payable pursuant to this Section 1.08(b); provided, however, that
nothing in this sentence shall obligate such Affected Person to
bear any out-of-pocket expense for which it is not reimbursed by
the Seller.
(c) If any Affected Person makes a demand for
additional amounts pursuant to Section 1.08(a) or (b), then the
Seller may, within 30 calendar days after receipt of such demand,
by notice to such Affected Person (with a copy to the Agent)
designate another Eligible Assignee to purchase and assume the
relevant Investor's rights and obligations hereunder and the
Agent shall use its best efforts to replace such Investor and any
Person providing liquidity or credit enhancement for such
Investor with such designated Eligible Assignee under this
Agreement and any liquidity or credit enhancement agreement
relating to this Agreement and under the Alternate Receivables
Purchase Agreement pursuant to documentation reasonably
satisfactory to such Investor and the Agent. Any such Eligible
Assignee designated by the Seller shall be subject to the
approval of the Agent, which approval shall not be unreasonably
withheld provided that all of the short-term public senior debt
securities of such Eligible Assignee are rated at least A-1 by
Standard & Poor's Ratings Group and at least P-1 by Moody's
Investors Service, Inc.
SECTION 1.09. Security Interest. As collateral
security for the performance by the Seller of all the terms,
covenants and agreements on the part of the Seller (whether as
Seller or otherwise) to be performed under this Agreement or any
document delivered in connection with this Agreement in
accordance with the terms thereof, including the punctual payment
when due of all obligations of the Seller hereunder or
thereunder, whether for indemnification payments, fees, expenses
or otherwise, the Seller hereby assigns to the Agent for its
benefit and the ratable benefit of the Investors, effective on
the Initial Purchase Date, and hereby grants to the Agent for its
benefit and the ratable benefit of the Investors, a security
interest in, all of the Seller's right, title and interest in and
to (a) the Originator Purchase Agreement and the Interco
Agreement, including, without limitation, (i) all rights of the
Seller to receive moneys due or to become due under or pursuant
to the Originator Purchase Agreement or the Interco Agreement,
(ii) all security interests and property subject thereto from
time to time purporting to secure payment of monies due or to
become due under or pursuant to the Originator Purchase
Agreement, (iii) all rights of the Seller to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to
the Originator Purchase Agreement or the Interco Agreement,
(iv) claims of the Seller for damages arising out of or for
breach of or default under the Originator Purchase Agreement or
the Interco Agreement and (v) the right of the Seller to compel
performance and otherwise exercise all remedies thereunder, (b)
all of the Receivables, the Related Security with respect thereto
and the Collections, and (c) to the extent not included in the
foregoing, all proceeds of any and all of the foregoing
(excluding any proceeds representing the purchase price paid by
the Seller to any Originator for the purchase or contribution of
any of the foregoing).
SECTION 1.10. Additional Yield. The Seller shall pay
to each Investor, so long as such Investor shall be required
under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities,
additional Yield on the unpaid Invested Amount of each Receivable
Interest of such Investor during each Fixed Period in respect of
which Yield is computed by reference to the Eurodollar Rate, for
such Fixed Period, at a rate per annum equal at all times during
such Fixed Period to the remainder obtained by subtracting (i)
the Eurodollar Rate for such Fixed Period from (ii) the rate
obtained by dividing such Eurodollar Rate referred to in
clause (i) above by that percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of such Investor for such
Fixed Period, payable on each date on which Yield is payable on
such Receivable Interest. Such additional Yield shall be
determined by such Investor and notice thereof given to the
Seller through the Agent within 30 days after any Yield payment
is made with respect to which such additional Yield is requested.
A certificate as to such additional Yield submitted to the Seller
and the Agent by such Investor shall be conclusive and binding
for all purposes, absent manifest error.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EVENTS OF TERMINATION
SECTION 2.01. Representations and Warranties;
Covenants. The Seller hereby makes, as of the Effective Date,
the representations and warranties set forth in Exhibit III
hereto, and hereby agrees, commencing on the Initial Purchase
Date, to perform and observe the covenants set forth in Exhibit
IV hereto.
SECTION 2.02. Events of Termination. If any of the
Events of Termination set forth in Exhibit V hereto shall occur
and be continuing, the Agent may, by notice to the Seller, take
either or both of the following actions: (x) declare the
Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred), and
(y) without limiting any right under the Servicer Agreement to
replace the Servicer, designate another Person to succeed the
Originators as the Servicer; provided that, automatically upon
the occurrence of any event described in paragraph (g) of Exhibit
V, the Facility Termination Date shall occur. Upon any such
declaration or designation or upon any such automatic
termination, the Investors and the Agent shall have, in addition
to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided after default
under the UCC and under other applicable law, which rights and
remedies shall be cumulative.
ARTICLE III
INDEMNIFICATION
SECTION 3.01. Indemnities by the Seller. Without
limiting any other rights that the Agent or the Investors or any
of their respective Affiliates or agents (each, an "Indemnified
Party") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and
against any and all claims, losses and liabilities (including
reasonable attorneys' fees) (all of the foregoing being
collectively referred to as "Indemnified Amounts") arising out of
or resulting from this Agreement or the use of proceeds of
purchases or reinvestments or the ownership of Receivable
Interests or in respect of any Receivable or any Contract,
excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part
of such Indemnified Party, (b) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible
Receivables or (c) any income taxes or franchise taxes imposed on
such Indemnified Party (other than as provided in Section 1.08(b)
hereof) by (i) the jurisdiction under the laws of which such
Indemnified Party is organized (or any political subdivision
thereof), (ii) any jurisdiction in which an office of such
Indemnified Party funding or maintaining the ownership of
Receivable Interests is located (or any political subdivision
thereof), or (iii) any jurisdiction in which such Indemnified
Party is already subject to tax, and arising out of or as a
result of this Agreement or the ownership of Receivable Interests
or in respect of any Receivable or any Contract. Without
limiting or being limited by the foregoing, the Seller shall pay
on demand to each Indemnified Party any and all amounts necessary
to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any of the
following:
(i) the creation of an undivided percentage
ownership interest in any Receivable which purports to
be part of the Net Receivables Pool Balance but which
is not at the date of the creation of such interest an
Eligible Receivable or which thereafter ceases to be an
Eligible Receivable;
(ii) reliance on any representation or warranty
or statement made or deemed made by the Seller (or any
of its officers) under or in connection with this
Agreement which shall have been incorrect in any
material respect when made;
(iii) the failure by the Seller or any
Originator to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the
related Contract; or the failure of any Pool Receivable
or the related Contract to conform to any such
applicable law, rule or regulation;
(iv) the failure to vest in the Investors a
perfected undivided percentage ownership interest, to
the extent of each Receivable Interest, in the
Receivables in, or purporting to be in, the Receivables
Pool and the Related Security and Collections in
respect thereof, free and clear of any Adverse Claim;
(v) the failure to have filed, or any delay in
filing, financing statements or other similar instru-
ments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to
any Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collec-
tions in respect thereof, whether at the time of any
purchase or reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense
(other than discharge in bankruptcy of the Obligor) of
the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including,
without limitation, a defense based on such Receivable
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 services
related to such Receivable or the furnishing or failure
to furnish such merchandise or services or relating to
collection activities with respect to such Receivable
(if such collection activities were performed by the
Seller or any of its Affiliates acting as Servicer);
(vii) any failure of the Seller to perform its
duties or obligations in accordance with the provisions
hereof or to perform its duties or obligations under
the Contracts, or any failure of the Servicer (if the
Seller or an Affiliate of the Seller) to perform its
duties or obligations in accordance with the provisions
of the Servicer Agreement;
(viii) any products liability or other claim
arising out of or in connection with merchandise,
insurance or services which are the subject of any
Contract;
(ix) the commingling of Collections of Pool
Receivables at any time with other funds;
(x) any investigation, litigation or proceeding
related to this Agreement or the use of proceeds of
purchases or reinvestments or the ownership of
Receivable Interests or in respect of any Receivable,
Related Security or Contract, excluding, however, any
investigation, litigation or proceeding brought by any
taxing authority with respect to income taxes or
franchise taxes of the type described in clause (c) of
the first sentence of Section 3.01; or
(xi) any claim brought by any Person other than
an Indemnified Party arising from any activity by the
Seller or any Affiliate of the Seller in servicing,
administering or collecting any Receivable.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement or consent to any departure by
the Seller therefrom shall be effective unless in a writing
signed by the Agent, as agent for the Investors, and, in the case
of any amendment, also signed by the Seller, and then such
amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Notwithstanding the foregoing, no amendment or waiver of any
provision of this Agreement or consent to any departure by the
Seller therefrom shall be effective unless a written statement is
obtained from each of the Relevant Rating Agencies that the
rating of the Issuer's commercial paper notes will not be
downgraded or withdrawn solely as a result of such amendment,
waiver or consent. No failure on the part of the Investors or
the Agent 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 4.02. Notices, Etc. All notices and other
communications hereunder shall, unless otherwise stated herein,
be in writing (which shall include facsimile communication) and
faxed or delivered, to each party hereto, at its address set
forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written
notice to the other parties hereto. Notices and communications
by facsimile shall be effective when sent (and shall be followed
by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when
received.
SECTION 4.03. Assignability. (a) Each Investor may
assign to any Eligible Assignee all or a portion of its rights
and obligations under this Agreement (including any Receivable
Interests or interests therein owned by it); provided, however,
that no such assignment shall be made to an Eligible Assignee if,
immediately after giving effect thereto, the Seller would be
required to pay any additional amounts under Section 1.08(a),
1.08(b) or 4.04(d) that would not otherwise be payable in the
absence of such assignment.
(b) This Agreement and the rights and obligations of
the Agent herein shall be assignable by the Agent and its
successors and assigns.
(c) The Seller may not assign its rights or
obligations hereunder or any interest herein without the prior
written consent of the Agent. Notwithstanding the foregoing, no
assignment by the Seller of its rights or obligations hereunder
shall be effective unless a written statement is obtained from
each of the Relevant Rating Agencies that the rating of the
Issuer's commercial paper notes will not be downgraded or
withdrawn solely as a result of such assignment.
(d) Without limiting any other rights that may be
available under applicable law, the rights of the Investors may
be enforced through them or by their agents.
SECTION 4.04. Costs, Expenses and Taxes. (a) In
addition to the rights to indemnification granted under Sec-
tion 3.01 hereof, the Seller agrees to pay on demand all costs
and expenses in connection with the preparation, execution,
delivery and administration (including periodic auditing of
Receivables) of this Agreement, any asset purchase agreement or
similar agreement relating to the sale or transfer of interests
in Receivable Interests and the other documents and agreements to
be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of one collective
counsel for the Agent, the Issuer and their respective Affiliates
and agents (which counsel shall be the same as the counsel whose
fees the Seller has agreed to pay pursuant to Section 4.04(a) of
the Alternate Receivables Purchase Agreement) with respect
thereto and with respect to advising the Agent, the Issuer and
their respective Affiliates and agents as to their rights and
remedies under this Agreement, and all costs and expenses, if any
(including reasonable counsel fees and expenses), of the Agent,
the Investors and their respective Affiliates and agents, in
connection with the enforcement of this Agreement and the other
documents and agreements to be delivered hereunder.
(b) In addition, the Seller shall pay (i) any and all
costs and expenses of any issuing and paying agent or other
Person responsible for the administration of the Issuer's
commercial paper program in connection with the preparation,
completion, issuance, delivery or payment of commercial paper
notes issued to fund the purchase or maintenance of any
Receivable Interest, and (ii) any and all stamp and other taxes
and fees payable in connection with the execution, delivery,
filing and recording of this Agreement or the other documents or
agreements to be delivered hereunder, and agrees to save each
Indemnified Party harmless from and against any liabilities with
respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
(c) The Seller also shall pay on demand all other
costs, expenses and taxes (excluding income taxes) incurred by
the Issuer or any stockholder or agent of the Issuer ("Other
Costs"), including the cost of administering the operations of
the Issuer, the cost of auditing the Issuer's books by certified
public accountants, the cost of rating the Issuer's commercial
paper by independent financial rating agencies, the taxes
(excluding income taxes) resulting from the Issuer's operations,
and the reasonable fees and out-of-pocket expenses of counsel for
any stockholder or agent of the Issuer with respect to advising
as to rights and remedies under this Agreement, the enforcement
of this Agreement or advising as to matters relating to the
Issuer's operations; provided that the Seller and any other
Persons who from time to time sell receivables or interests
therein to the Issuer ("Other Sellers") each shall be liable for
such Other Costs ratably in accordance with the usage under their
respective facilities; and provided further that if such Other
Costs are attributable to the Seller and not attributable to any
Other Seller, the Seller shall be solely liable for such Other
Costs.
(d) Subject to Section 4.04(f), any and all payments
made under this Agreement shall be made free and clear of and
without deduction for any and all present or future Taxes. If
any amount of Taxes shall be required by law to be deducted from
or in respect of any sum payable hereunder to any non-U.S.
Investor or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this section 4.04(d)), such non-U.S. Investor or the Agent, as
the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Seller
shall make such deductions and (iii) the Seller shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(e) Each non-U.S. Investor and the Agent, on or prior
to the date of its execution and delivery of this Agreement in
the case of the Agent and on the date of the assignment pursuant
to which it becomes an Investor in the case of each non-U.S.
Investor, and from time to time thereafter if requested in
writing by the Seller (unless such non-U.S. Investor can no
longer lawfully do so due to a change in law subsequent to the
date it became an Investor hereunder), shall provide the Seller
with Internal Revenue Service Form 1001 or 4224, as appropriate,
or any successor form prescribed by the Internal Revenue Service,
certifying that such non-U.S. Investor is entitled to benefits
under an income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of interest
to zero or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States.
(f) For any period with respect to which a non-U.S.
Investor has failed to provide the Seller with the appropriate
form described in Section 4.04(e) (other than if such failure is
due to a change in law occurring subsequent to the date on which
a form originally was required to be provided), such non-U.S.
Investor shall not be entitled to payments of additional amounts
under Section 1.08(b) or 4.04(d).
SECTION 4.05. CL-NY and Affiliates. CL-NY and its
Affiliates may generally engage in any kind of business with the
Seller or any Obligor, any of their respective Affiliates and any
Person who may do business with or own securities of the Seller
or any Obligor or any of their respective Affiliates, all as if
CL-NY were not the Agent and without any duty to account therefor
to the Investors.
SECTION 4.06. No Proceedings. Each of the Seller, the
Agent, the Servicer, each Investor, each assignee of a Receivable
Interest or any interest therein and each entity which enters
into a commitment to purchase Receivable Interests or interests
therein hereby agrees that it will not institute against, or join
any other person in instituting against, the Issuer any
proceeding of the type referred to in paragraph (g) of Exhibit V
so long as any commercial paper issued by the Issuer shall be
outstanding or there shall not have elapsed one year plus one day
since the last day on which any such commercial paper shall have
been outstanding.
SECTION 4.07. Confidentiality. Unless otherwise
required by applicable law, the Seller agrees to maintain the
confidentiality of this Agreement (and all drafts thereof) in
communications with third parties and otherwise; provided that
this Agreement may be disclosed to (a) third parties to the
extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to
the Agent, and (b) the Seller's legal counsel and auditors (who
shall also be subject to the terms of this confidentiality
provision).
SECTION 4.08. Integration. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement among the parties hereto
with respect to the subject matter hereof, superseding all prior
oral or written understandings.
SECTION 4.09. Construction of the Agreement. The
parties hereto intend that the purchase and sale of Receivable
Interests from the Seller to the Issuer be treated as a sale of
such Receivable Interests and the proceeds thereof, and the
parties hereto shall reflect the purchase and sale of Receivable
Interests in their respective books and records and financial
statements as a purchase and sale. However, if a determination
is made that such transfer shall not be so treated, this
Agreement shall be deemed to constitute a security agreement and
the transactions effected hereby shall be deemed to constitute a
secured financing in each case under applicable law and to that
end, the Seller hereby grants to the Agent, for the benefit of
the Investors, a security interest in the Receivable Interests so
transferred to secure its obligations hereunder.
SECTION 4.10. Right of Set-Off. (a) Without limiting
the foregoing, CL-NY is hereby authorized by the Seller at any
time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by CL-NY to or for the
credit or the account of the Seller, against any and all
obligations of the Seller now or hereafter existing under this
Agreement, to any Affected Party, any Indemnified Party or any
Investor, or their respective successors and assigns.
(b) CL-NY agrees that if it shall, through the exercise
by it of a right of setoff under this Section 4.10, obtain
payment with respect to any obligation of the Seller now or
hereafter existing under this Agreement to any Affected Party,
any Indemnified Party or any Investor, or any of their respective
successors and assigns, which payment results in CL-NY receiving
more than its pro rata share of the aggregate payments or
reductions of all obligations of the Seller now or hereafter
existing under this Agreement, it shall be deemed to have
simultaneously purchased from the Investors a participation in
the obligations or interests held by such Investors so that the
amount of unpaid obligations or interests or participations
therein held by CL-NY and the Investors shall be pro rata. If
all or any portion of any such excess payment is thereafter
recovered from CL-NY, the purchase provided for herein shall be
deemed to have been rescinded to the extent of such recovery
without interest.
SECTION 4.11. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT THE PERFECTION OF
THE INTERESTS OF THE INVESTORS IN THE RECEIVABLES, THE ORIGINATOR
PURCHASE AGREEMENT, THE INTERCO AGREEMENT OR REMEDIES HEREUNDER,
IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
SECTION 4.12. No Recourse. The obligations of the
Issuer under this Agreement are solely the corporate obligations
of the Issuer. No recourse shall be had for the payment of any
amount owing by the Issuer under this Agreement, or for the
payment by the Issuer of any fee in respect hereof or any other
obligation or claim of or against the Issuer arising out of or
based on this Agreement, against Lord or against any stockholder,
employee, officer, director or incorporator of the Issuer. For
purposes of this Section 4.12, the term "Lord" shall mean and
include Lord Securities Corporation, a Delaware corporation, and
all affiliates thereof and any employee, officer, director,
incorporator, stockholder or beneficial owner of any of them;
provided, however, that the Issuer shall not be considered to be
an affiliate of Lord for purposes of this Section 4.12.
SECTION 4.13. Execution in Counterparts. This
Agreement may be executed in any number of 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.
SECTION 4.14. Survival of Termination. The provisions
of Sections 1.08, 3.01, 4.04, 4.06 and 4.07 shall survive any
termination of this Agreement.
SECTION 4.15. Restatement of Originator Purchase
Agreement. Pursuant to paragraph (n) of Exhibit IV to the
Original Agreement, the Agent hereby consents to the amendment
and restatement, as of the Effective Date, of the Originator
Purchase Agreement and Amendment No. 1, dated as of the Effective
Date, to the Interco Agreement, in each case in the form
delivered to the Agent pursuant to paragraph 2(n) of Exhibit II
to this Agreement.
SECTION 4.16. References to the Agreement. Each reference
in each document delivered pursuant to the Original Agreement
(including, without limitation, the Certificate of Assignment) to
the "Receivables Purchase Agreement, dated as of November 15,
1994" shall mean and be a reference to this Agreement, as the
same may be amended or restated from time to time.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
SELLER: INTERCO RECEIVABLES CORP.
By: Lynn Chipperfield
-------------------------------
Name: Lynn Chipperfield
Title: Vice President
101 South Hanley Road
St. Louis, Missouri 63105
Facsimile No.: (314) 863-5306
ISSUER: ATLANTIC ASSET SECURITIZATION CORP.
By: Credit Lyonnais New York Branch, as
Attorney-in-Fact
By: Jonathan Kaplan
---------------------------
Name: Jonathan Kaplan
Title: Vice President
1301 Avenue of the Americas
New York, New York 10019
Facsimile No.: (212) 459-3258
AGENT: CREDIT LYONNAIS NEW YORK BRANCH
By: Jonathan Kaplan
----------------------------------
Name: Jonathan Kaplan
Title: Vice President
1301 Avenue of the Americas
New York, New York 10019
Facsimile No.: (212) 459-3258
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits), 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):
"Action" means Action Industries, Inc., a Virginia
corporation.
"Advances Outstanding" has the meaning given that term
in the Subordinated Loan Agreement.
"Adverse Claim" means a lien, security interest or
other charge or encumbrance, or any other type of preferential
arrangement.
"Affected Person" has the meaning assigned to that term
in Section 1.08(a).
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by
or is under common control with such Person or is a director or
officer of such Person; provided, however, that with respect to
Broyhill, Lane, Action, Thomasville and the Seller, the term
"Affiliate" shall be deemed not to include any Apollo Entity.
"Affiliated Obligor" means any Obligor that is an
Affiliate of another Obligor.
"Agent's Account" means the special account (account
number 01-25680-0001-00-001) of the Agent maintained at the
office of the Agent, ABA No. 026-008073, in New York, New York
for the benefit of the Investors.
"Aggregate Invested Amount" at any time means the sum
of the outstanding Invested Amount of all Receivable Interests
plus the outstanding "Invested Amount" of all "Receivable
Interests" under the Alternate Receivables Purchase Agreement.
"Alternate Base Rate" means a fluctuating interest rate
per annum as shall be in effect from time to time, which rate
shall be at all times equal to the highest of:
(a) the rate of interest established by CL-NY
from time to time as its base rate;
(b) 1/2 of one percent above the latest three-
week moving average of secondary market morning
offering rates in the United States for three-month
certificates of deposit of major United States money
market banks, such three-week moving average being
determined weekly on each Monday (or, if such day is
not a Business Day, on the next succeeding Business
Day) for the three-week period ending on the previous
Friday by CL-NY on the basis of such rates reported by
certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the
basis of quotations for such rates received by CL-NY
from three New York certificate of deposit dealers of
recognized standing selected by CL-NY, in either case
adjusted to the nearest 1/4 of one percent or, if there
is no nearest 1/4 of one percent, to the next higher
1/4 of one percent; and
(c) the Federal Funds Rate.
"Alternate Receivables Purchase Agreement" means the
Alternate Receivables Purchase Agreement, dated as of November
15, 1994, as amended and restated as of the Effective Date, among
the Seller, CL-NY and the Agent, as the same may, from time to
time, be further amended, modified or supplemented.
"Apollo Entity" means any of (i) Apollo Advisors, L.P.,
(ii) Lion Advisors, L.P., (iii) any accounts managed by Apollo
Advisors, L.P. or Lion Advisors, L.P. and (iv) any Person
directly or indirectly in control of, controlled by, or under
common control with Apollo Advisors, L.P. or Lion Advisors, L.P.,
other than Broyhill, Lane, Action, Thomasville, the Seller or
Interco and any of their respective Subsidiaries.
"Assignee Rate" for any Fixed Period for any Receivable
Interest means an interest rate per annum equal to the Eurodollar
Rate for such Fixed Period; provided, however, that in the case
of
(i) any Fixed Period on or prior to the first day
of which an Investor shall have notified the Agent that
the introduction of or any change in or in the
interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such
Investor to fund such Receivable Interest at the
Assignee Rate set forth above (and such Investor not
have subsequently notified the Agent that such
circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 29
days (but provided, however, that a Fixed Period running from one
day of a month to the numerically corresponding day of the
following month shall be considered to be one month, regardless
of the number of days therein), or
(iii) any Fixed Period for a Receivable
Interest the Invested Amount of which allocated to the
Investors is less than $500,000,
the "Assignee Rate" for each such Fixed Period shall be an
interest rate per annum equal to the Alternate Base Rate in
effect on the first day of such Fixed Period.
"Average Maturity" means at any time that period of
days equal to the weighted average maturity of the Pool
Receivables calculated by the Servicer in the then most recent
Seller Report; provided if the Agent shall disagree with any such
calculation, the Agent may recalculate such Average Maturity in a
commercially reasonable manner in accordance with industry
practice.
"Bank Credit Agreement" means the Credit Agreement
dated as of November 17, 1994, as amended and restated as of
December 29, 1995, among Interco, Broyhill, Lane, Thomasville,
the banks named therein and Bankers Trust Company, as agent.
"Broyhill" means Broyhill Furniture Industries, Inc., a
North Carolina corporation.
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City and (ii) if this
definition of "Business Day" is utilized in connection with the
Eurodollar Rate, dealings are carried out in the London interbank
market.
"Capitalized Lease Obligations" of any Person shall
mean all rental obligations which, under generally accepted
accounting principles, are or will be required to be capitalized
on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with such
principles.
"Collection Delay Period" means 10 days or such other
number of days as the Agent may select upon three Business Days'
notice to the Seller.
"Collections" means, with respect to any Receivable,
(a) all funds which are received by the Seller or the Servicer in
payment of any amounts owed in respect of such Receivable
(including, without limitation, purchase price, finance charges,
interest and all other charges), or applied to amounts owed in
respect of such Receivable (including, without limitation,
insurance payments, payments under letters of credit with respect
to such Receivable and net proceeds of the sale or other
disposition of repossessed goods or other collateral or property
of the related Obligor or any other party directly or indirectly
liable for the payment of such Receivable and available to be
applied thereon), (b) all Collections deemed to have been
received pursuant to Section 1.04 and (c) all other proceeds of
such Receivable.
"Consolidated EBIT" means, for any period, the
Consolidated Net Income of Interco and its Restricted
Subsidiaries, determined on a consolidated basis, before
Consolidated Net Interest Expense (to the extent deducted in
arriving at Consolidated Net Income) and provision for taxes or
gains or losses from sales of assets other than inventory sold in
the ordinary course of business, in each case that were included
in arriving at Consolidated Net Income.
"Consolidated EBITDA" means, for any period,
Consolidated EBIT, adjusted by adding thereto the amount of all
amortization of intangibles and depreciation, in each case that
were deducted in arriving at Consolidated EBIT for such period.
"Consolidated Net Income" means, for any period, the
net after tax income of Interco and its Restricted Subsidiaries
determined on a consolidated basis, minus cash Dividends paid in
respect of Disqualified Preferred Stock, without giving effect to
any extraordinary gains or losses.
"Consolidated Net Interest Coverage Ratio" for any
period means the ratio of Consolidated EBITDA to Consolidated Net
Interest Expense for such period.
"Consolidated Net Interest Expense" means, for any
period, the total consolidated interest expense of Interco and
its Restricted Subsidiaries for such period (calculated without
regard to any limitations on the payment thereof) plus, without
duplication, that portion of Capitalized Lease Obligations of
Interco and its Restricted Subsidiaries representing the interest
factor for such period, and capitalized interest expense, plus,
(i) all cash fees, service charges and other costs, as well as
all collections or other amounts retained by the Agent, the
Issuer and the "Banks" under the Alternate Receivables Purchase
Agreement which are in excess of amounts paid to the Seller under
the Agreement and the Alternate Receivables Purchase Agreement
for the purchase of receivables thereunder, and (ii) the product
of (x) the amount of all cash Dividend requirements (whether or
not declared or paid) on Disqualified Preferred Stock paid,
accrued or scheduled to be paid or accrued during such period,
times (y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective
consolidated Federal, state, local and foreign tax rate
(expressed as a decimal number between one and zero) of Interco
as reflected in the audited consolidated financial statements of
Interco for its most recently completed Fiscal Year, which
amounts described in the preceding clauses (i) and (ii) shall be
treated as interest expense of Interco and its Restricted
Subsidiaries for purposes of this definition regardless of the
treatment of such amounts under generally accepted accounting
principles, in each case net of the total consolidated cash
interest income of Interco and its Restricted Subsidiaries for
such period, but excluding the amortization of any deferred
financing costs and all amounts in respect of the Interest Rate
Protection Agreements, all determined on a consolidated basis.
"Contract" means an agreement between an Originator and
any Obligor, pursuant to or under which such Obligor shall be
obligated to make payments to such Originator for merchandise,
insurance or services from time to time.
"Courtesy Receivable" means a Receivable which arises
out of the provision of transportation services but does not
arise out of the transportation of goods shipped by an Originator
to an Obligor.
"CP Rate" for any Fixed Period for any Receivable
Interest means an interest rate per annum equal to the per annum
yield equivalent to the published discount for one-month
commercial paper issued by firms whose bonds are rated AA by
Standard & Poor's Corporation (or the equivalent), which is
reported for the first day of such Fixed Period in "Selected
Interest Rates" (Publication H.15 (519)), Federal Reserve
Statistical Release, published by the Board of Governors of the
Federal Reserve System (or successor publication) (or, if such
yield is not published, such other rate as the Agent and the
Seller shall agree to in writing).
"Credit and Collection Policy" means those receivables
credit and collection policies and practices of the Seller in
effect on the date of the Agreement and described in Schedule II
hereto, as modified in compliance with the Agreement.
"Cumulative Consolidated EBITDA" means, at any date, an
amount determined on a cumulative basis of Consolidated EBITDA
for each Fiscal Year ending on or prior to such date, beginning
with Fiscal Year 1996.
"Daily Settlement Trigger" means the occurrence of any
of the following:
(a) The Consolidated Net Interest Coverage Ratio for
any period of four consecutive fiscal quarters (or, if
shorter, the period beginning on January 1, 1996 and ended
on the last day of a fiscal quarter ended after the
Effective Date), in each case taken as one accounting
period, ended on the last day of a fiscal quarter set forth
below, shall be less than the amount set forth opposite such
period below:
Fiscal Quarter Ratio
-------------- -----
March 1996 1.83 : 1.00
June 1996 2.07 : 1.00
September 1996 2.51 : 1.00
December 1996 2.51 : 1.00
March 1997 2.62 : 1.00
June 1997 2.62 : 1.00
September 1997 2.62 : 1.00
December 1997 2.92 : 1.00
March 1998 3.00 : 1.00
June 1998 3.09 : 1.00
September 1998 3.19 : 1.00
December 1998 3.29 : 1.00
March 1999 3.37 : 1.00
June 1999 3.42 : 1.00
September 1999 3.47 : 1.00
December 1999 3.57 : 1.00
March 2000 3.66 : 1.00
June 2000 3.71 : 1.00
September 2000 3.76 : 1.00
December 2000 and thereafter 3.86 : 1.00
(b) The Consolidated EBITDA for any period of four
consecutive fiscal quarters (or, if shorter, the period
beginning on January 1, 1996 and ended on the last day of a
fiscal quarter ended after the Effective Date), in each case
taken as one accounting period, ended on the last day of a
fiscal quarter set forth below, shall be less than the
amount set forth opposite such period below:
Fiscal Quarter Amount
-------------- ------
March 1996 $ 30,000,000
June 1996 $ 65,000,000
September 1996 $105,000,000
December 1996 $145,000,000
March 1997 $147,500,000
June 1997 $150,000,000
September 1997 $152,500,000
December 1997 $155,000,000
March 1998 $158,000,000
June 1998 $162,000,000
September 1998 $166,000,000
December 1998 $170,000,000
March 1999 $172,500,000
June 1999 $175,000,000
September 1999 $177,500,000
December 1999 $180,000,000
March 2000 $182,500,000
June 2000 $185,000,000
September 2000 $187,500,000
December 2000
and thereafter $190,000,000
(c) The Leverage Ratio at any time shall be greater
than the ratio set forth opposite the fiscal quarter most
recently ended as set forth below:
Fiscal Quarter Ratio
-------------- -----
December 1996 4.52 : 1.00
March 1997 4.52 : 1.00
June 1997 4.29 : 1.00
September 1997 4.29 : 1.00
December 1997 4.08 : 1.00
March 1998 4.06 : 1.00
June 1998 3.86 : 1.00
September 1998 3.86 : 1.00
December 1998 3.65 : 1.00
March 1999 3.62 : 1.00
June 1999 3.62 : 1.00
September 1999 3.62 : 1.00
December 1999 3.41 : 1.00
March 2000 3.37 : 1.00
June 2000 3.17 : 1.00
September 2000 2.96 : 1.00
December 2000 and thereafter 2.96 : 1.00
(d) The Cumulative Consolidated EBITDA ending during
any Fiscal Year (beginning with Fiscal Year 1997) set forth below
shall be less than the amount set forth opposite such period
below:
Period Amount
------ ------
1997 $315,000,000
1998 $490,000,000
1999 $665,000,000
2000 and thereafter $890,000,000
provided that, from and after the first date upon which Interco
or any of the Originators shall have used more than $50,000,000
of Net Cash Proceeds from sales or issuances of equity of Interco
(including pursuant to any exercise of the Interco Warrants, any
exercise of any stock options and the issuance of any Preferred
Stock) to repay Term Loans under the Bank Credit Agreement
pursuant to Sections 4.01, 4.02(e) and/or 4.02(f) of the Bank
Credit Agreement, and shall have furnished a certificate to the
Administrative Agent under the Bank Credit Agreement (with a copy
to the Agent) showing in reasonable detail the amount of such
applications pursuant to the respective such Sections, then each
of the amounts required by this clause (d) shall be reduced (i)
by $15,000,000 if the principal amount of Term Loans so repaid
with such Net Cash Proceeds from equity issuances is greater than
$50,000,000 but less than or equal to $75,000,000 or (ii) by
$20,000,000 if the principal amount of Term Loans so repaid with
such Net Cash Proceeds from equity issuances is greater than
$75,000,000;
(e) The Net Dilution Ratio shall be greater than 7%;
(f) The Default Ratio shall be greater than 7%;
(g) Any Event of Termination shall occur under
paragraph (e) or (g) of Exhibit V; or
(h) The Originators shall have repurchased Receivables
(pursuant to indemnity provisions or otherwise) from the
Seller in an aggregate amount exceeding $17,500,000 in any
Fiscal Year.
Deemed Uncollectible Ratio means the ratio (expressed
as a percentage) computed as of the last day of each fiscal month
of the Originators by dividing (i) the sum of (x) three times the
aggregate Outstanding Balance of all Originator Receivables
originated by Lane, Action or Broyhill that met the requirements
of clauses (ii) or (iii) (but not clause (i)) of the definition
of Defaulted Receivable on such day or on the last day of any of
the immediately preceding six fiscal months (in the case of
Receivables originated by Broyhill) or eight fiscal months (in
the case of Receivables originated by Lane or Action) (such
amounts with respect to preceding fiscal months to be computed
net of recoveries on such Defaulted Receivables received on or
prior to such day) plus (y) if such computation is for a fiscal
month prior to December 1996, one times, and otherwise, three
times, the aggregate Outstanding Balance of all Originator
Receivables originated by Thomasville that met the requirements
of clauses (ii) or (iii) (but not clause (i)) of the definition
of Defaulted Receivable on such day or on the last day of any of
the immediately preceding seven fiscal months (such amounts with
respect to preceding fiscal months to be computed net of
recoveries on such Defaulted Receivables received on or prior to
such day) by (ii) the aggregate Outstanding Balance of all
Originator Receivables on such day. For purposes of this
definition, the terms Outstanding Balance and Defaulted
Receivable shall be interpreted as if all references in the
definitions thereof to Receivables were references to
Originator Receivables.
"Default Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each fiscal month of
the Originators by dividing (i) the aggregate Outstanding Balance
of all Originator Receivables that met the requirements of
clause (i) of the definition of Defaulted Receivable on such day
by (ii) the aggregate Outstanding Balance of all Originator
Receivables on such day. For purposes of this definition, the
terms "Outstanding Balance" and "Defaulted Receivable" shall be
interpreted as if all references in the definitions thereof to
"Receivables" were references to "Originator Receivables."
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof,
remains unpaid for over 90 days from the original due
date for such payment;
(ii) which is not a Priority DIP Receivable and
as to which the Obligor thereof or any other Person
obligated thereon or owning any Related Security in
respect thereof has taken any action, or suffered any
event to occur, of the type described in paragraph (g)
of Exhibit V; or
(iii) which, consistent with the Credit and
Collection Policy (as in effect at the time of the
creation of such Receivable), is deemed uncollectible.
"Designated Obligor" means, at any time, each Obligor
except any such Obligor as to which the Agent has, at least three
Business Days prior to the date of determination, given notice to
the Seller that such Obligor shall not be considered a Designated
Obligor by reason of the fact that in the reasonable opinion of
the Agent any one of the following shall exist as to such
Obligor: (i) the timely collectibility of the Receivables of
such Obligor has been impaired by reason of a material adverse
change in the financial condition, business, operations or
prospects of such Obligor, or (ii) such Obligor has demonstrated
an inconsistent payment history and in the reasonable opinion of
the Agent such inconsistent payment history materially impairs
the Agent's ability to rely on timely payment by such Obligor in
the future, or (iii) such Obligor is in a class of Obligors which
do not meet criteria of purchasers generally applicable to
obligors for companies which are similarly situated as the Seller
and which are selling receivables or undivided interests therein
in similar transactions. Unless the Agent shall hereafter notify
the Seller to the contrary, Trimble-Western Furniture Inc. shall
not be a Designated Obligor.
"Dilution" means, with respect to any Originator
Receivable, the aggregate amount of (i) any reductions or
adjustments in the Outstanding Balance of such Originator
Receivable as a result of any defective, rejected, returned,
repossessed or foreclosed merchandise or services or any cash
discount, credit memo, rebate, cooperative advertising,
chargeback or other adjustment, dispute or setoff and (ii) any
unresolved disputes relating to such Originator Receivable, which
have not yet resulted in the reduction or adjustment of the
Outstanding Balance of such Originator Receivable.
"Dilution Reserve" for any Receivable Interest at any
time means an amount equal to the product of (i) the Invested
Amount of such Receivable Interest on such date multiplied by
(ii) the greater of (a) 3% and (b) the sum of three times the Net
Dilution Ratio plus two times the difference between the Gross
Dilution Ratio and the Net Dilution Ratio as of the last day of
the preceding fiscal month.
"Effective Date" means December 29, 1995.
"Eligible Assignee" means CL-NY, any of its Affiliates,
any Person managed by CL-NY or any of its Affiliates, or any
financial or other institution acceptable to the Agent.
"Eligible Foreign Receivable" means a Receivable
meeting all of the criteria set forth in either of the following
clauses:
(i) the payment of such Receivable is fully
supported by a letter of credit issued by an office or
branch located in the United States of an Eligible LOC
Bank, the Agent holds a first priority, perfected
security interest in such letter of credit and the
issuer of such letter of credit has been notified of
such security interest; or
(ii) the Obligor of such Receivable is a Canadian
resident, the Agent holds a first priority, perfected
security interest in such Receivable which is
enforceable under applicable Canadian law, the Agent
has received an opinion of Canadian counsel for the
Seller, in form and substance satisfactory to the
Agent, as to perfection, enforcement, taxes and such
other matters as the Agent may reasonably request, and
all of the Relevant Rating Agencies shall have notified
the Agent that the purchase of Receivables of the type
described in this clause (ii) will not result in a
reduction or withdrawal of their respective ratings on
the commercial paper issued by the Issuer;
provided, however, that the aggregate Outstanding Balance of
Eligible Foreign Receivables which shall be considered Eligible
Receivables shall not at any time exceed an amount equal to 10%
of the Purchase Limit.
"Eligible July Receivable" means a Receivable in
existence at the close of business on the last day of the June
fiscal month or arising during the July fiscal month meeting all
of the criteria set forth in any one of the following clauses:
(i) such Receivable satisfies all of the criteria
set forth in the definition of Eligible Receivable
(without regard to the proviso therein) except that the
Obligor of such Receivable is a government or a
governmental subdivision or agency;
(ii) such Receivable satisfies all of the criteria
set forth in the definition of Eligible Receivable
(without regard to the proviso therein) except that the
Obligor of such Receivable is not a United States
resident and such Receivable is not an Eligible Foreign
Receivable; or
(iii) the Seller has requested, and the CCA
Depositors (as defined in the LAPA) have approved, in
their sole discretion, the classification of such
Receivable as an Eligible July Receivable.
"Eligible LOC Bank" means a commercial bank which
(i) has an office or branch in the United States and (ii) has
combined capital and surplus of at least $250,000,000.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which is a United States
resident (unless such Receivable is an Eligible Foreign
Receivable), is not an Affiliate of any of the parties
hereto, and is not a government or a governmental
subdivision or agency;
(ii) the Obligor of which, at the time of the
initial creation of an interest therein under the
Agreement, is a Designated Obligor;
(iii) which at the time of the initial creation
of an interest therein under the Agreement is not a
Defaulted Receivable;
(iv) which, according to the Contract related
thereto, is required to be paid in full (A) within 120
days of the original billing date therefor, (B) later
than 120 days but within 150 days of the original
billing date therefor, but only (x) if such Receivable
was originated by Lane or Action and (y) to the extent
that the Outstanding Balance of such Receivable at the
time of the initial creation of an interest therein
under the Agreement, when aggregated with the
Outstanding Balance of all other Pool Receivables
originated by Lane or Action and having similar payment
terms, does not exceed $23,000,000, or (C) later than
150 days but within 180 days of the original billing
date therefor, but only (x) if such Receivable was
originated by Lane or Action and (y) to the extent that
the Outstanding Balance of such Receivable at the time
of the initial creation of an interest therein under
the Agreement, when aggregated with the Outstanding
Balance of all other Pool Receivables originated by
Lane or Action and having similar payment terms, does
not exceed $7,000,000;
(v) which is an "account" or "general
intangible" within the meaning of the UCC of the
applicable jurisdictions governing the perfection of
the interest created by a Receivable Interest;
(vi) which was generated in the ordinary course
of an Originator's business and does not constitute a
Courtesy Receivable;
(vii) which is denominated and payable only in
United States dollars in the United States;
(viii) which arises under a Contract which is
substantially in the form of the form of contract or
the form of invoice (in the case of any open account
agreement) previously approved by the Agent; and which
Contract, together with such Receivable, is in full
force and effect and constitutes the legal, valid and
binding obligation of the Obligor of such Receivable to
pay a determinable amount and which is not subject to
any dispute, offset, counterclaim or defense whatsoever
(except payments for cooperative advertising and the
potential discharge in bankruptcy of such Obligor);
(ix) which, together with the Contract related
thereto, does not contravene in any material respect
any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and
regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to
which no party to the Contract related thereto is in
violation of any such law, rule or regulation in any
material respect if such violation would impair the
collectibility of such Receivable;
(x) which satisfies all applicable requirements
of the Credit and Collection Policy in a manner not
materially less stringent than the Credit and
Collection Policy in effect on the date of the Original
Agreement (as to Lane, Action or Broyhill) or on the
Effective Date (as to Thomasville ); provided, however,
that for purposes of this definition, any change in the
Credit and Collection Policy notified to the Agent
pursuant to subsection (f) of Exhibit IV by the Seller
and not objected to within 30 Business Days of such
notice, shall be deemed "not materially less
stringent";
(xi) which complies with such other criteria and
requirements (other than those relating to the
collectibility of such Receivable) as the Agent may
from time to time specify to the Seller upon 30 days'
notice; provided that such criteria and requirements
are specified in good faith, take into account current
market conditions, and are for the purpose of not
permitting the condition of the Receivables, taken as a
whole, to drop below the condition thereof as at the
date of the execution of the Original Agreement (as to
Lane, Action or Broyhill) or as of the Effective Date
(as to Thomasville); and
(xii) the sale or transfer of which does not
contravene or conflict with any law;
provided, however, that for purposes of the computation of the
Net Receivables Pool Balance during the period from (and
including) the first day of the July fiscal month in any year
through (and including) the last day of the July fiscal month in
any year, "Eligible Receivables" shall include Eligible July
Receivables having an Outstanding Balance not in excess of an
amount which will result in July Availability equal to
$25,000,000.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) which together with the Seller would be
treated as a single employer under the provisions of Title I or
Title IV of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Rate" means, for any Fixed Period, an
interest rate per annum (expressed as a decimal and rounded
upwards, if necessary, to the nearest one hundredth of a
percentage point) equal to the offered rate per annum for
deposits in U.S. dollars in a principal amount of not less than
$1,000,000 for such Fixed Period as of 11:00 A.M., London time,
two Business Days before the first day of such Fixed Period,
which appears on the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace "Page 3750"
on that service for the purpose of displaying London interbank
offered rates of major banks) (the "Telerate LIBO Page");
provided that if on any Business Day on which the Eurodollar Rate
is to be determined, no offered rate appears on the Telerate LIBO
Page, the Agent will request the principal London office of each
of Credit Lyonnais and Citibank, N.A. (the "Eurodollar Reference
Banks"), to provide the Agent with its quotation at approximately
11:00 A.M., London time, on such date of the rate per annum it
offers to prime banks in the London interbank market for deposits
in U.S. dollars for the requested Fixed Period in an amount
substantially equal to the Invested Amount associated with such
Fixed Period and, if these two quotations are provided, the
Eurodollar Rate shall be equal to the average (rounded upwards,
if necessary, to the nearest one hundredth of a percentage point)
of such rates; if the Eurodollar Reference Banks do not furnish
timely information to the Agent for determining the Eurodollar
Rate, then the Eurodollar Rate shall be considered to be the
Alternate Base Rate for such Fixed Period.
"Eurodollar Rate Reserve Percentage" of any Investor
for any Fixed Period means the reserve percentage applicable two
Business Days before the first day of such Fixed Period under
regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) (or if more than
one such percentage shall be applicable, the daily average of
such percentages for those days in such Fixed Period during which
any such percentage shall be so applicable) for determining the
maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement)
for such Investor with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurocurrency
Liabilities is determined) having a term equal to such Fixed
Period.
"Event of Termination" has the meaning specified in
Exhibit V.
"Facility Termination Date" means the earliest of (a)
December 29, 2000 or (b) the date determined pursuant to Section
2.02 or (c) the date the Purchase Limit reduces to zero pursuant
to Section 1.01(b).
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Year" means each fiscal year of Interco ending
on December 31 of each calendar year.
"Fixed Period" means, with respect to any Receivable
Interest:
(a) in the case of any Fixed Period in respect of
which Yield is computed by reference to the CP Rate, a
period from each Rate Determination Date for such
Receivable Interest to the next succeeding Rate
Determination Date for such Receivable Interest; and
(b) in the case of any Fixed Period in respect of
which Yield is computed by reference to the Assignee
Rate, initially the period commencing on the date of
purchase of such Receivable Interest and ending such
number of days as the Seller shall select and the Agent
shall approve; and thereafter each period commencing on
the last day of the immediately preceding Fixed Period
for such Receivable Interest and ending such number of
days as the Seller shall select and the Agent shall
approve, in each case on notice by the Seller received
by the Agent (including notice by telephone, confirmed
in writing) not later than (x) 12:00 noon (New York
City time) on the third Business Day preceding the date
of purchase or such last day, if Yield is to be
computed by reference to the Eurodollar Rate, or (y)
11:00 A.M. (New York City time) on the date of purchase
or such last day, if Yield is to be computed by
reference to the Alternate Base Rate, except that if
the Agent shall not have received such notice or
approved such period on or before 11:00 A.M. (New York
City time) on the date of purchase or such last day,
such period shall be one day;
provided that (with respect to both clauses (a) and (b) above):
(i) any Fixed Period in respect of which Yield is
computed by reference to the Alternate Base Rate shall
be a period from one to and including 29 days, as the
Seller may select as provided above, and any Fixed
Period in respect of which Yield is computed by
reference to the Eurodollar Rate shall be a period of
one month;
(ii) any Fixed Period (other than of one day)
which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding
Business Day (provided, however, if Yield in respect of
such Fixed Period is computed by reference to the
Eurodollar Rate, and such Fixed Period would otherwise
end on a day which is not a Business Day, and there is
no subsequent Business Day in the same calendar month
as such day, such Fixed Period shall end on the next
preceding Business Day);
(iii) in the case of any Fixed Period of one day,
(A) if such Fixed Period is the initial Fixed Period
for a Receivable Interest, such Fixed Period shall be
the day of purchase of such Receivable Interest; (B)
any subsequently occurring Fixed Period which is one
day shall, if the immediately preceding Fixed Period is
more than one day, be the last day of such immediately
preceding Fixed Period, and, if the immediately
preceding Fixed Period is one day, be the day next
following such immediately preceding Fixed Period; and
(C) if such Fixed Period occurs on a day immediately
preceding a day which is not a Business Day, such Fixed
Period shall be extended to the next succeeding
Business Day; and
(iv) in the case of any Fixed Period for any
Receivable Interest which commences before the Termina-
tion Date for such Receivable Interest and would
otherwise end on a date occurring after such
Termination Date, such Fixed Period shall end on such
Termination Date and the duration of each Fixed Period
which commences on or after the Termination Date for
such Receivable Interest shall be of such duration as
shall be selected by the Agent.
"Gross Dilution Ratio" means, on the last day of any
fiscal month of the Originators, the ratio (expressed as a
percentage) computed by dividing (i) the balance of all
Originator Receivables representing resolved or unresolved
Dilutions during such month by (ii) the aggregate Outstanding
Balance of all Originator Receivables on such day; provided,
however, that the balance of all Originator Receivables
originated by Thomasville representing resolved or unresolved
Dilutions during any fiscal month shall be deemed to be an amount
equal to the sum, for the prior seven months, of the amount
deducted for Dilution from the Outstanding Balance of all
Originator Receivables originated by Thomasville. For purposes
of this definition, the term "Outstanding Balance" shall be
interpreted as if all references in the definition thereof to
"Receivables" were references to "Originator Receivables."
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest,
fees and charges) of such Person for borrowed money or for the
deferred purchase price of property or services, (ii) the maximum
amount available to be drawn under all letters of credit issued
for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Adverse Claim on any property owned by
such Person, whether or not such Indebtedness has been assumed by
such Person (to the extent of the value of the respective
property), (iv) the aggregate amount required to be capitalized
under leases under which such Person is the lessee, (v) all
obligations of such Person to pay a specified purchase price for
goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all obligations of such
Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of kinds
referred to in clauses (i) through (v) above or in clause (vii),
and (vii) all obligations under any Interest Rate Protection
Agreement or under any similar type of agreement. In addition to
the foregoing, for the purposes of calculating Consolidated Debt
and making adjustments on a Pro Forma Basis, the Invested Amount
under the Agreement and the "Invested Amount" under the Alternate
Receivables Purchase Agreement shall constitute Indebtedness.
"Initial Purchase Date" means November 17, 1994;
provided, however, that when used in connection with Receivables
originated by Thomasville , Initial Purchase Date shall mean
the Effective Date.
"Interco" means Interco Incorporated, a Delaware
corporation.
"Interco Agreement" means the Interco Agreement dated
as of November 15, 1994, as amended by Amendment No. 1 thereto
dated as of the Effective Date, made by Interco in favor of the
Seller, as the same may be further amended, modified or restated
from time to time.
"Interest Rate Protection Agreement" means any interest
rate swap agreement, interest rate cap agreement, interest collar
agreement, interest rate hedging agreement, interest rate floor
agreement or other similar agreement or arrangement.
"Invested Amount" of each Receivable Interest means the
original amount paid to the Seller for such Receivable Interest
at the time of its purchase by the Issuer pursuant to the
Agreement, or such amount divided or combined in accordance with
Section 1.07, in each case reduced from time to time by
Collections distributed on account of such Invested Amount
pursuant to Section 1.04(d); provided that if such Invested
Amount shall have been reduced by any distribution and thereafter
all or a portion of such distribution is rescinded or must
otherwise be returned for any reason, such Invested Amount shall
be increased by the amount of such rescinded or returned
distribution, as though it had not been made.
"Investor" means the Issuer and all other owners by
assignment or otherwise of a Receivable Interest or any interest
therein and, to the extent of the undivided interests so
purchased, shall include any participants.
"Issuer" means Atlantic Asset Securitization Corp. and
any successor or assign of the Issuer that is a receivables
investment company which in the ordinary course of its business
issues commercial paper or other securities to fund its
acquisition and maintenance of receivables.
"July Availability" means, on the last day of the July
fiscal month of each year prior to the occurrence of the Facility
Termination Date, an amount equal to the lowest of (i) the
aggregate outstanding Invested Amount on such date minus the
maximum outstanding Invested Amount that would be permitted on
such date under the Receivables Agreement if the Receivables Pool
did not include any Eligible July Receivables, such amount to be
calculated and included in the Seller Report for the July fiscal
month, (ii) $25,000,000 and (iii) the Total Unutilized Revolving
Loan Commitment (as such term is defined in the Bank Credit
Agreement).
"July CCA" has the meaning given that term in the LAPA.
"Lane" means The Lane Company, Incorporated, a Virginia
corporation.
"LAPA" means the Liquidity Asset Purchase Agreement,
dated as of December 29, 1995, among CL-NY, as purchaser and
liquidity agent, the Issuer and the Agent, as the same may be
amended, modified, restated or supplemented.
"Lenders" means the Lenders party to the Subordinated
Loan Agreement.
"Leverage Ratio" means on any date the ratio of (i)
Consolidated Debt on such date to (ii) Consolidated EBITDA for
the period of four consecutive fiscal quarters most recently
ended on or prior to such date, in each case taken as one
accounting period.
"Liquidation Day" means, for any Receivable Interest,
(i) each day during a Settlement Period for such Receivable
Interest on which the conditions set forth in paragraph 2 of
Exhibit II are not satisfied, and (ii) each day which occurs on
or after the Termination Date for such Receivable Interest.
"Liquidation Fee" means, for any Fixed Period during
which a Liquidation Day occurs, the amount, if any, by which
(i) the additional Yield (calculated without taking into account
any Liquidation Fee or any shortened duration of such Fixed
Period pursuant to the proviso in the definition thereof) which
would have accrued during such Fixed Period on the reductions of
Invested Amount of the Receivable Interest relating to such Fixed
Period had such reductions remained as Invested Amount, exceeds
(ii) the income, if any, received by the Investors' investing the
proceeds of such reductions of Invested Amount.
"Lock-Box Account" means one or more accounts in the
name of the Agent maintained at a bank or other financial
institution for the purpose of receiving Collections.
"Lock-Box Agreement" means an agreement, in
substantially the form of Annex B, among an Originator, the
Seller, the Agent and each Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other
financial institutions holding one or more Lock-Box Accounts.
"Loss Percentage" means, for any Receivable Interest on
any date, the greater of (i) the sum of (a) three times the
Default Ratio plus (b) the Deemed Uncollectible Ratio, in each
case as of the last day of the fiscal month immediately preceding
such date and (ii) 10%.
"Loss Reserve" means, for any Receivable Interest on
any date, an amount equal to
LP x IA
where:
LP = the Loss Percentage for such Receivable
Interest on such date.
IA = the Invested Amount of such Receivable
Interest at the close of business of the
Servicer on such date.
"Net Dilution Ratio" means on any date the ratio
(expressed as a percentage) computed as of the last day of the
preceding fiscal month of the Originators, by dividing (i) the
balance of all Originator Receivables representing resolved or
unresolved Dilutions (other than Dilutions arising out of
cooperative advertising payments or discounts for early payment)
during such month by (ii) the aggregate Outstanding Balance of
all Originator Receivables on such day; provided, however, that
the balance of all Originator Receivables originated by
Thomasville representing resolved or unresolved Dilutions (other
than Dilutions arising out of cooperative advertising payments or
discounts for early payment) during any fiscal month shall be
deemed to be an amount equal to the sum, for the prior seven
months, of the amount deducted for Dilution (other than Dilution
arising out of cooperative advertising payments or discounts for
early payment) from the Outstanding Balance of all Originator
Receivables originated by Thomasville. For purposes of this
definition, the term "Outstanding Balance" shall be interpreted
as if all references in the definition thereof to "Receivables"
were references to "Originator Receivables".
"Net Receivables Pool Balance" means at any time the
Outstanding Balance of Eligible Receivables then in the Receiv-
ables Pool reduced by the sum of (i) the Outstanding Balance of
such Eligible Receivables that have become Defaulted Receivables,
plus (ii) the aggregate amount by which the Outstanding Balance
of Eligible Receivables (other than Defaulted Receivables) of
each Obligor then in the Receivables Pool exceeds the product of
(A), the Normal Concentration Percentage for such Obligor, or the
Special Concentration Percentage for such Obligor, as the case
may be, multiplied by (B) the Aggregate Invested Amount at such
time, plus (iii) the excess, if any, of the Outstanding Balance
of Priority DIP Receivables over $500,000.
"Normal Concentration Percentage" for any Obligor means
at any time 2%, or such other percentage ("Special Concentration
Percentage") set forth below for such Obligor; provided that in
the case of an Obligor with any Affiliated Obligor, the Normal
Concentration Percentage and the Special Concentration Percentage
shall be calculated as if such Obligor and such Affiliated
Obligor are one Obligor; provided further that in the case of an
Obligor having Receivables fully supported by a letter of credit
issued by an Eligible LOC Bank, the Normal Concentration
Percentage and the Special Concentration Percentage shall be
calculated as if such Eligible LOC Bank is the Obligor and the
chart in the next sentence referred to certificate of deposit
ratings; provided further that the Agent may cancel any Special
Concentration Percentage upon three Business Days' notice to the
Seller. The Special Concentration Percentages for J.C. Penney
Company, Inc. and Sears Roebuck & Co. shall be 15% and 10%,
respectively, for so long as the short-term public senior debt
ratings of such Obligors by Standard & Poor's Ratings Group and
Moody's Investors Service, Inc. remain at least equal to those in
effect on the date of the Original Agreement; provided, however,
that such Special Concentration Percentages shall be increased
(subject to the Agent's right to cancel any Special Concentration
Percentage upon three Business Days' notice to the Seller) or
reduced based on subsequent changes in such debt ratings as set
forth below:
Short-Term Public Special Concentration
Senior Debt Rating Percentage
------------------- ---------------------
A-1/P-1 15%
A-2/P-2, A-1/P-2 or A-2/P-1 10%
A-3/P-3, A-2/P-3 or A-3/P-2 2%
The Special Concentration Percentage of Haverty Furniture
Companies, Inc. and Wal-Mart Stores, Inc. shall each be 5%. At
each annual anniversary of the execution of the Agreement, the
foregoing Special Concentration Percentages for Haverty Furniture
Companies, Inc. and Wal-Mart Stores, Inc. may be revised by
request of the Seller, provided that such revision is consented
to by the Agent (it being understood that the Agent agrees to
duly consider such request but shall have no obligation to give
such consent). The Agent shall provide the Relevant Rating
Agencies with prior notice of any proposed increase in any
Special Concentration Percentage or the establishment of any new
Special Concentration Percentage.
"Obligor" means a Person obligated to make payments to
any Originator pursuant to a Contract.
"Original Agreement" has the meaning attributed thereto
in the Preliminary Statements.
"Original Bank Credit Agreement" means the Bank Credit
Agreement as defined in the Original Agreement, without giving
effect to the amendment and restatement thereof as of the
Effective Date.
"Original Originator" means each of Lane, Action and
Broyhill.
"Original PCA" means the Originator Purchase Agreement
as defined in the Original Agreement.
"Originator" means each of Lane, Action, Broyhill and
Thomasville.
"Originator Purchase Agreement" means the Purchase and
Contribution Agreement dated as of November 15, 1994, as amended
and restated as of the Effective Date, between Lane, Action,
Broyhill and Thomasville, as sellers, and the Seller, as
purchaser, as the same may be further amended, modified or
restated from time to time.
"Originator Receivables" means, collectively, all
receivables created by each Originator (regardless of whether
such receivables have been transferred to the Seller or any
assignee or transferee of the Seller).
"Other Corporations" means Interco and all of its
Subsidiaries except the Seller.
"Outstanding Balance" of any Receivable at any time
means the then outstanding principal balance thereof; provided,
however, that in the case of any Receivable originated by
Broyhill which is subject to a third-party guarantee and entitled
to a cash discount for quick payment, the Outstanding Balance of
such Receivable shall be reduced by the amount of such cash
discount.
"Pension Plan" means any Plan which is subject to the
provisions of Title IV of ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA and which is maintained (in
whole or in part) for employees of Interco, any of its
Subsidiaries or any ERISA Affiliate.
"Pool Receivable" means a Receivable in the Receivables
Pool.
"Priority DIP Receivable" means a Receivable:
(i) the Obligor of which is the subject of a
federal bankruptcy case; and
(ii) the indebtedness of which constitutes a
priority under 11 U.S.C. Section 507(a)(1).
"Pro Forma Basis" means, as to any Person, for any of
the following events which occur subsequent to the commencement
of a period for which the financial effect of such event is being
calculated, and giving effect to the event for which such
calculation is being made, such calculation as will give pro
forma effect to such event as if same had occurred at the
beginning of such period of calculation, and
(i) for purposes of the foregoing calculation, the
transaction giving rise to the need to calculate the pro
forma effect to any of the following events shall be assumed
to have occurred on the first day of the four fiscal quarter
period last ended before the occurrence of the respective
event for which such pro forma effect is being determined
(the "Reference Period"), and
(ii) in making any determination with respect to the
incurrence or assumption of any Indebtedness or issuance of
any Disqualified Preferred Stock during the Reference Period
or subsequent to the Reference Period and on or prior to the
date of the transaction referenced in clause (i) above (the
"Transaction Date"), (w) all Indebtedness or Disqualified
Preferred Stock (including the Indebtedness or Disqualified
Preferred Stock incurred or assumed and for which the
financial effect is being calculated) incurred or
permanently repaid during the Reference Period shall be
deemed to have been incurred or repaid at the beginning of
such period, (x) Consolidated Net Interest Expense of such
Person attributable to interest or dividends on any
Indebtedness or Disqualified Preferred Stock, as the case
may be, bearing floating interest rates should be computed
on a pro forma basis as if the rate in effect on the
Transaction Date had been the applicable rate for the entire
period, (y) Consolidated Net Interest Expense of such Person
attributable to interest on any Indebtedness under any
revolving credit facility which was in effect during the
respective Reference Period shall be computed on a pro forma
basis based upon the average daily balance of such
Indebtedness outstanding during the applicable period (or,
if shorter, the portion of the period during which the
revolving credit facility was in effect) and (z)
Consolidated Net Interest Expense will be increased or
reduced by the net cost (including amortization of discount)
or benefit (after giving effect to amortization of discount)
associated with the Interest Rate Protection Agreements,
which will remain in effect for the twelve-month period
after the Transaction Date and which shall have the effect
of fixing the interest rate on the date of computation, and
(iii) in making any determination of Consolidated
EBITDA, pro forma effect shall be given to any acquisition
of part or all of a business or division of another Person
or any Significant Divestiture which occurred during the
Reference Period or subsequent to the Reference Period and
prior to the Transaction Date, Consolidated EBITDA shall be
determined as if such acquisition or Significant Divestiture
occurred on the first day of the Reference Period, taking
into account cost savings and expenses which would otherwise
be accounted for as an adjustment pursuant to Article 11 of
Regulation S-X under the Securities Act of 1933, as amended,
as if such cost savings or expenses were realized on the
first day of the Reference Period.
Purchase Limit means $210,000,000. The Purchase
Limit may be increased by the Seller, at its option, effective as
of March 1, 1996, June 1, 1996 and/or December 1, 1996 by a
written notice to the Agent received no later than five Business
Days prior to the applicable effective date; provided that (i) no
increase in the Purchase Limit shall be effective if an Event of
Termination shall exist on the proposed effective date, (ii) any
increase in the Purchase Limit shall be in the amount of at least
$1,000,000 or an integral multiple thereof, and (iii) in no event
shall the Purchase Limit exceed $225,000,000. The Purchase Limit
may be reduced pursuant to Section 1.01. References to the
unused portion of the Purchase Limit shall mean, at any time, the
Purchase Limit, as then reduced pursuant to Section 1.01(b) or
pursuant to the next sentence, minus the sum of the then
outstanding Invested Amount of Receivable Interests under the
Agreement and the then outstanding "Invested Amount" of
"Receivable Interests" under the Alternate Receivables Purchase
Agreement. Furthermore, on each day on which the Seller reduces
the unused portion of (or terminates) the "Total Commitment"
under the Alternate Receivables Purchase Agreement, the Purchase
Limit automatically shall reduce by the same amount (or so
terminate).
"Rate Determination Date" means, for any Receivable
Interest, the date of purchase of such Receivable Interest and
thereafter the eleventh day of each calendar month (provided that
(i) if the tenth day of any calendar month is not a Business Day,
the Rate Determination date for such month shall be the second
Business Day following the tenth day of such month, and (ii) if
the tenth day of any calendar month is a Business Day, but the
eleventh day is not, the Rate Determination Date for such month
shall be the first Business Day following the eleventh day of
such month) or any other day as shall have been agreed to in
writing by the Seller and the Agent prior to the immediately
preceding Rate Determination Date for such Receivable Interest.
"Rating Agency" means, collectively, Moody's Investors
Service, Inc. and Standard & Poor's Ratings Group, and their
respective successors in interest.
"Receivable" means the indebtedness of any Obligor
under a Contract (including the right to payment of any interest
or finance charges and other obligations of such Obligor with
respect thereto), which indebtedness has been acquired by the
Seller from one of the Originators by purchase or by capital
contribution pursuant to the Originator Purchase Agreement.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest in (i) all then outstanding Pool
Receivables arising prior to the time of the most recent
computation or recomputation of such undivided percentage
interest pursuant to Section 1.03, (ii) all Related Security with
respect to such Pool Receivables, and (iii) all Collections with
respect to, and other proceeds of, such Pool Receivables and
Related Security. Each undivided percentage interest shall be
computed as
IA + YR + LR + SFR + DR
-----------------------
NRPB
where:
IA = the Invested Amount of each such
Receivable Interest at the time of
computation.
YR = the Yield Reserve of each such
Receivable Interest at the time of
computation.
LR = the Loss Reserve of each such Receivable
Interest at the time of computation.
SFR = the Servicer Fee Reserve of each such
Receivable Interest at the time of
computation.
DR = the Dilution Reserve of each such
Receivable Interest at the time of
computation.
NRPB = the Net Receivables Pool Balance at the
time of computation.
Each Receivable Interest shall be determined from time to time
pursuant to the provisions of Section 1.03.
"Receivables Pool" means at any time the aggregation of
each then outstanding Receivable in respect of which the Obligor
is a Designated Obligor at such time or was a Designated Obligor
on the date of the initial creation of an interest in such
Receivable under the Agreement or the Alternate Receivables
Purchase Agreement.
"Related Security" means with respect to any
Receivable:
(i) all of the Seller's right, title and interest
in and to all Contracts or other agreements that relate to
such Receivable;
(ii) all of the Seller's interest in any
merchandise (including returned merchandise) relating to any
sale giving rise to such Receivable;
(iii) all other security interests or liens and
property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together
with all financing statements signed by an Obligor
describing any collateral securing such Receivable;
(iv) all guaranties, insurance and other agree-
ments or arrangements of whatever character from time to
time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable
or otherwise; and
(v) all other books, records and other
information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing
software and related property and rights) relating to such
Receivable and the related Obligor.
"Relevant Rating Agencies" means, collectively, each of
the Rating Agencies then rating the Issuer's commercial paper
notes at the request of the Issuer.
"Reportable Event" means a Reportable Event as defined
in Section 4043(b) of ERISA.
"Required Rating" means, with respect to any Person's
long-term public senior debt securities, a rating of at least B
by Standard & Poor's Ratings Group and at least B2 by Moody's
Investors Service, Inc. If such Person does not have long-term
public senior debt securities outstanding, such Person shall be
deemed to have a senior debt rating of at least B/B2 (a) if such
Person has public subordinated debt securities outstanding which
are rated and the equivalent senior debt rating of such Person
based on standard benchmarks above such Person's outstanding
public subordinated rated debt is at least B/B2, or (b) if such
Person does not have public subordinated rated debt securities
outstanding, based on the Agent's commercially reasonable
determination that such Person's long-term public senior debt
securities would receive a rating of at least B/B2 if such Person
did have such securities outstanding.
"Seller Report" means a report, in substantially the
form of Annex A hereto furnished by the Servicer to the Agent
pursuant to the Servicer Agreement.
"Servicer" means, at any time, the Person or Persons
then authorized pursuant to the Servicer Agreement to administer
and collect Pool Receivables.
"Servicer Agreement" means an agreement among the
Originators, the Seller and the Agent (and, if the Originators do
not act as Servicer, consented to by the Originators), in form
and substance satisfactory to them, governing the appointment and
responsibilities of the Servicer as to administration and
collection of the Pool Receivables, and requiring the Servicer to
perform its obligations set forth in the Agreement, as the same
may be amended, modified, restated or supplemented from time to
time.
"Servicer Fee" means the servicer fee referred to in
the Servicer Agreement.
"Servicer Fee Reserve" for any Receivable Interest at
any time means the sum of (i) the unpaid Servicer Fee relating to
such Receivable Interest accrued to such time, plus (ii) an
amount equal to (a) the aggregate Pool Receivables relating to
such Receivable Interest on such date multiplied by (b) the
product of (x) the percentage per annum at which the Servicer Fee
is accruing on such date and (y) a fraction having the sum of the
Average Maturity plus the Collection Delay Period (each as in
effect at such date) as its numerator and 360 as its denominator.
"Settlement Date" for any Receivable Interest means the
last day of each Settlement Period for such Receivable Interest.
"Settlement Period" for any Receivable Interest means
each period commencing on the first day and ending on the last
day of each Fixed Period for such Receivable Interest and, on and
after the Termination Date for such Receivable Interest, such
period (including, without limitation, a period of one day) as
shall be selected from time to time by the Agent or, in the
absence of any such selection, each period of thirty days from
the last day of the immediately preceding Settlement Period.
"Special CCA" has the meaning given that term in the
LAPA.
"Special Concentration Percentage" has the meaning
assigned to that term in the definition of Normal Concentration
Percentage.
"Subordinated Loan Agreement" means the subordinated
loan agreement which may hereafter be entered into between the
Seller and the Lenders party thereto, substantially in the form
of Annex D hereto, pursuant to which such Lenders will agree to
make revolving loans to the Seller not exceeding $15,000,000 in
outstanding principal amount at any time, which loans shall be
secured by a subordinate lien on the same collateral that has
been granted to the Agent for the benefit of the Investors
pursuant to Section 1.09 of the Agreement, and which loans shall
be subordinate in right of payment to the payment of the Invested
Amount and Yield.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association, joint venture, or other
business entity of which more than 50% of the total voting power
of shares of stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the
election of the Person or Persons (whether directors, managers,
trustees or other persons performing similar functions) having
the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Tangible Net Worth" means at any time the excess of
(i) the Outstanding Balance of all Receivables plus cash and Cash
Equivalents of the Seller, minus (ii) the sum of (a) the
Outstanding Balance of such Receivables which have become
Defaulted Receivables, plus (b) Invested Amount, Yield Reserve,
Loss Reserve, Servicing Fee Reserve and Dilution Reserve, plus
(c) "Invested Amount", "Yield Reserve", "Loss Reserve",
"Servicing Fee Reserve" and "Dilution Reserve" under the
Alternate Receivables Purchase Agreement.
"Taxes" means, in the case of any Investor or the
Agent, taxes, levies, imposts, deductions, charges, withholdings
and liabilities, now or hereafter imposed, levied, collected,
withheld or assessed by any country (or any political subdivision
thereof), excluding income or franchise taxes imposed on it by
(i) the jurisdiction under the laws of which such Investor or the
Agent, as the case may be, is organized (or by any political
subdivision thereof), (ii) any jurisdiction in which an office of
such Investor or the Agent funding or maintaining the ownership
of Receivable Interests is located (or any political subdivision
thereof), or (iii) any jurisdiction in which such Investor or the
Agent is already subject to tax.
"Termination Date" for any Receivable Interest means
the earlier of (i) the Business Day which the Seller or the Agent
so designates by notice to the other at least one Business Day in
advance for such Receivable Interest and (ii) the Facility
Termination Date.
"Thomasville" means Thomasville Furniture Industries,
Inc., a Pennsylvania corporation.
"Thomasville Availability" means, on any date, an
amount equal to (i) the aggregate outstanding Invested Amount on
such date minus (ii) the maximum outstanding Invested Amount that
would be permitted on such date if the Receivables Pool did not
include any Receivables originated by Thomasville, such amount to
be calculated based on the most recent Seller Report.
"UCC" means the Uniform Commercial Code as from time to
time in effect in the specified jurisdiction.
"Yield" means, for any Receivable Interest for any
Fixed Period:
(i) to the extent the Issuer will be funding
such Receivable Interest during such Fixed Period through
the issuance of commercial paper,
CPR x IA x ED + LF
---
360
(ii) to the extent the Investors will not be
funding such Receivable Interest during such Fixed Period
through the issuance of commercial paper,
AR x IA x ED + LF
---
360
where:
CPR = the CP Rate for such Receivable Interest
for such Fixed Period
AR = the Assignee Rate for such Receivable
Interest for such Fixed Period
IA = the Invested Amount of such Receivable
Interest during such Fixed Period
ED = the actual number of days elapsed during
such Fixed Period
LF = the Liquidation Fee, if any, for such
Receivable Interest for such Fixed
Period;
provided that no provision of the Agreement shall require the
payment or permit the collection of Yield in excess of the
maximum permitted by applicable law; and provided further that
Yield for any Receivable Interest shall not be considered paid by
any distribution to the extent that at any time all or a portion
of such distribution is rescinded or must otherwise be returned
for any reason.
"Yield Reserve" for any Receivable Interest at any time
means the sum of (i) the Liquidation Yield at such time for such
Receivable Interest, plus (ii) the then accrued and unpaid Yield
for such Receivable Interest, plus (iii) the accrued and unpaid
program fee set forth in the Fee Agreement multiplied by a
fraction, the numerator of which is the Invested Amount of such
Receivable Interest and the denominator of which is the Aggregate
Invested Amount. For purposes of this definition, "Liquidation
Yield" means, for any Receivable Interest on any date, an amount
equal to:
[IA x (ABR + 1.0%) x (AM + CDP)] + [PL x PFR x IA x (AM + CDP)]
-------- -- --------
360 AIA 360
where:
IA = the Invested Amount of such Receivable
Interest on such date
ABR = the Alternate Base Rate for such Receivable
Interest for a 30-day Fixed Period deemed to
commence on such date
AM = the Average Maturity as in effect at such
date
CDP = the Collection Delay Period as in effect at
such date
PL = the Purchase Limit
PFR = the rate per annum at which the program fee
set forth in the Fee Agreement is accruing on
such date
AIA = the Aggregate Invested Amount on such date.
- - - - - -
Other Terms. The terms "Cash Equivalents",
"Consolidated Debt", "Disqualified Preferred Stock", "Dividends",
"Interco Warrants", "Net Cash Proceeds", "Preferred Stock",
"Restricted Subsidiaries", "Significant Divestiture", "Term
Loans" and "Transaction" shall have the meanings attributed
thereto in the Bank Credit Agreement as in effect on the date
hereof, without giving effect to any further amendments to the
Bank Credit Agreement (unless the Agent shall have consented to
such amendments in writing), and regardless of any subsequent
expiration or termination of the Bank Credit Agreement. All
accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State
of New York, and not specifically defined herein, are used herein
as defined in such Article 9.
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase under the
Original Agreement. The initial purchase of a Receivable
Interest under the Original Agreement was subject to the
conditions precedent that the Agent shall have received on or
before the date of such purchase the following, each (unless
otherwise indicated) dated such date, in form and substance
satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board
of Directors of the Seller approving the Original Agreement and
certified copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect
to the Original Agreement.
(b) A copy of the certificate or articles of
incorporation, as amended, of the Seller, certified as of a
recent date by the Secretary of State or other appropriate
official of Delaware, and a certificate as to the good standing
of the Seller from such Secretary of State or other official,
dated as of a recent date.
(c) A certificate of the Secretary or Assistant
Secretary of the Seller certifying (i) that attached thereto is a
true and complete copy of the By-Laws of the Seller as in effect
on the date of such certificate and at all times since a date
prior to the date of the resolutions described in paragraph (a)
above, (ii) that the certificate or articles of incorporation of
the Seller has not been amended since the date of the last
amendment thereto shown on the certificate of good standing
furnished pursuant to paragraph (b) above, and (iii) the names
and true signatures of the officers of the Seller authorized to
sign the Original Agreement and the other documents to be
delivered by it hereunder.
(d) Acknowledgment copies, or time stamped receipt
copies of proper financing statements, duly filed on or before
the date of such initial purchase under the UCC of all
jurisdictions that the Agent may deem necessary or advisable in
order to perfect the ownership and security interests
contemplated by the Original Agreement and the Original PCA.
(e) Acknowledgment copies, or time stamped receipt
copies of proper financing 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 the Seller or any Original Originator.
(f) Completed requests for information, dated on or
before the date of such initial purchase, listing the financing
statements referred to in subsection (d) above and all other
effective financing statements filed in the jurisdictions
referred to in subsection (d) above that name the Seller or any
Original Originator as debtor, together with copies of such other
financing statements (none of which shall cover any Receivables,
Contracts or Related Security).
(g) Copies of executed Lock-Box Agreements with the
Lock-Box Banks.
(h) Certified copies of the resolutions of the Board
of Directors of each Original Originator approving the Original
PCA and the Servicer Agreement and certified copies of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Originator
Purchase Agreement and the Servicer Agreement.
(i) A copy of the certificate or articles of
incorporation, as amended, of each Original Originator, certified
as of a recent date by the Secretary of State or other
appropriate official of the state of its organization, and a
certificate as to the good standing of each Original Originator
from such Secretary of State or other official, dated as of a
recent date.
(j) A certificate of the Secretary or Assistant
Secretary of each Original Originator certifying (i) that
attached thereto is a true and complete copy of the By-Laws of
such Original Originator as in effect on the date of such
certificate and at all times since a date prior to the date of
the resolutions described in paragraph (i) above, (ii) that the
certificate or articles of incorporation of such Original
Originator has not been amended since the date of the last
amendment thereto shown on the certificate of good standing
furnished pursuant to paragraph (i) above, and (iii) the names
and true signatures of the officers thereof authorized to sign
the Original PCA and the Servicer Agreement.
(k) A favorable opinion of Morgan, Lewis & Bockius,
counsel for the Seller and the Original Originators,
substantially in the form of Annex C to the Original Agreement
and as to such other matters as the Agent may reasonably request.
(l) The Servicer Agreement.
(m) The Certificate of Assignment, substantially in
the form of Annex D to the Original Agreement, evidencing the
assignment by the Seller to the Agent for the benefit of the
Investors of the Receivable Interests.
(n) The fee agreement referred to in Section 1.05.
(o) The Original PCA and the Interco Agreement, duly
executed by the parties thereto, and evidence that all of the
conditions precedent to the initial purchase under the Original
PCA have been satisfied.
(p) A reliance letter from Morgan, Lewis & Bockius,
counsel for the Original Originators and Interco, stating that
the Agent and the Investors may rely on the opinion delivered to
the Seller pursuant to Section 3.01 (g) of the Original PCA as if
such opinion had been addressed to them.
(q) Evidence of payment of all fees and expenses,
including the fees and expenses of counsel to the Agent, incurred
in connection with the preparation, execution and delivery of the
Original Agreement and any other documents executed in connection
herewith and the transactions contemplated hereby.
(r) A certificate of the Secretary or Assistant
Secretary of Lane, and Broyhill certifying that attached thereto
is a true and complete copy of the Original Bank Credit Agreement
and the Security Agreement referred to therein.
(s) An intercreditor agreement among Bankers Trust
Company, as agent, the Seller and the Agent, duly executed by the
parties thereto.
(t) Written confirmation from each of the Relevant
Rating Agencies that the rating of the Issuer's commercial paper
notes will not be downgraded or withdrawn solely as a result of
entering into the Original Agreement.
2. Conditions Precedent to Effectiveness of Amended
and Restated Agreement. The effectiveness of the Agreement and
the initial purchase on or after the Effective Date of a
Receivable Interest under the Agreement are each subject to the
conditions precedent that the Agent shall have received on or
before the Effective Date the following, each (unless otherwise
indicated) dated such date, in form and substance satisfactory to
the Agent:
(a) Certified copies of the resolutions of the Board
of Directors of the Seller approving the Agreement and certified
copies of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to the
Agreement.
(b) A copy of the certificate or articles of
incorporation, as amended, of the Seller, certified as of a
recent date by the Secretary of State or other appropriate
official of Delaware, and a certificate as to the good standing
of the Seller from such Secretary of State or other official,
dated as of a recent date.
(c) A certificate of the Secretary or Assistant
Secretary of the Seller certifying (i) that attached thereto is a
true and complete copy of the By-Laws of the Seller as in effect
on the date of such certificate and at all times since a date
prior to the date of the resolutions described in paragraph (a)
above, (ii) that the certificate or articles of incorporation of
the Seller has not been amended since the date of the last
amendment thereto shown on the certificate of good standing
furnished pursuant to paragraph (b) above, and (iii) the names
and true signatures of the officers of the Seller authorized to
sign the Agreement and the other documents to be delivered by it
hereunder.
(d) Acknowledgment copies, or time stamped receipt
copies of proper financing statements, duly filed on or before
the Effective Date under the UCC of all jurisdictions that the
Agent may deem necessary or advisable in order to perfect the
ownership and security interests contemplated by the Agreement
and the Originator Purchase Agreement.
(e) Acknowledgment copies, or time stamped receipt
copies of proper financing statements, if any, necessary to
release all security interests and other rights of any Person in
the Receivables, Contracts or Related Security originated by
Thomasville .
(f) Completed requests for information, dated on or
before the Effective Date, listing the financing statements
referred to in subsection (d) above and all other effective
financing statements filed in the jurisdictions referred to in
subsection (d) above that name the Seller or Thomasville as
debtor, together with copies of such other financing statements
(none of which shall cover any Receivables, Contracts or Related
Security).
(g) Copies of executed Lock-Box Agreements with
Corestates Bank, N.A. and Wachovia Bank of North Carolina,
relating to Collections of Receivables originated by Thomasville.
(h) Certified copies of the resolutions of the Board
of Directors of each Originator approving the Originator Purchase
Agreement and the Servicer Agreement and certified copies of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Originator
Purchase Agreement and the Servicer Agreement.
(i) A copy of the certificate or articles of
incorporation, as amended, of each Originator, certified as of a
recent date by the Secretary of State or other appropriate
official of the state of its organization, and a certificate as
to the good standing of each Originator from such Secretary of
State or other official, dated as of a recent date.
(j) A certificate of the Secretary or Assistant
Secretary of each Originator certifying (i) that either (A)
attached thereto is a true and complete copy of the By-Laws of
such Originator as in effect on the date of such certificate and
at all times since a date prior to the date of the resolutions
described in paragraph (i) above, or (B) in the case of the
Original Originators, that there has been no change to the
By-Laws of such Originator since November 15, 1994, (ii) that the
certificate or articles of incorporation of such Originator has
not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to
paragraph (i) above, and (iii) the names and true signatures of
the officers thereof authorized to sign the Originator Purchase
Agreement and the Servicer Agreement.
(k) A favorable opinion of Morgan, Lewis & Bockius,
counsel for the Seller and the Originators, substantially in the
form of Annex C hereto and as to such other matters as the Agent
may reasonably request.
(l) An amendment to the Servicer Agreement.
(m) An amendment to the fee agreement referred to in
Section 1.05.
(n) The Originator Purchase Agreement and Amendment
No. 1 to the Interco Agreement, duly executed by the parties
thereto, and evidence that all of the conditions precedent to the
initial purchase of Receivables from Thomasville under the
Originator Purchase Agreement have been satisfied.
(o) A reliance letter from Morgan, Lewis & Bockius,
counsel for the Originators and Interco, stating that the Agent
and the Investors may rely on the opinion delivered to the Seller
pursuant to Section 3.01A(g) of the Originator Purchase Agreement
as if such opinion had been addressed to them.
(p) Evidence of payment of all fees and expenses,
including the fees and expenses of counsel to the Agent, incurred
in connection with the preparation, execution and delivery of
this Agreement and any other documents executed in connection
herewith and the transactions contemplated hereby.
(q) A certificate of the Secretary or Assistant
Secretary of Lane, Broyhill and Thomasville certifying that
attached thereto is a true and complete copy of the Bank Credit
Agreement (as amended and restated) and the Security Agreement
(as amended and restated) referred to therein.
(r) The intercreditor agreement (as amended and
restated) among Bankers Trust Company, as agent, the Seller and
the Agent, duly executed by the parties thereto.
(s) Written confirmation from each of the Relevant
Rating Agencies that the rating of the Issuer's commercial paper
notes will not be downgraded or withdrawn solely as a result of
entering into the Agreement.
(t) Two completed Seller Reports, prepared on a pro
forma basis for the period ended November 30, 1995, one including
and the other excluding Receivables originated by Thomasville.
(u) Evidence of the deposit, into the Special CCA, of
an amount equal to the Thomasville Availability.
3. Conditions Precedent to All Purchases and Reinvest-
ments. Each purchase (including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent
that
(a) the Servicer shall have delivered to the Agent on
or prior to such purchase or reinvestment, in form and substance
satisfactory to the Agent, a completed Seller Report containing
information covering the most recently ended reporting period for
which information is required pursuant to the Servicer Agreement
and, if requested by the Agent, a listing by Obligor of all Pool
Receivables and such additional information as may reasonably be
requested by the Agent,
(b) on the date of such purchase or reinvestment the
following statements shall be true (and acceptance of the
proceeds of such purchase or reinvestment shall be deemed a
representation and warranty by the Seller that such statements
are then true):
(i) On the Effective Date, the representations
and warranties contained in Exhibit III are correct on and
as of such date as though made on and as of such date, and
on the date of each subsequent purchase and each
reinvestment, the representations contained in paragraphs
(g), (h), (j), (k) and (o) of Exhibit III are correct on and
as of the date of such purchase or reinvestment as though
made on and as of such date,
(ii) No event has occurred and is continuing, or
would result from such purchase or reinvestment, that
constitutes an Event of Termination or that would constitute
an Event of Termination but for the requirement that notice
be given or time elapse or both (unless such event or Event
of Termination shall have been specifically waived in
writing by the Agent; provided that the parties hereto
acknowledge that the Events of Termination set forth in
paragraphs (g) and (h) of Exhibit V cannot be waived by the
Agent for this purpose),
(iii) No event described in paragraph (g) of
Exhibit V has occurred and is continuing (without giving
effect to the 30-day period provided therein for dismissal
or stay),
(iv) All of the long-term public senior debt
securities of Interco shall have the Required Rating,
(v) The Agent shall not have given the Seller at
least one Business Day's notice that the Investors have
terminated the reinvestment of Collections in Receivable
Interests,
(c) the Agent shall have received, on or prior to the
date of any such purchase or reinvestment during the period from
August 10 to September 10 of each year prior to the occurrence of
the Facility Termination Date, evidence of the deposit, into the
July CCA, of an amount equal to the July Availability, and
(d) the Agent shall have received such other
approvals, opinions or documents as it may reasonably request.
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the state
of Delaware, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business
requires it to be so qualified.
(b) The execution, delivery and performance by the
Seller of the Agreement and the other documents to be delivered
by it thereunder, including the Seller's use of the proceeds of
purchases and reinvestments, (i) are within the Seller's
corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene (1) the Seller's
charter or by-laws, (2) any law, rule or regulation applicable to
the Seller, (3) any contractual restriction binding on or
affecting the Seller or its property or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting the
Seller or its property, and (iv) do not result in or require the
creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties, other
than in favor of the Agent. The Agreement has been duly executed
and delivered by the Seller.
(c) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Seller of the Agreement or any other document
to be delivered thereunder; or to the extent authorization,
approval or other action by, or notice to or filing with, any
governmental authority or regulatory body is required, it has
been obtained, notice has been given or the appropriate filing
has been made.
(d) The Agreement constitutes the legal, valid and
binding obligation of the Seller enforceable against the Seller
in accordance with its terms.
(e) The consolidated and consolidating balance sheets
of Interco and its Subsidiaries as at December 31, 1994 and
September 30, 1995, and the related consolidated and
consolidating statements of income and cash flow and changes in
shareholders' equity of Interco and its Subsidiaries for the
fiscal year and nine-month period ended on such dates, copies of
which have been furnished to the Agent, fairly present the
financial condition of Interco and its Subsidiaries as at such
dates and the results of the operations of Interco and its
Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles
consistently applied, and since September 30, 1995 there has been
no material adverse change in the business, operations, property
or financial or other condition of Interco. The pro forma
balance sheet of the Seller as at November 30, 1995, giving
effect to the purchase to be made on the Effective Date of a
Receivable Interest under the Agreement, a copy of which has been
furnished to the Agent, fairly presents the financial condition
of the Seller as at such date, in accordance with generally
accepted accounting principles, and since November 30, 1995 there
has been no material adverse change in the business, operations,
property or financial or other condition of the Seller.
(f) There is no pending or threatened action or
proceeding affecting the Seller or Interco or any of its
Subsidiaries before any court, governmental agency or arbitrator
which may materially adversely affect the financial condition or
operations of the Seller, Interco or any Originator or the
ability of the Seller to perform its obligations under the
Agreement, or which purports to affect the legality, validity or
enforceability of the Agreement.
(g) No proceeds of any purchase or reinvestment will
be used to acquire any equity security of a class which is
registered pursuant to Section 12 of the Securities Exchange Act
of 1934.
(h) The Seller is the legal and beneficial owner of
the Pool Receivables and Related Security free and clear of any
Adverse Claim, except for a subordinated security interest
created under the Subordinated Loan Agreement. Upon each
purchase of or reinvestment in a Receivable Interest, the
Investors shall acquire a valid and perfected first priority
undivided percentage ownership interest to the extent of the
pertinent Receivable Interest in each Pool Receivable then
existing or thereafter arising and in the Related Security and
Collections with respect thereto. No effective financing
statement or other instrument similar in effect covering any
Contract or any Pool Receivable or the Related Security or
Collections with respect thereto is on file in any recording
office, except those filed in favor of the Agent relating to the
Agreement, the Alternate Receivable Purchase Agreement and the
Subordinated Loan Agreement and those filed in favor of the
Seller pursuant to the Originator Purchase Agreement.
(i) Each Seller Report (if prepared by the Seller or
one of its Affiliates, or to the extent that information
contained therein is supplied by the Seller or an Affiliate),
information, exhibit, financial statement, document, book, record
or report furnished or to be furnished at any time by or on
behalf of the Seller to the Agent or the Investors in connection
with the Agreement is or will be accurate in all material
respects as of its date or (except as otherwise disclosed to the
Agent or the Investors, as the case may be, at such time) as of
the date so furnished, and no such document contains or will
contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances
under which they were made, not misleading.
(j) The principal place of business and chief
executive office of the Seller and the office where the Seller
keeps its records concerning the Pool Receivables are located at
the address or addresses referred to in paragraph (b) of Exhibit
IV.
(k) The names and addresses of all the Lock-Box Banks,
together with the account numbers of the Lock-Box Accounts of the
Seller at such Lock-Box Banks, are specified in Schedule I hereto
(or at such other Lock-Box Banks and/or with such other Lock-Box
Accounts as have been notified to the Agent in accordance with
the Agreement).
(l) The Seller was incorporated on November 4, 1994,
and the Seller did not engage in any business activities prior to
November 15, 1994. The Seller has no Subsidiaries.
(m) Without limiting the generality of paragraph (f)
above, (i) there are no pending claims or litigation and (ii)
neither the Seller nor any of the Originators has received or
given any written communication from or to any governmental
authority or any other Person, in each case concerning the
possible presence of any asbestos or hazardous wastes including,
without limitation, toxic or hazardous substances, wastes or
contaminants and discharges of sewage or effluents, for which the
Seller or any Originator may be responsible under any applicable
federal, state or local law, rule, regulation or order, which in
the case of either clause (i) or (ii), may materially adversely
affect the financial condition or operations of the Seller or any
of the Originators or the ability of the Seller to perform its
obligations under the Agreement.
(n) The fair value of the property of the Seller is
greater than the total amount of liabilities, including
contingent liabilities, of the Seller, (ii) the present fair
salable value of the assets of the Seller is not less than the
amount that will be required to pay all probable liabilities of
the Seller on its debts as they become absolute and matured,
(iii) the Seller does not intend to, and does not believe that it
will, incur debts or liabilities beyond the Seller's abilities to
pay such debts and liabilities as they mature and (iv) the Seller
is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which the Seller's
property would constitute unreasonably small capital.
(o) With respect to each Pool Receivable, the Seller
(i) shall have received such Pool Receivable as a contribution to
the capital of the Seller by one of the Originators or (ii) shall
have purchased such Pool Receivable from one of the Originators
in exchange for payment (made by the Seller to such Originator in
accordance with the provisions of the Originator Purchase
Agreement) of cash in an amount which constitutes fair
consideration and reasonably equivalent value. Each such sale
referred to in clause (ii) of the preceding sentence shall not
have been made for or on account of an antecedent debt owed by an
Originator to the Seller and no such sale is or may be voidable
or subject to avoidance under any section of the Federal
Bankruptcy Code.
(p) On the Initial Purchase Date, and after giving
effect to the purchase on such date, the Tangible Net Worth of
the Seller was equal to at least 3% of the Aggregate Invested
Amount.
EXHIBIT IV
COVENANTS
Covenants of the Seller. Until the latest of the
Facility Termination Date, the date on which no Invested Amount
of or Yield on any Receivable Interest shall be outstanding or
the date all other amounts owed by the Seller hereunder to the
Investors or the Agent are paid in full:
(a) Compliance with Laws, Etc. The Seller will comply
in all material respects with all applicable laws, rules,
regulations and orders and preserve and maintain its corporate
existence, rights, franchises, qualifications, and privileges
except to the extent that the failure so to comply with such
laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and
privileges would not materially adversely affect the collecti-
bility of the Receivables Pool or the ability of the Seller to
perform its obligations under the Agreement.
(b) Offices, Records and Books of Account. The Seller
will keep its principal place of business and chief executive
office and the office where it keeps its records concerning the
Pool Receivables at the address of the Seller set forth under its
name on the signature page to the Agreement or, upon 30 days'
prior written notice to the Agent, at any other locations in
jurisdictions where all actions reasonably requested by the Agent
to protect and perfect the interest in the Pool Receivables have
been taken and completed. The Seller also will maintain and
implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing
Pool Receivables and related Contracts 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 Pool Receivables
(including, without limitation, records adequate to permit the
daily identification of each Pool Receivable and all Collections
of and adjustments to each existing Pool Receivable).
(c) Performance and Compliance with Contracts and
Credit and Collection Policy. The Seller will, at its expense,
timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under
the Contracts related to the Pool Receivables, and timely and
fully comply in all material respects with the Credit and
Collection Policy in regard to each Pool Receivable and the
related Contract.
(d) Sales, Liens, Etc. The Seller will not sell,
assign (by operation of law or otherwise) or otherwise dispose
of, or create or suffer to exist any Adverse Claim upon or with
respect to, any Pool Receivable, Related Security, related
Contract or Collections, or upon or with respect to any account
to which any Collections of any Pool Receivable are sent, or
assign any right to receive income in respect thereof, other than
in favor of the Agent (with respect to the Agreement, the
Alternate Receivables Purchase Agreement and the Subordinated
Loan Agreement).
(e) Extension or Amendment of Receivables. Except as
provided in the Servicer Agreement, the Seller will not extend
the maturity or adjust the Outstanding Balance or otherwise
modify the terms of any Pool Receivable, or amend, modify or
waive any term or condition of any Contract related thereto.
(f) Change in Business or Credit and Collection
Policy. The Seller will not make any change in the character of
its business or in the Credit and Collection Policy that would,
in either case, materially adversely affect the collectibility of
the Receivables Pool or the ability of the Seller to perform its
obligations under the Agreement without the prior written consent
of the Agent. The Seller shall not make any other change without
30 Business Days prior written notice to the Agent. The Agent
shall promptly forward to the Relevant Rating Agencies all
changes to the Credit and Collection Policy which it receives
from the Seller.
(g) Audits. The Seller will, and will obtain the
contractual agreement of each Originator to, from time to time
during regular business hours as may be reasonably requested by
the Agent, permit the Agent, or its agents or representatives, at
the Seller's expense, (i) to examine and make copies of and
abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession
or under the control of the Seller or any Originator relating to
Pool Receivables and the Related Security, including, without
limitation, the related Contracts, and (ii) to visit the offices
and properties of the Seller or any Originator for the purpose of
examining such materials described in clause (i) above, and to
discuss matters relating to Pool Receivables and the Related
Security or the Seller's performance hereunder or under the
Contracts with any of the officers or employees of the Seller or
any Originator having knowledge of such matters.
(h) Change in Payment Instructions to Obligors. The
Seller will not add or terminate any bank as a Lock-Box Bank from
those listed in Schedule I to the Agreement, or make any change
in its instructions to Obligors regarding payments to be made to
the Seller or payments to be made to any Lock-Box Bank, without
the prior written consent of the Agent and receipt by the Agent
of executed copies of Lock-Box Agreements with each new Lock-Box
Bank; provided, however, that within sixty (60) days following
the date hereof, the Agent shall have received copies of executed
Lock-Box Agreements, in form and substance satisfactory to the
Agent, relating to the Lock-Box Accounts of Thomasville which are
maintained at Mellon Bank, N.A. and Bank of America as of the
date hereof.
(i) Deposits to Lock-Box Accounts. The Seller will
deposit, or cause to be deposited, all Collections of Pool
Receivables into Lock-Box Accounts. The Seller will not deposit
or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other
than Collections of Pool Receivables.
(j) Marking of Records. At its expense, the Seller
will mark its financial statements and master data processing
records evidencing Pool Receivables and related Contracts with a
legend evidencing that Receivable Interests related to such Pool
Receivables and related Contracts have been sold in accordance
with the Agreement.
(k) Reporting Requirements. The Seller will provide
(or, in the case of clauses (xiv) and (xv) below, cause the
Servicer to provide) to the Agent (in multiple copies, if
requested by the Agent) the following:
(i) as soon as available and in any event within
45 days after the end of the first three quarters of each
fiscal year of the Seller, a balance sheet of the Seller and
a consolidated and consolidating balance sheet of Interco
and its Subsidiaries as of the end of such quarter and
statements of income and retained earnings of the Seller and
consolidated and consolidating statements of income and
retained earnings of Interco and its Subsidiaries for the
period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief
financial officer of the Seller and Interco, as the case may
be; provided, however, that the requirements of this clause
(i) as to financial statements of Interco and its
Subsidiaries may be satisfied by delivery of Interco's form
10-Q filed with the Securities and Exchange Commission;
(ii) as soon as available and in any event
within 90 days after the end of each fiscal year of the
Seller, a copy of the annual report for such year for the
Seller and Interco and its Subsidiaries, containing
financial statements for such year audited by Peat Marwick
or other independent public accountants acceptable to the
Agent; provided, however, that the requirements of this
clause (ii) as to financial statements of Interco and its
Subsidiaries may be satisfied by delivery of Interco's form
10-K filed with the Securities and Exchange Commission;
(iii) as soon as possible and in any event
within five days after the occurrence of each Event of
Termination or event which, with the giving of notice or
lapse of time, or both, would constitute an Event of
Termination, a statement of the chief financial officer of
the Seller setting forth details of such Event of
Termination or event and the action that the Seller has
taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing
thereof, copies of all reports that Interco sends to any of
its security holders, and copies of all reports and
registration statements that Interco or any of its
Subsidiaries files with the Securities and Exchange
Commission or any national securities exchange;
(v) promptly after the filing or receiving
thereof, copies of all reports and notices that Interco or
any Affiliate files under ERISA with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or that Interco or any Affiliate
receives from any of the foregoing or from any multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) to
which Interco or any Affiliate is or was, within the
preceding five years, a contributing employer, in each case
in respect of the assessment of withdrawal liability or an
event or condition which could, in the aggregate, result in
the imposition of liability on Interco and/or any such
Affiliate in excess of $1,000,000;
(vi) at least ten Business Days prior to any
change in the name of the Seller or any Originator, a notice
setting forth the new name and the effective date thereof;
(vii) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of the Seller or any Originator as the Agent may
from time to time reasonably request;
(viii) promptly (and in any event within ten
Business Days) after the Seller obtains knowledge thereof,
notice of any (a) litigation, investigation or proceeding
which may exist at any time between the Seller or any
Originator and any governmental authority which, in either
case, if not cured or if adversely determined, as the case
may be, would have a material adverse effect on the
business, operations, property or financial or other
condition of the Seller or such Originator; (b) litigation
or proceeding adversely affecting the Seller's ability to
perform its obligations under this Agreement or the Servicer
Agreement; (c) litigation or proceeding adversely affecting
the Seller or any Originator in which the amount involved is
$1,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought; or (d) any "Event of
Termination" under the Originator Purchase Agreement;
(ix) promptly after the occurrence thereof,
notice of a material adverse change in the business,
operations, property or financial or other condition of the
Seller or any Originator;
(x) as soon as possible and in any event within
one Business Day after the occurrence thereof, notice of any
period of ten consecutive Business Days occurring prior to
the "Facility Termination Date" under the Originator
Purchase Agreement during which no purchases of Receivables
by and no contributions of Receivables to the Seller are
made pursuant to the Originator Purchase Agreement;
(xi) promptly (and in any event within ten
Business Days) after the Seller's receipt thereof, a copy of
the quarterly and annual financial statements of Haverty
Furniture Companies, Inc.;
(xii) promptly, and in any event within three
Business Days after an executive officer of the Seller
obtains knowledge thereof, notice of the occurrence of any
event which constitutes a Daily Settlement Trigger;
(xiii) at the time of the delivery of the
financial statements provided for in clauses (i) and (ii) of
this paragraph, a certificate of the chief financial officer
of the Seller to the effect that, to the best of such
officer's knowledge, no Event of Termination or Daily
Settlement Trigger has occurred and is continuing or, if any
Event of Termination or Daily Settlement Trigger has
occurred and is continuing, specifying the nature and extent
thereof, which certificate shall set forth the calculations
required to establish compliance with the ratios and tests
set forth in clauses (a), (b), (c), (d) and (h) of the
definition of Daily Settlement Trigger;
(xiv) so long as monies shall be on deposit in
the Special CCA, on the date on which each Seller Report is
due, a second Seller Report prepared without including any
Receivables originated by Thomasville; and
(xv) on the date on which the Seller Report for
the fiscal month of July is due, and, so long as any monies
shall be on deposit in the July CCA, on each date thereafter
on which each Seller Report is due, Seller Reports prepared
both including and not including Eligible July Receivables
as Eligible Receivables.
(l) Daily Settlement Trigger. From and after the fifth
day after the occurrence of a Daily Settlement Trigger, and so
long as any Daily Settlement Trigger is continuing, the Seller
shall (a) cause the Servicer to submit daily reports in form and
substance satisfactory to the Agent listing the aggregate
Outstanding Balance of all Eligible Receivables generated by each
Originator on the preceding Business Day, (b) use its best
efforts to cause each Lock-Box Bank to submit daily reports to
the Agent listing the aggregate amount of Collections received in
the Lock-Box Account(s) at such Lock-Box Bank on the preceding
Business Day, and (c) cause all Collections (and only
Collections) to be deposited daily, from the Lock-Box Accounts or
other locations in which Collections are received, into an
account (the "Concentration Account") maintained in a bank
acceptable to the Agent in the name of both the Seller and the
Agent. Without in any way affecting the provisions of Section
1.04 of the Agreement relating to the disbursement of funds to
the Agent or the Investors, no funds in the Concentration Account
shall be distributed to or for the benefit of the Seller until
the Agent notifies the bank in which the Concentration Account is
located to release funds therein to the Seller; provided that the
Agent shall notify such bank to release funds to the Seller
representing Collections received on any Business Day so long as
the Agent has received all daily reports as required by clauses
(a) and (b) above through the third Business Day preceding such
release date and the Agent is satisfied that the Net Receivables
Pool Balance based on such reports is sufficient for the Seller
to meet its obligations under the Agreement. The funds in the
Concentration Account shall be invested in a manner acceptable to
the Agent. If all events constituting a Daily Statement Trigger
shall have been cured or shall no longer be continuing, and no
Event of Termination shall then exist, the Seller and Servicer
may resume processing Collections and delivering reports as they
did immediately prior to the occurrence of a Daily Settlement
Trigger.
(m) Corporate Separateness.
(1) The Seller shall at all times maintain at least two
independent directors each of whom (x) is not currently and
has not been during the five years preceding the date of the
Agreement an officer, director or employee of an Affiliate
of the Seller or any Other Corporation, (y) is not a current
or former officer or employee of the Seller and (z) is not a
stockholder of any Other Corporation or any of their
respective Affiliates.
(2) The Seller shall not direct or participate in the
management of any of the Other Corporations' operations.
(3) The Seller shall conduct its business from an
office separate from that of the Other Corporations (but
which may be located in the same facility as one or more of
the Other Corporations). The Seller shall have stationery
and other business forms and a mailing address and a
telephone number separate from that of the Other
Corporations.
(4) The Seller shall at all times be adequately
capitalized in light of its contemplated business.
(5) The Seller shall at all times provide for its own
operating expenses and liabilities from its own funds.
(6) The Seller shall maintain its assets and
transactions separately from those of the Other Corporations
and reflect such assets and transactions in financial
statements separate and distinct from those of the Other
Corporations and evidence such assets and transactions by
appropriate entries in books and records separate and
distinct from those of the Other Corporations. The Seller
shall hold itself out to the public under the Seller's own
name as a legal entity separate and distinct from the Other
Corporations. The Seller shall not hold itself out as
having agreed to pay, or as being liable, primarily or
secondarily, for, any obligations of the Other Corporations.
(7) The Seller shall not maintain any joint account
with any Other Corporation or become liable as a guarantor
or otherwise with respect to any Indebtedness or contractual
obligation of any Other Corporation.
(8) The Seller shall not make any payment or
distribution of assets with respect to any obligation of any
Other Corporation or grant an Adverse Claim on any of its
assets to secure any obligation of any Other Corporation.
(9) The Seller shall not make loans, advances or
otherwise extend credit to any of the Other Corporations,
other than such loans, advances or extensions which are made
on arm's-length terms and conditions and in accordance with
the consolidated cash management system for Interco and its
Subsidiaries.
(10) The Seller shall hold regular duly noticed
meetings of its Board of Directors and make and retain
minutes of such meetings.
(11) The Seller shall have bills of sale (or similar
instruments of assignment) and, if appropriate, UCC-1
financing statements, with respect to all assets purchased
from any of the Other Corporations.
(12) The Seller shall not engage in any transaction
with any of the Other Corporations, except as permitted by
the Agreement and as contemplated by the Originator Purchase
Agreement.
(13) The Seller shall comply with (and cause to be true
and correct) each of the facts and assumptions contained in
paragraphs (a) - (r) on pages [3-6] of the opinion of
Morgan, Lewis & Bockius delivered pursuant to
paragraphs 1(k) and 2(k) of Exhibit II to the Agreement.
(n) Originator Purchase Agreement; Interco Agreement.
The Seller will not amend, waive or modify any provision of the
Originator Purchase Agreement or the Interco Agreement or waive
the occurrence of any "Event of Termination" under the Originator
Purchase Agreement, without in each case the prior written
consent of the Agent. The Seller will perform all of its
obligations under the Originator Purchase Agreement in all
material respects and will enforce the Originator Purchase
Agreement and the Interco Agreement in accordance with their
respective terms in all material respects.
(o) Nature of Business. The Seller will not engage in
any business other than the purchase of Receivables, Related
Security and Collections from the Originators and the
transactions contemplated by the Agreement, the Alternate
Receivables Purchase Agreement and the Subordinated Loan
Agreement.
(p) Mergers, Etc. The Seller will not merge with or
into or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series
of transactions), all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or
partnership agreement with, any Person, other than as
contemplated by the Agreement and the Originator Purchase
Agreement.
(q) Distributions, Etc. The Seller will not declare
or make any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities on account of
any shares of any class of capital stock of the Seller, or return
any capital to its shareholders as such, or purchase, retire,
defease, redeem or otherwise acquire for value or make any
payment in respect of any shares of any class of capital stock of
the Seller or any warrants, rights or options to acquire any such
shares, now or hereafter outstanding; provided, however, that the
Seller may declare and pay cash dividends on its capital stock to
its shareholders so long as (i) no Event of Termination shall
then exist or would occur as a result thereof, (ii) after giving
effect to such dividends, the Tangible Net Worth of the Seller
shall be equal to at least 3% of the Aggregate Invested Amount,
(iii) such dividends are in compliance with all applicable law
including the Delaware General Corporation Law, and (iv) such
dividends have been approved by all necessary and appropriate
corporate action of the Seller.
(r) Indebtedness. The Seller will not incur any
Indebtedness, other than any Indebtedness incurred pursuant to
the Agreement, the Alternate Receivables Purchase Agreement or
the Subordinated Loan Agreement.
(s) Certificate of Incorporation. The Seller will not
amend or delete Articles Third, Ninth or Tenth of its certificate
of incorporation.
EXHIBIT V
EVENTS OF TERMINATION
Each of the following shall be an "Event of
Termination":
(a) A "Servicer Default" shall occur under the
Servicer Agreement; or
(b) The Seller or the Servicer shall fail to transfer
to the Agent when requested any rights, pursuant to the Agreement
or the Servicer Agreement, which the Seller or the Servicer then
has as Servicer, or the Seller shall fail to make any payment
required under Section 1.04; or
(c) Any representation or warranty made or deemed made
by the Seller or the Servicer (or any of their respective
officers) under or in connection with the Agreement, the Original
Agreement or the Servicer Agreement or any information or report
delivered by the Seller pursuant to the Agreement or the Original
Agreement or by the Servicer pursuant to the Servicer Agreement
shall prove to have been incorrect or untrue in any material
respect when made or deemed made or delivered and (if
correctable) shall remain incorrect or untrue for ten days after
the earlier of actual knowledge by the Seller or the Servicer of
such incorrectness or untruth or written notice to the Seller or
Servicer thereof; or
(d) The Seller shall fail to perform or observe (i)
any covenant contained in Exhibit IV, paragraph (a), (b) or (c)
and any such failure shall remain unremedied for twenty days
after the earlier of Seller's actual knowledge thereof or written
notice to the Seller thereof, or (ii) any other term, covenant or
agreement contained in the Agreement (other than as described in
paragraph (a) above or clause (i) of this paragraph (d)) or in
any other agreement delivered in connection herewith on its part
to be performed or observed and any such failure shall remain
unremedied for ten days after the earlier of Seller's actual
knowledge thereof or written notice thereof shall have been given
to the Seller by the Agent; or
(e) The Seller or Interco or any of its Subsidiaries
shall fail to pay any principal of or premium or interest on any
of its Indebtedness which is outstanding in a principal amount of
at least $10,000,000 in the aggregate when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), or any other event shall
occur or condition shall exist under any agreement or instrument
relating to any such Indebtedness, and such failure to pay, event
or condition shall continue after the applicable grace period, if
any, specified in such agreement or instrument, and as a result
thereof, the maturity of such Indebtedness is accelerated; or any
such Indebtedness shall be declared to be due and payable, or
required to be prepaid in full (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased,
or an offer to repay, redeem, purchase or defease such
Indebtedness in full shall be required to be made, in each case
prior to the final stated maturity thereof; or any such
Indebtedness shall fail to be paid at the final stated maturity
thereof; or
(f) Any purchase or any reinvestment pursuant to the
Agreement shall for any reason (other than pursuant to the terms
hereof) cease to create, or any Receivable Interest shall for any
reason cease to be, a valid and perfected first priority
undivided percentage ownership interest to the extent of the
pertinent Receivable Interest in each applicable Pool Receivable
and the Related Security and Collections with respect thereto;
provided, however, that no Event of Termination shall occur under
this paragraph (f) if (i) the aggregate Outstanding Balance of
the Pool Receivables in which the Investors cease to have a valid
and perfected first priority undivided percentage ownership
interest does not exceed $250,000 at any time and (ii) the Seller
makes any deemed Collection payment with respect thereto which is
required pursuant to Section 1.04(e)(ii) on or prior to the next
Settlement Date; or
(g) The Seller or any Originator shall make a general
assignment for the benefit of creditors; or any proceeding shall
be instituted by or against the Seller or any Originator seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of
a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of
any such proceeding instituted against the Seller or any
Originator (but not instituted by any of them), either such
proceeding shall remain undismissed or unstayed for a period of
30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its
property) shall occur; or the Seller or any Originator shall take
any corporate action to authorize any of the actions set forth
above in this paragraph (g); or
(h) The sum of the Receivable Interests plus the
"Receivable Interests" under the Alternate Receivables Purchase
Agreement shall for a period of two consecutive Business Days be
greater than 100%; or
(i) (i) A Reportable Event shall have occurred with
respect to a Pension Plan, (ii) the filing by Interco, any ERISA
Affiliate, or an administrator of any Plan of a notice of intent
to terminate such a Plan in a "distress termination" under the
provisions of Section 4041 of ERISA, or (iii) the receipt of
notice by Interco, any ERISA Affiliate, or an administrator of a
Plan that the Pension Benefit Guaranty Corporation has instituted
proceedings to terminate (or appoint a trustee to administer)
such a Pension Plan, and in each case in clauses (i) through
(iii) of this paragraph (i), such event or conditions, if any,
could subject Interco or any ERISA Affiliate to any taxes,
penalties or other liabilities which, in the opinion of the
Agent, could have a material adverse effect on the financial
condition of Interco or any ERISA Affiliate; or
(j) An "Event of Termination" or "Facility Termination
Date" shall occur under the Originator Purchase Agreement, or the
Originator Purchase Agreement shall cease to be in full force and
effect; or
(k) All of the outstanding capital stock of the Seller
shall cease to be owned, directly or indirectly, by Interco; or
(l) The Advances Outstanding under the Subordinated
Loan Agreement shall at any time for a period of two consecutive
Business Days be greater than the sum of (i) one-half of the Loss
Reserve plus (ii) one-half of the Dilution Reserve plus (iii)
one-half of the "Loss Reserve" under the Alternate Receivables
Purchase Agreement plus (iv) one-half of the "Dilution Reserve"
under the Alternate Receivables Purchase Agreement.