Exhibit 10.1
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RECEIVABLES SALE AGREEMENT
DATED AS OF JUNE 6, 2002
AMONG
CONSOLIDATED COATINGS CORPORATION, WEATHERPROOFING
TECHNOLOGIES, INC., DAP PRODUCTS INC., THE TESTOR CORPORATION,
ZINSSER CO., INC., TREMCO INCORPORATED, RUST-OLEUM CORPORATION,
THE EUCLID CHEMICAL COMPANY, AND REPUBLIC POWDERED METALS, INC.,
AS ORIGINATORS
AND
RPM FUNDING CORPORATION,
AS BUYER
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TABLE OF CONTENTS
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PAGE
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ARTICLE I. AMOUNTS AND TERMS.........................................................................2
Section 1.1 [Reserved].....................................................................2
Section 1.2 Sales of Receivables...........................................................2
Section 1.3 Payment for the Purchases......................................................3
Section 1.4 Purchase Price Credit Adjustments..............................................4
Section 1.5 Payments and Computations, Etc.................................................4
Section 1.6 Transfer of Records............................................................4
Section 1.7 Characterization...............................................................5
ARTICLE II. REPRESENTATIONS AND WARRANTIES...........................................................6
Section 2.1 Representations and Warranties of Originators..................................6
ARTICLE III. CONDITIONS OF PURCHASE.................................................................10
Section 3.1 Conditions Precedent to Initial Purchase......................................10
Section 3.2 Conditions Precedent to Subsequent Payments...................................10
Section 3.3 Reaffirmation of Representations and Warranties...............................10
ARTICLE IV. COVENANTS...............................................................................11
Section 4.1 Affirmative Covenants of Originators..........................................11
Section 4.2 Negative Covenants of Originators.............................................16
ARTICLE V. TERMINATION EVENTS.......................................................................18
Section 5.1 Termination Events............................................................18
Section 5.2 Remedies......................................................................19
ARTICLE VI. INDEMNIFICATION.........................................................................20
Section 6.1 Indemnities by Originators....................................................20
Section 6.2 Other Costs and Expenses......................................................22
ARTICLE VII. MISCELLANEOUS..........................................................................22
Section 7.1 Waivers and Amendments........................................................22
Section 7.2 Notices.......................................................................23
Section 7.3 Protection of Ownership Interests of Buyer....................................23
Section 7.4 Confidentiality...............................................................24
Section 7.5 Bankruptcy Petition...........................................................24
Section 7.6 CHOICE OF LAW.................................................................25
Section 7.7 CONSENT TO JURISDICTION.......................................................25
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Section 7.8 WAIVER OF JURY TRIAL..........................................................25
Section 7.9 Integration; Binding Effect; Survival of Terms................................26
Section 7.10 Counterparts; Severability; Section References................................26
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - States of Organization; Chief Executive Offices;
Locations of Records; Federal Employer Identification
Numbers; Organizational Identification Numbers; Other
Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - [Form of] Compliance Certificate
Exhibit V - Credit and Collection Policy
Exhibit VI - [Form of] Subordinated Note
Exhibit VII - [Form of] Monthly Report for Each Originator
Schedule A Preferred Shares
Schedule B List of Documents to Be Delivered to Buyer Prior to the
initial Purchase
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of June 6, 2002, is by and
among Consolidated Coatings Corporation, an Ohio corporation, Weatherproofing
Technologies, Inc., a Delaware corporation, DAP Products Inc., a Delaware
corporation, The Testor Corporation, an Ohio corporation, Zinsser Co., Inc., a
New Jersey corporation, Tremco Incorporated, an Ohio corporation, Rust-Oleum
Corporation, an Illinois corporation, The Euclid Chemical Company, an Ohio
corporation, and Republic Powdered Metals, Inc., an Ohio corporation (each of
the foregoing, an "ORIGINATOR" and collectively, the "ORIGINATORS"), and RPM
Funding Corporation, a Delaware corporation ("BUYER"). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in EXHIBIT I hereto (or, if not defined in Exhibit I
hereto, the meanings assigned to such terms in EXHIBIT I to the Purchase
Agreement hereinafter defined).
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter
will own, Receivables. Each of the Originators wishes to sell and assign to
Buyer, and Buyer wishes to purchase from such Originator, all of such
Originator's right, title and interest in and to its Receivables, together
with the Related Security and Collections with respect thereto.
Each of the Originators and Buyer intends the transactions
contemplated hereby to be true sales of the Receivables from such
Originator to Buyer, providing Buyer with the full benefits of ownership of
the Receivables originated by such Originator, and none of the Originators
or Buyer intends these transactions to be, or for any purpose to be
characterized as, loans from Buyer to any Originator.
Buyer will sell undivided interests in the Receivables and in the
associated Related Security and Collections pursuant to that certain
Receivables Purchase Agreement dated as of June 6, 2002 (as the same may
from time to time hereafter be amended, supplemented, restated or otherwise
modified, the "PURCHASE AGREEMENT") among Buyer, RPM, Inc., an Ohio
corporation ("RPM"), as initial Servicer, Jupiter Securitization
Corporation ("JUPITER"), Blue Ridge Asset Funding Corporation (together
with Jupiter, the "CONDUITS"), Wachovia Bank, National Association,
individually and as Blue Ridge Agent, and Bank One, NA (Main Office
Chicago), individually, as Jupiter Agent and as administrative agent (in
such last capacity, the "ADMINISTRATIVE AGENT").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE I.
AMOUNTS AND TERMS
Section 1.1 [RESERVED].
Section 1.2 SALES OF RECEIVABLES.
(a) In consideration for payment of the Purchase Price in accordance
with SECTION 1.3 and upon the terms and subject to the conditions set forth
herein, each Originator hereby sells, assigns, transfers, sets-over and
otherwise conveys to Buyer, without recourse (except to the extent
expressly provided herein), and Buyer hereby agrees to purchase from each
Originator, all of such Originator's right, title and interest in and to
all of such Originator's Receivables existing on the Initial Cutoff Date
and all Receivables originated by such Originator on each day from and
after the Initial Cutoff Date through and including such Originator's
Termination Date, together with all Related Security relating thereto and
all Collections thereof. In connection with the payment of the Purchase
Price for any Receivables purchased hereunder, Buyer may request that the
applicable Originator deliver, and such Originator shall deliver, such
approvals, opinions, information, reports or documents as Buyer may
reasonably request.
(b) It is the intention of the parties hereto that each Transfer of
Receivables made hereunder shall constitute a "sale of accounts" (as such
term is used in Article 9 of the UCC) or other absolute conveyance, which
Transfer is absolute and irrevocable and provides Buyer with the full
benefits of ownership of the Receivables. Except for the Purchase Price
Credits owed pursuant to SECTION 1.4, the Transfers of Receivables
hereunder are made without recourse to the Originators; PROVIDED, HOWEVER,
that (i) each Originator shall be liable to Buyer for all representations,
warranties and covenants made by such Originator pursuant to the terms of
the Transaction Documents to which such Originator is a party, and (ii)
such Transfers do not constitute and are not intended to result in an
assumption by Buyer or any assignee thereof of any obligation of the
applicable Originator or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any
other obligations of any Originator. In view of the intention of the
parties hereto that each Transfer of Receivables made hereunder shall
constitute a sale or other outright conveyance of such Receivables rather
than a loan secured thereby, each Originator agrees that it will, on or
prior to the date hereof and in accordance with SECTION 4.1(e)(ii), mark
its master data processing records relating to the Receivables with a
legend acceptable to Buyer and to the Administrative Agent (as Buyer's
collateral assignee), evidencing that Buyer has purchased such Receivables
as provided in this Agreement and agrees to note in its financial
statements that its Receivables have been sold to Buyer. Upon the request
of Buyer or the Administrative Agent (as Buyer's collateral assignee), each
Originator will execute and file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to perfect and maintain the
perfection of Buyer's ownership interest in the Receivables originated by
such Originator and the Related Security and Collections with
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respect thereto, or as Buyer or the Administrative Agent (as Buyer's
collateral assignee) may reasonably request.
Section 1.3 PAYMENT FOR THE PURCHASES.
(a) The Purchase Price for each Receivable shall be due and owing in
full by Buyer to the applicable Originator or its designee on the date each
such Receivable comes into existence (except that Buyer may, with respect
to any such Purchase Price, offset against such Purchase Price any amounts
owed by such Originator to Buyer hereunder and which have become due but
remain unpaid) and shall be paid to such Originator in the manner provided
in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after the
Initial Cutoff Date, on each Settlement Date, Buyer shall pay the Purchase
Price therefor to the applicable Originator in accordance with SECTION
1.3(d) and in the following manner:
FIRST, by delivery of immediately available funds, to the extent
of funds available to Buyer from its subsequent sale of an interest in the
Receivables to the Administrative Agent for the benefit of the Purchasers
under the Purchase Agreement, or other cash on hand; and/or
SECOND, by delivery of the proceeds of a Subordinated Loan in an
amount not to exceed the least of (A) the remaining unpaid portion of such
Purchase Price, and (B) the maximum Subordinated Loan that could be
borrowed without rendering Buyer's Net Worth less than the Required Capital
Amount. Such Originator is hereby authorized by Buyer to endorse on the
schedule attached to its Subordinated Note an appropriate notation
evidencing the date and amount of each advance thereunder, as well as the
date of each payment with respect thereto, provided that the failure to
make such notation shall not affect any obligation of Buyer thereunder
and/or
THIRD, by accepting such Receivables as a contribution to Buyer's
preferred equity capital associated with such Originator's Preferred Shares
identified on SCHEDULE A hereto; provided that no such capital contribution
shall be made from and after the date on which any Originator notifies
Buyer in writing that it has designated a date as such Originator's
Termination Date.
Subject to the limitations set forth in clause SECOND above, each Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to such Originator's Termination Date. The Subordinated Loans shall be
evidenced by, and shall be payable in accordance with the terms and provisions
of such Originator's Subordinated Note and shall be payable solely from funds
which Buyer is not required under the Purchase Agreement to set aside for the
benefit of, or otherwise pay over to, the Administrative Agent or the
Purchasers.
(c) From and after an Originator's Termination Date, each Originator
shall not be obligated to (but may, at its option) (i) sell its Receivables
to Buyer, or (ii)
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contribute Receivables to Buyer's preferred equity capital pursuant to
clause THIRD of SECTION 1.3(b) unless such Originator reasonably determines
that the Purchase Price therefor will be satisfied with funds available to
Buyer from sales of interests in the Receivables pursuant to the Purchase
Agreement, Collections, proceeds of Subordinated Loans, other cash on hand
or otherwise.
(d) Although the Purchase Price for each Receivable shall be due and
payable in full by Buyer to the applicable Originator on the date such
Receivable comes into existence, settlement of the Purchase Price between
Buyer and such Originator shall be effected on a monthly basis on
Settlement Dates with respect to all Receivables coming into existence
during the same Calculation Period and based on the information contained
in the Monthly Report delivered by the Servicer pursuant to Article VIII of
the Purchase Agreement for the Calculation Period then most recently ended.
Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the applicable Subordinated Note made
pursuant to SECTION 1.3(b) and any contribution of preferred equity capital
by an Originator to Buyer made pursuant to SECTION 1.3(b) shall be deemed
to have occurred and shall be effective as of the last Business Day of the
Calculation Period to which such settlement relates.
Section 1.4 PURCHASE PRICE CREDIT ADJUSTMENTS. If on any day, any
Originator is deemed to have received a Deemed Collection with respect to any
Receivable sold by it to Buyer hereunder, then, in such event, Buyer shall be
entitled to a credit (each, a "PURCHASE PRICE CREDIT") against the Purchase
Price otherwise payable to such Originator hereunder in an amount equal to such
Deemed Collection. If such Purchase Price Credit exceeds the original
Outstanding Balance of the Receivables originated by the applicable Originator
on such day, then the applicable Originator shall pay the remaining amount of
such Purchase Price Credit in cash within 10 Business Days thereafter; PROVIDED
that if the applicable Originator's Termination Date has not occurred, such
Originator shall be allowed to deduct the remaining amount of such Purchase
Price Credit from any indebtedness owed to it under its Subordinated Note to the
extent permitted thereunder.
Section 1.5 PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by Buyer hereunder shall be paid or deposited in accordance with the
terms hereof on the day when due in immediately available funds to the account
of the applicable Originator designated from time to time by such Originator or
as otherwise directed by such Originator. In the event that any payment owed by
any Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; PROVIDED, HOWEVER, that such
Default Fee shall not at any time exceed the maximum rate permitted by
applicable law.
Section 1.6 TRANSFER OF RECORDS.
(a) In connection with each Transfer of a Receivable by an Originator
hereunder, such Originator hereby sells, transfers, assigns and otherwise
conveys to
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Buyer all of such Originator's right and title to and interest in the
Records relating to such Receivable without the need for any further
documentation in connection with such Transfer. In connection with each
such Transfer, such Originator hereby grants to each of Buyer, the
Administrative Agent and the Servicer an irrevocable, non-exclusive license
to use, without royalty or payment of any kind, all software used by such
Originator to account for the Receivables originated or serviced by such
Originator, to the extent necessary to administer such Receivables, whether
such software is owned by such Originator or is owned by others and used by
such Originator under license agreements with respect thereto, provided
that should the consent of any licensor of such software be required for
the grant of the license described herein, to be effective, such Originator
hereby agrees that upon the request of Buyer (or the Administrative Agent,
as Buyer's collateral assignee), such Originator will use its reasonable
efforts to obtain the consent of such third-party licensor. The license
granted hereby shall be irrevocable until the indefeasible payment in full
of the Aggregate Unpaids, and shall terminate on the date this Agreement
terminates in accordance with its terms.
(b) Each Originator (i) shall take such action requested by Buyer
and/or the Administrative Agent (as Buyer's collateral assignee), from time
to time hereafter, that may be necessary or appropriate to ensure that
Buyer has an enforceable ownership interest in the Records relating to the
Receivables purchased from such Originator hereunder, and (ii) shall use
its reasonable efforts to ensure that Buyer, the Administrative Agent and
the Servicer each has an enforceable right (whether by license or
sublicense or otherwise) to use all of the computer software used to
account for such Receivables and/or to recreate such Records.
Section 1.7 CHARACTERIZATION.
(a) If, notwithstanding the intention of the parties expressed in
SECTION 1.2(b), any sale by any Originator to Buyer of Receivables
hereunder shall be characterized as a secured loan and not a sale, or such
sale shall for any reason be ineffective or unenforceable, then this
Agreement shall be deemed to constitute a security agreement under the UCC
and other applicable law. For this purpose and without being in derogation
of the parties' intention that each sale of Receivables hereunder shall
constitute a true sale thereof, each Originator hereby grants to Buyer a
valid and perfected security interest in all of such Originator's right,
title and interest in, to and under all Receivables now existing and
hereafter arising, and in all Collections and Related Security with respect
thereto (including, without limitation, each Lock-Box and Collection
Account), all other rights and payments relating to the Receivables and all
proceeds of the foregoing to secure the prompt and complete payment of a
loan deemed to have been made in an amount equal to the Purchase Price of
the Receivables originated by such Originator together with all other
obligations of such Originator hereunder, which security interest shall be
prior to all other Adverse Claims thereto. Buyer shall have, in addition to
the rights and remedies which they may have under this Agreement, all other
rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative, Each
Originator hereby
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authorizes Buyer (or the Administrative Agent, as Buyer's collateral
assignee), within the meaning of Section 9-509 of any applicable enactment
of the UCC, as secured party, to file, without the signature of the debtor,
the UCC financing statements contemplated hereby.
(b) Each Originator acknowledges that Buyer, pursuant to the Purchase
Agreement, shall collaterally assign to the Administrative Agent, for the
benefit of the Administrative Agent and the Purchasers thereunder, all of
its rights, remedies, powers and privileges under this Agreement and that
the Administrative Agent may further assign such rights, remedies, powers
and privileges to the extent permitted in the Purchase Agreement. Each
Originator agrees that the Administrative Agent, as the collateral assignee
of Buyer, shall, following the occurrence and during the continuance of an
Amortization Event, have the right to enforce this Agreement and to
exercise directly all of Buyer's rights and remedies under this Agreement
(including, without limitation, the right to give or withhold any consents
or approvals of Buyer to be given or withheld hereunder, and, in any case,
without regard to whether specific reference is made to Buyer's assigns or
collateral assignees in the provisions of this Agreement which set forth
such rights and remedies) and each Originator agrees to cooperate fully
with the Administrative Agent and the Purchasers in the exercise of such
rights and remedies. Each Originator further agrees to give to the
Administrative Agent copies of all notices it is required to give to Buyer
hereunder.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF ORIGINATORS. Each Originator
hereby represents and warrants to Buyer, as to such Originator and the
Receivables originated by it, that, as of the date of each Purchase:
(a) CORPORATE EXISTENCE AND POWER. Such Originator is a corporation
duly organized, validly existing and in good standing under the laws of the
state mentioned after its name in the preamble to this Agreement, and is duly
qualified to do business and is in good standing as a foreign corporation, and
has and holds all corporate power and all governmental licenses, authorizations,
consents and approvals required to carry on its business in each jurisdiction in
which its business is conducted except where the failure to so qualify or so
hold could not reasonably be expected to have a Material Adverse Effect.
(b) POWER AND AUTHORITY; DUE AUTHORIZATION, EXECUTION AND DELIVERY.
The execution and delivery by such Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and such Originator's use of the proceeds
of each Purchase made from it hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary corporate action on its
part. This Agreement and each other Transaction Document to which such
Originator is a party has been duly executed and delivered by such Originator.
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(c) NO CONFLICT; NO BULK SALE. The execution and delivery by such
Originator of this Agreement and each other Transaction Document to which it is
a party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws or any shareholder agreements, voting trusts, and similar arrangements
applicable to any of its authorized shares, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Originator or its Subsidiaries (except as
created hereunder) except, in any case, where such contravention or violation
could not reasonably be expected to have a Material Adverse Effect. No
transaction contemplated hereby with respect to such Originator requires
compliance with any bulk sales act or similar law.
(d) GOVERNMENTAL AUTHORIZATION. Other than the filing of the financing
statements required hereunder, 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 and delivery by such Originator of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) ACTIONS, SUITS. There are no actions, suits or proceedings
pending, or to the best of such Originator's knowledge, threatened, against or
affecting such Originator, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Originator is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) BINDING EFFECT. This Agreement and each other Transaction Document
to which such Originator is a party constitute the legal, valid and binding
obligations of such Originator enforceable against such Originator in accordance
with their respective terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) ACCURACY OF INFORMATION. All information heretofore furnished by a
Responsible Officer of such Originator to Buyer (or to the Administrative Agent,
as Buyer's collateral assignee) for purposes of or in connection with this
Agreement, any of the other Transaction Documents or any transaction
contemplated hereby or thereby is, and all such information hereafter furnished
by a Responsible Officer of such Originator to Buyer (or to the Administrative
Agent, as Buyer's collateral assignee) will be, true and accurate in every
material respect on the date such information is stated or certified and does
not and will not contain any material misstatement of fact or omit to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
(h) USE OF PROCEEDS. No proceeds of any Purchase from such Originator
hereunder will be used (i) for a purpose that violates, or would be inconsistent
with, any law, rule
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or regulation applicable to such Originator or (ii) to acquire any security in
any transaction which is subject to Section 12, 13 or 14 of the Securities
Exchange Act of 1934, as amended.
(i) GOOD TITLE. Immediately prior to each Purchase from such
Originator hereunder, such Originator (i) is the legal and beneficial owner of
the Receivables which are to be the subject of such Purchase and (ii) is the
legal and beneficial owner of the Related Security with respect thereto or
possesses a valid and perfected security interest therein, in each case, free
and clear of any Adverse Claim, except as created by the Transaction Documents.
(j) PERFECTION. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to transfer to Buyer (and
Buyer shall acquire from such Originator) (i) legal and equitable title to, with
the right to sell and encumber each Receivable originated by such Originator,
whether now existing or hereafter arising, together with the Collections with
respect thereto, and (ii) all of such Originator's right, title and interest in
the Related Security associated with each such Receivable, in each case, free
and clear of any Adverse Claim, except as created by the Transaction Documents.
There have been duly filed (or delivered to the Administrative Agent (as Buyer's
collateral assignee) in form suitable for filing) all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Buyer's ownership
interest in the Receivables originated by such Originator, the Related Security
and the Collections.
(k) PLACES OF BUSINESS AND LOCATIONS OF RECORDS. The state of
organization and chief executive office of such Originator and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit II
or such other locations of which Buyer has been notified in accordance with
SECTION 4.2(a) in jurisdictions where all action required by SECTION 4.2(a) has
been taken and completed. Such Originator's Federal Employer Identification
Number and organizational identification number are correctly set forth on
Exhibit II.
(l) COLLECTIONS. The conditions and requirements set forth in SECTION
4.1(i) have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of such Originator at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. Such Originator
has not granted any Person, other than Buyer (and, to the extent contemplated by
the Purchase Agreement, the Servicer and the Administrative Agent, as Buyer's
collateral assignee) dominion and control of any Lock-Box or Collection Account,
or the right to take dominion and control of any such Lock-Box or Collection
Account at a future time or upon the occurrence of a future event.
(m) MATERIAL ADVERSE EFFECT. Since May 31, 2001, no event has occurred
that would have a Material Adverse Effect.
(n) NAMES. In the past five (5) years, such Originator has not used
any corporate names, trade names or assumed names other than the name in which
it has executed this Agreement and as listed on Exhibit II.
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(o) OWNERSHIP OF ORIGINATORS. RPM owns, directly or indirectly, 100%
of the issued and outstanding shares of capital stock of such Originator, free
and clear of any Adverse Claim. Such capital stock is validly issued, fully paid
and nonassessable, and there are no options, warrants or other rights to acquire
securities of such Originator.
(p) NOT A HOLDING COMPANY OR AN INVESTMENT COMPANY. Such Originator is
not a "holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor statute. Such Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) COMPLIANCE WITH LAW. Such Originator has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable originated by such Originator, together with the
Contract related thereto, does not contravene any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy), and no part of
such Contract is in violation of any such law, rule or regulation, except where
such contravention or violation could not reasonably be expected to have a
Material Adverse Effect.
(r) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Such Originator has
complied in all material respects with its Credit and Collection Policy with
regard to each Receivable originated by it and the related Contract, and has not
made any material change to such Credit and Collection Policy, except such
material change as permitted by SECTION 4.2(c) and in compliance with the
notification requirements in SECTION 4.1(a)(vii).
(s) PAYMENTS TO SUCH ORIGINATOR. With respect to each Receivable
transferred hereunder by such Originator to Buyer, the Purchase Price received
by such Originator constitutes reasonably equivalent value in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by such Originator of any Receivable hereunder is or may be voidable
under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss. 101 et
seq.), as amended.
(t) ENFORCEABILITY OF CONTRACTS. Each Contract with respect to each
Receivable originated by such Originator is effective to create, and has
created, a legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(u) NATURE OF RECEIVABLES. Each Receivable originated by such
Originator is an "account" under and as defined in the UCC of all applicable
jurisdictions.
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(v) ACCOUNTING. The manner in which such Originator accounts for the
transactions contemplated by this Agreement does not jeopardize the true sale
analysis.
(w) PURPOSE. Such Originator has determined that, from a business
viewpoint, its sales of Receivables to Buyer and the other transactions
contemplated herein and in the Purchase Agreement are in the best interests of
such Originator.
(x) ELIGIBLE RECEIVABLES. Each Receivable originated by such
Originator that was included on any Monthly Report as an Eligible Receivable was
an Eligible Receivable on the date on which it was sold or contributed to Buyer
hereunder.
ARTICLE III.
CONDITIONS OF PURCHASE
Section 3.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial Purchase
from each Originator under this Agreement is subject to the conditions precedent
that (a) Buyer shall have received on or before the date of such Purchase those
documents listed on SCHEDULE B and (b) all of the conditions to the initial
purchase under the Purchase Agreement shall have been satisfied or waived in
accordance with the terms thereof.
Section 3.2 CONDITIONS PRECEDENT TO SUBSEQUENT PAYMENTS. Buyer's obligation
to pay each Originator for Receivables coming into existence after the Initial
Cutoff Date shall be subject to the further conditions precedent that: (a) the
Facility Termination Date shall not have occurred; (b) Buyer (or the
Administrative Agent, as Buyer's collateral assignee) shall have received such
other opinions or documents as it may reasonably request pursuant to SECTION 6.2
of the Purchase Agreement, and (c) on the date such Receivable came into
existence, the following statements shall be true (and acceptance of the
proceeds of any payment for such Receivable shall be deemed a representation and
warranty by such Originator that such statements are then true):
(i) the representations and warranties of such Originator set
forth in ARTICLE II are true and correct on and as of the date such
Receivable came into existence as though made on and as of such date;
and
(ii) no event has occurred and is continuing that will constitute
a Termination Event or a Potential Termination Event.
Section 3.3 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
Originator, by accepting the Purchase Price related to each Purchase of such
Originator's Receivables and Related Security, shall be deemed to have certified
that the representations and warranties of such Originator contained in ARTICLE
II are true and correct as to such Originator on and as of the date of such
Purchase, with the same effect as though made on and as of such day, and that
each of the applicable conditions precedent set forth in this ARTICLE III has
been satisfied as of the date of such purchase.
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ARTICLE IV.
COVENANTS
Section 4.1 AFFIRMATIVE COVENANTS OF ORIGINATORS. Until the date on which
this Agreement terminates in accordance with its terms, each Originator hereby
covenants as set forth below:
(a) FINANCIAL REPORTING. Such Originator will maintain, for itself and
each of its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish to Buyer (or to the Administrative Agent, as
Buyer's collateral assignee):
(i) ANNUAL REPORTING. As soon as available and in any event
within 90 days after the end of each fiscal year of such Originator,
consolidated statements of income, shareholders' equity and cash flows of
RPM (or, once applicable, Parent) and its Subsidiaries for such year and
the related consolidated balance sheet as at the end of such year, setting
forth in each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by an opinion thereon of Ciulla,
Smith & Dale LLP or other independent certified public accountants of
recognized national standing, which opinion shall state that said
consolidated financial statements fairly present in all material respects
the consolidated financial condition and results of operations of such
Originator and its Subsidiaries as at the end of, and for, such fiscal
year; provided that delivery to the Buyer of RPM's (or, once applicable,
Parent's) filing with the SEC of SEC Form 10-K for each fiscal year shall
satisfy the requirements of this SECTION 4.1(A)(I) for each Originator.
(ii) QUARTERLY REPORTING. As soon as available and in any event
within 60 days after the end of each fiscal quarter of such Originator
other than the last fiscal quarter in each fiscal year, consolidated
statements of income, shareholders' equity and cash flows of RPM (or, once
applicable, Parent) and its Subsidiaries for such fiscal quarter and for
the portion of the fiscal year ended at the end of such fiscal quarter, and
the related consolidated balance sheet as at the end of such fiscal
quarter, accompanied, in each case, by a certificate of a Senior Officer,
which certificate shall state that said consolidated financial statements
fairly present in all material respects the consolidated financial
condition and results of operations of RPM (or, once applicable, Parent) in
accordance with GAAP (except for footnotes of the type required by the SEC
to be included in quarterly reports on Form 10-Q), consistently applied, as
at the end of, and for, such period (subject to normal year-end audit
adjustments); provided that delivery to the Buyer of RPM's (or, once
applicable, Parent's) filing with the SEC of SEC Form 10-Q for the first
three quarters of each fiscal year shall satisfy the requirements of this
SECTION 4.1(a)(ii) for each Originator.
(iii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of EXHIBIT
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IV signed by an Authorized Officer of each Originator and dated the date of
such annual financial statement or such quarterly financial statement, as
the case may be.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly upon the
furnishing thereof to the shareholders of RPM (or, once applicable,
Parent), copies of all financial statements, reports and proxy statements
so furnished.
(v) SEC FILINGS. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports (other than SEC Forms 10-K and 10-Q filed by RPM (or, once
applicable, Parent) and delivered in accordance with SECTIONS 4.1(a)(i) and
(ii) and other than SEC Forms 3, 4 or 5) which RPM or any of its
Subsidiaries files with the SEC.
(vi) COPIES OF NOTICES. Promptly upon its receipt of any notice,
request for consent, financial statements, certification, report or other
communication under or in connection with any Transaction Document from any
Person other than Buyer, any of the Agents or any of the Purchasers, copies
of the same.
(vii) CHANGE IN CREDIT AND COLLECTION POLICY. At least thirty
(30) days prior to the effectiveness of any material change in or material
amendment to such Originator's Credit and Collection Policy, a copy of its
Credit and Collection Policy then in effect and a notice (A) indicating
such change or amendment, and (B) if such proposed change or amendment
would be reasonably likely to adversely affect the collectibility of the
Receivables originated by such Originator or decrease the credit quality of
any newly created Receivables, requesting Buyer's consent thereto.
(viii) OTHER INFORMATION. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or
the condition or operations, financial or otherwise, of such Originator as
Buyer (or the Administrative Agent, as Buyer's collateral assignee) may
from time to time reasonably request in order to protect the interests of
Buyer (and the Administrative Agent, as Buyer's collateral assignee) under
or as contemplated by this Agreement.
(b) NOTICES. Such Originator will notify the Buyer (and the
Administrative Agent, as Buyer's collateral assignee) in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same
and, if applicable, the steps being taken with respect thereto:
(i) TERMINATION EVENTS OR POTENTIAL TERMINATION EVENTS. The
occurrence of each Termination Event and each Potential Termination Event,
by a statement of an Authorized Officer of such Originator.
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(ii) JUDGMENT AND PROCEEDINGS. (1) The entry of any judgment or
decree against any Originator or any of its Subsidiaries if the aggregate
amount of all judgments and decrees then outstanding against the
Originators and their Subsidiaries exceeds $35,000,000 after deducting (a)
the amount with respect to which the applicable Originator or Subsidiary is
insured and with respect to which the insurer has acknowledged
responsibility, and (b) the amount for which the applicable Originator or
Subsidiary is otherwise indemnified if the terms of such indemnification
are satisfactory to Buyer (and the Administrative Agent, as Buyer's
collateral assignee), and (2) the institution of any litigation,
arbitration proceeding or governmental proceeding against any Originator
which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(iii) MATERIAL ADVERSE EFFECT. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) DEFAULTS UNDER OTHER AGREEMENTS. The occurrence of a default
or an event of default under any other financing arrangement involving
Indebtedness or a line of credit in excess of $5,000,000 pursuant to which
such Originator is a debtor or an obligor.
(v) DOWNGRADE OF RPM (OR, ONCE APPLICABLE, PARENT). Any downgrade
in the rating of any Indebtedness of RPM (or, once applicable, Parent) by
Standard and Poor's Ratings Group or by Moody's Investors Service, Inc.,
setting forth the Indebtedness affected and the nature of such change.
(c) COMPLIANCE WITH LAWS AND PRESERVATION OF CORPORATE EXISTENCE. Such
Originator will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Originator will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted, except where the failure to so qualify or remain in good standing
could not reasonably be expected to have a Material Adverse Effect and except
that any Originator may merge with and into another Originator.
(d) AUDITS. Such Originator will furnish to Buyer (and to the Agents,
as Buyer's collateral assignees) from time to time such information with respect
to it and the Receivables originated or serviced by it as Buyer (or any of the
Agents) may reasonably request. Such Originator will, from time to time during
regular business hours as requested by Buyer (or any of the Agents), upon
reasonable notice and at the sole cost of such Originator, permit Buyer and the
Agents or their respective agents or representatives: (i) to examine and make
copies of and abstracts from all Records in the possession or under the control
of such Originator relating to such Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of such Originator for the purpose of examining such
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materials described in clause (i) above, and to discuss matters relating to such
Originator's financial condition or such Receivables and the Related Security or
such Originator's performance under any of the Transaction Documents or such
Originator's performance under the Contracts and, in each case, with any of the
officers or employees of such Originator having knowledge of such matters (each
of the foregoing examinations and visits, a "REVIEW"); PROVIDED, HOWEVER, that,
except in connection with an Extension Request under and as defined in the
Purchase Agreement, so long as no Amortization Event or Potential Amortization
Event (each, as defined in the Purchase Agreement) has occurred, the Originators
shall only be responsible for the costs and expenses of one (1) Review in any
one calendar year.
(e) KEEPING AND MARKING OF RECORDS AND BOOKS.
(i) Such Originator will maintain and implement administrative
and operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables originated by it 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 such Receivables
(including, without limitation, records adequate to permit the
immediate identification of each such new Receivable and all
Collections of and adjustments to each such existing Receivable). Such
Originator will give Buyer (and the Agents, as Buyer's collateral
assignees) notice of any material change in the administrative and
operating procedures referred to in the previous sentence other than a
change in the type of software used by such Originator.
(ii) Such Originator will: (A) on or prior to the date hereof,
mark its master data processing records and other books and records
relating to the Receivables originated by it with a legend, acceptable
to Buyer (and to the Administrative Agent, as Buyer's collateral
assignee), describing Buyer's ownership interests in such Receivables
and further describing the Purchaser Interests of the Administrative
Agent (on behalf of the Purchasers) under the Purchase Agreement and
(B) upon the request of Buyer (or any of the Agents, as Buyer's
collateral assignees) following the occurrence of a Termination Event
or an Amortization Event (as defined in the Purchase Agreement: (x)
mark each Contract with a legend describing Buyer's ownership
interests in such Receivables and further describing the Purchaser
Interests of the Administrative Agent (on behalf of the Purchasers)
and (y) deliver to Buyer (or, following the occurrence and during the
continuance of an Amortization Event, to the Administrative Agent, as
Buyer's collateral assignee) all Contracts (including, without
limitation, all multiple originals of any such Contract that
constitutes an instrument, a certificated security or chattel paper
under the UCC) relating to such Receivables.
(f) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION POLICY. Such
Originator will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables originated
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or serviced by it, and (ii) comply in all material respects with its Credit and
Collection Policy in regard to each such Receivable and the related Contract.
(g) OWNERSHIP. Such Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, (i) legal and equitable title to
the Receivables originated by such Originator and the associated Collections and
(ii) all of such Originator's right, title and interest in the Related Security
associated with such Receivables, in each case, free and clear of any Adverse
Claims other than Adverse Claims in favor of Buyer (and the Administrative
Agent, as Buyer's collateral assignee) (including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Buyer's interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence the
interest of Buyer as Buyer (or the Administrative Agent, as Buyer's collateral
assignee) may reasonably request).
(h) PURCHASERS' RELIANCE. Such Originator acknowledges that the
Administrative Agent and the Purchasers are entering into the transactions
contemplated by the Purchase Agreement in reliance upon Buyer's identity as a
legal entity that is separate from such Originator and any Affiliates thereof.
Therefore, from and after the date of execution and delivery of this Agreement,
such Originator will take all reasonable steps including, without limitation,
all steps that Buyer (or the Administrative Agent, as Buyer's collateral
assignee) may from time to time reasonably request to maintain Buyer's identity
as a separate legal entity and to make it manifest to third parties that Buyer
is an entity with assets and liabilities distinct from those of such Originator
and any Affiliates thereof and not just a division of such Originator or any
such Affiliate. Without limiting the generality of the foregoing and in addition
to the other covenants set forth herein, such Originator (i) will not hold
itself out to third parties as liable for the debts of Buyer nor purport to own
the Receivables and other assets acquired by Buyer, (ii) will take all other
actions necessary on its part to ensure that Buyer is at all times in compliance
with the covenants set forth in SECTION 7.1(i) of the Purchase Agreement and
(iii) will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between such Originator and
Buyer on an arm's-length basis and in a manner consistent with the procedures
set forth in U.S. Treasury Regulations ss.ss.1.1502-33(d) and 1.1552-1.
(i) COLLECTIONS. Such Originator shall direct all Obligors to make
payments of such Originator's Receivables directly to a Lock Box or Collection
Account that has been transferred into the name of the Buyer (or the
Administrative Agent, as Buyer's collateral assignee) and is the subject of a
Collection Account Agreement at a Collection Bank. If, notwithstanding the
foregoing, any Obligor makes payment to such Originator, such Originator further
agrees to remit any Collections (including any security deposits applied to the
Outstanding Balance of any Receivable) that it receives on such Receivables
directly to a Collection Bank for deposit into a Collection Account within two
(2) Business Days after receipt thereof, and agrees that all such Collections
shall be deemed to be received in trust for Buyer (and the Administrative Agent,
as Buyer's collateral assignee); PROVIDED THAT, to the extent permitted pursuant
to SECTION 1.3, such Originator may retain such Collections as a portion of the
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Purchase Price then payable to or apply such Collections to the reduction of the
outstanding balance of its Subordinated Note.
(j) TAXES. Except to the extent that such Originator is included in
consolidated tax returns or reports filed by RPM (or, once applicable, Parent),
such Originator will file all tax returns and reports required by law to be
filed by it and will promptly pay all taxes and governmental charges at any time
owing, except any such taxes which are not yet delinquent or are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books. Such Originator will also pay when due any taxes payable in connection
with the Receivables originated by it, exclusive of taxes on or measured by
income or gross receipts of Buyer and its assigns.
(k) INSURANCE. Such Originator will maintain in effect, at such
Originator's expense, such casualty and liability insurance as such Originator
deems appropriate in its good faith business judgment. Such Originator will pay
the premiums therefor. The foregoing requirements shall not be construed to
negate, reduce or modify, and are in addition to, such Originator's obligations
hereunder.
(l) REPORTS. Such Originator shall prepare the following reports and
forward to the Servicer (i) on the 12th day of each month or if such date is not
a Business Day, the next Business Day (the "MONTHLY REPORTING Date"), and at
such times as the Servicer shall request, a Monthly Report and (ii) at such
times as the Servicer shall reasonably request, a listing by Obligor of all
Receivables originated by such Originator together with an aging of such
Receivables.
Section 4.2 NEGATIVE COVENANTS OF ORIGINATORS. Until the date on which this
Agreement terminates in accordance with its terms, each Originator hereby
covenants that:
(a) NAME CHANGE, OFFICES AND RECORDS. Such Originator will not (i)
change its name (within the meaning of Section 9-507(c) of any applicable
enactment of the UCC), identity, corporate structure or location of books and
records unless, at least fifteen (15) Business Days prior to the effective date
of any such name change, change in corporate structure or change in location of
books and records, such Originator notifies Buyer thereof and delivers to Buyer
(or to the Administrative Agent, as Buyer's collateral assignee) such financing
statements (Forms UCC-1 and UCC-3) executed by such Originator (if required
under applicable law) which Buyer (or the Administrative Agent, as Buyer's
collateral assignee) may reasonably request to reflect such name change,
location change or change in corporate structure, together with such other
documents and instruments that Buyer (or the Administrative Agent, as Buyer's
collateral assignee) may reasonably request in connection therewith and has
taken all other steps to ensure that Buyer continues to have an exclusive
perfected ownership or security interest in the Receivables originated by it,
the Related Security related thereto and any Collections thereon, or (ii) change
its jurisdiction of organization unless Buyer (and the Administrative Agent, as
Buyer's collateral assignee) shall have received from such Originator, prior to
such change, (A) those items described in clause (i) hereof, and (B) if Buyer
(or the Administrative Agent, as
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Buyer's collateral assignee) shall so request, an opinion of counsel, in form
and substance reasonably satisfactory to such Person, as to such organization
and such Originator's valid existence and good standing and the perfection and
priority of Buyer's ownership or security interest in the Receivables originated
by such Originator and the Related Security and the Collections related thereto.
(b) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Such Originator will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer (and the Administrative Agent, as Buyer's
collateral assignee) shall have received, at least ten (10) days before the
proposed effective date therefor, (i) written notice of such addition,
termination or change and (ii) with respect to the addition of a Collection Bank
or a Collection Account or Lock-Box, an executed Collection Account Agreement
with respect to the new Collection Account or Lock-Box; provided, however, that
such Originator may make changes in instructions to Obligors regarding payments
if such new instructions require such Obligor to make payments to another
existing Collection Account.
(c) MODIFICATIONS TO CONTRACTS AND CREDIT AND COLLECTION POLICY. Such
Originator will not make any change to its Credit and Collection Policy that
could adversely affect the collectibility of the Receivables originated or
serviced by such Originator or decrease the credit quality of any such newly
created Receivables. Except as otherwise permitted in its capacity as a
permitted sub-Servicer pursuant to Article VIII of the Purchase Agreement, such
Originator will not extend, amend or otherwise modify the terms of any
Receivable originated or serviced by it or any Contract related thereto in any
material respect other than in accordance with its Credit and Collection Policy.
(d) SALES, LIENS. Except pursuant to the Transaction Documents, such
Originator will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, or create or suffer to exist
any Adverse Claim upon (including, without limitation, the filing of any
financing statement) or with respect to, any Receivable originated by it or the
associated Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer provided
for herein), and such Originator will defend the right, title and interest of
Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under such Originator. Such Originator shall
not create or suffer to exist any mortgage, pledge, security interest,
encumbrance, lien, charge or other similar arrangement on any of its inventory.
(e) ACCOUNTING FOR PURCHASE. Such Originator will not, and will not
permit any Affiliate to, account for the transactions contemplated hereby in any
manner other than as a sale by such Originator to Buyer of Receivables
originated by such Originator and the associated Collections and Related
Security.
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ARTICLE V.
TERMINATION EVENTS
Section 5.1 TERMINATION EVENTS. The occurrence of any one or more of the
following events shall constitute a Termination Event with respect to an
Originator:
(a) Such Originator shall fail to make any payment or deposit required
hereunder on or within one (1) Business Day after the date on which the
same is required to be made.
(b) Such Originator or Performance Guarantor shall fail to perform or
observe any covenant contained in SECTION 4.1(l) or any provision of
SECTION 4.2 other than SECTION 4.2(c).
(c) (i) Such Originator or Performance Guarantor shall fail to perform
or observe any other covenant, agreement or other obligation hereunder
(other than as referred to in another paragraph of this SECTION 5.1) or any
other Transaction Document to which it is a party and such failure shall
continue for three (3) consecutive Business Days following the earlier to
occur of (i) notice from Buyer (or any Agent, as its collateral assignee)
of such non-performance or non-observance, or (ii) the date on which a
Responsible Officer of such Originator (or Performance Guarantor, as the
case may be) otherwise becomes aware of such non-performance or
non-observance.
(d) Any representation, warranty, certification or statement made by
such Originator in this Agreement, any other Transaction Document or in any
other document required to be delivered pursuant hereto or thereto shall
prove to have been incorrect when made or deemed made in any material
respect and is not cured within five (5) Business Days following the
earlier to occur of (i) notice from Buyer (or any Agent, as its collateral
assignee) of such inaccuracy, or (ii) the date on which a Responsible
Officer of such Originator (or Performance Guarantor, as the case may be)
otherwise becomes aware of such inaccuracy, PROVIDED THAT the materiality
threshold in this subsection shall not be applicable with respect to any
representation or warranty which itself contains a materiality threshold
although the five (5) Business Day cure period shall continue to apply.
(e) Any Originator shall default, or the Performance Guarantor or any
of its Subsidiaries (other than an Originator) shall default, in the
payment when due of any principal or of or interest on any Material
Indebtedness; or any event or condition shall occur which results in the
acceleration of the maturity of any such Material Indebtedness.
(f) (i) Such Originator, Performance Guarantor or any of their
respective Subsidiaries shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors;
or (ii) any proceeding shall be instituted by or against such Originator,
Performance Guarantor or any of their respective Subsidiaries seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization,
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arrangement, adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property or (iii) such Originator, Performance
Guarantor or any of their respective Subsidiaries shall take any corporate
action to authorize any of the actions set forth in the foregoing clauses
(i) or (ii) of this subsection (f).
(g) A Change of Control shall occur with respect to such Originator or
Performance Guarantor.
(h) One or more final judgments for the payment of money in an amount
in excess of $35,000,000, individually or in the aggregate, shall be
entered against such Originator or Performance Guarantor on claims not
covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect
for thirty (30) consecutive days without a stay of execution.
Section 5.2 REMEDIES. Upon the occurrence and during the continuation of a
Termination Event, Buyer may take any of the following actions: (i) declare the
applicable Originator's Termination Date to have occurred, whereupon such
Originator's Termination Date shall forthwith occur, without demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Originators; PROVIDED, HOWEVER, that upon the occurrence of a Termination Event
described in SECTION 5.1(f), or of an actual or deemed entry of an order for
relief with respect to Performance Guarantor or any Originator under the Federal
Bankruptcy Code, such Originator's Termination Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Originator and (ii) to the fullest extent permitted by
applicable law, declare that the Default Fee shall accrue with respect to any
amounts then due and owing by each Originator to Buyer. The aforementioned
rights and remedies shall be without limitation and shall be in addition to all
other rights and remedies of Buyer (or the Administrative Agent, as Buyer's
collateral assignee) otherwise available under any other provision of this
Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including, without limitation, all rights and remedies
provided under the UCC, all of which rights shall be cumulative.
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ARTICLE VI.
INDEMNIFICATION
Section 6.1 INDEMNITIES BY ORIGINATORS. Without limiting any other rights
that Buyer may have hereunder or under applicable law, each Originator hereby
agrees to indemnify (and pay upon demand to) Buyer and its assigns, officers,
directors, agents and employees (each, an "INDEMNIFIED PARTY") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of Buyer or any such assign) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables originated by such Originator, excluding, however,
in all of the foregoing cases:
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the United States, the Indemnified Party's
jurisdiction of organization (or, in the case of an individual, primary
residence) or any other jurisdiction in which such Indemnified Party has
established a taxable nexus other than in connection with the transactions
contemplated hereby and by the Purchase Agreement on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the Intended Characterization;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of such Originator or limit the recourse of Buyer to such Originator
for amounts otherwise specifically provided to be paid by such Originator under
the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject to the exclusions in clauses (a), (b) and (c)
above, each Originator shall indemnify Buyer for Indemnified Amounts (including,
without limitation, losses in respect of uncollectible Receivables, regardless
of whether reimbursement therefor would constitute recourse to such Originator)
relating to or resulting from:
(i) any representation or warranty made by such Originator (or
any of its officers) under or in connection with this Agreement, any
other Transaction Document to which such Originator is a party or any
other information or report required to be delivered by any such
Person pursuant hereto or thereto, which shall have been false or
incorrect when made or deemed made;
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(ii) the failure by such Originator to comply with any applicable
law, rule or regulation with respect to any Receivable originated by
it, or any Contract related thereto, or the nonconformity of any such
Receivable or Contract with any such applicable law, rule or
regulation or any failure of any Originator to keep or perform any of
its obligations, express or implied, with respect to any such
Contract;
(iii) any failure of such Originator to perform its duties,
covenants or other obligations in accordance with the provisions of
this Agreement or any other Transaction Document to which it is a
party;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with goods that
are the subject of any Contract or any Receivable originated by such
Originator;
(v) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable originated by such Originator (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 goods or services related to such
Receivable or the furnishing or failure to furnish such goods or
services;
(vi) the commingling of Collections of such Receivables at any
time with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document to which
such Originator is a party, the transactions contemplated hereby, the
use by such Originator of the proceeds of any purchase from it
hereunder or any other investigation, litigation or proceeding
relating to such Originator in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any such Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(ix) (A) failure of such Originator generally to pay its debts as
such debts become due or admission by such Originator in writing of
its inability to pay its debts generally or any making by such
Originator of a general assignment for the benefit of creditors; or
(B) the institution of any proceeding by or against such Originator
seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order
21
for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property, or (C) the
taking by such Originator of any corporate action to authorize any of
the actions set forth in clauses (A) or (B) above in this clause (ix);
(x) any failure to vest and maintain vested in Buyer, or to
transfer to Buyer, legal and equitable title to, and ownership of, an
exclusive perfected ownership interest in the Receivables originated
by such Originator and the associated Related Security and
Collections, free and clear of any Adverse Claim (except as created by
the Transaction Documents);
(xi) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any such Receivable, the Related Security and Collections with respect
thereto, and the proceeds of any thereof, whether at the time of sale
to Buyer or at any subsequent time; and
(xii) any action or omission by such Originator which reduces or
impairs the rights of Buyer with respect to any Receivable or the
value of any such Receivable.
Section 6.2 OTHER COSTS AND EXPENSES. In addition to the obligations of
each Originator under SECTION 6.1, each Originator agrees to pay on demand:
(a) all reasonable costs and expenses, including attorneys' fees, in
connection with the enforcement against such Originator of this Agreement
and the other Transaction Documents executed by such Originator; and
(b) all stamp duties and other similar filing or recording taxes and
fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement or the other Transaction
Documents executed by such Originator, and agrees to indemnify Indemnified
Parties against any liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 WAIVERS AND AMENDMENTS.
(a) No failure or delay on the part of Buyer (or, following the
occurrence and during the continuance of an Amortization Event, the
Administrative Agent, as Buyer's collateral assignee) in exercising any
power, right or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right
or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided
shall be cumulative and
22
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the
specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by each Originator and Buyer
and, to the extent required under the Purchase Agreement, the
Administrative Agent and the Financial Institutions or the Required
Financial Institutions.
Section 7.2 NOTICES. All communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other parties hereto
at their respective addresses or telecopy numbers set forth on the signature
pages hereof or at such other address or telecopy number as such Person may
hereafter specify for the purpose of notice to each of the other parties hereto.
Each such notice or other communication shall be effective (a) if given by
telecopy, upon the receipt thereof, (b) if given by mail, three (3) Business
Days after the time such communication is deposited in the mail with first class
postage prepaid or (c) if given by any other means, when received at the address
specified in this SECTION 7.2.
Section 7.3 PROTECTION OF OWNERSHIP INTERESTS OF BUYER.
(a) Each Originator agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take
all actions, that may be necessary or desirable, or that Buyer (or the
Administrative Agent, as Buyer's collateral assignee) may request, to
perfect, protect or more fully evidence the interest of Buyer hereunder and
the Purchaser Interests, or to enable Buyer (or, following the occurrence
and during the continuance of an Amortization Event, the Administrative
Agent, as Buyer's collateral assignee) to exercise and enforce its (or
their) rights and remedies hereunder. At any time, Buyer may, at the
applicable Originator's sole cost and expense, direct such Originator to
notify the Obligors of Receivables originated or serviced by it of the
ownership interests of Buyer under this Agreement and may also direct that
payments of all amounts due or that become due under any or all Receivables
be made directly to Buyer or its designee.
(b) If any Originator fails to perform any of its obligations
hereunder, Buyer may (but shall not be required to) perform, or cause
performance of, such obligation, and Buyer's costs and expenses incurred in
connection therewith shall be payable by such Originator as provided in
SECTION 6.2. Each Originator irrevocably authorizes Buyer (and, from and
after the occurrence and during the continuance of an Amortization Event,
the Administrative Agent, as Buyer's collateral assignee) at any time and
from time to time in the sole discretion of Buyer (or the Administrative
Agent), and appoints Buyer (and, from and after the occurrence and during
the continuance of an Amortization Event, the Administrative Agent) as its
attorney(ies)-in-fact, to act on behalf of such Originator (i) to execute
on behalf of such Originator as debtor and to file financing statements
necessary or desirable in Buyer's sole discretion to perfect and to
maintain the perfection
23
and priority of the ownership interest of Buyer in the Receivables and (ii)
to file a carbon, photographic or other reproduction of this Agreement or
any financing statement with respect to the Receivables as a financing
statement in such offices as Buyer (or, as applicable, the Administrative
Agent) in its sole discretion deem necessary or desirable to perfect and to
maintain the perfection and priority of Buyer's interests in the
Receivables. This appointment is coupled with an interest and is
irrevocable.
Section 7.4 CONFIDENTIALITY.
(a) Each of the parties hereto shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of the Fee
Letters and the other confidential or proprietary information with respect
to the Originators, the Agents, the Purchasers and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except
that such party and its officers and employees may disclose such
information (i) to such party's external accountants and attorneys and (ii)
as required by any applicable law, regulation or order of any judicial or
administrative proceeding provided that each party shall use commercially
reasonable efforts to ensure, to the extent permitted given the
circumstances, that any such information which is so disclosed is kept
confidential.
(b) Anything herein to the contrary notwithstanding, each Originator
hereby consents to the disclosure of any nonpublic information with respect
to it (i) to each of the Agents and Purchasers, (ii) to any prospective or
actual assignee or participant of any of the Agents or Purchasers, and
(iii) to any rating agency, Commercial Paper dealer or provider of a
surety, guaranty or credit or liquidity enhancement to a Conduit or any
entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which either of the Co-Agents acts as the
administrative agent or administrator and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing,
provided each such Person is advised of the confidential nature of such
information and, in the case of a Person described in clause (ii) above,
agrees to be bound by the provisions of this SECTION 7.4. In addition, the
Agents and the Purchasers may disclose any such nonpublic information
pursuant to any law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or
not having the force or effect of law) although each of them shall use
commercially reasonable efforts to ensure, to the extent permitted given
the circumstances, that any such information which is so disclosed is kept
confidential.
Section 7.5 BANKRUPTCY PETITION.
(a) Each Originator and Buyer each hereby covenants and agrees that, prior
to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of each of the Conduits, it will not institute
against, or join any other Person in instituting against, such Conduit or any
such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
24
(b) Each Originator covenants and agrees that, prior to the date that is
one year and one day after the payment in full of all Aggregate Unpaids under
the Purchase Agreement, it will not institute against, or join any other Person
in instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
Section 7.6 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.
Section 7.7 CONSENT TO JURISDICTION. EACH ORIGINATOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH
ORIGINATOR PURSUANT TO THIS AGREEMENT, AND EACH ORIGINATOR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ANY
ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH ORIGINATOR
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
Section 7.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.
25
Section 7.9 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
the Originators, Buyer and their respective successors and permitted
assigns (including any trustee in bankruptcy). No Originator may assign any
of its rights and obligations hereunder or any interest herein without the
prior written consent of Buyer. Buyer may pledge and assign at any time its
rights and obligations hereunder and interests herein to any other Person
without the consent of any Originator, and hereby notifies the Originators
that it has pledged and collaterally assigned its right, title and interest
hereunder with respect to each Receivable in which the Purchasers have
acquired any interest under the Receivables Purchase Agreement to the
Administrative Agent, for the benefit of the Agents and the Purchasers
under the Purchase Agreement. This Agreement shall create and constitute
the continuing obligation of each of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies
with respect to (i) any breach of any representation and warranty made by
any Originator pursuant to Article II; (ii) the indemnification and payment
provisions of Article VI; and (iii) SECTION 7.5 shall be continuing and
shall survive any termination of this Agreement.
Section 7.10 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which, taken together, shall constitute one and the same
agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
[SIGNATURE PAGES FOLLOW]
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
CONSOLIDATED COATINGS CORPORATION,
DAP PRODUCTS INC., THE TESTOR
CORPORATION, ZINSSER CO., INC., TREMCO
INCORPORATED, RUST-OLEUM
CORPORATION, THE EUCLID CHEMICAL
COMPANY, AND REPUBLIC POWDERED
METALS, INC.
By: /s/ P. Kelly Tompkins
----------------------------------
Name: P. Kelly Tompkins
Title: Secretary
ADDRESS: c/o RPM, Inc.
2628 Pearl Road
P.O. Box 777
Medina, Ohio 44258
Attention: Treasurer
Phone: (330) 273-8837
Fax: (330) 225-6574
WEATHERPROOFING TECHNOLOGIES, INC.
By: /s/ Jeffrey L. Korach
----------------------------------
Name: Jeffrey L. Korach
Title: President
ADDRESS: c/o RPM, Inc.
2628 Pearl Road
P.O. Box 777
Medina, Ohio 44258
Attention: Treasurer
Phone: (330) 273-8837
Fax: (330) 225-6574
27
RPM FUNDING CORPORATION
By: /s/ P. Kelly Tompkins
----------------------------------
Name: P. Kelly Tompkins
Title: Vice President, Secretary
ADDRESS: RPM Funding Corporation
2628 Pearl Road, Suite 100
Medina, Ohio 44258
Attention: Treasurer
Phone: (330) 273-8837
Fax: (330) 225-6574
28
EXHIBIT I
DEFINITIONS
This is Exhibit I to the Agreement (as hereinafter defined). As used
in the Agreement and the Exhibits and Schedules thereto, capitalized terms have
the meanings set forth in this Exhibit I (such meanings to be equally applicable
to the singular and plural forms thereof). If a capitalized term is used in the
Agreement, or any Exhibit or Schedule thereto, and not otherwise defined therein
or in this Exhibit I, such term shall have the meaning assigned thereto in
Exhibit I to the Purchase Agreement.
"ADMINISTRATIVE AGENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"AGREEMENT" means the Receivables Sale Agreement, dated as of June 6,
2002, among the Originators and Buyer, as the same may be amended, restated or
otherwise modified.
"AMORTIZATION EVENT" has the meaning set forth in the Purchase
Agreement.
"AUTHORIZED OFFICER" means, with respect to each Originator, its
president, corporate controller, chief financial officer, treasurer or
secretary.
"BUYER" has the meaning set forth in the preamble to the Agreement.
"CALCULATION PERIOD" means each calendar month or portion thereof
which elapses during the term of the Agreement. The first Calculation Period for
each Originator shall commence on the date of the initial Purchase of
Receivables from such Originator hereunder and the final Calculation Period
shall terminate on its Termination Date.
"CHANGE OF CONTROL" means (a) the acquisition by any Person (other
than Parent), or two or more Persons acting in concert (other than Parent and
any Subsidiary of Parent), of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of RPM
(or, once applicable, Parent) or (b) RPM (or, once applicable, Parent) ceases to
own, directly or indirectly, 100% of the outstanding voting stock of any
Originator or Buyer.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
"CONDUITS" has the meaning set forth in the Preliminary Statements to
the Agreement.
29
"CREDIT AND COLLECTION POLICY" means each Originator's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in EXHIBIT V, as modified from time to time in
accordance with the Agreement.
"DEEMED COLLECTIONS" means the aggregate of all amounts an Originator
shall have been deemed to have received as a Collection of a Receivable sold by
it. An Originator shall be deemed to have received a Collection (but only to the
extent of the reduction or cancellation identified below) of a Receivable sold
by it if at any time (i) the Outstanding Balance of any such Receivable is
either (x) reduced as a result of any defective or rejected goods, any discount
or any adjustment or otherwise by such Originator (other than cash Collections
on account of the Receivables) or (y) reduced or canceled as a result of a
setoff in respect of any claim by any Person (whether such claim arises out of
the same or a related transaction or an unrelated transaction) or (ii) any of
the representations or warranties in Article II were not true with respect to
such Receivable at the time of its sale hereunder (in which case, such
Originator shall be deemed to have received a Collection in an amount equal to
the Outstanding Balance of such Receivable).
"DEFAULT FEE" means a per annum rate of interest equal to the sum of
(i) the Base Rate, PLUS (ii) 2% per annum (computed for actual days elapsed on
the basis of a year consisting of 360 days).
"DISCOUNT FACTOR" means, with respect to any Receivable, a percentage
calculated to provide Buyer with a reasonable return on its investment in such
Receivable after taking account of (i) the time value of money based upon the
anticipated dates of collection of such Receivable and the cost to Buyer of
financing its investment in such Receivable during such period and (ii) the risk
of nonpayment by the related Obligor. Each Originator and Buyer may agree from
time to time to change the Discount Factor with respect to the Receivables
originated by such Originator based on changes in one or more of the items
affecting the calculation thereof, PROVIDED that any change to the Discount
Factor shall take effect as of the commencement of a Calculation Period, shall
apply only prospectively and shall not affect the Purchase Price payment in
respect of a Purchase which occurred during any Calculation Period ending prior
to the Calculation Period during which any Originator and Buyer agree to make
such change.
"FINANCE CHARGES" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
"INITIAL CUTOFF DATE" means the close of business on the date of this
Agreement.
"INTENDED CHARACTERIZATION" means, for income tax purposes, the
characterization of the acquisition by the Purchasers of Purchaser Interests
under the Purchase Agreement as a loan or loans by the Purchasers to the Seller
secured by the Receivables, the Related Security and the Collections.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or operations of any Originator, or of RPM (or, once
applicable, Parent) and its
30
Subsidiaries, taken as a whole, (ii) the ability of any Originator to perform
its obligations under the Agreement or any other Transaction Document, (iii) the
legality, validity or enforceability of the Agreement or any other Transaction
Document, (iv) Buyer's (or any of its assigns') interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or Collections with respect thereto, or (v) the collectibility of the
Receivables generally or of any material portion of the Receivables, in each
case, relating to Receivables sold by such Originator hereunder.
"MATERIAL INDEBTEDNESS" means (a) with respect to the Performance
Guarantor and its Subsidiaries (other than the Originators), Indebtedness in
excess of $20 million in aggregate principal amount and (b) with respect to any
Originator, Indebtedness in excess of $10 million in aggregate principal amount.
"MONTHLY REPORT" means a report, in substantially the form of EXHIBIT
VII hereto (appropriately completed), furnished by an Originator to the Servicer
pursuant to SECTION 4.1(l).
"NET WORTH" means as of the last Business Day of each Calculation
Period preceding any date of determination, the excess, if any, of (a) the
aggregate Outstanding Balance of the Receivables at such time, OVER (b) the sum
of (i) the Aggregate Capital outstanding at such time, PLUS (ii) the aggregate
outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"ORIGINAL BALANCE" means, with respect to any Receivable coming into
existence after the Initial Cutoff Date, the Outstanding Balance of such
Receivable on the date it was created.
"ORIGINATOR(S)" has the meaning set forth in the preamble to the
Agreement.
"PARENT" means any publicly-held corporation, limited liability
company or partnership that (a) is formed for the sole purpose of acquiring,
directly or indirectly (whether by distribution or otherwise), substantially all
of the outstanding voting stock of all classes of RPM, (b) is owned immediately
after the acquisition described in clause (a) of this definition by the same
shareholders as were shareholders of RPM immediately prior to the acquisition
described in clause (a) of this definition, and (c) hereafter owns, directly or
indirectly, all of the outstanding voting stock of all classes of RPM.
"PERFORMANCE GUARANTOR" means RPM (or any Parent that hereafter
unconditionally assumes in writing RPM's obligations under the Performance
Undertaking in accordance with the Purchase Agreement).
"PERFORMANCE UNDERTAKING" has the meaning provided in the Purchase
Agreement.
31
"POTENTIAL TERMINATION EVENT" means an event which, without remedial
action and with the passage of time or the giving of notice, or both, would
constitute a Termination Event.
"PREFERRED SHARES" means shares of Buyer's Serial Preferred Stock, as
defined in Buyer's Certificate of Incorporation, as amended.
"PURCHASE" means each purchase pursuant to SECTION 1.2(a) of the
Agreement by Buyer from an Originator of Receivables originated by such
Originator and the Related Security and Collections related thereto, together
with all related rights in connection therewith.
"PURCHASE AGREEMENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"PURCHASE PRICE" means, with respect to any Receivable, the price to
be paid by Buyer to the applicable Originator for such Receivable and the
Related Security and Collections with respect thereto in accordance with SECTION
1.3 of the Agreement, which price shall equal (i) the product of (x) the
Original Balance of such Receivable, MULTIPLIED BY (y) one minus the Discount
Factor then in effect, minus (ii) any Purchase Price Credits to be credited
against the Purchase Price otherwise payable in accordance with SECTION 1.4 of
the Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in SECTION 1.4 of
the Agreement.
"RECEIVABLE" means all rights to payment owed to an Originator (at the
times it arises, and before giving effect to any transfer or conveyance under
the Agreement) or Buyer (after giving effect to the transfers under the
Agreement) constituting an account arising in connection with the sale of goods
or the rendering of services by such Originator and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; PROVIDED, FURTHER, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless of whether the account debtor or such
Originator treats such indebtedness, rights or obligations as a separate payment
obligation.
"RECORDS" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the applicable Originator's interest in the inventory
and goods (including returned or repossessed inventory or goods), if any,
the sale of which by
32
such Originator gave rise to such Receivable, and all insurance contracts
with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements 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,
(iv) all enforcement rights or rights to receive payment with
respect to service contracts and other contracts and agreements associated
with such Receivable,
(v) all Records related to such Receivable,
(vi) all of the applicable Originator's right, title and interest
in each Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"REQUIRED CAPITAL AMOUNT" means, as of any date of determination, an
amount equal to the greater of (i) 3% of the aggregate Outstanding Balance of
all Receivables as of such date and (ii) $15,000,000.
"RESPONSIBLE OFFICER" means, with respect to any Person, each of the
following officers (if applicable) of such Person (or anyone performing
substantially the same functions as the following officers typically perform):
any of such Person's Senior Officers, or such Person's assistant treasurer,
credit manager or controller .
"RPM" has the meaning set forth in the Preliminary Statements to the
Agreement.
"SEC" means the United States Securities and Exchange Commission or
any successor regulatory body.
"SENIOR OFFICER" means, as to each Originator, the chief executive
officer, president, chief financial officer, vice president, treasurer, or
secretary.
"SERVICER" means the Person who from time to time is designated as the
"SERVICER" under and as defined in the Purchase Agreement,
33
"SUBORDINATED LOAN" has the meaning set forth in SECTION 1.3(a) of the
Agreement.
"SUBORDINATED NOTE" means each promissory note in substantially the
form of EXHIBIT VI hereto as more fully described in SECTION 1.3 of the
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"TERMINATION DATE" means, as to each Originator, the earliest to occur
of (i) the Facility Termination Date, (ii) the Business Day immediately prior to
the occurrence of a Termination Event set forth in SECTION 5.1(f) with respect
to such Originator or Performance Guarantor, (iii) the Business Day specified in
a written notice from Buyer (or its assigns) to such Originator following the
occurrence of any other Termination Event with respect to such Originator , and
(iv) the date which is thirty (30) days after Buyer's receipt of written notice
from such Originator that it wishes to terminate the facility evidenced by this
Agreement.
"TERMINATION EVENT" has the meaning set forth in SECTION 5.1 of the
Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each
Collection Account Agreement, the Subordinated Notes, the Performance
Undertaking and all other instruments, documents and agreements executed and
delivered in connection herewith.
"TRANSFER" means a sale or contribution of Receivables pursuant to the
Agreement.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE
STATE OF ILLINOIS, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS
DEFINED IN SUCH ARTICLE 9.
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