Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 1 to Registration Statement 6 50K
2: EX-10.02 Component Supply Agreement 209 615K
3: EX-10.02(A) Amend. No. 1 to Component Supply Agreement 2 11K
4: EX-10.02(B) Amend. No. 2 to Component Supply Agreement 2 11K
5: EX-10.02(C) Letter of Intent Dated Feb. 21, 1996 by G.M.T.G. 5 19K
6: EX-10.02(D) Letter of Intent Dated Feb. 21, 1996 by G.M.T.G. 3 18K
7: EX-10.02(E) Letter Agreement 13 71K
8: EX-10.02(F) Amended and Restated Memorandum of Understanding 39 261K
9: EX-10.02(G) Mou Extension Agreement 1 11K
10: EX-10.03 Gmcl Purchase Order Agreement 29 80K
11: EX-10.04 Am/Gmcl Supply Agreement 24 70K
12: EX-10.04(A) Amending Agreement Dated as of September 5, 1996, 1 10K
Between Aam, Inc. and Gmcl
13: EX-10.04(B) Amending Agreement Dated as of October 7, 1996, 1 11K
Between Aam, Inc. and Gmcl
14: EX-10.04(C) Amendment No. 1 to Aam/Gmcl Supply Agreement 1 10K
Dated February 17, 1994, Between Aam,
Inc. and Gmcl
15: EX-10.05 Agreement 1 10K
16: EX-10.05(A) Letter Dated December 13, 1996, by Aam, Inc. 4 24K
17: EX-10.08 Management Stock Option Plan 14 56K
18: EX-10.10 Indemnification Agreement 11 29K
19: EX-10.16 Aam Master Trust Pooling Agreement 130 425K
20: EX-10.16(A) Aam Master Trust Series 1997-A Supplement to 108 326K
Pooling Agreement
21: EX-10.17 Receivables Sale Agreement 72 317K
22: EX-10.18 Servicing Agreement 40 131K
23: EX-10.19 Agreement for Information Technology Services 106 330K
EXECUTION COPY
Exhibit 10.17
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RECEIVABLES SALE AGREEMENT
Between
AAM RECEIVABLES CORP.,
as Company
and
AMERICAN AXLE & MANUFACTURING, INC.
as Seller and Servicer
Dated as of October 29, 1997
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TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Other Definitional Provisions.............................................................7
ARTICLE II
Purchase and Sale of Receivables
SECTION 2.01. Purchase and Sale of Receivables......................................................... 8
SECTION 2.02. Purchase Price...........................................................................13
SECTION 2.03. Payment of Purchase Price................................................................13
SECTION 2.04. No Repurchase............................................................................15
SECTION 2.05. Rebates, Adjustments, Returns,
Reductions and Modifications...............................................15
SECTION 2.06. Seller Repurchase Payments...............................................................15
SECTION 2.07. Certain Charges..........................................................................17
SECTION 2.08. Certain Allocations......................................................................17
SECTION 2.09. Further Assurances.......................................................................17
SECTION 2.10. GMT/PPAP Rejection Period................................................................18
ARTICLE III
Conditions to Purchase and Sale
SECTION 3.01. Conditions Precedent to the
Company's Purchase of Receivables
on the Effective Date......................................................18
SECTION 3.02. Conditions Precedent to All the
Company's Purchases of Receivables.........................................20
SECTION 3.03. Conditions Precedent to the Seller's
Obligations on the Effective Date..........................................21
SECTION 3.04. Conditions Precedent to All the
Seller's Obligations.......................................................21
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ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of
the Seller Relating to Itself..............................................22
SECTION 4.02. Representations and Warranties of
the Seller Relating to the
Receivables................................................................27
SECTION 4.03. Representations and Warranties of
the Company................................................................28
ARTICLE V
Affirmative Covenants
SECTION 5.01. Certificates; Other Information..........................................................30
SECTION 5.02. Compliance with Law and Policies.........................................................31
SECTION 5.03. Preservation of Corporate Existence......................................................31
SECTION 5.04. Separate Corporate Existence.............................................................31
SECTION 5.05. Maintaining Records; Access to
Properties and Inspections.................................................32
SECTION 5.06. Location of Records......................................................................33
SECTION 5.07. Computer Files...........................................................................33
SECTION 5.08. Payment of and Compliance with
Obligations................................................................33
SECTION 5.09. Collections..............................................................................34
SECTION 5.10. Furnishing Copies, Etc...................................................................34
SECTION 5.11. Obligations with Respect to Obligors
and Receivables............................................................35
SECTION 5.12. Responsibilities of the Seller...........................................................35
SECTION 5.13. Assessments..............................................................................35
SECTION 5.14. Further Action...........................................................................36
SECTION 5.15. Sale of Receivables......................................................................37
SECTION 5.16. GMT/PPAP Rejection Period................................................................37
ARTICLE VI
Negative Covenants
SECTION 6.01. Limitations on Transfers of
Receivables, Etc...........................................................37
SECTION 6.02. Extension or Amendment of Receivables....................................................37
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SECTION 6.03. Change in Payment Instructions to
Obligors...................................................................38
SECTION 6.04. Change in Name...........................................................................38
SECTION 6.05. Policies.................................................................................38
SECTION 6.06. Modification of Ledger...................................................................39
SECTION 6.07. Accounting for Purchases.................................................................39
SECTION 6.08. Instruments..............................................................................39
SECTION 6.09. Ineligible Receivables...................................................................39
SECTION 6.10. Business of the Seller...................................................................40
SECTION 6.11. Limitation on Fundamental Changes........................................................40
SECTION 6.12. Amendment of GM Agreements...............................................................40
ARTICLE VII
Purchase Termination Events
SECTION 7.01. Purchase Termination Events..............................................................40
SECTION 7.02. Remedies.................................................................................44
ARTICLE VIII
Seller Note
SECTION 8.01. Seller Note..............................................................................45
SECTION 8.02. Restrictions on Transfer of Seller
Note.......................................................................46
SECTION 8.03. Discretion; Aggregate Amount.............................................................46
ARTICLE IX
Miscellaneous
SECTION 9.01. Payments.................................................................................47
SECTION 9.02. Costs and Expenses.......................................................................47
SECTION 9.03. Successors and Assigns...................................................................48
SECTION 9.04. Governing Law............................................................................49
SECTION 9.05. No Waiver; Cumulative Remedies...........................................................49
SECTION 9.06. Amendments and Waivers...................................................................49
SECTION 9.07. Severability.............................................................................49
SECTION 9.08. Notices..................................................................................50
SECTION 9.09. Counterparts.............................................................................50
SECTION 9.10. Waivers of Jury Trial....................................................................50
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SECTION 9.11. Jurisdiction; Consent to Service
of Process.................................................................51
SECTION 9.12. Integration..............................................................................52
SECTION 9.13. No Bankruptcy Petition...................................................................52
SECTION 9.14. Termination..............................................................................52
SECTION 9.15. Construction of Agreement................................................................53
Exhibit A Form of Seller Note
SCHEDULES
Schedule 1 Receivables
Schedule 2 Lockboxes
Schedule 3 Chief Executive Office
Schedule 4 Names
Schedule 5 Discounted Percentage
RECEIVABLES SALE AGREEMENT dated as of
October 29, 1997 (this "Agreement"), between
AMERICAN AXLE & MANUFACTURING, INC., a Delaware
corporation, as seller (in such capacity, the
"Seller") and as servicer (in such capacity, the
"Servicer") and AAM RECEIVABLES CORP., a Delaware
corporation (the "Company").
W I T N E S S E T H :
WHEREAS in the ordinary course of business, the Seller
generates Receivables (such term and all other capitalized terms being defined
or referenced in Article I);
WHEREAS the Seller is willing to sell to the Company, and
the Company is willing to purchase from the Seller, all of the Seller's right,
title and interest in, to and under the Receivables then existing and
thereafter created and all other Receivable Assets;
WHEREAS, the Seller and the Company desire the sale of
Receivables and Receivable Assets rom the Seller to the Company to be a true
sale providing the company with the full benefits of ownership and of the
Receivables; and
WHEREAS, the Servicer, the Company and The Chase Manhattan
Bank, as Trustee, have entered into a Pooling Agreement dated as of the date
hereof (such agreement, as it may be amended, modified or otherwise
supplemented from time to time, being the "Pooling Agreement") in order to
create a master trust into which the Company will transfer all its right,
title and interest in, to and under the Receivables and certain other assets
then or hereafter owned by the Company.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. Capitalized terms
defined or referenced in the Pooling Agreement shall be used
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Receivables Sale Agreement
herein as therein defined (unless otherwise defined or referenced herein), and
the following terms shall have the following meanings:
"Adjustment Amount" shall have the meaning specified in
subsection 2.06(a).
"Applicable Insolvency Laws" shall have the meaning specified
in subsection 7.01(d).
"Collections" shall mean all collections and all amounts
received in respect of the Receivables assigned to the Company, including
Recoveries, Adjustment Payments, indemnification payments made by the Servicer
and payments received in respect of Dilution Adjustments, together with all
collections received in respect of the Related Property in the form of cash,
checks, wire transfers or any other form of cash payment, and all proceeds of
Receivables and collections thereof (including, without limitation,
collections evidenced by an account, note, instrument, letter of credit,
security, contract, security agreement, chattel paper, general intangible or
other evidence of indebtedness or security, whatever is received upon the
sale, exchange, collection or other disposition of, or any indemnity, warranty
or guaranty payable in respect of, the foregoing and all "proceeds" as defined
in Section 9-306 of the UCC as in effect in the State of New York).
"Credit Agreement" shall mean the Credit Agreement dated as of
October 27, 1997, among American Axle & Manufacturing of Michigan, Inc., the
Seller, the lenders named therein, The Chase Manhattan Bank, as Administrative
Agent and Collateral Agent, and Chase Manhattan Bank of Delaware, as Fronting
Bank (including any amendments or modifications thereto or refinancing thereof).
"Cut-Off Date" shall mean the close of business on October 24,
1997.
"Discounted Percentage" shall have the meaning specified in
Schedule 6.
"Documents" shall have the meaning specified in subsection
7.02(b)(iii).
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Receivables Sale Agreement
"Early Termination" shall have the meaning specified in
Article VII.
"Effective Date" shall mean October 29, 1997.
"ERISA Affiliate" shall mean with respect to any Person, any
trade or business (whether or not incorporated) that is a member of a group of
which such Person is a member and which is treated as a single employer under
Section 414 of the Internal Revenue Code.
"GM Agreements" shall mean (i) the Component Supply
Agreement, as amended, dated as of February 29, 1994, between the Seller and
General Motors Corporation, (ii) the GMCL Purchase Order Agreement, as
amended, dated as of February 17, 1994, and effective on March 1, 1994,
between the Seller and General Motors of Canada Limited ("GMCL"), (iii) the
Amended and Restated Memorandum of Understanding dated as of September 22,
1997, as amended pursuant to an Extension Agreement dated as of September 22,
1997 between the Seller and General Motors Corporation, (iv) the letter
agreement, dated as of February 20, 1996, between the Seller and General
Motors Corporation and (v) any agreements entered into between the Seller and
General Motors or GMCL succeeding or replacing the agreements in clauses (i)
and (ii), including "Lifetime Program Contracts".
"Ineligibility Event" shall have the meaning specified in
subsection 2.06.
"Ineligible Receivable" shall have the meaning specified in
subsection 2.06.
"Insolvency Event" with respect to the Seller, shall mean the
occurrence of any one or more of the Purchase Termination Events specified in
subsection 7.01(d).
"Multiemployer Plan" shall mean with respect to any Person,
a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which such
Person or any ERISA Affiliate of such Person (other than one considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Internal Revenue Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
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Receivables Sale Agreement
"Payment Date" shall have the meaning specified in subsection
2.03(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or any successor
thereto.
"Plan" shall mean, with respect to any Person, any pension
plan (other than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Internal Revenue Code which is maintained for
employees of such Person or any ERISA Affiliate of such Person.
"Pooling Agreement" shall have the meaning specified in the
recitals hereto.
"Potential Purchase Termination Event" shall mean any
condition or act specified in Article VII that, with the giving of notice or the
lapse of time or both, would become a Purchase Termination Event.
"Purchase Price" shall have the meaning specified in Section
2.02.
"Purchase Termination Event" shall have the meaning specified
in Section 7.01.
"Purchased Receivable" shall mean, at any time, any Receivable
sold to the Company by the Seller pursuant to, and in accordance with the terms
of, this Agreement.
"Receivable" shall mean the indebtedness and payment
obligations of any Person to the Seller (including, without limitation,
obligations constituting an account or general intangible or evidenced by a
note, instrument, contract, security agreement, chattel paper or other
evidence of indebtedness or security and whether or not any invoice or other
bill has been rendered by the Seller or any other Person) arising from (x) a
sale of merchandise or services by the Seller (including, without limitation,
any right to payment for goods sold or for services rendered), (y) an
obligation of any Person to provide rebates to the Seller with respect to, or
to reimburse the Seller for, a portion of the costs of materials and parts to
be used in the manufacturing of products for such Person or its affiliates, or
(z) an obligation of any Person to pay for
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Receivables Sale Agreement
tooling or equipment purchased or built by the Seller for the purpose of
manufacturing products for such Person, including the right to payment of any
interest, sales taxes, finance charges, returned check or late charges and
other obligations of such Person with respect thereto; provided that any
Tooling Receivable that is not generated as part of the GMT 800 program or any
other program providing for periodic payments to the Seller shall not
constitute a "Receivable" until the Production Part Approval Process (PPAP)
has been completed with respect to the tooling giving rise to such Tooling
Receivable; provided further that in no event shall any intercompany or
intracompany obligation owed to the Seller by any of its Subsidiaries,
divisions or other operating units constitute a "Receivable".
"Receivable Assets" shall have the meaning specified in
subsection 2.01(a).
"Reference Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If The Chase Manhattan Bank shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including the failure of the Federal Reserve Bank of New York to publish rates
or the inability of The Chase Manhattan Bank to obtain quotations in accordance
with the terms of the definition thereof, the Reference Rate shall be determined
without regard to clause (b) of the immediately preceding sentence, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Reference Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively. The
term "Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being effective. The
term "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
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Receivables Sale Agreement
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for the day for such transactions received
by The Chase Manhattan Bank from three Federal funds brokers of recognized
standing selected by it.
"Related Property" shall mean, with respect to each
Receivable:
(a) all of the Seller's interest in the goods
(including returned goods), if any, relating to the sale
which gave rise to such Receivable;
(b) all other security interests or Liens, and the
Seller's interest in the property subject thereto, from time
to time purporting to secure payment of such Receivable,
whether pursuant to the contract related to such Receivable
or otherwise, together with all financing statements signed
by an Obligor describing any collateral securing such
Receivable; and
(c) all guarantees, insurance, letters of credit
and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such
Receivable whether pursuant to the contract related to such
Receivable or otherwise;
including in the case of clauses (b) and (c), without limitation,
pursuant to any obligations evidenced by a note, instrument,
contract, security agreement, chattel paper or other evidence of
indebtedness or security.
"Reportable Event" shall mean any reportable event
as defined in Section 4043(b) of ERISA or the regulations issued
thereunder with respect to a Plan (other than a Plan maintained by an
ERISA Affiliate which is considered an ERISA Affiliate only pursuant
to subsection (m) or (o) of Section 414 of the Internal Revenue
Code).
"Sale Documents" shall mean this Agreement
and the Seller Note.
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Receivables Sale Agreement
"Sale Termination Date" shall have the
meaning specified in subsection 9.13(b).
"Seller" shall have the meaning specified in
the recitals hereto.
"Seller Dilution Adjustment Payment" shall
have the meaning specified in Section 2.05.
"Seller Note" shall have the meaning
specified in Section 8.01.
"Seller Repurchase Payment" shall have the
meaning specified in subsection 2.06.
"Tooling Receivable" shall mean any
Receivable described in clause (z) of the definition
thereof.
"Transactions" shall have the meaning
specified in subsection 4.01(b).
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Other Definitional Provisions. (a)
The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and article,
section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms relating
to the Seller and the Company, unless otherwise defined herein, shall
have the respective meanings given to them under GAAP.
(c) The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of
such terms.
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Receivables Sale Agreement
(d) Any reference herein to a Schedule or Exhibit
to this Agreement shall be deemed to be a reference to such Schedule
or Exhibit as it may be amended, modified or supplemented from time
to time to the extent that such Schedule or Exhibit may be amended,
modified or supplemented (or any term or provision of any Transaction
Document may be amended that would have the effect of amending,
modifying or supplementing information contained in such Schedule or
Exhibit) in compliance with the terms of the Transaction Documents.
(e) Any reference in this Agreement to any
representation, warranty or covenant "deemed" to have been made is
intended to encompass only representations, warranties or covenants
that are expressly stated to be repeated on or as of dates following
the execution and delivery of this Agreement, and no such reference
shall be interpreted as a reference to any implicit, inferred, tacit
or otherwise unexpressed representation, warranty or covenant.
(f) The words "include", "includes" or "including"
shall be interpreted as if followed, in each case, by the phrase
"without limitation".
ARTICLE II
Purchase and Sale of Receivables
SECTION 2.01. Purchase and Sale of Receivables. (a)
The Seller hereby sells, transfers, assigns, and conveys, without
recourse (except as expressly provided herein), to the Company, all
its present and future right, title and interest in, to and under:
(i) all Receivables, including those existing at the
close of business on the Effective Date and all such Receivables
thereafter arising from time to time until but not including the
date an Early Termination occurs;
(ii) the Related Property;
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Receivables Sale Agreement
(iii) all Collections;
(iv) all rights (including rescission,
replevin or reclamation) relating to any
Receivable or arising therefrom;
(v) all proceeds of or payments in respect of any and
all of the foregoing clauses (i) through (iv) (including
Collections).
Such property described in the foregoing clauses (i) through (v)
shall be referred to herein as the "Receivable Assets".
(b) On the Effective Date and on the date of
creation of each newly created Receivable (but only so long as no
Early Termination shall have occurred and be continuing), all of the
Seller's right, title and interest in and to (i) in the case of the
Effective Date, all then existing Receivables and all other
Receivable Assets in respect of such Receivables and (ii) in the case
of each such date of creation, all such newly created Receivables and
all other Receivable Assets in respect of such Receivables shall be
considered to be part of the assets that have been sold, transferred,
assigned, set over and otherwise conveyed to the Company pursuant to
paragraph (a) above without any further action by the Seller or any
other Person. Anything herein to the contrary notwith standing, to
the extent the Seller shall not have received payment from the
Company of the Purchase Price for any Receivable and other related
Receivable Assets in accordance with the terms of Section 2.03, such
Receivable and Receivable Assets shall, upon receipt of notice from
the Seller of such failure to receive payment, immediately and
automatically be sold, assigned, transferred and reconveyed by the
Company to the Seller without any further action by the Company or
any other Person.
(c) The parties to this Agreement intend that, for
accounting and commercial purposes, the transactions contemplated by
Section 2.01 hereby shall be, and shall be treated as, a purchase by
the Company and a sale by the Seller of the Purchased Receivables and
other Receivable Assets and not a lending trans-
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Receivables Sale Agreement
action. All sales of Receivables and other Receivable Assets by the
Seller hereunder shall be without recourse to, or representation or
warranty of any kind (express or implied) by, the Seller, except as
other wise specifically provided herein. The foregoing sale,
assignment, transfer and conveyance does not constitute and is not
intended to result in the creation or assumption by the Company of any
obligation of the Seller or any other Person in connection with the
Receivables, the other Receivable Assets or any agreement or instrument
relating thereto, including any obligation to any Obligor. Although it
is the intent of the parties to this Agreement that the conveyance of
the Seller's right, title and interest in, to and under the Receivables
and other Receivable Assets pursuant to this Agreement shall constitute
purchases and sales and not loans, in the event that any such
conveyance is deemed to be a loan, it is the intent of the parties to
this Agreement that the Seller hereby grants to the Company a security
interest (as defined in the UCC as in effect in the States of New York
and Michigan) in all of the Seller's present and future right, title
and interest in, to and under the Receivables, the Related Property,
all Collections, all rights (including rescission, replevin or
reclamation) relating to any Receivable or arising therefrom and all
proceeds or payments in respect of any of the foregoing (it is
understood and agreed that the parties intend that such security
interest shall be perfected and first priority upon the filing of UCC-1
financing statements with the appropriate authorities) and that this
Agreement shall constitute a security agreement under applicable law in
favor of the Company.
(d) In connection with the foregoing conveyances,
the Seller agrees to record and file, or cause to be recorded and
filed, at its own expense, financing statements (and continuation
statements with respect to such financing statements when
applicable), (i) with respect to the Receivables now existing and
hereafter acquired pursuant to this Agreement by the Company from the
Seller and (ii) with respect to any other Receivable Assets for which
a security interest may be perfected under the relevant UCC,
legislation or similar statute by such filing, in each case meeting
the requirements of applicable law in such manner and
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Receivables Sale Agreement
in such jurisdictions as are necessary to perfect and maintain
perfection of the conveyance of such Receivables and any other
Receivable Assets to the Company, and to deliver to the Company no
later than 10 days after the Effective Date (i) where available, a
file-stamped copy or certified statement of such financing statement
or other evidence of such filing and (ii) otherwise, a photocopy,
certified by a Responsible Officer to be a true and correct copy, of
each such financing statement or other filing made no later than 10
days after the Effective Date.
(e) In connection with the foregoing sales,
transfers, assignments and conveyances, the Seller agrees at its own
expense, no later than 30 days after the Effective Date with respect
to the Receivables and any other similar receivables that it will, as
agent of the Company, (i) indicate or cause to be indicated on the
computer files (but not on individual invoices or individual
collection files) relating to such Receivables and any such other
receivables (by means of a general legend that will automatically
appear at or near the beginning of any screen, list or print-out of
such Receivables) that, unless otherwise specifically identified on
such screen, list or print-out as a receivable not so sold,
transferred, assigned and conveyed, all Receivables (and any such
other receivables) included in such screen, list or print-out and all
other Receivable Assets (and any other similar related property) have
been sold, transferred, assigned and conveyed to the Company in
accordance with this Agreement and (ii) deliver or transmit or cause
to be delivered or transmitted to the Company a computer tape,
diskette or data transmission containing at least the information
specified in Schedule 1 as to all such Receivables, as of a date no
later than the Cut-Off Date.
(f) As further confirmation of the sale of the
Receivables, but subject to Section 7.02, it is understood and agreed
that the Company shall have the following rights:
(i) the Company (and its assignees) shall have the
right at any time to notify, or require that the Seller at
its own expense notify, the
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Receivables Sale Agreement
respective Obligors of the Company's ownership of the
Purchased Receivables and other Receivable Assets and may
direct that payment of all amounts due or to become due
under the Purchased Receivables be made directly to the
Company or its designee;
(ii) the Company (and its assignees) shall have the
right to (A) sue for collection on any Purchased Receivables
or (B) sell any Purchased Receivables to any Person for a
price that is acceptable to the Company.
(iii) the Seller shall, upon the Company's written
request and at the Seller's expense, (A) assemble all of the
Seller's documents, instruments and other records (including
credit files and computer tapes or disks) that (1) evidence
or will evidence or record Receivables sold by the Seller
and (2) are other wise necessary or desirable to effect
Collections of such Purchased Receivables (collectively, the
"Documents") and (B) deliver the Documents to the Company or
its designee at a place designated by the Company. In
recognition of the Seller's need to have access to any
Documents which may be transferred to the Company hereunder,
whether as a result of its continuing business relationship
with any Obligor for Receivables purchased here under or as
a result of its responsibilities as a Servicer, the Company
hereby grants to the Seller an irrevocable license to access
the Documents transferred by the Seller to the Company and
to access any such transferred computer software in
connection with any activity arising in the ordinary course
of the Seller's business or in performance of the Seller's
duties as a Servicer; provided that the Seller shall not
disrupt or otherwise interfere with the Company's use of and
access to the Documents and its computer software during
such license period;
(iv) the Seller hereby grants to the Company an
irrevocable power of attorney (coupled with an interest) to
take any and all steps in the Seller's name necessary or
desirable, in the
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Receivables Sale Agreement
reasonable opinion of the Company, to collect all amounts
due under the Purchased Receivables, including, without
limitation, enforcing the Purchased Receivables and
exercising all rights and remedies in respect thereof and
(without regard to the limitation set forth in subsection
7.02(b)) endorsing the Seller's name on checks and other
instruments representing Collections; and
(v) upon written request of the Company, the Seller
will (A) deliver to the Company all licenses, rights,
computer programs, related material, computer tapes, disks,
cassettes and data necessary for the immediate collection of
the Purchased Receivables by the Company, with or without
the participation of the Seller (excluding software licenses
which by their terms are not permitted to be so delivered;
provided that the Seller shall use reasonable efforts to
obtain the consent of the relevant licensor to such
delivery) and (B) make such arrangements with respect to the
collection of the Purchased Receivables as may be reasonably
required by the Company.
SECTION 2.02. Purchase Price. The aggregate
purchase price payable by the Company to the Seller (the "Purchase
Price") for Receivables and other Receivable Assets on any Payment
Date under this Agreement shall be equal to the product of (a) the
aggregate outstanding Principal Amount of Receivables as set forth in
the applicable Daily Report created since the previous Daily Report
and (b) the Discounted Percentage then in effect.
SECTION 2.03. Payment of Purchase Price. (a) The
Company shall pay or provide for the Purchase Price for Receivables
and other Receivable Assets (net of the deductions referred to in
Section 2.03(d)) in the manner provided below on each day for which
Daily Reports are prepared and delivered to the Company (each such
day, a "Payment Date").
(b) The Purchase Price (net of the
deductions referred to in Section 2.03(d)) shall be
paid by the Company to the Seller or to such accounts
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Receivables Sale Agreement
or such Persons as the Seller may direct in writing (which direction
may consist of standing instructions provided by the Seller that
shall remain in effect until changed by the Seller in writing), on
each Payment Date as follows:
(i) to the extent available for such purpose, in cash
from the net proceeds of a transfer of such Purchased
Receivables by the Company to other Persons (including the
Trustee pursuant to the Pooling Agreement);
(ii) to the extent available for such purpose, in
cash from Collections received by the Company from other Persons
(including from the Trustee pursuant to the Pooling Agreement
and any Supplement thereto);
(iii) at the option of the Company (subject to the provisions
of Sections 8.03), by incurring Indebtedness to the Seller
evidenced by the Seller Note; and
(iv) in cash from the proceeds of capital contributed
by the Seller to the Company, if any, in respect of its equity
interest in the Company.
(c) Any increase in the principal amount of the
Seller Note, in payment of any Purchase Price pursuant to Section
2.03(b), shall be applied to the Purchase Price in an amount equal to
such increase.
(d) The Company shall deduct from the Purchase
Price otherwise payable to the Seller on any Payment Date, any
outstanding Seller Dilution Adjustment Payments and Seller Repurchase
Payments pursuant to Section 2.05, and 2.06, respectively.
(e) All cash payments under this Agreement shall be
made not later than 3:30 p.m. (New York City time) on the date
specified therefor in same day funds.
(f) Whenever any payment to be made under this
Agreement shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day.
Amounts not paid when
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Receivables Sale Agreement
due in accordance with the terms of this Agreement shall bear
interest at a rate equal at all times to the Reference Rate, payable
on demand.
SECTION 2.04. No Repurchase. Except to the extent
expressly set forth herein, the Seller shall not have any right or
obligation under this Agreement, by implication or otherwise, to
repurchase from the Company any Purchased Receivables or other
Receivable Assets or to rescind or otherwise retroactively effect any
purchase of any such Purchased Receivables or other Receivable Assets
after the Payment Date relating thereto.
SECTION 2.05. Rebates, Adjustments, Returns,
Reductions and Modifications. From time to time the
Seller may make Dilution Adjustments to Receivables in
accordance with this Section 2.05 and Section 6.02.
The Seller agrees to pay to the Company, on the
Payment Date immediately succeeding the date of the grant of any
Dilution Adjustment, the amount of any such Dilution Adjustment (a
"Seller Dilution Adjustment Payment"). The amount of any Dilution
Adjustment shall be set forth on the first Daily Report prepared
after the date of the grant thereof.
SECTION 2.06. Seller Repurchase Payments. If (i)
any representation or warranty under subsection 4.02(a) or (b) is not
true and correct in any material respect as of the date specified
therein with respect to any Receivable sold to the Company or any
Receivable encompassed by the representation or warranty under
subsection 4.02(c) is determined not to be an Eligible Receivable as
of its date of purchase, (ii) there is a breach of any covenant under
Section 6.01 with respect to any Receivable and such breach has a
material adverse effect on the Company's interest in such Receivable,
(iii) the Company's interest in any Receivable is not a first
priority perfected ownership or security interest at any time as a
result of any action taken by, or the failure to take action by, the
Seller, (iv) any Eligible Receivable becomes subject to any asserted
defense, dispute, off set or counterclaim of any kind as a result of
any action taken by, any failure to take action by, or any
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Receivables Sale Agreement
event relating to the Seller (other than as expressly permitted by
this Agreement or the Pooling Agreement)(provided that in the case of
any Eligible Receivable that becomes subject only in part to any of
the foregoing, this Section 2.06 shall apply only to the portion
thereof that is so subject) or (v) there is a breach by the Seller of
any covenant contained in Section 5.02, 5.08, 5.09, 6.02, 6.03, 6.04
or 6.05 with respect to any Receivable, and as a result thereof such
Receivable (or a portion thereof) ceases to be an Eligible Receivable
on the date on which such breach occurs (each event referred to in
clauses (i), (ii), (iii), (iv) and (v) of this Section 2.06 shall be
referred to herein as an "Ineligibility Event" and any Receivable (or
portion thereof) as to which an Ineligibility Event applies shall be
referred to herein as an "Ineligible Receivable"), then the Seller
agrees to pay to the Company, upon the request of the Company or the
Seller obtaining knowledge thereof, an amount (the "Adjustment
Amount") equal to the Principal Amount of such Receivable (or portion
thereof) (whether the Company paid the related Purchase Price in cash
or otherwise) less Collections received by the Company in respect of
such Receivable; provided that in no event shall an Ineligibility
Event arise solely from any Receivable becoming a Defaulted
Receivable or any other default by an Obligor with respect to any
Receivable. Such payment shall be made on or prior to the 30th day
after the day the Company requests payment or the Seller obtains
knowledge thereof (except that if such day is not a Business Day,
then such payment shall be made on the Business Day immediately
succeeding such day) (unless such breach or incorrectness shall have
been cured or waived on or before such day); provided that in the
event that (x) an Early Termination has occurred and is continuing or
(y) the Company shall be required to make a payment in respect of
such Receivable pursuant to Section 2.05 of the Pooling Agreement and
the Company has insufficient funds to make such payment, the Seller
shall make such payment immediately. Any payment by the Seller
pursuant to this Section 2.06 is referred to as a "Seller Repurchase
Payment". If, on or prior to such 30th day (or the Business Day
immediately succeeding such 30th day, as applicable), the Seller
shall make a Seller Repurchase Payment in respect of any such
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Receivables Sale Agreement
Ineligible Receivable, then the Company shall have no further remedy
against the Seller in respect of the Ineligibility Event with respect
to such Receivable. Simultaneously with any Seller Repurchase Payment
with respect to any Receivable, such Receivable and the Receivable
Assets with respect thereto shall immediately and automatically be
sold, assigned, transferred and conveyed by the Company to the Seller
without any further action by the Company or any other Person.
SECTION 2.07. Certain Charges. Each of the Seller
and the Company agrees that late charge revenue, reversals of
discounts, other fees and charges and other similar items, whenever
created, accrued in respect of Purchased Receivables shall be the
property of the Company notwithstanding the occurrence of an Early
Termination and all Collections with respect thereto shall continue
to be allocated and treated as Collections in respect of Purchased
Receivables.
SECTION 2.08. Certain Allocations. The Seller
hereby agrees that, following the occurrence of an Early Termination,
all Collections and other proceeds received in respect of Receivables
generated by the Seller shall be applied, first, to pay the out
standing Principal Amount of Purchased Receivables (as of the date of
such Early Termination) of the Obligor to whom such Collections are
attributable until such Purchased Receivables are paid in full and,
second, to the Seller to pay Receivables of such Obligor not sold to
the Company; provided, however, that notwithstanding the foregoing,
if the Seller can attribute a Collection to a specific Obligor and a
specific Receivable, then such Collection shall be applied to pay
such Receivable of such Obligor; and the Company and the Servicer
shall take such action as the Seller may reasonably request, at the
expense of the Seller, to assure that any Receivable not sold to the
Company, the Related Property and Collections with respect thereto do
not remain commingled with other Collections hereunder and are
immediately paid to the Seller.
SECTION 2.09. Further Assurances. From time
to time at the request of the Seller, the Company shall
deliver to the Seller such documents, assignments,
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Receivables Sale Agreement
releases and instruments of termination as the Seller may reasonably
request to evidence the reconveyance by the Company to the Seller of
a Receivable pursuant to the terms of Section 2.01(b) or 2.06,
provided that the Company shall have been paid all amounts due
thereunder; and the Company and the Servicer shall take such action
as the Seller may reasonably request, at the expense of the Seller,
to assure that any receivable not sold to the Company, the Related
Property and Collections with respect thereto do not remain
commingled with other Collections hereunder and are immediately paid
to the Seller.
SECTION 2.10. GMT/PPAP Rejection Period.
Notwithstanding anything to the contrary contained herein, during any
GMT/PPAP Rejection Period, no Tooling Receivable shall be sold,
assigned, transferred or otherwise conveyed hereunder; provided that
immediately upon the cessation of any GMT/PPAP Rejection Period all
existing Tooling Receivables relating to the GMT 800 Program shall
immediately be sold hereunder.
ARTICLE III
Conditions to Purchase and Sale
SECTION 3.01. Conditions Precedent to the Company's
Purchase of Receivables on the Effective Date. The obligation of the
Company to purchase the Receivables and the other Receivable Assets
hereunder on the Effective Date from the Seller is subject to the
conditions precedent, which may be waived by the Company, that (a)
each of the Sale Documents shall be in full force and effect and (b)
the conditions set forth below shall have been satisfied on or before
the Effective Date:
(i) the Company shall have received copies of duly
adopted resolutions of the Board of Directors of the Seller, as
in effect on such Effective Date, authorizing this Agreement,
the documents to be delivered by the Seller hereunder and the
transactions contemplated hereby, certified by the Secretary or
Assistant Secretary of the Seller;
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Receivables Sale Agreement
(ii) the Company shall have received duly executed
certificates of the Secretary or an Assistant Secretary of the
Seller, dated the Effective Date, and in form and substance
reason ably satisfactory to the Company, certifying the names
and true signatures of the officers authorized on behalf of the
Seller to sign this Agreement and any instruments or documents
in connection with this Agreement (on which certificates the
Company may conclusively rely until such time as the Company
shall receive from the Seller a revised certificate with respect
to the Seller meeting the requirements of this subsection (ii));
(iii) the Seller shall have made available for filing
and recordation, at its own expense, UCC-1 financing statements
with respect to the Receivables and other Receivable Assets in
such manner and in such jurisdictions as are necessary to
perfect the Company's ownership interest thereof under the UCC;
and all other action necessary, in the reasonable judgment of
the Company, to perfect under the UCC (to the extent applicable)
the Company's ownership of the Receivables and other Receivable
Assets shall have been duly taken;
(iv) the Seller shall have delivered or transmitted
to the Company, with respect to the Receivables originated by
it, a computer tape, diskette or data transmission reasonably
acceptable to the Company showing, as of a date no later than
the Cut-Off Date, at least the information specified in Schedule
1 as to all Receivables to be transferred by the Seller to the
Company on such Effective Date;
(v) the Company shall have received reports of UCC-1
and other searches of the Seller with respect to the Receivables
and the other Receivable Assets reflecting the absence of Liens
thereon, except for Liens created in connection with the sale by
the Seller to the Company, and by the Company to the Trust, of
such Receivables and other Receivable Assets.
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Receivables Sale Agreement
(vi) the Company shall be satisfied that the Seller's
systems, procedures and record keeping relating to the Purchased
Receivables originated by the Seller are sufficient and
satisfactory in order to permit the purchase and administration
of such Purchased Receivables in accordance with the terms and
intent of this Agreement; and
(vii) the Company shall have received such other
approvals, opinions or documents as the Company may reasonably
request.
SECTION 3.02. Conditions Precedent to All the
Company's Purchases of Receivables. The obligation of the Company to
purchase any Receivable and the other related Receivable Assets on
each date (including the Effective Date) shall be subject to the
further conditions precedent, which may be waived by the Company,
that, on and as of the related Payment Date, the following statements
shall be true (and the acceptance by the Seller of the Purchase Price
for such Receivable on such Payment Date shall constitute a
representation and warranty by the Seller that on such Payment Date
the statements in clauses (i) and (ii) below are true):
(i) the representations and warranties of the Seller
contained in Sections 4.01 and 4.02 shall be true and correct in
all material respects on and as of such Payment Date as though
made on and as of such date, except insofar as such
representations and warranties are expressly made only as of
another date (in which case they shall be true and correct in
all material respects as of such other date);
(ii) after giving effect to such purchase, no (A)
Early Termination or (B) Potential Purchase Termination Event
with respect to a Purchase Termination Event set forth in clause
(d)(i) or (ii) of Section 7.01 shall have occurred and be
continuing; and
(iii) the Company shall have received such other
approvals, opinions or documents as the Company may reasonably
request;
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Receivables Sale Agreement
provided, however, that the failure of the Seller to satisfy any of
the foregoing conditions shall not prevent the Seller from
subsequently selling Receivables originated by it upon satisfaction
of all such conditions.
SECTION 3.03. Conditions Precedent to the Seller's Obligations
on the Effective Date. The obligations of the Seller on the Effective
Date shall be subject to the conditions precedent, which may be
waived by the Seller, that the Seller shall have received on or
before the Effective Date the following, each dated such Effective
Date and in form and substance satisfactory to the Seller:
(i) a copy of duly adopted resolutions of the Board
of Directors of the Company authorizing this Agreement, the
documents to be delivered by the Company hereunder and the
transactions contemplated hereby, certified by the Secretary or
Assistant Secretary of the Company; and
(ii) a duly executed certificate of the Secretary or
Assistant Secretary of the Company certifying the names and true
signatures of the officers authorized on its behalf to sign this
Agreement and the other documents to be delivered by it hereunder.
SECTION 3.04. Conditions Precedent to All the
Seller's Obligations. The obligation of the Seller to sell any
Receivable on any date (including on the Effective Date) shall be
subject to the further conditions precedent, which may be waived by
the Seller, that, on the related Payment Date, the following
statement shall be true (and the payment by the Company of the
Purchase Price for such Receivable on such date shall constitute a
representation and warranty by the Company on such Payment Date that
the statement in clause (ii) below is true): after giving effect to
such purchase, (i) no Purchase Termination Event set forth in
paragraph (d) of Section 7.01 hereof, and (ii) no Early Amortization
Event set forth in paragraph (a) of Section 7.01 of the Pooling
Agreement (as in effect on the date hereof and without giving effect
to any amendment or supplement to, or
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Receivables Sale Agreement
modification or waiver of, or departure from, such paragraph unless,
in each case, the Seller shall have consented thereto) shall have
occurred and be continuing.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties
of the Seller Relating to Itself. The Seller
represents and warrants as to itself on the Effective
Date and each Payment Date as follows:
(a) Organization; Powers. It (i) is a corporation
duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (ii) has all requisite power
and authority, to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (iii) is
qualified to do business in, and is in good standing in, every
jurisdiction where the nature of its business so requires, except
where the failure so to qualify could not reasonably be expected to
result in a Material Adverse Effect and (iv) has the corporate power
and authority to execute, deliver and perform its obligations under
each of the Transaction Documents and each other agreement or
instrument contemplated hereby or thereby to which it is or will be a
party.
(b) Authorization. The execution, delivery and
performance by the Seller of each of the Transaction Documents to
which the Seller is a party and the other transactions contemplated
hereby and thereby (collectively, the "Transactions") (i) have been
duly authorized by all requisite corporate and, if required,
stockholder action and (ii) will not (A) violate (1) any Requirement
of Law or the certificate or articles of incorporation or other
constitutive document or by-laws of any Subsidiary or (2) any
provision of any Contractual Obligation to which it or any Subsidiary
is a party or by which any of them or any of their property is or may
be bound, (B) be in conflict with, result in a breach of or
23
Receivables Sale Agreement
constitute (alone or with notice or lapse of time or both) a default
under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any such
Contractual Obligation except where any such conflict, violation,
breach or default referred to in clause (A) or (B), individually or
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect or (C) result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or
hereafter acquired by it or any Subsidiary (other than any Lien
created hereunder or contemplated or permitted hereby).
(c) Enforceability. This Agreement has been duly
executed and delivered by the Seller and consti tutes, and each other
Transaction Document to which the Seller is a party when executed and
delivered by the Seller will constitute, a legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance
with its respective terms, subject (a) as to enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights
generally, from time to time in effect and (b) to general principles
of equity (whether enforcement is sought by a proceeding in equity or
at law).
(d) Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority is or will be required in connection with the
Transactions, except for (i) the filing of Uniform Commercial Code
financing statements, (ii) such as have been made or obtained and are
in full force and effect and (iii) such actions, consents, approvals
and filings the failure of which to obtain or make could not
reasonably be expected to result in a Material Adverse Effect.
(e) Litigation; Compliance with Laws.
(i) There are no actions, suits or proceedings at law
or in equity or by or before any Governmental Authority
now pending or, to the knowledge of the Seller,
threatened against or affecting the Seller or any
Subsidiary or any business, property or rights of any
24
Receivables Sale Agreement
such Person (A) that involve any Transaction Document or the
Transactions or (B) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect.
(ii) Neither it nor any Subsidiary is in default
with respect to any judgment, writ, injunction, decree or order of
any Governmental Authority, where such violation or default could
reasonably be expected to result in a Material Adverse Effect.
(f) Agreements. (i) Neither it nor any
Subsidiary is a party to any agreement or instrument or
subject to any corporate restriction that has resulted
or could reasonably be expected to result in a Material
Adverse Effect.
(ii) Neither it nor any Subsidiary is in default in
any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness or any other material agreement or
instrument (including the GM Agreements) to which it is a party or by
which it or any of its properties or assets are bound, where such
default could reasonably be expected to result in a Material Adverse
Effect.
(iii) As of the Effective Date, neither it nor any
Subsidiary is a party to any contract with GM relating to Receivables
other than the GM Agreements. Each of the GM Agreements (other than
Lifetime Program Contracts) is in full force and effect in accordance
with its terms except as could not reasonably be expected to have a
Material Adverse Effect.
(g) Federal Reserve Regulations.
(i) Neither it nor any Subsidiary is engaged
principally, or as one of its important activities, in
the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(ii) No part of the proceeds from the sale of
Receivables hereunder will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately, (A) to purchase
or carry Margin Stock or to
25
Receivables Sale Agreement
extend credit to others for the purpose of purchasing or carrying
Margin Stock or to refund indebtedness originally incurred for such
purpose, or (B) for any purpose which entails a violation of, or
which is inconsistent with, the provisions of the Regulations of the
Board, including Regulation G, U or X.
(h) Investment Company Act. It is not an
"investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940.
(i) Tax Returns. It and each Subsidiary has filed
or caused to be filed all Federal, state and other material tax
returns and has paid or caused to be paid all taxes due and payable
by it and all assessments received by it, in each case to the extent
that nonpayment could reasonably be expected to result in a Material
Adverse Effect.
(j) Employee Benefit Plans. Except to the extent
failure to comply could not reasonably be expected to result in a
Material Adverse Effect, the Seller and its ERISA Affiliates are in
compliance in all material respects with the applicable provisions of
ERISA and the Code and the regulations and published interpretations
thereunder. No Reportable Event has occurred or is reasonably
expected to occur that, when taken together with all other such
Reportable Events, could reasonably be expected to result in a
Material Adverse Effect.
(k) Indebtedness to Company. Immediately prior to
consummation of the transactions contemplated hereby on such
Effective Date, it had no outstanding Indebtedness to the Company
other than amounts permitted by this Agreement.
(l) Lockboxes. Set forth in Schedule 2 is a
complete and accurate description as of the Effective Date of each
Lockbox Account currently maintained by the Seller. Each of the
Lockbox Agreements to which the Seller is a Party is the legal, valid
and binding obligation of the Seller, enforceable against the Seller
in accordance with its terms.
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Receivables Sale Agreement
(m) Chief Executive Office. The offices at which
the Seller keeps its records concerning the Receivables originated by
it either (x) are located as set forth on Schedule 3 hereto or (y)
the Seller has notified the Company of the location thereof in
accordance with Section 5.06. The chief executive office of the
Seller is listed opposite its name on Schedule 3 and is the place
where the Seller is "located" for the purposes of Section 9-103(3)(d)
of the UCC as in effect in the State of New York. As of the Effective
Date, the state and county where the chief executive office of the
Seller is "located" for the purposes of 9-103(3)(d) of the UCC as in
effect in the State of New York has not changed in the past four
months.
(n) Bulk Sales Act. No transaction contemplated
hereby with respect to the Seller requires compliance with, or will
be subject to avoidance under, any bulk sales act or similar law.
(o) Names. The legal name of the Seller is as set
forth in this Agreement. It has no trade names, fictitious names,
assumed names or "doing business as" names except as set forth on
Schedule 4.
(p) Solvency. No Insolvency Event with respect to
the Seller has occurred and the sale of the Receivables by it to the
Company has not been made in contemplation of the occurrence thereof.
Both prior to and after giving effect to the transactions occurring
on the Effective Date and after giving effect to each subsequent
transaction contemplated hereunder (i) the fair value of the assets
of the Seller at a fair valuation will exceed the debts and
liabilities, sub ordinated, contingent or otherwise, of the Seller;
(ii) the present fair salable value of the property of the Seller
will be greater than the amount that will be required to pay the
probable liability of the Seller on its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (iii) the Seller will be
able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured;
and (iv) the Seller will not have unreasonably small
27
Receivables Sale Agreement
capital with which to conduct the business in which it is engaged as
such business is now conducted and is proposed to be conducted. For
all purposes of clauses (i) through (iv) above, the amount of
contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability. The Seller does not intend to,
nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of and
amounts of cash to be received by it and the timing of the amounts of
cash to be payable on or in respect of its Indebtedness.
(q) No Purchase Termination Event. As of
the Effective Date, no Purchase Termination Event or Potential
Purchase Termination Event with respect to the Seller has occurred
and is continuing.
(r) No Fraudulent Transfer. The Seller is not
entering into this Agreement with the intent (whether actual or
constructive) to hinder, delay, or defraud its present or future
creditors and is receiving reasonably equivalent value and fair
consideration for the Receivables originated by it being transferred
hereunder.
(s) Collection Procedures. The Seller has in place
procedures pursuant to the Transaction Documents which are either
necessary or advisable to ensure the timely collection of Receivables
originated by it.
(t) Filings. On or prior to the date that is 10
days after the Effective Date, all filings and other acts (including
but not limited to all filings and other acts necessary or advisable
under the UCC) shall have been made or performed such that the
Company has on such date a first priority perfected ownership or
security interest in respect of all Receivables.
SECTION 4.02. Representations and Warranties
of the Seller Relating to the Receivables. The Seller
hereby represents and warrants to the Company on each
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Receivables Sale Agreement
Payment Date that with respect to the Receivables originated by it
being paid for as of such date:
(a) Receivables Description. As of the CutOff Date,
the computer tape, diskette or data transmission delivered
or transmitted pursuant to Section 2.01(e) sets forth in all
material respects an accurate and complete listing of all
Receivables sold to the Company as of the Cut-Off Date and
the information contained therein in accordance with
Schedule 1 with respect to each such Receivable is true and
correct as of the Cut-Off Date. As of the Cut-Off Date, the
aggregate amount of Receivables owned by the Seller is
accurately set forth on such computer tape, diskette or data
transmission.
(b) No Liens. Each Receivable existing on the
Effective Date or, in the case of Receivables sold to the
Company after the Effective Date, on the date that each such
Receivable shall have been sold to the Company, has been
conveyed to the Company free and clear of any Liens, except
for Permitted Liens specified in clauses (i), (iii) or (iv)
of the definition thereof.
(c) Eligible Receivable. On the Effective Date,
each Receivable that is represented to be an Eligible
Receivable sold to the Company on such date is an Eligible
Receivable on the Effective Date and, in the case of
Receivables sold to the Company after the Effective Date,
each such Receivable that is represented to be an Eligible
Receivable sold to the Company on such later date is an
Eligible Receivable on such later date.
SECTION 4.03. Representations and Warranties
of the Company. The Company represents and warrants as
to itself as follows:
(a) Organization; Powers. The Company (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be
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Receivables Sale Agreement
conducted, (iii) is qualified to do business in, and is in good
standing in, every jurisdiction where the nature of its business so
requires, except where the failure so to qualify would not have a
Material Adverse Effect and (iv) has the corporate power and
authority to execute, deliver and perform its obligations under each
of the Transaction Documents and each other agreement or instrument
contemplated hereby or thereby to which it is or will be a party.
(b) Authorization. The execution, delivery and
performance by the Company of each of the Transactions (i) have been
duly authorized by all requisite corporate and, if required,
stockholder action and (ii) will not (A) violate (1) any Requirement
of Law or (2) any provision of any Transaction Document or any other
material Contractual Obligation to which the Company is a party or by
which it or any of its property is or may be bound, (B) be in
conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under, or give rise to any
right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any Transaction Document or any
other material Contractual Obligation or (C) result in the creation
or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by the Company (other than any
Lien created hereunder or contemplated or permitted hereby).
(c) Enforceability. This Agreement has been duly
executed and delivered by the Company and constitutes, and each other
Transaction Document to which the Company is a party when executed
and delivered by the Company will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in
accordance with its respective terms, subject (a) as to enforcement
of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors' rights generally, from time to time in effect and (b) to
general principles of equity whether enforcement is sought by a
proceeding in equity or at law.
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Receivables Sale Agreement
(d) Accounting Treatment. The Company will not
prepare any financial statements that shall account for the
transactions contemplated hereby, nor will it in any other respect
(other than for tax purposes) account for the transactions
contemplated hereby, in a manner that is inconsistent with the
Company's owner ship interest in the Receivables.
ARTICLE V
Affirmative Covenants
The Seller hereby agrees that, so long as there are
any amounts outstanding with respect to Purchased Receivables
originated by it previously sold by the Seller to the Company or
until an Early Termination, whichever is later, the Seller shall:
SECTION 5.01. Certificates; Other
Information. Furnish to the Company:
(a) not later than 120 days after the end of each
fiscal year and not later than 90 days after the end of each
of the first three fiscal quarters of each fiscal year, a
certificate of a Responsible Officer of the Seller stating
that, to the knowledge of such Responsible Officer (after
due inquiry), the Seller during such period has observed or
performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects
every condition, contained in the Sale Documents to which it
is a party to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of
any Purchase Termination Event or Potential Purchase
Termination Event except as specified in such certificate;
and
(b) promptly, such additional financial and other
information as the Company may from time to time reasonably
request.
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Receivables Sale Agreement
SECTION 5.02. Compliance with Law and
Policies. (i) Comply in all material respects with the
Requirements of Law and Contractual Obligations applicable to it.
(ii) Perform its obligations in all material
respects in accordance and compliance with the Policies, as amended
from time to time in accordance with the Transaction Documents, in
regard to the Receivables originated by it and the other Receivable
Assets.
SECTION 5.03. Preservation of Corporate Existence.
(i) Preserve and maintain its corporate existence, rights, franchises
and privileges in the jurisdiction of its incorporation and (ii)
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the nature of its business so
requires, except where the failure so to qualify would not,
individually or in the aggregate with other such failures, have a
Material Adverse Effect.
SECTION 5.04. Separate Corporate Existence.
(i) Maintain its deposit account or accounts,
separate from those of the Company and ensure that its funds will not
be diverted to the Company, nor will such funds be commingled with
the funds of the Company;
(ii) To the extent that it shares any officers or
other employees with the Company, the salaries of and the expenses
related to providing benefits to such officers and other employees
shall be fairly allocated among it and the Company, and it and the
Company shall bear their fair shares of the salary and benefit costs
associated with all such common officers and employees;
(iii) To the extent that it jointly contracts with
the Company to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing shall be
allocated fairly between it and the Company, and it and the Company
shall bear their fair shares of such costs. To the extent that it
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Receivables Sale Agreement
contracts or does business with vendors or service providers where
the goods and services provided are partially for the benefit of the
Company, the costs incurred in so doing shall be fairly allocated
between it and the Company in proportion to the benefit of the goods
or services each is provided, and it and the Company shall bear their
fair shares of such costs. All material transactions between it and
the Company, whether currently existing or hereafter entered into,
shall be only on an arm's length basis, it being understood and
agreed that the transactions contemplated in the Transaction
Documents meet the requirements of this clause (iii);
(iv) Maintain office space separate from the office
space of the Company (but which may be located at the same address as
the Company). To the extent that it and the Company have offices in
the same location, there shall be a fair and appropriate allocation
of overhead costs between them, and each shall bear its fair share of
such expenses;
(v) Not assume or guarantee any of the
liabilities of the Company; and
(vi) Take, or refrain from taking, as the case may
be, all other actions that are necessary to be taken or not to be
taken in order (x) to ensure that the assumptions and factual
recitations set forth in the Specified Bankruptcy Opinion Provisions
remain true and correct with respect to it (and, to the extent within
its control, to ensure that the assumptions and factual recitations
set forth in the Specified Bankruptcy Opinion Provisions remain true
and correct with respect to the Company) and (y) to comply with those
procedures described in such provisions that are applicable to it.
SECTION 5.05. Maintaining Records; Access to
Properties and Inspections. Maintain all financial records in
accordance with GAAP and permit any persons designated by the Company
to visit and inspect its financial records and properties at
reasonable times, upon reasonable prior notice to it, and as often as
reasonably requested and to make extracts from and copies of such
financial records, and permit any
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Receivables Sale Agreement
persons designated by the Company upon reasonable prior notice to
discuss the affairs, finances and condition of the Seller with the
officers thereof and independent accountants therefor (subject to
reasonable requirements of confidentiality, including requirements
imposed by law or by contract).
SECTION 5.06. Location of Records. Keep its chief
place of business and chief executive office, and the offices where
it keeps the records concerning the Purchased Receivables (and all
original documents relating thereto), at the locations referred to
for it on Schedule 3 hereto or upon 30 days' prior written notice to
the Company, at such other locations in a jurisdiction where all
action required by Section 5.14 shall have been taken and completed
and be in full force and effect; provided, however, that the Rating
Agency shall be notified of any such changes in location and such
location shall not be changed to a state which is within the Tenth
Circuit unless it delivers an opinion of counsel reasonably
acceptable to the Rating Agencies to the effect that Octagon Gas
Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir. 1993), is no longer
controlling precedent in the Tenth Circuit.
SECTION 5.07. Computer Files. At its own cost and
expense, retain the ledger used by it as a master record of the
Obligors and retain copies of all documents relating to each Obligor
as custodian and agent for the Company and other Persons with
interests in the Purchased Receivables and mark the computer tape or
other physical records of the Purchased Receivables to the effect
that interests in the Purchased Receivables existing with respect to
the Obligors listed thereon have been sold to the Company and that
the Company has sold an interest therein and, subsidiarily, has
granted a security interest therein.
SECTION 5.08. Payment of and Compliance with
Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all
its obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with
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Receivables Sale Agreement
respect thereto have been provided on its books or except where the
failure to so pay, discharge or otherwise satisfy such obligations
would not have a Material Adverse Effect in respect of the Seller and
would not subject any of its properties to a Lien which is not a
Permitted Lien. The Seller shall defend the right, title and interest
of the Company in, to and under the Receivables originated by it and
the other Receivable Assets, whether now existing or hereafter
created, against all claims of third parties claiming through the
Seller. The Seller will duly fulfill all obligations on its part to
be fulfilled under or in connection with each Receivable originated
by it and will do nothing to impair the rights of the Company in such
Receivable.
SECTION 5.09. Collections. Instruct each Obligor to
make payments in respect of its Receivables to a Lockbox or a Lockbox
Account or by wire transfer to a Lockbox Account or the Collection
Account and to comply in all material respects with procedures with
respect to Collections reasonably specified from time to time by the
Company. In the event that any payments in respect of any such
Receivables are made directly to the Seller (including, without
limitation, any employees thereof or independent contractors employed
thereby), the Seller shall, within two Business Days of receipt
thereof, deliver (which may be via regular mail) or deposit such
amounts to a Lockbox, a Lockbox Account or the Collection Account
and, prior to forwarding such amounts, the Seller shall hold such
payments in trust as custodian for the Company and the Trustee.
SECTION 5.10. Furnishing Copies, Etc.
Furnish to the Company:
(a) within five Business Days of the Company's
request, a certificate of the chief financial officer of the
Seller or of the Servicer, on behalf of the Seller,
certifying, as of the date thereof, to the knowledge of such
officer, that no Purchase Termination Event has occurred and
is continuing or if one has so occurred, specifying the
nature and extent thereof
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Receivables Sale Agreement
and any corrective action taken or proposed to be
taken with respect thereto;
(b) promptly after a Responsible Officer of the
Seller obtains knowledge of the occurrence of any Purchase
Termination Event or Potential Purchase Termination Event,
written notice thereof specifying the nature and extent
thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(c) promptly following request therefor, such other
information, documents, records or reports regarding or with
respect to the Purchased Receivables of the Seller, as the
Company may from time to time reasonably request; and
(d) promptly upon determining that any Purchased
Receivable originated by it designated as an Eligible
Receivable on the applicable Daily Report or Monthly
Settlement Statement was not an Eligible Receivable as of
the date provided therefor, written notice of such
determination.
SECTION 5.11. Obligations with Respect to Obligors
and Receivables. Take all actions on its part reasonably necessary to
maintain in full force and effect its rights under all contracts
relating to the Purchased Receivables originated by it.
SECTION 5.12. Responsibilities of the Seller.
Notwithstanding anything herein to the contrary, the Seller shall
perform or cause to be performed in all material respects all its
obligations under the Policies related to the Purchased Receivables
to the same extent as if such Purchased Receivables had not been
transferred to the Company hereunder.
SECTION 5.13. Assessments. Promptly pay and
discharge all taxes, assessments, levies and other governmental
charges imposed upon it except such taxes, assessments, levies and
charges which are being contested in good faith and for which the
Seller has set aside on its books adequate reserves.
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Receivables Sale Agreement
SECTION 5.14. Further Action. In addition
to the foregoing:
(a) The Seller agrees that from time to time, at
its expense, it will promptly execute and deliver all
further instruments and documents, and take all further
action, that may be necessary in the Seller's reasonable
judgment or that the Company may reasonably request, in
order to more fully effect the purposes of this Agreement
and the transfer of the Receivables hereunder, to protect or
more fully evidence the Company's right, title and interest
in the Purchased Receivables, or to enable the Company to
exercise or enforce any of its rights in respect thereof.
Without limiting the generality of the foregoing, the Seller
will upon the request of the Company (i) execute and file
such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be
necessary or, in the opinion of the Company, advisable and
(ii) obtain the agreement of any Person having a Lien on any
Receivables owned by the Seller (other than any Lien created
or imposed hereunder or under the Pooling Agreement or any
Permitted Lien) to release such Lien upon the purchase of
any such Receivables by the Company.
(b) The Seller hereby irrevocably authorizes the
Company to file one or more financing or continuation
statements (and other similar instruments), and amendments
thereto, relative to all or any part of the Purchased
Receivables and the other Receivable Assets sold or to be
sold by the Seller without the signature of the Seller to
the extent permitted by applicable law.
(c) If the Seller fails to perform any of its
agreements or obligations under this Agreement, the Company
may (but shall not be required to) perform, or cause
performance of, such agreements or obligations, and the
expenses of the Company incurred in connection therewith
shall be payable by the Seller as provided in Section 9.02.
The Company agrees promptly to notify the Seller after any
such performance;
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Receivables Sale Agreement
provided, however, that the failure to give such notice
shall not affect the validity of any such performance.
SECTION 5.15. Sale of Receivables. Sell
Receivables solely in accordance with the terms of this
Agreement.
SECTION 5.16. GMT/PPAP Rejection Period. (i)
Immediately notify the Company and the Servicer if in connection with
any Supplier Quality Assurance review relating to the GMT 800
Program, any officer of the Seller receives notice from GM that such
review is unsatisfactory in any material respect, (ii) keep the
Company and the Servicer reasonably informed of the corrective
actions being taken by Seller and (iii) promptly notify the Company
and the Servicer of the commencement and termination of any GMT/PPAP
Rejection Period.
ARTICLE VI
Negative Covenants
The Seller hereby agrees that, so long as there are
any amounts outstanding with respect to Purchased Receivables
originated by it previously sold by the Seller to the Company or
until an Early Termination with respect to the Seller, whichever is
later, the Seller shall not, directly or indirectly:
SECTION 6.01. Limitations on Transfers of
Receivables, Etc. At any time sell, transfer or other-
wise dispose of any of the Receivables or other
Receivable Assets pursuant to:
(i) any Lien Creation except for Permitted
Liens; or
(ii) any Investment.
SECTION 6.02. Extension or Amendment of
Receivables. Extend, make any Dilution Adjustment to,
rescind, cancel, amend or otherwise modify, or attempt
or purport to extend, amend or otherwise modify, the
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Receivables Sale Agreement
terms of any Purchased Receivables, or otherwise take any action to
cause, or which would permit, a Receivable that was designated as an
Eligible Receivable on the Payment Date relating to such Receivable
to cease to be an Eligible Receivable, except in any such case (a) in
accordance with the terms of the Policies, (b) as required by any
Requirement of Law or (c) in the case of Dilution Adjustments, upon
making a Seller Dilution Adjustment Payment pursuant to Section 2.05.
SECTION 6.03. Change in Payment Instructions to
Obligors. Instruct any Obligor of any Purchased Receivables to make
any payments with respect to any Receivables other than, in
accordance with Section 5.09, to a Lockbox, a Lockbox Account or the
Collection Account; provided, however, that, in accordance with
Section 2.03 of the Servicing Agreement, (i) it may terminate any
Lockbox Agreements or Lockbox Accounts and (ii) it may execute
additional Lockbox Agreements or Lockbox Accounts and instruct
Obligors to make payments in respect of any Receivables to such
additional accounts; provided, however, upon the satisfaction of the
Rating Agency Condition (or, if no Outstanding Series has been rated
by a Rating Agency, with the consent of the Agent) the Seller may
enter into any amendments or modifications of a Lockbox Agreement
that the Seller reasonably deems necessary to conform such Lockbox
Agreement to the cash management system of the Company or the Seller.
SECTION 6.04. Change in Name. Change its name, use
an additional name, or change its identity or corporate structure in
any manner which would or might make any financing statement or
continuation statement (or other similar instrument) relating to this
Agreement seriously misleading within the meaning of Section 9-402(7)
of the UCC, or impair the perfection of the Company's interest in any
Receivable under any other similar law, without 30 days' prior
written notice to the Company.
SECTION 6.05. Policies. Make any change or
modification (or permit any change or modification to
be made) to the Policies that is materially adverse to
the interests of the Company or its assigns (including
39
Receivables Sale Agreement
the Trustee and the Investor Certificateholders), except (i) if such
changes or modifications are necessary under any Requirement of Law,
(ii) if such changes or modifications would not reasonably be likely
to have a Material Adverse Effect with respect to the Company, or
(iii) if the Rating Agency Condition is satisfied with respect
thereto.
SECTION 6.06. Modification of Ledger.
Delete or otherwise modify the marking on the ledger
referred to in Section 2.01(e).
SECTION 6.07. Accounting for Purchases. Prepare any
financial statements which shall account for the transactions
contemplated hereby (other than capital contributions and the Seller
Note contemplated hereby) in any manner other than as a sale of the
Purchased Receivables by the Seller to the Company or in any other
respect account for or treat the transactions contemplated hereby
(including for financial accounting purposes, except as required by
law) (other than capital contributions and the Seller Note
contemplated hereby) in any manner other than as sales of the
Purchased Receivables originated by the Seller to the Company;
provided, however, that this subsection shall not apply for any tax
or tax accounting purposes.
SECTION 6.08. Instruments. Subject to the delivery
requirements set forth in Section 2.01(b) of the Pooling Agreement,
take any action to cause any Receivable not evidenced by an
"instrument" (as defined in the UCC as in effect in the State of New
York or other similar statute or legislation) upon origination to
become evidenced by an instrument, except in connection with the
enforcement or collection of an overdue Receivable.
SECTION 6.09. Ineligible Receivables. With out the
prior written approval of the Company, take any action to cause, or
which would permit, a Receivable that was designated as an Eligible
Receivable on the Payment Date relating to such Receivable to cease
to be an Eligible Receivable, except as otherwise expressly provided
by this Agreement; provided that in no event
40
Receivables Sale Agreement
shall an Eligible Receivable becoming a Defaulted Receivable
constitute a breach of this Section 6.09.
SECTION 6.10. Business of the Seller. Fail
to maintain and operate the business currently
conducted by the Seller and business activities reason
ably incidental or related thereto in substantially the
manner in which it is presently conducted and operated
if such failure would materially adversely affect the
interests of the Company under the Transaction
Documents.
SECTION 6.11. Limitation on Fundamental Changes.
Enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or
dissolution), or make any material change in its present method of
conducting business, or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property,
business or assets other than the assignments and transfers
contemplated hereby.
SECTION 6.12. Amendment of GM Agreements. Amend,
supplement, modify or waive any of the provisions of the GM
Agreements relating to the Receivables or consent or agree to suffer
to exist or permit any such amendment, supplement, modification or
waiver or exercise any consent rights granted to it thereunder unless
such amendment, supplement, modification or waiver or such exercise
of consent rights (a) could not reasonably be expected to have a
Material Adverse Effect with respect to the Seller or (b) has been
consented to in writing by the Company.
ARTICLE VII
Purchase Termination Events
SECTION 7.01. Purchase Termination Events.
If any of the following events (herein called "Purchase
Termination Events") shall have occurred and be
continuing:
(a) the Seller shall fail (i) to pay any
amount due pursuant to Section 2.06 in accordance
41
Receivables Sale Agreement
with the provisions thereof and such failure shall continue
unremedied for a period of five Business Days from the
earlier of (A) the date any Responsible Officer of the
Seller obtains knowledge of such failure and (B) the date
the Seller receives notice of such failure from the Company,
the Servicer or the Trustee or (ii) to pay any other amount
required to be paid by the Seller hereunder within five
Business Days of the date when due; or
(b) the Seller shall fail to observe or perform in
any material respect any covenant or agreement applicable to
it contained herein (other than as specified in paragraph
(a) of this Section 7.01); provided that no such failure
shall constitute a Purchase Termination Event under this
paragraph (b) unless such failure shall continue unremedied
for a period of 30 consecutive days from the date the Seller
receives notice of such failure from the Company, the
Servicer or the Trustee; or
(c) any representation, warranty, certification or
statement made or deemed made by the Seller in this
Agreement or in any statement, record, certificate,
financial statement or other document delivered pursuant to
this Agreement shall prove to have been incorrect in any
material respect when made or deemed made; provided that no
such event shall constitute a Purchase Termination Event
unless such event shall continue unremedied for a period of
30 days from the earlier of (A) the date any Responsible
Officer of the Seller obtains knowledge thereof and (B) the
date the Seller receives notice of the incorrectness of such
representation or warranty from the Company, the Servicer or
the Trustee; provided, further, that a Purchase Termination
Event shall not be deemed to have occurred under this
paragraph (c) based upon a breach of any representation or
warranty set forth in Section 4.02 if the Seller shall have
complied with the provisions of Section 2.06 in respect
thereof; or
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Receivables Sale Agreement
(d) (i) a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the
Seller in an involuntary case under the Bankruptcy Code or
any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect (the Bankruptcy Code and all
other such applicable laws being collectively, "Applicable
Insolvency Laws"), which decree or order is not stayed or
any other similar relief shall be granted under any
applicable federal or state law now or hereafter in effect
and shall not be stayed; (ii)(A) an involuntary case is
commenced against the Seller under any Applicable Insolvency
Law now or hereafter in effect, a decree or order of a court
having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over the Seller, or over
all or a substantial part of the property of the Seller,
shall have been entered, an interim receiver, trustee or
other custodian of the Seller for all or a substantial part
of the property of the Seller is involuntarily appointed, a
warrant of attachment, execution or similar process is
issued against any substantial part of the property of the
Seller, and (B) any event referred to in clause (ii)(A)
above continues for 60 days unless dismissed, bonded or
discharged; (iii) the Seller shall at its request have a
decree or an order for relief entered with respect to it or
commence a voluntary case under any Applicable Insolvency
Law now or hereafter in effect, or shall consent to the
entry of a decree or an order for relief in an involuntary
case, or to the conversion of an involuntary case to a
voluntary case, under any such Applicable Insolvency Law,
consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a
substantial part of its property; (iv) the making by the
Seller of any general assignment for the benefit of
creditors; or (v) the Board of Directors of the Seller
authorizes action to approve any of the foregoing; or
43
Receivables Sale Agreement
(e) there shall have occurred (i) an Early
Amortization Event set forth in Section 7.01 of the Pooling
Agreement or (ii) the Amortization Period with respect to
all Outstanding Series shall have occurred and be
continuing; or
(f) the Seller has been terminated as Servicer
following a Servicer Default with respect to the Seller
under the Servicing Agreement; or
(g) a notice of Lien shall have been filed by the
PBGC against the Seller under Section 412(n) of the Code or
Section 302(f) of ERISA for a failure to make a required
installment or other payment to a plan to which Section
412(n) of the Code or Section 302(f) of ERISA applies and
such notice could reasonably be expected to have a Material
Adverse Effect with respect to the Seller unless there shall
have been delivered to the Trustee and the Rating Agencies
proof of release of such Lien; or
(h) any Lien in an amount equal to or greater than
$10,000,000 has been asserted against or imposed on the
Receivables pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. ss.
9607(l), or any equivalent or comparable state law, relating
to or arising from the costs of, response to, or
investigation, remediation or monitoring of, any
environmental contamination resulting from the current or
past operations of the Seller, unless such Lien is being
contested in compliance with the standard set forth in
Section 5.13; or
(i) a Federal tax notice of Lien, in an amount
equal to or greater than $2,000,000, shall have been filed
against the Seller, unless such Lien is being contested in
compliance with the standard set forth in Section 5.13 or
there shall have been delivered to the Trustee and the
Rating Agencies proof of release of such Lien; or
(j) any "Event of Default", as such term is
defined in paragraph (b), (c) or (d) (but only
44
Receivables Sale Agreement
with respect to Article VI of the Credit Agreement in the
case of paragraph (d)) of Article VII of the Credit
Agreement, after giving effect to any grace period
applicable thereto under the Credit Agreement, shall have
occurred and be continuing;
then, (i) in the case of any Purchase Termination Event described in
paragraph (d), (e) or (g) above, the obligation of the Company to
purchase Receivables shall thereupon automatically terminate without
further notice of any kind, which is hereby waived by the Seller and
(ii) in the case of any other Purchase Termination Event, so long as
such Purchase Termination Event shall be continuing, the Company may
terminate its obligation to purchase Receivables from the Seller by
written notice to the Seller (any termination pursuant to clause (i)
or (ii) of this Article VII is herein called an "Early Termination");
provided, how ever, that in the event of an involuntary petition or
proceeding as described in paragraphs (d)(i) and (d)(ii) above, the
Company shall not purchase Receivables from the Seller until such
time, if any, as such involuntary petition or proceeding has been
dismissed, provided that such dismissal shall have occurred within 60
days of the filing of such petition or the commencement of such
proceeding.
SECTION 7.02. Remedies. (a) If an Early
Termination has occurred and is continuing:
(i) the Company (and its assignees) shall have all
of the rights and remedies provided to a secured creditor or
a purchaser of accounts under the UCC by applicable law in
respect thereto.
(ii) If required by the terms of Section 9-504 or
9-505 of the UCC (or analogous provisions of any other
similar law applicable to the Receivables), the Company (and
its assignees) may offer to sell any Purchased Receivable to
any Person, together, at its option, with all other
Receivables created by the same Obligor. Any Purchased
Receivable sold hereunder (other than pursuant to the
Pooling Agreement) shall cease to be a Receivable for all
purposes under this Agreement as of the effective date of
such sale;
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Receivables Sale Agreement
(b) In the absence of a Purchase Termination Event
under Section 7.01(d) or (e)(i), it is understood and agreed that the
Company will not exercise the rights granted to it pursuant to
Section 2.01(f) in its own capacity.
ARTICLE VIII
Seller Note
SECTION 8.01. Seller Note. On the Effective Date,
the Company shall issue to the Seller a sub ordinated note
substantially in the form of Exhibit A (as amended, supplemented or
otherwise modified from time to time, the "Seller Note"). The Company
may incur Indebtedness evidenced by the Seller Note on any date only
(i) if such date is a Payment Date; (ii) in payment to the Seller of
all or a portion of the Purchase Price (net of such deductions as
provided in Section 2.03(d)) for Receivables and other Receivable
Assets required to be paid for by the Company to the Seller on such
Payment Date in accordance with Section 2.02; (iii) to the extent
that cash was not available to pay such Purchase Price (net of such
deductions) in accordance with subsections 2.03(b)(i), 2.03(b)(ii)
and 2.03(b)(iii) (as applicable); and (iv) subject, in any event, to
Section 8.03. The aggregate principal amount of the Seller Note at
any time shall be equal to the difference between (i) the sum of the
aggregate principal amount on the issuance thereof and each addition
to the principal amount of such Seller Note pursuant to Section 2.03
as of such time and (ii) the aggregate amount of all payments made in
respect of the principal of such Seller Note as of such time. All
payments made in respect of the Seller Note shall be allocated,
first, to pay accrued and unpaid interest thereon, and second, to pay
the outstanding principal amount thereof. Interest on the principal
amount of the Seller Note (as such principal amount may have been
increased pursuant to the following proviso) shall accrue at the
Reference Rate in effect from time to time from and including the
Effective Date and shall be paid on each Distribution Date with
respect to amounts accrued and not paid as of
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Receivables Sale Agreement
the last day of the preceding Settlement Period and the maturity date
thereof; provided, however, that, to the maximum extent permitted by
law, accrued interest on the Seller Note which is not so paid shall
be added, at the request of the Seller, to the principal amount of
the Seller Note. The principal amount of the Seller Note (as such
principal amount may have been increased pursuant to the proviso to
the preceding sentence) shall be payable on the maturity date of the
Seller Note (unless sooner prepaid pursuant to the terms thereof and
of the other Transaction Documents). Default in the payment of
principal or interest under the Seller Note shall not constitute a
default or event of default or a Purchase Termination Event
hereunder, a Servicer Default under the Servicing Agreement or an
Early Amortization Event under the Pooling Agreement or any
Supplement thereto.
SECTION 8.02. Restrictions on Transfer of Seller
Note. Neither the Seller Note, nor any right of the Seller to receive
payments thereunder, shall be assigned, transferred, exchanged,
pledged, hypothecated, participated or otherwise conveyed, except as
provided in the Credit Agreement and the security documents related
thereto.
SECTION 8.03. Aggregate Amount. Anything herein to
the contrary notwithstanding, the Company may not make any payment of
any Purchase Price in the form of Indebtedness of the Company under
the Seller Note unless (i) at the time of such payment and after
giving effect thereto, the fair market value of the Company's assets,
including any beneficial interests in or indebtedness of a trust and
all Receivables and Receivable Assets the Company owns, is greater
than the amount of its liabilities, including its liabilities on the
Seller Note and all interest and other fees due and payable under the
Pooling Agreement and the other Transaction Documents plus
$10,000,000 and (ii) the aggregate principal amount of Indebtedness
evidenced by the Seller Note, incurred on or before such Payment Date
and outstanding on such Payment Date (after giving effect to all
repayments thereof on or before such Payment Date) would not exceed
25% of the outstanding balance of the Receivables on such Payment
Date. The principal amount of Indebtedness evidenced by the
47
Receivables Sale Agreement
Seller Note incurred on any Payment Date shall not, in any event, be
greater than the excess, if any, of (x) the Purchase Price for
Receivables and other Receivable Assets required to be paid for by
the Company on such Payment Date pursuant to Section 2.03 over (y)
the portion of such Purchase Price paid in cash pursuant to
sub-sections 2.03(b)(i), 2.03(b)(ii) and 2.03(b)(iii).
ARTICLE IX
Miscellaneous
SECTION 9.01. Payments. Each cash payment to be
made by either the Company or the Seller here under shall be made on
the required payment date and in immediately available funds at the
office of the payee set forth below its signature hereto or to such
other office as may be specified by either party in a notice to the
other party hereto.
SECTION 9.02. Costs and Expenses. The Seller agrees
(a) to pay or reimburse the Company for all its costs and expenses
incurred in connection with the enforcement or preservation of any
rights against the Seller under this Agreement and the other Sale
Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Company, (b) to pay, indemnify, and
hold the Company harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any
delay caused by the Seller in paying, stamp, excise and other similar
taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or any amendment,
supplement or modification of, or any waiver or consent under or in
respect of, this Agreement and any such other documents, and (c) to
pay, indemnify, and hold the Company harmless from and against any
and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which would not have been imposed on,
incurred by or asserted against the Company but for its having
acquired the Receivables hereunder (all such other liabilities,
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Receivables Sale Agreement
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements being herein called "Indemnified
Liabilities"); provided, however, that such indemnity shall not be
available to the extent that such Indemnified Liabilities result from
the gross negligence or wilful misconduct of the Company; and
provided, further, that the Seller shall have no obligation under
this Section 9.02 to the Company with respect to Indemnified
Liabilities arising from (i) any action taken, or omitted to be
taken, by a Servicer that is not an Affiliate of the Seller, (ii) any
action taken by the Trustee or the Company in collecting from an
Obligor or (iii) a delay in payment, or a default, by an Obligor with
respect to any Purchased Receivable (other than arising out of (x)
any discharge, claim, offset or defense (other than discharge in
bankruptcy of the Obligor or otherwise in respect of Charged-Off
Receivables) of the Obligor to the payment of any Purchased
Receivable (including, without limitation, a defense based on such
Purchased Receivable not being a legal, valid and binding obligation
of such Obligor enforceable against it in accordance with its terms)
or any other claim resulting from the sale of the merchandise or
services related to any such Purchased Receivable or the furnishing
or failure to furnish such merchandise or services, (y) a failure by
the Seller to perform its duties or obligations under this Agreement
or (z) the sale of any Purchased Receivable that is designated on the
applicable Daily Report to be an Eligible Receivable and is
determined to have been at the date of such sale an Ineligible
Receivable). The agreements in this Section 9.02 shall survive the
collection of all Receivables, the termination of this Agreement and
the payment of all amounts payable here under.
SECTION 9.03. Successors and Assigns. This
Agreement shall be binding upon and inure to the
benefit of the Seller and the Company and their
respective successors (whether by merger, consolidation
or otherwise) and assigns. The Seller agrees that it
will not assign or transfer all or any portion of its
rights or obligations hereunder without the prior
written consent of the Company. The Seller
acknowledges that the Company shall assign all of its
49
Receivables Sale Agreement
rights hereunder to the Trustee. The Seller consents to such
assignment and agrees that the Trustee, to the extent provided in the
Pooling Agreement, shall be entitled to enforce the terms of this
Agreement and the rights (including, without limitation, the right to
grant or withhold any consent or waiver) of the Company directly
against the Seller, whether or not a Purchase Termination Event, a
Potential Purchase Termination Event, an Early Amortization Event or
a Potential Early Amortization Event has occurred. The seller further
agrees that, in respect of its obligations hereunder, it will act at
the direction of and in accordance with all requests and instructions
from the Trustee until all amounts due to the Investor
Certificateholders are paid in full. The Trustee, on behalf of the
Investor Certificateholders, shall have the rights of a third-party
beneficiary under this Agreement.
SECTION 9.04. Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.05. No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising, on the part of the
Company, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise
of any right, remedy, power or privilege here under preclude any
other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
SECTION 9.06. Amendments and Waivers. Neither this
Agreement nor any terms hereof may be amended, supplemented or
modified except in a writing signed by the Company and the Seller.
Any amendment, supplement or modification shall not be effective
until the Rating Agency Condition has been satisfied.
SECTION 9.07. Severability. Any provision
of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or
50
Receivables Sale Agreement
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.08. Notices. All notices, requests and
demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or three days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Company and the
Seller, or to such other address as may be hereafter notified by the
respective parties hereto:
The Company: AAM Receivables Corp.
1840 Holbrook Avenue, Suite 2A
Detroit, MI 48212
Attention: Mark Umlauf
Telecopier: (313) 873-5472
The Seller: American Axle & Manufacturing, Inc.
1840 Holbrook Avenue
Detroit, MI 48212
Attention: Gary Witosky
Telecopier: (313) 974-2229
in each case, with a copy to
Trustee: The Chase Manhattan Bank, as
Trustee
450 W. 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance
Services
Telecopier: (212) 946-3240
SECTION 9.09. Counterparts. This Agreement
may be executed by one or more of the parties to this
Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts
taken together shall be deemed to constitute one and
the same instrument. A set of the copies of this
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Receivables Sale Agreement
Agreement signed by all the parties shall be lodged with the Company.
SECTION 9.10. Waivers of Jury Trial. EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER SALE DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND THE OTHER SALE DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.10.
SECTION 9.11. Jurisdiction; Consent to Service of
Process. (a) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE
UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER SALE DOCUMENTS OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE
COMPANY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR THE OTHER SALE DOCUMENTS AGAINST THE SELLER OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT THEY MAY
LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT
52
Receivables Sale Agreement
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER SALE DOCUMENTS IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 9.08. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY
PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
SECTION 9.12. Integration. This Agreement and the
other Transaction Documents contain a final and complete integration
of all prior expressions by the parties hereto with respect to the
subject matter hereof and thereof and shall together constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof and thereof, superseding all prior oral or written
understandings.
SECTION 9.13. No Bankruptcy Petition. The
Seller, by entering into this Agreement, and any
present or future holder of the Seller Note, by its
acceptance thereof, covenants and agrees that, prior to
the date which is one year and one day after the date
of termination of this Agreement pursuant to
Section 9.14, it will not institute against, or join
any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under
any Applicable Insolvency Laws.
SECTION 9.14. Termination. This Agreement will
terminate at such time as (a) the commitment of the Company to
purchase Receivables from the Seller hereunder shall have terminated
and (b) all Receivables purchased hereunder have been collected, and
the proceeds thereof turned over to the Company and all other amounts
owing to the Company hereunder shall have been paid in full or, if
Receivables sold hereunder have not been collected, such Receivables
have become Defaulted Receivables and the Company shall have
53
Receivables Sale Agreement
completed its collection efforts in respect thereto; provided,
however, that the indemnities of the Seller to the Company set forth
in this Agreement shall survive such termination and provided,
further that, to the extent any amounts remain due and owing to the
Company hereunder, the Company shall remain entitled to receive any
collections on Receivables sold hereunder which have become Defaulted
Receivables after it shall have completed its collection efforts in
respect thereof.
SECTION 9.15. Construction of Agreement. (a) The
Seller hereby grants to the Company a security interest in all of the
Seller's right, title and interest in, to and under the Receivables
and other Receivable Assets now existing and hereafter created, all
monies due or to become due and all amounts received with respect
thereto and all "proceeds" thereof (including Recoveries), to secure
all of the Seller's obligations hereunder.
(b) This Agreement shall constitute a
security agreement under applicable law.
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Receivables Sale Agreement
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers thereunto
duly authorized, all as of the day and year first above written.
AMERICAN AXLE &
MANUFACTURING, INC., as
Seller and Servicer
by
/s/ Gary J. Witkosky
--------------------
Name: Gary J. Witkosky
Title: Chief Financial
Officer
AAM RECEIVABLES CORP.
by
/s/ Patrick S. Lancaster
------------------------
Name: Patrick S. Lancaster
Title: Secretary
Exhibit A to the
Receivables Sale Agreement
[FORM OF
SELLER NOTE]
New York, New York
__________, 1997
AAM RECEIVABLES CORP., a Delaware corporation (the
"Company"), hereby promises to pay to the order of American Axle &
Manufacturing, Inc., a Delaware corporation, in its capacity as Seller under
the Receivables Sale Agreement described below the principal amount of this
Seller Note, determined as described below, together with interest thereon
at a rate per annum equal to the Reference Rate in effect from time to time
plus 2.50% in lawful money of the United States of America. Capitalized
terms used herein but not defined herein shall have the meanings assigned to
such terms in the Receivables Sale Agreement dated as of October 29, 1997,
between the Company and American Axle & Manufacturing, Inc. as seller (in
such capacity, the "Seller") and as servicer (in such capacity, the
"Servicer") (as amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Receivables Sale Agreement") and in
the Pooling Agreement, dated as of October 29, 1997, among the Company, the
Servicer, and The Chase Manhattan Bank, a New York banking corporation, as
Trustee (as amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Pooling Agreement"). This Seller Note is the
Seller Note referred to in the Receivables Sale Agreement and is subject to
the terms and conditions thereof.
1. Principal Amount. The aggregate principal amount of this
Seller Note at any time shall be calculated in accordance with Section 8.01
of the Receivables Sale Agreement and shall be recorded by the Servicer (the
authority to so record such amounts being hereby granted to the Servicer) on
the schedule annexed to and constituting a part of this Seller Note.
2. Payments of Principal and Interest. (a) Principal on this
Seller Note may be prepaid at any time. Principal not prepaid shall be due
and payable on the Trust Termination Date (as defined in the Pooling
Agreement).
(b) Payments of interest on this Seller Note shall be paid
on each Distribution Date (with respect to interest accrued and not paid as
of the preceding Distribution Date (or, in the case of the first
Distribution Date, as of the date on which this Seller Note is issued)) and
on the Trust Termination Date by depositing such payment in such account of
the Seller as the
2
Seller may designate in writing; provided, however, that accrued interest on
this Seller Note which is not so paid may (to the maximum extent permitted
by law) be added to the principal amount of this Seller Note as indicated on
the schedule annexed to and constituting a part of this Seller Note.
Notwithstanding the foregoing, no payments of interest or principal may be
made under this Seller Note at the times and to the extent prohibited under
the Subordination Provisions and Certain Termination Events described in
Sections 3 and 6 below.
3. Subordination Provisions. The Company covenants and
agrees, and the Seller, by its acceptance of this Seller Note, likewise
covenants and agrees, that the payment of all obligations of the Company to
the Seller under this Seller Note from or with the proceeds (such proceeds
being the "Proceeds") of Receivables (as defined in the Pooling Agreement)
or Related Property (as defined in the Pooling Agreement)(and any
extensions, renewals, financing, refundings and replacements of all or any
part of such obligations) (the "Seller Subordinated Debt") are hereby
expressly subordinated in right of payment to the payment and performance of
the obligations of the Company to the Trustee for the benefit of the Holders
(as defined in the Pooling Agreement) howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due (the "Senior Obligations") to
the extent and in the manner set forth in this paragraph including each of
the following subparts:
(a) Insolvency Events; Priority of Senior Obligations;
Payments Made Directly to the Trustee. In the event of any
bankruptcy, dissolution, winding up, liquidation, readjustment,
reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or
upon an assignment for the benefit of creditors, or any other
marshalling of the assets and liabilities of the Company (each an
"Insolvency Event") or any sale of all or substantially all the
assets of the Company (except pursuant to the Pooling Agreement and
any Supplement thereto),
(i) the Senior Obligations shall first be paid and
performed in full and in cash before the Seller shall be
entitled to receive and to retain any payment or
distribution from or with the Proceeds in respect of the
Seller Subordinated Debt, whether of principal, interest or
otherwise; and
(ii) any payment or distribution from or with the
Proceeds of any kind (including cash or property arising
3
from Proceeds which may be payable or deliverable by
reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Seller
Subordinated Debt) in respect of the Seller Subordinated
Debt that otherwise would be payable or deliverable with
respect to the Seller Subordinated Debt directly or
indirectly, by set-off or in any other manner to the Seller,
shall be paid or delivered by the Person making such payment
or delivery (whether a trustee in bankruptcy, a receiver,
custodian, liquidating trustee or otherwise) directly to the
Trustee on behalf of the Holders for application to (in the
case of cash) or as collateral for (in the case of noncash
property or securities) the payment of the Senior
Obligations until the Senior Obligations shall have been
paid in full in cash.
(b) Payments Received by Seller. In the event that the
Seller receives any payment or other distribution of any kind or
character arising from Proceeds from the Company or from any other
source whatsoever in respect of the Seller Subordinated Debt after
the commencement of an Insolvency Event, such payment or other
distribution shall be deemed to be property of the Holders and shall
be received and held by the Seller in trust for the Trustee on behalf
of the Holders and shall be turned over by the Seller to the Trustee
for the benefit of the Holders forthwith, until all Senior
Obligations have been paid and performed in full and in cash.
(c) Application of Payments. All payments and distributions
arising from Proceeds received by the Trustee in respect of the
Seller Subordinated Debt, to the extent received in or converted into
cash, may be applied by the Trustee for the benefit of the Holders
(i) first to the payment of any and all reasonable expenses
(including reasonable attorneys' fees and legal expenses) paid or
incurred by the Trustee or any Holder in enforcing these
Subordination Provisions, or in endeavoring to collect or realize
upon the Seller Subordinated Debt, and (ii) any balance remaining
therefrom shall be applied by the Trustee toward the payment of the
Senior Obligations in a manner determined by the Trustee to be in
accordance with the Pooling Agreement.
(d) Seller's Rights of Subrogation. The Seller agrees that
no payment or distribution to Holders pursuant to these Subordination
Provisions shall entitle the Seller to exercise any right of
subrogation in respect thereof until the Senior Obligations shall
have been paid in full in cash. The Seller agrees that these
Subordination Provisions herein shall not
4
be affected by any action, or failure to act, by any holder of Senior
Obligations which results, or may result, in affecting, impairing or
extinguishing any right of reimbursement or subrogation or other right
or remedy of the Seller.
(e) Company's Obligations Absolute. The provisions of this
paragraph are intended solely for the purpose of defining the
relative rights with respect to Proceeds of the Seller, on the one
hand, and the Holders, on the other hand. Nothing contained in these
provisions or elsewhere in this Seller Note is intended to or shall
impair, as between the Company, its creditors (other than the
Trustee) and the Seller, the Company's obligation, which is
unconditional and absolute, to pay the Seller Subordinated Debt as
and when the same shall become due and payable in accordance with the
terms hereof and of the Receivables Sale Agreement or to affect the
relative rights of the Seller and creditors of the Company (other
than the Certificateholders); provided that any payments made by the
Company pursuant to this subsection shall be made solely from funds
available to the Company which are not otherwise needed to be applied
to the payment of any amounts by the Company pursuant to any Pooling
and Servicing Agreements, and the Seller shall make no claim against
the Company for payment in contravention of this proviso.
(f) Avoided Payments. If, at any time, any payment (in whole
or in part) made with respect to any Senior Obligations is rescinded
or must be restored or returned by a Holder or the Trustee on behalf
of the Holders, the provisions of this paragraph shall continue to be
effective or shall be reinstated, as the case may be, as though such
payment had not been made.
(g) Subordination Not Affected by Certain Actions of Holders
or the Trustee. As between the Seller, on the one hand, and the
Holders and the Trustee, on the other hand, each of the Holders or
the Trustee may, from time to time, at its sole discretion, without
notice to the Seller, and without waiving any of its rights under
these Subordination Provisions, take any or all of the following
actions: (i) retain or obtain an interest in any property to secure
any of the Senior Obligations; (ii) extend or renew for one or more
periods (whether or not longer than the original period), alter,
increase or exchange any of the Senior Obligations, or release or
compromise any obligation of any nature with respect to any of the
Senior Obligations; (iii) amend, supplement, amend and restate, or
otherwise modify any Transaction Document; and (iv) release its
5
security interest in, or surrender, release or permit any
substitution or exchange for all or any part of any rights or property
securing any of the Senior Obligations.
(h) Waiver of Notice. By its acceptance hereof, the Seller
hereby waives: (i) notice of acceptance of the provisions of this
paragraph by any of the Holders or the Trustee; (ii) notice of the
existence, creation, non-payment or non-performance of all or any of
the Senior Obligations; and (iii) all diligence in enforcement,
collection or protection of, or realization upon, the Senior
Obligations or any security therefor.
4. Restrictions on Assignment. Neither this Seller Note, nor
any right of the Seller to receive payments hereunder, shall be assigned,
transferred, exchanged, pledged, hypothecated, participated or otherwise
conveyed, except as provided in the Credit Agreement and in the security
documents related thereto.
5. No Bankruptcy Petition. The Seller covenants and agrees
that, prior to the date which is one year and one day after the date of
termination of the Receivables Sale Agreement pursuant to Section 9.13
thereof, it will not institute against, or join any other Person in
instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any federal or state bankruptcy or similar law.
6. Certain Termination Events. During the continuance of any
Early Amortization Event set forth in paragraphs (a) or (b) of Section 7.01
of the Pooling Agreement, until all Senior Obligations have been paid in
full:
(a) the Company shall cease making any payments to the
Seller under this Seller Note;
(b) the Trustee (on behalf of the Holders) may demand, sue
for, collect and receive every payment or distribution of any kind
made in respect of the Seller Subordinated Debt and file claims and
proofs of claim and take such other action (including enforcing any
security interest or other lien securing payment of the Seller
Subordinated Debt) as the Trustee (on behalf of the Holders) may deem
necessary for the exercise or enforcement of any of the rights or
interests of Holders; provided that in the event the Trustee takes
such action, it shall apply all proceeds first to the payment of
costs under this Seller Note, then to the payment of the Senior
Obligations and any surplus proceeds remaining thereafter to be paid
over to whosoever may be lawfully entitled thereto; and
6
(c) the Seller shall promptly take such action as the
Trustee (on behalf of the Holders) may request (i) to file
appropriate claims or proofs of claim in respect of the Seller
Subordinated Debt; (ii) to execute and deliver to the
Trustee (on behalf of the Holders) such powers of attorney,
assignments, or other instruments as the Trustee may request in order
to enable it to enforce any and all claims with respect to, and any
security interests and other liens securing payment of, the Seller
Subordinated Debt, and (iii) to collect and receive any and all
payments or distributions which may be payable or deliverable upon or
with respect to the Seller Subordinated Debt for account of the
Trustee (on behalf of the Holders).
7. The Company covenants and agrees that, at any time that
the outstanding principal amount of this Seller Note is greater than zero,
it shall not declare or pay any dividend on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of capital stock of the Company, whether now or
hereafter outstanding, or make any other distribution in respect thereof.
THIS SELLER NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ANY CONFLICT OF LAW PRINCIPLES.
AAM RECEIVABLES CORP.,
by
-------------------------
Name:
Title:
Schedule 1 to
Seller Note
Subordinated Loans and Payments of Principal1
---------------------------------------------
Amount of Unpaid
Amount of Principal Principal Notation
Date Loans Repaid Balance Made by
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1 The grid below may be maintained electronically by the Seller, rather
than in written form.
Schedule 1 to the
Receivables Sale Agreement
Receivables
American Axle & Manufacturing, Inc. aged trial balance as of
October 29, 1997, on computer diskette.
Schedule 2 to the
Receivables Sale Agreement
Lockboxes
Lockbox Account
Name Bank Name Number Number
---- --------- ------- -------
American Axle Mellon Bank 360254 091-8591
& Manufacturing, P.O. Box 360254
Inc. Pittsburgh, PA 15251-6254
Schedule 3 to the
Receivables Sale Agreement
Chief Executive Office
Jurisdiction of Location of Chief Office Where Records
Seller Incorporation Executive Office are kept
------ --------------- ---------------- --------------------
American Axle & 1840 Holbrook Ave.
Manufacturing, Inc. Delaware Detroit, MI 48212 Finance Dept.
Other Locations where Records
Concerning Receivables are Located
----------------------------------
A. Detroit Gear & Axle and Detroit Forge
1840 Holbrook Avenue
Detroit, Michigan 48212
B. Buffalo Gear & Axle
1001 East Delavan Avenue
Buffalo, New York 14215
C. Tonawanda Forge
2390 Kenmore
Tonawanda, New York 14150
D. Three Rivers Plant
One Manufacturing Drive
Three Rivers, Michigan 49093
E. Engineering, Sales & Marketing
Techinical Center
2965 Technology Drive
Rochester Hills, Michigan 48309
Schedule 4 to the
Receivables Sale Agreement
Names
-----
Seller Trade Names
------ -----------
American Axle & Manufacturing, Inc. AAM*
The corporation is frequently referred to as "AAM" and, for this reason, it
is claimed as a trade name. The corporation does not have any "doing
business as" names or "assumed names".
Schedule 5 to the
Receivables Sale Agreement
Discounted Percentage
All terms defined or referenced in the Receivables Sale
Agreement, the Pooling Agreement or a Supplement and not otherwise defined
or referenced herein are used herein as therein defined or referenced.
The Discounted Percentage applicable to the Receivables
purchased on any date from the Seller shall equal (a) during the initial
Accrual Period, 99.25% and (b) thereafter, the percentage obtained from the
following formula:
100% - (A + B + C + D)
all determined by the Company as of the Related Payment Date,
Where
A = Adjusted Loss Reserve Percentage, which as of such Payment
Date will equal the ratio obtained by dividing (a) Charged-
Off Receivables (net of recoveries in respect of Charged-Off
Receivables) during the six-fiscal month period immediately
preceding the Settlement Report Date most recently preceding
such Payment Date by (b) two times the aggregate amount of
Collections during the three-fiscal month period immediately
preceding the Settlement Report Date most recent to such
Payment Date.
B = Adjusted Carrying Cost Reserve Percentage, which as of such Payment
Date will equal the amount obtained by dividing (a) the product of
(i) 1.5, (ii) the average of the Days Sales Outstanding for the three
Settlement Report Dates most recent to such Payment Date and (iii)
the Reference Rate as of the Settlement Report Date most recent to
such Payment Date by (b) 365.
C = The Servicing Fee Percentage divided by 360.
D = Processing Expense Reserve Percentage, which will equal 1/20 of 1%
and reflects the cost of the Company's overhead, including costs of
processing the purchase of Receivables and other normal operation
costs and a reasonable profit margin.
None of the elements of the above-referenced formula, in
respect of any purchase of Receivables, will be adjusted following the
related Payment Date.
With respect to each calculation set forth above with
respect to a Settlement Report Date, such calculation as calculated on such
Settlement Report Date and included in the
2
applicable Monthly Settlement Statement shall remain in effect from and
including the related Settlement Report Date to but excluding the following
Settlement Report Date.
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 6/5/98 | | | | | | | None on these Dates |
| | 10/29/97 | | 1 | | 67 |
| | 10/27/97 | | 7 |
| | 10/24/97 | | 7 |
| | 9/22/97 | | 8 |
| | 2/20/96 | | 8 |
| | 3/1/94 | | 8 |
| | 2/17/94 | | 8 |
| List all Filings |
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