\nsection 7.5 Bankruptcy Petition………………………………………………………………………….. 20
\n ——————-<\/p>\nSection 7.6 CHOICE OF LAW……………………………………………………………………………….. 20
\n ————-<\/p>\n
Section 7.7 CONSENT TO JURISDICTION………………………………………………………………………. 20
\n ———————–<\/p>\n
Section 7.8 WAIVER OF JURY TRIAL…………………………………………………………………………. 20
\n ——————–<\/p>\n
Section 7.9 Integration; Binding Effect; Survival of Terms………………………………………………….. 21
\n ———————————————-<\/p>\n
Section 7.10 Counterparts; Severability; Section References………………………………………………….. 21
\n ———————————————-
\n<\/c><\/s><\/caption>\n<\/table>\n
Exhibits and Schedules
\n ———————-<\/p>\n
Exhibit I Definitions<\/p>\n
Exhibit II Principal Place of Business; Location(s) of Collection Records;
\n Federal Employer Identification Number; Other Names<\/p>\n
Exhibit III Lock-Boxes and Collection Accounts<\/p>\n
Exhibit IV Form of Compliance Certificate<\/p>\n
Exhibit V Copy of Credit and Collection Policy<\/p>\n
Exhibit VI Form of Purchase Report<\/p>\n
Schedule A List of Documents to Be Delivered to the Buyer Prior to the
\n Purchases<\/p>\n
iii<\/p>\n
RECEIVABLES PURCHASE AND SALE AGREEMENT<\/p>\n
THIS RECEIVABLES PURCHASE AND SALE AGREEMENT, dated as of October 25,
\n2000, is by and among Mohawk Carpet Corporation, a Delaware corporation (“Mohawk
\nCarpet”), Mohawk Commercial, Inc., a Delaware corporation (“Mohawk Commercial”),
\nDurkan Patterned Carpets, Inc., a Georgia corporation (“Durkan;” each of Mohawk
\nCarpet, Mohawk Commercial and Durkan being hereinafter referred to as an
\n“Originator” and collectively, as the “Originators”), and Mohawk Factoring,
\nInc., a Delaware corporation (“Buyer”), and replaces and supersedes the
\nfollowing agreements (each, an “Existing Agreement”) in their entirety:<\/p>\n
(i) that certain Receivables Purchase and Sale Agreement dated
\n December 31, 1997 by and between the Buyer and Mohawk Carpet;<\/p>\n
(ii) that certain Receivables Purchase and Sale Agreement dated May
\n 13, 1999 by and between the Buyer and Durkan;<\/p>\n
(iii) that certain Receivables Purchase and Sale Agreement dated
\n December 31, 1997 by and between the Buyer and Mohawk Commercial.<\/p>\n
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
\nhave the meanings assigned to such terms in Exhibit I hereto.
\n ———<\/p>\n
PRELIMINARY STATEMENTS<\/p>\n
Each of the Originators has from time to time sold Receivables to the
\n Buyer pursuant to the Existing Agreement to which such Originator is a
\n party and wishes to terminate and replace such Existing Agreement in its
\n entirety with this Agreement.<\/p>\n
Each of the Originators and the Buyer intended that the past transfers
\n of Receivables under the Existing Agreements, and that all transfers of
\n Receivables hereunder, be true sales to the Buyer by such Originator of the
\n Receivables originated by it, providing the Buyer with the full benefits of
\n ownership of such Receivables, and none of the Originators nor the Buyer
\n intends these transactions to be, or for any purpose to be characterized as
\n loans from the Buyer to such Originator.<\/p>\n
Each of the Originators acknowledges that from and after October 26,
\n 2000, the Buyer intends to finance purchases of Receivables from the
\n Originators, in part, from the proceeds of loans made pursuant to a Credit
\n and Security Agreement of even date herewith (as the same may from time to
\n time hereafter be amended, supplemented, restated or otherwise modified,
\n the “Credit and Security Agreement”) among the Buyer, as the borrower,
\n Mohawk Servicing, Inc., a Delaware corporation, as the initial Servicer,
\n Blue Ride Asset Funding Corporation (“Blue Ridge”) and certain other
\n lenders from time to time party<\/p>\n
1<\/p>\n
thereto, and Wachovia Bank, N.A., as agent for Blue Ridge and the other
\n Lenders (in such capacity, together with its successors, the “Agent”).<\/p>\n
NOW, THEREFORE, in consideration of the foregoing premises and the
\nmutual agreements herein contained and other good and valuable consideration,
\nthe receipt and adequacy of which are hereby acknowledged, the parties hereto
\nagree as follows:<\/p>\n
ARTICLE I
\n AMOUNTS AND TERMS OF THE PURCHASE<\/p>\n
Section 1.1 Purchase of Receivables.
\n ———————–<\/p>\n
(a) Effective on October 26, 2000, in consideration for the Purchase
\nPrice paid to each Originator and upon the terms and subject to the conditions
\nset forth herein, each Originator does hereby sell, assign, transfer, set-over
\nand otherwise convey to the Buyer, without recourse (except to the extent
\nexpressly provided herein), and the Buyer does hereby purchase from such
\nOriginator, all of such Originator’s right, title and interest in and to all
\nReceivables originated by such Originator and existing as of the close of
\nbusiness on the Initial Cutoff Date and all Receivables thereafter originated by
\nsuch Originator through and including the Termination Date, together, in each
\ncase, with all Related Security relating thereto. In accordance with the
\npreceding sentence, on October 26, 2000 the Buyer shall acquire all of each
\nOriginator’s right, title and interest in and to all Receivables existing as of
\nthe Initial Cutoff Date and thereafter arising through and including the
\nTermination Date, together with all of such Originator’s rights in and to all
\nRelated Security relating thereto. The Buyer shall be obligated to pay the
\nPurchase Price for the Receivables purchased hereunder from each Originator in
\naccordance with Section 1.2. From and after the Termination Date, the Buyer
\n ———–
\nshall not be obligated to purchase Receivables from any Originator.<\/p>\n
(b) On each Monthly Reporting Date, each Originator shall (or shall
\nrequire the Servicer to) deliver to the Buyer a report in substantially the form
\nof Exhibit VI hereto (each such report being herein called a “Purchase Report”)
\nwith respect to the Receivables sold by such Originator to the Buyer during the
\nfiscal month then most recently ended. In addition to, and not in limitation of,
\nthe foregoing, in connection with the payment of the Purchase Price for any
\nReceivables purchased hereunder, the Buyer may request that the applicable
\nOriginator deliver, and such Originator shall deliver, such approvals, opinions,
\ninformation or documents as the Buyer may reasonably request.<\/p>\n
(c) It is the intention of the parties hereto that each Purchase of
\nReceivables from an Originator made hereunder shall constitute a sale, which
\nsale is absolute and irrevocable and provides the Buyer with the full benefits
\nof ownership of the Receivables originated by such Originator. Except for the
\nPurchase Price Credits owed to such Originator pursuant to Section 1.3, the sale
\n ———–
\nof Receivables hereunder by each Originator is made without recourse to such
\nOriginator; provided, however, that (i) such Originator shall be liable to the
\nBuyer for all representations, warranties, covenants and indemnities made by
\nsuch Originator pursuant to the terms of the Transaction Documents to which such
\nOriginator is a party, and (ii) such sale does<\/p>\n
2<\/p>\n
not constitute and is not intended to result in an assumption by the Buyer or
\nany assignee thereof of any obligation of such Originator or any Person arising
\nin connection with the Receivables, the related Contracts and \/or other Related
\nSecurity or any other obligations of such Originator. In view of the intention
\nof the parties hereto that each Purchase of Receivables ma hereunder shall
\nconstitute a sale of such Receivables rather than loans secured thereby, each
\nOriginator agrees that it will, on or prior to the date hereof and in accordance
\nwith Section 4.1 (e)(ii), mark its master data processing records relating to
\n ——————-
\nthe Receivables originated by it with a legend properly evidencing that the
\nBuyer has purchased such Receivables as provided ii this Agreement and to note
\nin its financial statements that its Receivables have been sold to the Buyer.
\nUpon the request of the Buyer or the Agent (as the Buyer’s assignee), each
\nOriginator will execute and file such financing or continuation statements, or
\namendments thereto or assignments thereof, and such other instruments or
\nnotices, as may be necessary or appropriate perfect and maintain the perfection
\nof the Buyer’s ownership interest in the Receivables originated by such
\nOriginator and the Related Security with respect thereto, or as the Buyer may
\nreasonably request.<\/p>\n
Section 1.2 Payment for the Purchases.
\n ————————- <\/p>\n
(a) The Purchase Price for the Purchase from each Originator of
\nits Receivables in existence as of the close of business on the Initial Cutoff
\nDate and not previously (assigned or transferred to the Buyer, if any, shall be
\npayable in full by the Buyer to such Originator on October 26, 2000 in
\nimmediately available funds.<\/p>\n
(b) The Purchase Price for each Receivable coming into existence
\nafter the Cutoff Date shall be due and owing in full by the Buyer to the
\napplicable Originator or its designee immediately available funds on the date
\neach such Receivable came into existence except that Buyer may, with respect to
\nany such Purchase Price:<\/p>\n
(i) offset against such Purchase Price any amounts owed by such
\n Originator to the Buyer hereunder and which unpaid); and\/or<\/p>\n
(ii) elect to defer payment of all or any portion of the Purchase
\n Price for Receivables originated by such Originator during the same
\n Calculation Period (based on the information contained in the Purchase
\n Report delivered by such Originator for the Calculation Period then most
\n recently ended) until the next succeeding Settlement Date.<\/p>\n
Section 1.3 Purchase Price Credit Adjustments. If on any day:
\n ———————————<\/p>\n
(a) the Outstanding Balance of a Receivable purchased from any
\n Originator is:<\/p>\n
(i) reduced as a result of any defective or rejected or
\n returned goods or services, any discount or any adjustment or
\n otherwise by such<\/p>\n
3<\/p>\n
Originator (other than as a result of such Receivable becoming a
\n Charged-Off Receivables or to reflect cash Collections on account of
\n such Receivable),<\/p>\n
(ii) reduced or canceled as a result of a setoff in respect
\n of any claim by any Person (whether such claim arises out of the same
\n or a related transaction or an unrelated transaction), or<\/p>\n
(b) any of the representations and warranties set forth in Section
\n ——-
\n 2.1(i), (l), (p), (q), (r),(s) or (t) hereof is not true when made or
\n —————————— —
\n deemed made with respect to any Receivable,<\/p>\n
then, in such event, the Buyer shall be entitled to a credit (each, a “Purchase
\nPrice Credit”) against the Purchase Price otherwise payable to the applicable
\nOriginator hereunder equal to the Outstanding Balance of such Receivable
\n(calculated before giving effect to the applicable reduction or cancellation).
\nIf such Purchase Price Credit exceeds the Original Balance of the Receivables
\noriginated by the applicable Originator on any day, such Originator shall pay
\nthe remaining amount of such Purchase Price Credit in cash immediately.<\/p>\n
Section 1.4 Payments and Computations. Etc. All amounts to be paid or
\n ——————————-
\ndeposit the Buyer hereunder shall be paid or deposited in accordance with the
\nterms hereof on the day when due in immediately available funds to the account
\nof the applicable Originator designated from time to time by such Originator or
\nas otherwise directed by such Originator. In the event that any payment owed by
\nany Person hereunder becomes due on a day that is not a Business Day, then such
\npayment shall be made on the next succeeding Business Day. If any Person to pay
\nany amount hereunder when due, such Person agrees to pay, on demand, the Default
\nin respect thereof until paid in full; provided, however, that such Default Fee
\nshall not at any time exceed the maximum rate permitted by applicable law. All
\ncomputations of interest payable hereunder shall be made on the basis of a year
\nof 360 days for the actual number of days elapsed.<\/p>\n
Section 1.5 Transfer of Collection Records; License of Software; Access
\n ———————————————————–
\nto Contracts. In connection with, and in consideration of, the Purchase from
\n————
\neach Originator of Receivables originated by it, each Originator will deliver to
\nthe Buyer or to the Servicer, on behalf of the Buyer, originals or copies (in
\nwritten, photostatic, electronic or other mutually acceptable form) of such
\nOriginator’s Collection Records relating to all Receivables sold by it
\nhereunder. Each Originator shall permit the Servicer and the Buyer during such
\nOriginator’s normal business hours and without undue disruption to the
\nOriginator’s operations, at the expense of the Buyer or the Servicer, as
\napplicable (but in no event at the expense of the Agent), to inspect and copy
\nall such collection Records and other books and records regarding the
\nReceivables and the Contracts solely for purposes of administering and
\ncollecting the Receivables hereunder and under the Collection Services
\nAgreement. In order to facilitate such administration, collection and servicing
\nof such Receivables, each Originator hereby grants to each of the Buyer,
\nServicer, and, for so long as the Credit and Security Agreement remains in
\neffect, the Agent, an irrevocable, non-exclusive license to use, without royalty
\nor payment of any kind, all software used by such Originator to account for such
\nReceivables, to the extent necessary to administer such Receivables, whether
\nsuch software is owned<\/p>\n
4<\/p>\n
by such Originator or is owned by others and used by such Originator under
\nlicense agreements with respect thereto, provided that should the consent of any
\nlicensor of such software be required for the grant of the license described
\nherein, to be effective, such Originator hereby agrees that upon the request of
\nthe Servicer or the Buyer, such Originator will use its reasonable efforts to
\nobtain the consent of such third-party licensor. The license granted hereby
\nshall be irrevocable until the later to occur of (i) the indefeasible payment in
\nfull of the Aggregate Unpaids under the Credit and Security Agreement, and (ii)
\nthe date on which this Agreement terminates in accordance with its terms.<\/p>\n
Section 1.6 Characterization. If, notwithstanding the intention of the
\n —————-
\nparties expressed in Section 1.1(c), any sale by an Originator to the Buyer of
\n ————–
\nReceivables hereunder shall be characterized as a secured loan and not a sale or
\nsuch sale shall for any reason be ineffective or unenforceable, then this
\nAgreement shall be deemed to constitute a security agreement under the UCC and
\nother applicable law. For this purpose and without being in derogation of the
\nparties’ intention that the sale of Receivables by each Originator hereunder
\nshall constitute a true sale thereof, such Originator hereby grants to the Buyer
\na duly perfected security interest in all of such Originator’s right, title and
\ninterest in and to all Receivables of such Originator which exist on the Initial
\nCutoff Date or arise thereafter through and including the Termination Date,
\ntogether with all Related Security with respect thereto, all other rights and
\npayments relating to such Receivables and all proceeds of the foregoing, to
\nsecure the prompt and complete payment of a loan deemed to have been made in an
\namount equal to the Purchase Price of the Receivables purchased from such
\nOriginator together with any Purchase Interest applicable thereto and all other
\nobligations of such Originator hereunder, which security interest shall be prior
\nto all other Adverse Claims thereto. Upon the occurrence of a Termination Event,
\nthe Buyer shall have, in addition to the rights and remedies which it may have
\nunder this Agreement, all other rights and remedies provided to a secured
\ncreditor upon default under the UCC and other applicable law, which rights and
\nremedies shall be cumulative.<\/p>\n
ARTICLE II
\n REPRESENTATIONS AND WARRANTIES<\/p>\n
Section 2.1 Representations and Warranties of Originators. Each Originator
\n ——————————————–
\nhereby represents and warrants to the Buyer on the date of the Purchase from
\nsuch Originator hereunder and, except for representations and warranties that
\nare limited to a certain date, on each date that any Receivable is originated by
\nsuch Originator on or after the date of such Purchase through and including the
\nTermination Date, that:<\/p>\n
(a) Existence and Power. Such Originator is a corporation, duly
\n ——————-
\norganized,validly existing and in good standing under the laws of the state set
\nforth after its name in the preamble to this Agreement, and is duly qualified to
\ndo business and is in good standing as a foreign entity, and has and holds all
\norganizational power, and all governmental licenses, authorizations, consents
\nand approvals required to carry on its business in each jurisdiction in which
\nits business is conducted except where the failure to so qualify or so hold is
\nnot reasonably likely to have a Material Adverse Effect.<\/p>\n
5<\/p>\n
(b) Power and Authority; Due Authorization, Execution and Delivery.
\n ————————————————————–
\nThe execution and delivery by such Originator of this Agreement and each other
\nTransaction Document to which it is a party, and the performance of its
\nobligations hereunder and thereunder, and such Originator’s use of the proceeds
\nof the Purchase made from it hereunder, are within its corporate powers and
\nauthority and have been duly authorized by all necessary corporate action on its
\npart. This Agreement and each other Transaction Document to which such
\nOriginator is a party has been duly executed and delivered by such Originator.<\/p>\n
(c) No Conflict. The execution and delivery by such Originator of
\n ———–
\nthis Agreement and each other Transaction Document to which it is a party, and
\nthe performance of its obligations hereunder and thereunder do not contravene or
\nviolate (i) its Organizational Documents, (ii) any law, rule or regulation
\napplicable to it, (iii) any restrictions under any agreement, contract or
\ninstrument to which it is a party or by which it or any of its property is
\nbound, or (iv) any order, writ, judgment, award, injunction or decree applicable
\nto it, and do not result in the creation or imposition of any Adverse Claim on
\nassets of such Originator or its Subsidiaries (except as created hereunder)
\nexcept, in any case, where such contravention or violation is not reasonably
\nlikely to have a Material Adverse Effect; and no transaction contemplated hereby
\nrequires compliance with any bulk sales act or similar law.<\/p>\n
(d) Governmental Authorization. Other than the filing of the
\n ————————–
\nfinancing statements required hereunder, no authorization or approval or other
\naction by, and no notice to or filing with, any governmental authority or
\nregulatory body is required for the due execution and delivery by such
\nOriginator of this Agreement and each other Transaction Document to which it is
\na party and the performance of its obligations hereunder and thereunder.<\/p>\n
(e) Actions, Suits. There are no actions, suits or proceedings
\n ————–
\npending, or to the best of such Originator’s knowledge, threatened, before any
\ncourt, arbitrator or other body, that could reasonably be expected to have a
\nMaterial Adverse Effect, except as previously disclosed or for which reserves in
\nreasonable amounts have been established. Such Originator is not in default with
\nrespect to any order of any court, arbitrator or governmental body.<\/p>\n
(f) Binding Effect. This Agreement and each other Transaction
\n ————–
\nDocument to which such Originator is a party constitute the legal, valid and
\nbinding obligations of such Originator enforceable against such Originator in
\naccordance with their respective terms, except as such enforcement may be
\nlimited by applicable bankruptcy, insolvency, reorganization or other similar
\nlaws relating to or limiting creditors’ rights generally and by general
\nprinciples of equity (regardless of whether enforcement is sought in a
\nproceeding in equity or at law).<\/p>\n
(g) Accuracy of Information. All written information heretofore
\n ———————–
\nfurnished by such Originator or any of its Affiliates to the Buyer for purposes
\nof or in connection with this Agreement, any of the other Transaction Documents
\nor any transaction contemplated hereby or thereby is, and all such information
\nhereafter furnished by such Originator or any of its Affiliates to the Buyer, as
\nof the date thereof, does not and will not contain any material misstatement of
\nfact or omit to state a material fact necessary to make the statements contained
\ntherein, in light the circumstances under which they were made, not misleading.<\/p>\n
6<\/p>\n
(h) Use of Proceeds. No payment made to any Originator hereunder will
\n —————
\nbe used for a purpose that violates Regulation T, U or X of the Board of
\nGovernors of the Federal Reserve System.<\/p>\n
(i) Good Title. Each Receivable which is sold to the Buyer hereunder
\n ———-
\nshall be owned by the respective Originator, free and clear of any Adverse
\nClaim, except as provided herein or except as may be granted by the Buyer.
\nWhenever the Buyer makes a purchase hereunder, it shall have acquired and shall
\ncontinue to have maintained a valid ownership interest (free and clear of any
\nAdverse Claim) in the respective Originator’s entire right, title and interest
\nin and to each Receivable and the Related Security with respect thereto. There
\nhave been duly filed all financing statements or other similar instruments or
\ndocuments necessary under the UCC of all appropriate jurisdictions to perfect
\nthe Buyer’s ownership interest in such Receivables and the Related Security to
\nthe extent such interest can be perfected by filing a financing statement under
\nthe UCC.<\/p>\n
(j) [Reserved].
\n ——— <\/p>\n
(k) Places of Business and Locations of Collection Records. The
\n ——————————————————
\nprincipal places of business and chief executive office of such Originator and
\nthe offices where it keeps its Collection Records are located at the address(es)
\nlisted on Exhibit II or such other locations of which the Buyer has been
\n ———-
\nnotified in accordance with Section 4.2(a) in jurisdictions where all action
\n ————-
\nrequired by Section 4.2(a) has been taken and completed. Such Originator’s
\n ————-
\nFederal Employer Identification Number is correctly set forth on Exhibit II.
\n ———- <\/p>\n
(l) Collections. Such Originator has directed all Obligors on the
\n ———–
\nReceivables originated by it existing on or after the Initial Cutoff Date to
\nmake payments thereon directly to a Collection Account or Lock-Box of the Buyer
\nwhich is listed on Exhibit III hereto as the same may be amended from time to
\n ———–
\ntime by the Buyer upon not less than 30 days’ prior written notice to the
\nOriginators.<\/p>\n
(m) Material Adverse Effect. Since June 30, 2000, no event has
\n ———————–
\noccurred that would have a Material Adverse Effect.<\/p>\n
(n) Names. In the 5 years ending on the date of this Agreement, such
\n —–
\nOriginator has not used any corporate name in which a financing statement naming
\nsuch Originator (or any entity which has merged with and into such Originator)
\nas a debtor may be properly recorded and effective to grant a security interest
\nunder the UCC as in effect in any applicable jurisdiction other than (i) the
\nname in which it has executed this Agreement, and (ii) as listed on Exhibit II.
\n ———- <\/p>\n
(o) Not a Holding Company or an Investment Company. Such Originator
\n ———————————————-
\nis not a “holding company” or a “subsidiary holding company” of a “holding
\ncompany” within the meaning of the Public Utility Holding Company Act of 1935,
\nas amended, or any successor statute. Such Originator is not an “investment
\ncompany” within the meaning of the Investment Company Act of 1940, as amended,
\nor any successor statute.<\/p>\n
7<\/p>\n
(p) Compliance with Law. Each Receivable reflected in any Purchase
\n ——————-
\nReport as an Eligible Receivable, together with the Invoice related thereto,
\ndoes not violate any laws, rules or regulations applicable thereto (including,
\nwithout limitation, laws, rules and regulations relating to truth in lending,
\nfair credit billing, fair credit reporting, equal credit opportunity, fair debt
\ncollection practices and privacy), except where such violation is not reasonably
\nlikely to have a Material Adverse Effect.<\/p>\n
(q) Compliance with Credit and Collection Policy. Such Originator has
\n ——————————————–
\ncomplied in all material respects with the Credit and Collection Policy with
\nregard to each Receivable originated by it and the related Contract, and has not
\nmade any change since the Initial Cut-Off Date to such Credit and Collection
\nPolicy, except such material change as to which the Buyer has been notified and
\nhas consented, as required, in accordance with Section 4.1 (a)(vi).
\n ——————- <\/p>\n
(r) Payments to such Originator. With respect to each Receivable
\n —————————
\noriginated by such Originator and sold to the Buyer hereunder, the Purchase
\nPrice (and, if applicable, Purchase Interest) received by such Originator
\nconstitutes fair and reasonably equivalent value in consideration therefor.<\/p>\n
(s) Enforceability of Receivables. Each Receivable sold by such
\n —————————–
\nOriginator to the Buyer hereunder is a legal, valid and binding obligation of
\nthe related Obligor to pay the Outstanding Balance of the Receivable created
\nthereunder and accrued Finance Charges (if any) thereon, enforceable against the
\nObligor in accordance with its terms, except as such enforcement may be limited
\nby applicable bankruptcy, insolvency, reorganization or other similar laws
\nrelating to or limiting creditors’ rights generally and by general principles of
\nequity (regardless of whether enforcement is sought in a proceeding in equity or
\nat law).<\/p>\n
(t) Eligible Receivables. Each Receivable reflected in any Purchase
\n ——————–
\nReport as an Eligible Receivable was an Eligible Receivable on the date of its
\nacquisition by the Buyer hereunder.<\/p>\n
(u) Accounting. The manner in which such Originator accounts for the
\n ———-
\ntransactions contemplated by this Agreement does not jeopardize the
\ncharacterization of the transactions contemplated herein as being true sales.<\/p>\n
ARTICLE III
\n CONDITIONS OF PURCHASE<\/p>\n
Section 3.1 Conditions Precedent to Purchase. The Purchase from each
\n ——————————–
\nOriginator under this Agreement is subject to the conditions precedent that the
\nBuyer shall have received on or before the date thereof the documents listed on
\nSchedule A.
\n———- <\/p>\n
Section 3.2 Conditions Precedent to Subsequent Payments. the Buyer’s
\n ——————————————-
\nobligation to pay for Receivables coming into existence after the Initial Cutoff
\nDate shall be subject to the further conditions precedent that: (a) the Facility
\nTermination Date shall not have occurred under<\/p>\n
8<\/p>\n
the Credit and Security Agreement; (b) the Buyer (or, at any time the Credit
\nand Security Agreement remains in effect, the Agent as the Buyer’s assignee)
\nshall have received such other approvals, opinions or documents as it may
\nreasonably request; and (c) on the date such Receivable came into existence, the
\nfollowing statements shall be true (and acceptance of the proceeds of any
\npayment for such Receivable shall be deemed a representation and warranty by
\nsuch Originator that such statements are then true):<\/p>\n
(i) the representations and warranties set forth in Article II
\n ———-
\n are true and correct on and as of the date such Receivable came into
\n existence as though made on and as of such date; and<\/p>\n
(ii) no event has occurred and is continuing that will constitute
\n a Termination Event.<\/p>\n
Notwithstanding the foregoing conditions precedent, and subject to the
\napplicable Originator’s receipt of payment of the Purchase Price for any
\nReceivable, all of such Originator’s right, title and interest in and under such
\nReceivable and the Related Security with respect thereto shall vest in the
\nBuyer, whether or not the conditions precedent to the Buyer’s obligation to pay
\nfor such Receivable were in fact satisfied. The failure of such Originator to
\nsatisfy any of the foregoing conditions precedent may, however, give rise to a
\nclaim for indemnity under Article VI of this Agreement.
\n ———- <\/p>\n
ARTICLE IV
\n COVENANTS<\/p>\n
Section 4.1 Affirmative Covenants of Originators. Until the date on
\n ————————————
\nwhich this Agreement terminates in accordance with its terms, each Originator
\nhereby covenants as set forth below:<\/p>\n
(a) Financial Reporting. Such Originator will maintain, for itself
\n ——————-
\nand each of its Subsidiaries, a system of accounting established and
\nadministered in accordance with GAAP, and furnish to the Buyer (or, at any time
\nthe Credit and Security Agreement remains in effect, the Agent as the Buyer’s
\nassignee):<\/p>\n
(i) Annual Reporting. Promptly upon the filing thereof, and
\n —————-
\nwithin 90 days after the close of each of Parent’s fiscal years, audited,
\nunqualified consolidated financial statements (which shall include balance
\nsheets, statements of earnings and stockholders’ equity and cash flows) for
\nParent and its consolidated Subsidiaries (which include such Originator) for
\nsuch fiscal year, accompanied by an opinion of independent public accountants of
\nrecognized national standing.<\/p>\n
(ii) Quarterly Reporting. Promptly upon the filing thereof, and
\n ——————-
\nwithin 45 days after the close of the first three (3) quarterly periods of each
\nof Parent’s fiscal years, consolidated balance sheets of Parent and its
\nconsolidated Subsidiaries (including such Originator) as at the close of each
\nsuch period and consolidated statements of earnings and<\/p>\n
9<\/p>\n
stockholders’ equity and cash flows for Parent and its consolidated Subsidiaries
\nfor the period from the beginning of such fiscal year to the end of such
\nquarter, all certified by a Responsible Financial Officer of Parent.<\/p>\n
(iii) Compliance Certificate. Together with the financial
\n ———————-
\nstatements required hereunder, a compliance certificate in substantially the
\nform of Exhibit IV signed by an Authorized Officer of Parent and dated the date
\n ———-
\nof such annual financial statement or such quarterly financial statement, as the
\ncase may be.<\/p>\n
(iv) Shareholders’ Statements and Reports. Promptly upon the
\n ————————————
\nfurnishing thereof generally to the shareholders of Parent, copies of all
\nfinancial statements, reports and proxy statements so furnished.<\/p>\n
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of
\n ————–
\nall registration statements (other than registration statements on Forms S-8 or
\nS-3 covering benefit or compensation plans, stock purchase or dividend
\nrepurchase plans, or for purposes of resales of securities by holders) and
\nannual, quarterly or other periodic reports which Parent or any of its
\nSubsidiaries files with the Securities and Exchange Commission.<\/p>\n
(vi) Change in Credit and Collection Policy. At least thirty
\n ————————————–
\n(30) days prior to the effectiveness of any material change in or material
\namendment to the Credit and Collection Policy, a copy of the Credit and
\nCollection Policy then in effect and a notice indicating such proposed change or
\namendment and, if such proposed change is reasonably likely to adversely affect
\nthe collectibility of the Receivables generally or materially decrease the
\ncredit quality of newly created Receivables generally, requesting the Buyer’s
\nconsent thereto.<\/p>\n
(vii) Other Information. Promptly, from time to time, such other
\n —————–
\ninformation, documents, records or reports relating to the Receivables
\noriginated by such Originator or the condition or operations, financial or
\notherwise, of such Originator as the Buyer may from time to time reasonably
\nrequest in order to protect the interests of the Buyer under or as contemplated
\nby this Agreement; provided, however, that the Buyer shall keep all such
\ninformation which is not otherwise in the public domain confidential and require
\na confidentiality agreement from any third party that may properly request such
\ninformation.<\/p>\n
(b) Notices. Such Originator will notify the Buyer in writing of any
\n ——-
\nof the following promptly upon learning of the occurrence thereof, describing
\nthe same and, if applicable, the steps being taken with respect thereto:<\/p>\n
(i) Termination Events or Unmatured Termination Events. The
\n ————————————————–
\n occurrence of each Termination Event and each Unmatured Termination Event,
\n by a statement of an Authorized Officer of such Originator.<\/p>\n
(ii) Material Adverse Effect. The occurrence of any event or
\n ———————–
\n condition that has had, or is reasonably likely to have, a Material Adverse
\n Effect.<\/p>\n
(iii) ERISA Events. The occurrence of any ERISA Event.
\n ————<\/p>\n
10<\/p>\n
(c) Compliance with Laws and Preservation of Existence. Such
\n ————————————————–
\nOriginator will comply in all respects with all applicable laws, rules,
\nregulations, orders, writs, judgments, injunctions, decrees or awards to which
\nit may be subject, except where the failure to so comply is not reasonably
\nlikely to have a Material Adverse Effect. Such Originator will preserve and
\nmaintain its legal existence, rights, franchises and privileges in the
\njurisdiction of its organization, and qualify and remain qualified in good
\nstanding as a foreign entity in each jurisdiction where its business is
\nconducted, except where the failure to so qualify or remain in good standing is
\nnot reasonably likely to have a Material Adverse Effect.<\/p>\n
(d) Audits. Such Originator will furnish to the Buyer from time to
\n ——
\ntime such information with respect to it and the Receivables sold by it as the
\nBuyer may reasonably request. Such Originator will, from time to time during
\nregular business hours as requested by the Buyer (or, at any time the Credit and
\nSecurity Agreement remains in effect, the Agent as the Buyer’s assignee), upon
\nnot less than two (2) Business Days’ prior written notice unless a Termination
\nEvent has occurred, permit the Buyer or their respective agents or
\nrepresentatives: (i) to examine and make copies of and abstracts from all Other
\nRecords in the possession or under the control of such Originator relating to
\nthe Receivables and the Related Security, including, without limitation, the
\nrelated Contracts to the extent permitted by Section 1.5, and (ii) to visit the
\noffices and properties of such Originator for the purpose of examining such
\nmaterials described in clause (i) above, and to discuss, on a confidential
\nbasis, matters relating to such Originator’s financial condition or the
\nReceivables and the Related Security or such Originator’s performance under any
\nof the Transaction Documents or such Originator’s performance under the
\nContracts and, in each case, with any of the officers or employees of such
\nOriginator having knowledge of such matters.<\/p>\n
(e) Keeping and Marking of Records and Books.
\n —————————————- <\/p>\n
(i) Such Originator will maintain or will cause the Servicer to
\n maintain administrative and operating procedures (including, without
\n limitation, an ability to recreate records evidencing Receivables in
\n the event of the destruction of the originals thereof), and keep and
\n maintain all documents, books, records and other information
\n reasonably necessary or advisable for the collection of all
\n Receivables (including, without limitation, records adequate to permit
\n the immediate identification of each new Receivable and all
\n Collections of and adjustments to each existing Receivable). Such
\n Originator will give, or will direct the Servicer to give, the Buyer
\n notice of any material change in the administrative and operating
\n procedures referred to in the previous sentence.<\/p>\n
(ii) Such Originator will (A) on or prior to the date hereof,
\n mark its master data processing records and other books and records
\n relating to the Receivables with a legend or code describing the
\n Buyer’s ownership interests in the Receivables and (B) upon the
\n request of the Buyer following the occurrence of a Termination Event,
\n mark each Invoice<\/p>\n
11<\/p>\n
applicable to any Receivable sold by such Originator to the Buyer
\n hereunder with a legend or code describing the Buyer’s ownership
\n thereof.<\/p>\n
(f) Compliance with Contracts and Credit and Collection Policy.
\n ———————————————————-
\nSuch Originator will timely (i) perform and comply in all material respects with
\nall provisions, covenants and other promises required to be observed by it under
\nthe Contracts related to the Receivables originated by it, and (ii) comply in
\nall material respects with the Credit and Collection Policy in regard to each
\nsuch Receivable and the related Contract.<\/p>\n
(g) Ownership. Such Originator will take all necessary action to
\n ———
\nestablish and maintain, irrevocably, the Buyer’s right, title and interest in
\nand to the Receivables originated or acquired by such Originator and sold to the
\nBuyer hereunder, and to keep the Receivables and associated Related Security, in
\neach case, free and clear of any Adverse Claims other than Adverse Claims in
\nfavor of the Buyer (including, without limitation, the filing of all financing
\nstatements, continuation statements and\/or financing statement amendments
\nnecessary under the UCC of all appropriate jurisdictions to perfect the Buyer’s
\ninterest in such Receivables and Related Security to the extent such interest
\ncan be perfected by filing any of the foregoing under the UCC and such other
\naction to perfect, protect or more fully evidence the interest of the Buyer as
\nthe Buyer may reasonably request).<\/p>\n
(h) Lenders’ Reliance. Such Originator acknowledges that creditors
\n —————–
\nof the Buyer are relying upon the Buyer’s identity as a legal entity that is
\nseparate from such Originator and its other Affiliates and agrees to take all
\nreasonable steps to maintain the Buyer’s identity as a separate legal entity and
\nto make it manifest to third parties that the Buyer is an entity with assets and
\nliabilities distinct from those of such Originator and its other Affiliates and
\nnot just a division thereof Without limiting the generality of the foregoing and
\nin addition to the other covenants set forth herein, such Originator (i) will
\nnot hold itself out to third parties as liable for the debts of the Buyer nor
\npurport to own any of the Receivables or Related Security sold to the Buyer
\nhereunder, and (ii) will conduct all business with the Buyer on terms reasonably
\nbelieved by such Originator and the Buyer to be reasonably comparable to those
\napplicable in transactions with an unaffiliated Person in similar circumstances.<\/p>\n
(i) Taxes. To the extent not handled by Parent, such Originator
\n —–
\nwill file all tax returns and reports required by law to be filed by it and
\npromptly pay all taxes and governmental charges at any time owing, except any
\nsuch taxes which are not yet delinquent or are being diligently contested in
\ngood faith by appropriate proceedings and for which adequate reserves in
\naccordance with GAAP shall have been set aside on its books. Such Originator
\nwill pay when due any taxes payable in connection with the Receivables
\noriginated by it, exclusive of taxes on or measured by income or gross receipts
\nof the Buyer and its assigns.<\/p>\n
Section 4.2 Negative Covenants of Originators. Until the date on which
\n ———————————
\nthis Agreement terminates in accordance with its terms, each Originator hereby
\ncovenants that:<\/p>\n
(a) Name Change, Offices and Collection Records. Such Originator
\n ——————————————-
\nwill not (i) change its state of organization, (ii) change its legal name, or
\n(iii) change its identity or<\/p>\n
12<\/p>\n
corporate structure (within the meaning of Section 9-402(7) of any applicable
\nenactment of the UCC), (iv) relocate its chief executive office (so long as its
\nchief executive office determines the place of perfection of the Buyer’s
\nownership interest in such Originator’s Receivables), or (v) relocate any office
\nwhere Collection Records are kept by or on behalf of such Originator unless, in
\neach of the foregoing cases, it shall have: (A) given the Buyer at least 30
\ndays’ prior written notice thereof and (B) delivered to the Buyer all financing
\nstatements, instruments and other documents requested by the Buyer in connection
\nwith such change or relocation.<\/p>\n
(b) Change in Payment Instructions to Obligors. Such Originator
\n ——————————————
\nwill not direct any Obligor on the Receivables sold by it to the Buyer hereunder
\nto make payments to any location other than to one of the Buyer’s Lock-Boxes or
\nCollection Accounts listed on Exhibit III hereto as the same may be amended
\n ———–
\nfrom time to time by the Buyer upon not less than 30 days’ prior written notice
\nto the Originators.<\/p>\n
(c) Modifications to Credit and Collection Policy. Such
\n ———————————————
\nOriginator will not, and will not cause or authorize the Servicer to, make any
\nmaterial change to the Credit and Collection Policy that would materially
\ndecrease the collectibility of its Receivables generally.<\/p>\n
(d) Sales, Liens. Such Originator will not sell, assign (by
\n ————
\noperation of law or otherwise) or otherwise dispose of, or grant any option with
\nrespect to, or create or suffer to exist any Adverse Claim upon (including,
\nwithout limitation, the filing of any financing statement) or with respect to,
\nany Receivable or the Related Security, or upon or with respect to any Contract
\nunder which any Receivable arises, or assign any right to receive income with
\nrespect thereto (other than, in each case, the creation of the interests therein
\nin favor of the Buyer provided for herein), and such Originator will defend the
\nright, title and interest of the Buyer in, to and under any of the foregoing
\nproperty, against all claims of third parties claiming through or under such
\nOriginator.<\/p>\n
(e) Accounting for Purchases. Such Originator will not account
\n ————————
\nfor the transactions contemplated hereby in any manner other than the sale for
\nfinancial accounting purposes by such Originator to the Buyer of the Receivables
\nsold and transferred by such Originator on or after the Initial Cutoff Date
\nthrough and including the Termination Date, together with the associated Related
\nSecurity, except to the extent that such transactions are not recognized on
\naccount of consolidated financial reporting in accordance with generally
\naccepted accounting principles.<\/p>\n
ARTICLE V
\n TERMINATION EVENTS<\/p>\n
Section 5.1 Termination Events. The occurrence of any one or more of the
\n ——————
\nfollowing events shall constitute a Termination Event:<\/p>\n
(a) Such Originator shall fail to make any payment or deposit
\nrequired hereunder when due, or to perform or observe any term, covenant or
\nagreement hereunder or<\/p>\n
13<\/p>\n
under any other Transaction Document to which it is a party and such failure
\nshall continue for 30 days after written notice of such failure is given.<\/p>\n
(b) Any representation, warranty, certification or statement made
\nby such Originator in this Agreement, any other Transaction Document to which it
\nis a party, or in any other document delivered pursuant hereto or thereto shall
\nprove to have been incorrect in any material respect when made or deemed made;
\nprovided that the materiality threshold in the preceding clause shall not be
\napplicable with respect to any representation or warranty which itself contains
\na materiality threshold.<\/p>\n
(c) Failure of any Originator to pay any Indebtedness when due in
\nexcess of $25,000,000 (“Material Debt”); or the default by any Originator in the
\nperformance of any term, provision or condition contained in any agreement under
\nwhich any Material Debt was created or is governed, the effect of which is to
\ncause, or to permit the holder or holders of such Material Debt to cause, such
\nIndebtedness to become due prior to its stated maturity; or any Material Debt of
\nany Originator shall be declared to be due and payable or required to be prepaid
\n(other than by a regularly scheduled payment) prior to the date of maturity
\nthereof.<\/p>\n
(d) (i) Any Originator or any of its Material Subsidiaries
\nshall generally not pay its debts as such debts become due or shall admit in
\nwriting its inability to pay its debts generally or shall make a general
\nassignment for the benefit of creditors; or (ii) any proceeding shall be
\ninstituted by or against such Originator or any of its Material Subsidiaries
\nseeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding
\nup, reorganization, arrangement, adjustment, protection, relief or composition
\nof it or its debts under any law relating to bankruptcy, insolvency or
\nreorganization or relief of debtors, or seeking the entry of an order for relief
\nor the appointment of a receiver, trustee or other similar official for it or
\nany substantial part of its property or (iii) any Originator or any of its
\nMaterial Subsidiaries shall take any corporate action to authorize any of the
\nactions set forth in the foregoing clauses (i) or (ii) of this subsection (d).<\/p>\n
(e) A Change of Control shall occur.<\/p>\n
(f) One or more final judgments for the payment of money in an
\namount in excess of $25,000,000, individually or in the aggregate, shall be
\nentered against any Originator on claims not covered by insurance or as to which
\nthe insurance carrier has denied its responsibility, and such judgment shall
\ncontinue unsatisfied and in effect for thirty (30) consecutive days without a
\nstay of execution.<\/p>\n
(g) The PBGC or Internal Revenue Service shall file any notice of
\nlien on any of the Receivables or the Related Security.<\/p>\n
Section 5.2 Remedies. Upon the occurrence and during the continuation of a
\n ——–
\nTermination Event, the Buyer may take any of the following actions: (i) declare
\nthe Termination Date to have occurred, whereupon the Termination Date shall
\nforthwith occur, without demand, protest or further notice of any kind, all of
\nwhich are hereby expressly waived by each Originator;<\/p>\n
14<\/p>\n
provided, however, that upon the occurrence of a Termination Event described in
\nSection 5.1(d), or of an actual or deemed entry of an order for relief with
\n————–
\nrespect to such Originator under the Federal Bankruptcy Code, the Termination
\nDate shall automatically occur, without demand, protest or any notice of any
\nkind, all of which are hereby expressly waived by each Originator and (ii) to
\nthe fullest extent permitted by applicable law, declare that the Default Fee
\nshall accrue with respect to any amounts then due and owing by such Originator
\nto the Buyer. The aforementioned rights and remedies shall be without limitation
\nand shall be in addition to all other rights and remedies of the Buyer and, so
\nlong as the Credit and Security Agreement remains in effect, the Agent as the
\nBuyer’s assignee otherwise available under any other provision of this
\nAgreement, by operation of law, at equity or otherwise, all of which are hereby
\nexpressly preserved, including, without limitation, all rights and remedies
\nprovided under the UCC, all of which rights shall be cumulative.<\/p>\n
ARTICLE VI
\n INDEMNIFICATION<\/p>\n
Section 6.1 Indemnities, by Originators. Without limiting any other rights
\n —————————
\nthat the Buyer may have hereunder or under applicable law, each Originator
\nhereby agrees to indemnify (and pay upon demand to) the Buyer and its assigns,
\nofficers, directors, agents and employees (each an “Indemnified Party”) from and
\nagainst any and all damages, losses, claims, taxes, liabilities, costs, expenses
\nand for all other amounts payable, including reasonable attorneys’ fees and
\ndisbursements (all of the foregoing being collectively referred to as
\n“Indemnified Amounts”) awarded against and actually paid or actually incurred by
\nany of them arising out of or as a result of this Agreement or the acquisition,
\neither directly or indirectly, by the Buyer of any interest in the Receivables
\noriginated by such Originator, excluding, however:<\/p>\n
(a) Indemnified Amounts to the extent a final judgment of a court
\n of competent jurisdiction holds that such Indemnified Amounts resulted from
\n gross negligence or willful misconduct on the part of the Indemnified Party
\n seeking indemnification;<\/p>\n
(b) Indemnified Amounts to the extent the same includes losses in
\n respect of Receivables originated by such Originator that are uncollectible
\n on account of the insolvency, bankruptcy or lack of creditworthiness of the
\n related Obligor; or<\/p>\n
(c) taxes imposed by the jurisdiction in which such Indemnified
\n Party’s principal executive office is located, on or measured by the
\n overall net income or gross receipts of such Indemnified Party;<\/p>\n
provided, however, that nothing contained in this sentence shall limit the
\nliability of such Originator or limit the recourse of the Buyer to such
\nOriginator for amounts otherwise specifically provided to be paid by such
\nOriginator under the terms of this Agreement. Without limiting the generality of
\nthe foregoing indemnification, but subject in each case to clauses (a),<\/p>\n
15<\/p>\n
(b) and (c) above, each Originator shall indemnify the Buyer for Indemnified
\nAmounts relating to or resulting from:<\/p>\n
(i) any representation or warranty made by such Originator
\n (or any officers of such Originator) under or in connection with any
\n Purchase Report, this Agreement, any other Transaction Document or any
\n other information or report delivered by such Originator pursuant hereto or
\n thereto for which the Buyer has not received a Purchase Price Credit that
\n shall have been false or incorrect when made or deemed made;<\/p>\n
(ii) the failure by such Originator, to comply with any
\n applicable law, rule or regulation with respect to any Receivable or
\n Contract related thereto, or the nonconformity of any Receivable or
\n Contract included therein with any such applicable law, rule or regulation
\n or any failure of such Originator to keep or perform any of its
\n obligations, express or implied, with respect to any Contract;<\/p>\n
(iii) any failure of such Originator to perform its duties,
\n covenants or other obligations in accordance with the provisions of this
\n Agreement or any other Transaction Document;<\/p>\n
(iv) any products liability, personal injury or damage, suit
\n or other similar claim arising out of or in connection with goods or
\n services that are the subject of any Contract or any Receivable;<\/p>\n
(v) any dispute, claim, offset or defense (other than
\n discharge in bankruptcy of the Obligor) of the Obligor to the payment of
\n any Receivable (including, without limitation, a defense based on such
\n Receivable or the related Contract not being a legal, valid and binding
\n obligation of such Obligor enforceable against it in accordance with its
\n terms), or any other claim resulting from the sale of the goods or service
\n related to such Receivable or the furnishing or failure to furnish such
\n goods or services;<\/p>\n
(vi) any Collections received, directly or indirectly by an
\n Originator (or its agent) which are not promptly remitted to Buyer;<\/p>\n
(vii) any investigation, litigation or proceeding related to or
\n arising from this Agreement or any other Transaction Document, the
\n transactions contemplated hereby, such Originator’s use of the proceeds of
\n the Purchase from it hereunder, the ownership of the Receivables originated
\n by such Originator or any other investigation, litigation or proceeding
\n relating to such Originator in which any Indemnified Party becomes involved
\n as a result of any of the transactions contemplated hereby;<\/p>\n
(viii) any inability to litigate any claim against any Obligor
\n in respect of any Receivable reflected in any Purchase Report as being an
\n Eligible Receivable as a result of such Obligor being immune from civil and
\n commercial law and suit on the grounds of sovereignty or otherwise from any
\n legal action, suit or proceeding;<\/p>\n
(ix) any Termination Event described in Section 5.1(d);
\n ————– <\/p>\n
16<\/p>\n
(xi) any failure to vest and maintain vested in the Buyer,
\n or to transfer to the Buyer, ownership of the Receivables originated by
\n such Originator and purported to be conveyed to the Buyer hereunder,
\n together with the associated Related Security, in each case, free and clear
\n of any Adverse Claim;<\/p>\n
(xii) the failure to have filed, or any delay in filing,
\n financing statements or other similar instruments or documents under the
\n UCC of any applicable jurisdiction or the applicable laws of Canada with
\n respect to any Receivable originated by such Originator and the Related
\n Security with respect thereto, and the proceeds of any thereof, whether at
\n the time of the Purchase from such Originator hereunder or at any
\n subsequent time;<\/p>\n
(xiii) any action or omission by such Originator which
\n impairs the rights of the Buyer with respect to any Receivable or reduces
\n the value of any such Receivable (for any reason other than the application
\n of Collections thereto or charge-off of any Receivable as uncollectible)
\n unless the Buyer has received a Purchase Price Credit therefor; and<\/p>\n
(xiv) the failure of any Receivable reflected as an Eligible
\n Receivable on any Purchase Report prepared by such Originator to be an
\n Eligible Receivable at the time acquired by the Buyer.<\/p>\n
Section 6.2 Other Costs and Expenses. Each Originator shall pay to the
\n ————————
\nBuyer on demand all reasonable costs and out-of-pocket expenses actually
\nincurred in connection with the preparation, execution and delivery of this
\nAgreement, the transactions contemplated hereby and the other documents to be
\ndelivered hereunder. In addition to the foregoing, each Originator shall pay, on
\ndemand, any and all reasonable costs and expenses, including reasonable counsel
\nfees and expenses, actually incurred by the Buyer (or, at any time the Credit
\nand Security Agreement remains in effect, the Agent as the Buyer’s assignee) in
\nconnection with (i) any amendment to or waiver of this Agreement, and\/or (ii)
\nthe enforcement of this Agreement and the other documents delivered hereunder
\nfollowing a Termination Event.<\/p>\n
ARTICLE VII
\n MISCELLANEOUS<\/p>\n
Section 7.1 Waivers and Amendments.
\n ———————- <\/p>\n
(a) No failure or delay on the part of the Buyer (or, at any time
\n the Credit and Security Agreement remains in effect, the Agent as the
\n Buyer’s assignee) in exercising any power, right or remedy under this
\n Agreement shall operate as a waiver thereof, nor shall any single or
\n partial exercise of any such power, right or remedy preclude any other
\n further exercise thereof or the exercise of any other power, right or
\n remedy. The rights and remedies herein provided shall be cumulative and
\n nonexclusive of any rights or remedies provided by law.<\/p>\n
17<\/p>\n
Any waiver of this Agreement shall be effective only in the specific
\n instance and for the specific purpose for which given.<\/p>\n
(b) No provision of this Agreement may be amended, supplemented,
\n modified or waived except in writing signed by each Originator and the
\n Buyer and, to the extent required under the Credit and Security Agreement,
\n the Agent and the Liquidity Banks or the Required Liquidity Banks. At any
\n time while the Credit and Security Agreement remains in effect, any
\n material amendment, supplement, modification or waiver will require
\n satisfaction of the Rating Agency Condition.<\/p>\n
Section 7.2 Notices. All communications and notices provided for hereunder
\n ——-
\nshall be in writing (including bank wire, telecopy or electronic facsimile
\ntransmission or similar writing) and shall be given to the other parties hereto
\nat their respective addresses or telecopy numbers set forth on the signature
\npages hereof or at such other address or telecopy number as such Person may
\nhereafter specify for the purpose of notice to each of the other parties hereto.
\nEach such notice or other communication shall be effective (a) if given by
\ntelecopy, upon the receipt thereof, (b) if given by mail, three (3) Business
\nDays after the time such communication is deposited in the mail with first class
\npostage prepaid or (c) if given by any other means, when received at the address
\nspecified in this Section 7.2.
\n ———– <\/p>\n
Section 7.3 Protection of Ownership Interests of the Buyer.
\n ———————————————- <\/p>\n
(a) Each Originator agrees that from time to time, at its expense,
\nit will promptly execute and deliver all instruments and documents, and take all
\nactions, that may be necessary or desirable, or that the Buyer (or, at any time
\nthe Credit and Security Agreement remains in effect, the Agent as the Buyer’s
\nassignee) may request, to perfect, protect or more fully evidence the interest
\nof the Buyer (or, at any time the Credit and Security Agreement remains in
\neffect, the Agent as the Buyer’s assignee) hereunder, or to enable the Buyer
\n(or, at any time the Credit and Security Agreement remains in effect, the Agent
\nas the Buyer’s assignee) to exercise and enforce their rights and remedies
\nhereunder. At any time following a Termination Event, the Buyer (or, at any time
\nthe Credit and Security Agreement remains in effect, the Agent as the Buyer’s
\nassignee) may, at such Originator’s sole cost and expense, direct such
\nOriginator to notify the Obligors of Receivables of the ownership interests of
\nthe Buyer under this Agreement and may also direct that payments of all amounts
\ndue or that become due under any or all Receivables be made directly to the
\nBuyer (or, at any time the Credit and Security Agreement remains in effect, the
\nAgent as the Buyer’s assignee) or the Buyer’s (or such assigns’) designee.<\/p>\n
(b) If any Originator fails to perform any of its obligations
\nhereunder, the Buyer (or, at any time the Credit and Security Agreement remains
\nin effect, the Agent as the Buyer’s assignee) may (but shall not be required to)
\nperform, or cause performance of, such obligations, and the Buyer’s (or such
\nassigns’) costs and expenses incurred in connection therewith shall be payable
\nby such Originator as provided in Section 6.2. Each Originator irrevocably
\n ————
\nauthorizes the Buyer (and, at any time the Credit and Security Agreement remains
\nin<\/p>\n
18<\/p>\n
effect, the Agent as the Buyer’s assignee) at any time and from time to time in
\nthe sole discretion of the Buyer (or, at any time the Credit and Security
\nAgreement remains in effect, the Agent as Buyer’s assignee), and appoints the
\nBuyer (and, at any time the Credit and Security Agreement remains in effect, the
\nAgent as the Buyer’s assignee) as its attorney(ies)-in-fact, to act on behalf of
\nsuch Originator (i) to execute on behalf of such Originator as debtor, in the
\nevent such Originator fails to timely execute, and to file financing statements
\nnecessary in the Buyer’s my time while the Credit and Security Agreement remains
\nin effect, the Agent’s) reasonable opinion to perfect and to maintain the
\nperfection and priority of the interest of the in the Receivables originated by
\nsuch Originator and (ii) in the event such Originator fails to deliver any
\nfinancing statement requested pursuant to the preceding clause (i), to file a
\ncarbon photographic or other reproduction of this Agreement or any financing
\nstatement with respect to receivables as a financing statement in such offices
\nas the Buyer (or, at any time the Credit Security Agreement remains in effect,
\nthe Agent as the Buyer’s assignee) in their sole discretion deem necessary or
\ndesirable to perfect and to maintain the perfection and priority of the Buyer’s
\ninterest in such Receivables. This appointment is coupled with an interest and
\nis able.<\/p>\n
Section 7.4 Confidentiality.
\n ————— <\/p>\n
(a) Each Originator shall maintain and shall cause each of its
\nemployees and officers to maintain the confidentiality of the Fee Letter (under
\nand as defined in the Credit and Security Agreement) and the electronic models
\nand files (including electronic files containing model accounting entries for
\nsecuritization transactions) provided by the Agent or Blue Ridge in connection
\nwith the Credit and Security Agreement, provided, however, such information may
\nbe disclosed to third parties to the extent such disclosure is (i) required to
\ncomply with any applicable law (including federal and state securities laws) or
\norder of any judicial or administrative proceeding, or (ii) required in response
\nto any summons or subpoena or in connection with any litigation, provided,
\nfurther, that such Originator inform such person that such information is
\nsensitive, proprietary and confidential. Notwithstanding the foregoing, each
\nOriginator shall have no obligation of confidentiality in respect of any
\ninformation which may be generally available to the public or becomes available
\nto the public through no fault of such Originator or its Affiliates.<\/p>\n
(b) The Buyer (and, accordingly, each of its assigns) shall
\nmaintain, shall cause each of its employees, officers and agents to maintain,
\nand shall require the Lenders to maintain and to cause each of their respective
\nemployees, officers and agents to maintain, the confidentiality of any
\ninformation obtained by it in respect of the Receivables (including, without
\nlimitation, credit losses and delinquency levels) and any other proprietary or
\nconfidential information with respect to Parent, the Obligors, the Receivables,
\nthe Originators and the Servicer in communications with third parties; provided,
\nhowever, such information may be disclosed to third parties to the extent such
\ndisclosure is (i) required to comply with any applicable law (including federal
\nand state securities laws) or order of any judicial or administrative
\nproceeding, or (ii) required in response to any summons or subpoena or in
\nconnection with any litigation, or (iii) to any Person specified in Section 14.5
\nof the Credit and Security Agreement on the terms set forth therein.<\/p>\n
19<\/p>\n
Section 7.5 Bankruptcy Petition.
\n ——————- <\/p>\n
(a) Each Originator and the Buyer covenant and agree that, prior
\nto the date that is one year and one day after the payment in full of all
\noutstanding senior indebtedness of Blue Ridge, it will not institute against, or
\njoin any other Person in instituting against, Blue Ridge any bankruptcy,
\nreorganization, arrangement, insolvency or liquidation proceedings or other
\nsimilar proceeding under the laws of the United States or any state of the
\nUnited States.<\/p>\n
(b) Each Originator covenants and agrees that, prior to the date
\nthat is one year and one day after the payment in full of all outstanding
\nobligations of the Buyer under the Credit and Security Agreement, it will not
\ninstitute against, or join any other Person in instituting against, the Buyer
\nany bankruptcy, reorganization, arrangement, insolvency or liquidation
\nproceedings or other similar proceeding under the laws of the United States or
\nany state of the United States.<\/p>\n
Section 7.6 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
\n ————-
\nIN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
\nOF GEORGIA.<\/p>\n
Section 7.7 CONSENT TO JURISDICTION. ORIGINATOR HEREBY IRREVOCABLY SUBMITS
\n ———————–
\nTO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR GEORGIA STATE
\nCOURT SITTING IN FULTON COUNTY, GEORGIA IN ANY ACTION OR PROCEEDING ARISING OUT
\nOF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT
\nTO THIS AGREEMENT AND ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
\nRESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
\nCOURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
\nTHE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
\nSUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
\nBUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF
\nANY OTHER JURISDICTION.<\/p>\n
Section 7.8 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
\n ——————–
\nAPPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
\nPROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
\nTORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
\nWITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS
\nAGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.<\/p>\n
20<\/p>\n
Section 7.9 Integration; Binding Effect; Survival of Terms.
\n ———————————————- <\/p>\n
(a) The Transaction Documents contain the final and complete
\nintegration of all prior expressions by the parties hereto with respect to the
\nsale and collection of the Receivables and Related Security and shall constitute
\nthe entire agreement among the parties hereto with respect to such subject
\nmatter, superseding all prior oral or written understandings with respect to the
\nsale and collection of the Receivables and Related Security.<\/p>\n
(b) Nothing contained herein or in any other Transaction Document
\nshall be deemed to prohibit or limit any merger or consolidation of an
\nOriginator with another Originator so long as any necessary financing statements
\nare filed, promptly after the effectiveness of such merger or consolidation,
\nunder the UCC in all jurisdictions necessary to make the representations and
\nwarranties contained in this Agreement true and correct after giving effect to
\nsuch merger or consolidation. This Agreement shall be binding upon and inure to
\nthe benefit of the Originators, the Buyer and their respective successors and
\npermitted assigns (including any trustee in bankruptcy). No Originator may
\nassign any of its rights and obligations hereunder or any interest herein
\nwithout the prior written consent of the Buyer; provided, however, that no
\nconsent of the Buyer shall be required in connection with an assignment by
\noperation of law to the surviving Originator in a merger or consolidation
\ndescribed in the first sentence of this Section 7.9(b). The Buyer may pledge or
\nassign at any time its rights and obligations hereunder and interests herein to
\nany other Person without the consent of any Originator. Without limiting the
\nforegoing, each Originator acknowledges that the Buyer, pursuant to the Credit
\nand Security Agreement, may grant to the Agent for the benefit of the Secured
\nParties (under and as defined in the Credit and Security Agreement), a security
\ninterest in the Buyer’s rights, remedies, powers and privileges hereunder. This
\nAgreement shall create and constitute the continuing obligations of the parties
\nhereto in accordance with its terms and shall remain in full force and effect
\nuntil terminated in accordance with its terms; provided, however, that the
\nrights and remedies with respect to (i) any breach of any representation and
\nwarranty made by any Originator pursuant to Article II; (ii) the indemnification
\n ———-
\nand payment provisions of Article VI; and (iii) Section 7.4 shall be continuing
\n ———- ———–
\nand shall survive any assignment or termination of this Agreement.<\/p>\n
Section 7.10 Counterparts; Severability; Section References. This Agreement
\n ———————————————-
\nmay be executed in any number of counterparts and by different parties hereto in
\nseparate counterparts, each of which when so executed shall be deemed to be an
\noriginal and all of which when taken together shall constitute one and the same
\nAgreement. Any provisions of this Agreement which are prohibited or
\nunenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
\nto the extent of such prohibition or unenforceability without invalidating the
\nremaining provisions hereof, and any such prohibition or unenforceability in any
\njurisdiction shall not invalidate or render unenforceable such provision in any
\nother jurisdiction. Unless otherwise expressly indicated, all references herein
\nto “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
\nsections of, and schedules and exhibits to, this Agreement.<\/p>\n
(Signature pages follows)<\/p>\n
21<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
\nbe executed and delivered by their duly authorized officers as of the date
\nhereof in Wilmington, Delaware.<\/p>\n
MOHAWK CARPET CORPORATION<\/p>\n
By: __________________________
\n Name: Sidney J. Frost
\n Title: Vice President and Treasurer<\/p>\n
Address: 160 S. Industrial Blvd.
\n Calhoun, GA 30703
\n Attn: Sidney J. Frost
\n Phone: (706) 624-2239
\n Fax: (706) 625-3851<\/p>\n
MOHAWK COMMERCIAL, INC.<\/p>\n
By: __________________________
\n Name: Sidney J. Frost
\n Title: Vice President and Treasurer<\/p>\n
Address: 160 S. Industrial Blvd.
\n Calhoun, GA 30703
\n Attn: Sidney J. Frost
\n Phone: (706) 624-2239
\n Fax: (706) 625-3851<\/p>\n
DURKAN PATTERNED CARPETS, INC.<\/p>\n
By: __________________________
\n Name: Sidney J. Frost
\n Title: Vice President, Treasurer and
\n Secretary<\/p>\n
Address: 160 S. Industrial Blvd.
\n Calhoun, GA 30703
\n Attn: Sidney J. Frost
\n Phone: (706) 624-2239
\n Fax: (706) 625-3851<\/p>\n
22<\/p>\n
MOHAWK FACTORING, INC.<\/p>\n
By: __________________________
\n Name: Linda Bubacz
\n Title: Assistant Treasurer and Secretary<\/p>\n
Address: 300 Delaware Ave.
\n Suite 1273 C
\n Wilmington, Delaware 19801
\n Attn: Linda Bubacz
\n Phone: (302) 552-3100
\n Fax: (302) 552-3128<\/p>\n
23<\/p>\n
Exhibit I<\/p>\n
Definitions
\n ———–<\/p>\n
This is Exhibit I to the Agreement (as hereinafter defined). As used in the
\nAgreement and the Exhibits and Schedules thereto, capitalized terms have the
\nmeanings set forth in this Exhibit I (such meanings to be equally applicable to
\nthe singular and plural forms thereof).<\/p>\n
“Adverse Claim” means a lien, security interest, charge or encumbrance, or
\nother right or claim in, of or on any Person’s assets or properties in favor of
\nany other Person.<\/p>\n
“Agent” has the meaning set forth in the Preliminary Statements to the
\nAgreement.<\/p>\n
“Agreement” means the Receivables Purchase and Sale Agreement, dated as of
\nOctober 25, 2000, among Originators and the Buyer, as the same may be amended,
\nrestated or otherwise modified.<\/p>\n
“Blue Ridge” has the meaning set forth in the Preliminary Statements to the
\nAgreement.<\/p>\n
“Business Day” means any day on which banks are not authorized or required
\nto close in New York, New York or Atlanta, Georgia, and The Depository Trust
\nCompany of New York is open for business, and, if the applicable Business Day
\nrelates to any computation or payment to be made with respect to the LIBO Rate,
\nany day on which dealings in dollar deposits are carried on in the London
\ninterbank offering market.<\/p>\n
“Buyer” has the meaning set forth in the preamble to the Agreement.<\/p>\n
“Calculation Period” means each fiscal month of the Buyer or portion
\nthereof which elapses during the term of the Agreement. The first Calculation
\nPeriod shall commence on the date of the Purchases hereunder and the final
\nCalculation Period shall terminate on the Termination Date. For purposes of the
\nuse of this term in other definitions in Exhibit I to this Agreement,
\nCalculation Periods occurring prior to the date of the Purchases hereunder shall
\nmean a fiscal month of the Buyer.<\/p>\n
“Canadian Receivable” means a Receivable owing from an Obligor domiciled
\nin, or organized under the laws of, Canada or one of its political subdivisions.<\/p>\n
“Change of Control” means the acquisition by any Person, or two or more
\nPersons acting in concert, of beneficial ownership (within the meaning of Rule
\n13d-3 of the Securities and Exchange Commission under the Securities Exchange
\nAct of 1934) of 30% or more of the outstanding shares of voting stock of Parent,
\nor Parent ceases to own, directly or indirectly, all of the outstanding shares
\nof voting stock of each Originator.<\/p>\n
24<\/p>\n
“Collection Accounts” means those accounts shown on Exhibit III, as the
\n ———–
\nsame may be amended from time to time by the Buyer in accordance with the terms
\nhereof.<\/p>\n
“Collection Records” means, with respect to any Receivable, all Invoices
\nand all other documents, books, records and other information (including,
\nwithout limitation, computer programs, tapes, disks, punch cards, data
\nprocessing software and related property and rights) relating to amounts paid on
\nor owing in respect of such Receivable.<\/p>\n
“Collections” means, with respect to any Receivable, all cash collections
\nand other cash proceeds in respect of such Receivable, including, without
\nlimitation, all Finance Charges or other related amounts accruing in respect
\nthereof and all cash proceeds of Related Security with respect to such
\nReceivable.<\/p>\n
“Collection Services Agreement” means that certain Servicing Agreement
\ndated as of October 25, 2000 by and between the Buyer and Mohawk Servicing,
\nInc., as Servicer, providing for the collection and servicing of all Receivables
\nheld by the Buyer.<\/p>\n
“Contingent Obligation” of a Person means any agreement, undertaking or
\narrangement by which such Person assumes, guarantees, endorses, contingently
\nagrees to purchase or provide funds for the payment of, or otherwise becomes or
\nis contingently liable upon, the obligation or liability of any other Person, or
\nagrees to maintain the net worth or working capital or other financial condition
\nof any other Person, or otherwise assures any creditor of such other Person
\nagainst loss, including, without limitation, any comfort letter, operating
\nagreement, take-or-pay contract or application for a letter of credit.<\/p>\n
“Contract” means, with respect to any Receivable, any and all instruments
\nand agreements, if any, pursuant to which such Receivable arises but excluding
\nany Invoice.<\/p>\n
“Credit and Collection Policy” means each Originator’s credit and
\ncollection policies and practices relating to Contracts and Receivables existing
\non and as administered historically prior to the date hereof and summarized in
\nExhibit V, as modified from time to time in accordance with the Agreement.<\/p>\n
“Credit and Security Agreement” has the meaning set forth in the
\nPreliminary Statements to the Agreement.<\/p>\n
“Default Fee” means a per annum rate of interest equal to the sum of (i)
\nthe Prime Rate, plus (ii) 2% per annum.<\/p>\n
“Defaulted Receivable” means a Receivable: (i) as to which the Obligor
\nthereof has suffered an Event of Bankruptcy; (ii) which, consistent with the
\nCredit and Collection Policy, would be written off Originator’s books as
\nuncollectible; or (iii) as to which any payment, or part thereof, remains unpaid
\nfor 61 days or more from the original due date for such payment.<\/p>\n
“Delinquent Receivable” means a Receivable as to which any payment, or part
\nthereof, remains unpaid for 31-60 days from the original due date for such
\npayment.<\/p>\n
25<\/p>\n
“Discount Factor” means a percentage calculated to provide the Buyer with a
\nreasonable return on its investment in the Receivables originated by each
\nOriginator after taking account of (i) the time value of money based upon the
\nanticipated dates of collection of such Receivables and the cost to the Buyer of
\nfinancing its investment in such Receivables during such period and (ii) the
\nrisk of nonpayment by the Obligors. Each Originator and the Buyer may agree from
\ntime to time to change the Discount Factor based on changes in one or more of
\nthe items affecting the calculation thereof, provided that any change to the
\nDiscount Factor shall take effect as of the commencement of a Calculation
\nPeriod, shall apply only prospectively and shall not affect the Purchase Price
\npayment made prior to such Calculation Period during which such Originator and
\nthe Buyer agree to make such change.<\/p>\n
“Durkan” has the meaning set forth in the preamble to the Agreement.<\/p>\n
“Eligible Receivable” means, at any time, a Receivable:<\/p>\n
(i) the Obligor of which (a) if a natural person, is a resident of
\n the United States or Canada or, if a corporation or other business
\n organization, is organized under the laws of the United States, Canada or
\n any political subdivision of the United States or Canada and has its chief
\n executive office in the United States or Canada; (b) is not an Affiliate of
\n any of the parties hereto; and (c) is not a government or a governmental
\n subdivision or agency; provided, however, that in no event may the sum of
\n 100% of all Canadian Receivables denominated in United States Dollars that
\n are included as Eligible Receivables plus 85% of all Canadian Receivables
\n denominated in Canadian Dollars that are included as Eligible Receivables
\n exceed 3% of total Receivables at any time,<\/p>\n
(ii) which is not a Defaulted Receivable,<\/p>\n
(iii) which was not a Delinquent Receivable on (A) the date of
\n Purchase (if such Receivable was in existence on the Initial Cutoff Date),
\n or (B) the date on which such Receivable came into existence (in all other
\n cases),<\/p>\n
(iv) which (A) by its terms is due and payable within 91 days of
\n the original billing date therefor, (B) has not had its payment terms
\n extended more than once, and (C) will not, when added to all other Eligible
\n Receivables, cause the weighted average of the payment terms for all
\n Eligible Receivables to exceed 50 days,<\/p>\n
(v) which is an “account,” a “general intangible” or “chattel
\n paper” within the meaning of Article 9 of the UCC in the applicable
\n jurisdiction, and is not evidenced by an “instrument” within the meaning of
\n Article 9 of the UCC,<\/p>\n
26<\/p>\n
(vi) which is denominated and payable only in United States Dollars
\n or Canadian Dollars in the United States or Canada,<\/p>\n
(vii) which is in full force and effect and constitutes the legal,
\n valid and binding obligation of the related Obligor enforceable against
\n such Obligor in accordance with its terms,<\/p>\n
(viii) which (A) does not require the Obligor’s consent to the
\n transfer, sale, pledge or assignment of the rights of the applicable
\n Originator under the applicable Contract or Invoice and (B) does not
\n contain a confidentiality provision that purports to restrict the ability
\n of the Buyer (or, at any time the Credit and Security Agreement remains in
\n effect, the Agent as the Buyer’s assignee) to exercise its rights under
\n this Agreement, including, without limitation, its right to review the
\n Contract or Invoice applicable thereto,<\/p>\n
(ix) which represents an obligation to pay a specified sum of
\n money, contingent only upon (A) the sale of goods or the provision of
\n services by the applicable Originator (which sale has been consummated or
\n services have been performed), and (B) satisfaction by such Originator of
\n any applicable warranty claims which have not yet been made or asserted,<\/p>\n
(x) which does not contravene any law, rule or regulation
\n applicable thereto (including, without limitation, any law, rule and
\n regulation relating to truth in lending, fair credit billing, fair credit
\n reporting, equal credit opportunity, fair debt collection practices and
\n privacy),<\/p>\n
(xi) which satisfies all applicable requirements of the applicable
\n Credit and Collection Policy,<\/p>\n
(xii) which was generated in the ordinary course of the applicable
\n Originator’s business,<\/p>\n
(xiii) which arises solely from the sale (and not the lease) of goods
\n or the provision of services to the related Obligor by the applicable
\n Originator or a predecessor to such Originator, and not by any other Person
\n (in whole or in part),<\/p>\n
(xiv) which is not the subject of, to the Originator’s knowledge,
\n any dispute, counterclaim, right of rescission, set-off, counterclaim or
\n any other defense (including defenses arising out of violations of usury
\n laws) of the applicable Obligor against the applicable Originator or any
\n other Adverse Claim, and the Obligor thereon holds no right as against such<\/p>\n
27<\/p>\n
Originator to cause such Originator to repurchase the goods or merchandise
\n the sale of which shall have given rise to such Receivable (except with
\n respect to sale discounts effected pursuant to the Contract, or defective
\n goods returned in accordance with the terms of the Contract); provided,
\n however, that if such dispute, offset, counterclaim or defense affects only
\n a portion of the Outstanding Balance of such Receivable, then such
\n Receivable may be deemed an Eligible Receivable to the extent of the
\n portion of such Outstanding Balance which is not so affected, and provided,
\n further, that Receivables of any Obligor which has any accounts payable by
\n the applicable Originator or by a wholly-owned Subsidiary of such
\n Originator (thus giving rise to a potential offset against such
\n Receivables) may be treated as Eligible Receivables to the extent that the
\n Obligor of such Receivables has agreed pursuant to a written agreement in
\n form and substance satisfactory to the Buyer (and, at any time the Credit
\n and Security Agreement remains in effect, the Agent as the Buyer’s
\n assignee), that such Receivables shall not be subject to such offset,<\/p>\n
(xv) as to which the applicable Originator has satisfied and fully
\n performed all obligations on its part with respect to such Receivable
\n required to be fulfilled by it, and no further action is required to be
\n performed by any Person with respect thereto other than payment thereon by
\n the applicable Obligor, and<\/p>\n
(xvi) as to which each of the representations and warranties
\n contained in Sections 2.1(i), (1) and (s) is true and correct.<\/p>\n
“ERISA” means the Employee Retirement Income Security Act of 1974, as
\namended from time to time, and any rule or regulation issued thereunder.<\/p>\n
“ERISA Affiliate” means any trade or business (whether or not incorporated)
\nunder common control with any Originator within the meaning of Section 4 14(b)
\nor (c) of the Code (and Sections 4 14(m) and (o) of the Code for purposes of
\nprovisions relating to Section 412 of the Code).<\/p>\n
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
\n(b) a withdrawal by any Originator or any ERISA Affiliate from a Pension Plan
\nsubject to Section 4063 of ERISA during a plan year in which it was a
\nsubstantial employer (as defined in Section 4001 (a) (2) of ERISA) or a
\ncessation of operations which is treated as such a withdrawal under Section
\n4062(e) of ERISA; (c) a complete or partial withdrawal by any Originator or any
\nERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
\nPlan is in reorganization; (d) the filing of a notice of intent to terminate,
\nthe treatment of a Plan amendment as a termination under Section 4041 or 404 IA
\nof ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
\nPlan or Multiemployer Plan; (e) an event or condition which might reasonably be
\nexpected to constitute grounds under Section 4042 of ERISA for the termination
\nof, or the appointment of a trustee to administer, any Pension Plan or
\nMultiemployer<\/p>\n
28<\/p>\n
Plan; or (f) the imposition of any liability under Tide IV of ERISA, other than
\nPBGC premiums due but not delinquent under Section 4007 of ERISA, upon any
\nOriginator or any ERISA Affiliate.<\/p>\n
“Factored Receivable” means, with respect to any Originator, any right to
\npayment for goods sold or services performed by such Originator existing on or
\nafter the Initial Cutoff Date which is sold or pledged to any factor and
\ndesignated on such Originator’s accounting system with code “C”, “D”, “S”, “I”
\nor any other code identified as such in writing by the Originator to the Buyer
\n(and, as long as the Credit and Security Agreement remains in effect, the Agent
\nas the Buyer’s assignee), or which directs that payment be made to a factor
\nother than the Buyer.<\/p>\n
“Finance Charges” means, with respect to any Contract, any finance,
\ninterest, late payment charges or similar charges owing by an Obligor pursuant
\nto such Contract.<\/p>\n
“Indebtedness” of a Person means such Person’s (i) obligations for borrowed
\nmoney, (ii) obligations representing the deferred purchase price of property or
\nservices (other than accounts payable arising in the ordinary course of such
\nPerson’s business payable on terms customary in the trade), (iii) obligations,
\nwhether or not assumed, secured by liens or payable out of the proceeds or
\nproduction from property now or hereafter owned or acquired by such Person, (iv)
\nobligations which are evidenced by notes, acceptances, or other instruments, (v)
\ncapitalized lease obligations, (vi) net liabilities under interest rate swap,
\nexchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities
\nin respect of unfunded vested benefits under plans covered by Title IV of ERISA.<\/p>\n
“Initial Cutoff Date” means the close of business on the Business Day
\nimmediately prior to the date hereof.<\/p>\n
“Invoice” means any paper or electronic invoice evidencing any Receivable.<\/p>\n
“Lock-Boxes” means those lock-boxes shown on Exhibit III, as the same may
\n ———–
\nbe amended from time to time by the Buyer in accordance with the terms hereof.<\/p>\n
“Material Adverse Effect” means a material adverse effect on (i) the
\nfinancial condition or results of operations of Parent and its Subsidiaries,
\nconsidered as a whole, (ii) the ability of any Originator to perform its
\nobligations under this Agreement or any other Transaction Document to which such
\nOriginator is a party, (iii) the legality, validity or enforceability of this
\nAgreement or any other Transaction Document to which such Originator is a party,
\n(iv) any Originator’s, the Buyer’s, the Agent’s or any Lender’s interest in the
\nReceivables generally or in any significant portion of the Receivables or the
\nRelated Security with respect thereto, or (v) the collectibility of the
\nReceivables generally or of any material portion of the Receivables.<\/p>\n
“Material Subsidiary” means, as of the date of any determination thereof,
\nany Subsidiary that either: (a) owns assets having a book value equal to or
\ngreater than 5% of the consolidated total assets shown on the consolidated
\nbalance sheet of Parent and its consolidated<\/p>\n
29<\/p>\n
subsidiaries, or (b) had net income for any prior period of four consecutive
\nfiscal quarters equal to or greater than 5% of the Parent’s and its consolidated
\nsubsidiaries consolidated net income shown on the statements of earnings for the
\nsame four fiscal quarter period.<\/p>\n
“Mohawk Carpet” has the meaning set forth in the preamble to the Agreement.<\/p>\n
“Mohawk Commercial” has the meaning set forth in the preamble to the
\nAgreement.<\/p>\n
“Monthly Reporting Date” means the 18th day of each calendar month
\nhereafter (or if any such day is not a Business Day, the next succeeding
\nBusiness Day thereafter).<\/p>\n
“Multiemployer Plan” means a “multiemployer plan,” within the meaning of
\nSection 4001(a)(3) of ERISA, to which any Originator or any ERISA Affiliate
\nmakes, is making, or is obligated to make contributions or, during the preceding
\nthree calendar years, has made, or been obligated to make, contributions.<\/p>\n
“Obligor” means a Person obligated to make payments on a Receivable.<\/p>\n
“Organizational Documents” means, for any Person, the documents for its
\nformation and organization, which, for example, (a) for a corporation are its
\ncorporate charter and bylaws, (b) for a partnership are its certificate of
\npartnership (if applicable) and partnership agreement, (c) for a limited
\nliability company are its certificate of formation or organization and its
\noperating agreement, regulations or the like and (d) for a trust is the trust
\nagreement, declaration of trust, indenture or bylaws under which it is created.<\/p>\n
“Original Balance” means, with respect to any Receivable coming into
\nexistence after the Initial Cutoff Date, the Outstanding Balance of such
\nReceivable on the date it was created.<\/p>\n
“Originator” has the meaning set forth in the preamble to the Agreement.<\/p>\n
“Other Records” means, with respect to any Receivable: (a) all Contracts
\nand (b) all other documents, books, records and other information (including,
\nwithout limitation, computer programs, tapes, disks, punch cards, data
\nprocessing software and related property and rights) relating to the
\ncreditworthiness of any Obligor in respect thereof.<\/p>\n
“Outstanding Balance” of any Receivable at any time means then outstanding
\nprincipal balance thereof.<\/p>\n
“Parent” means Mohawk Industries, Inc., a Delaware corporation, and its
\nsuccessors.<\/p>\n
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor
\nthereto.<\/p>\n
30<\/p>\n
“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
\nsubject to Title IV of ERISA which any Originator sponsors or maintains, or to
\nwhich it makes, is making, or is obligated to make contributions, or in the case
\nof a multiple employer plan (as described in Section 4064(a) of ERISA) has made
\ncontributions at any time during the immediately preceding five plan years.<\/p>\n
“Person” means an individual, partnership, corporation (including a
\nbusiness trust), limited liability company, joint stock company, trust,
\nunincorporated association, joint venture or other entity, or a government or
\nany political subdivision or agency thereof.<\/p>\n
“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
\nwhich any Originator or any of its ERISA Affiliates sponsors or maintains or to
\nwhich any Originator or any of its ERISA Affiliates makes, is making, or is
\nobligated to make contributions and includes any Pension Plan, other than a Plan
\nmaintained outside the United States primarily for the benefit of Persons who
\nare not U.S. residents.<\/p>\n
“Purchase” means the purchase by the Buyer from an Originator pursuant to
\nSection 1.1(a) of the Agreement of the Receivables originated by such Originator
\n————–
\nand the Related Security related thereto, together with all related rights in
\nconnection therewith.<\/p>\n
“Purchase Price” means, with respect to the Purchase from each Originator,
\nthe aggregate price to be paid by the Buyer to such Originator for such Purchase
\nin accordance with Section 1.2 of the Agreement for the Receivables originated
\n ———–
\nby such Originator and the associated Related Security being sold to the Buyer,
\nwhich price shall equal on any date (i) the product of (x) the Outstanding
\nBalance of such Receivables on such date, multiplied by (y) one minus the
\nDiscount Factor in effect on such date, minus (ii) any Purchase Price Credits to
\nbe credited against the Purchase Price otherwise payable in accordance with
\nSection 1.3 of the Agreement.
\n———–<\/p>\n
“Purchase Price Credit” has the meaning set forth in Section 1.3 of the
\n ———–
\nAgreement.<\/p>\n
“Purchase Report” has the meaning set forth in Section 1.1(b) of the
\n ————–
\nAgreement.<\/p>\n
“Rating Agency Condition” means, at any time the Credit and Security
\nAgreement remains in effect, the Rating Agency Condition as defined therein.<\/p>\n
“Receivable” means all indebtedness and other obligations owed to an
\nOriginator, at the times it arises and before giving effect to any transfer or
\nconveyance under the Agreement, arising in connection with the sale of goods or
\nthe rendering of services by such Originator or a predecessor (including,
\nwithout limitation, any indebtedness, obligation or interest constituting an
\naccount, chattel paper or general intangible) together with the obligation, if
\nany, to pay any Finance Charges with respect thereto and all proceeds thereof;
\nprovided, however, in no event shall the term “Receivable” include any Factored
\nReceivable or any Receivable coming into existence after the Termination Date.
\nAll Receivables are identified with the legend paid to<\/p>\n
31<\/p>\n
Buyer or similar language. For purposes of this Agreement, indebtedness and
\nother rights and obligations arising from any one transaction, including,
\nwithout limitation, indebtedness and other rights and obligations represented by
\nan individual invoice, shall constitute a Receivable separate from a Receivable
\nconsisting of the indebtedness and other rights and obligations arising from any
\nother transaction; provided, further, that any indebtedness, rights or
\nobligations referred to in the immediately preceding sentence shall be a
\nReceivable regardless or whether the account debtor or such Originator treats
\nsuch indebtedness, rights or obligations as a separate payment obligation.<\/p>\n
“Related Security” means, with respect to any Receivable:<\/p>\n
(i) all of the applicable Originator’s interest, if any, in
\n the goods (including returned or repossessed goods), the sale of which by
\n such Originator gave rise to such Receivable,<\/p>\n
(ii) all other security interests or liens and property
\n subject thereto from time to time, if any, purporting to secure payment of
\n such Receivable, together with all financing statements and security
\n agreements describing any collateral securing such Receivable,<\/p>\n
(iii) all guaranties, letters of credit, credit insurance and
\n other agreements or arrangements of whatever character from time to time
\n supporting payment of such Receivable,<\/p>\n
(iv) all service contracts and agreements, if any, associated
\n with such Receivable,<\/p>\n
(v) all Collections, and<\/p>\n
(vi) all other proceeds and insurance proceeds of any of the
\n foregoing or of any Receivable.<\/p>\n
“Reportable Event” means any of the events set forth in Section
\n4043(c) of ERISA or the regulations thereunder, other than any such event for
\nwhich the 30-day notice requirement under ERISA has been waived in regulations
\nissued by the PBGC.<\/p>\n
“Responsible Financial Officer” of Parent means any of its chief
\nfinancial officer, vice president & corporate controller or vice president & treasurer, acting singly.<\/p>\n
“Servicer” means Mohawk Servicing, Inc. and its permitted successors
\nand assigns.<\/p>\n
“Settlement Date” means the second Business Day after each Monthly
\nReporting Date.<\/p>\n
32<\/p>\n
“Termination Date” means the earliest to occur of (i) the date on which the
\nBuyer is unable to pay the Purchase Price for any Receivable in accordance with
\nSection 1.2, (ii) the Business Day immediately prior to the occurrence of a
\n———–
\nTermination Event set forth in Section 5.1(d), (iii) the Business Day specified
\n ————–
\nin a written notice from the Buyer (or, at any time the Credit and Security
\nAgreement remains in effect, the Agent as the Buyer’s assignee) to the
\nOriginators following the occurrence of any other Termination Event, (iv) the
\ndate which is 5 Business Days after the Buyer’s receipt of written notice from
\nany Originator that it wishes to terminate sales under this Agreement, and (v)
\nthe date which is 5 Business Days after each Originator receives written notice
\nthat the Buyer wishes to terminate purchases under this Agreement.<\/p>\n
“Termination Event” has the meaning set forth in Section 5.1 of the
\n ———–
\nAgreement.<\/p>\n
“Transaction Documents” means, collectively, this Agreement, the Collection
\nServices Agreement, and all Purchase Reports.<\/p>\n
“Unmatured Termination Event” means an event which, with the passage of
\ntime or the giving of notice, or both, would constitute a Termination Event.<\/p>\n
All accounting terms not specifically defined herein shall be construed in
\naccordance with GAAP. All terms used in Article 9 of the UCC in the State of
\nGeorgia, and not specifically defined herein, are used herein as defined in such
\nArticle 9.<\/p>\n
33<\/p>\n
Exhibit II
\n ———-<\/p>\n
Places of Business; Locations of Collection Records;
\n —————————————————-
\n Federal Employer Identification Number(s); Other Names
\n ——————————————————<\/p>\n
Places of Business: <\/p>\n
Mohawk Carpet Corporation Durkan Patterned Carpets, Inc.
\nFEI# 58-2185429 FEI# 58-1729913
\nAddress: Address:
\n160 S. Industrial Blvd. 160 S. IndustriBlvd.
\nCalhoun, GA 30703 Calhoun, GA 30703 <\/p>\n
Mohawk Commercial, Inc.
\nFEI# 58-2357716
\nAddress:
\n160 S. Industrial Blvd.
\nCalhoun, GA 30703 <\/p>\n
Location of Collection Records: <\/p>\n
Mohawk Servicing, Inc Mohawk Servicing, Inc.
\n235 Industrial Blvd. 160 S. Industrial Blvd.
\nChatsworth, GA 30705 Calhoun, GA 30703 <\/p>\n
Federal Employer Identificati on Number: <\/p>\n
Mohawk Carpet Corporation Durkan Patterned Carpets, Inc.
\nFEI # 58-2185429 FEI# 58-1729913 <\/p>\n
Mohawk Commercial, Inc.
\nFEI# 58-2357716 <\/p>\n
34<\/p>\n
Legal, Trade and Assumed Names: <\/p>\n
Alladin Mills Insignia <\/p>\n
World Contract Sunrise <\/p>\n
Mohawk Commercial Hamilton <\/p>\n
IMAGE Cyboney <\/p>\n
Galaxy Mohawk Rug & Textile <\/p>\n
Merit Hospitality Ultra Weave <\/p>\n
Custom Weave Durkan Commercial <\/p>\n
Wunda Wave American Weavers <\/p>\n
Mohawk International <\/p>\n
Karastan <\/p>\n
Alliance Pad <\/p>\n
Mohawk Non-Woven <\/p>\n
Mohawk Carpet <\/p>\n
World <\/p>\n
Diamond <\/p>\n
Durkan Patterned Carpet <\/p>\n
Rug & Textile Group <\/p>\n
Aladdin Rug <\/p>\n
Townhouse <\/p>\n
New Mark & James <\/p>\n
J MAR <\/p>\n
American Rug Craftsman <\/p>\n
Horizon <\/p>\n
Alexander Smith <\/p>\n
Bigelow <\/p>\n
Harbinger <\/p>\n
Helios <\/p>\n
Delaware Valley Wool ________ <\/p>\n
Greenville Yarn <\/p>\n
Burton Rug <\/p>\n
35<\/p>\n
EXHIBIT III<\/p>\n
Lock-Boxes and Collection Accounts<\/p>\n
\n\n—————————————————————————————-
\n BUYER’S RELATED COLLECTION ACCOUNT
\n ——- ————————–
\n LOCK-BOX OF BUYER
\n ——– ——–
\n
\n—————————————————————————————-
\nP.O. Box 91157 Account No. 8188602028 at
\nChicago, IL 60693-1157 Bank of America in Chicago, Illinois
\n ABA No. 071000039
\n—————————————————————————————–
\nP.O. Box 99312 Account No. 8188602028 at
\nChicago, IL 60693-9312 Bank of America in Chicago, Illinois
\n ABA No. 071000039
\n—————————————————————————————–
\nP.0. Box 98808 Account No. 8188602028 at
\nChicago, IL 60693-8808 Bank of America in Chicago, Illinois
\n ABA No. 071000039
\n—————————————————————————————–
\nP.O. Box 101450 Account No. 12420855 at
\nAtlanta, GA 30392-1450 Wachovia in Atlanta, GA
\n ABA No. 061000010
\n—————————————————————————————–
\nP.O. Box 751487 Account No. 12420855 at
\nCharlotte, NC 28275-1487 Wachovia in Charlotte, NC
\n ABA No. 061000010
\n—————————————————————————————–
\nP.O. Box 951495 Account No. 12420855 at
\nDallas, TX 75395-1495 Wachovia in Dallas, TX
\n ABA No. 061000010
\n—————————————————————————————–
\nP.O. Box 101804 Account No. 13244224 at
\nAtlanta, GA 30392-1804 Wachovia in Atlanta, GA
\n ABA No. 061000010
\n—————————————————————————————–
\nP.O. Box 751075 Account No. 13244224 at
\nCharlotte, NC 28275-1487 Wachovia in Charlotte, NC
\n ABA No. 061000010
\n—————————————————————————————–
\n<\/c><\/s><\/caption>\n<\/table>\n 36<\/p>\n
\n\n———————————————————————————————————
\n
\nP.O. Box 951495 Account No. 13244224 at
\nDallas, TX 75395-1495 Wachovia in Dallas, TX
\n ABA No. 061000010
\n———————————————————————————————————
\nUnit 80033 (for Canadian funds) Bank of Montreal Account No. 3144-
\nP.O. Box 5600, Station Main 1014450 at Bank of Montreal in
\nBurlington, Ontario, Canada L7R4X3 Burlington, Ontario
\n———————————————————————————————————
\nUnit 00067 (for Canadian funds) Bank of Montreal Account No. 3144-
\nP.O. Box 2488, Station M 1014450 at Bank of Montreal in Calgary,
\nCalgary, Alberta, Canada T2P4W2 Alberta
\n———————————————————————————————————
\nUnit 980033 (for US Dollars) Bank of Montreal Account No. 3144-
\nP.O. Box 5600, Station Main 4503209 at Bank of Montreal in
\nBurlington, Ontario, Canada L7R4X3 Burlington, Ontario
\n———————————————————————————————————
\nUnit 800067 (for US Dollars) Bank of Montreal Account No. 3144-
\nP.O. Box 2488, Station M 4503209 at Bank of Montreal in Calgary,
\nCalgary, Alberta, Canada T2P4W2 Alberta
\n———————————————————————————————————
\n<\/c><\/s><\/caption>\n<\/table>\nThe foregoing may be changed by the Buyer at any time upon 30 days prior written
\nnotice to each Originator.<\/p>\n
37<\/p>\n
Exhibit IV
\n ———-<\/p>\n
Form of Compliance Certificate
\n ——————————<\/p>\n
This Compliance Certificate is furnished pursuant to that certain
\nReceivables Purchase and Sale Agreement dated as of October 25, 2000, among
\nMohawk Carpet Corporation, Mohawk Commercial, Inc., Durban Patterned Carpets,
\nInc., and Mohawk Factoring, Inc. (as amended, restate or otherwise modified from
\ntime to time in accordance with the Transaction Documents, the “Agreement”).
\nCapitalized terms used and not otherwise defined herein are used with the
\nmeanings attributed thereto in the Agreement.<\/p>\n
THE UNDERSIGNED HEREBY CERTIFIES TIM T:<\/p>\n
1. I am the duly elected _______________ and, accordingly, a
\nResponsible Financial Officer, of Mohawk Industries, Inc., a Delaware
\ncorporation (the “Parent”).<\/p>\n
2. I have reviewed the terms of the Agreement and I have made, or
\nhave caused to be made under my supervision, a detailed review of the
\ntransactions and conditions of Parent and its Subsidiaries during the accounting
\nperiod covered by the attached financial statements.<\/p>\n
3. The examinations described in paragraph 2 did not disclose, and I
\nhave no knowledge of, the existence of any condition or event which constitutes
\na Termination Event or an Unmatured Termination Event, as each such term is
\ndefined under the Agreement, during or at the end of the accounting period
\ncovered by the attached financial statements or as of the date of this
\nCertificate[, except as set forth below].<\/p>\n
[4. Described below are the exceptions, if any, to paragraph 3 by
\nlisting, in detail, the nature of the condition or event, the period during
\nwhich it has existed and the action which Parent and its Subsidiaries have
\ntaken, is taking, or proposes to take with respect to each such condition or
\nevent: ___________________].<\/p>\n
The foregoing certifications, together with the computations set forth
\nin Schedule I hereto and the financial statements delivered with this
\nCertificate in support hereof, are made and delivered this ____ day of ________,
\n200_.<\/p>\n
___________________________
\n [Name]<\/p>\n
38<\/p>\n
Exhibit V
\n ———<\/p>\n
Credit and Collection Policy
\n —————————-<\/p>\n
[attach copy]<\/p>\n
39 <\/p>\n
Exhibit VI
\n ———-<\/p>\n
[Form of] Purchase Report
\n ————————<\/p>\n
For the Calculation Period beginning [date] and ending [date]<\/p>\n
——<\/p>\n
TO: THE BUYER
\nCC: (WHILE THE CREDIT AND SECURITY AGREEMENT REMAINS IN EFFECT)
\nTHE AGENT
\nFROM: [INSERT ORIGINATOR NAME]<\/p>\n
\n\n————————————————————————————————————————————
\n————————————————————————————————————————————
\n
\nAggregate Outstanding Balance of all
\nReceivables sold during the period: $ _____________ A
\n————————————————————————————————————————————
\nLess: Aggregate Outstanding Balance of all
\nReceivables sold during such period which
\nwere not Eligible Receivables on the date
\nwhen sold: ($ ___________) (B)
\n————————————————————————————————————————————
\nEquals: Aggregate Outstanding Balance of all
\nEligible Receivables sold during the
\nperiod (A-B): $ __________ =C
\n————————————————————————————————————————————
\nLess: Purchase Price discount during the
\nPeriod: ($ ___________) (D)
\n————————————————————————————————————————————
\nEquals: Gross Purchase Price Payable
\nduring the period (C — D) $ __________ =E
\n————————————————————————————————————————————
\nLess: Total Purchase Price Credits arising (F)
\nduring the Period: ($ ___________)
\n————————————————————————————————————————————
\nEquals: Net Purchase Price payable during
\nthe Period (E — F): $ __________ =G
\n————————————————————————————————————————————<\/p>\n————————————————————————————————————————————
\nCash Purchase Price Paid to Originator H
\nduring the period: ($ ___________)
\n————————————————————————————————————————————
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
40<\/p>\n
The undersigned hereby represents and warrants that the information set forth
\nabove is accurate and complete as of the last day of the Calculation Period set
\nforth above.<\/p>\n
[ORIGINATOR NAME]<\/p>\n
By: _______________________________________________
\n Name:
\n Title:<\/p>\n
41<\/p>\n
Schedule A
\n ———-<\/p>\n
DOCUMENTS TO BE DELIVERED TO BUYER
\n ON OR PRIOR TO THE INITIAL PURCHASE OF RECEIVABLES<\/p>\n
1. Executed copies of the Receivables Purchase and Sale Agreement, duly
\n executed by the parties thereto.<\/p>\n
2. Copy of each Credit and Collection Policy to attach to the Receivables
\n Purchase and Sale Agreement as an Exhibit.<\/p>\n
3. A certificate of each Originator’s [Assistant] Secretary certifying:<\/p>\n
(a) A copy of the Resolutions of the Board of Directors of such
\n Originator, authorizing Originator’s execution, delivery and performance
\n of the Receivables Purchase and Sale Agreement and the other documents
\n to be delivered by it thereunder;<\/p>\n
(b) A copy of the Organizational Documents of such Originator (also
\n certified, to the extent that such documents are filed with any
\n governmental authority, by the Secretary of State of the jurisdiction of
\n organization of such Originator on or within thirty (30) days prior to
\n closing);<\/p>\n
(c) Good Standing Certificates for such Originator issued by the
\n Secretaries of State of its state of incorporation and the State of
\n Georgia; and<\/p>\n
(d) The names and signatures of the officers authorized on its
\n behalf to execute the Receivables Purchase and Sale Agreement and any
\n other documents to be delivered by it thereunder.<\/p>\n
4. Pre-filing state and federal tax lien, judgment lien and UCC lien searches
\n against each Originator from the following jurisdictions:<\/p>\n
a. State of Delaware<\/p>\n
b. Superior Court Clerk’s Cooperative Authority (State of Georgia)<\/p>\n
c. Superior Court Clerk’s Office in the following Georgia
\n Counties:<\/p>\n
(i) Gordon<\/p>\n
(ii) Murray<\/p>\n
(iii) Whitfield<\/p>\n
42<\/p>\n
5. Duly executed UCC financing statements, in form appropriate for filing in
\n all jurisdictions as may be necessary or, in the opinion of the Buyer (or,
\n at any time the Credit and Security Agreement remains in effect, the Agent
\n as the Buyer’s assignee), desirable, under the UCC of all appropriate
\n jurisdictions or any comparable law in order to perfect the transfer of the
\n ownership interests contemplated by the Receivables Purchase and Sale
\n Agreement.<\/p>\n
6. Duly executed UCC termination statements, in form suitable for filing, if
\n any, necessary to release all security interests and other rights of any
\n Person in the Receivables, Contracts Related Security previously granted by
\n each Originator.<\/p>\n
7. A favorable opinion of legal counsel for each Originator licensed to give
\n opinions under Georgia law reasonably acceptable to the Buyer (and the
\n Agent, as the Buyer’s assignee) as to the following:<\/p>\n
(a) Such Originator is a corporation duly organized, validly
\nexisting, and it good standing under the laws of the State of Delaware.<\/p>\n
(b) Such Originator has all requisite authority to conduct its
\nbusiness in the jurisdiction where it maintains its chief executive office.<\/p>\n
(c) The execution and delivery by such Originator of the Receivables
\nPurchase and Sale Agreement and each other Transaction Document to which it is a
\nparty and its performance of its obligations thereunder have been duly
\nauthorized by all necessary organizational action and proceedings on the part of
\nsuch Originator and will not:<\/p>\n
(i) require any action by or in respect of, or filing with, any
\n governmental body, agency or official (other than the filing of UCC
\n financing statements);<\/p>\n
(ii) contravene, or constitute a default under, any provision of
\n applicable law or regulation or of its articles or certificate of
\n incorporation or bylaws or of any agreement, judgment, injunction, order,
\n decree or other instrument binding upon such Originator; or<\/p>\n
(iii) result in the creation or imposition of any Adverse Claim on
\n assets of such Originator or any of its Subsidiaries (except as
\n contemplated by the Receivables Purchase and Sale Agreement).<\/p>\n
(d) The Receivables Purchase and Sale Agreement and each other
\nTransaction Document to which it is a party has been duly executed and delivered
\nby such Originator and constitutes the legally valid, and binding obligation of
\nsuch Originator enforceable in accordance with its terms, except to the extent
\nthe enforcement thereof may be limited by bankruptcy, insolvency or similar laws
\naffecting the enforcement of creditors’ rights generally and subject also to the
\navailability of equitable remedies if equitable remedies are sought.<\/p>\n
43<\/p>\n
(e) In the event that the Receivables Purchase and Sale Agreement is
\nheld to create a transfer for security purposes rather than a true sale or other
\noutright assignment, the provisions of the Receivables Purchase and Sale
\nAgreement are effective to create valid security interests in favor of the Buyer
\nin all of such Originator’s right, title and interest in and to the Receivables
\ndescribed therein which constitute “accounts,” “chattel paper” or “general
\nintangibles” (each as defined in the UCC) (collectively, the “Opinion
\nCollateral”).<\/p>\n
(f) Upon filing of such UCC-1 Financing Statements in such filing
\noffices and payment of the required filing fees, the security interest in favor
\nof the Buyer in the Opinion Collateral will be perfected and assigned of record
\nto the Agent.<\/p>\n
(g) Based solely on our review of the UCC Search Reports and assuming
\n(i) the filing of the Financing Statements and payment of the required filing
\nfees in accordance with paragraph (f) and (ii) the absence of any intervening
\nfilings between the date and time of the Search Reports and the date and time of
\nthe filing of the Financing Statements and other customary exhibits, the
\nsecurity interest of the Buyer in the Opinion Collateral is prior to any
\nsecurity interest granted in the Opinion Collateral by such Originator, the
\npriority of which is determined solely by the filing of a financing statement in
\nthe [describe filing offices].<\/p>\n
(h) To the best of the opinion giver’s knowledge, there is no action,
\nsuit or other proceeding against such Originator which would materially
\nadversely affect the ability of such Originator to perform its obligations under
\nthe Receivables Purchase and Sale Agreement.<\/p>\n
(i) Such Originator is not an “investment company” as such term is
\ndefined in the Investment Company Act of 1940, as amended.<\/p>\n
8. A “true sale” opinion and “substantive consolidation” opinion of counsel
\n for Originator with respect to the transactions contemplated by the
\n Receivables Purchase and Sale Agreement.<\/p>\n
9. A Certificate of a Responsible Financial Officer of each Originator
\n certifying that, as of the closing date, no Termination Event or Unmatured
\n Termination Event exists and is continuing.<\/p>\n
10. Executed copies of (i) all consents from and authorizations by any Persons
\n and (ii) all waivers and amendments to existing credit facilities, that are
\n necessary in connection with the Receivables Purchase and Sale
\n Agreement.\/1\/<\/p>\n
11. A copy of the Servicing Agreement duly executed by the parties thereto.<\/p>\n
________________
\n\/1\/ Per Alston & Bird, no consents \/ waivers are needed.<\/p>\n
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