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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file Number 1-6348
HOWMET CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2838093
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Address of Principal Executive Offices: 475 Steamboat Road, Greenwich, CT
06836-1960
Registrant's telephone number, including area code 203-661-4600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [ ] NO [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing. $0.00
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. COMMON STOCK, $1.00 PAR
VALUE, AS OF MARCH 28, 1997 : 10 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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PART I
ITEM 1 -- BUSINESS
Howmet Corporation (the "Company") is a leading manufacturer of investment
cast superalloy, titanium and aluminum components for jet aircraft and
industrial gas power generation. The Company operates in one business segment,
investment castings; it uses investment casting techniques to produce
high-performance and high-reliability superalloy and titanium components to the
exacting specifications of the major manufacturers. Prior to December 13, 1995,
the Company was owned by Pechiney Corporation, a wholly owned subsidiary of
Pechiney International, a French corporation. On December 13, 1995 Blade
Acquisition Corp. ("Blade"), which is 51% owned by The Carlyle Group and its
affiliates ("Carlyle"), and 49% owned by Thiokol Corporation ("Thiokol"),
acquired Pechiney Corporation and the capital stock of certain Cercast
companies owned by Pechiney International (the "Acquisition"). The Cercast
companies were merged into the Company and Pechiney Corporation's name was
changed to Howmet Holdings Corporation ("Holdings"). The Company remains a
wholly owned subsidiary of Holdings. Thiokol has the option to purchase
Carlyle's interest in the Company after December 13, 1998.
PRODUCTS AND SERVICES
Howmet manufactures superalloy, titanium and aluminum castings for turbine
engines and airframe applications for customers worldwide. The table below
describes Howmet's major products:
MAJOR PRODUCTS SUMMARY PRODUCT DESCRIPTION AND APPLICATION
Blades High temperature superalloy rotating turbine engine
components. Blades act as air foils which are driven by
the hot gas flow.
Vanes High temperature superalloy non-rotating turbine
engine components. Vanes are the fixed airfoils which
direct the gas flow.
IGT shroud blocks Vane holders that provide a seal to fix each vane in
position.
Turbine rotors Integrated cast rotating wheels of blades primarily for
use in smaller engines. Rotors are like blades but are
manufactured as a single part instead of being built of
separate parts.
Nozzle rings Integrated cast non-rotating rings of vanes primarily
for use in smaller engines. Nozzle rings are like vanes
but are manufactured as a single integral component.
Compressor stators Integrated cast non-rotating rings of compressor vanes
for use in both small and large engines. Compressor
stators are like vanes but are manufactured as a single
component.
Frames Large diameter thin-wall cases used to support their
respective sections of turbine engines such as fans,
compressors and turbines.
Bearing housings Large diameter, heavy structural supports for
bearings.
Airframe components Titanium and aluminum structures for commercial and
military aircraft, including door frames, flap tracks,
nacelles, longerons, wing tips, nose and tail cones.
Electronics packaging Aluminum boxes with card slots and cooling fins for
electronic avionics packages.
Electro-optical system Heads-up displays, gimbels and other housings.
housings
Engine parts Gear boxes, front frames, blocker doors for small
engines.
Pumps and compressors Fuel pumps, a/c blowers, oil tanks, fans.
Howmet also operates component repair facilities entirely devoted to the
refurbishment of a wide range of components for jet aircraft engines, focusing
primarily on turbine hot section components such as blades, vanes, and shrouds.
The refurbishment market is highly regulated; FAA and OEM certifications are
required for each refurbishment process used for components and for each
refurbishment facility. Howmet has provided coating services to aerospace and
other industries since the early 1960s. The Company's protective metallic and
ceramic coatings
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are designed to prolong the life of complex turbine components by improving
their resistance to wear, oxidation and corrosion. Howmet provides four
different coating processes to customers: diffusion coating, overlay coating,
recoating and masking. Howmet also offers customers machining services, develops
a variety of alloys to meet customer needs, and provides research and
development services on specific customer projects, as discussed below.
JOINT VENTURES
Howmet currently is participating in two joint ventures, one in Japan with
Komatsu and the other in the United States with Rolls-Royce, Inc. The Japanese
joint venture, Komatsu-Howmet Ltd. ("KHL"), manufactures investment cast
components for IGT and aerospace customers, primarily in Japan and other Asian
countries. Howmet currently holds an option to purchase Komatsu's interest in
this venture. The joint venture with Rolls Royce, R-H Component Technologies
L.C. ("RHCT"), was organized to serve the North American refurbishment market
for aircraft engine parts (excluding PWA parts). These joint ventures are
accounted for by the equity method.
SUPPLY
The Company's raw materials include metals and minerals used to produce the
alloys included in its castings, including titanium, hafnium, aluminum, nickel,
cobalt and copper, among others. The Company has multiple sources of supply for
most of these metals and has not experienced any material supply interruption
for more than twenty years. Prices of these materials can be volatile, and the
Company engages in forward purchases of some of these materials under certain
market conditions, and passes certain price fluctuations through to customers
pursuant to its long-term agreements. The Company ordinarily does not, however,
otherwise attempt to hedge the price risk of its raw materials.
PATENTS
The Company has obtained numerous patents, licenses, and proprietary
information which it believes provide it with a competitive advantage, including
proprietary modifications and applications of the directional solidification and
single crystal processes. To protect its proprietary information, the Company
requires its employees to sign confidentiality agreements, reinforces
confidentiality upon an employee's departure from the Company, and builds some
of its own specialized equipment, such as casting furnaces, to prevent
competitors from learning about Howmet's newly developed processes. Competitors
in the Company's business also hold patents and other forms of proprietary
information, and there is active technical competition in that business. No
assurances can be given that one company or another will not obtain a
technological advantage from time to time, in one aspect of the industry's
technology or another.
MAJOR CUSTOMERS
Howmet is a leading provider of precision investment casting components to the
leading producers of aircraft gas turbine engine components. The Company's top
ten customers represented approximately 62% of the Company's net sales in 1996.
The Company's principal customers are General Electric ("GE") and Pratt &
Whitney Aircraft Division of United Technologies Corporation ("PWA") (including
Pratt & Whitney-Canada). Sales to these customers represented 19% and 14%,
respectively, of the Company's 1996 net sales. None of the Company's other
customers represented more than 10% of 1996 net sales.
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Contractual relationships with the Company's principal customers vary. More
than half of the Company's business is derived from multi-year contracts,
typically three years in length. Under these contracts, the Company's customers
agree to order from the Company, and the Company agrees to supply, specified
percentages of specified parts at specified pricing over the life of the
contracts. The customers are not required to order fixed numbers of parts,
although pricing may be subject to certain threshold quantities. Historically,
many customers have chosen to single source components due to the high cost of
tooling and process qualification. Some of these contracts include provisions
requiring specified price reductions over the term of the contract, based on
lower production costs as programs mature, shared benefits from other cost
reductions resulting from joint production decisions, and negotiated reductions.
One of Howmet's largest customers, GE's Power Systems division ("GEPS"), in
response to a corporate policy decision to reduce sole sourcing, has exercised
its right to terminate its long-term sole source contract with Howmet effective
in February 1997, and has placed orders for certain components with Precision
Castparts Corp. ("PCC"). The Company is currently negotiating with GEPS for a
new long-term contract. In the interim the parties have agreed to continue their
relationship based on the terms set forth in the prior agreement. Based on the
negotiations and on the nature of the products currently in production and
planned for production for GEPS, the Company expects to continue producing a
substantial volume of castings for GEPS. To the extent that multiple sourcing by
GEPS reduces the Company's volume in 1997, the Company has other business
opportunities with other customers to make use of available capacity based on
current market conditions. See "Competition".
The Company's backlog of orders as of December 31, 1996 was $648 million.
Because of the short lead and delivery times often involved and because the
Company's orders are often affected by year-end deferrals and from time to time
by other deferrals and cancellations, backlog may not be a significant
indicator of future performance of the Company.
COMPETITION
The Company believes it has a majority market share in the investment casting
market. PCC is the Company's primary competitor. PCC is a public company with
calendar year 1996 reported sales of $843.4 million. The Company competes with
PCC and others primarily on technological sophistication, quality, price,
service and delivery for orders from large, well-capitalized customers with
significant market power.
Superalloy castings represent a substantial cost component of customers'
engines, and customers are increasingly focused on reducing costs and
responding to increasing competition in their markets. The Company's major
customers for these castings are intensely price competitive with each other,
and this price competition increases their incentives to reduce costs from
their suppliers. Aluminum casting manufacturers also compete on the basis of
price, quality and service.
Competition in the component repair market is primarily based on reliability
of service, pricing, quality, and turn time. Since most customers desire no more
than two or three suppliers, demonstrated experience is very important to
maintaining the business. Howmet's principal competitor in the repair market and
the largest participant in the market is Chromalloy Gas Turbine ("Chromalloy"),
the largest operating unit of Sequa Corporation. SIFCO Industries, Inc. and
Indivers N.V. (Interturbine) are the Company's other significant competitors in
this market.
Orders for components are primarily awarded through a competitive bidding
process. Drawings and specifications for each part bid are sent to the
appropriate manufacturing plant for input from engineering, quality and business
center managers in the plant as part of the formal bid process.
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RESEARCH AND DEVELOPMENT
Howmet has been a leader over many years in developing new investment casting
processes such as the Mono-Shell(TM) process for mold formation, and in putting
the directional solidification and single crystal casting processes into
commercial production. The Company is also developing and commercializing its
Spraycast-X(R) technology, by which atomized alloy is sprayed onto a mandrel to
yield a preformed shape such as a ring. Howmet has also been a leader in fine
grain casting, hot isostatic pressing (a pressurizing process performed near the
melting point of metal to increase its density), and the chemical vapor
deposition coating process. The research center staff of 162 includes 69 degreed
engineers and scientists. A portion of the Company's total research and
development funding comes from Howmet's customers, who regularly retain Howmet
for specific projects. Howmet also provides research and development services by
contract to governmental agencies. The Company's aggregate research and
development expense for the years ended December 31, 1994, 1995 and 1996 were
$19.2 million, $26.4 million, and $24.2 million respectively.
ENVIRONMENTAL MATTERS
The Company is subject to comprehensive and changing international, federal,
state and local laws, regulations and ordinances that (i) govern activities or
operations that may have adverse environmental effects, such as discharges to
air and water, as well as handling and disposal practices for solid and
hazardous wastes, and (ii) impose liability for the costs of cleaning up, and
certain damages resulting from, sites of past spills, disposals or other
releases of hazardous substances and materials (together, "Environmental Laws").
Management believes that the Company's current operations are in substantial
compliance with such Environmental Laws. However, due to the nature of the
Company's operations, the Company is involved from time to time in legal
proceedings involving remediation of environmental contamination from past or
present operations, as well as compliance with environmental requirements
applicable to ongoing operations. There can be no assurance that material costs,
liabilities, or penalties will not be incurred in connection with any such
proceedings, claims or compliance requirements or in connection with currently
unknown environmental liabilities.
The Company's facilities have made, and will continue to make, expenditures to
comply with current and future environmental laws. The Company anticipates that
it will incur additional capital and operating costs in the future to comply
with existing environmental laws and new requirements arising from new or
amended statutes and regulations. In addition, because the applicable regulatory
agencies have not yet promulgated final standards for some existing
environmental programs, the Company cannot at this time reasonably estimate the
cost for compliance with these additional requirements. The amount of any such
compliance costs could be material.
The Company is subject to liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") (the federal
"Superfund" statute), and similar state statutes for the investigation and
remediation of environmental contamination at properties owned and/or operated
by it and at off-site locations where it has arranged for the disposal of
hazardous substances. Courts have determined that liability under CERCLA is, in
most cases, joint and several, meaning that any responsible party could be held
liable for all costs necessary for investigating and remediating a release or
threatened release of hazardous substances. As a practical matter, liability at
most CERCLA (and similar) sites is shared among all the solvent Potentially
Responsible Parties ("PRPs"). The most relevant factors in determining the
probable liability of a PRP at a CERCLA site usually are the cost of the
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investigation and remediation, the relative amount of hazardous substances
contributed by the PRP to the site, and the number of solvent PRPs.
The Company has received recent test results indicating levels of
polychlorinated bi-phenyls ("PCBs") at its Dover, New Jersey facility which
will require remediation. These levels have been reported to the New Jersey
Department of Environmental Protection ("NJDEP"), and the Company is preparing
a work plan to define the risk and to test possible clean-up options. The
statement of work must be approved by the NJDEP pursuant to an Administrative
Consent Order entered into between the Company and NJDEP on May 20, 1991
regarding clean-up of the site. Various remedies are possible and could
involve expenditures ranging from $2 million to $22 million or more. The
Company has recorded a $2 million long-term liability as of December 31, 1996
for this matter. Given the uncertainties, it is possible that the estimated
range of this cost and the amount accrued will change in the near term. The
indemnification discussed below applies to the costs associated with this
matter.
The Company is currently investigating possible and known contamination
(including soil and groundwater contamination) at the following other North
American facilities currently or previously owned and operated by the Company:
Whitehall, Michigan; Branford, Connecticut; Farmington, Connecticut; and
Hillsboro, Texas. The Company currently estimates that the total investigation
and remediation costs at these facilities will be $1.2 million. The Company is
also addressing environmental issues at five European facilities. The Company
has conducted an assessment and estimates actual expenditures at these
properties to be not more than $1.3 million.
As a result of off-site waste disposal prior to the acquisition, the Company
is subject to liability for, and is currently involved in certain matters
relating to the investigation and/or remediation of environmental contamination
at properties not owned or operated by the Company. The Company has been or may
be named a PRP at the following sites: Metcoa Metals, Pennsylvania;
Barkhampstead Landfill, Connecticut; Combe Fill South Landfill, New Jersey; PJP
Landfill, New Jersey; Solvent Recovery Service, Connecticut; PCB Treatment Inc.
Site, Missouri; and Omega Chemical Corporation Site, California. The Company
estimates that its total liability at those sites may range up to $3.8 million.
In connection with the Acquisition, Pechiney International and Pechiney S.A.
are required to indemnify Blade for environmental liabilities and obligations
stemming from events occurring or conditions existing prior to the closing of
the Acquisition to the extent such liabilities exceed $6.0 million. Blade
assigned its rights to the Company with respect to any such indemnification
upon consummation of the Acquisition. The Company has recorded a long-term
receivable of $2 million related to this indemnification. There can be no
assurance, however, that Pechiney International and Pechiney S.A. will
indemnify the Company for all such environmental matters set forth above when
demanded by the Company. If Pechiney International and Pechiney S.A. do not
honor their indemnification obligations, the Company likely would be
responsible for such matters.
The Company's parent company, Holdings, has contingent liability exposure for
environmental contamination and related costs associated with certain
discontinued mining operations owned and/or operated until the early 1960s.
These liabilities include approximately $20.7 million in remediation and natural
resource damage liabilities at the Blackbird Mine Site in Idaho and at least
$4.0 million in investigation and remediation costs at the Holden Mine Site in
Washington. However, the Company has never owned or operated any of these
facilities, the Company has been dismissed as a defendant in the Blackbird mine
proceedings, Pechiney, S.A. and Holdings are primarily liable with respect to
such liabilities, and Pechiney International and Pechiney, S.A. have agreed to
indemnify Blade for such environmental liabilities in full. Blade assigned its
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rights to Holdings and the Company with respect to any such indemnification to
the extent that either Holdings or the Company incurs liability with respect to
such matters.
EMPLOYEES
As of December 31, 1996, the Company had 10,035 employees.
ITEM 2 -- PROPERTIES
Howmet has twenty-two facilities in the United States, four in France, two in
Great Britain and two in Canada, all of which are reasonably expected to meet
the production needs of the Company. Its KHL joint venture in Japan owns one
facility. Except as indicated, the facilities described below are all owned by
Howmet, or its subsidiaries:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
LOCATION (NO. OF FACILITIES) SIZE (SQ. FT.) LOCATION SIZE (SQ. FT.)
Bethlehem, Pennsylvania 47,200 (leased) Wichita Falls, Texas (2) 206,300
Branford, Connecticut 138,420 125,000
City of Industry, California 50,000 (leased) Winsted, Connecticut 81,000
Claremore, Oklahoma 75,000(a)
Cleveland, Ohio 100,000 OVERSEAS
Dover, New Jersey (2) 240,737 Dives, France (capital lease) 255,858
115,292 Evron, France 81,000
Hampton, Virginia 284,800 Exeter, U.K. (2) 184,350
4,090 (leased) 65,650
Hillsboro, Texas 51,000 (leased) Gennevilliers, France 47,361
LaPorte, Indiana (2) 186,100 Georgetown, Ontario 37,000
132,748(b) Le Creusot, France 156,077
Morristown, Tennessee 85,000 Montreal, Quebec 11,200
North Haven, Connecticut 65,000 86,194 (leased)
Whitehall, Michigan (6) 253,018 Terai, Japan 53,000(c)
114,270
89,461 (a) Includes 14,000 square feet leased to R-H
83,208 Component Technologies
57,605 (b) Howmet Transport Services Warehouse
43,029 (c) Factory owned by Komatsu-Howmet Ltd.
</TABLE>
ITEM 3 -- LEGAL MATTERS
The Company is a party to certain pending proceedings regarding environmental
matters. See "Environmental Matters." The Company, in its ordinary course of
business, is party to various other legal actions. Management believes these are
routine in nature and incidental to its operations. Management believes that the
outcome of any proceedings to which the Company currently is a party will not
have material adverse effects upon its operations, financial condition or
liquidity.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5 -- MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is not traded on any organized market. All shares
of the Company's common stock are owned by Howmet Holdings Corporation. All of
the shares of Howmet Holdings Corporation are owned by Blade Acquisition Corp.,
which is 51% owned by The Carlyle Group and its affiliates, and 49% owned by
Thiokol Holding Company, a wholly owned subsidiary of Thiokol Corporation. No
unregistered sales of equity securities occurred in 1996. The Company does not
currently pay any dividends on its common stock.
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ITEM 6 -- SELECTED FINANCIAL DATA
The following financial data should be read in conjunction with the financial
statements of the Company and the notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations". The combined
operations of Howmet and Cercast prior to the consummation of the Acquisition
are referred to as the "Predecessor Company Combined," and Howmet and its
subsidiaries after the consummation of the Acquisition are referred to as the
"Successor Company Consolidated."
<TABLE>
<CAPTION>
Predecessor Company Combined Successor Company Consolidated
------------------------------------------------- --------------------------------
Period from Period from
January 1, December 14,
Year Ended December 31, 1995 to 1995 to Year ended
---------------------------------- December 13, December 31, December 31,
(dollars in millions) 1992 1993 1994 1995 (a) 1995 (a) 1996
----------- ----------- ---------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales $ 920.2 $ 832.7 $ 858.3 $ 894.1 $ 51.4 $1,106.8
Gross profit 232.2 229.3 211.0 212.7 13.4 303.2
Selling, general and 116.1 104.5 90.9 105.0 4.6 117.3
administrative
Depreciation and amortization 30.7 31.0 33.1 32.6 2.8 59.7
Research and development 24.3 23.3 19.2 25.0 1.4 24.2
Restructuring charges (credit) 58.9 - 2.5 (1.6) - -
Goodwill write-off - - 47.4 - - -
----------- ----------- ---------- -------------- ---------------- ---------------
Operating income 2.2 70.5 17.9 51.7 4.6 102.0
Interest income-affiliates 4.4 5.3 9.4 8.6 - -
Interest income-third parties 2.7 0.8 0.6 1.3 - 1.7
Interest expense-affiliates - (0.9) (0.8) (2.1) - -
Interest expense-third parties (4.9) (4.8) (4.0) (3.7) (2.9) (39.3)
Other-net 0.5 (0.1) (0.1) (5.8) (1.0) (5.9)
Provision for income taxes 3.3 27.8 46.0 23.7 0.5 31.2
----------- ----------- ---------- -------------- ---------------- ---------------
Income (loss) before cumulative
effect of change in accounting $ 1.6 $ 43.0 $ (23.0) $ 26.3 $ 0.2 $27.3
(b)
=========== =========== ========== ============== ================ ===============
BALANCE SHEET DATA (END OF
PERIOD)(c):
Total assets $ 594.7 $ 579.6 $ 509.9 - $1,099.5 $1,023.9
Total debt 66.3 44.5 42.1 - 463.5 323.0
Stockholders' equity 291.9 239.1 166.3 - 276.3 304.5
</TABLE>
(a) Includes the results of operations of Turbine Components Corporation,
acquired in April 1995.
(b) In 1993, a $49.3 million charge (net of tax benefits of $31.5 million) was
recorded as a cumulative effect of a change in accounting. Effective
January 1, 1993, the Predecessor Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" which requires that the
estimated future cost of providing postretirement benefits such as health
care be recognized as an expense when employees render services instead of
when the benefits are paid. If SFAS No. 106 were in effect for 1992, net
income would have been reduced by approximately $2 million.
(c) Excludes the effects of advances to Pechiney Corporation, dividends to
Pechiney Corporation, and notes payable to Pechiney or its affiliates as
set forth below:
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------
1992 1993 1994
------------ ----------- ----------
(dollars in millions)
<S> <C> <C> <C>
BALANCE SHEET DATA (END OF
PERIOD):
Advances to Pechiney $160.7 $203.7 $238.7
Corporation
Dividends payable - 7.6 -
Notes payable - 12.9 20.0
</TABLE>
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ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The combined operations of Howmet and Cercast prior to the consummation of
the December 13, 1995 acquisition are referred to as "Predecessor Company
Combined," and Howmet and its subsidiaries after the consummation of the
December 13, 1995 acquisition are referred to as the "Successor Company
Consolidated." See Note 1 of Notes to Financial Statements.
The Company operates predominantly in a single industry as a manufacturer
of investment cast components for the aerospace and industrial gas turbine
industries through operating companies located in the United States, France, the
United Kingdom and Canada. See Note 12 of Notes to Financial Statements.
The Company's operating performance is affected by general economic trends
and by the following key factors:
Industry Trends. The Company manufactures superalloy, titanium and aluminum
castings for turbine engines and airframe applications for customers worldwide
in the commercial aviation, military aviation and industrial gas turbine
markets. The commercial aviation market, after a deep decline in the first half
of the present decade, has begun a period of upturn which is expected by
industry experts to last for much of the remainder of the decade. Worldwide
output of large commercial aviation engines, for which the Company makes the
majority share of airfoils, increased from 1995 to 1996 by 15%, and is expected
to increase in 1997 over 1996. Because of the lead time necessary to finish,
assemble and test these engines, the Company produced a portion of the airfoil
requirements for 1997 engines in 1996. Spare parts for engines in service are
an important part of the business, and have seen increases in 1996. This comes
about as a result of increased flight hours as well as actions by the now
profitable airlines to replenish their stocks of such components needed at the
time of engine overhaul. Military engine component production was approximately
constant, driven more by overhaul programs of the large existing fleet rather
than new aircraft builds. The military market is not expected to be robust in
the foreseeable future. Demand for components for large industrial gas turbines
grew in 1996. Driven by single digit increases in power consumption worldwide,
production of electricity by gas turbines holds a stable share among the
options for power generation. The Company is the majority supplier of airfoils
for such turbines and expects that such business will remain an important part
of its product line for the foreseeable future. In fact, the Company has and
continues to participate in a large number of IGT development programs for new
generation, high technology turbines, which assures an important continued
presence in this field.
Pricing. The Company has experienced pressure from all of its major
customers to assure price reductions as part of multi-year contracts. This is a
result of the competitive environment which the Company's OEM customers are
facing in the selling of their products in the worldwide market. Since winning
an initial order assures a long term profitable market for spare parts, fierce
competition exists and has successfully reduced the prices which OEMs receive in
the market. Pressure for reduced prices is then exerted by the OEM on the
suppliers.
Cost Reduction. In order to assure continued competitiveness and to
counterbalance the pricing pressures, the Company has a vigorous cost reduction
program. There are many elements of this program, all seeking to reduce cycle
times (and thus inventory), improve quality or reduce operating costs.
Improvement efforts are in place at all operating units, and are expected to
continue to yield results in the future.
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RESULTS OF OPERATIONS
Results of operations for the full year ended December 31, 1995 are
compared to the full years ended December 31, 1996 and 1994 even though the
acquisition was effected on December 13, 1995. (See Note 1 of Notes to Financial
Statements.) Management believes that full year comparisons are more meaningful
than comparisons involving the separate January 1 to December 13, 1995 and
December 14 to December 31, 1995 periods.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
Net sales increased by $161.3 million (17.1%) to $1,106.8 million for 1996
from $945.5 million for 1995. The increase was primarily due to volume increases
resulting from increased demand for aerospace and industrial gas turbine
airfoils, aluminum castings, and component repairs.
Gross profit increased by $77.1 million (34.1%) to $303.2 million for 1996
from $226.1 million for 1995. The principal reasons for the improvement were the
effects of volume increases and, to a lesser extent, operational improvements,
partially offset by price reductions. Other contributing factors include a $2.6
million lower LIFO charge in 1996 and a 1995 $5.4 million workers' compensation
charge for incurred but not reported claims (see 1995 versus 1994 comparison).
Selling, general and administrative expense increased $7.8 million (7.1%)
to $117.3 million for 1996. The increase was due primarily to performance-based
incentive costs.
Depreciation and amortization expense increased $24.3 million (68.4%) to
$59.7 million for 1996 from $35.4 million for 1995. Most of the increase relates
to the December 13, 1995 acquisition asset additions and revaluations including
goodwill, patents, non-compete agreement, and step-up of property, plant and
equipment.
Research and development expense decreased $2.2 million to $24.2 million
for 1996 from $26.4 million for 1995. Although still very active, a slight
decline in the level of new part development work was the principal reason for
the decrease.
Net interest expense (interest expense less interest income) amounted to
$37.6 million for 1996, and net interest income (interest income less interest
expense) amounted to $1.2 million for 1995. The expense in 1996 resulted
principally from the December 13, 1995 acquisition financing-related debt. In
1995, the Company recorded net interest income on loans to/from its former
owner, which are no longer outstanding. The 1995 interest income was partially
offset by $2.9 million third party interest expense recorded in the December 14
to 31, 1995 period, which was related primarily to acquisition financing.
Equity in loss of unconsolidated affiliates declined to a $1.4 million loss
in 1996 versus a $4.5 million loss in 1995. The decline is due to improved
results for the Japanese joint venture.
Losses on sales of receivables increased to $4.5 million in 1996 compared
to $.7 million in 1995. The increased loss is due to a full year of sales
activity in 1996 versus 1995 sales activity for only the December 14 to 31, 1995
period, since sales of receivables did not begin until after the acquisition.
The effective tax rate for 1996 was 53.3%, compared to an effective tax
rate of 47.7% for 1995. The higher rate in the current period reflects certain
losses and expenses for which there were no associated tax benefits, principally
goodwill amortization.
11
<PAGE> 12
As a result of the foregoing, net income was $27.3 million in 1996,
compared to $26.4 million in 1995.
The impact of inflation on net sales and earnings from operations was not
significant.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
Net sales increased by $87.2 million (10.2%) to $945.5 million for 1995
from $858.3 million for 1994. The increase was primarily due to increased demand
for aerospace airfoils, aluminum castings, and component repairs, offset in part
by selling price reductions of $4.8 million. Approximately $13.5 million of the
increase resulted from the Company's acquisition of TCC in April, 1995.
Gross profit increased by $15.1 million (7.2%) to $226.1 million for 1995
from $211.0 million for 1994, primarily due to the income effect of volume
increases aggregating $26.6 million, of which approximately $2.5 million
resulted from the acquisition of TCC. The favorable volume effect was partially
offset by price reductions aggregating $4.8 million. 1995 also included a $5.4
million charge for workers' compensation claims incurred but not reported
(incurred during the period due to the cessation of future insurance
underwriting by a self-insurance subsidiary of Holdings, and an evaluation of
such entity's remaining obligations). The Company's aggregate gross margin
declined slightly to 23.9% for 1995 from 24.6% for 1994 due primarily to these
charges.
Selling, general and administrative expense increased $18.7 million (20.6%)
to $109.6 million for 1995. The increase was due primarily to expenses
associated with the Company's promotion of new products and applications of
casting technology consistent with its strategy, and increased consulting and
employee benefit and compensation costs. In addition, credits, representing
adjustments of prior years' accruals (primarily for employee benefit programs),
were recorded in 1994.
Depreciation and amortization expense increased $2.3 million (6.9%) to
$35.4 million for 1995 from $33.1 million for 1994. $1.3 million of the increase
results from the acquisition of TCC in April 1995. The balance of the increase
is attributable to depreciation resulting from the step up of value of fixed
assets in the Acquisition, amortization of goodwill and other intangibles such
as patents and non-compete agreements in the period from December 14 to 31,
1995.
Research and development expense increased $7.2 million (37.5%) to $26.4
million for 1995 from $19.2 million for 1994. The increase is largely
attributable to additional development work on new IGT products in response to
customer development schedules.
During 1995, the Company canceled its plan for the closure of its Dover
alloy airmelt operation, and accordingly, reversed the related restructuring
reserve of $1.0 million previously provided. The Company also reduced a reserve
for moving administrative services to a central location for its operations in
France by $0.6 million. In 1994 the Company took a $1.0 million charge for the
Dover alloy airmelt operation and a $1.5 million charge for closure of the
Morristown, Tennessee wax manufacturing facility. See Note 16 of Notes to
Financial Statements.
Interest expense--affiliates for 1995 increased to $2.1 million, $1.3
million higher than the $0.8 million of expense incurred for 1994. The increase
was due to higher borrowings by the Company's casting operations in France from
Pechiney S.A. The borrowings were used to finance working capital additions and
capital expenditures.
12
<PAGE> 13
Interest expense--third parties increased to $6.6 million for 1995 from
$4.0 million for 1994. The increase of $2.6 million is primarily attributable to
the $425.0 million of senior debt and other borrowings incurred in the
Acquisition.
Equity in loss of unconsolidated subsidiaries increased by $3.0 million.
The higher losses are attributable to worse results for the Japanese joint
venture.
The effective tax rate for 1995 was 47.7%. This compares to an effective
tax rate of 200% for 1994. The lower rate in the current period reflects
non-recurrence of certain losses from 1994 for which there were no associated
tax benefits. In 1994 the Company recorded write-downs of goodwill totaling
$47.4 million that were not tax deductible.
As a result of the foregoing, net income was $26.5 million in 1995,
compared to a $23.0 million loss for 1994.
The impact of inflation on net sales and earnings from operations was not
significant.
LIQUIDITY AND CAPITAL RESOURCES
Since the consummation of the December 13, 1995 acquisition, the Company's
principal sources of liquidity are cash flow from operations and borrowings
under its revolving credit facility. The Company's principal requirements for
cash are to provide working capital, service debt and finance capital
expenditures. Cash available after satisfaction of these requirements is
currently being used to voluntarily repay debt prior to mandatory due dates.
In 1996 the Company generated $184.5 million in cash from operating
activities. This amount includes (i) increased accounts payables, (ii) pension
plan contributions that were approximately $6 million less than normal, and
(iii) $28.1 million that resulted from cost recoveries under, and modifications
of, certain customer agreements. These three substantial positive effects on
cash flow are not expected to repeat in 1997.
The Company has a five year revolving credit facility that provides $75
million of revolving credit borrowing and letter of credit capacity. At the
Company's option, in 1996 such capacity was reduced from $125 million. At
December 31, 1996, borrowings under this facility were $12 million, and $9.7
million of standby letters of credit were outstanding.
In 1996 the Company repaid $140.9 million of debt, including a $14 million
reduction in revolving credit borrowings and $98.4 million of voluntary senior
term facility repayments prior to mandatory due dates. In December 1996, the
senior term facility and senior revolving credit facility were amended to
reflect more favorable terms and conditions, including an approximate 150 basis
point reduction in interest rates. In February 1997, an additional 25 basis
point reduction occurred based on achieving certain financial milestones.
Capital expenditures in 1996 were $33.7 million. In 1997 capital
expenditures are expected to be approximately $55 million. The 1997 increase is
attributable to capacity expansion resulting from increased demand and to a
return to more normal levels of spending.
As part of the December 13, 1995 acquisition purchase price allocation, a
$21.0 million restructuring reserve was established for Howmet S.A. The extent
of the restructuring was less than initially anticipated; consequently, $19.1
million of the accrual was reversed. In 1996 $1.0 million was spent on this
restructuring effort and an additional $.9 million is expected to be spent in
1997.
13
<PAGE> 14
The Company has re-initiated a process that may result in the sale of its
refurbishment business, although no agreement has been reached. If the
refurbishment business is sold, proceeds will be used to reduce indebtedness or
invest in available opportunities in its existing businesses. The Company will
retain its Thermatech coating operations in any disposition of its refurbishment
business. Net sales of the refurbishment business that may be sold were $76.0
million in 1996 and $63.0 million in 1995. Earnings from operations of this
business were immaterial in both periods. Apart from the benefits of proceeds if
the business is sold, the impact of the sale will not have a material effect on
liquidity.
Based upon the current level of operations, management believes that cash
flow from operations, together with available borrowings under the revolving
credit facility, will be adequate to meet the Company's anticipated requirements
for working capital, capital expenditures, interest payments and scheduled
principal payments under the senior credit facilities prior to final maturity.
The Company guarantees certain indebtedness of its two joint ventures. As
of December 31, 1996 these joint ventures had outstanding indebtedness of
approximately $23.1 million, of which the Company has guaranteed approximately
$11.5 million. It is anticipated that such joint ventures may continue to incur
indebtedness. As part of the December 13, 1995 acquisition, Pechiney S.A. has
indemnified the Company, through its parent, Howmet Holdings Company, for a
limited amount of these guarantees. The indemnification is limited to $5.9
million and applies only to payments in excess of $6.0 million.
ENVIRONMENTAL MATTERS
See "Business - Environmental Matters", Note 15 of Notes to Financial
Statements, and Exhibit 99.1 for discussions of environmental matters.
IMPENDING ACCOUNTING CHANGE
In January 1997, the Company adopted SFAS No. 125 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities". The
standard establishes accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities, including the
sale of receivables. Adoption is not anticipated to have a material effect on
the results of operations or financial position of the Company.
* * * * * * * * * * *
The statements made herein that are not historical facts may be forward
looking statements. In connection with the "Safe Harbor" provision of the
Private Securities Litigation Reform Act of 1995, the Company hereby cautions
readers that the forward looking statements are subject to certain risks and
uncertainties, including without limitation those identified in Exhibit 99.1
hereto, which could cause actual results to differ materially from historical
results or those anticipated, and urges readers to review Exhibit 99.1
carefully. Factors discussed in Exhibit 99.1 include, among others, substantial
leverage and debt service, the effects of aerospace industry economic conditions
and cyclicality, reduced government sales, concentrated customer base,
competition, concentration of ownership and environmental matters.
14
<PAGE> 15
ITEM 8 -- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the Financial Statements and Schedules attached hereto and listed in Item
14(a)(1) and (a)(2) hereof.
ITEM 9 -- CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
PART III
ITEM 10 -- DIRECTORS AND OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the members
of the Board of Directors and the executive officers of the Company.
<TABLE>
<CAPTION>
NAME TITLE AGE
- -------- ------------------------------------------------ ---
<S> <C> <C>
William E. Conway Director 46
David L. Squier Director; President and Chief Executive Officer 51
James R. Wilson Director 55
B. Dennis Albrechtsen General Manager of Whitehall Castings 52
Allan Bergquist Vice President, Sales and Marketing 54
John Corrigan Vice President, Engineering 55
Henri Fine President, Cercast Group 52
Jack Lambert Vice President, Human Resources 50
Marklin Lasker Senior Vice President, International Operations 59
John Parkinson Vice President, Howmet Refurbishment, Inc. 47
Neil Paton Vice President, Technology 58
Roland Paul Vice President, General Counsel and Secretary 60
John C. Ritter Vice President, Finance; Chief Financial Officer 49
James R. Stanley Senior Vice President, United States Operations 55
Paul C. Wilson Vice President, Corporate Planning 49
</TABLE>
All directors of the Company hold office until the election and qualification
of their successors. Each director has held his position since consummation of
the Acquisition in 1995, except Mr. Squier who has been a director of Howmet
since September 1987. Certain executive officers of the Company are elected by
the Board of Directors and others are appointed by the President. They serve at
the Board's discretion, subject to the terms of certain employment agreements
described below. The Company does not pay any fees or remuneration to its
directors for service on the board or any board committee, but reimburses
directors for their ordinary out-of-pocket expenses incurred in connection with
attending meetings of the Board of Directors.
William E. Conway, Jr. was elected as a Director of Howmet and Blade upon
consummation of the Acquisition. He has been a Managing Director of The Carlyle
Group, a Washington, D.C.-based private merchant bank, since 1987. Mr. Conway
was Senior Vice President and Chief Financial Officer of MCI Communications
Corporation from 1984 until 1987, and was a Vice President and Treasurer of MCI
from 1981 to 1984. Mr. Conway presently serves on the Board of Directors of BDM
International, Inc., GTS Duratek, Inc., Tracor Inc., Nextel Communications,
Inc., and several privately held companies.
15
<PAGE> 16
David L. Squier has been President and Chief Executive Officer of the Company
since 1992. Mr. Squier began his association with Howmet when he joined the
Corporate Planning department of its predecessor in December 1971. He was
involved in manufacturing management from 1976 to 1978, became General Manager
of Wichita Falls Casting in 1979, and was promoted to Vice President of
Operations in 1983. He was elected a Director of Howmet in 1987. He was elected
as a Director of Blade and Holdings upon consummation of the Acquisition.
James R. Wilson was elected as a Director of Blade and the Company upon
consummation of the Acquisition. He became Chairman of the Board of Thiokol
Corporation in October 1995 and has served as a Director, President and Chief
Executive Officer of Thiokol Corporation since 1993. He was Chief Financial
Officer from 1989 through 1993, Senior Vice President from 1989 to 1992, and
Executive Vice President from 1992 to 1993. Mr. Wilson is also a director of
Rohr, Inc. and First Security Corporation.
B. Dennis Albrechtsen has held the position of General Manager of Howmet
Whitehall Castings since 1994. Prior to this, he served Howmet as Vice
President, Airfoil Operations since October 1988. He has also held positions of
responsibility at the Whitehall-Michigan, Dover-New Jersey and Wichita
Falls-Texas casting plants.
Allan Bergquist has been Vice President, Sales and Marketing of Howmet
Corporation since March, 1996. Prior thereto he served at Allied Signal as
Director, Marketing, Fluid Systems Division of Allied Signal and previously as
Corporate Director, Aircraft Systems Strategy, General Sales Manager, Allied
Signal Garrett, and Vice President, Marketing and Sales.
John Corrigan is Vice President of Engineering and has held that position since
1984. Since joining the Company in 1967, he has held a number of positions
including Chief Metallurgist, Director of Engineering, Plant Manager and General
Manager of the Hampton Virginia casting plant.
Henri Fine has been President of the Cercast Group since January 1991. Mr.
Fine started his career with Pechiney in France in 1971 and was with that
company in the United States and Canada from 1974 until the Acquisition. During
his 24 years with Pechiney, he held positions in corporate planning, marketing,
operations, general management and corporate development. He joined the Cercast
Group in April 1990.
Jack Lambert has been Vice President, Human Resources for Howmet since June
1994. Prior thereto, he served as a Vice President of Human Resources for
Rubbermaid, Inc., Home Products Division from March 1990 to June 1994 and Vice
President for Human Resources for operating units of United Technologies
Corporation from March 1981 to March 1990.
Marklin Lasker has been a Senior Vice President of the Company since February
1992. He is currently in charge of International Operations. Before joining the
Company, Mr. Lasker was Vice President and General Manager of North American,
Far East and Latin American operations for the AlliedSignal Turbocharger
Division from April 1989 to September 1991.
John Parkinson has been Vice President of Howmet Refurbishment, Inc. since
June 1989. He began his association with Howmet as an Engineering Manager in
March 1984 and has held positions as Plant Manager and General Manager.
Neil Paton has been the Vice President of Technology for the Company since
December 1990. Previously, Dr. Paton was a Program Manager and Director of
Materials Engineering of the Rocketdyne Division of Rockwell International
Corporation.
16
<PAGE> 17
Roland Paul has been Vice President, General Counsel and Secretary of the
Company since 1976. Mr. Paul was previously in private practice as an attorney
at law firms in New York and Paris and served as counsel to the United States
Senate Foreign Relations Subcommittee on United States Security Commitments
Abroad.
John C. Ritter became Vice President, Finance of both Howmet and Holdings in
April 1996 and is Chief Financial Officer of Howmet. Prior to his employment at
Howmet, he served as Vice President, Finance and Contracts, for AlliedSignal
Government Electronics from 1994-1996, and as Vice President, Finance and
Administration of Norden Systems division of United Technologies Corporation
("UTC") from 1991-1994. He has also held the positions of Vice President,
Finance and Administration, Chemical Systems Division, and Manager, Business
Analysis, Pratt & Whitney Aircraft--Government Products Division of UTC.
James R. Stanley has been Senior Vice President of the Company since 1992. He
is currently in charge of United States Operations. Previous to his employment
at Howmet, Mr. Stanley was the Vice President and General Manager of Customer
Support and Marketing at the Textron Turbine Engine Division of Textron, Inc.
from August 1990 to January 1992. He also held the position of Vice President of
Operations for Textron Lycoming and held numerous managerial positions for
nearly 20 years at General Electric Aircraft Engines.
Paul C. Wilson became Vice President of Corporate Planning in September 1995.
Since joining the Company in 1988, Dr. Wilson has held various senior management
positions with the Company, including President of Cercast and Business Planning
Manager.
17
<PAGE> 18
ITEM 11 -- EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
paid by the Company for services rendered during the years ended December 31,
1996, December 31, 1995, and December 31, 1994, to the Chief Executive Officer
and to each of the five other most highly compensated executive officers of the
Company (the "Named Executive Officers").
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
NAME AND OTHER ANNUAL LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION PAYOUTS(2) COMPENSATION(3)
- ------------------ ---- ----------- ------- ------------ --------- --------------
<S> <C> <C> <C> <C> <C> <C>
David L. Squier 1996 $350,000 $540,926 $ 5,902 $500,179 $1,178,347
Chief Executive Officer 1995 325,000 352,109 7,971 11,997 175,481
1994 300,000 268,860 12,425 -0- 24,080
James R. Stanley 1996 215,000 257,674 4,476 252,045 491,031
Senior Vice President, 1995 200,000 186,100 5,722 -0- 18,055
United States Operations 1994 193,000 136,221 6,399 -0- 7,580
Marklin Lasker 1996 200,004 214,686 1,621 237,757 506,115
Senior Vice President, 1995 190,800 150,745 5,006 -0- 19,406
International Operations 1994 184,800 129,746 4,451 -0- 8,106
B. Dennis Albrechtsen 1996 174,390 174,002 5,275 160,322 11,814
General Manager, 1995 173,000 136,213 6,317 -0- 11,286
Whitehall Castings 1994 168,000 98,592 6,065 -0- 7,110
Jack Lambert 1996 153,000 134,086 5,092 54,128 260,651
Vice President 1995 145,833 65,613 7,670 -0- -0-
Human Resources 1994 81,667 -0- 2,018 -0- 48,319
Ronald L. Wood 1996 135,629 190,829 6,471 158,736 331,701
Vice President, Finance 1995 170,355 123,367 5,746 -0- 20,202
(employment ended 9/96) 1994 166,200 99,855 3,627 -0- 6,121
</TABLE>
(1) Includes payments under the Company's Annual Bonus Plan and under its
Restructuring Plan, a three year annual incentive plan which began in 1992 and
ended in 1995, which allowed for payments to be made to the Named Executive
Officers in conjunction with the Company's restructuring efforts.
(2) The Company's Long-Term Incentive Plan allowed for annual payments based on
threshold, target and maximum goals tied to the Company's performance with
respect to profits and return on net assets over rolling three-year periods,
beginning in 1991. The Long-Term Incentive Plan was terminated in connection
with the Acquisition, and the listed amounts were determined and paid in 1996 to
give effect to that termination.
(3) A one time Sale Bonus was awarded to certain executives, including the Named
Executive Officers, upon consummation of the Acquisition (See "Transaction
Incentive Payments"). The following amounts were paid to the Named Executive
Officers: David L. Squier, $1,157,813; James Stanley, $475,000; Marklin Lasker,
$453,625; Jack Lambert, $249,375; Ronald L. Wood, $302,813. The Company makes
matching contributions dollar for dollar of the first five percent of all
employees' compensation deferred in the Company's 401(k) savings plan. The
Company maintains excess non-qualified plans that provide for payment of amounts
in the form of taxable compensation equal to the amounts that would have been
otherwise paid to employees under the 401(k) formula absent the benefit
limitations of the Code. These contributions are included. During 1995 the
Company made payments in lieu of vacation not taken by certain executive
officers due to activities related to the Acquisition. The following amounts
were paid to the Named Executive Officers: James Stanley, $7,692; Marklin
Lasker, $11,008; Jack Lambert, $5,654; and Ronald Wood, $7,863. The figures for
David Squier also reflect payment, provided by Pechiney, of premiums for a life
insurance policy in 1994 of $10,789 and 1995 of $153,488; the 1995 payment by
Pechiney prepaid all future premiums on the policy. The 1994 figure for Jack
Lambert reflects payment of a one time signing bonus of $44,236 when Mr. Lambert
joined the Company. The 1996 figure for Ronald Wood reflects payment for
relocation of $18,218. In 1996, Thiokol granted 230,000 contingent stock options
for Thiokol common stock to certain Company employees, including the Named
Executive Officers (see "Management Agreements").
18
<PAGE> 19
RETIREMENT PLANS
The Company maintains defined benefit pension plans for substantially all its
employees. Effective January 2, 1996, the Company adopted the Howmet Corporation
Salaried Employees Pension Plan (the "SEPP") a defined benefit plan that covers
most salaried employees, and provides for continuing benefits that had been
provided under another defined benefit plan (the "Pechiney Plan") prior to the
Acquisition. The following table shows the estimated annual pension benefits for
salaried employees payable upon retirement (including amounts attributable to
the SEPP, the Excess Benefit Plans and the Supplemental Retirement Plans, as
described below, and including any benefit payable under the Pechiney Plan) for
the specified compensation and years of service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 15 20 25 30 35 40
- ------------ ---------- ----------- ----------- ----------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
$200,000 $ 43,164 $ 57,552 $ 71,940 $ 86,328 $100,716 $111,716
$400,000 $ 88,164 $117,552 $146,940 $176,328 $205,716 $227,716
$600,000 $133,164 $177,552 $221,940 $266,328 $310,716 $343,716
$800,000 $178,164 $237,552 $296,940 $356,328 $415,715 $459,716
</TABLE>
As of December 31, 1996, the Named Executive Officers had the following
credited service for determining pension benefits: David L. Squier, 25 years;
James R. Stanley, 4 years; Marklin F. Lasker, 4 years; B. Dennis Albrechtsen, 21
years; Ronald Wood, 26 years; and Jack Lambert, 2 years.
All employees named in the Summary Compensation Table participate in the SEPP.
Before 1997, pension benefits for these employees are based on the average
earnings for the highest five consecutive years of the final ten years of
service. Compensation included in the final average earnings for the pension
benefit computation includes base annual salary and annual bonuses but excludes
payments for all other compensation. The SEPP benefit prior to 1997 takes into
account the service and compensation earned at Pechiney and will be reduced by
any benefit payable under the Pechiney Plan.
Effective January 1, 1997, the SEPP's design was changed to that of a cash
balance plan. The cash balance plan maintains hypothetical individual accounts
for participants. Amounts credited to the accounts are based on compensation and
age. Benefits earned before 1997 under the final average earnings formula are
being converted to opening account balances.
As of January 1, 1997, SEPP benefits are payable at retirement or termination.
Benefits may be payable as a single life annuity, a joint and survivor annuity,
a ten year certain option, a level income option or a lump sum.
Because the SEPP is subject to the benefit and compensation limits under the
Internal Revenue Code ("Code"), the Company has established two unfunded Excess
Benefit Plans that provide for payment of amounts that would have been paid to
employees under the pension formula absent the benefit and compensation limits
of the Code.
The Company also maintains several Supplemental Executive Retirement Plans
("SERPs") designed to provide unfunded supplemental retirement benefits to
certain employees of the Company. The first is designed to provide the selected
employees a benefit at retirement equal to that they would have earned under the
SEPP and the Excess Benefit Plans, had the SEPP not been converted to a cash
balance plan. Benefits under the SERP are offset by benefits received under the
SEPP and the Excess Benefit Plans. Currently, Messrs. Squier, Stanley, Lasker,
and Albrechtsen participate in this SERP.
19
<PAGE> 20
The second SERP is designed to provide the selected employees a benefit at
retirement equal to 50% of the participant's average three highest consecutive
years of compensation during the last ten years. SERP benefits are offset by
amounts the participant receives from certain other plans and Social Security.
Currently, Mr. Squier is the only employee participating in this SERP.
TRANSACTION INCENTIVE PAYMENTS
The Company instituted an additional incentive plan in 1995 for the Named
Executive Officers granting them significant incentive bonuses upon the
successful sale of the Company. The incentives provided for a bonus equal to:
(i) a payment equal to a multiple (ranging from one-and-one-half times to three
times) of the officer's 1995 base salary plus (ii) an additional payment equal
to 0.75% of the guaranteed payment for each million dollars by which the final
sale price exceeded Pechiney's threshold price. Payments earned and paid under
the Transaction Incentive Payments were the obligations of Pechiney pursuant to
the terms of the Stock Purchase Agreement and were paid in 1996.
EMPLOYMENT AGREEMENTS
In October, 1995 the Company entered into employment agreements (the
"Agreements") with thirteen management employees, including each Named Executive
Officer except Mr. Albrechtsen. The Agreements set base salary levels and
provide a specified percentage (generally from 30-60%) of base salary as a
target annual bonus amount. The Agreements also generally provide each Named
Executive Officer (the "Executive") with the use of a Company-owned automobile
and participation in benefit plans and programs available to the Company
management employees generally. The Agreements generally provide that in the
event the Executive's employment is terminated by the Company other than for
"cause" or by the Executive with "good reason" (each as defined therein) within
18 months following the Acquisition (or prior to the Executive's 62nd birthday
in the case of Mr. Squier), the Executive will be entitled to (i) the amount of
the Executive's base pay and target bonus for a specified period ranging from
18 to 36 months, (ii) a prorated portion of the annual bonus and any long-term
incentive awards that would have been payable in the year of termination, (iii)
Company-paid outplacement services, (iv) transfer to the Executive of the
Company-owned car he was using, (v) accelerated vesting under certain of the
Company's retirement plans, (vi) the right to continue to participate in the
Company's medical benefits plan for up to two years at the rates in effect for
active employees, and the right to be treated as a retiree for purposes of
continued coverage thereafter. The severance benefits described above are
generally conditioned on the Executive's agreement not to compete with the
business of the Company for a period of twelve months following the
participant's termination of employment. In the event of the Executive's death
or disability, the Agreements generally provide for the payment of prorated
annual bonus and long-term incentive plan awards, but not other severance
amounts. Mr. Squier's agreement provides that he is entitled to a supplemental
annual pension payment equal to the excess of 50% of his average base pay
during his final three years of employment over the amounts provided to him
under certain of the Company's retirement plans and under social security. Mr.
Albrechtsen has an employment agreement that sets a base salary and 35% of that
amount as an annual bonus target, and is generally effective until his 62nd
birthday. In the event that Mr. Albrechtsen's employment is terminated by the
Company without "cause" or by Mr. Albrechtsen with "good reason" (each as
defined therein), Mr. Albrechtsen is generally entitled to the amount of his
base salary and annual bonus for a period of 24 months; and if such termination
occurs after his 55th birthday, he is entitled to such amounts for a period of
36 months.
20
<PAGE> 21
STOCK APPRECIATION RIGHTS
In early 1996, Blade introduced a Stock Appreciation Rights ("SARs") plan.
Under the plan, SARs representing approximately 5% of Blade's equity value were
issued to certain executive officers of the Company. The SARs, similar to
phantom stock options, are valued based on appreciation in the value of Blade's
common stock, as defined, from the date of adoption of the plan to the earlier
of a sale of The Carlyle Group's controlling interest in Blade or five years.
The SARs vest over a five-year period based upon the passage of time and the
operating performance of the Company, with acceleration in the event of sale of
The Carlyle Group's controlling interest in Blade. The following table shows the
number and value of SARs granted to the Named Executive Officers during 1996.
STOCK APPRECIATION RIGHT GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL SARs OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO BASE FOR OPTION TERM
NAME AND SARs EMPLOYEES PRICE EXPIRATION ---------------------------
PRINCIPAL POSITION GRANTED IN FISCAL YEAR ($/SAR) DATE 5% 10%
- ------------------ ----------- -------------- ------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
David L. Squier 20,000 19.5 $100 3/31/01 $531,890 $ 1,170,248
James R. Stanley 7,500 7.3 $100 3/31/01 $199,459 $ 438,843
Marklin Lasker 5,000 4.9 $100 3/31/01 $132,973 $ 292,562
B. Dennis Albrechtsen 3,000 2.9 $100 3/31/01 $ 79,784 $ 175,537
Ronald L. Wood 0 0 -- -- 0 0
Jack Lambert 3,000 2.9 $100 3/31/01 $ 79,784 $ 175,537
</TABLE>
INSIDER PARTICIPATION
David L. Squier, President and Chief Executive Officer of the Company
is a Director of the Company and participates in the decisions of the Board of
Directors of the Company concerning officer compensation.
21
<PAGE> 22
ITEM 12 -- PRINCIPAL STOCKHOLDERS
All of the capital stock of the Company is owned by Holdings and all of the
common stock of Holdings is owned by Blade. The following table sets forth the
ownership of common stock of Blade by each person known by Blade to be the owner
of 5% or more of Blade's outstanding common stock.
<TABLE>
<CAPTION>
PERCENTAGE OF ALL
NUMBER OUTSTANDING
BENEFICIAL OWNER(1) OF SHARES COMMON STOCK
- ------------------- --------- ------------
<S> <C> <C>
Carlyle-Blade Acquisition Partners, L.P.,
a Delaware limited partnership ("CBAP")(2) .. 5,100 51
c/o The Carlyle Group
1001 Pennsylvania Avenue, N.W
Washington, D.C. 20004
Thiokol Corporation(3) ....................... 4,900 49
2475 Washington Boulevard Ogden, Utah 84401
William E. Conway, Jr ........................ 0
David L. Squier .............................. 0
James R. Wilson .............................. 0
James R. Stanley ............................. 0
B. Dennis Albrechtsen ........................ 0
Marklin Lasker ............................... 0
Jack Lambert ................................. 0
Ronald Wood .................................. 0
All directors and executive officers
as a group (15 persons)(4)................... 0
</TABLE>
(1) Except as otherwise indicated, each beneficial owner has the sole power to
vote, as applicable, and to dispose of all shares of common stock owned by such
beneficial owner. Carlyle and Thiokol are parties to a Stockholders Agreement
governing, among other matters, voting of Blade common stock in the election of
directors. Because of their rights under the Stockholders Agreement, Carlyle and
Thiokol may be deemed beneficial owners of 100% of the Company's outstanding
common stock. Each of Carlyle and Thiokol disclaims ownership of all shares it
does not own of record, directly or through partnerships.
(2) CBAP is the record owner of the shares beneficially owned by Carlyle.
Carlyle Partners II, L.P. and Carlyle Partners III, L.P. (the "General
Partners") are the general partners of CBAP. TC Group, L.L.C., a Delaware
limited liability company, is the sole general partner of each of the General
Partners, and TCG Holdings, L.L.C., a Delaware limited liability company, is the
sole managing member of TC Group, L.L.C. The General Partners, TC Group, L.L.C.
and TCG Holdings could therefore be deemed to be beneficial owners of the shares
owned by CBAP. TC Group, L.L.C. is also the general partner of certain limited
partners of CBAP.
Under the terms of the Stockholders Agreement between Thiokol and Carlyle,
each of Thiokol and Carlyle nominated an equal number of directors to the Board
of Directors of Blade, and one additional director was selected from management
to serve on Blade's Board of Directors. See "Directors and Officers of the
Company" for the identities and backgrounds of the directors. Blade and its
subsidiaries may not take certain actions without the approval of a
supermajority of Blade's directors, including but not limited to certain
mergers, sale transactions, transactions with affiliates, issuances of capital
stock, incurrence of indebtedness and payments of dividends on or repurchases of
capital stock. Other than transfers to affiliates made in accordance with the
Stockholders Agreement, no transfer of capital stock of Blade may be made by any
stockholder without the consent of Carlyle and Thiokol until the sixth
anniversary of the Closing Date or the expiration of the Call Option (as defined
below), whichever is later. At any time after the third anniversary and before
the sixth anniversary of the Closing Date, Thiokol will have the right to
purchase all common stock then held by Carlyle at a price equal to the greater
of Carlyle's capital contributions compounded at a fixed rate or fair market
value (the "Call Option"). In addition, after the expiration of Thiokol's Call
Options, Thiokol and Carlyle will have the right to participate, on a pro rata
basis, in sales by the
22
<PAGE> 23
other of the Blade stock they hold; at any time after the sixth anniversary of
the Closing Date, each of Thiokol and Carlyle will have the right to compel the
participation of the other in sales of all the outstanding shares of Blade's
stock; and each of Thiokol and Carlyle may, with the consent of the other,
initiate a public offering. Pursuant to a registration rights agreement entered
into in connection with the Stockholders Agreement, Thiokol and Carlyle will
have certain "demand" and "piggyback" registration rights with respect to their
Blade common stock, which become effective if Thiokol's Call Option lapses. The
Stockholders Agreement also provides for an acceleration of Thiokol's Call
Option in the event there is a change in control of Carlyle's beneficial
ownership. Carlyle is entitled to control the Blade Board of Directors in the
event of a change in control of Thiokol.
(3) Thiokol's investment in Blade is owned of record by Thiokol's wholly owned
subsidiary, Thiokol Holding Company.
(4) Certain executive officers acquired limited partnership interests in CBAP in
1996. None of such officers have voting or investment discretion with respect to
the Company's stock.
ITEM 13 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AGREEMENTS
Concurrently with the closing of the Acquisition, Howmet entered into
management agreements ("Management Agreements") with TCG Holdings, L.L.C. and
Thiokol for certain management and financial advisory services to be provided to
the Company and its subsidiaries. The Management Agreements provide for the
payment to each of TCG Holdings, L.L.C. and Thiokol annual management fees in an
amount equal to $1.0 million. Also concurrently with the closing of the
Acquisition, a predecessor to Holdings entered into transaction fee agreements
with TCG Holdings, L.L.C. and Thiokol for the provision of advisory services
relating to the negotiation, structuring and financing of the Acquisition, for
fees of $2.0 million, which were paid to each of TCG Holdings, L.L.C. and
Thiokol.
During 1996, Thiokol granted 230,000 contingent stock options for Thiokol
common stock to certain Company employees, including the Named Executive
Officers. The options granted to the Named Executive Officers have an exercise
price of $35.50 per option, the market price of Thiokol stock on the date of the
grant. The options will vest only if Thiokol acquires the Company. The options
vest, and are exercisable, 50% on the date of Thiokol's acquisition of Howmet
equity from Carlyle and 25 percent each year thereafter. In the event Thiokol
does not acquire 100% of the equity ownership of Blade, the stock options become
void. The options expire not later than ten years after the date of the grant.
TAX SHARING AGREEMENT
Blade entered into income tax sharing agreements (the "Tax Sharing
Agreements") with each of Holdings and the Company (the "Subsidiaries") on
December 13, 1995. The Tax Sharing Agreements provide that in any year in which
a Subsidiary is included in any consolidated tax return of Blade, and the
Subsidiary has taxable income, the Subsidiary will pay to Blade the amount of
the tax liability the Subsidiary would have had if it filed a separate return
(the "Separate Income Tax Liability"). In the event that the amount of Separate
Income Tax Liability for a Subsidiary in any taxable year in which it is filing
a consolidated return with Blade exceeds the amount equal to the product of (a)
the income tax liability of the group of corporations filing on a consolidated
basis for the taxable year (the "Blade Group Tax Liability") and (b) a fraction,
the numerator of which is equal to the Subsidiary's Separate Income Tax
Liability and the denominator of which is equal to the aggregate total of the
Separate Income Tax Liability of all Subsidiaries which are included in Blade's
consolidated tax return, then the Subsidiary will not be obligated to pay Blade
the amount of such excess. In the event that the Blade Group Tax Liability
exceeds the sum of all Subsidiaries' Separate Income Tax Liability for such
year, Blade
23
<PAGE> 24
may collect from the Subsidiaries the amount of such excess, provided, however,
that no Subsidiary shall be required to pay to Blade an amount that exceeds the
excess of (i) the sum of such Subsidiary's Separate Income Tax Liability for the
period beginning when such Subsidiary was included in the Blade's Consolidated
Return and ending in the tax year at issue over (ii) the sum of amounts paid by
such Subsidiary pursuant to this sentence. Adjustments to income arising from
events occurring subsequent to the filing of the consolidated return
attributable to matters such as amended returns, carrybacks, audit adjustments
and refund claims will be given effect between Blade and the Subsidiaries as
soon as practicable after determination of such adjustments. The Tax Sharing
Agreements provide for a similar allocation between Blade and the Subsidiaries
in the event that any state and local income taxes of Blade and the Subsidiaries
are determined on a combined, consolidated or unitary basis.
24
<PAGE> 25
PART IV
ITEM 14 -- EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) -- Financial Statements
The following Consolidated Financial Statements of the Company and its
subsidiaries are included in this Report:
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Reports of Independent Auditors F-1 - F-5
Consolidated Balance Sheets at December 31, 1996 and 1995 F-6
Statements of Operations and Retained Earnings for the Year ended
December 31, 1996, the Period from December 14, 1995 to December
31, 1995 (Successor Company Consolidated), the Period
from January 1, 1995 to December 31, 1995 (Predecessor Company
Combined), and the Year Ended December 31, 1994 (Predecessor
Company Combined). . . . . . . . . . . . . . . . . . . . . . . . . F-7
Statements of Cash Flows for the year ended December 31, 1996, the
Period from December 14, 1995 to December 31, 1995 (Successor
Company Consolidated), the Period from January 1, 1995 to
December 13, 1995 (Predecessor Company Combined), and the
Year Ended December 31, 1994 (Predecessor Company
Combined). . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Notes to Financial Statements F-9 - F-28
(a) (2) -- Financial Statement Schedule
The following schedule to the Financial Statements of the Company and its
subsidiaries is included in this Report:
Schedule
II -- Valuation and Qualifying Accounts and reserves F-29
</TABLE>
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required or are
inapplicable, and therefore have been omitted.
25
<PAGE> 26
(a) (3) -- Exhibits
Regulation S-K
Exhibit No.:
3.1 Certificate of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to the Company's Registration Statement on
Form S-4 filed January 9, 1996 (registration no. 333-00200)).
3.2 By-laws of the Company (incorporated herein by reference to Exhibit
3.2 to the Company's Registration Statement on Form S-4 filed January
9, 1996 (registration no. 333-00200)).
4.1 Registration Rights Agreement dated as of December 7, 1995, among the
Company, BT Securities Corporation, and Lehman Brothers, Inc.
(incorporated herein by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-4 filed January 9, 1996
(registration no. 333-00200)).
4.2(a) Indenture dated as of December 7, 1995 between the Company and Marine
Midland Bank, as Trustee (incorporated herein by reference to Exhibit
4.2(a) to the Company's Registration Statement on Form S-4 filed
January 9, 1996 (registration no. 333-00200)).
4.2(b) Supplemental Indenture dated as of December 13, 1995 between the
Company and Marine Midland Bank, as Trustee (incorporated herein by
reference to Exhibit 4.2 to Amendment no. 2 to the Company's
Registration Statement on Form S-4 filed April 1, 1996 (registration
no. 333-00200)).
4.3 Credit Agreement dated as of December 13, 1995 among Blade
Acquisition Corp., Howmet Holdings Acquisition Corp., Howmet
Acquisition Corp., Bankers Trust Company, various banks, Citicorp
USA, Inc., and The First National Bank of Chicago as Managing Agents,
Bankers Trust Company as Syndication Agent, Citicorp USA, Inc. as
Documentation Agent and The First National Bank of Chicago, as
Administrative Agent, together with certain collateral documents
attached thereto as exhibits, including the Subsidiary Guaranty,
Pledge Agreement and Security Agreement among Blade Acquisition
Corp., Pechiney Corporation, Howmet Corporation, certain subsidiaries
and affiliates of Howmet Corporation and the First National Bank of
Chicago (incorporated herein by reference to Exhibit 4.3 to Amendment
no. 2 to the Company's Registration Statement on Form S-4 filed April
1, 1996 (registration no. 333-00200)).
4.4 Copies of the executed original 10% Senior Subordinated Notes due
2003 of the Company (the "Original Notes"), authenticated and
delivered by Marine Midland Bank as Trustee on December 7, 1995
(incorporated herein by reference to Exhibit 4.4 to the Company's
Registration Statement on Form S-4 filed January 9, 1996
(registration no. 333-00200)).
4.5 Form of 10% Senior Subordinated Notes due 2003 of the Company offered
in exchange for the Original Notes (included in Exhibit 4.2).
4.6 Amended and Restated Credit Agreement dated as of December 5, 1996
among Blade Acquisition Corp., Howmet Holdings Corporation., Howmet
Corporation, Bankers Trust Company, various banks, Citicorp USA,
Inc., and The First National Bank of Chicago as Managing Agents,
Bankers Trust Company as Syndication Agent, Citicorp USA, Inc. as
Documentation Agent and The First National Bank of Chicago, as
26
<PAGE> 27
Administrative Agent, together with certain collateral documents
attached thereto as exhibits, including the Subsidiary Guaranty,
Pledge Agreement and Security Agreement among Blade Acquisition
Corp., Howmet Holdings Corp., Howmet Corporation, certain
subsidiaries and affiliates of Howmet Corporation and the First
National Bank of Chicago.
4.7 Blade Receivables Master Trust Amended and Restated Pooling and
Servicing Agreement dated April 18, 1996 among Blade Receivables
Corporation as Transferor, Howmet Corporation as Servicer and
Manufacturers and Traders Trust Company as Trustee together with
certain collateral documents attached thereto as exhibits, including
the Amended and Restated Receivables Purchase Agreement dated as of
April 18, 1996 between Howmet Corporation and certain subsidiaries of
Howmet Corporation, as Settlors, and Blade Receivables Corporation as
Buyer.
10.1 Howmet Corporation Annual Bonus Plan (incorporated herein by
reference to Exhibit 10.1 to Amendment No. 1 to the Company's
Registration Statement on Form S-4 filed January 17, 1996
(registration no. 333-00200)).
10.2 Howmet Restructuring Cash Incentive Plan (incorporated herein by
reference to Exhibit 10.2 to Amendment No. 1 to the Company's
Registration Statement on Form S-4 filed January 17, 1996
(registration no. 333-00200)).
10.3 Howmet Corporation Excess Benefit Plan (incorporated herein by
reference to Exhibit 10.4 to Amendment No. 1 to the Company's
Registration Statement on Form S-4 filed January 17, 1996
(registration no. 333-00200)).
10.4 Howmet Corporation Transaction Incentive Payments Plan (incorporated
herein by reference to Exhibit 10.5 to Amendment No. 1 to the
Company's Registration Statement on Form S-4 filed January 17, 1996
(registration no. 333-00200)).
10.5 Howmet Corporation Enhanced Bonus Program for Employees Grade 22 and
Above (incorporated herein by reference to Exhibit 10.6 to Amendment
No. 1 to the Company's Registration Statement on Form S-4 filed
January 17, 1996 (registration no. 333-00200)).
10.6 1986 Howmet Corporation Deferred Compensation Plan (incorporated
herein by reference to Exhibit 10.7 to Amendment No. 1 to the
Company's Registration Statement on Form S-4 filed January 17, 1996
(registration no. 333-00200)).
10.7 Howmet Corporation 1995 Executive Deferred Compensation Plan
(incorporated herein by reference to Exhibit 10.8 to Amendment No. 1
to the Company's Registration Statement on Form S-4 filed January 17,
1996 (registration no. 333-00200)).
10.8 Employment Agreement dated October 4, 1995, between Howmet
Corporation and Henri Fine (incorporated herein by reference to
Exhibit 10.9 to Amendment No. 1 to the Company's Registration
Statement on Form S-4 filed January 17, 1996 (registration no.
333-00200)).
10.9 Employment Agreement dated October 4, 1995, between Howmet
Corporation and Jack Lambert (incorporated herein by reference to
Exhibit 10.10 to Amendment No. 1 to the Company's Registration
Statement on Form S-4 filed January 17, 1996 (registration no.
333-00200)).
27
<PAGE> 28
10.10 Employment Agreement dated October 4, 1995, between Howmet
Corporation and Mark Lasker (incorporated herein by reference to
Exhibit 10.11 to the Company's Registration Statement on Form S-4
filed January 9, 1996 (registration no. 333-00200)).
10.11 Employment Agreement dated October 4, 1995, between Howmet
Corporation and Neil Paton (incorporated herein by reference to
Exhibit 10.12 to Amendment No. 1 to the Company's Registration
Statement on Form S-4 filed January 17, 1996 (registration no.
333-00200)).
10.12 Employment Agreement dated October 4, 1995, between Howmet
Corporation and James Stanley (incorporated herein by reference to
Exhibit 10.13 to the Company's Registration Statement on Form S-4
filed January 9, 1996 (registration no. 333-00200)).
10.13 Employment Agreement dated October 4, 1995, between Howmet
Corporation and Paul Wilson (incorporated herein by reference to
Exhibit 10.14 to Amendment No. 1 to the Company's Registration
Statement on Form S-4 filed January 17, 1996 (registration no.
333-00200)).
10.14 Employment Agreement dated October 4, 1995, between Howmet
Corporation and Roland Paul (incorporated herein by reference to
Exhibit 10.16 to Amendment No. 1 to the Company's Registration
Statement on Form S-4 filed January 17, 1996 (registration no.
333-00200)).
10.15 Employment Agreement dated October 4, 1995, between Howmet
Corporation and David Squier (incorporated herein by reference to
Exhibit 10.17 to the Company's Registration Statement on Form S-4
filed January 9, 1996 (registration no. 333-00200)).
10.16 Employment Agreement dated October 4, 1995, between Howmet Turbine
Components Corporation and B. Dennis Albrechtsen (incorporated herein
by reference to Exhibit 10.18 to the Company's Registration Statement
on Form S-4 filed January 9, 1996 (registration no. 333-00200)).
10.17 Letter Agreement regarding payment of life insurance between Howmet
Corporation and David L. Squier (incorporated herein by reference to
Exhibit 10.19 to Amendment No. 1 to the Company's Registration
Statement on Form S-4 filed January 17, 1996 (registration no.
333-00200)).
10.18(a) Tax Sharing Agreement among Howmet Corporation, Howmet Management
Services, Inc., Howmet-Tempcraft, Inc., Howmet Thermatech Canada,
Inc., Howmet Transport Services, Inc., Howmet Sales, Inc., Howmet
Refurbishment, Inc., Turbine Components Corporation, Blade
Receivables Corporation, a Nevada corporation, and Howmet Cercast
(USA), Inc., dated as of December 13, 1995 (incorporated herein by
reference to Exhibit 10.20(a) to the Company's Registration Statement
on Form S-4 filed January 9, 1996 (registration no. 333-00200)).
10.18(b) Tax Sharing Agreement among Blade Acquisition Corp., Pechiney
Corporation, Howmet Insurance Co., Inc., Howmet Corporation and all
of its directly and indirectly owned subsidiaries, dated as of
December 13, 1995 (incorporated herein by reference to Exhibit
10.20(b) to the Company's Registration Statement on Form S-4 filed
January 9, 1996 (registration no. 333-00200)).
10.19 Management Agreement between Howmet Corporation and Thiokol Holding
Company dated as of December 13, 1995 (incorporated herein by
reference to Exhibit 10.21 to the
28
<PAGE> 29
Company's Registration Statement on Form S-4 filed January 9, 1996
(registration no. 333-00200)).
10.20 Management Agreement between Howmet Corporation and TCG Holdings,
L.L.C., dated as of December 13, 1995 (incorporated herein by
reference to Exhibit 10.22 to the Company's Registration Statement on
Form S-4 filed January 9, 1996 (registration no. 333-00200)).
10.21 Assignment and Assumption Agreement between Howmet Holdings
Acquisition Corp. and Howmet Acquisition Corp., dated as of December
6, 1995 and Indemnification Provisions of the Stock Purchase
Agreement among Pechiney, Pechiney International S.A., Howmet Cercast
S.A. and Blade Acquisition Corp., dated as of October 12, 1995
(incorporated herein by reference to Exhibit 10.23 to Amendment No. 1
to the Company's Registration Statement on Form S-4 filed January 17,
1996 (registration no. 333-00200)).
10.22 Revised Employment Letter dated February 13, 1996, between Howmet
Corporation and John C. Ritter (incorporated herein by reference to
Exhibit 10.24 to Amendment No. 3 to the Company's Registration
Statement on Form S-4 filed June 11, 1996 (registration no.
333-00200)).
10.23 Stock Appreciation Right Agreement between Howmet Corporation and
David L. Squier dated May 17, 1996 (incorporated herein by reference
to Exhibit 10.24 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 29, 1996, filed August 28, 1996.)
10.24 Stock Appreciation Right Agreement between Howmet Corporation and
James Stanley dated May 17, 1996 (incorporated herein by reference to
Exhibit 10.25 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 29, 1996, filed August 28, 1996.)
10.25 Stock Appreciation Right Agreement between Howmet Corporation and
Mark Lasker dated May 17, 1996 (incorporated herein by reference to
Exhibit 10.26 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 29, 1996, filed August 28, 1996.)
10.26 Stock Appreciation Right Agreement between Howmet Corporation and
John C. Ritter dated May 17, 1996 (incorporated herein by reference
to Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 29, 1996, filed August 28, 1996).
10.27 Stock Appreciation Right Agreement between Howmet Corporation and
Allan Bergquist dated May 17, 1996 (incorporated herein by reference
to Exhibit 10.28 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 29, 1996, filed August 28, 1996).
10.28 Stock Appreciation Right Agreement between Howmet Corporation and B.
Dennis Albrechtsen dated May 17, 1996 (incorporated herein by
reference to Exhibit 10.29 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 29, 1996, filed August 28, 1996).
10.29 Howmet Corporation Amended and Restated Special 1995 Executive
Deferred Compensation Plan effective as of November 1, 1995
(incorporated herein by reference
29
<PAGE> 30
to Exhibit 10.30 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 29, 1996, filed August 28, 1996).
10.30 The Howmet Corporation Nonqualified Deferred Compensation Trust dated
April 29, 1996 (incorporated herein by reference to Exhibit 10.31 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
June 29, 1996, filed August 28, 1996).
21.1 List of Significant Subsidiaries
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Company during the last
quarter of 1996.
30
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
HOWMET CORPORATION
Dated: March 31, 1997 By: John C. Ritter
-------------------------------
John C. Ritter
Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
Dated: March 31, 1997 David L. Squier
-------------------------------
David L. Squier
President and Chief Executive Officer and
Director (Principal Executive Officer)
Dated: March 31, 1997 William E. Conway
-------------------------------
William E. Conway
Director
Dated: March 31, 1997 James R. Wilson
-------------------------------
James R. Wilson
Director
Dated: March 31, 1997 John C. Ritter
-------------------------------
John C. Ritter
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
</TABLE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
No annual report or proxy material has been sent to security holders by
Registrant.
31
<PAGE> 32
Report of Independent Auditors
The Board of Directors and Shareholders
Howmet Corporation
We have audited the accompanying consolidated balance sheets of Howmet
Corporation and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of operations and retained earnings, and cash
flows for the year ended December 31, 1996, and for the periods from January 1,
1995 to December 13, 1995 (Predecessor Company) and December 14, 1995 to
December 31, 1995 (Successor Company). Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits. We did not audit the 1995 financial
statements of Howmet SA, CIRAL SNC and Howmet Limited (UK), wholly-owned
subsidiaries, which statements reflect total assets of $201 million as of
December 31, 1995, and total revenues of $221 million for the year ended
December 31, 1995. Those statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates
to data included for Howmet SA, CIRAL SNC and Howmet Limited (UK), is
based solely on the reports of other auditors. The combined financial
statements of Howmet Corporation and Howmet Cercast Group for the year
ended December 31, 1994 were audited by other auditors whose report dated
October 27, 1995 expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts (including the allocation of the results of
operations of Howmet SA, CIRAL SNC and Howmet Limited (UK) between the
period from December 14, 1995 to December 31, 1995) and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits and the reports of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and, for 1995, the reports of other
auditors, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Howmet Corporation
and subsidiaries as of December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for the year ended
December 31, 1996, for the periods from January 1, 1995 to December 13, 1995
and December 14, 1995 to December 31, 1995, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
January 27, 1997
F-1
<PAGE> 33
REPORT OF INDEPENDENT ACCOUNTANTS
11 July 1996
To the Board of Directors of Howmet Limited
We have audited the balance sheet of Howmet Limited ("the Company") as of
31 December 1995, and the related profit and loss account and statements of
changes in cash flows and changes in shareholders' equity for the year ended 31
December 1995, all expressed in pounds sterling and prepared on the basis set
forth in the financial statements (not separately presented herein). These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with United Kingdom generally accepted
auditing standards which do not differ in any material respect from auditing
standards generally accepted in the United States. These standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company at 31 December
1995 and the results of the Company's operations and its cash flows for the year
ended 31 December 1995 in conformity with generally accepted accounting
principles in the United Kingdom.
Price Waterhouse
Bristol, England
F-2
<PAGE> 34
AUDITOR'S REPORT ON THE ANNUAL ACCOUNTS
(YEAR ENDED DECEMBER 31, 1995)
To the Stockholders
Howmet SA
68 Rue du Moulin du Cage
92230 Gennevilliers
The following report is a free translation of the statutory auditor's
report issued in France except with respect to the reference to generally
accepted auditing standards in the United States (see paragraph 1, below).
In accordance with the terms of our appointment by the General Meeting, we
hereby present our report for the year ended December 31, 1995 on:
- the audit of the annual accounts (balance sheet and income statement)
of Howmet SA (not separately presented herein);
- the specific procedures and disclosures required by law.
The Board of Directors is responsible for the preparation of the annual
accounts. Our responsibility is to express an opinion on these accounts based on
our audit.
1. OPINION ON THE ANNUAL ACCOUNTS
We conducted our audit in accordance with generally accepted auditing
standards (GAAS) in France (which are substantially similar to generally
accepted auditing standards in the United States). These standards require the
auditor to perform such tests and procedures as give reasonable assurance that
the annual accounts are free from material misstatement. An audit includes
examination, on a test basis, of evidence relevant to the information contained
in these accounts. It also includes an assessment of the accounting policies
used and of significant estimates made by the Board of Directors in the
preparation of the annual accounts, and an evaluation of the overall adequacy of
the presentation of these accounts. We believe that our audit provides a
reasonable basis for the opinion expressed below.
In our opinion, the annual accounts have been properly prepared and present
fairly the company's results for the year ended December 31, 1995, and its
assets, liabilities and financial position as at that date in accordance with
accounting principles generally accepted in France.
2. SPECIFIC PROCEDURES AND DISCLOSURES
We have also performed the specific procedures required by the law, in
accordance with auditing standards.
We have no comments to make on the fair presentation or on the consistency
with the annual accounts of the information given in the Management Report of
the Board of Directors or in documents sent to the stockholders on the company's
financial position and annual accounts.
In accordance with the law, we have ensured that the necessary disclosures
on acquisitions of participating and controlling interests and on the identity
of stockholders have been provided in the Management Report.
Signed in Paris on May 23, 1996
The Auditor
/s/ Befec-Price Waterhouse
F-3
<PAGE> 35
AUDITOR'S REPORT ON THE ANNUAL ACCOUNTS
(YEAR ENDED DECEMBER 31, 1995)
To the Stockholders
CIRAL SNC
ZAC de la Presaie
53600 Evron
The following report is a free translation of the statutory auditor's
report issued in France except with respect to the reference to generally
accepted auditing standards in the United States (see paragraph 1, below).
In accordance with the terms of our appointment by the General Meeting, we
hereby present our report for the year ended December 31, 1995 on:
- the audit of the annual accounts (balance sheet and income statement)
of Ciral SNC (not separately presented herein);
- the specific procedures and disclosures required by law.
The manager is responsible for the preparation of the annual accounts. Our
responsibility is to express an opinion on these accounts based on our audit.
1. OPINION ON THE ANNUAL ACCOUNTS
We conducted our audit in accordance with generally accepted auditing
standards (GAAS) in France (which are substantially similar to generally
accepted auditing standards in the United States). These standards require the
auditor to perform such tests and procedures as give reasonable assurance that
the annual accounts are free from material misstatement. An audit includes
examination, on a test basis, of evidence relevant to the information contained
in these accounts. It also includes an assessment of the accounting policies
used and of significant estimates made by the manager in the preparation of the
annual accounts, and an evaluation of the overall adequacy of the presentation
of these accounts. We believe that our audit provides a reasonable basis for the
opinion expressed below.
In our opinion, the annual accounts have been properly prepared and present
fairly the company's results for the year ended December 31, 1995, and its
assets, liabilities and financial position as at that date in accordance with
accounting principles generally accepted in France.
2. SPECIFIC PROCEDURES AND DISCLOSURES
We have also performed the specific procedures required by the law, in
accordance with auditing standards.
We have no comments to make on the fair presentation or on the consistency
with the annual accounts of the information given in the Management Report of
the manager or in documents sent to the stockholders on the company's financial
position and annual accounts.
Signed in Paris on May 15, 1996
The Auditor
/s/ Befec-Price Waterhouse
F-4
<PAGE> 36
REPORT OF INDEPENDENT ACCOUNTANTS
To the Boards of Directors of
Howmet Corporation and Howmet Cercast Group
In our opinion, the accompanying combined statements of operations and
retained earnings and of cash flows for the year ended December 31, 1994 present
fairly, in all material respects, the results of operations and cash flows of
Howmet Corporation and Howmet Cercast Group (collectively, the "Predecessor
Company") and each of their consolidated subsidiaries, affiliated by common
ownership and management, for the year ended December 31, 1994 in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Predecessor Company's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
We have not audited the combined financial statements of the Predecessor
Company for any period subsequent to December 31, 1994.
Price Waterhouse LLP /s/ PRICE WATERHOUSE LLP
Stamford, Connecticut
October 27, 1995
F-5
<PAGE> 37
Howmet Corporation
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
December 31,
1996 1995
---------- ----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 23,398 $ 9,606
Accounts receivable (less allowance of $5,623 and $8,258) 76,870 88,533
Inventories 149,419 150,288
Retained receivables 46,132 42,690
Deferred income taxes 20,957 --
Other current assets 2,982 3,481
---------- ----------
Total current assets 319,758 294,598
Property, plant and equipment, net 291,086 301,563
Goodwill, net 253,377 311,092
Acquisition intangibles and other assets, net 159,672 192,250
---------- ----------
Total assets $1,023,893 $1,099,503
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 76,840 $ 58,987
Accrued liabilities 157,408 154,957
Income taxes payable 18,561 11,930
Long-term debt due within one year 56,106 45,303
Deferred income taxes -- 22,516
---------- ----------
Total current liabilities 308,915 293,693
Accumulated postretirement benefit obligation 88,569 84,421
Other liabilities 37,245 20,257
Deferred income taxes 17,777 6,663
Long-term debt 266,870 418,186
---------- ----------
Total liabilities 719,376 823,220
Commitments and contingencies (see Notes 8 and 15)
Stockholders' equity:
Common stock, $1 par value, 1,000 shares
authorized; 10 shares issued and outstanding -- --
Capital surplus 275,000 275,000
Retained earnings 27,461 160
Cumulative translation adjustment 2,056 1,123
---------- ----------
Total stockholders' equity 304,517 276,283
---------- ----------
Total liabilities and stockholders' equity $1,023,893 $1,099,503
========== ==========
</TABLE>
See notes to the financial statements.
F-6
<PAGE> 38
Howmet Corporation
Statements of Operations and Retained Earnings
(Dollars in thousands)
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
-------------------------------------- --------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
-------------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C>
Net sales $ 1,106,812 $ 51,366 $ 894,132 $ 858,251
Operating costs and expenses:
Cost of sales 803,624 38,021 681,427 647,272
Selling, general and administrative expense 117,342 4,591 104,990 90,894
Depreciation and amortization expense 59,686 2,780 32,654 33,089
Research and development expense 24,207 1,425 25,004 19,169
Restructuring expense (credit) -- -- (1,624) 2,546
Goodwill writeoff -- -- -- 47,400
----------- -------- --------- ---------
1,004,859 46,817 842,451 840,370
----------- -------- --------- ---------
Earnings from operations 101,953 4,549 51,681 17,881
Interest income, affiliates -- -- 8,628 9,462
Interest income, third parties 1,665 23 1,297 552
Interest expense, affiliates -- -- (2,155) (843)
Interest expense, third parties (39,301) (2,925) (3,713) (3,948)
Equity in loss of unconsolidated affiliates (1,390) (159) (4,315) (1,434)
Losses on sales of receivables (4,450) (657) -- --
Other, net (16) (190) (1,477) 1,324
----------- -------- --------- ---------
Income before income taxes 58,461 641 49,946 22,994
Income taxes 31,160 481 23,662 45,984
----------- -------- --------- ---------
Net income (loss) 27,301 160 26,284 (22,990)
Retained earnings at beginning of period 160 -- 297,914 340,665
Dividends declared on common stock -- -- (200,000) (19,761)
----------- -------- --------- ---------
Retained earnings at end of period $ 27,461 $ 160 $ 124,198 $ 297,914
=========== ======== ========= =========
</TABLE>
See notes to the financial statements.
F-7
<PAGE> 39
Howmet Corporation
Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
-------------------------------- ---------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
----------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
Operating activities
Net income (loss) $ 27,301 $ 160 $ 26,284 $(22,990)
Adjustment to reconcile net income (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization 63,326 2,965 32,654 33,089
Equity in loss of unconsolidated affiliates 1,390 159 4,315 1,434
Goodwill writeoff -- -- -- 47,400
Changes in assets and liabilities:
Accounts receivable 8,790 (19,793) (11,431) 7,847
Inventories 17,145 12,382 (1,655) 15,608
Deferred income taxes (2,292) 167 (2,650) 9,770
Accounts payable 17,213 (5,452) (23,111) 9,992
Accrued liabilities and other liabilities 21,880 (2,723) 17,246 (6,714)
Income taxes payable 6,135 (594) (18,738) (519)
Long-term customer receivable 21,138 -- -- --
Other - net 2,460 -- 12,325 (3,525)
--------- --------- --------- --------
Net cash provided (used) by operating
activities 184,486 (12,729) 35,239 91,392
Investing activities
Proceeds from disposal of fixed assets 283 13 3,217 5,027
Payments made for capital expenditures (33,686) (1,613) (41,203) (37,991)
Decrease (increase) in advances to Pechiney -- -- 237,368 (34,914)
Payments made for investments and other assets -- (1,076) (5,790) (454)
Acquisition of business, net of cash acquired 3,634 (737,546) -- --
--------- --------- --------- --------
Net cash provided (used) by investing
activities (29,769) (740,222) 193,592 (68,332)
Financing activities
Issuance of debt 147,250 50,842 37,013 8,534
Repayment of debt (288,100) (40,000) (56,986) (4,021)
Payment of dividends -- -- (200,000) (28,613)
Proceeds from acquisition financing:
Sale of accounts receivable -- 51,400 -- --
Issuance of debt -- 450,200 -- --
Issuance of equity -- 250,000 -- --
--------- --------- --------- --------
Net cash provided (used) by financing
activities (140,850) 762,442 (219,973) (24,100)
Effect of exchange rate changes on cash (75) 115 234 (439)
--------- --------- --------- --------
Net increase (decrease) in cash 13,792 9,606 9,092 (1,479)
Cash and cash equivalents at beginning of period 9,606 -- 4,962 6,441
--------- --------- --------- --------
Cash and cash equivalents at end of period $ 23,398 $ 9,606 $ 14,054 $ 4,962
========= ========= ========= ========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Income taxes $ 28,427 $ 876 $ 42,646 $ 34,643
Interest $ 36,190 $ 37 $ 5,265 $ 4,425
</TABLE>
See notes to the financial statements.
F-8
<PAGE> 40
Howmet Corporation
Notes to Financial Statements
1. BASIS OF PRESENTATION
SUCCESSOR COMPANY
Blade Acquisition Corp. ("Blade") was formed in October 1995 to acquire Pechiney
Corporation from Pechiney International, S.A. ("Pechiney International") and the
Cercast group of companies from Howmet Cercast S.A., a subsidiary of Pechiney
International. The Carlyle Group and certain of its affiliates ("The Carlyle
Group") and Thiokol Holding Company, a wholly-owned subsidiary of Thiokol
Corporation ("Thiokol"), own 51% and 49%, respectively, of Blade's common stock.
The acquisition was effected through a series of transactions, including the
purchase of Pechiney Corporation by Howmet Holdings Acquisition Corp. ("HHAC"),
a wholly-owned subsidiary of Blade; the purchase of the capital stock of certain
Cercast companies by Howmet Acquisition Corp. ("HAC"), a wholly-owned subsidiary
of HHAC; and the mergers of HHAC with and into Pechiney Corporation and of HAC
with and into Howmet Corporation ("Successor Company" or "Howmet"). After the
mergers, Pechiney Corporation's name was changed to Howmet Holdings Corporation
("Holdings"). Howmet is a wholly-owned subsidiary of Holdings. Howmet and its
subsidiaries, including the Cercast group of companies, is the only operating
subsidiary of Holdings. The Stock Purchase Agreement provides Blade with
indemnities for certain pre-closing tax, environmental and product liability
matters. These indemnities were assigned to the Company by Blade.
An agreement between The Carlyle Group and Thiokol Holding Company provides that
Thiokol Holding Company may purchase all of The Carlyle Group's interest in
Blade, from December 13, 1998 to December 13, 2001. At any time after December
13, 2001, Thiokol Holding Company and The Carlyle Group will have the right to
compel the participation of the other in sales of all the outstanding shares of
Blade's common stock. Thiokol Holding Company or The Carlyle Group may, with the
consent of the other, initiate a public offering.
The acquisition was completed on December 13, 1995 for a total purchase price,
including transaction fees and expenses, of approximately $771.6 million (after
agreed upon 1996 post-closing adjustments). Financing for the acquisition
included (i) borrowing of $300.0 million under a senior term loan facility, (ii)
the sale of $125.0 million aggregate principal amount of senior subordinated
notes, (iii) $51.4 million of proceeds from a special purpose receivables
facility, (iv) $10.2 million in borrowings under a $125.0 million revolving
credit facility, (v) $10.0 million of borrowings through a Canadian facility,
and (vi) a $250.0 million cash equity investment from the proceeds of the
issuance of $200.0 million of Blade common stock and $50.0 million of Blade
pay-in-kind preferred stock. The acquisition financing also included a $25.0
million pay-in-kind junior subordinated purchaser note issued to Pechiney
International by Howmet's parent company, which amount was contributed to
Howmet's capital.
The acquisition was accounted for in accordance with the purchase method of
accounting, and accordingly, the Successor Company Consolidated Financial
Statements reflect the allocation of the purchase price and related acquisition
costs to the assets acquired and liabilities assumed based on their fair values.
The following unaudited condensed financial information gives effect, on a pro
forma basis, to the acquisition as if it had occurred at the beginning of the
years ended December 31, 1995 and 1994 (in thousands):
F-9
<PAGE> 41
Howmet Corporation
Notes to Financial Statements (continued)
1. BASIS OF PRESENTATION (CONTINUED)
<TABLE>
<CAPTION>
Pro Forma (Unaudited)
Year Ended December 31,
1995 1994
-----------------------
<S> <C> <C>
Net sales $945,498 $858,251
Net loss (19,150) (58,560)
</TABLE>
The pro forma net loss in 1994 includes a $47.4 million write off of goodwill as
discussed in Note 5. The pro forma information does not necessarily represent
what the actual consolidated results would have been for these periods and is
not intended to be indicative of future results.
PREDECESSOR COMPANY
The combined statements of operations and retained earnings and cash flows have
been prepared to present the combined operations of Howmet Corporation and
Howmet Cercast Group ("Cercast") (collectively, the "Predecessor Company"),
affiliated entities with common ownership and management, on a historical cost
basis prior to their acquisition by Blade. All transactions between Howmet
Corporation and Cercast have been eliminated.
The Predecessor Company had significant transactions with Pechiney International
and its majority owner, Pechiney S.A., a French corporation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
References to the "Company" relate to both the Predecessor Company and the
Successor Company.
PRINCIPLES OF CONSOLIDATION
The accompanying financial statements include all subsidiary companies and
reflect the use of the equity method of accounting for 50% owned joint ventures.
All significant intercompany accounts and transactions have been eliminated.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the carrying amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the respective period. Amounts affected include, but are not limited to,
allowances for doubtful accounts, reserves for contract losses and other
accruals. Actual results could differ from those estimates.
REVENUE RECOGNITION
The Company recognizes revenue from the sale of its products upon shipment.
Provision for estimated losses on sales commitments are recorded when
identified.
F-10
<PAGE> 42
Howmet Corporation
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company considers all
investment instruments with a maturity of three months or less when acquired to
be cash equivalents.
INVENTORIES
Inventories are stated at cost, which approximates or is less than replacement
value. The Company values a substantial portion of its inventories on the
last-in, first-out ("LIFO") method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost. Depreciation is computed
principally on the straight-line method over the estimated useful lives of the
respective assets, ranging from 4 to 8 years for machinery and equipment and
from 19 to 30 years for buildings.
GOODWILL
Goodwill is the excess of the purchase price over the fair value of tangible and
identifiable intangible net assets acquired and is amortized on a straight-line
basis over 40 years. The carrying value of goodwill is reviewed when facts and
circumstances suggest that it may be impaired. The Company assesses its
recoverability by determining whether the amortization of the goodwill balance
over its remaining life can be recovered through undiscounted projected future
cash flows. If it cannot be fully recovered, goodwill is considered to be
impaired. The amount of impairment is measured based upon the present value of
these projected future cash flows at appropriate discount rates less the book
value of goodwill.
ACQUISITION INTANGIBLES
Other acquisition intangible assets consist of the fair value, at the December
13, 1995 acquisition date (Note 1), of patents, technology and a noncompete
agreement. They are being amortized on a straight-line basis over 10 to 15
years.
TRANSLATION OF FOREIGN CURRENCIES
All assets and liabilities of the Company's subsidiaries outside of the U.S.,
except for Canada, are translated into U.S. dollars at year-end exchange rates.
Revenues and expenses are translated into U.S. dollars at average rates of
exchange prevailing during the period. Unrealized currency translation
adjustments are deferred in the balance sheet, whereas transaction gains and
losses are recognized currently in the statement of operations.
The Canadian operation's functional currency is the U.S. dollar. Therefore,
Canadian monetary assets and liabilities are translated at period end exchange
rates and inventories and other nonmonetary assets and liabilities are
translated at historical rates. Adjustments resulting from translation of
Canadian monetary assets and liabilities at year-end exchange rates are included
in the statements of operations.
INCOME TAXES
Except for items representing permanent differences between pretax book income
and taxable income, income taxes are provided on all revenue and expense items
included in the statements of operations, regardless of the period in which such
items are recognized for income tax purposes. Deferred income taxes result from
the future tax consequences associated with temporary differences between the
carrying amounts of assets and liabilities for financial and tax reporting
purposes.
F-11
<PAGE> 43
Howmet Corporation
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
IMPAIRMENT OF LONG-LIVED ASSETS
In 1996, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 121 "Accounting for the Impairment of Long-Lived Assets to be
Disposed Of." The standard requires the Company to review long-lived and
intangible assets for impairment whenever events or circumstances indicate that
the carrying value of an asset may not be recoverable. Adoption did not have a
material effect on the results of operations or financial position of the
Company.
ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENT OF
LIABILITIES
In January 1997, the Company adopted SFAS No. 125 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities". The standard
establishes accounting and reporting standards for transfers and servicing of
financial assets and extinguishments of liabilities, including the sale of
receivables. Adoption is not anticipated to have a material effect on the
results of operations or financial position of the Company.
RECLASSIFICATION OF PRIOR PERIOD FINANCIAL STATEMENTS
Certain 1995 and 1994 amounts have been reclassified to be consistent with 1996
presentation.
3. INVENTORIES
Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1996 1995
-------- --------
<S> <C> <C>
Raw materials and supplies $ 56,121 $ 63,281
Work in progress and finished goods 95,041 87,078
-------- --------
FIFO inventory 151,162 150,359
LIFO valuation adjustment (1,743) (71)
-------- --------
$149,419 $150,288
======== ========
</TABLE>
At December 31, 1996 and 1995, inventories include $48.2 million and $39.7
million, respectively, that are not valued using LIFO.
In 1996 and 1994, inventory levels were reduced. This resulted in liquidation of
LIFO inventory carried at the lower costs prevailing in prior years as compared
with costs of current purchases. The effect of charging these lower LIFO costs
to cost of sales rather than the cost of current purchases was not significant
in 1996 and decreased cost of sales by $9 million and increased net income by
$5.5 million in 1994.
F-12
<PAGE> 44
Howmet Corporation
Notes to Financial Statements (continued)
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment includes the following (in thousands):
<TABLE>
<CAPTION>
December 31,
1996 1995
-------- --------
<S> <C> <C>
Land $ 14,601 $ 14,502
Buildings 70,665 67,603
Machinery and equipment 246,781 221,305
-------- --------
332,047 303,410
Accumulated depreciation (40,961) (1,847)
-------- --------
$291,086 $301,563
======== ========
</TABLE>
Depreciation expense was $39.6 million in 1996, $1.8 million in the period from
December 14 to 31, 1995, $31.9 million in the period from January 1 to December
13, 1995 and $31 million in 1994.
5. GOODWILL
Goodwill relates to the acquisition of the Company by Blade (Note 1).
Accumulated amortization was $8.1 million and $.4 million at December 31, 1996
and 1995. The $57.7 million 1996 reduction in goodwill was due to $7.7 million
of amortization, the recognition of $30.5 million of preacquisition U.S. net
operating loss carryforward benefits and alternative minimum tax credits (Note
9) that were not estimable at the acquisition date, the reversal of $22.3
million of restructuring accruals (Note 16), the 1996 $3.6 million settlement
reduction of the acquisition price, and finalization of the carrying value of
certain other assets and liabilities upon completion of the data collection and
estimation process.
As a result of the acquisition of Cercast in 1989, goodwill of approximately $67
million was recorded. During 1994, the Predecessor Company recorded goodwill
write-offs totaling $47.4 million, the principal component of which, $42.4
million, related to Cercast. Cercast is a producer of aluminum investment
castings for the defense electronics and commercial aerospace industries which
are primarily North American and European based. Management estimated that the
market for aluminum investment castings in North America had declined
significantly due to downsizing in the defense industry sector and a then
existing downturn in commercial aerospace orders. As a result, the industry had
shifted from a seller's market to a buyer's market with pricing under severe
pressure. Similarly, the European market for aluminum casting had experienced a
decline due to weakness in both sectors of the aerospace industry. These
conditions resulted in Cercast achieving lower than expected sales and related
profitability. The Predecessor Company determined that the defense industry
sector decline was permanent in nature and that based on its estimate of
expected future operating results, the entire remaining goodwill balance would
not be recoverable. The methodology used by management to evaluate the
recoverability of goodwill was to discount 10 years of projected cash flows at
12% (the Predecessor Company's estimated long term cost of capital) together
with an associated discounted earnings valuation for the remaining amortization
period. The amount of impairment was measured on this basis as well. The forward
projections made by management were based on approved budgets and related
information and represented management's belief of the most likely future
scenario.
Also in 1994, $5 million of goodwill related to the Company's Tempcraft tooling
subsidiary was written off. The evaluation and measurement criteria used in
making this determination were similar to that described above for Cercast.
F-13
<PAGE> 45
Howmet Corporation
Notes to Financial Statements (continued)
6. ACQUISITION INTANGIBLES AND OTHER ASSETS, NET
Acquisition intangibles and other assets, net include the following (in
thousands):
<TABLE>
<CAPTION>
December 31,
1996 1995
----------------------------
<S> <C> <C>
Patents and technology, net of accumulated $ 60,323 $ 67,063
amortization of $7,077 and $337
Non-compete agreement, net of accumulated 69,758 74,758
amortization of $5,242 and $242
Deferred financing costs, net of accumulated 13,844 16,186
amortization of $3,827 and $185
Other assets 15,747 34,243
-------- --------
$159,672 $192,250
======== ========
</TABLE>
Patents and technology and the non-compete agreement are being amortized over
their estimated useful lives of 10 years and 15 years, respectively. The
deferred financing costs are being amortized over the life of the financings.
7. FINANCING ARRANGEMENTS
Long-term debt is summarized as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1996 1995
---------------------------
<S> <C> <C>
Senior term facility $175,000 $300,000
Senior revolving credit facility 12,000 26,000
Senior subordinated notes 125,000 125,000
Other 10,976 12,489
-------- --------
322,976 463,489
Less current portion 56,106 45,303
-------- --------
$266,870 $418,186
======== ========
</TABLE>
Principal maturities for the succeeding five years ended December 31 are as
follows: 1997--$56.1 million, 1998--$35.2 million, 1999--$35.2 million,
2000--$35.2 million and 2001--$35.2 million. At December 31, 1996, $9.7 million
of letters of credit were outstanding and $53.4 million of borrowing capacity
was available under the revolving credit facility.
In December 1996, the senior term facility and senior revolving credit facility
(collectively, the "Senior Credit Facilities") were amended to reflect more
favorable terms and conditions. Under the amended agreement, the $185 million of
outstanding principal in the three tranches of the former senior term facility
was converted into a $175 million single tranche senior term loan and $10
million of borrowings under the revolving credit facility. The $175 million
senior term loan is due in equal $8.8 million quarterly payments and matures in
December 2001. The senior revolving credit facility, which expires in December
2001, provides $75 million of revolving credit capacity, including up to $50
million of standby letters of credit.
F-14
<PAGE> 46
Howmet Corporation
Notes to Financial Statements (continued)
7. FINANCING ARRANGEMENTS (CONTINUED)
Excluding the effects of the swap agreements discussed below, interest on
borrowings under the Senior Credit Facilities is, at the Company's option, at a
bank's base rate (8.25% at December 31, 1996) plus .25% or at Eurodollar rates
(approximately 5.7% at December 31, 1996) plus 1.25%. The Eurodollar pricing
option requires a minimum commitment of thirty days. Rates will decline if the
Company achieves certain financial milestones. There is a .25% commitment fee
on the unutilized portion of the revolving credit facility and a 1.5% fee on
the outstanding letters of credit. At December 31, 1995, the three tranches of
the senior term facility were comprised of: $145 million Tranche A, at base
rate plus 1.5% or Eurodollar rate plus 2.5%; $100 million Tranche B, at base
rate plus 2% or Eurodollar rate plus 3%; $55 million Tranche C, at base rate
plus 2.25% or Eurodollar rate plus 3.25%.
The Company has interest rate swap agreements, based on long term treasury
rates, that effectively fix $200 million of variable rate Eurodollar debt
through February 1998. The swap agreements have fixed the Company's ninety day
Eurodollar borrowing rate at 5%. As of December 31, 1996, the fair value of
these swap agreements is $1.8 million as a result of ninety day Eurodollar
interest rate increases. The counterparties to these transactions are major
financial institutions. The Company does not anticipate nonperformance by the
counterparties.
The Senior Credit Facilities are guaranteed by Blade and are secured by a
security interest in all stock owned by Blade (with certain exceptions) and in
substantially all other assets (other than receivables sold pursuant to the
receivables facility) owned by the Company. The Senior Credit Facilities
prohibit cash dividends and contain financial covenants that require the Company
to meet certain financial ratios and tests. In addition, they contain other
restrictions customarily found in such agreements, such as limits on
indebtedness, payments for acquisitions and capital expenditures and payments
with respect to capital stock. The Senior Credit Facilities contain events of
default including cross defaults with respect to other debt and the receivables
facility, and a change of control of Blade or the Company (with the exception of
certain changes in control between Thiokol Holding Company and The Carlyle
Group).
The senior subordinated notes ("Notes") are due in 2003, are unsecured and bear
interest at 10% per annum. The Notes are redeemable in whole or in part on
December 1, 1999 at 105% of principal amount, declining annually to 100% on
December 1, 2002. Prior to December 1, 1998, the Company may redeem up to $45
million principal amount with the net proceeds of one or more equity offerings.
Also, after December 1, 1997 the Notes may be redeemed if Thiokol Holding
Company acquires the entire equity interest of Blade. The Notes limit the
Company's ability to incur additional indebtedness, sell assets and enter into
mergers and certain other transactions. Noteholders have the right to require
the Company to repurchase their Notes at 101% if there is a change in control of
Blade.
The Company has an agreement to sell, on a revolving basis, an undivided
interest in a defined pool of accounts receivable. At December 31, 1996 the
defined pool of outstanding accounts receivable amounted to $101.1 million. The
Company received $55 million from the sale of such eligible receivables to a
master trust and has deducted this amount from accounts receivable in the
December 31, 1996 consolidated balance sheet. Losses on the sale of receivables
are included in the line so captioned in the statements of operations. The $46.1
million difference between the total eligible pool and the $55 million sold
represents retainage on the sale in the event the receivables are not fully
collected.
F-15
<PAGE> 47
Howmet Corporation
Notes to Financial Statements (continued)
7. FINANCING ARRANGEMENTS (CONTINUED)
Because the Senior Credit Facilities are comprised of loans with variable
interest rates, the carrying value approximates fair value at December 31, 1996.
The senior subordinated notes are thinly traded; fair value of $135 million is
based on management's knowledge of recent trading prices.
8. COMMITMENTS
The Successor Company and its subsidiaries have noncancellable operating leases
relating principally to manufacturing and office facilities and certain
equipment. Future minimum payments under noncancellable leases as of December
31, 1996 are as follows: 1997--$5.4 million, 1998--$3.7 million, 1999--$2.7
million, 2000--$2.1 million, 2001--$1.1 million and thereafter $2.8 million.
Total rental expense for all operating leases was $8 million in 1996, $.4
million in the period from December 14 to 31, 1995, $6.7 million in the period
from January 1 to December 13, 1995 and $6.1 million in 1994.
As of December 31, 1996 the Company is committed to spend $15 million for 1997
capital expenditures.
9. INCOME TAXES
On December 13, 1995, the Successor Company and its subsidiaries ("Subsidiary")
and Blade entered into a tax sharing agreement (the "Tax Sharing Agreement").
The Tax Sharing Agreement provides that in any year in which a Subsidiary is
included in any consolidated Federal income tax return of Blade, and the
Subsidiary has taxable income, the Subsidiary will pay to Blade the amount of
the Federal income tax liability the Subsidiary would have had if it filed a
separate tax return (the "Separate Income Tax Liability"). In the event that the
amount of Separate Income Tax Liability for a Subsidiary in any taxable year in
which it is filing a consolidated Federal income tax return with Blade exceeds
the amount equal to the product of (a) the income tax liability of the group of
corporations filing on a consolidated basis for the taxable year (the "Blade
Group Tax Liability") and (b) a fraction, the numerator of which is equal to the
Subsidiary's Separate Income Tax Liability and the denominator of which is equal
to the aggregate total of the Separate Income Tax Liability of all Subsidiaries
which are included in Blade's consolidated tax return, then the Subsidiary will
not be obligated to pay Blade the amount of such excess. In the event that the
Blade Group Tax Liability exceeds the sum of all Subsidiaries' Separate Income
Tax Liability for such year, Blade may collect from the Subsidiaries the amount
of such excess, provided, however, that no Subsidiary shall be required to pay
Blade an amount that exceeds the excess of (i) the sum of such Subsidiary's
Separate Income Tax Liability for the period beginning when such Subsidiary was
first included in Blade's consolidated Federal income return and ending in the
tax years at issue less (ii) the cumulative total of all amounts previously paid
pursuant to the Tax Sharing Agreement. Adjustments to income arising from events
occurring subsequent to the filing of the consolidated Federal income tax return
attributable to matters such as amended returns, carrybacks, audit adjustments
and refund claims will be given effect between Blade and the Subsidiaries as
soon as practicable after determination of such adjustments. The Tax Sharing
Agreement provides for a similar allocation between Blade and the Subsidiaries
in the event that any state, local or foreign income taxes of Blade and the
Subsidiaries are determined on a combined, consolidated or unitary basis.
F-16
<PAGE> 48
Howmet Corporation
Notes to Financial Statements (continued)
9. INCOME TAXES (CONTINUED)
Prior to the acquisition, the Predecessor Company and Pechiney were parties to a
tax-sharing agreement requiring the Predecessor Company to pay to Pechiney an
amount equal to U.S. income taxes that would be payable if the Predecessor
Company was a stand alone taxpayer. The Predecessor Company is included in a
U.S. consolidated tax return with Pechiney and other related entities.
Accordingly, the tax strategies reflected in Pechiney's U.S. consolidated tax
return are not necessarily consistent with the basis of preparation for the
Predecessor Company's tax provision in the accompanying financial statements.
Income taxes were provided in the following amounts (in thousands):
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
--------------------------------------- ---------------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
----------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
Current income taxes:
U.S. Federal $15,474 $166 $22,900 $24,352
State 11,700 43 3,976 3,474
Foreign 6,278 313 2,809 4,039
------- ---- ------- -------
33,452 522 29,685 31,865
Deferred income taxes (2,292) (41) (6,023) 14,119
------- ---- ------- -------
$31,160 $481 $23,662 $45,984
======= ==== ======= =======
</TABLE>
F-17
<PAGE> 49
Howmet Corporation
Notes to Financial Statements (continued)
9. INCOME TAXES (CONTINUED)
The provision for income taxes differs from the amount of income taxes
determined by applying the U.S. statutory federal tax rate (35%) to pretax
income as follows (in thousands):
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
--------------------------------- --------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
----------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
U.S. Federal income tax at
statutory rate $20,461 $ 195 $17,481 $ 8,048
State income taxes, net of federal
benefit 5,637 52 2,009 3,001
Foreign tax differential 163 88 2,483 16,166
Goodwill 2,694 237 598 4,669
Additional tax reserves -- -- -- 6,092
Deferred tax adjustments -- -- -- 6,712
Adjustment to prior years'
provision -- -- 1,144 --
Other 2,205 (91) (53) 1,296
------- ---- ------- -------
$31,160 $ 481 $23,662 $45,984
======= ==== ======= =======
</TABLE>
In 1994 a provision for potential tax exposures was provided due to developments
related to examinations by federal and state taxing authorities of the
Predecessor Company's prior years' income tax returns. Deferred tax adjustments
in 1994 represent a change in the Predecessor Company's overall estimated state
income tax rate and other adjustments relating to permanent differences.
Domestic and foreign components of pre-tax income are as follows (in thousands):
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
--------------------------------- ----------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
----------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C>
United States $39,554 $(1,879) $37,877 $57,629
Foreign 18,907 2,520 12,069 (34,635)
------- ------- ------- -------
$58,461 $ 641 $49,946 $22,994
======= ======= ======= =======
</TABLE>
F-18
<PAGE> 50
Howmet Corporation
Notes to Financial Statements (continued)
9. INCOME TAXES (CONTINUED)
The components of the net deferred income tax asset (liability) are as follows
(in thousands):
<TABLE>
<CAPTION>
December 31,
1996 1995
--------------------------
<S> <C> <C>
Alternative minimum tax credits
and foreign net operating losses $ 31,848 $ 17,652
Other post retirement benefits 38,017 35,504
Vacation and deferred compensation accruals 9,926 8,054
Pension liability 6,711 3,470
Restructuring accrual 341 9,263
Other accruals 23,883 14,071
--------- ---------
Gross deferred tax asset 110,726 88,014
Valuation allowance (5,855) (8,105)
--------- ---------
Total deferred tax asset 104,871 79,909
--------- ---------
Inventory (27,334) (34,375)
Property, plant and equipment (50,107) (47,754)
Patents and technology (24,250) (26,959)
--------- ---------
Total deferred tax liability (101,691) (109,088)
--------- ---------
Net deferred tax asset(liability) $ 3,180 $ (29,179)
========= =========
</TABLE>
The change in net deferred tax asset/liability includes a $2.3 million deferred
tax benefit which is included in net 1996 income tax expense. Also, in 1996
net deferred tax liabilities were reduced by $30.1 million, and goodwill was
reduced by the same amount. The principal reason for this reduction was
recognition of $30.5 million of preacquisition U.S. net operating loss
carryforward benefits and alternative minimum tax credits, which were acquired
as part of the December 13, 1995 acquisition and that were not estimable at the
acquisition date. All the U.S. net operating loss carryforwards have been used
to offset U.S. federal taxes that would have otherwise been payable in 1996.
The alternative minimum tax credits have no expiration date.
During the period from December 14 to 31, 1995 and the period from January 1 to
December 13, 1995, the Company's and the Predecessor Company's deferred tax
valuation allowances increased by $.1 million and $4.1 million, respectively.
During 1996, the Company's deferred tax valuation allowance decreased by $2.2
million, principally due to a change in estimated foreign net operating losses.
At December 31, 1996 and 1995, the Company had available approximately
$15.8 million and $23.3 million, respectively, of foreign net operating loss
carryforwards which can only be used to offset foreign taxable income. A
majority of these carryforwards expire over the next four years. At December 31,
1996 and 1995, the Company carried a valuation allowance equal to the deferred
tax asset associated with these foreign net operating loss carryforwards.
Management believes it is more likely than not that future operations will
generate sufficient taxable income to realize the other deferred tax assets. A
continuation of the 1996 level of earnings will provide ample taxable income for
such realizations.
F-19
<PAGE> 51
Howmet Corporation
Notes to Financial Statements (continued)
10. PENSIONS
The Predecessor Company had trusteed noncontributory defined benefit retirement
plans covering substantially all of its employees in the U.S. and Canada. All
plans became plans of the Successor Company as part of the acquisition (Note 1)
except the Howmet Combined Pension Plan, which covered nonunion hourly and
salaried employees. In accordance with the Stock Purchase Agreement, an
affiliate of Pechiney International assumed sponsorship of the Howmet Combined
Pension Plan and transferred assets related to the active nonunion hourly
employees to the Company's new defined benefit plan, which has substantially the
same provisions and benefits as the Howmet Combined Pension Plan with respect to
those nonunion hourly employees. That Pechiney International affiliate has no
liability to pay benefits to the active hourly group. In addition, in accordance
with the Stock Purchase Agreement, the Howmet Combined Pension Plan benefits
related to salaried employees were frozen as of January 6, 1996. The liabilities
to the salaried group for service prior to the acquisition and related assets
continue to be administered by that Pechiney International affiliate. The
Successor Company has designed a replacement defined benefit retirement plan for
its salaried employees to cover periods after the former plan was frozen.
Effective January 1, 1997, the Company has amended the salaried plan to change
the formula from "final pay" to "cash balance." This change will result in a
1997 reduction in plan obligations of an estimated $35-40 million, and 1997
expense will be an estimated $2 million less than it would have been using the
prior plan formula. The tables presented below reflect the salaried plan before
the 1997 changes. The Successor Company intends to make and the Predecessor
Company made annual contributions to the retirement plans in amounts up to the
maximum allowable for tax deduction purposes.
The following items are the components of the net periodic pension cost for the
U.S. and Canadian plans (in thousands):
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
------------------------------------ --------------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
------------ ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
Service cost - benefits earned during
the period $ 8,589 $ 397 $ 7,779 $ 7,889
Interest cost on the projected
benefit obligation 9,682 474 8,003 13,786
Actual return on plan assets (10,876) (437) (12,780) 548
Net amortization of unrecognized net
assets and prior service cost
1,040 -- -- 177
Deferral of actual vs. expected
return on plan assets -- -- 4,703 (18,091)
-------- ----- -------- --------
Net periodic pension cost $ 8,435 $ 434 $ 7,705 $ 4,309
======== ===== ======== ========
</TABLE>
F-20
<PAGE> 52
Howmet Corporation
Notes to Financial Statements (continued)
10. PENSIONS (CONTINUED)
The following table sets forth the U.S. and Canadian plans' funded status and
amounts recognized in the balance sheets (in thousands):
<TABLE>
<CAPTION>
December 31, 1996
Actuarial benefit obligation
------------------------------
Exceed Less than December 31,
plan assets plan assets 1995
----------- ----------- -----------
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ (8,882) $(80,277) $ (80,216)
Nonvested benefit obligation (2,532) (3,375) (6,219)
--------- -------- ---------
Accumulated benefit obligation (11,414) (83,652) (86,435)
Additional benefits based on estimated future salary
increases (41,195) (1,120) (41,820)
--------- -------- ---------
Projected benefit obligation (52,609) (84,772) (128,255)
Fair value of plan assets 2,435 112,211 107,256
--------- -------- ---------
Projected benefit obligation (in excess of)
less than plan assets (50,174) 27,439 (20,999)
Unrecognized net loss or (gain) 2,002 (1,548) --
--------- -------- ---------
Accrued pension liability $ (48,172) $ 25,891 $ (20,999)
========= ======== =========
</TABLE>
The discount rate used to determine the actuarial present value of the projected
benefit obligation was 7.5% at December 31, 1996 and 1995. The expected rate of
return was 9% at December 31, 1996 and 9.5% at December 31, 1995 for U.S. plan
assets and 8% for Canadian plan assets at December 31, 1996 and 1995. The
expected increase in future salaries for those plans using future compensation
assumptions was 5.0% at December 31, 1996 and 1995 for the U.S. plans and 6% for
the Canadian plans at December 31, 1996 and 1995. The unrecognized net asset and
the unrecognized prior service cost are being amortized based on the projected
future service lives of employees, which range from 15-25 years. Plan assets are
primarily invested in equity securities, debt securities, and temporary cash
investments. Accrued pension cost is included in the amounts captioned "Accrued
liabilities" and "Other liabilities" in the consolidated balance sheets.
The net pension expense for the Successor Company's United Kingdom operations
was $.7 million in each of 1996, 1995 and 1994. The Company sponsors a 401(k)
plan for domestic salaried employees in which the Company matches the
employee's contribution for up to 5% of the employee's base salary and bonus.
The company contributed approximately $4 million to the plan in each of 1996,
1995 and 1994.
F-21
<PAGE> 53
Howmet Corporation
Notes to Financial Statements (continued)
11. POSTRETIREMENT BENEFITS
The Company provides postretirement health care and life insurance benefits to
its eligible active and retired employees, including certain union, nonunion and
salaried employees. Components of the net periodic postretirement benefit cost
were as follows (in thousands):
<TABLE>
<CAPTION>
Successor Company Predecessor Company
Consolidated Combined
--------------------------------------- --------------------------------------
Period from Period from
Year ended December 14, 1995 January 1, 1995 Year ended
December 31, to to December 31,
1996 December 31, 1995 December 13, 1995 1994
----------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
Service cost - benefits
attributable to service during
the period $2,939 $135 $2,454 $2,397
Interest cost on accumulated
postretirement benefit obligation
6,588 345 6,281 6,442
------ ---- ------ ------
Net periodic postretirement benefit
cost $9,527 $480 $8,735 $8,839
====== ==== ====== ======
</TABLE>
The amounts recognized as a liability in the Company's consolidated balance
sheets are as follows (in thousands):
<TABLE>
<CAPTION>
December 31
-------------------------
1996 1995
------- -------
<S> <C> <C>
Retirees $49,820 $52,006
Fully eligible active plan participants 14,062 11,912
Other plan participants 32,130 26,854
Unrealized net loss (1,443) --
------- -------
Total 94,569 90,772
Less current portion 6,000 6,351
------- -------
$88,569 $84,421
======= =======
</TABLE>
The accumulated postretirement benefit obligation was determined using weighted
average discount rates of 7.5% for 1996 and 1995. The health care cost trend
rate assumption for pre-age 65 benefits was 12% in 1995 and 11% in 1996 and was
assumed to decline 1% annually to 6% in the year 2001 and remain constant
thereafter. The health care cost trend rate for post-age 65 benefits was 10% in
1995 and 9% in 1996 and was assumed to decline gradually to 5% in the year 2001
and remain constant thereafter. A 1% increase in the health care cost trend rate
would have increased the accumulated postretirement benefit obligation by $6.1
million and $6 million at December 31, 1996 and 1995, respectively, and the net
periodic cost by $.7 million in both 1996 and 1995.
F-22
<PAGE> 54
Howmet Corporation
Notes to Financial Statements (continued)
12. GEOGRAPHIC INFORMATION
The Company operates predominantly in a single industry as a manufacturer of
investment cast components primarily for sale to the defense and commercial
aircraft and industrial gas turbine engine industries. The Company is a
multinational entity with operating subsidiaries in two geographic regions,
North America (including the United States and Canada) and Europe (including
France and the United Kingdom). Intercompany transfers between geographic areas
are not significant. In computing earnings from operations for subsidiaries
outside of the United States, no allocations of general corporate expenses have
been made.
<TABLE>
<CAPTION>
North America Europe Total
------------------------------------------------
<S> <C> <C> <C>
Successor Company Consolidated:
1996
Sales to unaffiliated customers $867,548 $239,264 $1,106,812
Earnings from operations 88,197 13,756 101,953
Identifiable assets 785,814 238,079 1,023,893
Period from December 14, 1995 to December 31, 1995
Sales to unaffiliated customers 34,894 16,472 51,366
Earnings from operations 2,118 2,431 4,549
Identifiable assets 858,704 240,799 1,099,503
Predecessor Company Combined:
Period from January 1, 1995 to December 13, 1995
Sales to unaffiliated customers 703,657 190,475 894,132
Earnings from operations 31,831 19,850 51,681
1994
Sales to unaffiliated customers 678,481 179,770 858,251
Earnings (loss) from operations 30,135 (12,254) 17,881
</TABLE>
Sales to unaffiliated customers include export sales of $330.1 million in 1996,
$19.3 million in the period from December 14 to 31, 1995, $278.1 million in the
period from January 1 to December 13, 1995, and $176.9 million in 1994. Export
sales of domestic operations, included in total export sales, were $235.0
million in 1996, $10.1 million in the period from December 14 to 31, 1995,
$160.4 million in the period from January 1 to December 13, 1995, and $126.2
million in 1994.
The Company's sales to its two largest customers were $206 million and $159.5
million in 1996, $10.5 million and $7.9 million in the period from December 14
to 31, 1995, $184 million and $138.1 million in the period from January 1 to
December 13, 1995 and $229.2 million and $123.7 million in 1994. Receivables
from these customers were $16.5 million and $12.7 million at December 31, 1996
and $17.1 million and $12.2 million at December 31, 1995.
Stockholders' equity reflects a $.9 million increase in cumulative translation
adjustment in 1996. $5.1 million of such amount is attributable to United
Kingdom operations, offset by a $4.2 million decrease attributable to French
operations.
F-23
<PAGE> 55
Howmet Corporation
Notes to Financial Statements (continued)
13. TRANSACTIONS WITH AFFILIATES
The Predecessor Company had financing and other transactions with Pechiney.
Interest income earned from advances to Pechiney was based on short-term
borrowing rates obtained by Pechiney. The average advance balance was $148.7
million for the period from January 1 to December 13, 1995 and $217.9 million in
1994.
The Successor Company has management agreements with an affiliate of The Carlyle
Group and with Thiokol Holding Company for certain management and financial
advisory services. Each agreement provides for the payment of an annual
management fee of $1 million.
In December 1995, certain executives of the Predecessor Company invested $2.5
million in The Carlyle Group's partnership controlling Blade. The investments
were funded with all or a portion of a bonus earned in connection with the
acquisition (Note 1). The partnership interests are subordinated to the claims
of creditors of the Successor Company. Partnership interests are expected to
receive a cash distribution upon a sale of The Carlyle Group's interest in
Blade, and the executives will receive shares of such distribution, pro rata to
their capital contributions in the partnership.
In early 1996, Blade adopted a Stock Appreciation Rights ("SARs") plan. Under
the plan, SARs representing up to 5% of Blade's equity value may be issued to
executive officers of the Successor Company. The SARs are similar to phantom
stock options and are valued based on appreciation of the value of Blade's
common stock, as defined, from the date of adoption of the plan to the earlier
of five years or a sale of The Carlyle Group's controlling interest in Blade.
The SARs vest over a five-year period based upon the passage of time, the
operating performance of the Successor Company and the tenure of the executive
officers, with acceleration in the event of sale of The Carlyle Group's
controlling interest in Blade. During 1996, 102,550 SARs were granted with a
base price of $100 per appreciation right. Compensation cost of $6.6 million was
charged against income for this plan in 1996 and is included in the amount
captioned "Other Liabilities" in the December 31, 1996 consolidated balance
sheet.
During 1996, 230,000 contingent stock options for Thiokol stock were granted to
certain executives of the Successor Company. The options are contingent on
Thiokol's purchase of The Carlyle Group's total interest in Blade. 50% of such
options vest and become exercisable on the date of such purchase; 25% vest and
become exercisable on both of the subsequent two anniversaries following the
first vesting date. If Thiokol does not obtain 100% of the equity ownership of
the Company prior to December 13, 2001, the options become void. The options
expire not later than 10 years after the date of grant. The exercise price of
the options is the price of Thiokol stock on the first trading date after the
dates of grant (range of $35-$41).
F-24
<PAGE> 56
Howmet Corporation
Notes to Financial Statements (continued)
14. FINANCIAL INSTRUMENTS
Financial instruments which potentially subject the Company to credit risk
consist principally of trade receivables. The Company does not require
collateral and maintains reserves for potential credit losses for trade accounts
receivable. The Company's accounts receivable are principally due from companies
in the aerospace and industrial gas turbine engine industries. The fair values
of the Company's trade receivables and payables approximate their carrying
amounts. For information pertaining to the fair values of the Company's interest
rate swap agreements and other debt instruments, refer to Note 7.
The Company enters into forward exchange contracts as a hedge against currency
fluctuations of certain foreign currency transactions. At December 31, 1996, the
following were outstanding: contracts to purchase 8.6 million Canadian dollars
with maturity dates from January to November 1997 for $6.5 million; contracts to
sell 6.1 million pound sterling with maturity dates from January to June 1997
for $10 million. At December 31, 1996, the fair value of the Canadian contracts
was $6.3 million and the pound sterling contracts was $9.7 million. The fair
value of foreign currency contracts was estimated by obtaining quotes from
brokers. The market value gains or losses arising from foreign exchange
contracts offset foreign exchange gains or losses on the underlying hedged
assets. The Company's exposure to currency risk is limited to currency rate
movement and is considered to be negligible.
During 1994, the Predecessor Company entered into an option contract to purchase
up to $1.3 million Canadian dollars as a hedge against currency fluctuations of
certain foreign currency transactions. These options were exercisable from June
1995 through December 1996. The market value gains or losses arising from
currency exchange options offset foreign exchange gains or losses on the
underlying hedged assets. The Company's exposure to currency risk in these
options was limited to currency rate movements and was considered to be
negligible.
The counterparties to the foreign exchange transactions are major financial
institutions. The Company does not anticipate nonperformance by the
counterparties.
15. CONTINGENCIES
The Company has received recent test results indicating levels of
polychlorinated bi-phenyls ("PCBs") at its Dover, New Jersey facility which
will require remediation. These levels have been reported to the New Jersey
Department of Environmental Protection ("NJDEP"), and the Company is preparing
a work plan to define the risk and to test possible clean-up options. The
statement of work must be approved by the NJDEP pursuant to an Administrative
Consent Order entered into between the Company and NJDEP on May 20, 1991
regarding clean-up of the site. Various remedies are possible and could involve
expenditures ranging from $2 million to $22 million or more. The Company has
recorded a $2 million long-term liability as of December 31, 1996 for this
matter. Given the uncertainties, it is possible that the estimated range of
this cost and the amount accrued will change in the near term. The
indemnification discussed below applies to the costs associated with this
matter.
In addition to the above, liabilities arising for clean-up costs associated with
hazardous types of materials in several waste disposal facilities exist. In
particular, the Company has been or may be named a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
or similar state laws at twelve on-site and off-site locations. At December 31,
1996, $4.4 million of accrued environmental liabilities are included in the
consolidated balance sheet for such matters.
F-25
<PAGE> 57
Howmet Corporation
Notes to Financial Statements (continued)
15. CONTINGENCIES (CONTINUED)
In connection with the December 13, 1995 acquisition, Pechiney International
and Pechiney, S.A. indemnified the Company for environmental liabilities
stemming from events occurring or conditions existing on or prior to the
December 13, 1995 acquisition date, to the extent that such liabilities exceed
a cumulative $6 million. This indemnification applies to all of the
aforementioned environmental matters. Pursuant to this indemnification, at
December 31, 1996 the Company has recorded a receivable from Pechiney
International and Pechiney, S.A. of $2 million. Changes in any of the
aforementioned accrued liabilities will result in an equal change in the amount
receivable from Pechiney International and Pechiney, S.A.
Estimated environmental costs are not expected to materially impact the
financial position or the results of the Successor Company's operations in
future periods. However, environmental clean-up periods are protracted in length
and environmental costs in future periods are subject to changes in
environmental remediation regulations. Any losses which are not covered by the
Pechiney International and Pechiney, S.A. indemnifications and which are in
excess of amounts currently accrued will be charged to operations in the
periods in which they occur.
The Company, in its ordinary course of business, is involved in other
litigation, administrative proceedings and investigations of various types in
several jurisdictions. The Company believes these are routine in nature and
incidental to its operations, and that the outcome of any proceedings to which
the Company currently is a party will not have a material adverse effect upon
its operations or financial condition.
At December 31, 1996, the Company guaranteed certain indebtedness aggregating
$11.5 million of its 50% owned entities.
16. RESTRUCTURING
1992 RESTRUCTURING PROVISION
Reengineering programs: In 1992, the Company recorded a $39.8 million
restructuring charge associated with reengineering certain of the Predecessor
Company's business processes and related activities. The costs include severance
and relocation for approximately 1,835 employees ($13.4 million), consulting
fees ($3.1 million) and expenses related to the evaluation, design and
implementation of a company wide synchronous manufacturing environment with
cellular work stations, uniform work instructions and business center management
and reporting ($23.3 million).
Capacity rationalization: Also, in 1992, the Company recorded a $19.1 million
restructuring charge for streamlining operations, including expenses related to
severance and relocation for approximately 562 employees ($8.8 million), asset
writedowns ($1.3 million) and the transfer and reinstallation of equipment ($9
million).
Management periodically reevaluated the adequacy of the remaining restructuring
accrual. Based upon these reevaluations, in 1994, the Predecessor Company
reversed the portion of the accrual related to a U.S. plant shutdown ($1.8
million) and a French social plan ($1.4 million) due to improved business
conditions; in addition, other minor components of the 1992 restructuring
accrual were adjusted to reflect revised estimates. In 1996 the accrual was
re-evaluated and reduced by $2.8 million. Goodwill was reduced by the same
amount.
F-26
<PAGE> 58
Howmet Corporation
Notes to Financial Statements (continued)
16. RESTRUCTURING (CONTINUED)
The following tables set forth the 1994, 1995 and 1996 activity for the
restructuring provision established in 1992 (in thousands):
<TABLE>
<CAPTION>
Reengineering Capacity
Programs Rationalization Total
-----------------------------------------------
<S> <C> <C> <C>
December 31, 1993 balance $ 18,770 $10,673 $ 29,443
Cash costs (11,657) (3,312) (14,969)
Non-cash costs (165) (165)
Changes in estimate 1,434 (3,320) (1,886)
-----------------------------------------------
December 31, 1994 balance 8,547 3,876 12,423
Cash costs (6,368) (2,815) (9,183)
Non-cash costs (92) (92)
-----------------------------------------------
December 31, 1995 balance 2,179 969 3,148
Changes in estimate (2,179) (619) (2,798)
-----------------------------------------------
December 31, 1996 balance $ 0 $ 350 $ 350
</TABLE>
Costs for the December 14 to 31, 1995 period were not significant and are
included in the above 1995 activity. Restructuring accruals are included in the
amounts captioned "Accrued liabilities" in the consolidated balance sheet.
1994 RESTRUCTURING PROVISION
Morristown Wax Closure: In 1994, the Predecessor Company recorded a $1.5 million
restructuring charge in connection with its plan to close its Morristown,
Tennessee wax facility. The closure was effected in order to reduce excess
capacity and enhance coordination and lead time at Howmet's casting plants. The
restructuring provision was primarily comprised of exit costs ($1 million),
termination benefits ($.2 million) and other items ($.3 million). In 1996 the
accrual was re-evaluated and reduced by $.1 million. Goodwill was reduced by the
same amount.
Dover Airmelt Closure: Also in 1994, the Predecessor Company recorded a $1
million restructuring provision in connection with its plan to exit its airmelt
business at its Dover Alloy plant in New Jersey. The decision to exit the
airmelt business was primarily due to the unprofitability of the airmelt product
line which was not considered an essential part of the Company's alloy
operations. The restructuring charge was entirely comprised of exit costs. This
decision was reversed in 1995 because a buyer could not be found. The Company
has since increased airmelt business and generated improved returns.
Howmet S.A. Administrative Office Closure: Also in 1994, the Predecessor Company
recorded a $2 million restructuring charge related to the closure of its
administrative office in Asnieres, France and the opening of an administrative
office in Dives, France. The restructuring charge was comprised of termination
benefits ($.6 million), exit costs ($1.2 million) and other items ($.2 million).
A portion of the accrual deemed to be excess was reversed and credited to income
in 1995. In 1996 the accrual was re-evaluated and reduced by $.3 million.
Goodwill was reduced by the same amount.
F-27
<PAGE> 59
Howmet Corporation
Notes to Financial Statements (continued)
16. RESTRUCTURING (CONTINUED)
The following is an analysis related to the restructuring reserve activities for
the 1994 restructuring programs (in thousands):
<TABLE>
<CAPTION>
Dover Howmet
Morristown Airmelt S.A. Total
---------------------------------------------------------
<S> <C> <C> <C> <C>
1994 restructuring provision $ 1,450 $ 1,000 $ 1,982 $4,432
Cash costs (176) (176)
Non-cash costs (239) (239)
---------------------------------------------------------
December 31, 1994 balance 1,035 1,000 1,982 4,017
Cash costs (706) (1,279) (1,985)
Non-cash costs (132) 262 130
Changes in estimate (1,000) (624) (1,624)
---------------------------------------------------------
December 31, 1995 balance 197 0 341 538
Cash costs (93) (93)
Changes in estimate (104) (341) (445)
---------------------------------------------------------
December 31, 1996 balance $ 0 $ 0 $ 0 $ 0
</TABLE>
Costs for the December 14 to 31, 1995 period were not significant and are
included in the above 1995 activity. Restructuring accruals are included in the
amounts captioned "Accrued liabilities" in the consolidated balance sheet.
1995/1996 RESTRUCTURING PROVISION
In connection with the December 13, 1995 acquisition, management determined that
certain manufacturing capabilities would be eliminated and the related
facilities would be utilized for purposes other than for manufacturing.
Accordingly, a reserve of $21 million (including $5 million in "Accrued
liabilities"), principally for severance costs, was recorded. The extent of the
restructuring was less than initially anticipated; consequently, in 1996 $19.1
million of the accrual was reversed and goodwill was reduced by an equal amount.
1996 expenditures for this restructuring effort were $1 million, principally for
termination costs for 45 permanent and temporary employees. The $.9 million
December 31, 1996 accrual balance is included in amounts captioned "Accrued
liabilities" in the consolidated balance sheet. This amount is expected to be
spent in 1997, principally for termination costs related to 15 employees.
F-28
<PAGE> 60
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
HOWMET CORPORATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
BALANCE AT CHARGED TO COSTS CHARGED TO DEDUCTIONS BALANCE AT
DESCRIPTION BEGINNING OF PERIOD AND EXPENSES OTHER ACCOUNTS FROM RESERVES END OF PERIOD
SUCCESSOR COMPANY CONSOLIDATED:
FOR THE YEAR ENDED DECEMBER 31, 1996
Reserves:
<S> <C> <C> <C> <C> <C>
Accounts Receivable $ 8,258 4,386(a) 15 (7,035) $ 5,624
Inventories $24,351 13,631 (2,233) (12,889) $22,860
Deferred income tax
valuation allowance $ 8,105 (2,250) $ 5,855
PERIOD DECEMBER 14, 1995 TO DECEMBER 31, 1995
Reserves:
<S> <C> <C> <C> <C> <C>
Accounts Receivable $ 8,375 - (a) (96) (21) $ 8,258
Inventories $20,872 4,850 1,792 (3,163) $24,351
Deferred income tax
valuation allowance $ 7,995 110 - - $ 8,105
PREDECESSOR COMPANY COMBINED:
PERIOD JANUARY 1, 1995 TO DECEMBER 13, 1995
Reserves:
<S> <C> <C> <C> <C> <C>
Accounts Receivable $ 6,107 1,288(a) 1,931 (951) $ 8,375
Inventories $13,501 14,922 (1,342) (6,209) $20,872
Deferred income tax
valuation allowance $ 2,957 5,038 - - $ 7,995
FOR THE YEAR ENDED DECEMBER 31, 1994
Reserves:
<S> <C> <C> <C> <C> <C>
Accounts Receivable $ 6,737 300(a) 1,641 (2,571) $ 6,107
Inventories $16,294 13,744 1,520 (18,057) $13,501
Deferred income tax
valuation allowance $ 1,415 2,241 - (699) $ 2,957
</TABLE>
(a) Includes bad debt expense of $1.0 million in 1996, $- for the period
from December 14 to 31, 1995, $.5 million for the period from
January 1 to December 13, 1995, and a $.6 million credit in 1994.
F-29
<PAGE> 61
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
- ----------- -------------
4.6 Amended and Restated Credit Agreement dated as of December 5, 1996
among Blade Acquisition Corp., Howmet Holdings Corporation., Howmet
Corporation, Bankers Trust Company, various banks, Citicorp USA,
Inc., and The First National Bank of Chicago as Managing Agents,
Bankers Trust Company as Syndication Agent, Citicorp USA, Inc. as
Documentation Agent and The First National Bank of Chicago, as
Administrative Agent, together with certain collateral documents
attached thereto as exhibits, including the Subsidiary Guaranty,
Pledge Agreement and Security Agreement among Blade Acquisition
Corp., Howmet Holdings Corporation, Howmet Corporation, certain
subsidiaries and affiliates of Howmet Corporation and the First
National Bank of Chicago
4.7 Blade Receivables Master Trust Amended and Restated Pooling and
Servicing Agreement dated April 18, 1996 among Blade Receivables
Corporation as Transferor, Howmet Corporation as Servicer and
Manufacturers and Traders Trust Company as Trustee together with
certain collateral documents attached thereto as exhibits, including
the Amended and Restated Receivables Purchase Agreement dated as of
April 18, 1996 between Howmet Corporation and certain subsidiaries of
Howmet Corporation, as Settlors, and Blade Receivables Corporation as
Buyer.
21.1 List of Significant Subsidiaries
27.1 Financial Data Schedule
99.1 Cautionary Statement for Purposes of the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995.
<PAGE> 1
CREDIT AGREEMENT
among
BLADE ACQUISITION CORP.,
HOWMET HOLDINGS CORPORATION
HOWMET CORPORATION
VARIOUS BANKS,
BANKERS TRUST COMPANY,
CITICORP USA, INC.
and
THE FIRST NATIONAL BANK OF CHICAGO,
as MANAGING AGENTS
BANKERS TRUST COMPANY,
as SYNDICATION AGENT,
CITICORP USA, INC.,
as DOCUMENTATION AGENT
and
THE FIRST NATIONAL BANK OF CHICAGO,
as ADMINISTRATIVE AGENT
Dated as of December 13, 1995
and
Amended and Restated as of December 5, 1996
<PAGE> 2
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit ................................. 1
1.01 The Commitments ............................................ 1
1.02 Minimum Amount of Each Borrowing ........................... 4
1.03 Notice of Borrowing ........................................ 4
1.04 Disbursement of Funds ...................................... 5
1.05 Notes ...................................................... 6
1.06 Conversions ................................................ 7
1.07 Pro Rata Borrowings ........................................ 8
1.08 Interest ................................................... 8
1.09 Interest Periods ........................................... 9
1.10 Increased Costs, Illegality, etc. .......................... 11
1.11 Compensation ............................................... 13
1.12 Change of Lending Office ................................... 13
1.13 Replacement of Banks ....................................... 14
SECTION 2. Letters of Credit .......................................... 15
2.01 Letters of Credit .......................................... 15
2.02 Letter of Credit Requests .................................. 17
2.03 Letter of Credit Participations ............................ 17
2.04 Agreement to Repay Letter of Credit Drawings ............... 19
2.05 Increased Costs ............................................ 20
SECTION 3. Commitment Commission; Fees; Reductions of Commitment ...... 21
3.01 Fees ....................................................... 21
3.02 Voluntary Termination of Unutilized Commitments ............ 22
3.03 Mandatory Reduction of Commitments ......................... 23
SECTION 4. Prepayments; Payments; Taxes ............................... 24
4.01 Voluntary Prepayments ...................................... 24
4.02 Mandatory Repayments and Commitment Reductions ............. 25
4.03 Method and Place of Payment ................................ 30
4.04 Net Payments; Taxes ........................................ 30
SECTION 5. Conditions Precedent to Loans on the Restatement Effective
Date ....................................................... 32
5.01 Execution of Agreement; Notes .............................. 33
(i)
<PAGE> 3
Page
----
5.02 Fees, etc. ................................................. 33
5.03 Opinions of Counsel ........................................ 33
5.04 Corporate Documents; Proceedings; etc ...................... 33
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining Agreements;
Debt Agreements; Acquisition Documents; Tax Sharing
Agreements ................................................ 34
5.06 Subsidiaries Guaranty ...................................... 34
5.07 Pledge Agreement ........................................... 34
5.08 Security Agreement ......................................... 34
5.09 Mortgage Amendments; etc. .................................. 34
5.10 Consent Letter ............................................. 35
5.11 Adverse Change, etc. ....................................... 35
5.12 Litigation ................................................. 36
5.13 Solvency Certificate; Environmental Analyses; Insurance .... 36
5.14 Financial Statements; Projections .......................... 36
5.15 Senior Subordinated Indebtedness ........................... 37
5.16 Refinancing; Original Credit Agreement; etc. ............... 37
SECTION 6. Conditions Precedent to All Credit Events on and After the
Restatement Effective Date ................................. 38
6.01 No Default; Representations and Warranties ................. 38
6.02 Notice of Borrowing; Letter of Credit Request .............. 38
SECTION 7. Representations, Warranties and Agreements ................. 39
7.01 Corporate Status ........................................... 39
7.02 Corporate Power and Authority .............................. 39
7.03 No Violation ............................................... 39
7.04 Governmental Approvals ..................................... 40
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. ............................ 40
7.06 Litigation ................................................. 41
7.07 True and Complete Disclosure ............................... 42
7.08 Use of Proceeds; Margin Regulations ........................ 42
7.09 Tax Returns and Payments ................................... 42
7.10 Compliance with ERISA ...................................... 43
7.11 The Security Documents ..................................... 44
7.12 Representations and Warranties in Documents ................ 45
7.13 Properties ................................................. 45
(ii)
<PAGE> 4
Page
----
7.14 Capitalization ............................................. 45
7.15 Subsidiaries ............................................... 46
7.16 Compliance with Statutes, etc. ............................. 46
7.17 Investment Company Act ..................................... 47
7.18 Public Utility Holding Company Act ......................... 47
7.19 Environmental Matters ...................................... 47
7.20 Labor Relations ............................................ 48
7.21 Patents, Licenses, Franchises and Formulas ................. 48
7.22 Indebtedness ............................................... 49
7.23 Special Purpose Corporations ............................... 49
SECTION 8. Affirmative Covenants ...................................... 49
8.01 Information Covenants ...................................... 49
8.02 Books, Records and Inspections ............................. 53
8.03 Maintenance of Property; Insurance ......................... 54
8.04 Corporate Franchises ....................................... 54
8.05 Compliance with Statutes, etc. ............................. 55
8.06 Compliance with Environmental Laws ......................... 55
8.07 ERISA ...................................................... 56
8.08 End of Fiscal Years; Fiscal Quarters ....................... 57
8.09 Performance of Obligations ................................. 57
8.10 Payment of Taxes ........................................... 57
8.11 Ownership of Subsidiaries .................................. 58
8.12 Additional Security; Further Assurances; Surveys ........... 58
8.13 Permitted Acquisitions and Certain Additional Capital
Expenditures .............................................. 60
8.14 Interest Payments on Parent PIK Subordinated Notes ............... 61
8.15 Maintenance of Corporate Separateness ...................... 61
8.16 Foreign Subsidiaries Security .............................. 62
8.17 Drawings on, and Replacements of, Acquisition Letters of
Credit .................................................... 62
SECTION 9. Negative Covenants ......................................... 63
9.01 Liens ...................................................... 63
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. .... 67
9.03 Restricted Payments ........................................ 70
9.04 Indebtedness ............................................... 72
9.05 Advances, Investments and Loans ............................ 75
(iii)
<PAGE> 5
Page
----
9.06 Transactions with Affiliates ............................... 78
9.07 Capital Expenditures ....................................... 79
9.08 Consolidated Interest Coverage Ratio ....................... 79
9.09 Consolidated Fixed Charge Coverage Ratio ................... 80
9.10 Maximum Leverage Ratio ..................................... 80
9.11 Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other
Agreements; etc. .......................................... 80
9.12 Limitation on Certain Restrictions on Subsidiaries ......... 81
9.13 Limitation on Issuance of Capital Stock .................... 82
9.14 Limitation on Creation of Subsidiaries ..................... 82
9.15 Business ................................................... 83
SECTION 10. Events of Default .......................................... 83
10.01 Payments ................................................... 83
10.02 Representations, etc. ...................................... 83
10.03 Covenants .................................................. 83
10.04 Default Under Other Agreements ............................. 84
10.05 Bankruptcy, etc. ........................................... 84
10.06 ERISA ...................................................... 85
10.07 Security Documents ......................................... 85
10.08 Guaranty ................................................... 86
10.09 Judgments .................................................. 86
10.10 Change of Control .......................................... 86
10.11 Receivables Facility ....................................... 86
10.12 Installment Notes; Acquisition Letters of Credit ........... 86
SECTION 11. Definitions and Accounting Terms ........................... 87
11.01 Defined Terms .............................................. 87
SECTION 12. The Agents ................................................. 125
12.01 Appointment ................................................ 125
12.02 Nature of Duties ........................................... 125
12.03 Lack of Reliance on the Agents ............................. 125
12.04 Certain Rights of the Agents ............................... 126
12.05 Reliance ................................................... 126
12.06 Indemnification ............................................ 126
12.07 Each Agent in its Individual Capacity ...................... 127
12.08 Holders .................................................... 127
(iv)
<PAGE> 6
Page
----
12.09 Resignation by the Agents .................................. 127
12.10 Removal of the Administrative Agent ........................ 128
SECTION 13. Miscellaneous .............................................. 128
13.01 Payment of Expenses, etc. .................................. 128
13.02 Right of Setoff ............................................ 129
13.03 Notices .................................................... 130
13.04 Benefit of Agreement ....................................... 130
13.05 No Waiver; Remedies Cumulative ............................. 132
13.06 Payments Pro Rata .......................................... 133
13.07 Calculations; Computations ................................. 133
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL ................................ 134
13.09 Counterparts ............................................... 135
13.10 Effectiveness .............................................. 136
13.11 Headings Descriptive ....................................... 136
13.12 Amendment or Waiver; etc. .................................. 136
13.13 Survival ................................................... 138
13.14 Domicile of Loans .......................................... 138
13.15 Limitation on Additional Amounts, etc. ..................... 138
13.16 Confidentiality ............................................ 139
13.17 Register ................................................... 139
13.18 Intercreditor Agreement .................................... 140
13.19 Obligation to Make Payments in Dollars ..................... 140
13.20 Addition of New Banks; Termination of Commitments of Non-
Continuing Banks; etc. ..................................... 140
13.21 Post Closing Actions ....................................... 142
14.01 The Parent Guaranty ........................................ 143
14.02 Bankruptcy ................................................. 144
14.03 Nature of Liability ........................................ 144
14.04 Independent Obligation ..................................... 144
14.05 Authorization .............................................. 144
14.06 Reliance ................................................... 146
14.07 Subordination .............................................. 146
14.08 Waiver ..................................................... 146
14.09 Maximum Liability .......................................... 147
(v)
<PAGE> 7
Page
----
SCHEDULE I Commitments (Sections 3.02, 4.01, 11.01 ["Bank"; "New Bank";
"Revolving Loan Commitment"; "Term Loan Commitment"]; 13.04(b),
13.20(c))
SCHEDULE II Bank Addresses (Section 13.03)
SCHEDULE III Real Property (Sections 7.11(c), 7.13 ["Original Mortgaged
Property"])
SCHEDULE IV Liabilities (Section 7.05(c))
SCHEDULE V Projections (Sections 7.05(d), 7.22)
SCHEDULE VI Tax Matters (Section 7.09)
SCHEDULE VII ERISA (Section 7.10)
SCHEDULE VIII Subsidiaries (Sections 7.15, 11.01; ["Subsidiary Guarantor";
"Subsidiary Pledgor"])
SCHEDULE IX Holdings' Subsidiary Ownership Organizational Chart (Section
7.15)
SCHEDULE X Labor Relations (Section 7.20)
SCHEDULE XI Existing Indebtedness (Sections 7.22, 9.04(iii), 9.05(vii))
SCHEDULE XII Insurance (Section 8.03(a))
SCHEDULE XIII Existing Liens (Section 9.01(iii))
SCHEDULE XIV Management Fees (Section 9.06)
SCHEDULE XV Original Letters of Credit (["Original Letters of Credit"])
EXHIBIT A Notice of Borrowing (Section 1.03(a))
EXHIBIT B-1 Term Note(Section 1.05(a))
EXHIBIT B-2 Revolving Note (Section 1.05(a))
EXHIBIT B-3 Swingline Note (Section 1.05(a))
EXHIBIT C Letter of Credit Request (Section 2.02(a))
EXHIBIT D Section 4.04(b)(ii) Certificate (Section 4.04(b)(ii))
EXHIBIT E-1 Opinion of Special Counsel to the Borrower (Section 5.03)
EXHIBIT E-2 Opinion of General Counsel to the Borrower (Section 5.03)
EXHIBIT F Amended and Restated Subsidiaries Guaranty (Section 5.06)
EXHIBIT G Amended and Restated Pledge Agreement (Section 5.07)
EXHIBIT H Amended and Restated Security Agreement (Section 5.08)
EXHIBIT I Consent Letter (Section 5.10)
EXHIBIT J Solvency Certificate (Section 5.13)
EXHIBIT K Assignment and Assumption Agreement (Sections 1.13, 11.01
["Assignment and Assumption Agreement"])
EXHIBIT L Amended and Restated Intercreditor Agreement (Section 13.18)
(vi)
<PAGE> 8
CREDIT AGREEMENT, dated as of December 13, 1995 and amended and restated
as of December 5, 1996, among BLADE ACQUISITION CORP., a Delaware corporation
("Holdings"), HOWMET HOLDINGS CORPORATION (f/k/a PECHINEY CORPORATION), a
Delaware corporation ("Parent"), HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), the Banks party hereto from time to time, BANKERS TRUST COMPANY,
CITICORP USA, INC. and THE FIRST NATIONAL BANK OF CHICAGO, as Managing Agents
(in such capacity, collectively, the "Managing Agents," and each a "Managing
Agent"), BANKERS TRUST COMPANY, as Syndication Agent (in such capacity, the
"Syndication Agent"), CITICORP USA, INC., as Documentation Agent (in such
capacity, the "Documentation Agent") and THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent (in such capacity, the "Administrative Agent") (all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
WITNESSETH:
WHEREAS, Holdings, Parent, the Borrower, the Original Banks, Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent are parties to a Credit Agreement, dated as of December 13, 1995 (as the
same has been amended, modified or supplemented to, but not including, the
Restatement Effective Date, the "Original Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Original Credit
Agreement in the form of this agreement as herein provided;
NOW, THEREFORE, the parties hereto agree that the Original Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions set
forth herein, each Bank with a Term Loan Commitment severally agrees (A) in the
case of each Continuing Bank, to convert into Term Loans (as hereinafter
defined), on the Restatement Effective Date, Original Tranche A Term Loans made
by such Continuing Bank pursuant to the Original Credit Agreement and
outstanding on the Restatement
<PAGE> 9
Effective Date in an aggregate principal amount equal to the lesser of (x) the
aggregate principal amount of such Original Tranche A Term Loans made by such
Continuing Bank and so outstanding or (y) such Continuing Bank's Term Loan
Commitment as in effect on the Restatement Effective Date (before giving effect
to any reductions thereto on such date pursuant to Section 3.03(b)(i) but after
giving effect to any reductions thereto on or prior to such date pursuant to
Section 3.03(b)(ii)), and/or (B) to make, on the Restatement Effective Date, a
term loan (each, a "Term Loan" and, collectively, the "Term Loans") to the
Borrower, which Term Loans (i) shall, at the option of the Borrower, be Base
Rate Loans or Eurodollar Loans, provided that, except as otherwise specifically
provided in Section 1.10(b), all Term Loans comprising the same Borrowing shall
at all times be of the same Type and (ii) shall be made by each Bank in that
initial aggregate principal amount (which, in the case of each Continuing Bank,
shall include the principal amount of Term Loans converted pursuant to clause
(A) above) as is equal to the Term Loan Commitment of such Bank on such date
(before giving effect to any reductions thereto on such date pursuant to Section
3.03(b)(i) but after giving effect to any reductions thereto on or prior to such
date pursuant to Section 3.03(b)(ii)). Once repaid, Term Loans incurred
hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Bank with a Revolving Loan Commitment severally agrees, at any time and from
time to time on and after the Restatement Effective Date and prior to the
Maturity Date, to make a revolving loan or revolving loans (each, a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower, which Revolving
Loans (i) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar
Loans, provided that except as otherwise specifically provided in Section
1.10(b), all Revolving Loans comprising the same Borrowing shall at all times be
of the same Type, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed for any Bank at any time outstanding
that aggregate principal amount which, when added to the product of (x) such
Bank's Adjusted Percentage and (y) the sum of (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Bank at such time and (iv) shall not exceed for all Banks at
any time outstanding that aggregate principal amount which, when added to (x)
the amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (y) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline Loans
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) then outstanding, equals the
Total Revolving Loan Commitment at such time.
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(c) Subject to and upon the terms and conditions herein set forth, the
Swingline Bank in its individual capacity agrees to make at any time and from
time to time on and after the Restatement Effective Date and prior to the
Swingline Expiry Date, a revolving loan or revolving loans (each, a "Swingline
Loan" and, collectively, the "Swingline Loans") to the Borrower, which Swingline
Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks
then outstanding and the Letter of Credit Outstandings at such time, an amount
equal to the Adjusted Total Revolving Loan Commitment at such time (after giving
effect to any reductions to the Adjusted Total Revolving Loan Commitment on such
date), (iv) shall not exceed at any time outstanding the Maximum Swingline
Amount and (v) shall not be extended if the Swingline Bank receives a written
notice from any Agent or the Required Banks that has not been rescinded that
there is a Default or an Event of Default in existence hereunder.
(d) On any Business Day, the Swingline Bank may, in its sole discretion,
give notice to the other Banks that its outstanding Swingline Loans shall be
funded with a Borrowing of Revolving Loans (provided that such notice shall be
deemed to have been automatically given upon the occurrence of a Default or an
Event of Default under Section 10.05 or upon the exercise of any of the remedies
provided in the last paragraph of Section 10), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Banks with a Revolving Loan Commitment (without giving effect to any reductions
thereto pursuant to the last paragraph of Section 10) pro rata based on each
Bank's Adjusted Percentage (determined before giving effect to any termination
of the Revolving Loan Commitments pursuant to the last paragraph of Section 10)
and the proceeds thereof shall be applied directly to the Swingline Bank to
repay the Swingline Bank for such outstanding Swingline Loans. Each such Bank
hereby irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by the Swingline
Bank notwithstanding (i) the amount of the Mandatory Borrowing may not comply
with the minimum amount for Borrowings otherwise required hereunder, (ii)
whether any conditions specified in Section 6 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) the date of such Mandatory
Borrowing and (v) the amount of the Total Revolving Loan Commitment or the
Adjusted Total Revolving Loan Commitment at such time. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then each
such Bank hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to
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<PAGE> 11
such purchase) from the Swingline Bank such participations in the outstanding
Swingline Loans as shall be necessary to cause such Banks to share in such
Swingline Loans ratably based upon their respective Adjusted Percentages
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 10), provided that (x) all
interest payable on the Swingline Loans shall be for the account of the
Swingline Bank until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Bank shall be required to pay the Swingline Bank
interest on the principal amount of participation purchased for each day from
and including the day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
overnight Federal Funds Rate for the first three days and at the rate otherwise
applicable to Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Term Loans shall not be less than $5,000,000. The aggregate
principal amount of each Borrowing of Revolving Loans shall be not less than (x)
in the case of a Borrowing of Eurodollar Loans, $2,000,000 and (y) in the case
of a Borrowing of Base Rate Loans, $1,000,000, provided that Mandatory
Borrowings shall be made in the amounts required by Section 1.01(d). The
aggregate principal amount of each Borrowing of Swingline Loans shall not be
less than $500,000 and, if greater, shall be in an integral multiple of
$100,000. More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than fifteen Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrow- ings), it shall give the Administrative Agent at its Notice Office at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Base Rate Loan and at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Eurodollar Loan to be made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given before 11:00 A.M.
(Chicago time) in the case of a Borrowing of Eurodollar Loans and 12:00 Noon
(Chicago time) in the case of a Borrowing of Base Rate Loans on such day. Each
such written notice or written confirmation of telephonic notice (each, a
"Notice of Borrowing"), except as otherwise expressly provided in Section 1.10,
shall be irrevocable and shall be given by the Borrower in the form of Exhibit
A, appropriately completed to specify the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, the date of such Borrowing (which
shall be a Business Day), whether the Loans being made pursuant to such
Borrowing shall constitute Term Loans or Revolving Loans and whether the Loans
being made pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
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Period to be applicable thereto. The Administrative Agent shall promptly give
each Bank which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing, notice of such proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to make a Borrowing of Swingline
Loans hereunder, it shall give the Swingline Bank not later than 12:00 Noon
(Chicago time) on the date that a Swingline Loan is to be made, written notice
or telephonic notice promptly confirmed in writing of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and specify in each case
(A) the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice of any Borrowing of Loans, the Administrative
Agent or the Swingline Bank, as the case may be, may act without liability upon
the basis of telephonic notice of such Borrowing, believed by the Administrative
Agent or the Swingline Bank, as the case may be, in good faith to be from the
chairman of the board, the president, the treasurer, any assistant treasurer or
any controller of the Borrower (or any other officer of the Borrower designated
in writing to the Administrative Agent and the Swingline Bank by the Chairman of
the Board, the President or the Treasurer as being authorized to give such
notices under this Agreement) prior to receipt of written confirmation. In each
such case, the Borrower hereby waives the right to dispute the Administrative
Agent's and the Swingline Bank's record of the terms of such telephonic notice
of such Borrowing of Loans.
1.04 Disbursement of Funds. Except as otherwise specifically provided in
the immediately succeeding sentence, no later than 12:00 Noon (Chicago time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, not later than 2:00 P.M. (Chicago time) on the date specified pursuant to
Section 1 .03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (Chicago time) on the date specified in Section 1.01(d)), each Bank
with a Commitment of the respective Tranche will make available its pro rata
portion of each such Borrowing requested to be made on such date (or in the case
of Swingline Loans, the Swingline Bank shall make available the full amount
thereof). All such amounts shall be made available in Dollars and in immediately
available funds at the Payment Office of the Administrative Agent, and the
Administrative Agent will make available to the Borrower at the Payment Office
the aggregate of the
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amounts so made available by the Banks (for Loans other than Swingline Loans,
prior to 1:00 P.M. (Chicago time) on such day, to the extent of funds actually
received by the Administrative Agent prior to 12:00 Noon (Chicago time) on such
day). Unless the Administrative Agent shall have been notified by any Bank prior
to the date of Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, at the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result of
any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each, a "Term Note" and, collectively, the "Term Notes"), (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes") and (iii) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit B-3,
with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Term Loan
made by such Bank on the Restatement Effective Date and be payable in the
principal amount of Term Loans evidenced thereby, (iv) mature on the Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans,
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<PAGE> 14
as the case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The Revolving Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Revolving
Loan Commitment of such Bank and be payable in the principal amount of the
outstanding Revolving Loans evidenced thereby from time to time, (iv) mature on
the Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d) The Swingline Note issued to the Swingline Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of the Swingline Bank and be dated
the Restatement Effective Date, (iii) be in a stated principal amount equal to
the Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby from time to time, (iv) mature on
the Swingline Expiry Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi)
be subject to mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in any such notation or endorsement shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert from time
to time, on any Business Day occurring after the Restatement Effective Date, all
or a portion equal to at least (x) in the case of a conversion of Term Loans,
$5,000,000 and (y) in the case of a conversion of Revolving Loans, $2,000,000
(or $1,000,000 if in the case of a conversion into Base Rate Loans), of the
outstanding principal amount of Loans made pursuant to one or more Borrowings
(so long as of the same Tranche) of one or more Types of Loans into a Borrowing
(of the same Tranche) of another Type of Loan, provided that (i) if for any
reason whatsoever any Eurodollar Loans are converted into Base Rate Loans on a
day which is not the last day of an Interest Period applicable to the Loans
being converted, the Borrower shall pay all amounts owing in connection
therewith as required by Section 1.11, (ii) no partial conversion of Eurodollar
Loans shall reduce the outstanding principal amount of such Eurodollar Loans
made pursuant to a single Borrowing to less
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<PAGE> 15
than (x) in the case of Term Loans, $5,000,000 and (y) in the case of Revolving
Loans, $2,000,000, (iii) unless the Required Banks otherwise specifically agree
in writing, Base Rate Loans may only be converted into Eurodollar Loans if no
Default or Event of Default is in existence on the date of the conversion, (iv)
no conversion pursuant to this Section 1.06 shall result in a greater number of
Eurodollar Borrowings than is permitted under Section 1.02 and (v) Swingline
Loans may not be converted pursuant to this Section 1.06. Each such conversion
shall be effected by the Borrower by giving the Administrative Agent at its
Notice Office prior to 12:00 Noon (Chicago time) at least (x) in the case of a
conversion to Eurodollar Loans, three Business Days' prior notice and (y) in the
case of a conversion to Base Rate Loans, one Business Day's prior notice (each a
"Notice of Conversion") specifying the Loans to be so converted, the
Borrowing(s) pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis of
their Term Loan Commitments or Revolving Loan Commitments, as the case may be,
provided that all Borrowings of Revolving Loans made pursuant to a Mandatory
Borrowing shall be incurred from the Banks pro rata on the basis of their
Adjusted Percentages. It is understood that no Bank shall be responsible for any
default by any other Bank of its obligation to make Loans hereunder and that
each Bank shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Base Rate Loan and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall be equal to the sum of the Applicable Margin
plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date the proceeds thereof are made
available to the Borrower until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06 or 1.09, as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each
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<PAGE> 16
case, bear interest at a rate per annum equal to the greater of (x) 2% per annum
in excess of the rate otherwise applicable to Base Rate Loans from time to time
and (y) the rate which is 2% in excess of the rate then borne by such Loans, in
each case with such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for each Interest Period applicable to Eurodollar
Loans and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three, six, nine, or twelve-month period,
or a period selected as provided in clause (ix) below, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the date of
any conversion thereto from a Loan of a different Type) and each Interest Period
occurring thereafter in respect of such Eurodollar Loan shall commence on the
day on which the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month:
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<PAGE> 17
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, however, that if any Interest Period for a Eurodollar
Loan would otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) unless the Required Banks otherwise specifically agree in
writing, no Interest Period may be selected at any time when a Default or Event
of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche
of Loans shall be selected which extends beyond the Maturity Date;
(vii) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a mandatory repayment
of such Term Loans will be required to be made under Section 4.02(b) if the
aggregate principal amount of Term Loans which have Interest Periods which will
expire after such date will be in excess of the aggregate principal amount of
Term Loans then outstanding less the aggregate amount of such required
prepayment;
(viii) no nine or twelve month Interest Period shall be available to
the Borrower unless (x) the Managing Agents consent thereto, such consent not to
be unreasonably withheld, and (y) such Interest Period is available to each Bank
(as determined by each Bank) making a Loan of the respective Tranche; and
(ix) with respect to Term Loans, the Borrower may select an Interest
Period which is shorter or longer (but not by more than 30 days) than one, two
or three months, but only if, and to the extent that, the Administrative Agent
determines that the selection of such Interest Period is necessary or desirable
to align the last day of the respective Interest Period (or of one or more
successive Interest Periods which will occur after such Interest Period) with a
Scheduled Repayment Date which will occur with respect to the Term Loans, which
Interest Periods as described in this clause (ix) shall only be made available
if (x) agreed by the Borrower and the Administrative Agent and (y) such Interest
Period is available to each Bank (as determined by each Bank) making a Term
Loan.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
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<PAGE> 18
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental (including for this
purpose any regulatory body with jurisdiction over such Bank) rule,
regulation, order, guideline or request (whether or not having the force
of law) or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Bank of the principal of
or interest such Eurodollar Loan or any other amounts payable hereunder
(except for changes in the rate of tax on, or determined by reference to,
the net income or profits of such Bank, or any franchise tax based on the
net income or profits of such Bank, in either case pursuant to the laws of
the United States of America, the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located or
any subdivision thereof or therein), but without duplication of any
amounts payable in respect of Taxes pursuant to Section 4.04(a), or (B) a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate and/or (y) other circumstances since
the date of this Agreement affecting such Bank or the interbank Eurodollar
market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good
faith with any governmental request (whether or not having force of law)
or (z) impracticable as a result of a contingency occurring after the date
of this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the
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<PAGE> 19
other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Administrative Agent
notifies the Borrower and the Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of Borrowing
or Notice of Conversion given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall, subject to the provisions of Section 13.15 (to the extent
applicable) pay to such Bank, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its reasonable discretion
shall determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing in reasonable
detail the basis for and the calculation thereof, submitted to the Borrower by
such Bank in good faith shall, absent manifest error, be final and conclusive
and binding on all the parties hereto) and (z) in the case of clause (iii)
above, the Borrower shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law. Each of the Administrative Agent and each Bank agrees that if it gives
notice to the Borrower of any of the events described in clause (i) or (iii)
above, it shall promptly notify the Borrower and, in the case of any such Bank,
the Administrative Agent, if such event ceases to exist. If any such event
described in clause (iii) above ceases to exist as to a Bank, the obligations of
such Bank to make Eurodollar Loans and to convert Base Rate Loans into
Eurodollar Loans on the terms and conditions contained herein shall be
reinstated.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the Borrower may (and in the case of
a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Bank or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least one Business Day's
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank determines
that the introduction of or any change in any applicable law or governmental
(including for this purpose any regulatory body with jurisdiction over such
Bank) rule, regulation, order, guideline, directive or request (whether or not
having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, in each case introduced or changed after the
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date hereof, will have the effect of increasing the amount of capital required
or expected to be maintained by such Bank or any corporation controlling such
Bank based on the existence of such Bank's Commitments hereunder or its
obligations hereunder, then the Borrower shall, subject to the provisions of
Section 13.15 (to the extent applicable), pay to such Bank, upon its written
demand therefor, such additional amounts as shall be required to compensate such
Bank or such other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for and calculation of such additional amounts.
1.11 Compensation. The Borrower shall, subject to the provisions of
Section 13.15 (to the extent applicable), compensate each Bank, upon its written
request (which request shall set forth in reasonable detail the basis for
requesting and the calculation of such compensation), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Bank to fund its Eurodollar Loans but excluding any
loss of anticipated profit) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Administrative Agent) a Borrowing of,
or conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)) or a
Loan is not continued as a Eurodollar Loan after an election of a new Interest
Period as provided in Section 1.09; (ii) if any repayment (including any
repayment made pursuant to Sections 4.01, 4.02 or 13.12(b), as a result of an
acceleration of the Loans pursuant to Section 10 or as a result of a replacement
of a Bank pursuant to Section 1.13) or conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest Period with respect
thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on
any date specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Bank or (y) any
election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the occurrence of
any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.05 or Section 4.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any Loans
or Letters of Credit affected by such event,
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provided that such designation is made on such terms that such Bank and its
lending office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
such Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Sections 1.10,
2.05 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans or fund Unpaid Drawings, (y)
upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in excess of those being generally charged by the other Banks, or (z) as
provided in Section 13.12(b) in the case of certain refusals by a Bank to
consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks, the
Borrower shall have the right, if no Default or Event of Default will exist
immediately after giving effect to the respective replacement, to either replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") reasonably acceptable to the
Administrative Agent, provided that (i) at the time of any replacement pursuant
to this Section 1.13, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all
fees payable pursuant to said Section 13.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the sum (without
duplication) of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Bank, (B) an amount equal to
all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect thereto at
such time and (C) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank pursuant to Section 3.01 and (y) the respective
Issuing Bank an amount equal to such Replaced Bank's Adjusted Percentage (for
this purpose, determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such Replaced
Bank) of any Unpaid Drawing (which at such time remains an Unpaid Drawing) to
the extent such amount was not theretofore funded by such Replaced Bank, and
(ii) all obligations of the Borrower owing to the Replaced Bank (other than
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreements, the payment of
amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of the appropriate Note or
Notes executed by the Borrower, (x) the Replacement Bank shall
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become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01
and 13.06), which shall survive as to such Replaced Bank and (y) in the case of
a replacement of a Defaulting Bank with a Non-Defaulting Bank, the Adjusted
Percentages of the Banks shall be automatically adjusted at such time to give
effect to such replacement (and to give effect to the replacement of a
Defaulting Bank with one or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and conditions
herein set forth, the Borrower may request that any Issuing Bank issue, at any
time and from time to time on and after the Restatement Effective Date and prior
to the Maturity Date, (x) for the account of the Borrower and for the benefit of
any holder (or any trustee, agent or other similar representative for any such
holders) of L/C Supportable Indebtedness of the Borrower or any of its
Subsidiaries, an irrevocable standby letter of credit, in a form customarily
used by such Issuing Bank or in such other form as has been approved by such
Issuing Bank (each such standby letter of credit, a "Standby Letter of Credit")
in support of such L/C Supportable Indebtedness and (y) for the account of the
Borrower and for the benefit of sellers of goods or materials to the Borrower or
any of its Subsidiaries, an irrevocable sight documentary letter of credit in a
form customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank (each such documentary letter of credit, a "Trade
Letter of Credit", and each such Trade Letter of Credit and each Standby Letter
of Credit, a "Letter of Credit") in support of commercial transactions of the
Borrower and its Subsidiaries. On the Restatement Effective Date, all Original
Letters of Credit shall be deemed to have been issued under this Agreement and
shall for all purposes constitute "Letters of Credit" hereunder.
(b) Subject to the terms and conditions contained herein, the
Administrative Agent hereby agrees that it will (and at the Borrower's request
each other Issuing Bank may, at its option, agree that it will), at any time and
from time to time on or after the Restatement Effective Date and prior to the
Maturity Date, following its receipt of the respective Letter of Credit Request,
issue for the account of the Borrower one or more Letters of Credit (x) in the
case of Standby Letters of Credit, in support of such L/C Supportable
Indebtedness of the Borrower or any of its Subsidiaries as is permitted to
remain outstanding without giving rise to a Default or Event of Default
hereunder and (y) in the case of Trade Letters of Credit, in support of sellers
of goods or materials as referenced in Section 2.01(a), provided that the
respective Issuing Bank shall be under no obligation to issue any Letter of
Credit of the types described above if at the time of such issuance:
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<PAGE> 23
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Issuing Bank as of the date hereof and which such Issuing Bank in good
faith deems material to it; or
(ii) such Issuing Bank shall have received notice from any Bank
prior to the issuance of such Letter of Credit of the type described in
the penultimate sentence of Section 2.02(b).
(c) Letters of Credit may be issued at the request of the Borrower
in Dollars or in any other currencies acceptable to the Issuing Bank.
(d) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $50,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans made by Non-Defaulting Banks and then outstanding
and Swingline Loans then outstanding, an amount equal to the Adjusted Total
Revolving Loan Commitment at such time and (ii) each Letter of Credit shall by
its terms terminate on or before the earlier of (x) the date which occurs 12
months after the date of the issuance thereof (although any such Standby Letter
of Credit may be extendable for successive periods of up to 12 months, but not
beyond the tenth Business Day prior to the Maturity Date, on terms acceptable to
the Issuing Bank thereof) or (y) the Maturity Date.
(e) Upon any amendment, modification or extension of any outstanding
Letter of Credit, the Borrower and/or the respective Issuing Bank shall give
notice to the Administrative Agent of such amendment, modification or extension
on the date of the effectiveness thereof (and, promptly after receiving such
notice, the Administrative Agent shall send a copy of such notice to the Banks)
and shall promptly send to the Administrative Agent a true and correct copy of
the documentation governing the respective amendment, modification or extension.
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<PAGE> 24
2.02 Letter of Credit Requests. (a) Whenever the Borrower desires that a
Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Bank at least five Business
Days' (or such shorter period as is acceptable to the respective Issuing Bank)
written notice thereof. Each notice shall be in the form of Exhibit C (each, a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(d). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the conditions specified
in Section 5 or Section 6, as applicable, are not then satisfied, or that the
issuance of such Letter of Credit would violate Section 2.01(d), then such
Issuing Bank shall issue the requested Letter of Credit for the account of the
Borrower in accordance with such Issuing Bank's usual and customary practices.
Upon the issuance of any Letter of Credit, (x) the Borrower and the respective
Issuing Bank shall notify the Administrative Agent, on the date of the issuance
thereof, of such issuance and shall, on such date, cause to be delivered to the
Administrative Agent (which delivery may be by telecopier) a copy of the Letter
of Credit so issued and (y) promptly after its receipt of the notice described
in preceding clause (x), the Administrative Agent shall notify each Bank of the
respective issuance.
2.03 Letter of Credit Participations. (a) Immediately upon the issuance by
any Issuing Bank of any Letter of Credit, such Issuing Bank shall be deemed to
have sold and transferred to each Bank with a Revolving Loan Commitment, other
than such Issuing Bank (each such Bank, in its capacity under this Section 2.03,
a "Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's Adjusted Percentage, in such Letter of Credit, each drawing
made thereunder and the obligations of the Borrower under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto. Upon
any change in the Revolving Loan Commitments or Adjusted Percentages of the
Banks pursuant to Sections 1.13, 13.04 or 13.12 or as a result of a Bank
Default, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.03 to reflect the new Adjusted
Percentages of the assignor and assignee Bank or of all Banks with Revolving
Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, such Issuing
Bank shall have no obligation relative to the other Banks other than to confirm
that any documents required to be delivered under such Letter of Credit appear
to have been delivered and that they appear to substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Issuing Bank
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<PAGE> 25
under or in connection with any Letter of Credit if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Issuing Bank any resulting liability to the Borrower or any Bank.
(c) In the event that any Issuing Bank makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to such
Issuing Bank pursuant to Section 2.04(a), such Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Participant,
of such failure, and each Participant shall promptly and unconditionally pay to
such Issuing Bank the amount of such Participant's Adjusted Percentage of such
unreimbursed payment in Dollars (or, in the case of any unreimbursed payment
made in a currency other than Dollars, of the Dollar Equivalent of such
unreimbursed payment, as determined by the Issuing Bank on the date on which
such unreimbursed payment was made by the Issuing Bank) and in same day funds.
If the Administrative Agent so notifies, prior to 11:00 A.M. (Chicago time) on
any Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to such Issuing Bank in Dollars
(or, in the case of any unreimbursed payment made in a currency other than
Dollars, of the Dollar Equivalent thereof) such Participant's Adjusted
Percentage of the amount of such payment on such Business Day (or, if notice is
given after 11:00 A.M. (Chicago time) on any Business Day, on the next Business
Day) in same day funds. If and to the extent such Participant shall not have so
made its Adjusted Percentage of the amount of such payment available to such
Issuing Bank, such Participant agrees to pay to such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Bank at the overnight Federal
Funds Rate. The failure of any Participant to make available to such Issuing
Bank its Adjusted Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
such Issuing Bank its Adjusted Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to such Issuing Bank such
other Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall forward such payment to
the Administrative Agent, which in turn shall distribute to each Participant
which has paid its Adjusted Percentage thereof, in Dollars (or, in the case of
any payment received in a currency other than Dollars, of the Dollar Equivalent
thereof) and in same day funds, an amount equal to such Participant's share
(based upon the aggregate amount funded by such Participant to the aggregate
amount funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
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(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Issuing Bank, any Participant, or any other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Administrative Agent, in Dollars (or, in the case of any payment or disbursement
made by the Issuing Bank in any currency other than Dollars, of the Dollar
Equivalent of such payment or disbursement as determined by the Issuing Bank on
the date of such payment or disbursement) and in immediately available funds at
the Payment Office, for any payment or disbursement made by it under any Letter
of Credit (each such amount, so paid until reimbursed, an "Unpaid Drawing"), no
later than one Business Day after the Administrative Agent notifies the Borrower
of such payment or disbursement, with interest on the amount so paid or
disbursed by such Issuing Bank, to the extent not reimbursed prior to 12:00 Noon
(Chicago time) on the date of such payment or disbursement, from and
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including the date paid or disbursed to but excluding the date such Issuing Bank
was reimbursed by the Borrower therefor at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for Base Rate
Loans, provided, however, that to the extent such amounts are not reimbursed
prior to 12:00 Noon (Chicago time) on the first Business Day following notice to
the Borrower by the Administrative Agent of such payment or disbursement,
interest shall thereafter accrue on the amounts so paid or disbursed by such
Issuing Bank (and until reimbursed by the Borrower) at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans maintained as Base Rate Loans plus 2%, in each such case,
with interest to be payable on demand; provided further, that it is understood
and agreed, however, that the notice referred to above in this clause (a) and in
the immediately preceding proviso shall not be required to be given if a Default
or an Event of Default under Section 10.05 shall have occurred and be continuing
(in which case the Unpaid Drawings shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which are hereby
waived by each Credit Party) and shall bear interest at the rate provided in the
foregoing proviso on and after the first Business Day following the respective
Drawing). The respective Issuing Bank shall give the Borrower prompt notice of
each Drawing under any Letter of Credit, provided that the failure to give any
such notice shall in no way affect, impair or diminish the Borrower's
obligations hereunder.
(b) The obligations of the Borrower under this Section 2.04 to reimburse
the respective Issuing Bank with respect to drawings on Letters of Credit (each,
a "Drawing") (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Bank (including in its capacity as issuer of the Letter of Credit or
as Participant), or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing, the respective Issuing Bank's only obligation to
the Borrower being to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to the Borrower.
2.05 Increased Costs. If at any time after the date of this Agreement, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change in generally acceptable accounting principles, shall either (i)
impose, modify or make applicable any reserve. deposit, capital adequacy or
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similar requirement against letters of credit issued by any Issuing Bank or
participated in by any Participant, or (ii) impose on any Issuing Bank or any
Participant any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit; and the result of any of the foregoing is to
increase the cost to any Issuing Bank or any Participant of issuing, maintaining
or participating in any Letter of Credit, or reduce the amount of any sum
received or receivable by any Issuing Bank or any Participant hereunder or
reduce the rate of return on its capital with respect to Letters of Credit
(except for changes in the rate of tax on, or determined by reference to, the
net income or profits of such Issuing Bank or such Participant, or any franchise
tax based on the net income or profits of such Bank or Participant, in either
case pursuant to the laws of the United States of America, the jurisdiction in
which it is organized or in which its principal office or applicable lending
office is located or any subdivision thereof or therein), but without
duplication of any amounts payable in respect of Taxes pursuant to Section
4.04(a), then, upon demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Administrative Agent) and subject to the provisions of
Section 13.15 (to the extent applicable), the Borrower shall pay to such Issuing
Bank or such Participant such additional amount or amounts as will compensate
such Bank for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Any Issuing Bank or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.05, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
such Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for and the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such Participant.
The certificate required to be delivered pursuant to this Section 2.05 shall, if
delivered in good faith and absent manifest error, be final and conclusive and
binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay the Administrative Agent for
distribution to each Bank with a Revolving Loan Commitment a commitment
commission (the "Commitment Commission") for the period from the Restatement
Effective Date to and including the Maturity Date (or such earlier date as the
Total Revolving Loan Commitment shall have been terminated), computed at a rate
for each day equal to the Applicable Commitment Commission Percentage, as in
effect from time to time, on the daily average Unutilized Revolving Loan
Commitment of such Bank, provided, however, that no Bank shall be entitled to
Commitment Commission for any period during which such Bank is a Defaulting
Bank. Accrued Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Maturity Date or such earlier
date upon which the Total Revolving Loan Commitment is terminated.
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(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment (based
on their respective Adjusted Percentages) a fee in respect of each Letter of
Credit issued hereunder (the "Letter of Credit Fee"), for the period from and
including the date of issuance of such Letter of Credit to and including the
termination of such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin for Eurodollar Loans, as in effect from time to time, on the
daily Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
upon the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued for its account
hereunder (the "Facing Fee") for the period from and including the date of
issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate equal to 1/4 of 1% per annum of the daily
Stated Amount of such Letter of Credit; provided that in no event shall the
annual Facing Fee with respect to any Letter of Credit be less than $200, it
being agreed that, on the date of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination of such Letter of Credit, $200 will
be paid toward the next year's Facing Fees for such Letter of Credit, which
amount shall be credited in direct order to the Facing Fees which would
otherwise be payable with respect to such Letter of Credit in the succeeding
annual period. Accrued Facing Fees shall be due and payable quarterly in arrears
on each Quarterly Payment Date and on the date upon which the Total Revolving
Loan Commitment has been terminated and such Letter of Credit has been
terminated in accordance with its terms.
(d) The Borrower shall pay, upon each drawing under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the respective Issuing Bank is
generally imposing in connection with such occurrence with respect to letters of
credit.
(e) The Borrower shall pay to each of the Managing Agents, whether in
their capacity as an Agent or a Managing Agent, for their own account, such
other fees as have been agreed to in writing by the Borrower and the Managing
Agents.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least
one Business Day's prior notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Banks), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part, in integral multiples of $1,000,000 in the case
of partial reductions to the Total Revolving Loan Commitment, provided that (i)
each such reduction shall apply proportionately to perman-
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ently reduce the Revolving Loan Commitment of each Bank with such a Commitment
and (ii) the reduction to the Total Unutilized Revolving Loan Commitment shall
in no case be in an amount which would cause the Revolving Loan Commitment of
any Bank to be reduced (as required by preceding clause (i)) by an amount which
exceeds the remainder of (x) the Unutilized Revolving Loan Commitment of such
Bank as in effect immediately before giving effect to such reduction minus (y)
such Bank's Adjusted Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, subject to the requirements of said Section
13.12(b) and upon five Business Days' written notice to the Administrative Agent
at its Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), terminate all of the Revolving Loan Commitment
of such Bank so long as all Loans, together with accrued and unpaid interest,
fees and all other amounts, owing to such Bank are repaid concurrently with the
effectiveness of such termination (at which time Schedule I shall be deemed
modified to reflect such changed amounts), and at such time, such Bank shall no
longer constitute a "Bank" for purposes of this Agreement, except with respect
to indemnification provisions under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall
survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and the
Term Loan Commitment and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety on December 31, 1996 and the Original Credit Agreement
shall continue in effect unless the Restatement Effective Date shall have
occurred on or prior to such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Term Loan Commitment (and the Term Loan Commitment
of each Bank) shall (i) terminate in its entirety on the Restatement Effective
Date (after giving effect to the making of the Term Loans on such date) and (ii)
prior to the termination of the Total Term Loan Commitment as provided in clause
(i) above, be reduced from time to time to the extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety on the Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date after the Restatement Effective Date upon which
a mandatory prepayment of Term Loans pursuant to Section 4.02(d), (e) or (f) is
required (and ex-
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ceeds in amount the aggregate principal amount of Term Loans then outstanding)
or would be required if Term Loans were then outstanding, the Total Revolving
Loan Commitment shall be permanently reduced by the amount, if any, by which the
amount required to be applied pursuant to said Section (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of Term Loans then outstanding.
(e) Each reduction to the Total Term Loan Commitment and the Total
Revolving Loan Commitment pursuant to this Section 3.03 (or pursuant to Section
4.02) shall be applied proportionately to reduce the Term Loan Commitment or the
Revolving Loan Commitment, as the case may be, of each Bank with such a
Commitment.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the right to prepay
the Loans, without premium or penalty, in whole or in part at any time and from
time to time on the following terms and conditions: (i) the Borrower shall give
the Administrative Agent prior to 1:00 P.M. (Chicago time) at its Notice Office
(x) at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Base Rate Loans (or same
day notice in the case of Swingline Loans provided such notice is given prior to
12:00 Noon (Chicago time)) and (y) at least five Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Eurodollar Loans, whether Term Loans, Revolving Loans or Swingline Loans
shall be prepaid, the amount of such prepayment and the Types of Loans to be
prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent shall
promptly transmit to each of the Banks; (ii) each prepayment shall be in an
aggregate principal amount of at least $1,000,000 (or $500,000 in the case of
Swingline Loans or Revolving Loans) or such lesser amount of a Borrowing which
is outstanding, provided that if any partial prepayment of Eurodollar Loans made
pursuant to any Borrowing shall reduce the outstanding Eurodollar Loans made
pursuant to such Borrowing to an amount less than (1) in the case of Term Loans,
$5,000,000 and (2) in the case of Revolving Loans, $2,000,000, then such
Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) at the time of any prepayment of Eurodollar Loans
pursuant to this Section 4.01 on any day other than the last day of an Interest
Period applicable thereto, the Borrower shall pay the amounts required pursuant
to Section 1.11; (iv) in the event of certain refusals by a Bank as provided in
Section 13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, upon S Business Days' written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks) repay all Loans, together with
accrued and unpaid interest, Fees, and
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other amounts owing to such Bank in accordance with said Section 13.12(b) so
long as (A) the Revolving Loan Commitment, if any, of such Bank is terminated
concurrently with such repayment (at which time Schedule I shall be deemed
modified to reflect the changed Revolving Loan Commitments) and (B) the consents
required by Section 13.12(b) in connection with the repayment pursuant to this
clause (iv) have been obtained; and (v) except as provided in preceding clause
(iv), each prepayment in respect of any Loans made pursuant to a Borrowing shall
be applied pro rata among the Loans comprising such Borrowing; provided that at
the Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01, such prepayment shall not be applied to any
Revolving Loan of a Defaulting Bank. Each prepayment of principal of Term Loans
pursuant to this Section 4.01 shall be applied (i) first, in direct order of
maturity to those Scheduled Repayments which will be due and payable within 12
months after the date the respective prepayment is made pursuant to this Section
4.01 and (ii) second, to the extent the amount to be applied exceeds the amount
to be applied pursuant to preceding clause (i), to reduce the then remaining
Scheduled Repayments of Term Loans pro rata based upon the then remaining
principal amounts of the Scheduled Repayments after giving effect to all prior
reductions thereto; provided that repayments of Term Loans pursuant to clause
(iv) of the first sentence of Section 4.01 shall only apply to reduce the then
remaining Scheduled Repayments to the extent the Term Loans so repaid are not
replaced pursuant to Section 13.12(b), with any such reductions to reduce the
then remaining Scheduled Repayments in inverse order of maturity unless
otherwise specifically agreed by the Required Banks.
4.02 Mandatory Repayments and Commitment Reductions. (a) (i) On any day on
which the sum of the aggregate outstanding principal amount of the Revolving
Loans made by Non-Defaulting Banks, Swingline Loans and the Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then in
effect, the Borrower shall prepay principal of Swingline Loans and, after the
Swingline Loans have been repaid in full, Revolving Loans of Non-Defaulting
Banks in an amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Swingline Loans and Revolving Loans of
Non-Defaulting Banks, the aggregate amount of the Letter of Credit Outstandings
exceeds the Adjusted Total Revolving Loan Commitment as then in effect, the
Borrower shall pay to the Administrative Agent at the Payment Office on such
date an amount of cash or Cash Equivalents equal to the amount of such excess
(up to a maximum amount equal to the Letter of Credit Outstandings at such
time), such cash or Cash Equivalents to be held as security for all obligations
of the Borrower to Non-Defaulting Banks hereunder in a cash collateral account
to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount of the
Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrower shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
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(b) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on (i) each Quarterly Payment Date commencing in
March 1997 through, and including, September 2001 and (ii) the Maturity Date,
the Borrower shall be required to repay Term Loans, to the extent then
outstanding, in a principal amount equal to $8,750,000 (each such repayment, as
the same may be reduced as provided in Sections 4.01 and 4.02(g), a "Scheduled
Repayment," and each such date, a "Scheduled Repayment Date").
(c) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date after the Restatement Effective Date
upon which Holdings or any of its Subsidiaries receives any proceeds from any
sale or issuance of its equity (other than (i) proceeds received from the
issuance of shares of Holdings Common Stock to the extent that the aggregate
proceeds excluded pursuant to this clause (i) do not exceed, in any period of
four consecutive fiscal quarters, $5,000,000 and (ii) proceeds received by
Parent or any of its Subsidiaries from the issuance of shares of common stock of
Parent or any of its Subsidiaries to Holdings or any of its Subsidiaries) an
amount equal to 100% of the cash proceeds of the respective sale or issuance
(net of underwriting discounts and commissions and other direct costs associated
therewith, including, without limitation, legal fees and expenses) shall be
applied as a mandatory repayment of principal of outstanding Term Loans (or, if
the Restatement Effective Date has not yet occurred, such amounts shall be
applied as a mandatory reduction to the Total Term Loan Commitment) in
accordance with the requirements of Section 4.02(g) and (h).
(d) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date after the Restatement Effective Date
upon which Holdings or any of its Subsidiaries receives any proceeds from any
incurrence by Holdings or any of its Subsidiaries of Indebtedness for borrowed
money (other than Indebtedness for borrowed money permitted to be incurred
pursuant to Section 9.04 as such Section is in effect on the Restatement
Effective Date), an amount equal to the cash proceeds (net of underwriting
discounts and commissions and other costs associated therewith including,
without limitation, legal fees and expenses) of the respective incurrence of
Indebtedness shall be applied as a mandatory repayment of principal of
outstanding Term Loans (or, if the Restatement Effective Date has not yet
occurred, such amounts shall be applied as a mandatory reduction to the Total
Term Loan Commitment) in accordance with the requirements of Sections 4.02(g)
and (h). In addition to the foregoing mandatory repayments or commitment
reductions, on each date after the Restatement Effective Date upon which the
Receivables Maximum Funding Amount is increased to an amount which, when added
to the amount of the Total Revolving Loan Commitment as then in effect, exceeds
$150,000,000 (or exceeds the highest amount to which the sum of (x) the
Receivables Maximum Funding Amount and (y) the amount of the Total Revolving
Loan Commitment, has theretofore been raised above such triggering amount and
before such increase) an amount equal to the amount of such increase shall be
required to be applied as a mandatory
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repayment of principal of outstanding Term Loans in accordance with the
requirements of Sections 4.02(g) and (h).
(e) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date after the Restatement Effective Date
upon which Holdings or any of its Subsidiaries receives proceeds from any sale
of assets (including capital stock and securities held thereby, but excluding
(i) sales or transfers of inventory in the ordinary course of business, (ii)
sales or transfers of assets in accordance with Sections 9.02(vi), (viii) and
(xi) as originally in effect, (iii) sales of assets between the Borrower and its
Wholly-Owned Subsidiaries and/or sales of assets between Wholly-Owned
Subsidiaries of the Borrower, in each case to the extent permitted by Section
9.02, (iv) the first $10,000,000 in Net Sale Proceeds from sales of other assets
occurring during any calendar year beginning after the Original Effective Date
and (v) Net Sale Proceeds from sales by the Borrower of assets or capital stock
of Howmet Refurbishment, Inc. to the extent used as described in the proviso to
Section 9.02(xvi) to repurchase, redeem or otherwise retire outstanding Parent
PIK Subordinated Notes)), an amount equal to 100% of the Net Sale Proceeds
therefrom shall be applied as a mandatory repayment of principal of outstanding
Term Loans (or, if the Restatement Effective Date has not yet occurred, such
amounts shall be applied as a mandatory reduction to the Total Term Loan
Commitment) in accordance with the requirements of Sections 4.02(g) and (h);
provided, that so long as no Default or Event of Default then exists, up to $50
million in the aggregate (but not more than $25 million in any calendar year) of
Net Sale Proceeds of asset sales effected in accordance with Section 9.02(xii)
shall not be required to be so applied on the date of the receipt thereof to the
extent that the Borrower has delivered a certificate to the Administrative Agent
on or prior to such date stating that such Net Sale Proceeds shall be used to
effect Permitted Acquisitions and/or additional Capital Expenditures, in each
case in accordance with the requirements of Section 8.13(c), within 180 days
following such date; provided further, that if all or any portion of such Net
Sale Proceeds not required to be applied pursuant to the preceding proviso are
not so utilized within 180 days after the date of the receipt of such Net Sale
Proceeds, then such remaining portion not so utilized shall be applied on the
date which is 180 days after the date of receipt of such Net Cash Proceeds in
accordance with the requirements of this Section 4.02(e) (without regard to
this, or the immediately preceding, proviso).
(f) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, within 10 days following each date after the
Restatement Effective Date on which Holdings or any of its Subsidiaries receives
any proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net of reasonable costs including, without limitation,
legal costs and expenses, and taxes incurred in connection with such Recovery
Event) shall be applied as a mandatory repayment of principal of outstanding
Term Loans in accordance with the requirements of Sections 4.02(g) and (h),
provided that (x) so long as no Default or Event of Default then
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exists and such proceeds do not exceed $10,000,000, such proceeds shall not be
required to be so applied on such date to the extent that the Borrower has
delivered a certificate to the Administrative Agent on or prior to such date
stating that such proceeds shall be used or shall be committed to be used to
replace or restore any properties or assets in respect of which such proceeds
were paid within one year following the date of such Recovery Event (which
certificate shall set forth the estimates of the proceeds to be so expended) and
(y) so long as no Default or Event of Default then exists and to the extent that
(a) the amount of such proceeds exceeds $10,000,000, (b) the amount of such
proceeds, together with other cash available to the Borrower and permitted to be
spent by it on Capital Expenditures during the relevant period pursuant to
Section 9.07 (without regard to Section 9.07(c)(ii) in the case of such other
cash), equals 100% of the cost of replacement or restoration of the properties
or assets in respect of which such proceeds were paid as determined by the
Borrower and as supported by such estimates or bids from contractors or
subcontractors or such other supporting information as the Administrative Agent
may reasonably request, (c) the Borrower has delivered to the Administrative
Agent a certificate on or prior to the date the application would otherwise be
required pursuant to this Section 4.02(f) in the form described in clause (x)
above and also certifying its determination as required by preceding clause (b),
and (d) the Borrower has delivered to the Administrative Agent such evidence as
the Administrative Agent may reasonably request in form and substance reasonably
satisfactory to the Administrative Agent establishing that the Borrower
reasonably expects to have sufficient resources available to it from time to
time, including without limitation cash, revenues and insurance proceeds, such
that the Borrower can reasonably be expected to satisfy all obligations and
expenses of the Borrower (including, without limitation, all debt service
requirements, including pursuant to this Agreement) without any delay or
extension thereof, for the period from the date of the respective casualty,
condemnation or other event giving rise to the Recovery Event and continuing
through the completion of the replacement or restoration of respective
properties or assets, then the entire amount of the proceeds of such Recovery
Event and not just the portion in excess of $10,000,000 shall be deposited with
the Administrative Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Administrative Agent and the Borrower whereby such proceeds
shall be disbursed to the Borrower or its order from time to time as needed to
pay actual costs incurred by it in connection with the replacement or
restoration of the respective properties or assets (pursuant to such reasonable
certification requirements as may be established by the Administrative Agent),
provided further, that at any time while an Event of Default has occurred and is
continuing (other than an Event of Default existing solely under Section 10.03
as a result of the violation of any or all of Sections 9.08 through 9.10,
inclusive, but in each case only if, and to the extent, that the violation of
said covenant has occurred as a result of the underlying event giving rise to
the Recovery Event), the Required Banks may direct the Administrative Agent (in
which case the Administrative Agent shall, and is hereby authorized by the
Borrower to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment of Obligations hereunder in
the same manner as proceeds would be applied
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pursuant to the Security Agreement, and provided further, that if all or any
portion of such proceeds not required to be applied to the repayment of Term
Loans pursuant to the second preceding proviso (whether pursuant to clause (x)
or (y) thereof) are either (A) not so used or committed to be so used within one
year after the date of the respective Recovery Event or (B) if committed to be
used within one year after the date of receipt of such Net Sale Proceeds and not
so used within two years after the date of the respective Recovery Event then,
in either such case, such remaining portion not used or committed to be used in
the case of preceding clause (A) and not used in the case of preceding clause
(B) shall be applied on the date which is the first anniversary of the date of
the respective Recovery Event in the case of clause (A) above or the date
occurring two years after the date of the respective Recovery Event in the case
of clause (B) above as a mandatory repayment of principal of outstanding Term
Loans in accordance with the requirements of Section 4.02(g) and (h).
(g) Each amount required to be applied to Term Loans (or to the Total Term
Loan Commitment) pursuant to Sections 4.02(c), (d), (e) and (f) shall be applied
to repay the outstanding principal amount of Term Loans then outstanding. The
amount of each principal repayment of Term Loans made as required by (A)
Sections 4.02(d), (e) and (f) shall be applied to reduce the then remaining
Scheduled Repayments pro rata based upon the then remaining principal amounts of
the Scheduled Repayments after giving effect to all prior reductions thereto and
(B) Section 4.02(c) shall be applied (i) first, in direct order of maturity to
those Scheduled Repayments which will be due and payable within 12 months after
the date the respective prepayment is made pursuant to this Section 4.02 and
(ii) second, to the extent the amount to be applied exceeds the amount to be
applied pursuant to preceding clause (i), to reduce the then remaining Scheduled
Repayments of Term Loans pro rata based upon the then remaining principal
amounts of the Scheduled Repayments after giving effect to all prior reductions
thereto.
(h) With respect to each repayment of Loans required by this Section 4.02,
the Borrower may designate the Types of Loans of the respective Tranche which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings of the respective Tranche pursuant to which made, provided that: (i)
repayments of Eurodollar Loans pursuant to this Section 4.02 may only be made on
the last day of an Interest Period applicable thereto unless all Eurodollar
Loans of the respective Tranche with Interest Periods ending on such date of
required repayment and all Base Rate Loans of the respective Tranche have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than (x) in the case of Term Loans, $5,000,000
and (y) in the case of Revolving Loans, $2,000,000, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Loans comprising a Borrowing
shall be applied pro rata among such Loans. In the absence of a designation by
the Borrower as described in
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the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11.
(i) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Swingline Loans shall be repaid in full on
the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the Maturity Date.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (Chicago time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments: Taxes. (a) All payments made by any Credit Party
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Bank pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Bank is located
or any subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non- excluded taxes, levies, imports, duties,
fees, assessments or other charges (all such non- excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Borrower agrees to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or net profits of such Bank
pursuant to the laws of the jurisdiction in which such bank is organized or in
which the principal office or applicable lending office of such Bank is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which
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such bank is organized or in which the principal office or applicable lending
office of such Bank is located and for any withholding or income or similar
taxes as such Bank shall determine are payable by, or withheld from, such Bank
in respect of such amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Bank pursuant to this sentence. The Borrower will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Restatement Effective Date, or in the
case of a Bank that is an assignee or transferee of an interest under this
Agreement pursuant to Section 1.13 or 13.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), on
or before the date of such assignment or transfer to such Bank, (i) two accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001 (or successor forms) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, or (ii) if the Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Restatement Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate in
which case such Bank shall not be required to deliver any such Form or
Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section 13.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority
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thereof or therein) from interest, Fees or other amounts payable hereunder for
the account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) to the extent that such Bank has not
provided to the Borrower on or prior to the date so required U.S. Internal
Revenue Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
4.04(a) to gross-up payments to be made to a Bank in respect of income or
similar taxes imposed by the United States if (I) such Bank has not provided to
the Borrower on or prior to the date so required the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section 4.04(b)
or (II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such Forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 4.04
and except as set forth in Section 13.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes after
the Restatement Effective Date (or, if later, the date such Bank became party to
this Agreement) in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such Taxes.
(c) Upon the reasonable request of the Borrower, any Bank that is a United
States person (as such term is defined in Section 7701 (a)(30) of the Code)
shall provide the Borrower with two accurate and complete original signed copies
of an Internal Revenue Service Form W-9, or any successor form that such Bank is
entitled to provide at such time in order to comply with United States backup
withholding tax requirements.
(d) If the Borrower pays any additional amount under this Section 4.04 to
a Bank and such Bank determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any reduction of, or
credit against, its Tax liabilities in or with respect to the taxable year in
which the additional amount is paid, such Bank shall pay to the Borrower an
amount that the Bank shall, in its sole discretion, determine is equal to the
net benefit, after tax, which was obtained by the Bank in such year as a
consequence of such refund, reduction or credit. The decision as to whether a
Bank claims any refund or credit or files any amended tax return shall be in the
sole discretion of such Bank. Nothing in this Section 4.04(d) shall require a
Bank to disclose or detail the basis of its calculation of the amount of any tax
benefit or any other amount to the Borrower or to any other party (including,
without limitation, any tax return).
SECTION 5. Conditions Precedent to Loans on the Restatement Effective
Date. The obligation of each Bank to make Loans, and the obligation of each
Issuing Bank to issue Letters of Credit, on the Restatement Effective Date, is
subject at the time of the
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making of such Loans or the issuance of such Letters of Credit to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Restatement
Effective Date (i) this Agreement shall have been executed and delivered as
provided in Section 13.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each of the Banks the appropriate Term
Note and/or Revolving Note executed by the Borrower, and to the Swingline Bank
the Swingline Note executed by the Borrower, in each case in the amount,
maturity and as otherwise provided herein.
5.02 Fees, etc. (a) The Borrower shall have paid to the Administrative
Agent for the account of each Continuing Bank and each New Bank a financing fee
equal to 1/8 of 1% of the sum of such Bank's Commitments as in effect on the
Restatement Effective Date (before giving effect to any extensions of credit on
such date).
(b) In addition to any amounts payable by the Borrower pursuant to
paragraph (a) above, on the Restatement Effective Date, the Borrower shall have
paid to the Agents, the Managing Agents and the Banks all costs, fees and
expenses (including, without limitation, legal fees and expenses) payable to the
respective Agents, Managing Agents and the Banks to the extent then due.
5.03 Opinions of Counsel. On the Restatement Effective Date, the
Administrative Agent shall have received (i) from Latham & Watkins, special
counsel to Holdings and its Subsidiaries, an opinion addressed to each of the
Agents and each of the Banks and dated the Restatement Effective Date covering
the matters set forth in Exhibit E-1 and (ii) from Roland Paul, general counsel
to the Borrower an opinion addressed to each of the Agents and each of the Banks
and dated the Restatement Effective Date covering the matters set forth in
Exhibit E-2.
5.04 Corporate Documents; Proceedings; etc. (a) On the Restatement
Effective Date, the Administrative Agent shall have received certificates of all
Credit Parties (x) certifying that there were no changes, or providing the text
of any changes, to the certificate of incorporation and by-laws of such Credit
Parties as delivered pursuant to Section 5.04 of the Original Credit Agreement
and (y) to the effect that each such Credit Party is in good standing in its
respective state of incorporation and in those states where each such Credit
Party conducts business.
(b) All corporate and legal proceedings and all material instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Managing Agents, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals,
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good standing certificates and bring-down telegrams or facsimiles, if any, which
the Managing Agents reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Debt Agreements; Acquisition
Documents; Tax Sharing Agreements. On or prior to the Restatement Effective
Date, the Administrative Agent shall have received (i) a certification from the
chairman of the board, the president, any vice president or the treasurer of the
Borrower that all agreements and plans referenced in Section 5.05 of the
Original Credit Agreement, previously delivered (or made available) to the
Administrative Agent by each Credit Party, remain in full force and effect (or
specifying which of such agreements and plans do not remain in full force and
effect) and (ii) any amendments thereto or additional such agreements.
5.06 Subsidiaries Guaranty. On the Restatement Effective Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered an
Amended and Restated Subsidiaries Guaranty in the form of Exhibit F hereto (as
modified, supplemented or amended from time to time, the "Subsidiaries
Guaranty").
5.07 Pledge Agreement. On the Restatement Effective Date, each Credit
Party shall have duly authorized, executed and delivered an Amended and Restated
Pledge Agreement in the form of Exhibit G (as modified, supplemented or amended
from time to time, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as Pledgee, all the Pledged Securities, if any, referred to
therein then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with executed
and undated stock powers, in the case of capital stock constituting Pledged
Securities.
5.08 Security Agreement. On the Restatement Effective Date, each Credit
Party shall have duly authorized, executed and delivered an Amended and Restated
Security Agreement in the form of Exhibit H (as modified, supplemented or
amended from time to time, the "Security Agreement") covering all of such Credit
Party's present and future Security Agreement Collateral, in each case together
with evidence that all other actions necessary (including the filing of any new
financing statements or the amending of any existing financing statements) or,
in the reasonable opinion of the Collateral Agent, desirable to perfect and
protect (or maintain the perfection of) the security interests purported to be
created (or maintained) by the Security Agreement have been taken.
5.09 Mortgage Amendments: etc. On the Restatement Effective Date, the
Collateral Agent shall have received:
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(i) fully executed counterparts of amendments (the "Mortgage
Amendments"), in form and substance satisfactory to the Managing Agents to
each of the Original Mortgages, together with evidence that counterparts
of each of the Mortgage Amendments have been delivered to the title
insurance company insuring the Lien of the Original Mortgages for
recording in all places to the extent necessary or, in the reasonable
opinion of the Collateral Agent, desirable to effectively maintain a valid
and enforceable first priority (subject to Permitted Liens) mortgage lien
on each Original Mortgaged Property in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors; and
(ii) endorsements of the authorized issuing agent for title insurers
reasonably satisfactory to the Collateral Agent to each Original Mortgage
Policy assuring the Collateral Agent that each Original Mortgage is a
valid and enforceable first priority mortgage lien on the respective
Original Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Liens.
5.10 Consent Letter. On the Restatement Effective Date, the
Administrative Agent shall have received a letter from CT Corporation System,
presently located at 1633 Broadway, New York, New York 10019, substantially in
the form of Exhibit I, indicating its consent to its appointment by each Credit
Party as its agent to receive service of process as specified in Section 13.08.
5.11 Adverse Change, etc. (a) On the Restatement Effective Date,
nothing shall have occurred since September 30, 1996 (and the Banks shall have
become aware of no facts, conditions or other information not previously known),
which a Managing Agent or the Required Banks reasonably believe could have a
material adverse effect on the rights or remedies of any Managing Agent or the
Banks, or on the ability of Holdings, Parent or the Borrower to perform their
respective obligations to the Managing Agents and the Banks or which the
Managing Agents or the Required Banks reasonably believe would have a material
adverse effect on the business, property, assets, nature of assets, liabilities,
condition (financial or otherwise) or prospects of Holdings, Parent, the
Borrower or any such Person and its Subsidiaries taken as a whole.
(b) On or prior to the Restatement Effective Date, all necessary
governmental (domestic and foreign) and third party approvals in connection with
the Transaction, the transactions contemplated by the Credit Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods shall have expired without any action
being taken by any competent authority which, in the judgment of a Managing
Agent or the Required Banks, restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a
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hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the Transaction.
5.12 Litigation. On the Restatement Effective Date, no litigation by any
entity (private or governmental) shall be pending or threatened with respect to
the Transaction or any documentation executed in connection therewith, or which
any Managing Agent or the Required Banks shall determine is reasonably likely to
have a materially adverse effect on the Transaction or the business, property,
assets, liabilities, condition (financial or otherwise) or prospects of
Holdings, Parent, the Borrower, or any such Person and its Subsidiaries taken as
a whole.
5.13 Solvency Certificate; Environmental Analyses; Insurance. On or before
the Restatement Effective Date, the Borrower shall cause to be delivered to the
Administrative Agent (i) a solvency certificate from an officer of Holdings, in
the form of Exhibit J hereto, setting forth his conclusions that, after giving
effect to the Transaction and the incurrence of all the financings contemplated
herein, each of Holdings and its Subsidiaries taken as a whole, and the Borrower
and its Subsidiaries taken as a whole, is not insolvent and will not be rendered
insolvent by the indebtedness incurred in connection therewith, and will not be
left with unreasonably small capital with which to engage in their business and
will not have incurred debts beyond their ability to pay debts as they mature,
(ii) such environmental updates as may have been reasonably requested by the
Managing Agents and (iii) a summary of all insurance policies in form and
substance reasonably satisfactory to the Managing Agents and evidence of
insurance complying with the requirements of Section 8.03 for the business and
properties of Holdings and its Subsidiaries, in scope, form and substance
reasonably satisfactory to the Managing Agents and the Required Banks and naming
the Collateral Agent as an additional insured and/or loss payee, and stating
that such insurance shall not be cancelled or revised without 30 days prior
written notice by the insurer to the Collateral Agent.
5.14 Financial Statements; Projections. (a) On or prior to the Restatement
Effective Date, there shall have been delivered to the Administrative Agent
unaudited consolidating and consolidated financial statements for Holdings and
its Subsidiaries for the nine-month period ended September 30, 1996.
(b) On or prior to the Restatement Effective Date there shall have been
delivered to the Administrative Agent detailed projected consolidated financial
statements of the Borrower and its Subsidiaries certified by the chief financial
officer of the Borrower for the period from January 1, 1997 to December 31, 2001
(the "Projections"), which Projections (x) shall reflect the forecasted
consolidated financial condition and income and expenses of the Borrower and its
Subsidiaries after giving affect to the Transaction and the related financing
thereof and the other transactions contemplated hereby and (y) shall be
satisfactory in form and substance to the Managing Agents.
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5.15 Senior Subordinated Indebtedness. On or prior to the Restatement
Effective Date, the Borrower shall have delivered to the Administrative Agent an
officers' certificate (signed by an officer or officers satisfactory to the
Administrative Agent) (x) meeting the requirements of the Senior Subordinated
Notes Indenture (and the parenthetical contained in clause (e) of the definition
of Senior Indebtedness contained therein) to the effect that the issuance of the
Indebtedness pursuant to this Agreement does not violate the "Limitation on
Indebtedness" covenant of the Senior Subordinated Note Indenture and setting
forth in reasonable detail the reasons therefor, (y) certifying that this
Agreement and the related documents hereto constitute the "New Bank Credit
Facility" and "Designated Senior Indebtedness" under, and as defined in, the
Senior Subordinated Note Indenture and that all Obligations hereunder constitute
"Senior Indebtedness" under, and as defined in, the Senior Subordinated Note
Indenture and (z) certifying that the "Initial Amount" (as defined in the Senior
Subordinated Note Indenture) is, on and immediately after the occurrence of the
Restatement Effective Date, at least $250 million and further certifying that
all Term Loans incurred hereunder, together with extensions of credit (i.e.,
Revolving Loans, Swingline Loans and Letters of Credit) incurred from time to
time under this Agreement in the full amount of the Total Revolving Loan
Commitment, are permitted to be incurred and remain outstanding pursuant to
Section 4.12(b)(i)(A) of the Senior Subordinated Note Indenture.
5.16 Refinancing; Original Credit Agreement; etc. On the Restatement
Effective Date, (i) unless otherwise agreed by the Administrative Agent and the
Borrower, each Original Bank shall have surrendered to the Administrative Agent
for cancellation the promissory notes issued to it pursuant to the Original
Credit Agreement in respect of its Original Term Loans, Original Revolving Loans
and Original Swingline Loans, (ii) each Continuing Bank shall have converted its
Original Tranche A Term Loan as contemplated by Section 1.01(a), (iii) all
Original Tranche A Term Loans being converted as described in preceding clause
(ii) which were outstanding as Eurodollar Loans shall, at the time of such
conversion, be converted into Base Rate Loans or borrowed as Eurodollar Loans in
accordance with Section 1.01(a) and the Borrower shall pay breakage costs in
accordance with the provisions of Section 1.11 of the Original Credit Agreement
in connection therewith, (iv) all Original Tranche A Term Loans (except to the
extent converted pursuant to preceding clause (ii)), Original Tranche B Term
Loans, Original Tranche C Term Loans, Original Revolving Loans and Original
Swingline Loans shall be repaid in full on the Restatement Effective Date
(although Loans may be incurred hereunder on the Restatement Effective Date in
accordance with the provisions hereof) and, if any Original Loans (including,
without limitation, Original Tranche A Term Loans converted into Term Loans
hereunder) were at such time maintained as Eurodollar Loans, all breakage costs
owing in connection therewith shall have been paid as contemplated by Section
1.11 of the Original Credit Agreement, (v) each Original Bank shall have
received payment in full of all amounts then due and owing to it under the
Original Credit Agreement, (vi) the Borrowers shall have paid all accrued and
unpaid interest and fees owing under the Original Credit
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Agreement through the Restatement Effective Date, and (vii) the Administrative
Agent shall have received evidence in form, scope and substance satisfactory to
it that the matters set forth in this Section 5.16 have been satisfied on such
date.
SECTION 6. Conditions Precedent to All Credit Events on and After the
Restatement Effective Date. The obligation of each Bank to make Loans (including
Loans made on the Restatement Effective Date but excluding Mandatory Borrowings
made thereafter, which shall be made as provided in Section 1.01(d)), and the
obligation of an Issuing Bank to issue any Letter of Credit, is subject, at the
time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (excluding Swingline Loans and Mandatory Borrowings, and
except as otherwise provided in Section 1.10), the Administrative Agent shall
have received the notice required by Section 1.03(a). Prior to the making of any
Swingline Loan, the Swingline Bank shall have received the notice required by
Section 1.03(b)(i)
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the respective Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 2.02.
The acceptance of the proceeds of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Managing Agents and
each of the Banks that all the conditions specified in Section 5 and in this
Section 6 and applicable to such Credit Event exist as of that time (except to
the extent that any of the conditions specified in Section 5 are required to be
satisfactory to or determined by any Bank, the Required Banks and/or the
Managing Agents, or were previously waived in writing by the Required Banks).
All of the Notes, certificates, legal opinions and other documents and papers
referred to in Section 5 and in this Section 6, unless otherwise specified,
shall be delivered to the Administrative Agent at the Notice Office for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts for each of the Banks and shall be in form and substance reasonably
satisfactory to the Agents.
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SECTION 7. Representations, Warranties and Agreements. In order to induce
the Banks to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each of Holdings,
Parent and the Borrower makes the following representations, warranties and
agreements, in each case after giving effect to the Transaction as consummated
on the Restatement Effective Date, all of which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, with the occurrence of each Credit Event on
or after the Restatement Effective Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct in all material respects on and as of the Restatement Effective
Date and on the date of each such Credit Event (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
7.01 Corporate Status. Holdings, Parent, the Borrower and each of their
respective Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the conduct of its business requires such
qualifications except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower, the Borrower and its
Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as a whole.
7.02 Corporate Power and Authority. Each Credit Party has the corporate
power and authority to execute, deliver and perform the terms and provisions of
each of the Documents to which it is party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each of
such Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such Documents constitutes the
legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms,
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covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of the material
properties or assets of Holdings, Parent, the Borrower or any of their
respective Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Holdings, Parent, the Borrower or any of their
respective Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of Holdings, Parent,
the Borrower or any of their respective Subsidiaries, except (with respect to
any matter specified in clause (i), (ii) or (iii) above relating to a Document
other than a Credit Document) for any contraventions, conflicts, breaches,
defaults or violations which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect (x) on the Transaction
or (y) on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower, the Borrower and its
Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as a whole.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except (x) as have been obtained or made and (y) if this representation is
being made at any time prior to the tenth day following the Restatement
Effective Date, filings or recordations of financing statements, Mortgages,
Mortgage Amendments and other documents pursuant to the terms of the Security
Documents (all of which filings and recordations shall be completed within 10
days after the Restatement Effective Date or, in the case of additional actions
required by Section 8.12, such date as is provided in said Section 8.12)), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. (a) The unaudited consolidating and consolidated financial
statements of Holdings and its Subsidiaries for the nine-month period ended
September 30, 1996, and furnished to the Banks prior to the Restatement
Effective Date pursuant to Section 5.14(a), present fairly the financial
condition of Holdings and its Subsidiaries at the date of such statements. In
addition, the financial statements in the offering memorandum of the Borrower,
dated November 22, 1995 are true and correct in all material respects for the
periods presented therein. All such historical financial statements have been
prepared in accordance with generally accepted accounting principles and
practices consistently applied, except for the omission of footnotes and
ordinary end of period adjustments (none of which individually, or in the
aggregate, would be material). Since September 30, 1996, there has been no
material adverse change in the performance, business, operations, property,
assets,
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nature of assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower, the Borrower and its Subsidiaries taken as a whole or Holdings
and its Subsidiaries taken as a whole.
(b) (i) On and as of the Restatement Effective Date, on a pro forma basis,
after giving effect to the Transaction and all other transactions contemplated
by the Documents and to all Indebtedness (including the Loans) being incurred or
assumed, and Liens created by each Credit Party in connection therewith, with
respect to Holdings, Parent and the Borrower, individually, and each such Person
and its Subsidiaries taken as a whole, (x) the sum of the assets, at a fair
valuation, of each such Person, individually, and each such Person and its
Subsidiaries taken as a whole, will exceed its or their debts; (y) it has not
incurred and does not intend to incur, nor believes that it will incur, debts
beyond its ability to pay such debts as such debts mature; and (z) it will have
sufficient capital with which to conduct its business. For purposes of this
Section 7.05(b), "debt" means any liability on a claim and "claim" means (i)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) Except as set forth on Schedule IV, there were as of the Restatement
Effective Date no liabilities or obligations with respect to Holdings or any of
its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due) which, either individually or in the
aggregate, would be materially adverse to the Borrower, the Borrower and its
Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as a whole.
As of the Restatement Effective Date, none of the Credit Parties knows of any
basis for the assertion against it of any liability or obligation of any nature
that is not fully disclosed in Schedule IV which, either individually or in the
aggregate, could be materially adverse to the Borrower, the Borrower and its
Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as a whole.
(d) The Projections set forth on Schedule V hereto were prepared in good
faith on a basis consistent with the financial statements referred to in Section
7.05(a), and, at the time of the preparation thereof, based on good faith
estimates and assumptions believed by management of Holdings to be reasonable.
7.06 Litigation. There are no actions, suits or proceedings pending or, to
the best knowledge of Holdings, Parent and the Borrower, threatened (i) with
respect to any Document or (ii) with respect to matters not covered by Section
7.19, that could reasonably be expected to materially and adversely affect the
business, operations, property, assets,
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liabilities, condition (financial or otherwise) or prospects of the Borrower,
the Borrower and its Subsidiaries taken as a whole or Holdings and its
Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of Holdings, Parent or the Borrower in writing
to any of the Agents or any Bank (including, without limitation, all information
contained in the Documents) for purposes of or in connection with this
Agreement, the other Credit Documents or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of Holdings, Parent or the Borrower in writing to any
of the Agents or any Bank will be, true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Loans
shall be used by the Borrower to (x) consummate the Transaction, (y) pay fees
and expenses related thereto and (z) provide for the Borrower's general
corporate and working capital purposes.
(b) No part of the proceeds of any Loan will be used to purchase or carry
any Margin Stock or to extend credit for the purpose of purchasing or carrying
any Margin Stock. Neither the making of any Loan nor the use of the proceeds
thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of Holdings, Parent, the Borrower,
Howmet Cercast (Canada) and each of their respective Subsidiaries (the
"Taxpayers") have timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods, with the appropriate taxing
authority, all Federal, state and other material returns, statements, forms and
reports for taxes (the "Returns") required to be filed by or with respect to the
income, properties or operations of Holdings, Parent, the Borrower, Howmet
Cercast (Canada) and/or any of their respective Subsidiaries. The Returns
accurately reflect in all material respects all liability for taxes of the
Taxpayers for the periods covered thereby. Each of the Taxpayers have paid all
material taxes payable by them other than taxes which are not delinquent, and
other than those contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
Except as set forth on Schedule VI, there is no material action, suit,
proceeding, investigation, audit, or claim now pending or, to the best knowledge
of Holdings, Parent, the Borrower or Howmet Cercast (Canada), threatened by any
authority regarding any taxes relating to any of the Taxpayers. As of the
Restatement Effective Date, except as set forth in Schedule VI, none of the
Taxpayers has entered into an agreement or
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waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of any of
such Taxpayers, or is aware of any circumstances that would cause the taxable
years or other taxable periods of any of such Taxpayers not to be subject to the
normally applicable statute of limitations. None of the Taxpayers has provided,
with respect to themselves or property held by them, any consent under Section
341 of the Code. None of the Taxpayers has incurred, or will incur, any material
tax liability in connection with the Acquisition, the Mergers and the other
transactions contemplated hereby. Notwithstanding anything to the contrary in
this Section 7.09, each representation in this Section 7.09 shall not be deemed
to be incorrect if and to the extent any liability of Holdings and its
Subsidiaries resulting from a fact or circumstance that otherwise would cause
such representation to be untrue is covered by any Acquisition Letter of Credit.
7.10 Compliance with ERISA. (i) Except as set forth on Schedule VII, each
Plan (other than a Multiemployer Plan) is in substantial compliance with ERISA
and the Code; except as set forth on Schedule VII, no Reportable Event has
occurred with respect to a Plan that has or could reasonably be expected to
result in a material liability not reflected in the Borrower's financial
statements (other than a Multiemployer Plan); no Plan (other than a
Multiemployer Plan) is insolvent or in reorganization; no Plan (other than a
Multiemployer Plan) had during the last twelve months or has an Unfunded Current
Liability in excess of $10,000,000; no Plan (other than a Multiemployer Plan)
has an accumulated or waived funding deficiency, or has applied for an extension
of any amortization period within the meaning of Section 412 of the Code; all
contributions required to be made by Holdings, Parent, Borrower or any of their
Subsidiaries or any ERISA Affiliate with respect to a Plan and a Foreign Pension
Plan have been timely made; none of Holdings, Parent, the Borrower or any of
their respective Subsidiaries nor any ERISA Affiliate has incurred any material
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971, 4975 or 4980 of the Code or expects to incur any liability (including any
indirect, contingent or secondary liability) under any of the foregoing Sections
with respect to any Plan; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan (other than a Multiemployer Plan); no
condition exists which presents a material risk to Holdings, Parent, the
Borrower or any of their respective Subsidiaries or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of Holdings, Parent, the Borrower, their respective Subsidiaries and
their ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $1,000,000; no lien imposed under the Code or ERISA on the assets of
Holdings, Parent, the Borrower or any of their respective Subsidiaries or any
ERISA Affiliate exists or is reasonably likely
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to arise on account of any Plan; and Holdings, Parent, the Borrower and their
respective Subsidiaries may cease contributions to or terminate any employee
benefit plan maintained by any of them without incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither
Holdings, Parent, the Borrower nor any of their Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of the
Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities by
more than $2,000,000.
7.11 The Security Documents. (a) The provisions of the Security Agreement
are effective to create or maintain in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement, upon the
filing of Form UCC-1 financing statements or the appropriate equivalent (which
filings have been made), create or maintain a fully perfected first lien on, and
security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens, to the extent a security interest in such collateral can be
perfected or maintained by the filing of a financing statement. The recordation
of the Assignment of Security Interest in U.S. Patents and Trademarks in the
form attached to the Security Agreements in the United States Patent and
Trademark Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will be effective, under applicable law, to perfect the
security interest granted to the Collateral Agent in the trademarks and patents
covered by the Security Agreement and the recordation of the Assignment of
Security Interest in U.S. Copyrights in the form attached to the Security
Agreement with the United States Copyright Office together with filings on Form
UCC-1 made pursuant to the Security Agreement will be effective under federal
law to perfect the security interest granted to the Collateral Agent in the
copyrights covered by the Security Agreement. Each of the Credit Parties party
to the Security Agreement has good and valid title to all Security Agreement
Collateral described therein, free and clear of all Liens except those described
above in this clause (a).
(b) The security interests created in favor of the Collateral Agent, as
Pledgee, for the benefit of the Secured Creditors under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings
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are required in order to perfect (or maintain the perfection or priority of) the
security interests created in the Pledged Securities under the Pledge
Agreements.
(c) The Mortgages (as amended by the Mortgage Amendments) create, as
security for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and mortgage lien on all of the
Mortgaged Properties in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Secured
Creditors, superior to and prior to the rights of all third persons (except that
the security interest and mortgage lien created in the Mortgaged Properties may
be subject to the Permitted Encumbrances related thereto) and subject to no
other Liens (other than Permitted Liens). Schedule III contains a true and
complete list of each parcel of Real Property owned or leased by the Borrower
and its Subsidiaries on the Restatement Effective Date, and the type of interest
therein held by the Borrower or such Subsidiary. The Borrower and each of its
Subsidiaries have good and indefeasible title to all fee-owned Mortgaged
Properties and valid leasehold title to all Leaseholds, in each case free and
clear of all Liens except those described in the first sentence of this
subsection (c).
7.12 Representations and Warranties in Documents. All representations and
warranties set forth in the other Documents were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made).
7.13 Properties. Holdings, Parent, the Borrower and each of their
respective Subsidiaries have good and valid title to all properties owned by
them, including all property reflected in the balance sheet of the Borrower
referred to in Section 7.05(a) and in the pro forma balance sheet referred to in
Section 5.14 (except as sold or otherwise disposed of since the date of such
balance sheet in the ordinary course of business), free and clear of all Liens,
other than (i) as referred to in the balance sheet or in the notes thereto or in
the pro forma balance sheet or (ii) Permitted Liens otherwise permitted by
Section 9.01. On the Restatement Effective Date, Schedule III sets forth a true
and complete description of all Real Property owned or leased by the Borrower
and/or its Subsidiaries and sets forth the direct owner or lessee thereof.
7.14 Capitalization. (a) On the Restatement Effective Date and after
giving effect to the Transaction, the authorized capital stock of Holdings shall
consist of 10,000 shares of common stock, all of which shall be issued and
outstanding, and 15,000 shares of preferred stock, 5,000 of which shall be
issued and outstanding (as shares of Holdings PIK Preferred Stock). All such
outstanding shares have been duly and validly issued, are fully paid and
non-assessable and have been issued free of preemptive rights. As of the
Restatement Effective Date, Holdings does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating
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to, its capital stock, except for the Thiokol Purchase Option and the Holdings
PIK Preferred Stock (which, being pay-in-kind, provides for the issuance of
additional shares of Holdings PIK Preferred Stock in payment of accrued
dividends thereon).
(b) On the Restatement Effective Date and after giving effect to the
Transaction, the authorized capital stock of Parent shall consist of 1,000
shares of common stock, 10 of which shall be issued and outstanding and
delivered for pledge under the Pledge Agreement. All such outstanding shares
have been duly and validly issued, are fully paid and non-assessable and have
been issued free of preemptive rights. As of the Restatement Effective Date,
Parent does not have outstanding any securities convertible into or exchangeable
for its capital stock or outstanding any rights to subscribe for or to purchase,
or any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
(c) On the Restatement Effective Date and after giving effect to the
Transaction, the authorized capital stock of the Borrower shall consist of 1,000
shares of common stock, 10 of which shall be issued and outstanding and
delivered for pledge pursuant to the Pledge Agreement. All such outstanding
shares of common stock have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. As of the Restatement Effective
Date, the Borrower does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
7.15 Subsidiaries. After giving effect to the Transaction (x) Holdings
will have no Subsidiaries other than Parent and its Subsidiaries and (y) Parent
shall have no Subsidiaries other than the Borrower and its Subsidiaries, and
Howmet Insurance. After giving effect to the Transaction, the Borrower will have
no Subsidiaries other than (i) those Subsidiaries listed on Schedule VIII and
(ii) new Subsidiaries created in compliance with Section 9.14. An accurate
organization chart, showing the ownership structure of Holdings and each of its
Subsidiaries, is set forth on Schedule IX.
7.16 Compliance with Statutes, etc. Each of Holdings, Parent, the Borrower
and their respective Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (other than applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls which are the subject of Section 7.19), except such noncompliances as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities,
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condition (financial or otherwise) or prospects of the Borrower, the Borrower
and its Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as
a whole.
7.17 Investment Company Act. None of Holdings, Parent, the Borrower or any
of their respective Subsidiaries is an "investment company or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
7.18 Public Utility Holding Company Act. None of Holdings, Parent, the
Borrower or any of their respective Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a " subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) Holdings, Parent, the Borrower and each of
their respective Subsidiaries have complied with, and on the date of each Credit
Event will be in compliance with, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge after inquiry of Holdings, Parent and the
Borrower, past or threatened Environmental Claims against Holdings, Parent, the
Borrower or any of their respective Subsidiaries or any Real Property owned or
operated by Holdings, Parent, the Borrower or any of their respective
Subsidiaries. There are no facts, circumstances, conditions or occurrences on
any Real Property owned or operated by Holdings, Parent, the Borrower or any of
their respective Subsidiaries or, to the best knowledge after inquiry of
Holdings, Parent or the Borrower, on any property adjoining or in the vicinity
of any such Real Property, that could reasonably be expected (i) to form the
basis of an Environmental Claim against Holdings, Parent, the Borrower or any of
their respective Subsidiaries or any such Real Property, or (ii) to cause any
such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property by Holdings, Parent, the
Borrower or any of their respective Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used, treated
or stored on, or transported to or from, any Real Property owned or operated by
Holdings, Parent, the Borrower or any of their respective Subsidiaries where
such generation, use, treatment, storage or transportation could give rise to an
Environmental Claim or has violated or could reasonably be expected to violate
any Environmental Law. Hazardous Materials have not at any time been Released on
or from any Real Property owned or operated by Holdings, Parent, the Borrower or
any of their respective Subsidiaries where such Release could give rise to an
Environmental Claim or has violated or could reasonably be expected to violate
any applicable Environmental Law.
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(c) Notwithstanding anything to the contrary in this Section 7.19, the
representations made in this Section 7.19 shall only be untrue if the aggregate
effect of all failures and noncompliances of the types described above could
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower, the Borrower and its Subsidiaries taken as a whole or
Holdings and its Subsidiaries taken as a whole after giving effect to (i) the $6
million net reserve on the balance sheet of the Borrower, as set forth on the
report on Form 10-Q (as filed with the SEC) of the Borrower for its fiscal
quarter ended September 30, 1996, for environmental liabilities, (ii) the
indemnity provisions of the Stock Purchase Agreement and (iii) letters of credit
covering Excluded Liabilities (as defined in the Stock Purchase Agreement).
7.20 Labor Relations. Except as set forth on Schedule X, none of Holdings,
Parent, the Borrower nor any of their respective Subsidiaries is engaged in any
unfair labor practice that could reasonably be expected to have a material
adverse effect on the Borrower, the Borrower and its Subsidiaries taken as a
whole or Holdings and its Subsidiaries taken as a whole and there is (i) no
unfair labor practice complaint pending against Holdings, Parent, the Borrower
or any of their respective Subsidiaries or, to the best knowledge of Holdings,
Parent or the Borrower, threatened against any of them, before the National
Labor Relations Board, and no material grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Holdings, Parent the Borrower or any of their respective Subsidiaries
or, to the best knowledge of Holdings, Parent or the Borrower, threatened
against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against Holdings, Parent, the Borrower or any of their respective Subsidiaries
or, to the best knowledge of Holdings, Parent or the Borrower, threatened
against Holdings, the Borrower or any of their respective Subsidiaries and (iii)
to the best knowledge of Holdings, Parent and the Borrower, no union
representation proceeding is pending with respect to the employees of Holdings,
Parent or the Borrower or any of their respective Subsidiaries, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower,
the Borrower and its Subsidiaries taken as a whole or Holdings and its
Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of Holdings, Parent,
the Borrower and their respective Subsidiaries owns all material patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, in each case
reasonably necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to own or obtain which,
as the case may be, would result in a material adverse effect on the business.
operations, property, assets, liabilities, condition (financial or
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otherwise) or prospects of the Borrower, the Borrower and its Subsidiaries taken
as a whole or Holdings and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule XI sets forth a true and complete list
of all Indebtedness of Holdings, Parent, the Borrower and their respective
Subsidiaries as of the Restatement Effective Date and which (x) constituted
"Existing Indebtedness" under, and as defined in, the Original Credit Agreement
and (y) is to remain outstanding after giving effect to the Transaction (the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any other entity (to the
Borrower's knowledge, in the case of guarantees by Persons other than Holdings
and its Subsidiaries) which directly or indirectly guaranteed such debt.
7.23 Special Purpose Corporations. Holdings directly engages in no
business activities, except in connection with its ownership of the capital
stock of Parent and liabilities incident thereto. Parent engages in no direct
business activities, other than (i) its ownership of the capital stock of the
Borrower and Howmet Insurance and liabilities incident thereto, (ii) its
obligations with respect to the Installment Notes and its rights with respect to
the Installment Notes Trust and any Acquisition Letters of Credit, (iii) the
remediation of certain formerly owned environmental sites, as to which it has
received unconditional indemnification from one or more financially responsible
third parties and (iv) its obligations pursuant to the Parent PIK Subordinated
Notes.
SECTION 8. Affirmative Covenants. Holdings, Parent and the Borrower
hereby covenant and agree that on and after the Restatement Effective Date and
until the Total Commitments and all Letters of Credit have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. Holdings, Parent and/or the Borrower
will furnish to the Administrative Agent (with sufficient copies for each of the
Banks) and the Administrative Agent will promptly thereafter furnish to each
Bank:
(a) Quarterly Financial Statements. Within 45 days after the close
of each of the first three quarterly accounting periods in each fiscal
year of the Borrower, (i) the report on Form 10-Q (as filed with the
Securities and Exchange Commission or any successor thereto (the "SEC"))
of the Borrower for such quarterly period, with the financial information
contained therein to be certified by the chief financial officer or
treasurer of the Borrower, subject to normal year-end audit adjustments,
provided that if for any reason the Borrower ceases to file such reports
on Form 10- Q with the SEC, it shall nonetheless continue to furnish such
information to the Administrative Agent pursuant to this clause (a), and
(ii) management's discussion and analysis of the important operational and
financial developments during the
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fiscal quarter and year-to-date periods (except to the extent already included
in the report delivered pursuant to preceding clause (i)).
(b) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Borrower, (i) the report on Form 10-K (as filed with the
SEC) of the Borrower for such fiscal year, provided that if for any reason the
Borrower ceases to file such reports on Form 10-K with the SEC, it shall
nonetheless continue to furnish such information to the Administrative Agent
pursuant to this clause (b), (ii) the consolidated and consolidating balance
sheets of Holdings and its Consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements of income
and retained earnings and of cash flows for such fiscal year setting forth
comparative figures for the preceding fiscal year and certified (x) in the case
of the consolidating financial statements described above, by an officer of
Holdings and (y) in the case of such consolidated financial statements, by Ernst
& Young or such other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent, together
with a report of such accounting firm stating that in the course of its regular
audit of the financial statements of Holdings and its Subsidiaries, which audit
was conducted in accordance with generally accepted aud- iting standards, such
accounting firm obtained no knowledge of any Default or Event of Default which
has occurred and is continuing or, if in the opinion of such accounting firm
such a Default or Event of Default has occurred and is continuing, a statement
as to the nature thereof, and (iii) management's discussions and analysis of the
important operational and financial developments during such fiscal year (except
to the extent already included in the report delivered pursuant to preceding
clause (i)).
(c) Management Letters. Promptly after the receipt thereof by
Holdings, Parent, the Borrower or any of their respective Subsidiaries, a copy
of any management letter" received by any such Person from its certified public
accountants and the management's responses thereto.
(d) Budgets. No later than 30 days following the first day of each
fiscal year of the Borrower, beginning with the fiscal year commencing January
1, 1998, a budget in form satisfactory to the Managing Agents (including
budgeted statements of income and sources and uses of cash and balance sheets)
prepared by the Borrower for each of the fiscal years through the Maturity Date,
in each case, of the Borrower and its Subsidiaries, accompanied by the statement
of the chief financial officer or treasurer of the Borrower to the effect that,
to the best of his knowledge, the budget is a reasonable estimate for the period
covered thereby.
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(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 8.01(a) and (b), a certificate of
the chairman of the board, the president, the chief financial officer or the
treasurer of the Borrower to the effect that, to the best of such officer's
knowledge, no Default or Event of Default has occurred and is continuing or, if
any Default or Event of Default has occurred and is continuing, specifying the
nature and extent thereof, which certificate shall, in the case of any such
financial statements delivered in respect of a period ending on the last day of
a fiscal quarter or year of Holdings, (x) set forth the calculations required to
establish whether the Borrower was in compliance with the provisions of Sections
4.02(e) and (f), 9.03, 9.04, 9.05 and 9.07 through 9.10, inclusive, at the end
of such fiscal quarter or year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within three Business Days in the case of item (i) below or five Business Days
in the case of item (ii) below, after an officer of Holdings, Parent or the
Borrower obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or Event of Default and (ii) any litigation or
governmental investigation or proceeding pending (x) against Holdings, Parent,
the Borrower or any of their respective Subsidiaries which could reasonably be
expected to materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower, the Borrower and its Subsidiaries taken as a whole or Holdings and its
Subsidiaries taken as a whole, (y) with respect to any Indebtedness in excess of
$5,000,000 of Holdings, Parent, the Borrower or any of their respective
Subsidiaries taken as a whole or (z) with respect to any Document.
(g) Other Reports and Filings. Promptly, copies of all other
financial information, reports, proxy materials and other information which
Holdings, the Borrower or any of their respective Subsidiaries shall file with
the SEC or deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(h) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, an officer of Holdings, Parent, the Borrower or any of
their respective Subsidiaries obtains knowledge thereof, notice of one or more
of the following environmental matters, unless such officer reasonably concludes
that such environmental matters would not, individually or when aggregated with
all other such environmental matters, materially and adversely affect the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, the Borrower and its Subsidiaries taken
as a whole or Holdings and its Subsidiaries taken as a whole:
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(i) any pending or threatened Environmental Claim against Holdings,
Parent, the Borrower or any of their respective Subsidiaries or any Real
Property owned or operated by Holdings, Parent, the Borrower or any of
their respective Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by Holdings, Parent, the Borrower or any of
their respective Subsidiaries that (a) results in noncompliance by
Holdings, Parent, the Borrower or any of their respective Subsidiaries
with any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against Holdings, Parent, the
Borrower or any of their respective Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Holdings, Parent, the Borrower or any of their respective
Subsidiaries that could reasonably be expected to cause such Real Property
to be subject to any restrictions on the ownership, occupancy, use or
transferability by Holdings, Parent, the Borrower or any of their
respective Subsidiaries of such Real Property under any Environmental Law;
and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by Holdings, Parent, the Borrower or any of their
respective Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency; provided that in any event
Holdings, Parent and/or the Borrower shall deliver to each Bank all
notices received by it or any of their respective Subsidiaries from any
government or governmental agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and
Holdings', Parent's, the Borrower's or such Subsidiary's response thereto. In
addition, the Borrower will provide the Banks with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all communications with any Person (other than its
attorneys) relating to any Environmental Claim of which notice is required to be
given pursuant to this Section 8.01(h), and such detailed reports (not subject
to attorney-client or attorney work product privileges) of any such
Environmental Claim as may reasonably be requested by the Banks.
(i) Annual Meetings with Banks. At the request of Administrative Agent,
Holdings shall within 120 days after the close of each fiscal year of Holdings
hold
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a meeting at a time and place selected by Holdings and acceptable to the
Managing Agents with all of the Banks at which meeting shall be reviewed
the financial results of the previous fiscal year and the financial
condition of Holdings and its Subsidiaries and the budgets presented for
the current fiscal year of Holdings and its Subsidiaries.
(j) Installment Notes; Existing Installment Notes Letter of Credit;
Acquisition Letters of Credit. Holdings, Parent or the Borrower shall
promptly, and in any event within three Business Days, after it becomes
aware of (or in the case of clause (ix) below, after it receives) same,
provide the Administrative Agent with notice of (i) any dispute between
Parent and any holder of Installment Notes, (ii) any payment with respect
to the Installment Notes which is not paid directly from a drawing in a
like amount pursuant to the Existing Installment Notes Letter of Credit,
(iii) any failure to reinstate the Existing Installment Notes Letter of
Credit in accordance with its terms following a drawing thereunder to pay
interest, (iv) any drawing under the Existing Installment Notes Letter of
Credit, (v) any circumstance whatsoever which would permit a drawing under
any Acquisition Letter of Credit, (vi) any circumstance or occurrence
which would permit a drawing under any Acquisition Letter of Credit unless
such circumstance or occurrence is remedied or other actions taken
(including, but not limited to, a downgrade in the credit rating of the
respective issuer of the respective Acquisition Letter of Credit), (vii)
any replacement of any Acquisition Letter of Credit (whether or not in
accordance with the requirements of the Stock Purchase Agreement), (viii)
any claim for indemnification made by Holdings or any of its Subsidiaries
pursuant to the Stock Purchase Agreement and (ix) copies of all notices
received by it under the Installment Notes Trust or the Installment Notes
Trust Agreement. In connection with any notice of the type described
above, and following a request by any Agent, Holdings, Parent and the
Borrower shall promptly furnish the Banks with information describing the
actions, if any, it plans to take in connection with any of the items
described above.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings, Parent, the
Borrower or their respective Subsidiaries as any Agent (whether acting on
its own or at the request of any Bank) may reasonably request in writing.
8.02 Books, Records and Inspections. Holdings, Parent and the
Borrower will, and will cause each of their respective Subsidiaries to, keep
proper books of record and account in which full, true and correct entries in
conformity with generally accepted accounting principles and all requirements of
law shall be made of all dealings and transactions in relation to its business
and activities. Holdings, Parent and the Borrower will, and will cause each of
their respective Subsidiaries to, permit officers and designated
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representatives of any of the Agents or any Bank to visit and inspect, during
regular business hours and under guidance of officers of Holdings, Parent, the
Borrower or such Subsidiary, any of the properties of Holdings, Parent and the
Borrower or such Subsidiary, and to examine the books of account of Holdings,
Parent and the Borrower or such Subsidiary and discuss the affairs, finances and
accounts of Holdings, Parent, the Borrower or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all upon reasonable advance notice and at such reasonable times and intervals
and to such reasonable extent as such Agent or such Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule XII sets forth a
true and complete listing of all insurance maintained by Holdings, Parent, the
Borrower and their respective Subsidiaries as of the Restatement Effective Date.
Holdings, Parent and the Borrower will, and will cause each of their respective
Subsidiaries to, (i) keep all property necessary in its business in good working
order and condition (ordinary wear and tear excepted), (ii) maintain insurance
on all its property in at least such amounts and against at least such risks as
is consistent and in accordance with industry practice and (iii) furnish to each
Bank, upon written request, full information as to the insurance carried. In
addition to the requirements of the immediately preceding sentence, Holdings,
Parent and the Borrower will at all times cause insurance of the types described
in Schedule XII to be maintained (with the same scope of coverage as that
described in Schedule XII) at levels which are at least as great as the
respective amount described opposite the respective type of insurance on
Schedule XII under the column headed "Minimum Amount Required to be Maintained",
provided, however, that Holdings, Parent or the Borrower may discontinue or
reduce any insurance to the extent that it is no longer available at
commercially reasonable rates and so long as similarly situated companies are,
in general, reducing or eliminating such insurance in a manner consistent with
the changes being effected by the Credit Parties and their Subsidiaries.
(b) Holdings, Parent and the Borrower will, and will cause their
respective Domestic Subsidiaries to, at all times keep their respective property
insured in favor of the Collateral Agent, and all policies (including Mortgage
Policies) or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by Holdings, Parent, the Borrower
or any of their respective Domestic Subsidiaries) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee or
as an additional insured), (ii) shall state that such insurance policies shall
not be cancelled without 30 days' prior written notice thereof by the respective
insurer to the Collateral Agent and (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent and the Secured Creditors.
8.04 Corporate Franchises. Holdings, Parent and the Borrower will, and
will cause each of their respective Subsidiaries to, do or cause to be done, all
things
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necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents used in its business;
provided, however, that nothing in this Section 8.04 shall prevent (i) sales of
assets, consolidations or mergers by or involving Holdings, Parent, the Borrower
or any of their respective Subsidiaries in accordance with Section 9.02 or (ii)
the withdrawal by Holdings, Parent, the Borrower or any of their respective
Subsidiaries of their qualification as a foreign corporation in any jurisdiction
where such withdrawal could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower, the Borrower
and its Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as
a whole.
8.05 Compliance with Statutes, etc. Holdings, Parent and the Borrower
will, and will cause each of their respective Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower, the Borrower and its Subsidiaries taken as a whole or Holdings
and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Holdings, Parent and the
Borrower will comply, and will cause each of their respective Subsidiaries to
comply, in all material respects with all Environmental Laws applicable to the
ownership or use of Real Property now or hereafter owned or operated by
Holdings, Parent, the Borrower or any of their respective Subsidiaries, will
within a reasonable time-period pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws. None of Holdings, Parent, the Borrower nor any of their
respective Subsidiaries will generate, use, treat, store, Release or dispose of,
or permit the generation, use, treatment, storage, Release or disposal of
Hazardous Materials on any Real Property now or hereafter owned or operated by
Holdings, Parent, the Borrower or any of their respective Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property except for Hazardous Materials used or stored at any such
Real Properties in material compliance with all applicable Environmental Laws
and reasonably required in connection with the operation, use and maintenance of
any such Real Property.
(b) At the written request of the Administrative Agent or the Required
Banks, which request shall specify in reasonable detail the basis therefor, at
any time and from time to time, the Borrower will provide, at the Borrower's
sole cost and expense, an environmental site assessment report concerning any
Real Property now or hereafter owned
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or operated by Holdings, Parent, the Borrower or any of their respective
Subsidiaries, prepared by an environmental consulting firm approved by the
Administrative Agent, indicating the presence or absence of Hazardous Materials
and the potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property; provided that such request may be
made only if (i) there has occurred and is continuing an Event of Default, (ii)
the Administrative Agent or the Required Banks reasonably believe that Holdings,
Parent, the Borrower or any such Real Property is not in material compliance
with Environmental Law, or (iii) circumstances exist that reasonably could be
expected to form the basis of a material Environmental Claim against Holdings,
Parent, the Borrower or any such Real Property. If the Borrower fails to provide
the same within 90 days after such request was made, the Administrative Agent
may order the same, and the Borrower shall grant and hereby grants to the
Administrative Agent and the Banks and their agents access to such Real Property
and specifically grants the Administrative Agent and the Banks an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at the Borrower's expense.
8.07 ERISA. As soon as possible and, in any event, within 10 days after
Holdings, Parent, the Borrower or any of their respective Subsidiaries or any
ERISA Affiliate (collectively, the "Plan Parties") knows of the occurrence of
any of the following, Holdings or the Borrower will deliver to each of the Banks
a certificate of an officer of Holdings or the chief financial officer of the
Borrower setting forth details as to such occurrence and the action, if any,
that Holdings, Parent, the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by Holdings, Parent, the Borrower, such Subsidiary,
the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred other than with respect to
a Multiemployer Plan; that an accumulated funding deficiency has been incurred
or an application may reasonably be expected to be or has been made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan other
than with respect to a Multiemployer Plan; that a contribution required to be
made by Holdings, Parent, Borrower, any of their Subsidiaries and/or any ERISA
Affiliate, to a Plan or Foreign Pension Plan has not been timely made; that a
Plan other than a Multiemployer Plan has been or may reasonably be expected to
be terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan other than a Multiemployer Plan has an Unfunded Current
Liability giving rise to a lien under ERISA or the Code; that proceedings may
reasonably be expected to be or have been instituted to terminate or appoint a
trustee to administer a Plan other than a Multiemployer Plan; that a proceeding
has been instituted with respect to any Plan Party pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Multiemployer Plan; that
Holdings, Parent, the Borrower, any of their respective Subsidiaries or any
ERISA Affiliate will or may reasonably be expected to incur any liability
(including any
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indirect, contingent or secondary liability) to or on account of the termination
of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or
4980 of the Code or Section 409 or 502(i) or 502(1) of ERISA; or that Holdings,
Parent, the Borrower or any Subsidiary may incur any material liability solely
as a result of the adoption or amendment of any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA) in addition to the liability existing on the Restatement Effective Date
pursuant to any such welfare or pension plan. Upon request by any Bank, the
Borrower will deliver to such Bank a complete copy of the annual reports (Form
5500) of each Plan (other than a Multiemployer Plan) (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof, copies of
any material notices received by Holdings, Parent, the Borrower or any of their
respective Subsidiaries or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Banks no later than 15 days after
the date such notice has been received by Holdings, the Borrower, the Subsidiary
or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings shall cause (i) each
of its, and each of its Subsidiaries', fiscal years to end on December 31, and
(ii) each of its, and each of its Subsidiaries', (x) first three fiscal quarters
in each fiscal year to end on the last day of the thirteenth week of the
respective calendar quarter and (y) fourth fiscal quarter in each fiscal year to
end on December 31, provided, however, that, so long as no Default or Event of
Default then exists, Holdings may make one election to change its, and each of
its Subsidiaries', fiscal years to end on a date other than December 31.
8.09 Performance of Obligations. Each of Holdings, Parent and the Borrower
will, and will cause each of its Subsidiaries to, perform all of its obligations
under the terms of each mortgage, indenture, security agreement and other debt
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower, the Borrower
and its Subsidiaries taken as a whole or Holdings and its Subsidiaries taken as
a whole.
8.10 Payment of Taxes. Each of the Taxpayers will pay and discharge or
cause to be paid and discharged, and will cause each of their respective
Subsidiaries to pay and discharge, all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any material properties belonging to it, in
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each case on a timely basis, and all lawful claims which, if unpaid, might
become a lien or charge upon any material properties of the Taxpayers or any of
their respective Subsidiaries; provided that none of the Taxpayers or any of
their respective Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with generally accepted accounting principles.
8.11 Ownership of Subsidiaries. Holdings shall at all times own 100% of
the outstanding capital stock of Parent, which in turn shall at all times own
100% of the outstanding capital stock of the Borrower. Except as otherwise
expressly permitted pursuant to Section 9.14 in the case of the creation or
acquisition of new Subsidiaries after the Restatement Effective Date, the
Borrower shall directly or indirectly own 100% of the capital stock of each
Subsidiary of Holdings other than Parent, the Borrower and Howmet Insurance
(which shall be owned by the Parent). Without limiting the foregoing, the
Borrower shall at all times be required to directly own 100% of the capital
stock of each Receivables Subsidiary, which capital stock (and any promissory
notes received by the Borrower or any other Credit Party from any Receivables
Subsidiary) shall be pledged (and delivered for pledge) pursuant to the Pledge
Agreement.
8.12 Additional Security; Further Assurances; Surveys. (a) Holdings,
Parent and the Borrower will, and will cause each of their respective Domestic
Wholly-Owned Subsidiaries (other than Howmet Insurance and any Receivables
Subsidiary) to, grant to the Collateral Agent security interests and mortgages
(an "Additional Mortgage") in such Real Property having a Fair Market Value in
excess of $1,000,000 of any such Person as are not covered by the Original
Mortgages, to the extent acquired after the Restatement Effective Date and
requested from time to time by the Administrative Agent or the Required Banks
(each such Real Property, an "Additional Mortgaged Property"). All such
Additional Mortgages shall be granted pursuant to documentation substantially in
the form of the Mortgages delivered to the Administrative Agent on the Original
Effective Date or in such other form as is reasonably satisfactory to the
Administrative Agent and shall constitute valid and enforceable perfected Liens
superior to and prior to the rights of all third Persons and subject to no other
Liens except as are permitted by Section 9.01 at the time of perfection thereof.
The Additional Mortgages or instruments related thereto shall be duly recorded
or filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent
required to be granted pursuant to the Additional Mortgages and all taxes, fees
and other charges payable in connection therewith shall be paid in full.
(b) Holdings, Parent and the Borrower will, and will cause each of their
respective Domestic Wholly-Owned Subsidiaries (other than Howmet Insurance and
any Receivables Subsidiary) to, at the expense of the applicable Credit Party,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such
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vouchers, invoices, schedules, confirmatory assignments, confirmatory
conveyances, financing statements, transfer endorsements, confirmatory powers of
attorney, certificates, real property surveys, reports and other assurances or
confirmatory instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent may reasonably
require pursuant to this Section 8.12. Furthermore, Holdings, Parent and the
Borrower shall cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Collateral Agent to assure itself that this Section 8.12 has
been complied with.
(c) Holdings, Parent and the Borrower agree to cause each Domestic
Wholly-Owned Subsidiary (other than any Receivables Subsidiary) established or
created in accordance with Section 9.14 to execute and deliver a guaranty of all
Obligations and all obligations under Interest Rate Protection or Other Hedging
Agreements in substantially the form of the Subsidiaries Guaranty.
(d) The Borrower agrees to pledge and deliver all of the capital stock of
each new Subsidiary (excluding that portion of the voting stock of any Foreign
Subsidiary which would be in excess of 65% of the total outstanding voting stock
of such Foreign Subsidiary) established or created after the Restatement
Effective Date to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Pledge Agreement.
(e) Holdings, Parent and the Borrower will cause each Domestic Wholly-
Owned Subsidiary (other than the Receivables Subsidiary) established or created
in accordance with Section 9.14 to grant to the Collateral Agent a first
priority (subject to Permitted Liens) Lien on property (tangible and intangible)
other than any assets that may become Receivables Facility Assets of such
Subsidiary upon terms and with exceptions similar to those set forth in the
Security Documents as appropriate, and satisfactory in form and substance to the
Borrower, the Administrative Agent and Required Banks. Holdings, Parent and the
Borrower shall cause each such Domestic Wholly-Owned Subsidiary, at its own
expense, to execute, acknowledge and deliver, or cause the execution,
acknowledgement and delivery of, and thereafter register, file or record in any
appropriate governmental office, any document or instrument reasonably deemed by
the Collateral Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens. Holdings, Parent and the Borrower will cause
each of such Domestic Subsidiaries to take all actions reasonably requested by
the Administrative Agent (including, without limitation, the filing of UCC-1's)
in connection with the granting of such security interests.
(f) The security interests required to be granted pursuant to this Section
8.12 shall be granted pursuant to security documentation (which shall be
substantially similar to the Security Documents already executed and delivered
by the Borrower or its Subsidiaries, as applicable) or otherwise satisfactory in
form and substance to the Collateral
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Agent and the Borrower and shall constitute valid and enforceable perfected
security interests prior to the rights of all third Persons and subject to no
other Liens except such Liens as are permitted by Section 9.01. The Additional
Security Documents and other instruments related thereto shall be duly recorded
or filed in such manner and in such places and at such times as are required by
law to establish, perfect, preserve and protect the Liens, in favor of the
Collateral Agent for the benefit of the respective Secured Creditors, required
to be granted pursuant to the Additional Security Documents and all taxes, fees
and other charges payable in connection therewith shall be paid in full by the
Borrower. At the time of the execution and delivery of the Additional Security
Documents, the Borrower shall cause to be delivered to the Collateral Agent such
opinions of counsel, Mortgage Policies, title surveys, real estate appraisals
and other related documents as may be reasonably requested by the Managing
Agents or the Required Banks to assure themselves that this Section 8.12 has
been complied with.
(g) Each of Holdings and the Borrower agrees that each action required
above by Section 8.12 (a) or (b) shall be completed as soon as possible, but in
no event later than 60 days after such action is requested to be taken by the
Administrative Agent or the Required Banks. Each of Holdings and the Borrower
further agrees that each action required by Sections 8.12(c), (d), (e) and (f)
with respect to the creation or acquisition of a new Subsidiary shall be
completed contemporaneously with (or, in the case of any documents or
instruments to be registered, filed or recorded, within 10 days of) the creation
or acquisition of such new Subsidiary.
8.13 Permitted Acquisitions and Certain Additional Capital Expenditures.
(a) During any calendar year, the Borrower and its Subsidiaries may make
Permitted Acquisitions, so long as the aggregate consideration paid (including,
without limitation, the value of any noncompete, earn-out and other deferred
payout arrangements) in connection therewith does not exceed $10,000,000 during
such calendar year (it being understood that for calendar year 1996, such amount
shall be reduced by the amount of consideration paid in respect of Permitted
Acquisitions between January 1, 1996, and the Restatement Effective Date),
except to the extent such additional consideration is permitted pursuant to
following clauses (b) or (c).
(b) To the extent the aggregate amount of consideration paid (including,
without limitation, the value of any noncompete, earn-out and other deferred
payout arrangements) in respect of Permitted Acquisitions of the Borrower and
its Subsidiaries during any calendar year is less than $10,000,000 (after giving
effect to any decrease in such amount as provided above in clause (a) or
increase in any such amount as provided below in this clause (b)), the lesser of
(x) such unused amount and (y) $10,000,000, may be carried forward and utilized
by the Borrower and its Subsidiaries to make additional Permitted Acquisitions
in the immediately succeeding calendar year; provided that the
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maximum amount carried forward into any calendar year pursuant to this clause
(b) shall be $10,000,000.
(c) In addition to the Permitted Acquisitions permitted pursuant to
preceding clauses (a) and (b), additional Permitted Acquisitions and/or Capital
Expenditures by the Borrower and its Subsidiaries shall be permitted to be made
with proceeds of asset sales not otherwise required to be applied pursuant to
Section 4.02(e) by reason of the proviso to the first sentence thereof; provided
that the maximum aggregate amount of consideration paid (including, without
limitation, the value of any noncompete, earn-out and other deferred payout
arrangements) in connection with Permitted Acquisitions and Capital Expenditures
permitted pursuant to this clause (c) shall not exceed either (x) $25,000,000 in
any calendar year or (y) $50,000,000 in the aggregate for all periods after the
Original Effective Date.
(d) Notwithstanding anything to the contrary contained above, (x) the
aggregate principal amount of Permitted Acquired Debt assumed in connection with
any Permitted Acquisition (or which remains as an obligation of the respective
Subsidiary acquired after giving effect thereto) shall be counted as
consideration paid in connection therewith for purposes of determining
compliance with preceding clauses (a) through (c) of this Section 8.13 and (y)
in no event shall any Permitted Acquisition be made at any time when a Default
or Event of Default then exists, or would exist immediately after giving effect
thereto.
8.14 Interest Payments on Parent PIK Subordinated Notes. Parent shall, to
the maximum extent permitted pursuant to the terms of the Parent PIK
Subordinated Notes, make all payments of interest owing with respect thereto
through the issuance of additional Parent PIK Subordinated Notes, rather than by
making such interest payments in cash. Parent shall take all other actions as
may be necessary so that no cash payments are owing in respect of the Parent PIK
Subordinated Notes at any time prior to the date which occurs eight and one-half
years after the Original Effective Date.
8.15 Maintenance of Corporate Separateness. Holdings will, and will cause
each of its Subsidiaries to, satisfy customary corporate formalities, including
the holding of regular board of directors' and shareholders' meetings or action
by directors or shareholders without a meeting and the maintenance of corporate
offices and records. Neither the Borrower nor any of its Subsidiaries shall make
any payment to a creditor of Parent or Holdings in respect of any liability of
either such Person, and no bank account of Holdings or Parent shall be
commingled with any bank account of the Borrower or any of its Subsidiaries. Any
financial statements distributed to any creditors of Holdings or Parent shall
clearly establish or indicate the corporate separateness of such Person from the
Borrower and its Subsidiaries. Finally, neither Holdings nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which is
likely to result in the corporate existence of Holdings or Parent being ignored,
or in the assets and liabilities of Holdings
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or Parent being substantively consolidated with those of the Borrower or any of
its Subsidiaries in a bankruptcy, reorganization or other insolvency proceeding.
8.16 Foreign Subsidiaries Security. If following a change in the relevant
sections of the Code or the regulations, rules, rulings, notices or other
official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Administrative Agent and the Required
Banks does not within 30 days after a request from the Administrative Agent or
the Required Banks deliver evidence, in form and substance reasonably
satisfactory to the Administrative Agent and the Required Banks, with respect to
any Foreign Subsidiary which has not already had all of its stock pledged
pursuant to the Pledge Agreement that a pledge of 66-2/3% or more of the total
combined voting power of all classes of capital stock of such Foreign Subsidiary
entitled to vote, would cause the undistributed earnings of such Foreign
Subsidiary as determined for Federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes, then that portion of such Foreign Subsidiary's outstanding
capital stock not theretofore pledged pursuant to the Pledge Agreement shall be
pledged to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Pledge Agreement (or another pledge agreement in substantially
similar form, if needed), to the extent that the entering into such Pledge
Agreement is permitted by the laws of the respective foreign jurisdiction and
with all documents delivered pursuant to this Section 8.16 to be in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Banks.
8.17 Drawings on, and Replacements of, Acquisition Letters of Credit. (a)
If at any time Holdings or any of its Subsidiaries is permitted, in accordance
with the terms thereof, to make any drawing under any Acquisition Letter of
Credit, then Holdings, the Parent or the Borrower shall, or shall cause its
respective Subsidiary to, make such drawing or drawings as are then permitted to
be made under the respective Acquisition Letter of Credit as may be directed by
the Required Banks, with any such drawing to be made within five Business Days
(or (x) such longer period as is then required thereunder to effect such a
drawing or (y) subject to clause (x), such shorter period as will permit the
drawing to occur prior to the expiration date of any Acquisition Letter of
Credit) after Holdings or the Borrower has received written notice to make such
drawing from the Required Banks or by the Administrative Agent on their behalf.
The foregoing shall not prohibit Holdings, the Parent, the Borrower or their
respective Subsidiaries from making drawings under any Acquisition Letter of
Credit, in the absence of a direction by the Required Banks, at any time when it
is otherwise permitted to do so.
(b) If any Acquisition Letter of Credit is replaced by a substitute
Acquisition Letter of Credit (which substitution must be made in accordance with
the Stock Purchase Agreement), Holdings and its Subsidiaries shall take all
actions with respect thereto as it would have been required to take if such
replacement Acquisition Letter of
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Credit were originally issued on the Restatement Effective Date in accordance
with the requirements of Section 5.07 of the Original Credit Agreement.
(c) Except in connection with a replacement of an Acquisition Letter
of Credit with a substantially identical letter of credit in accordance with the
requirements of the Stock Purchase Agreement, neither Holdings nor any of its
Subsidiaries will surrender any Acquisition Letter of Credit for cancellation
(or agree thereto) prior to the stated expiration date thereof (as determined
without regard to any early expiration due to the surrender of the respective
Acquisition Letter of Credit), except in connection with a drawing of the full
stated amount of an Acquisition Letter of Credit where such drawing is the last
drawing which will be permitted thereunder and where the respective Acquisition
Letter of Credit must be surrendered in connection with such drawing.
(d) Neither Holdings nor any of its Subsidiaries will consent to any
investment of funds held pursuant to the Installment Notes Trust Agreement in
any investments which would not constitute Cash Equivalents.
SECTION 9. Negative Covenants. Holdings, Parent and the Borrower
covenant and agree that on and after the Restatement Effective Date and until
the Total Commitments and all Letters of Credit have terminated and the Loans,
Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
9.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to the Borrower or any of its
Subsidiaries), or assign any right to receive income or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute; provided that the provisions of this
Section 9.01 shall not prevent the creation, incurrence, assumption or existence
of the following (Liens described below are herein referred to as "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles in the United
States (or the equivalent thereof in any country in which a Foreign
Subsidiary is doing business, as applicable);
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(ii) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', ware- housemen's, materialmen's and mechanics' liens and
other similar Liens arising in the ordinary course of business, and (x)
which do not in the aggregate materially detract from the value of the
property or assets of the Borrower, the Borrower and its Subsidiaries
taken as a whole, or Holdings and its Subsidiaries taken as a whole, or
materially impair the use thereof in the operation of the business of the
Borrower, the Borrower and its Subsidiaries taken as a whole or Holdings
and its Subsidiaries taken as a whole or (y) which are being contested in
good faith by appropriate proceedings, which proceedings (or orders
entered in connection with such proceedings) have the effect of preventing
the forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Restatement Effective Date which are
listed, and the property subject thereto described, in Schedule XIII, but
only to the respective date, if any, set forth in such Schedule XIII for
the removal and termination of any such Liens, plus renewals and
extensions of such Liens to the extent set forth on Schedule XIII,
provided that (x) the aggregate principal amount of the Indebtedness, if
any, secured by such Liens does not increase from that amount outstanding
at the time of any such renewal or extension and (y) any such renewal or
extension does not encumber any additional assets or properties of
Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of
the business of Holdings and its Subsidiaries taken as a whole or
materially diminishing the aggregate value of the Collateral;
(vii) Liens upon assets of the Borrower and its Subsidiaries subject
to Capitalized Lease Obligations to the extent permitted by Section 9.04,
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset (other than proceeds thereof) of the
Borrower or any Subsidiary of the Borrower;
(viii) Liens placed upon assets used in the ordinary course of
business of the Borrower or any of its Subsidiaries at the time of
acquisition thereof by the
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Borrower or any such Subsidiary or within 120 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price
thereof, provided that (x) the aggregate outstanding principal amount of
all Indebtedness secured by Liens permitted by this clause (viii) shall
not at any time exceed $5,000,000 and (y) in all events, the Lien
encumbering the assets so acquired does not encumber any other asset
(other than proceeds thereof) of the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness, not materially
interfering with the conduct of the business of the Borrower, the Borrower
and its Subsidiaries taken as a whole or Holdings and its Subsidiaries
taken as a whole and not materially diminishing the aggregate value of the
Collateral;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(xi) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, provided that no
cash or property is deposited or delivered to secure the respective
judgment or award (or any appeal bond in respect thereof, except as
permitted by following clause (xiii));
(xii) statutory and contractual landlords' liens under leases or
subleases to which the Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, (y) to secure the performance of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (z)
arising by virtue of deposits made in the ordinary course of business to
secure liability for premiums to insurance carriers, provided that the
aggregate amount of deposits at any time pursuant to sub-clause (y) and
sub-clause (z) shall not exceed $1,000,000 in the aggregate;
(xiv) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this Agreement;
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(xv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods;
(xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business
in accordance with the past practices of the Borrower and its Subsidiaries
prior to the Restatement Effective Date;
(xvii) deposits made to secure statutory obligations in the form of
excise taxes;
(xviii) Liens shall be permitted to the extent same are deemed to
exist as a result of the establishment of the Installment Notes Trust, so
long as such Liens apply only to the New Installment Notes Letters of
Credit and any Secondary Letters of Credit issued in respect thereof, and
proceeds of drawings under such letters of credit made by the Installment
Notes Trustee;
(xix) Liens on Receivables Facility Assets transferred (A) to any
Receivables Subsidiary or (B) by any Receivables Subsidiary to the
Receivables Purchasers, and the filing of financing statements in
connection therewith, created by, and as set forth in, the Receivables
Documents;
(xx) Liens upon specific items of inventory or other goods and
proceeds thereof granted in favor of any Person (but not directly or
indirectly securing any Indebtedness) to facilitate the purchase, shipment
or storage of such inventory or other goods in the ordinary course of
business;
(xxi) Liens encumbering deposits securing Indebtedness under Other
Hedging Agreements, so long as the aggregate amount of deposits at any
time subject to Liens pursuant to this clause (xxi) does not exceed
$3,000,000 in the aggregate;
(xxii) Liens encumbering deposits made in the ordinary course of
business, not to exceed $5,000,000 in the aggregate at any time, to secure
nondelinquent obligations arising from statutory, regulatory, contractual
or warranty requirements of the Borrower or its Subsidiaries for which a
reserve or other appropriate provision, if any, as shall be required by
GAAP, shall have been made;
(xxiii) Liens on assets of Foreign Subsidiaries, provided that (x)
such Liens do not extend to, or encumber, assets which constitute
Collateral or the capital stock
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of the Borrower or any of its Subsidiaries and (y) such Liens extending to
the assets of any Foreign Subsidiary secure only Indebtedness incurred by
such Foreign Subsidiary pursuant to Section 9.04(xviii);
(xxiv) Liens on assets of any Subsidiary of the Borrower acquired as
a result of a Permitted Acquisition and securing only Permitted Acquired
Debt of such Subsidiary, so long as such Liens comply with the
requirements set forth in the definition of Permitted Acquired Debt; and
(xxv) Liens not otherwise permitted by the foregoing clauses (i)
through (xxiv) to the extent attaching to properties and assets with an
aggregate fair value not in excess of, and securing liabilities not in
excess of, $5,000,000 in the aggregate at any time outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property or
assets (other than purchases or other acquisitions of inventory, materials,
equipment and intangible assets in the ordinary course of business) of any
Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may (x) in the
ordinary course of business, sell, lease or otherwise dispose of any
assets which, in the reasonable judgment of such Person, are obsolete,
worn out or otherwise no longer useful in the conduct of such Person's
business and (y) sell, lease or otherwise dispose of any other assets,
provided that the aggregate Net Sale Proceeds of all assets subject to
sales or other dispositions pursuant to this clause (y) shall not exceed
$10,000,000 in any calendar year;
(iii) investments may be made to the extent permitted by Section
9.05;
(iv) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property in the ordinary course of business (so long as
any such lease does not create a Capitalized Lease Obligation except to
the extent permitted by Section 9.04);
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(v) each of the Borrower and its Subsidiaries may make sales or
transfers of inventory in the ordinary course of business and consistent
with past practices (including without limitation sales or transfers of
inventory by the Borrower to its Subsidiaries);
(vi) the Borrower and its Subsidiaries may sell or discount, in each
case without recourse and in the ordinary course of business, overdue
accounts receivable arising in the ordinary course of business, but only
in connection with the compromise or collection thereof consistent with
customary industry practice (and not as part of any bulk sale or financing
of receivables not otherwise permitted under clause (xi) below);
(vii) transfers of condemned property to the respective governmental
authority or agency that has condemned same (whether by deed in lieu of
condemnation or otherwise), and transfers of properties that have been
subject to a casualty to the respective insurer of such property as part
of an insurance settlement, shall be permitted;
(viii) licenses or sublicenses by the Borrower and its Subsidiaries
of software, trademarks and other intellectual property in the ordinary
course of business and which do not materially interfere with the business
of the Borrower, the Borrower and its Subsidiaries taken as a whole or
Holdings and its Subsidiaries taken as a whole shall be permitted;
(ix) the Installment Notes Trust shall be permitted to exist;
(x) the Borrower or any Domestic Wholly-Owned Subsidiary of the
Borrower may transfer assets or lease to or acquire or lease assets from
the Borrower or any other Domestic Wholly-Owned Subsidiary of the
Borrower, or any Domestic Wholly-Owned Subsidiary of the Borrower may be
merged into the Borrower (as long as the Borrower is the surviving
corporation of such merger as a Wholly-Owned Subsidiary of Parent) or any
other Domestic Wholly-Owned Subsidiary of the Borrower; provided that the
aggregate amount (taking the Fair Market Value) of such transfers of
assets (exclusive of assets transferred to the Intellectual Property
Subsidiary, or by the Intellectual Property Subsidiary to the Second Tier
IP Subsidiary, as contemplated by clauses (x) and (y) of the definition of
Intellectual Property Subsidiary) made to Domestic Wholly-Owned
Subsidiaries of the Borrower after the Original Effective Date shall not
exceed 15% of Consolidated Total Assets as of December 31, 1995;
(xi) sales, contributions and other transfers of Receivables
Facility Assets to the Receivables Subsidiary and sales and other
transfers of Receivables Facility
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Assets by the Receivable Subsidiary to the Receivables Purchasers, and purchases
and acquisitions of Receivables Facility Assets by the Receivables Subsidiary,
in each case pursuant to the Receivables Facility shall be permitted;
(xii) so long as no Default or Event of Default exists at the time
of the respective sale of assets or immediately after giving effect thereto,
sales of assets (which may include interests in Subsidiaries and in joint
ventures; provided that no part of the capital stock of any Subsidiary may be
sold pursuant to this clause (xii) unless all of the capital stock of the
respective Subsidiary owned by Holdings and its Subsidiaries is sold pursuant to
such a sale) of up to 5% of Consolidated Total Assets, as determined on the last
day of any calendar year, may be made in the immediately succeeding calendar
year; provided that (a) the sale price with respect to each such asset sold
shall not be less than the Fair Market Value of such asset and (b) at least 80%
of such sale price shall be payable only in cash or in Cash Equivalents;
(xiii) Holdings may liquidate any inactive Subsidiary so long as it
has reasonably determined that neither it, nor any Subsidiary of Holdings into
which such inactive Subsidiary is liquidated, will assume any material
contingent liabilities as a result thereof;
(xiv) Permitted Acquisitions shall be permitted to be made in
accordance with the requirements of Section 8.13;
(xv) any Foreign Subsidiary of the Borrower which is a Wholly-Owned
Subsidiary of the Borrower may merge with or into any other Foreign Subsidiary
of the Borrower which is also a Wholly-Owned Subsidiary of the Borrower;
(xvi) the Borrower may sell the assets or capital stock of Howmet
Refurbishment, Inc. so long as the Net Sale Proceeds thereof are applied to
repay Term Loans as provided in Section 4.02(e), provided that so long as no
Default or Event of Default then exists, the Borrower may make an intercompany
loan to Parent (I) in a principal amount not to exceed the lesser of (x) the
amount of such Net Sale Proceeds and (y) the maximum amount permitted to be so
loaned under the terms of the Senior Subordinated Note Indenture, and (II) only
to the extent the proceeds of such intercompany loan are promptly applied to
repurchase, redeem or otherwise retire outstanding Parent PIK Subordinated Notes
as provided in Section 9.11(ii) (it being understood and agreed that any portion
of such intercompany loan not so used to repurchase, redeem or otherwise retire
outstanding Parent PIK Subordinated Notes within 45 days of the making of such
intercompany loan shall be repaid to the Borrower and applied to repay Term
Loans as provided in Section 4.02(e)(without regard to clause (v) of the
parenthetical therein)), provided that one
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or more promissory notes evidencing such intercompany loans shall be
delivered by Parent to the Borrower and shall be pledged (and delivered)
by the Borrower as Collateral pursuant to the Pledge Agreement; and
(xvii) Howmet Insurance may release to Pechiney S.A. its $250,000
cash balance deposit (or any portion thereof), to the extent such deposit
is owned by Howmet Insurance, held by the Vermont Department of Banking
Insurance, Securities and Health Care Administration (the "Insurance
Department") so long as Pechiney S.A. concurrently substitutes a letter of
credit, in a stated amount equal to such released amount, issued for the
benefit of the Insurance Department.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02, such Collateral (unless sold to Holdings or a Subsidiary of
Holdings) shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and Collateral Agent shall be authorized
to take any actions deemed appropriate in order to effect the foregoing.
9.03 Restricted Payments. Holdings shall not, and shall not permit
any of its Subsidiaries to, authorize, declare or pay any Dividends with respect
to Holdings or any of its Subsidiaries or make any other Restricted Payment,
except that:
(i) any Subsidiary of the Borrower may pay Dividends to its
shareholders, in each case so long as the Borrower or any Subsidiary of
the Borrower which owns the respective equity interest in such Subsidiary
receives a percentage of any such Dividends which is at least equal to its
percentage equity interest in the respective Subsidiary paying the
Dividend;
(ii) Holdings may (x) repurchase Holdings Common Stock and/or
options to purchase Holdings Common Stock held by or (y) make payments
pursuant to equity appreciation rights agreements to, directors, executive
officers, members of management or employees of Holdings, the Borrower or
any of their Subsidiaries upon the death, disability, retirement or
termination of such director, executive officers, member of management or
employee, so long as (x) no Default or Event of Default then exists or
would exist after giving effect thereto and (y) the aggregate amount of
cash expended by Holdings pursuant to this clause (ii) shall not exceed
$2,000,000 in any calendar year or $5,000,000 in the aggregate;
(iii) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof) the Borrower
may pay cash Dividends to Parent, which shall promptly Dividend to
Holdings the amount to be utilized by Holdings, so long as the proceeds
thereof are promptly used by Parent
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and/or Holdings to (x) pay operating expenses in the ordinary course of business
and other similar corporate overhead costs and expenses, provided that the
aggregate amount of cash Dividends paid pursuant to this clause (x) in any
calendar year shall in no event exceed $2,000,000 or (y) pay amounts required to
be paid by Holdings or Parent to participants in employee benefit plans of
Pechiney Corporation, as provided in documents related thereto, provided that
the aggregate amount of any such payments pursuant to this clause (y) in any
calendar year shall in no event exceed $400,000, or (z) pay required fees and
expenses in connection with the Transaction and the registration under
applicable laws and regulations of their debt or equity securities otherwise
permitted hereunder;
(iv) the Borrower and its Subsidiaries may make payments owing by
them in accordance with the provisions of the Tax Sharing Agreement, so long as
all payments required to be made by Holdings and Parent to the Borrower and its
Subsidiaries are made when required pursuant to the terms of such Tax Sharing
Agreement;
(v) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, the Borrower and/or Parent may
make Restricted Payments to Holdings (or to Parent, which shall pay such amount
to Holdings) for the purpose of enabling Holdings to (y) pay the Dividends
referred to in clause (ii) above and (z) make payments pursuant to the
Carlyle/Thiokol Management Agreements as provided pursuant to Section 9.06(vi)
hereof, so long as all proceeds thereof are promptly (and in any event within
one Business Day) used by Holdings to pay such Dividends or payments;
(vi) regularly accruing dividends may be paid with respect to the
Holdings PIK Preferred Stock through the issuance of additional shares of
Holdings PIK Preferred Stock in accordance with the terms thereof;
(vii) the Borrower may, at its option at any time when no Default or
Event of Default is in existence, cancel all or any portion of the Indebtedness
owing pursuant to the Parent Acquisition Loan in a transaction which may
constitute a Dividend to the Parent;
(viii) so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto, the Borrower may make a
loan to Parent as permitted by Section 9.05 (xviii);
(ix) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, the Borrower may make Restricted
Payments to Parent for the purpose of enabling Parent to repurchase, redeem or
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otherwise retire outstanding Parent PIK Subordinated Notes to the extent
provided in Section 9.11(ii), so long as all proceeds thereof are promptly
(and in any event within one Business Day) used by Parent for such
purpose; and
(x) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, the Borrower may make
Restricted Payments and/or loans (pursuant to a revolving note issued
under an insurance funding agreement on the date hereof) to Parent not to
exceed (for all such Restricted Payments and loans) $1,000,000 in the
aggregate (plus the amount of any capital contributions or repayments of
loans thereafter made in respect of any such payment as described in the
immediately succeeding proviso) for the purpose of enabling Parent to make
equity contributions or loans to Howmet Insurance, which contributions or
loans shall be used by Howmet Insurance to cover its liabilities pending
reimbursement for such liabilities from Pechiney S.A. or an affiliate
thereof; provided that to the extent such reimbursement is subsequently
received by Holdings or any of its Subsidiaries (including, without
limitation, Howmet Insurance), such amounts shall, within 5 Business Days
after the receipt thereof, be contributed to the capital of the Borrower
or used to repay any such loans made by the Borrower.
9.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents (and Indebtedness represented by letters of credit and
related reimbursement obligations outstanding on the Restatement Effective
Date to the extent such Indebtedness is supported by a Letter of Credit);
(ii) Indebtedness of the Borrower pursuant to the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$125,000,000 less the aggregate amount of all repayments of Senior
Subordinated Notes effected after the Original Effective Date;
(iii) Existing Indebtedness shall be permitted to the extent the
same is listed on Schedule XI, but no refinancings or renewals thereof;
(iv) Accrued expenses and current trade accounts payable incurred in
the ordinary course;
(v) Indebtedness under Interest Rate Protection Agreements entered
into with respect to floating rate Indebtedness otherwise permitted to be
outstanding by the provisions of this Section 9.04;
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(vi) Indebtedness evidenced by Capitalized Lease Obligations to the
extent permitted pursuant to Section 9.07, provided that in no event shall the
aggregate principal amount of Capitalized Lease Obligations permitted by this
clause (vi) exceed $10,000,000 at any time outstanding;
(vii) Indebtedness subject to Liens permitted under Section
9.01(viii), so long as the outstanding amount of such Indebtedness does not
exceed the amount provided in said Section 9.01(viii);
(viii) intercompany Indebtedness of the Borrower and its
Wholly-Owned Subsidiaries, to the extent permitted by Section 9.05(vii);
(ix) in addition to any Indebtedness permitted by preceding clause
(viii), Indebtedness of any Wholly-Owned Subsidiary to the Borrower or another
Wholly- Owned Subsidiary constituting the purchase price in respect of
intercompany transfers of goods made in the ordinary course of business to the
extent not constituting Indebtedness for borrowed money;
(x) Indebtedness evidenced by Other Hedging Agreements entered into
pursuant to Section 9.05(vi);
(xi) Indebtedness of Parent pursuant to the Parent PIK Subordinated
Notes in an aggregate principal amount not to exceed $25,000,000 plus the
aggregate principal amount of Parent PIK Subordinated Notes issued to pay
interest owing on theretofore outstanding Parent PIK Subordinated Notes in
accordance with the requirements of Section 8.14, less the aggregate amount of
all repayments of principal of Parent PIK Subordinated Notes effected after the
Original Effective Date;
(xii) Indebtedness of Parent evidenced by the Installment Notes, so
long as (x) none of Holdings or any of its other Subsidiaries provides any
direct or indirect guarantee, or is obligated with respect thereto and (y) the
maximum amount at any time owing pursuant to the Installment Notes is fully
covered by the New Installment Letters of Credit and the Secondary Letters of
Credit issued in respect thereof;
(xiii) Indebtedness which may be deemed to exist pursuant to the
Receivables Facility, so long as, if the Receivables Facility Attributed
Indebtedness ever exceeds, when added to the amount of the Total Revolving Loan
Commitment as then in effect, $150,000,000, any repayments and commitment
reductions required as a result thereof pursuant to Section 4.02(d) shall have
been made in accordance with the terms thereof;
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(xiv) Indebtedness under performance bonds, letter of credit
obligations to provide security for workers' compensation claims and bank
overdrafts, in each case incurred in the ordinary course of business, provided
that any obligations arising in connection with such bank overdraft Indebtedness
is extinguished within five Business Days;
(xv) Indebtedness incurred by the Borrower or any of its
Subsidiaries and arising from agreements providing for indemnification related
to sales of goods or adjustment of purchase price or similar obligations in any
case incurred in connection with the disposition of any business, assets or
Subsidiaries of the Borrower;
(xvi) accounts payable to vendors for goods and services obtained in
the normal course of business and under normal terms and conditions;
(xvii) Indebtedness arising from transactions with the Receivables
Subsidiary as contemplated in Sections 9.05(xi), (xiv) and (xvi), so long as
such Indebtedness does not exceed the respective amounts, if any, as provided in
such respective Sections;
(xviii) Indebtedness incurred by Foreign Subsidiaries for their own
working capital and general corporate purposes, (x) to the extent that the
principal amount thereof is covered by a Letter of Credit issued pursuant to
this Agreement or (y) to the extent the principal amount of any such
Indebtedness is not so covered by a Letter of Credit outstanding hereunder, the
aggregate principal amount of Indebtedness outstanding pursuant to this
subclause (y) at no time exceeds $30,000,000;
(xix) Permitted Acquired Debt of Subsidiaries of the Borrower
assumed as a result of Permitted Acquisitions effected in accordance with the
requirements of Section 8.13, so long as the aggregate principal amount of
Permitted Acquired Debt incurred or assumed (x) in any calendar year shall not
exceed $5,000,000 or (y) after the Original Effective Date, shall not exceed
$20,000,000 in the aggregate;
(xx) Indebtedness expressly permitted pursuant to Sections 9.05(x),
(xv) and (xviii);
(xxi) Additional Indebtedness of the Borrower and its Subsidiaries
(other than the Intellectual Property Subsidiary and the Second Tier IP
Subsidiary) not to exceed $5,000,000 in aggregate principal amount outstanding
at any time;
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(xxii) Contingent Obligations of the Borrower as a guarantor of the
Indebtedness incurred by Foreign Subsidiaries permitted pursuant to
Section 9.04(xviii); and
(xxvii) Contingent Obligations of the Borrower constituting
performance guarantees of research contracts entered into or assumed by
the Intellectual Property Subsidiary in the ordinary course of business.
9.05 Advances, Investments and Loans. Holdings will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (all of the foregoing, "Investments"), except that the
following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables arising in the ordinary course of business and owing to any of
them;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may make loans and advances
in the ordinary course of business to their respective employees so long
as the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans
and advances) shall not exceed $3,500,000;
(iv) the Borrower may enter into Interest Rate Protection Agreements
to the extent permitted in Section 9.04(v);
(v) the Parent Acquisition Loan shall be permitted to remain
outstanding so long as such loan remains evidenced by a promissory note
delivered by the Borrower to the Collateral Agent as security pursuant to
the Pledge Agreement;
(vi) the Borrower may enter into and perform its obligations under
Other Hedging Agreements entered into in the ordinary course of business
and consistent with past practices so long as any such Other Hedging
Agreement is not speculative in nature and is (x) related to income
derived from foreign operations of the Borrower or any Subsidiary or
otherwise related to purchases permitted hereunder
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from foreign suppliers or (y) entered into to protect the Borrower and/or its
Subsidiaries against fluctuations in the prices of raw materials used in their
Businesses;
(vii) any Wholly-Owned Subsidiary of the Borrower (excluding each
Receivables Subsidiary) may make intercompany loans to the Borrower or any
Wholly-Owned Subsidiary of the Borrower (excluding each Receivables Subsidiary)
and the Borrower may make intercompany loans and advances to any Wholly- Owned
Subsidiary of the Borrower (excluding each Receivables Subsidiary), provided
that any promissory notes evidencing such intercompany loans owing to the
Borrower or any Domestic Wholly-Owned Subsidiary of the Borrower shall be
pledged (and delivered) as Collateral pursuant to the Pledge Agreement, and,
provided further, that the sum of the aggregate amount of such intercompany
loans (excluding intercompany loans listed on Schedule XI) from the Borrower and
its Domestic Wholly-Owned Subsidiaries outstanding at any time (calculated
without regard to any write-downs or write-offs thereof) to Foreign Wholly-Owned
Subsidiaries and the aggregate amount of the Indebtedness of Foreign
Subsidiaries outstanding at such time pursuant to sub-clause (y) of Section
9.04(xviii), when added to the amount guaranteed at such time pursuant to
Section 9.04(xxii), shall not exceed the lesser of (i) $40,000,000 minus the
amount guaranteed at such time by the Borrower pursuant to Section 9.04(xxii),
and (ii) the amount permitted under the Senior Subordinated Note Indenture;
(viii) the Borrower and its Subsidiaries may sell or transfer assets
to the extent permitted by Section 9.02, and may acquire non-cash consideration
in respect thereof to the extent permitted by Section 9.02(xii);
(ix) the Borrower may establish Subsidiaries to the extent permitted
by Section 9.14, and may effect Permitted Acquisitions in accordance with the
requirements of Section 8.13;
(x) the Installment Notes Trust shall be permitted to exist;
(xi) as a result of sales, contributions and other transfers of
Receivable Facility Assets to any Receivables Subsidiary in accordance with
Section 9.02(xi), Investments may exist from time to time consisting of (x)
contributions to the capital of such Receivables Subsidiary and (y) intercompany
loans being made (or deemed made) as a result of the transfer of such
Receivables Facility Assets, in each case so long as all capital stock of each
Receivables Subsidiary is pledged pursuant to the Pledge Agreement and all such
intercompany loans are evidenced by one or more promissory notes which are
pledged pursuant to the Pledge Agreement;
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(xii) the Borrower or any Wholly-Owned Subsidiary may make loans to
or Investments in Komatsu Howmet Ltd. Japan and R-H Component Technologies L.C.
(so long as the Borrower retains at least a 50% equity interest in such entity)
in an amount not to exceed $20,000,000 (excluding any such loans or Investments
outstanding on the Original Effective Date) in the aggregate at any time
outstanding (calculated without regard to any write-downs or write-offs
thereof);
(xiii) the Borrower and its Subsidiaries may make additional
Investments in an aggregate amount at any time outstanding (calculated without
regard to any write-downs or write-offs thereof) not to exceed in the aggregate
(x) $5,000,000 (which may, but are not required to, be made in joint ventures
and/or Subsidiaries which are not Wholly-Owned Subsidiaries) plus (y) $5,000,000
to be made only in joint ventures and/or Subsidiaries which are not Wholly-Owned
Subsidiaries, provided, that (I) in no event shall the aggregate amount of
Investments made pursuant to this clause (xiii) exceed the amount permitted
under the Senior Subordinated Note Indenture and (II) to the extent any
Investment pursuant to this clause (xiii) is made as an equity contribution to
any Subsidiary of the Borrower or its Subsidiaries, the basket provided for by
this clause (xiii) shall be replenished by the amount of any Dividends from the
Subsidiary receiving such equity contribution to the Person making such equity
contribution;
(xiv) the Borrower may guarantee obligations of its Subsidiaries
(other than any Receivables Subsidiary) as sellers pursuant to the Receivables
Documents, so long as no such guaranty shall give rise to recourse liability
(other than in connection with Standard Securitization Undertakings) for the
payment of any Receivables Facility Assets or the principal of, or interest on,
any Purchased Interest or Investor Certificate;
(xv) the Borrower may make loans to Parent, which in turn may make
loans or capital contributions to Howmet Insurance to the extent expressly
permitted pursuant to Section 9.03(x);
(xvi) to the extent necessary to maintain the net worth of a
Receivables Subsidiary in accordance with the requirements of the Receivables
Facility, the Borrower may at any time contribute one or more promissory notes
to the capital of such Receivables Subsidiary; provided that (x) at no time
shall the aggregate principal amount of such outstanding promissory notes exceed
$5,000,000 in the aggregate, and (y) all such promissory notes shall be repaid
through subsequent sales of Receivables Facility Assets to the respective
Receivables Subsidiary and not through cash payments;
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(xvii) the Intellectual Property Subsidiary may make capital
contributions to the Second Tier IP Subsidiary, in an amount not to exceed
the amount received by the Intellectual Property Subsidiary as royalty
income for patents, trademarks and other intellectual property; and
(xviii) the Borrower may make a loan to Parent to the extent
expressly permitted pursuant to Section 9.02(xvi).
9.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained by Holdings or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that:
(i) Restricted Payments may be paid to the extent provided in
Section 9.03;
(ii) loans may be made and other transactions may be entered into
between the Borrower and its Subsidiaries to the extent expressly
permitted by Sections 9.02(v), (x), (xi) and (xiii), 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors of
Holdings;
(iv) Holdings and its Subsidiaries may enter into employment
arrangements with respect to the procurement of services of their
respective officers and employees in the ordinary course of business,
including executive compensation arrangements;
(v) Holdings may make capital contributions to Parent, which may
make capital contributions to the Borrower;
(vi) so long as no Default or Event of Default then exists, or would
exist immediately after giving effect thereto, payments may be made
pursuant to the Carlyle/Thiokol Management Agreements; provided that in no
event shall the aggregate amount paid under either such Carlyle/Thiokol
Management Agreement exceed (i) $1,000,000 per annum, such fees to be
payable quarterly in arrears and (ii) the reimbursement of reasonable
out-of-pocket expenses as provided therein, to the extent actually
incurred;
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(vii) the Borrower and its Subsidiaries may enter into the
transactions contemplated by the Receivables Documents; and
(viii) Holdings and its Subsidiaries may pay management or similar
fees (x) to the Borrower and (y)(I) as set forth on Schedule XIV and (II)
otherwise, in an aggregate amount not to exceed $100,000.
In addition to the applicable requirements provided above, any
transactions (other than as described in clauses (i) through (vii) above)
between and among Holdings and/or its Subsidiaries on the one hand and any of
their respective Affiliates (excluding transactions between or among the
Borrower and its Wholly-Owned Subsidiaries) on the other hand between and among
the aforementioned parties with a value in excess of (A) $2,000,000 shall only
be permitted if a majority of the disinterested directors of Holdings approve
the transaction and (B) $10,000,000 shall only be permitted if the parties
thereto provide a fairness opinion from a Person, and in form and substance,
satisfactory to the Administrative Agent.
9.07 Capital Expenditures. (a) Holdings will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
the Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of such Capital Expenditures made under this Section 9.07(a)
does not exceed $55,000,000 in the aggregate for any calendar year.
(b) Notwithstanding anything to the contrary contained in clause (a)
above, to the extent that the aggregate amount of Capital Expenditures made by
the Borrower and its Subsidiaries (excluding only those Capital Expenditures
made pursuant to following clause (c)) in any calendar year of the Borrower are
less than $55,000,000, the amount of such difference, but in no case more than
$10,000,000, may be carried forward and used to make Capital Expenditures in the
immediately succeeding calendar year.
(c) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (a) and (b), the Borrower and its Subsidiaries may make
additional Capital Expenditures as follows: (i) Capital Expenditures consisting
of the reinvestment of Net Sale Proceeds of asset sales not required to be
applied to prepay the Loans pursuant to Section 4.02(e) as a result of the first
proviso thereto, (ii) the reinvestment of proceeds of Recovery Events not
required to be applied to prepay the Loans pursuant to Section 4.02(f), and
(iii) Permitted Acquisitions may be effected in accordance with the requirements
of Section 8.13.
9.08 Consolidated Interest Coverage Ratio. The Borrower will not
permit the Consolidated Interest Coverage Ratio for any Test Period, in each
case taken as one
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accounting period, ended on the last day of any fiscal quarter ended after the
Restatement Effective Date to be less than 2.50:1.00.
9.09 Consolidated Fixed Charge Coverage Ratio. The Borrower will not
permit the Consolidated Fixed Charge Coverage Ratio for any Test Period, in each
case taken as one accounting period, ended on the last day of any fiscal quarter
ended after the Restatement Effective Date to be less than 1.50:1.00.
9.10 Maximum Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time after the Restatement Effective Date to be greater than
3.50:1.00.
9.11 Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.
Holdings will not, and will not permit any of its Subsidiaries to, (i) amend or
modify, or permit the amendment or modification of, any provision of the
Existing Indebtedness or of any agreement (including, without limitation, any
purchase agreement, indenture, loan agreement or security agreement) relating
thereto other than any amendments or modifications to the Existing Indebtedness
or of any agreement relating thereto which do not in any way adversely affect
the interests of the Banks or that are determined to be immaterial by the
Managing Agents and are otherwise permitted under Section 9.04(iii), (ii) make
(or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event of,
any Installment Notes, Senior Subordinated Notes or Parent PIK Subordinated
Notes, or amend or modify, or permit the amendment or modification of, any
provision of any Installment Notes, Senior Subordinated Notes or Parent PIK
Subordinated Notes or any agreement (including, without limitation, any Senior
Subordinated Note Document) relating thereto, except for amendments or
modifications which are not in any way adverse to the interests of the Banks or
that are determined to be immaterial by the Managing Agents, provided, that so
long as there shall exist no Default or Event of Default, Parent may repurchase,
redeem or otherwise retire outstanding Parent PIK Subordinated Notes in an
amount which shall not exceed the amount permitted by the Senior Subordinated
Note Indenture, (iii) after the entering in to of any Receivables Facility in
accordance with the requirements of this Agreement, amend or modify, or permit
the amendment or modification of, any provision of the documentation with
respect thereto, except for amendments and modifications where the Receivables
Amendment Conditions are satisfied, (iv) amend or modify, or permit the
amendment or modification of, or surrender (except upon the termination thereof
in accordance with its terms) or release, any Acquisition Letter of Credit
(although the acceptance of replacement Acquisition Letters of Credit in the
form required to be accepted pursuant to the Stock Purchase Agreement shall be
permitted), provided, however, that Holdings may make such amendments or
modifications as are determined to be immaterial by the Managing Agents, (v)
amend or modify,
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or permit the amendment or modification of, the Stock Purchase Agreement or any
Installment Notes Trust Document, except for amendments or modifications which
are not in any way adverse to the interests of the Banks or that are determined
to be immaterial by the Managing Agents or (vi) amend, modify or change its
certificate of incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or by-laws, or any agreement
entered into by it, with respect to its capital stock (including any
Shareholders' Agreement), or enter into any new agreement with respect to its
capital stock, other than any amendments, modifications or changes pursuant to
this clause (vi) or any such new agreements pursuant to this clause (vi) which
the Borrower reasonably concludes do not adversely affect the interests of the
Banks, provided that nothing in this clause (vi) shall prevent Holdings or any
of its Subsidiaries from amending its Certificate of Incorporation or By-Laws
with respect to any matters other than its creditors or its capital stock
(including to provide indemnification to any officer or director of Holdings or
any such Subsidiary to the maximum extent permitted by Delaware law) and,
provided further, that Holdings may issue such capital stock as is provided in
Section 9.13.
9.12 Limitation on Certain Restrictions on Subsidiaries. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary to (a) pay dividends or
make any other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any Subsidiary of the
Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of the
Borrower, (b) make loans or advances to the Borrower or any of the Borrower's
Subsidiaries or (c) transfer any of its properties or assets to the Borrower or
any of the Borrower's Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) the Senior Subordinated Note Documents, (iv)
restrictions on the Receivables Subsidiary, and with respect to Receivables
Facility Assets, set forth in the Receivables Documents, (v) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or a Subsidiary of the Borrower, (vi)
customary provisions restricting assignment of any licensing agreement entered
into by the Borrower or a Subsidiary of the Borrower in the ordinary course of
business, (vii) any holder of a Permitted Lien may restrict the transfer of the
asset or assets subject thereto, (viii) any Indebtedness incurred after the
Restatement Effective Date in accordance with the provisions of this Agreement
may contain restrictions which are not more restrictive than those contained in
this Agreement, (ix) to the extent any Foreign Subsidiary incurs Indebtedness
pursuant to Section 9.04(xviii), and so long as such Indebtedness remains
outstanding, the terms of the documentation with respect to such Indebtedness
may contain restrictions of the types described above, but only with respect to
such Foreign Subsidiary and any of its Subsidiaries and (x) to the extent any
Subsidiary acquired or created after the Restatement Effective Date is the
obligor with respect to Permitted Acquired Debt permitted to remain outstanding
pursuant to the terms of this Agreement, such Permitted Acquired Debt may
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contain restrictions of the type otherwise described above with respect to such
Subsidiary (so long as such restrictions were not created in contemplation of
such Person becoming a Subsidiary or made more restrictive after the date of the
respective acquisition).
9.13 Limitation on Issuance of Capital Stock. (a) Holdings shall not issue
(i) any preferred stock (except for the issuance of additional shares of
Holdings PIK Preferred Stock in payment of regularly accruing dividends on
theretofore outstanding shares of Holdings PIK Preferred Stock) or (ii) any
redeemable common stock; provided that Holdings shall be permitted to issue
Qualified Preferred Stock at any time so long as the Net Cash Proceeds therefrom
are applied in accordance with the requirements of Section 4.02(c).
(b) Parent shall not issue, or permit any of its Subsidiaries to issue,
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and additional issuances which do not
decrease the percentage ownership of Holdings or any of its Subsidiaries in any
class of the capital stock of Parent or such Subsidiary, (iii) in the case of
Foreign Subsidiaries of the Borrower, to qualify directors to the extent
required by applicable law, and (iv) Subsidiaries of the Borrower formed after
the Restatement Effective Date pursuant to Section 9.14 may issue capital stock
to the Borrower or the respective Subsidiary of the Borrower which is to own
such stock in accordance with the requirements of Section 8.11. All capital
stock issued in accordance with this Section 9.13(b) shall, to the extent
required by the Pledge Agreement, be delivered to the Collateral Agent for
pledge pursuant to the Pledge Agreement.
9.14 Limitation on Creation of Subsidiaries. Neither Holdings, Parent nor
the Borrower shall establish, create or acquire any additional Subsidiaries
without the prior written consent of the Required Banks; provided that the
Borrower may establish or create one or more Wholly-Owned Subsidiaries of the
Borrower without such consent so long as (i) 100% of the capital stock of any
new Domestic Subsidiary (or all capital stock of any new Foreign Subsidiary
which is owned by any Credit Party, except that not more than 65% of the voting
stock of any such Foreign Subsidiary shall be required to be so pledged) is upon
the creation or establishment of any such new Subsidiary pledged and delivered
to the Collateral Agent for the benefit of the Secured Creditors under the
Pledge Agreement and (ii) upon the creation or establishment of any such new
Domestic Wholly-Owned Subsidiary (other than any Receivables Subsidiary), such
Domestic Wholly-Owned Subsidiary executes the Additional Security Documents and
guaranty required to be executed by it in accordance with Section 8.12.
Notwithstanding anything to the contrary contained above, (i) R-H Component
Technologies L.C. and/or Komatsu Howmet Ltd. Japan may become Subsidiaries of
the Borrower after the Restatement Effective Date, even if such Subsidiaries are
not Wholly-Owned Subsidiaries and (ii) the Borrower may acquire
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or create one or more Subsidiaries which are not Wholly-Owned Subsidiaries, so
long as the aggregate amount of Investments made therein by the Borrower and its
other Subsidiaries is made in accordance with Section 9.05(xiii).
9.15 Business. (a) Holdings shall engage in no business activities and
shall have no assets or liabilities, other than its ownership of the capital
stock of the Parent and liabilities incident thereto, including its liabilities
pursuant to the Pledge Agreement and its guaranty pursuant to Section 14.01.
(b) Parent shall engage in no business activities and shall have no assets
or liabilities, other than (v) its obligations set forth in Section 9.03(iii),
(w) its ownership of the capital stock of the Borrower and liabilities incident
thereto, including its liabilities pursuant to the Pledge Agreement, the
Security Agreement and its guaranty pursuant to Section 14.01, (x) its ownership
of the capital stock of Howmet Insurance and liabilities incident thereto, (y)
its obligations with respect to the Installment Notes, Excluded Liabilities and
other matters set forth in the disclosure schedules to the Stock Purchase
Agreement and its rights with respect to the Installment Notes Trust and any
Acquisition Letters of Credit and (z) its obligations pursuant to the Parent PIK
Subordinated Notes.
(c) Howmet Insurance shall engage in no new business, and shall underwrite
no new insurance, after the Restatement Effective Date.
(d) The Borrower will not, and will not permit any of its Subsidiaries
(other than any Receivables Subsidiary) to, engage (directly or indirectly) in
any business other than the Business and reasonable extensions thereof.
SECTION 10. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when due of
any principal of any Loan or any Note or (ii) default, and such default shall
continue un-remedied for three or more Business Days, in the payment when due of
any Unpaid Drawings or interest on any Loan or Note, or any Fees or any other
amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or statement made
by any Credit Party herein or in any other Credit Document or in any certificate
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 Covenants. Holdings, Parent or the Borrower shall (i) default in the
due performance or observance by it of any term, covenant or agreement contained
in
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Section 8.01(f)(i), the first sentence of Section 8.01(j), Section 8.08, the
first and third sentences of Section 8.11, or Section 8.13, 8.14, 8.17 or 9 or
(ii) default in the due performance or observance by it of any other term,
covenant or agreement contained in this Agreement and in the case of any default
specified in this clause (ii) such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by any Agent (whether
acting on its own or at the request of any of the Banks); or
10.04 Default Under Other Agreements. Holdings, Parent, the Borrower or
any of their respective Subsidiaries shall (i) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Obligations) of Holdings, Parent, the Borrower or
any of their respective Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that (x) it shall not be a
Default or Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i)
through (iii), inclusive, less the Howmet Cercast (Canada) Defaulted Amount (if
any) at such time, is at least $5,000,000; or
10.05 Bankruptcy, etc. Holdings, Parent, the Borrower or any of their
respective Subsidiaries (excluding Insignificant Subsidiaries) shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy", as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against Holdings,
Parent, the Borrower or any of their respective Subsidiaries (excluding
Insignificant Subsidiaries) and the petition is not controverted within 15 days,
or is not dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of Holdings, Parent, the Borrower
or any of their respective Subsidiaries (excluding Insignificant Subsidiaries),
or Holdings, Parent, the Borrower or any of their respective Subsidiaries
(excluding Insignificant Subsidiaries) commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings, Parent, the Borrower or any of their
respective Subsidiaries (excluding Insignificant Subsidiaries), or there is
commenced against Holdings, Parent, the Borrower or any of their respective
Subsidiaries (excluding Insignificant Subsidiaries) any such proceeding which
remains undismissed for a period of 60 days, or
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Holdings, Parent, the Borrower or any of their respective Subsidiaries
(excluding Insignificant Subsidiaries) is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or Holdings, Parent, the Borrower or any of their respective
Subsidiaries (excluding Insignificant Subsidiaries) suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or Holdings, Parent,
the Borrower or any of their respective Subsidiaries (excluding Insignificant
Subsidiaries) makes a general assignment for the benefit of creditors; or any
corporate action is taken by Holdings, Parent, the Borrower or any of their
respective Subsidiaries (excluding Insignificant Subsidiaries) for the purpose
of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or to be the subject of termination proceedings under ERISA, any Plan shall have
an Unfunded Current Liability, a contribution required to be made to a Plan or a
Foreign Pension Plan has not been timely made, Holdings, Parent, the Borrower or
any their respective Subsidiaries or any ERISA Affiliate has incurred or is
likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code, or Holdings, Parent, the
Borrower or any of their respective Subsidiaries has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) which provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA) or Foreign
Pension Plans; and (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) which lien, security interest or
liability, individually, and/or in the aggregate, in the opinion of the Required
Banks, will have a material adverse effect upon the business, operations,
condition (financial or otherwise) or prospects of Holdings, Parent, the
Borrower or of any such Person and its Subsidiaries taken as a whole; or
10.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease in any material respect to give the Collateral Agent for
the benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral (excluding assets
valued at up to $1,000,000 in the aggregate; provided that if the Borrower is
notified by the Administrative Agent of a lack of perfection with respect to any
of the Collateral, the Borrower will take such steps as are necessary or
advisable to perfect the Collateral Agent's security interest in such
Collateral)), in favor of the Collateral Agent,
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superior to and prior to the rights of all third Persons (except as permitted by
Section 9.01), and subject to no other Liens (except as permitted by Section
9.01), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
10.08 Guaranty. Any Guaranty or any provision thereof shall cease to be in
full force or effect as to the relevant Guarantor (unless such Guarantor is no
longer a Subsidiary by virtue of a liquidation, sale, merger or consolidation
permitted by Section 9.02), or any Guarantor or Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under the
relevant Guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to its Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered against
Holdings, Parent, the Borrower or any of their respective Subsidiaries involving
in the aggregate for Holdings, Parent, the Borrower and their respective
Subsidiaries (excluding Insignificant Subsidiaries) a liability (not paid or
fully covered by a reputable and solvent insurance company) and such judgments
and decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 60 consecutive
days, and the aggregate amount of all such judgments and decrees, to the extent
not covered by insurance, exceeds $5,000,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Receivables Facility. (x) The Borrower and its Subsidiaries shall
have, during any fiscal quarter, an aggregate amount of Noncomplying Receivables
and Dilution Adjustments (as these terms are defined on the Original Effective
Date in the Receivables Documents or, with respect to any replacement or amended
Receivables Facility, as such similar terms and concepts may be defined therein)
in excess of 10% of the unpaid balance of receivables sold to Receivables
Subsidiaries during such quarter, (y) for any reason financing is not available
to the Borrower pursuant to the Receivables Facility prior to the stated
maturity date thereof for a period of five or more consecutive days or (z) any
early amortization event or any event permitting any Receivables Purchaser or
Receivables Purchasers to effect an early termination of the Receivables
Facility (or a portion thereof) shall have occurred and be continuing; or
10.12 Installment Notes; Acquisition Letters of Credit. At any time (i)
Holdings or any of its Subsidiaries other than Parent makes any payment
whatsoever with respect to the Installment Notes, (ii) Parent makes any payment
whatsoever with respect to the Installment Notes which is not reimbursed to it
(whether through drawings under the
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New Installment Notes Letters of Credit, the Secondary Letters of Credit with
respect thereto, from the Installment Notes Trust or from Pechiney S.A.,
Pechiney International and/or Howmet Cercast S.A. or otherwise (but not from
Holdings and its Subsidiaries)) within ten Business Days after the date the
respective payment is made, (iii) for any reason whatsoever, the aggregate
outstanding principal amount of the Installment Notes is not covered by a New
Installment Notes Letter of Credit and a Secondary Letter of Credit issued in
accordance with the requirements of this Agreement and the Stock Purchase
Agreement or (iv) any Acquisition Letter of Credit shall fail to be outstanding
or be renewed or extended, except as permitted hereunder;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of any Agent, any Bank or
the holder of any Note to enforce its claims against any Credit Party (provided
that, if an Event of Default specified in Section 10.05 shall occur with respect
to the Borrower, the result which would occur upon the giving of written notice
by the Administrative Agent to the Borrower as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitments terminated, whereupon all Commitments of each Bank
shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
the Notes and all Obligations owing hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit, which may be terminated, in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.05 with respect to the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amount of cash, to be
held as security by the Collateral Agent, as is equal to the aggregate Stated
Amount of all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral as provided in Section 4.02.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acquisition" shall mean (i) the purchase by Howmet Holdings Acquisition
of 100% of the capital stock of Pechiney Corporation for $587,000,000 (less the
amount
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of Financing Obligations as described in Section 2.02 of the Stock Purchase
Agreement) in cash plus the delivery of the Parent PIK Subordinated Note to
Pechiney International in the aggregate principal amount of $25,000,000, (ii)
the purchase by Howmet Acquisition of (A) 100% of the capital stock of Howmet
Cercast (U.S.A) for $23,000,000, (B) the Noncompete Covenant for $75,000,000 and
(C) the purchase by Howmet of 100% of the capital stock of Financiere d'Ocquier,
S.A. for $21,000,000, pursuant to the Stock Purchase Agreement and (iii) the
purchase by Canada Acquisition Co. of 100% of the capital stock of Howmet
Cercast (Canada) for $19,000,000.
"Acquisition Documents" shall mean the Stock Purchase Agreement and all
other documentation entered into in connection with the Acquisition or the
Mergers.
"Acquisition Letters of Credit" shall mean the New Installment Notes
Letters of Credit, the Existing Installment Notes Letter of Credit, the
Insurance Letter of Credit, the Tax Letter of Credit, the Secondary Letters of
Credit and any other letters of credit issued pursuant to the Stock Purchase
Agreement (and any replacements or substitutions therefor).
"Additional Collateral" shall mean all property (whether real or personal)
in which security interests are granted (or have been purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
8.12.
"Additional Mortgage" shall have the meaning provided in Section 8.12(a).
"Additional Mortgaged Property" shall have the meaning provided in Section
8.12(a).
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.12 with respect to Additional Collateral, as each such
document may be modified, supplemented or amended from time to time.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan
Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total
Revolving Loan Commitment, as the case may be, has been terminated shall be
references to the Revolving Loan Commitments or Adjusted Total Revolving Loan
Commitment, as the case may be, in effect immediately prior to such termination,
provided
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that (A) no Bank's Adjusted Percentage shall change upon the occurrence of a
Bank Default from that in effect immediately prior to such Bank Default if after
giving effect to such Bank Default, and any repayment of Revolving Loans and
Swingline Loans at such time pursuant to Section 4.02(a) or otherwise, the sum
of (i) the aggregate outstanding principal amount of Revolving Loans of all
Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount of
Swingline Loans plus (iii) the Letter of Credit Outstandings, exceed the
Adjusted Total Revolving Loan Commitment; (B) the changes to the Adjusted
Percentage that would have become effective upon the occurrence of a Bank
Default but that did not become effective as a result of the preceding clause
(A) shall become effective on the first date after the occurrence of the
relevant Bank Default on which the sum of (i) the aggregate outstanding
principal amount of the Revolving Loans of all Non-Defaulting Banks plus (ii)
the aggregate outstanding principal amount of Swingline Loans plus (iii) the
Letter of Credit Outstandings is equal to or less than the Adjusted Total
Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Revolving Loans, or of Unpaid Drawings with respect to
Letters of Credit or of Swingline Loans, that were made during the period
commencing after the date of the relevant Bank Default and ending on the date of
such change to its Adjusted Percentage must be returned to the Borrower as a
preferential or similar payment in any bankruptcy or similar proceeding of the
Borrower, then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of
Revolving Loans made by such Bank plus such Bank's new Adjusted Percentage of
the outstanding principal amount of Swingline Loans and of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time the
Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of
all Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement, and any successor thereto.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.06 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
that for purposes of Section 9.06, an Affiliate of Holdings shall include any
Person that directly or indirectly owns more than 5% of any class of the capital
stock of Holdings and any officer or director of Holdings or any of its
Subsidiaries. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the manage-
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ment and policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall mean each of the Administrative Agent, the Documentation
Agent, the Syndication Agent, each Managing Agent and the Collateral Agent.
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended. restated, extended, renewed or replaced from time to time.
"Applicable Commitment Commission Percentage" and "Applicable Margin"
shall mean (i) for the period from the Restatement Effective Date to but not
including the first Start Date after the Restatement Effective Date, the
percentage per annum set forth below:
APPLICABLE APPLICABLE APPLICABLE
COMMITMENT MARGIN FOR MARGIN FOR
COMMISSION BASE RATE EURODOLLAR
PERCENTAGE LOANS LOANS
---------- ----- -----
0.250% 0.250% 1.250%
and (ii) during each Margin Adjustment Period beginning after the Restatement
Effective Date, the percentage per annum set forth below opposite the Leverage
Ratio indicated to have been achieved on the applicable Test Date for such
Margin Adjustment Period (as shown on the respective officer's certificate
delivered pursuant to Section 8.01(e)):
APPLICABLE APPLICABLE APPLICABLE
COMMITMENT MARGIN FOR MARGIN FOR
COMMISSION BASE RATE EURODOLLAR
LEVEL LEVERAGE RATIO PERCENTAGE LOANS LOANS
1 Less than or equal 0.150% 0% 0.50%
to 1.50:1.00
2 Greater than 0.200% 0% 0.75%
1.50:1.00 but less
than or equal to
2.00:1.00
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3 Greater than 0.250% 0% 1.00%
2.00:1.00 but less
than or equal to
2.50:1.00
4 Greater than 0.250% .25% 1.25%
2.50:1.00 but less
than or equal to
3.00:1.00
5 Greater than 0.375% .50% 1.50%
3.00:1.00
;provided, however, that (i) if by the tenth day after the last day of any
Margin Adjustment Period, the Borrower has failed to deliver the financial
statements required to be delivered pursuant to Section 8.01(a) and (b)
(accompanied by the officer's certificate required by Section 8.01(e)(i) showing
the applicable Leverage Ratio on the relevant Test Date) as at the end of the
fiscal quarter or year, as the case may be, ended immediately prior to such
date, the Applicable Commitment Commission Percentage and Applicable Margin for
the immediately succeeding Margin Adjustment Period shall be computed as if the
Leverage Ratio were at Level 5;
provided further, however, that so long as (x) no Default or Event of Default
exists, (y) the Test Date for December 1996 has occurred but the annual
financial statements for fiscal year 1996, required to be delivered pursuant to
Section 8.01(b), have not yet been delivered to the Administrative Agent and (z)
the Borrower delivers an officer's certificate (the "Estimated Leverage Ratio
Certificate") from its chief financial officer, in form and substance
satisfactory to the Administrative Agent, setting forth the Borrower's good
faith determination of the Leverage Ratio (the "Estimated Leverage Ratio") as of
such Test Date, then the applicable Margin Adjustment Period shall commence and
the Applicable Commitment Commission Percentage and the Applicable Margin
therefor shall be computed based on such Estimated Leverage Ratio, it being
understood that upon actual delivery by the Borrower of the annual financial
statements for such Test Date, the Borrower shall pay, within five days if
payment has already been made (otherwise, on the next Interest Payment Date), to
the Administrative Agent for the account of each Bank with affected Loans, any
additional amounts the Borrower would have paid hereunder had the Estimated
Leverage Ratio Certificate set forth the actual Leverage Ratio. Notwithstanding
anything to the contrary contained above in this definition, at any time that a
Default or Event of Default
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<PAGE> 99
shall exist, the Applicable Commitment Commission Percentage and the Applicable
Margin shall be computed as if Leverage Ratio were at Level 5.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Bank" shall mean each financial institution listed on Schedule I, as well
as any Person which becomes a "Bank" hereunder pursuant to 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been retracted)
of a Bank to make available its portion of any Borrowing (including any
Mandatory Borrowing) or to fund its portion of any unreimbursed payment under
Section 2.03(c) or (ii) a Bank having notified (which notice has not been
rescinded) in writing the Borrower and the Administrative Agent that it does not
intend to comply with its obligations under Section 1.01(b) or Section 2, in the
case (except for purposes of Section 1.13) of either clause (i) or (ii) as a
result of any takeover of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" shall mean, for any day, a rate of interest per annum equal to
the higher of (i) the Corporate Base Rate for such day and (ii) the sum of the
Federal Funds Rate for such day plus 1/2% per annum.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each Loan
designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"BNP" shall mean Banque Nationale de Paris.
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks (other than any Bank which has not funded its share
of such borrowing in accordance with this Agreement) having Commitments of the
respective Tranche (or from the Swingline Bank in the case of Swingline Loans)
on a given date (or resulting from a conversion or conversions on such date)
having in the case of Eurodollar Loans the same Interest Period, provided that
Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of
the related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
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<PAGE> 100
"Business" shall mean all aspects of the casting business, the aerospace
component repair business, the aircraft part refurbishment business, and each
other business engaged in by the Borrower and its Subsidiaries as of the
Restatement Effective Date including, in each case, reasonable extensions
thereof.
"Business Day" shall mean (i) with respect to any borrowing, payment or
rate selection of Eurodollar Loans, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States Dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago and New York for the conduct of substantially all
of their commercial lending activities.
"Canada Acquisition Co." shall mean 3203816 Canada Ltd., a Canadian
federal corporation.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Carlyle Entities" shall mean TC Group, L.L.C. (which operates under the
tradename "The Carlyle Group"), a Delaware Limited Liability Company, and any
Persons controlled by TC Group, L.L.C.
"Carlyle/Thiokol Management Agreements" shall mean collectively, the
Management Agreement, dated December 13, 1995, between TCG Holdings and Howmet
Corporation, the Management Agreement, dated December 13, 1995, between Thiokol
Holding Company and Howmet Corporation, the TCG Transaction Fee Agreement
between TCG Holdings L.L.C. and Howmet Holdings Acquisition Corp. and the
Thiokol Transaction Fee Agreement, dated December 13, 1995, between Thiokol
Corp. and Howmet Holdings Acquisition Corp.
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<PAGE> 101
"Carlyle/Thiokol Shareholders Agreement" shall mean the Shareholders
Agreement, dated as of December 13, 1995, between Thiokol Holdings Company,
Carlyle- Blade Acquisition Partners L.P. and Holdings.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Group or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than one year after the date of
acquisition by such Person, (v) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (i) through (iv) above and (vi) demand deposit accounts maintained in
the ordinary course of business.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) Holdings shall at any time cease to own
100% of the capital stock of Parent; (ii) Parent shall at any time cease to own
100% of the capital stock of the Borrower; (iii) at any time a "Change of
Control" under and as defined in the Senior Subordinated Note Indenture shall
have occurred; (iv) at any time and for any reason whatsoever, (x) the Permitted
Holders shall not have the right to elect, or shall for any reason not have
elected, a majority of the directors of Holdings, (y) the Permitted Holders
shall own less than a majority of the outstanding common stock of Holdings or
(z) any "Person" or "Group" (other than the Carlyle Entities) (as such terms are
used in Section 13(d) and 14(d) of the Exchange Act) is or shall become the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of a greater percentage of the common or any other
class of Voting Stock of Holdings than is owned by the Permitted Holders at such
time.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
Section refer-
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<PAGE> 102
ences to the Code are to the Code, as in effect at the date of this Agreement,
and to any subsequent provision of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties, all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10 hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents,
and any successor thereto.
"Collective Bargaining Agreements" shall have the meaning provided in the
Original Credit Agreement.
"Commitment" shall mean any of the commitments of any Bank, i.e. whether
the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of the Borrower and its Consolidated Subsidiaries, plus interest expense
and provision for taxes based on income (in each case to the extent deducted in
determining Consolidated Net Income) and without giving effect to any
extraordinary gains or losses or gains or losses from sales of assets other than
inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation and all non-cash charges in respect of pension and retiree
benefits, in each case that were deducted in arriving at Consolidated EBIT for
such period. For purposes of Sections 9.10 only, to the extent Consolidated
EBITDA has been reduced by Receivables Facility Financing Costs incurred during
a particular period, the amount of such Receivables Facility Financing Costs
will be added back in determining Consolidated EBITDA.
"Consolidated Fixed Charge Coverage Ratio" for any period shall mean the
ratio of (x) Consolidated EBITDA plus the amount of all lease payments expensed
by the Borrower and its Subsidiaries during such period (other than payments
constituting Capitalized Lease Obligations) and which were deducted in
determining Consolidated EBITDA for such period to (y) Consolidated Fixed
Charges for such period.
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<PAGE> 103
"Consolidated Fixed Charges" for any period shall mean the sum, without
duplication, of (i) Consolidated Net Interest Expense for such period, (ii) the
amount of all lease payments expensed by the Borrower and its Subsidiaries
during such period (other than payments constituting Capitalized Lease
Obligations) and (iii) the scheduled principal amount of all amortization
payments on all Indebtedness (including without limitation the principal
component of all Capitalized Lease Obligations, but excluding the Installment
Notes) of the Borrower and its Subsidiaries for such period (as determined on
the first day of the respective period).
"Consolidated Indebtedness" shall mean, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness (including the
Loans and any Capitalized Lease Obligations, but excluding the Installment
Notes) of the Borrower and its Subsidiaries on a consolidated basis as
determined in accordance with GAAP; provided that the aggregate amount of
Receivables Facility Attributed Indebtedness at any time shall be included as a
component of Consolidated Indebtedness, regardless of its treatment under GAAP.
"Consolidated Interest Coverage Ratio" for any period shall mean the ratio
of Consolidated EBITDA to Consolidated Net Interest Expense for such period.
"Consolidated Net Income" shall mean, for any period, the consolidated net
after tax income of the Borrower and its Consolidated Subsidiaries determined in
accordance with GAAP.
"Consolidated Net Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Consolidated Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the Borrower and its Consolidated Subsidiaries representing the
interest factor for such period, in each case net of the total consolidated cash
interest income of the Borrower and its Consolidated Subsidiaries for such
period, but excluding the amortization of any deferred financing costs incurred
in connection with this Agreement.
"Consolidated Subsidiaries" shall mean, as to any Person, all Subsidiaries
of such Person which are consolidated with such Person for financial reporting
purposes in accordance with GAAP.
"Consolidated Total Assets" shall mean the consolidated total assets of
the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
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<PAGE> 104
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include (x) endorsements of
instruments for deposit or collection in the ordinary course of business and (y)
any product warranties extended in the ordinary course of business. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Bank" shall mean each Original Bank with a Commitment under
this Agreement (immediately upon giving effect to the Restatement Effective
Date).
"Corporate Base Rate" shall mean a rate per annum equal to the corporate
base rate of interest announced by The First National Bank of Chicago from time
to time, changing when and as such corporate base rate changes.
"Credit Documents" shall mean this Agreement, and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Note, each
Security Document and the Subsidiaries Guaranty and, after the execution and
delivery thereof, each additional guaranty or security document executed
pursuant to Section 8.12.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean Holdings, Parent, the Borrower and each
Subsidiary Guarantor.
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"Debt Agreements" shall have the meaning provided in the Original Credit
Agreement.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank Default
is in effect.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding on or
after the Restatement Effective Date (or any options or warrants issued by such
Person with respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Restatement Effective Date (or
any options or warrants issued by such Person with respect to its capital
stock). Without limiting the foregoing, "Dividends" with respect to any Person
shall also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Documents" shall mean the Credit Documents, the Acquisition Documents,
the Installment Notes Trust Documents, the Senior Subordinated Note Documents,
the Receivables Documents, the Holdings PIK Preferred Stock Documents and the
Parent PIK Subordinated Note Documents.
"Dollar Equivalent" shall mean, at any time for the determination thereof,
the amount of Dollars necessary to purchase such other currency involved in such
computation at the Exchange Rate.
"Dollars" and the sign "$" shall each mean lawful money of the United
States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
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"Domestic Wholly-Owned Subsidiary" shall mean each Domestic Subsidiary
which is a Wholly-Owned Subsidiary of the Borrower.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Eligible Transferee" shall mean and include a commercial bank, financial
institution, any fund or other Person which regularly purchases interests in
loans or extensions of credit of the types made pursuant to this Agreement, any
other Person which would constitute a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act as in effect on the Restatement
Effective Date and, with the Borrower's consent (which may not be unreasonably
withheld or delayed), any other "accredited investor" (as defined in Regulation
D of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in the Original
Credit Agreement.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" means any Federal, state, foreign or local statute,
law, rule, regulation, ordinance, code, binding and enforceable guideline,
binding and enforceable written policy, and rule of common law now or hereafter
in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof (including any judicial or administrative
order, consent decree or judgment), applicable to Holdings, Parent, the Borrower
or any of their respective Subsidiaries, relating to the environment, employee
health and safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air
Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
U.S.C. Section 11001 et seq., the Hazardous Material Transportation Act, 49
U.S.C. Section 1801 et seq. and the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq. (to the extent it regulates occupational exposure to
Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from
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SCHEDULE I
----------
COMMITMENTS
-----------
<TABLE>
<CAPTION>
Term Revolving Loan
Bank Loan Commitment Commitment
- ---- --------------- ----------
<S> <C> <C>
The First National Bank of Chicago 14,000,000.00 6,000,000.02
Bankers Trust Company 14,000,000.00 6,000,000.00
Citicorp USA, Inc. 14,000,000.00 6,000,000.00
ABN/AMRO Bank N.V 12,250,000.00 5,250,000.00
Bank of Montreal 12,250,000.00 5,250,000.00
Credit Lyonnais New York Branch 12,250,000.00 5,250,000.00
Credit Suisse 12,250,000.00 5,250,000.00
Dresdner Bank AG, New York 12,250,000.00 5,250,000.00
Branch and Grand Cayman Island
Branch
Fleet National Bank 12,250,000.00 5,250,000.00
Bank of America Illinois 8,500,000.00 3,642,857.14
The Bank of New York 8,500,000.00 3,642,857.14
Bank of Nova Scotia 8,500,000.00 3,642,857.14
Banque Nationale de Paris 8,500,000.00 3,642,857.14
The Fuji Bank Limited, Los 8,500,000.00 3,642,857.14
Angeles Agency
Mellon Bank, N.A 8,500,000.00 3,642,857.14
Sakura Bank, Limited, Los Angeles 8,500,000.00 3,642,857.14
Agency
Totals $ 175,000,000.00 $ 75,000,000.00
</TABLE>
<PAGE> 108
SCHEDULE I
----------
COMMITMENTS
-----------
<TABLE>
<CAPTION>
Term Revolving Loan
Bank Loan Commitment Commitment
- ---- --------------- ----------
<S> <C> <C>
The First National Bank of Chicago 14,000,000.00 6,000,000.02
Bankers Trust Company 14,000,000.00 6,000,000.00
Citicorp USA, Inc. 14,000,000.00 6,000,000.00
ABN/AMRO Bank N.V 12,250,000.00 5,250,000.00
Bank of Montreal 12,250,000.00 5,250,000.00
Credit Lyonnais New York Branch 12,250,000.00 5,250,000.00
Credit Suisse 12,250,000.00 5,250,000.00
Dresdner Bank AG, New York 12,250,000.00 5,250,000.00
Branch and Grand Cayman Island
Branch
Fleet National Bank 12,250,000.00 5,250,000.00
Bank of America Illinois 8,500,000.00 3,642,857.14
The Bank of New York 8,500,000.00 3,642,857.14
Bank of Nova Scotia 8,500,000.00 3,642,857.14
Banque Nationale de Paris 8,500,000.00 3,642,857.14
The Fuji Bank Limited, Los 8,500,000.00 3,642,857.14
Angeles Agency
Mellon Bank, N.A 8,500,000.00 3,642,857.14
Sakura Bank, Limited, Los Angeles 8,500,000.00 3,642,857.14
Agency
Totals $ 175,000,000.00 $ 75,000,000.00
</TABLE>
<PAGE> 109
SCHEDULE II
-----------
BANK ADDRESSES
--------------
Bankers Trust Company 130 Liberty Street, 30th Floor
New York, New York 10006
Telephone No.: (212) 250-1724
Telecopier No.: (212) 250-7218
Attention: Mr. Dana F. Klein
Citicorp USA, Inc. 399 Park Avenue, 6th Floor
New York, New York 10043
Telephone No.: (212) 559-4659
Telecopier No.: (212) 793-1290
Attention: Mr. Timothy L. Freeman
The First National Bank One First National Plaza, Suite 0362
of Chicago Chicago, Illinois 60670
Telephone No.: (312) 732-8142
Telecopier No.: (312) 732-3885
Attention: Mr. David G. Dixon
Credit Lyonnais New York Branch 1301 Avenue of the Americas
New York, New York 10019
Telephone No.: (212) 261-7286
Telecopier No.: (212) 459-3176
Attention:
Fleet National Bank One Federal Street, MSN-MA-OF-0308
Boston, MA 02211
Telephone No.: (617) 346-0574
Telecopier No.: (617) 346-0585
Attention: Kerry McElhiney
Bank of America Illinois 555 South Flower Street, 11th Floor
Suite 5618
Los Angeles, California 90071
Telephone No.: (213) 228-6379
Telecopier No.: (213) 228-2756
Attention: Ms. Lori Y. Kannegieter
<PAGE> 110
SCHEDULE II
Page 3
The Bank of Nova Scotia One Liberty Plaza
New York, New York 10006
Telephone No.: (212) 225-5011
Telecopier No.: (212) 225-5090
Attention: Mr. James Trimble
The Bank of New York One Wall Street, 22nd Floor
New York, New York 10286
Telephone No.: (212) 635-6863
Telecopier No.: (212) 635-6999
Attention: Mr. Ken Sneider
The Fuji Bank Limited 333 South Hope Street, Suite 3900
Los Angeles Agency Los Angeles, CA 90071
Telephone No.: (213) 253-4143
Telecopier No.: (213) 253-4198
Attention: Mr. Hidetsugu Onishi
The Sakura Bank Limited 515 South Figueroa Street, Suite 400
Los Angeles Agency Los Angeles, CA 90071
Telephone No.: (213) 489-6295
Telecopier No.: (213) 623-8692
Attention: Mr. Fernando Buesa
Mellon Bank, N.A. 300 South Grand Avenue, Suite 3800
Los Angeles, CA 90071
Telephone No.: (213) 680-7354
Telecopier No.: (213) 680-7366
Attention: Mr. Lawrence Ivey
<PAGE> 111
SCHEDULE II
Page 4
Banque Nationale de Paris 180 Montgomery Street
San Francisco, CA 94104
Telephone No.: (415) 956-0707 ext. 206
Telecopier No.: (415) 296-8954
Attention: Mr. Guy Gibb
Credit Suisse 633 West 5th Street - 64th Floor
Los Angeles, CA 90071
Telephone No.: (213) 955-8276
Telecopier No.: (213) 955-8245
Attention: Ms. Debbie Shea
ABN AMRO Bank N.V. 101 California Street, Suite 4550
San Francisco, CA 94111
Telephone No.: (415) 984-3702
Telecopier No.: (415) 362-3524
Attention: Ms. Gina Brusatori
Bank of Montreal 430 Park Avenue, 14th Floor
New York, New York 10022
Telephone No.: (212) 605-1637
Telecopier No.: (212) 605-1451
Attention: Ms. Joanna Bellocq
Dresdner Bank AG, 75 Wall Street, 29th Floor
New York Branch and New York, New York 10005
Grand Cayman Branch Telephone No.: (212) 429-2198
Telecopier No.: (212) 429-2129
Attention: Mr. Andrew Mittag
Mr. Nicholas Kalogeropoulos
Mr. Vince Dolan
<PAGE> 112
time to time. For purposes of the representations and warranties contained in
Section 7.19, Environmental Law shall mean Environmental Law in effect as of the
date such representations and warranties are made or deemed to have been made.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA. amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with Holdings, Parent, the Borrower or any of their
Subsidiaries would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings,
Parent, the Borrower or any of their Subsidiaries being or having been a general
partner of such person.
"Estimated Leverage Ratio" shall have the meaning provided in the
definition of Applicable Commitment Commission Percentage.
"Estimated Leverage Ratio Certificate" shall have the meaning provided in
the definition of Applicable Commitment Commission Percentage.
"Eurodollar Loan" shall mean each Loan (excluding Swingline Loans)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean with respect to a Borrowing of Eurodollar
Loans for the relevant Interest Period the quotient of (a) the rate determined
by the Administrative Agent to be the rate at which deposits in U.S. dollars are
offered by The First National Bank of Chicago to first-class banks in the London
interbank market at approximately 11 a.m. (London time) two Business Days prior
to the first day of the Interest Period applicable to such Eurodollar Loan, in
the approximate amount of The First National Bank of Chicago's relevant
Eurodollar Loan and having a maturity approximately equal to the Interest Period
applicable to such Eurodollar Loan divided by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D). The Eurodollar Rate shall be rounded to the next higher multiple
of 1/100 of 1% if the rate is not such a multiple.
"Event of Default" shall have the meaning provided in Section 10.
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<PAGE> 113
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Rate" shall mean, when converting any amount denominated in a
currency other than Dollars into Dollars, the rate determined in good faith by
the Issuing Bank at the opening of business (or close of business in the case of
determinations of reimbursement obligations with respect to Drawings) in
Chicago, on the date as to which any determination thereof is to be made, as the
spot rate at which such currency is offered for sale to the Issuing Bank against
delivery of Dollars by the Issuing Bank. If for any reason the Exchange Rate for
any currency cannot be calculated as provided above, the Issuing Bank shall
calculate the Exchange Rate on such basis as it deems fair and equitable. In
determining the Stated Amount of any Letter of Credit (A) for purposes of
Sections 1.01(b), 1.01(c), 2.01(d) and 4.02(a), the Dollar Equivalent shall be
calculated (x) on the date of the issuance of such Letter of Credit, and (y) on
the first Business Day of each calendar month thereafter and (B) for purposes of
Section 3.01(b) or (c), the Dollar Equivalent shall be calculated on the first
day of each month in the quarterly period in which the respective payment is due
pursuant to said Sections. The Exchange Rate for all reimbursement obligations
with respect to Letters of Credit (including without limitation pursuant to
Sections 2.03 and 2.04) shall be determined by using the Dollar Equivalent as in
effect on the date the respective Unpaid Drawing was paid by the Issuing Bank.
"Existing Indebtedness" shall have the meaning provided in Section 7.22.
"Existing Installment Notes Letter of Credit" shall mean the Existing L/C
referred to in Exhibit 5.08(b) to the Stock Purchase Agreement, issued by BNP
for the benefit of the holders of the Installment Notes in support of the
payment thereof.
"Existing Tax Obligations" shall mean any state and Federal taxes owed by
the Borrower and/or Pechiney Corporation for periods prior to the Original
Effective Date.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Fair Market Value" shall mean, with respect to any asset, the price at
which a willing buyer, not an Affiliate of the seller, and a willing seller who
does not have to sell, would agree to purchase and sell such asset, as
determined in good faith by the Board of Directors or other governing body or,
pursuant to a specific delegation of authority by such Board or governing body,
a designated senior executive officer, of Borrower or the Subsidiary of Borrower
selling such asset.
"Federal Funds Rate" shall mean, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business
-101-
<PAGE> 114
Day) by the Federal Reserve Bank of New York or, if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10 A.M. (Chicago time) on such day on such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by the Administrative Agent in its sole discretion.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Financiere d'Ocquier, S.A." shall mean Financiere d'Ocquier S.A., a
French societe anonyme organized under the laws of the Republic of France.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings, Parent, the
Borrower or any one or more of their Subsidiaries primarily for the benefit of
employees of Holdings, Parent, the Borrower or such Subsidiaries residing
outside the United States of America, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof or Puerto Rico.
"GAAP" shall have the meaning provided in Section 13.07(a).
"Guaranteed Creditors" shall mean and include each of the Agents, the
Collateral Agent, the Banks and each party (other than any Credit Party) to an
Interest Rate Protection Agreement or Other Hedging Agreement to the extent such
party constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean all obligations of the Borrower (i) to
each Bank for the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of the principal and interest on each
Note issued by the Borrower to such Bank, and Loans made, under the Credit
Agreement and all reimbursement obligations and Unpaid Drawings with respect to
Letters of Credit, together with all the other obligations and liabilities
(including, without limitation, all indemnities, fees and interest thereon as
well as all interest accruing after the filing of a petition in a bankruptcy or
similar proceeding at the rate provided in the respective documentation,
regardless of whether or not such interest is an allowed claim in such a
bankruptcy proceeding) of the Borrower to such Bank now existing or hereafter
incurred under, arising out of or in con-
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<PAGE> 115
nection with the Credit Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by the Borrower and (ii) to each Bank and each
Affiliate of a Bank which enters into an Interest Rate Protection or Other
Hedging Agreement with the Borrower, which by its express terms are entitled to
the benefit of the Guaranty pursuant to Section 14 with the written consent of
the Borrower, the full and prompt payment when due (whether by acceleration or
otherwise) of all obligations of the Borrower owing under any such Interest Rate
Protection or Other Hedging Agreement, whether now in existence or hereafter
arising, and the due performance and compliance with all terms, conditions and
agreements contained therein.
"Guarantor" shall mean Holdings, Parent and each Subsidiary Guarantor.
"Guaranty" shall mean the guaranty issued by Holdings and Parent pursuant
to Section 14 hereof and each Subsidiaries Guaranty.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, friable asbestos, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances,"
"hazardous waste, " "hazardous materials,""extremely hazardous substances,"
"restricted hazardous waste," "toxic substances," "toxic pollutants,"
"contaminants," or "pollutants," or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority under Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of this
Agreement.
"Holdings Common Stock" shall mean the common stock of Holdings.
"Holdings PIK Preferred Stock" shall mean the 9% Series A Senior
Cumulative Preferred Stock of Holdings.
"Holdings PIK Preferred Stock Documents" shall mean the documents executed
and delivered with respect to the Holdings PIK Preferred Stock.
"Howmet Acquisition" shall have the meaning provided in the Original
Credit Agreement.
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<PAGE> 116
"Howmet Cercast (Canada)" shall mean Howmet Cercast (Canada), Inc., a
corporation organized under the laws of Canada.
"Howmet Cercast (Canada) Defaulted Amount" at any time shall mean the
aggregate principal amount of Indebtedness of Howmet Cercast (Canada) which at
such time is subject to the conditions described in one or more of clauses (i)
through (iii), inclusive, of Section 10.04, provided that at no time shall the
Howmet Cercast (Canada) Defaulted Amount exceed $5,000.001.
"Howmet Cercast S.A." shall mean Howmet Cercast S.A., a societe anonyme
organized under the laws of the Republic of France.
"Howmet Cercast (USA)" shall mean Howmet Cercast (USA), Inc., a Delaware
corporation.
"Howmet Holdings Acquisition" shall have the meaning provided in the
Original Credit Agreement.
"Howmet Insurance" shall mean Howmet Insurance Co., Inc., a Vermont
corporation.
"Howmet S.A." shall mean Howmet S.A., a societe anonyme organized under
the laws of the Republic of France.
"Howmet Transport" shall mean Howmet Transport Services, Inc., a Delaware
corporation.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit issued
for the account of such Person and all unpaid drawings in respect of such
letters of credit, (iii) all Indebtedness of the types described in clause (i),
(ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person (to the extent of the value of the respective property), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person and (vii) all obligations under any Interest Rate Protection Agreement or
Other Hedging Agreement or under any similar type of agreement. In addition to
the foregoing, all Receivables Facility Attributed Indebtedness shall constitute
Indebtedness.
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<PAGE> 117
"Insignificant Subsidiaries" shall mean any Subsidiary of the Borrower
which has assets of not greater than $5,000,000 in the aggregate and which, if
aggregated with all other Subsidiaries of the Borrower with respect to which an
event described under Section 10.05 has occurred and is continuing, would have
assets of not greater than $5,000,000.
"Installment Notes" shall mean the $716,386,477.12 aggregate principal
amount of outstanding (as of the Original Effective Date) promissory notes
payable by Pechiney Corporation pursuant to the purchase by Pechiney Corporation
of American National Can Company.
"Installment Notes Trust" shall mean the trust vehicle contemplated by
Section 5.08 of the Stock Purchase Agreement and created in accordance with said
Section 5.08 and Exhibit 5.08(a) to the Stock Purchase Agreement.
"Installment Notes Trust Agreement" shall mean the trust agreement entered
into with respect to the Installment Notes Trust, as in effect on the
Restatement Effective Date and as same may thereafter be amended in accordance
with the requirements of this Agreement.
"Installment Notes Trust Documents" shall mean the documentation creating
the Installment Notes Trust (including without limitation the Installment Notes
Trust Agreement), and all other documentation entered into in connection with
the Installment Notes Trust.
"Installment Notes Trustee" shall mean the trustee with respect to the
Installment Notes Trust.
"Insurance Letter of Credit" shall mean the Insurance Letter of Credit
referred to in Section 5.15 of the Stock Purchase Agreement (together with any
replacements thereof issued in accordance with the requirements of Section 5.16
of the Stock Purchase Agreement).
"Intellectual Property Subsidiary" shall mean a Domestic Wholly-Owned
Subsidiary of the Borrower which engages in no substantial business or
activities other than as related to the assets and business transferred to it as
described below, (x) to which the Borrower and its Subsidiaries (other than the
Intellectual Property Subsidiary) will from tune to time sell or otherwise
transfer patents, trademarks and other intellectual property, as well as the
Howmet Research Center located in Whitehall, Michigan, and (y) which will
transfer all or substantially all royalty income arising from such patents,
trademarks and other intellectual property to the Second Tier IP Subsidiary.
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<PAGE> 118
"Intercreditor Agreement" shall mean the amended and restated
intercreditor credit agreement in the form of Exhibit L.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Investor Certificates" shall have the meaning provided in the Receivables
Pooling Agreement.
"Issuing Bank" shall mean the Administrative Agent and any Bank which at
the request of the Borrower and with the consent of the Administrative Agent
(which shall not be unreasonably withheld) agrees, in such Bank's sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 2.
"L/C Supportable Indebtedness" shall mean (i) obligations of the Borrower
or its Subsidiaries incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds and other similar
statutory obligations and (ii) such other obligations of the Borrower or any of
its Subsidiaries as are permitted to exist pursuant to the terms of this
Agreement.
"Leaseholds" of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
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<PAGE> 119
"Leverage Ratio" shall mean, at any date of determination, the ratio of
(i) Consolidated Indebtedness on such date to (ii) Consolidated EBITDA for the
period of four consecutive quarters most recently ended on or prior to such
date, in each case taken as one accounting period.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan and each Swingline
Loan.
"Management Agreements" shall have the meaning provided in the Original
Credit Agreement.
"Managing Agents" shall have the meaning provided in the first paragraph
of this Agreement.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(d).
"Margin Adjustment Period" shall mean each period which shall commence on
a date occurring after the Restatement Effective Date on which the financial
statements are delivered pursuant to Section 8.01(a) or (b) and which shall end
on the earlier of (i) the date of actual delivery of the next financial
statements pursuant to Section 8.01(a) or (b) and (ii) the latest date on which
the next financial statements are required to be delivered pursuant to Section
8.01(a) or (b).
"Margin Stock" shall have the meaning provided in Regulation U.
"Maturity Date" shall mean December 5, 2001.
"Maximum Swingline Amount" shall mean $10,000,000.
"Mergers" shall mean and include (i) the merger of Howmet Holdings
Acquisition with and into Pechiney Corporation, with Pechiney Corporation (now
the parent) surviving said merger as a direct Wholly-Owned Subsidiary of
Holdings, and (ii) the merger of Howmet Acquisition with and into Howmet, with
Howmet surviving said merger as a direct Wholly-Owned Subsidiary of Parent.
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<PAGE> 120
"Mortgage" shall mean and include each Original Mortgage, as amended
pursuant to the respective Mortgage Amendment, and, after the execution and
delivery thereof, each Additional Mortgage, in each case as same may be amended,
modified or supplemented from time to time.
"Mortgage Amendments" shall have the meaning provided in Section 5.09.
"Mortgage Policies" shall mean and include each Original Mortgage Policy
and, after the execution and delivery thereof, each mortgage insurance policy
issued with respect to an Additional Mortgaged Property.
"Mortgaged Property" shall mean each Original Mortgaged Property and,
after the execution and delivery of any Additional Mortgage, shall include the
respective Additional Mortgaged Property.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of (i) reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and (ii) payments
of unassumed liabilities relating to the assets sold at the time of, or within
90 days after, the date of such sale, (iii) the amount of such gross cash
proceeds required to be used to repay any Indebtedness (other than Indebtedness
of the Banks pursuant to this Agreement) which is secured by the respective
assets which were sold, and (iv) the estimated marginal increase in income taxes
which will be payable by Holdings' consolidated group with respect to the fiscal
year in which the sale occurs as a result of such sale; and excluding any
portion of any such gross cash proceeds which Holdings determines in good faith
should be reserved for post-closing adjustments (to the extent Holdings delivers
to the Banks a certificate signed by an officer of Holdings as to such
determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined, (which shall not be later than
six months following the date of the respective asset sale), the amount (if any)
by which the reserved amount in respect of such sale or disposition exceeds the
actual post-closing adjustments payable by Holdings or any of its Subsidiaries
shall constitute Net Sale Proceeds on such date received by Holdings and/or any
of its Subsidiaries from such sale, lease, transfer or other disposition.
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"New Bank" shall mean each of the Persons listed on Schedule I that is not
a Continuing Bank.
"New Installment Notes Letters of Credit" shall mean the letters of credit
executed and delivered in connection with the establishment of the Installment
Notes Trust, as contemplated by Exhibit 5.08(b) to the Stock Purchase Agreement,
together with any replacements issued therefor in accordance with Section 5.16
of the Stock Purchase Agreement.
"Noncompete Covenant" shall mean the Covenant Not to Compete, dated
December 13, 1995, among Pechiney Corporation, Pechiney International and Howmet
Cercast S.A.
"Non-Continuing Bank" shall have the meaning provided in Section 13.20(b).
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Term Note, each Revolving Note and the Swingline
Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent located
at One First National Plaza, Agency/Compliance Division, Suite 0353 (1-15),
Chicago, IL 60670, Attention: Mr. Thomas Both, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts owing to any of the Managing Agents,
the Agents, the Collateral Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Original Banks" shall mean each Person which was a Bank under, and as
defined in, the Original Credit Agreement.
"Original Credit Agreement" shall have the meaning provided in the first
WHEREAS clause to this Agreement.
"Original Effective Date" shall mean the Effective Date, as defined in the
Original Credit Agreement.
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<PAGE> 122
"Original Letters of Credit" shall mean the letters of credit listed on
Schedule XV and previously issued under the Original Credit Agreement.
"Original Loans" shall mean the Original Term Loans, the Original
Revolving Loans and the Original Swingline Loans.
"Original Mortgage Policies" shall mean each mortgage insurance policy
issued with respect to an Original Mortgage under the Original Credit Agreement.
"Original Mortgaged Properties" shall mean all Real Property of the
Borrowers and their respective Subsidiaries listed on Schedule III.
"Original Mortgages" shall mean all Mortgages granted by the Borrowers
pursuant to the Original Credit Agreement and which have not been released by
the lenders thereunder prior to the Restatement Effective Date.
"Original Revolving Loans" shall mean the "Revolving Loans" under. and as
defined in, the Original Credit Agreement.
"Original Swingline Loans" shall mean the "Swingline Loans" under, and as
defined in, the Original Credit Agreement.
"Original Term Loans" shall mean the "Term Loans" under, and as defined
in, the Original Credit Agreement.
"Original Tranche A Term Loans" shall mean the "Tranche A Term Loans"
under, and as defined in, the Original Credit Agreement.
"Original Tranche B Term Loans" shall mean the "Tranche B Term Loans"
under, and as defined in, the Original Credit Agreement.
"Original Tranche C Term Loans" shall mean the "Tranche C Term Loans"
under, and as defined in, the Original Credit Agreement.
"Other Hedging Agreement shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency or
commodity values.
"Parent" shall have the meaning provided in the first paragraph of this
Agreement.
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"Parent Acquisition Loan" shall mean the loan by the Borrower to Holdings
made on the Original Effective Date, the proceeds of which were used by Holdings
to acquire 100% of the capital stock of Pechiney Corporation.
"Parent Guarantors" shall mean and include each of Holdings and Parent.
"Parent Guaranty" shall mean the guaranty of the Parent Guarantors
pursuant to Section 14.
"Parent PIK Subordinated Note Documents" shall mean the Parent PIK
Subordinated Notes, and all other documents executed and delivered with respect
to the Parent PIK Subordinated Notes.
"Parent PIK Subordinated Notes" shall mean (i) the subordinated promissory
note issued by Parent in the aggregate principal amount of $25 million as
partial consideration in connection with the Acquisition, which promissory note
shall be consistent with the terms contained as Exhibit 2.02 of the Stock
Purchase Agreement and shall be in form and substance satisfactory to the
Managing Agents and the Required Banks and (ii) any additional subordinated
promissory notes which are identical to the promissory note referenced in
preceding clause (i) (except as to the principal amount thereof) issued to pay
(in-kind) accrued interest owing with respect to any theretofore outstanding
Parent PIK Subordinated Notes.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent located
at One First National Plaza, Chicago, IL 60670, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Pechiney Corporation" shall have the meaning provided in the Original
Credit Agreement.
"Pechiney International" shall mean Pechiney International S.A., a societe
anonyme organized under the laws of the Republic of France.
"Pechiney S.A." shall mean Pechiney S.A., a societe anonyme organized
under the laws of the Republic of France.
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"Percentage" of any Bank at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such Bank
at such time and the denominator of which is the Total Revolving Loan Commitment
at such tune, provided that if the Percentage of any Bank is to be determined
after the Total Revolving Loan Commitment has been terminated, then the
Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquired Debt" shall mean Indebtedness of any Subsidiary of the
Borrower acquired pursuant to a Permitted Acquisition, which Indebtedness
existed at the tune of the consummation of such Permitted Acquisition and was
not created in contemplation thereof (and the provisions of which were not
altered in contemplation thereof), so long as (x) Holdings, the Borrower and its
other Subsidiaries have no liability with respect to any such Indebtedness and
(y) any Liens securing such Indebtedness apply only to assets of the Subsidiary
so acquired (and so long as additional assets of such Subsidiary are not granted
as security following, or in contemplation of, the respective permitted
acquisition).
"Permitted Acquisition" shall mean the acquisition by the Borrower or a
Domestic Wholly-Owned Subsidiary thereof of assets constituting part of or an
entire business, division or product line of any Person not already a Subsidiary
of the Borrower or of 100% of the capital stock of any such Person, or any other
acquisition of assets (excluding equity interests in other Persons except as
provided above) related to the Business; provided that (A) the consideration
paid by the Borrower consists solely of cash and/or, in the case of the
acquisition of a Wholly-Owned Subsidiary, the assumption of Permitted Acquired
Debt in accordance with the requirements of this Agreement, (B) the assets
acquired, or the business of the Person whose stock is acquired, shall be in the
Business or related to the Business, (C) no Default or Event of Default shall
exist at the tune of the consummation of the respective Permitted Acquisition or
immediately after giving effect thereto and (D) the Borrower in good faith
determines that the Borrower and its Subsidiaries taken as a whole is not likely
to assume or become liable for material increased contingent liabilities as a
result of such acquisition.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agents in their reasonable discretion.
"Permitted Holders" shall mean the Thiokol Permitted Holders and the
Carlyle Entities.
"Permitted Liens" shall have the meaning provided in Section 9.01.
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"Person" shall mean any individual, partnership, joint venture, limited
liability corporation, firm, corporation, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan, as defined in
Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of), Holdings, Parent, the Borrower or a
Subsidiary of Holdings, Parent, the Borrower or an ERISA Affiliate, and each
such plan for the five year period immediately following the latest date on
which Holdings, Parent, the Borrower, a Subsidiary of Holdings, Parent, the
Borrower or an ERISA Affiliate maintained, contributed or had an obligation to
contribute to such plan.
"Plan Parties" shall have the meaning provided in Section 8.07.
"Pledge Agreement" shall have the meaning provided in Section 5.07.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
each of the Pledge Agreements.
"Pledged Securities" shall mean "Pledged Securities" as defined in the
Pledge Agreement.
"Pledged Stock" shall mean "Pledged Stock" as defined in the Pledge
Agreement.
"Projections" shall have the meaning provided in Section 5.14(b).
"Purchased Interest" shall have the meaning provided in the Receivables
Pooling Agreement.
"Qualified Preferred Stock" shall mean any Holdings PIK Preferred Stock,
or any other preferred stock of Holdings, the express terms of which shall
provide that Dividends thereon shall not be required to be paid in cash at any
time that such cash payment would be prohibited by the terms of this Agreement
(and any refinancings, replacements or extensions hereof) and in either case
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
(including an event which would constitute a Change of Control), cannot mature
(excluding any maturity as the result of an optional redemption by the issuer
thereof) and is not mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, and is not redeemable, or required to be repurchased,
at the sole option of the holder thereof (including, without limitation, upon
the occurrence of an event which would
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constitute a Change of Control), in whole or in part, on or prior to the first
anniversary of the Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of March, June,
September and December, occurring after the Restatement Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Receivables Amendment Conditions" means, with respect to any amendment or
modification of any Receivables Document, the requirement that the following
shall be true after giving effect to such amendment or modification:
(A) the Receivables Maximum Funding Amount shall not be less than
$45,000,000 except to the extent that such amount is less than $45,000,000
due to a shrinkage of receivables of the Borrower and its Subsidiaries after
the Original Effective Date;
(B) the scheduled maturities of the Investor Certificates and the
Purchased Interests shall not be earlier than the scheduled maturities of
Investor Certificates issued under the Receivables Bridge Facility;
(C) the weighted average of the per annum interest rates payable in
respect of Investor Certificates and Purchased Interests would not exceed the
per annum interest rates applicable to Revolving Loans outstanding hereunder;
(D) any Receivables Subsidiary would be required to apply all funds
available to it (after giving effect to the allocation of funds to reserves
required under the terms of the Receivables Documents and to the payment of
interest, principal and other amounts owed under the Receivables Documents)
to pay the purchase price for accounts receivables (including any deferred
portion of the purchase price);
(E) if any early amortization event that is not in the Receivables Bridge
Facility shall be added to the Receivables Documents or any early
amortization event that is in the Receivables Documents is made more
restrictive, such additional early amortization event or change in an
existing early amortization event shall not be adverse in any material
respect to the interests of the Borrower and its Subsidiaries, taken as a
whole (as determined in good faith by the Borrower); provided that the
inclusion of an early amortization event from the Receivables Bridge Facility
in the
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documentation for another series of Investor Certificates or Purchased
Interests shall not be construed as the addition of an early amortization
event for purposes hereof;
(F) the degree of recourse to the Borrower or its Subsidiaries (other than
the Receivables Subsidiary) under or in the respect of the Receivables
Documents shall not be increased in any material respect (as determined in
good faith by the Borrower) and in no event shall the Borrower or any of its
Subsidiaries (other than the Receivables Subsidiary) have recourse liability
(except pursuant to Standard Securitization Undertakings) for the payment of
any Receivables Facility Assets or any Investor Certificates or Purchased
Interests;
(G) if additional covenants are included in the Receivables Documents or
existing covenants in the Receivables Documents are made more restrictive,
such additional covenants or changes to existing covenants shall not be
adverse in any material respect to the interests of the Borrower and its
Subsidiaries taken as a whole (as determined in good faith by the Borrower);
and
(H) if additional representations and warranties are included in the
Receivables Documents or existing representations and warranties are made
more restrictive, such additional representations and warranties shall not be
adverse in any material respect to the interest of the Borrower and its
Subsidiaries taken as a whole (as determined in good faith by the Borrower);
provided that, notwithstanding anything to the contrary contained in the
definition, any changes to the Receivables Documents which relate to the
Borrower's or any Subsidiary's servicing or origination or Receivables Facility
Assets that are transferred to the Receivable Subsidiary pursuant to the
Receivable Documents shall be permitted.
"Receivables Bridge Facility" shall mean the transactions contemplated by
the Series 1995-1 Supplement to the Receivables Pooling Agreement, dated as of
December 13, 1995, among Blade Receivables Corporation, the Company and
Manufacturers and Traders Trust Company, as Trustee, and the Revolving
Certificate Purchase Agreement (Series 1995-1), dated as of December 13, 1995,
among Blade Receivables Corporation, the Company, the Purchasers described
therein and Bankers Trust Company and The First National Bank of Chicago, as
Agents.
"Receivables Documents" shall mean all documentation relating to any
Receivables Facility, including, without limitation, the Receivables Pooling
Agreement and the documentation delivered in connection therewith (including any
documentation relating to a series of certificates or purchased interests issued
and sold pursuant thereto).
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"Receivables Facility" shall mean the Receivables Bridge Facility,
pursuant to which (x) the Borrower and its Subsidiaries will from time to time
sell or otherwise transfer accounts receivable to one or more Receivables
Subsidiaries and (y) the respective Receivables Subsidiary or Receivables
Subsidiaries shall sell or otherwise transfer accounts receivable and related
assets (or interests therein) to the Receivables Purchasers, as more fully set
forth in the Receivables Documents; provided that the Receivables Facility may
be replaced or supplemented, or successively replaced or supplemented, after the
Original Effective Date so long as the Receivables Amendment Conditions are
satisfied (in which event such replacement facility shall be deemed to be the
Receivables Facility hereunder).
"Receivables Facility Assets" shall mean all accounts receivable (whether
now existing or arising in the future) of the Borrower or any of its
Subsidiaries which are transferred to one or more Receivables Subsidiaries
pursuant to the Receivables Facility, and any assets directly related thereto,
including, without limitation, (i) Transferred Assets (as defined in Section 2.1
of the Receivables Pooling Agreement as originally in effect), (ii) all
collateral given by the respective account debtor or on its behalf (but not by
Holdings or any of its Subsidiaries) securing such accounts receivable, (iii)
all contracts and all guarantees (but not by Holdings or any of its
Subsidiaries) or other obligations directly related to such accounts receivable,
(iv) other related assets which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable, and (v) proceeds of
all of the foregoing.
"Receivables Facility Attributed Indebtedness" at any time shall mean the
principal amount of Indebtedness which would be outstanding at such time under
the Receivables Facility if same were structured as a secured lending agreement
rather than a purchase agreement).
"Receivables Facility Financing Costs" shall mean all cash fees, service
charges and other costs, as well as all collections or other amounts retained by
the Receivables Purchasers which are in excess of amounts paid to the Borrower
and its Subsidiaries under the Receivables Facility for the purchase of
Receivables pursuant to the Receivables Facility.
"Receivables Maximum Funding Amount" shall mean the sum of (x) with
respect to outstanding Investors Certificates and Purchased Interests that have
fixed principal amounts, such principal amounts plus (y) with respect to
Investors Certificates or Purchased Interests that have variable principal
amounts, the Receivables Stated Amounts thereof.
"Receivables Pooling Agreement" shall mean the Blade Receivables Master
Trust Pooling and Servicing Agreement, dated as of December 13, 1995, among
Blade
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Receivables Corporation, the Company and Manufacturers and Traders Trust
Company, as Trustee, as amended or modified from time to time.
"Receivables Purchasers" shall mean and include (i) Manufacturers and
Traders Trust Company, as Trustee under the Receivables Pooling Agreement, and
its successors in that capacity, (ii) the purchaser or purchasers of any
interest in the Receivables Facility Assets under or in connection with any
Receivables Facility and (iii) the respective successors and assigns of the
foregoing Receivables Purchasers.
"Receivables Stated Amount" means, with respect to an Investor Certificate
or Purchased Interest, the maximum amount of the funding commitment with respect
thereto.
"Receivables Subsidiary" means a Wholly-Owned Subsidiary of the Borrower
which engages in no activities other than in connection with the financing of
accounts receivable and which is designated by the Board of Directors of the
Borrower (as provided below) as a Receivables Subsidiary (a) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which (i) is
guaranteed by Holdings or any other Subsidiary of Holdings (excluding guarantees
of obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates Holdings or any other Subsidiary of Holdings in any way other than
pursuant to Standard Securitization Undertakings or (iii) subjects any property
or asset of Holdings or any other Subsidiary of Holdings, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings, (b) with which neither
Holdings nor any of its Subsidiaries has any contract, agreement, arrangement or
understanding (other than pursuant to the Receivables Documents (including with
respect to fees payable in the ordinary course of business in connection with
the servicing of accounts receivable and related assets)) on terms less
favorable to Holdings or such Subsidiary than those that might be obtained at
the time from persons that are not Affiliates of Holdings, and (c) to which
neither Holdings nor any other Subsidiary of Holdings has any obligation to
maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results. Any such designation by the Board
of Directors of the Borrower shall be evidenced to the Administrative Agent by
filing with the Administrative Agent a certified copy of the resolution of the
Board of Directors of the Borrower giving effect to such designation and an
officer's certificate certifying that, to the best of such officer's knowledge
and belief after consultation with counsel, such designation complied with the
foregoing conditions.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds (other than insurance proceeds
relating to Excluded Liabilities (as defined in the Stock Purchase Agreement))
or condemnation award payable (i) by reason of theft, loss, physical destruction
or damage or any other similar event with
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respect to any property or assets of the Borrower or any of its Subsidiaries and
(ii) under any policy of insurance required to be maintained under Section 8.03.
"Refinancing" shall mean all repayments and refinancings of Indebtedness
under the Original Credit Agreement in connection with the Transaction.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Term Loans (or, if prior to the Restatement Effective Date, Term
Loan
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Commitments) and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and Adjusted Percentage of Swingline Loans and
Letter of Credit Outstandings) represent an amount greater than 50% of the sum
of all outstanding Term Loans (or, if prior to the Restatement Effective Date,
Term Loan Commitments) of Non-Defaulting Banks and the Adjusted Total Revolving
Loan Commitment (or after the termination thereof, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Banks and the aggregate Adjusted
Percentages of all Non-Defaulting Banks of the total outstanding Swingline Loans
and Letter of Credit Outstandings at such time).
"Restatement Effective Date" shall have the meaning provided in Section
13.10.
"Restricted Payment" shall mean (i) the authorization, declaration or
payment of any Dividend with respect to Holdings or any of its Subsidiaries,
(ii) the payment by the Borrower or any of its Subsidiaries of any advance or
loan made by Holdings or Parent, (iii) the payment by Parent of any loan or
advance made to it by Holdings and (iv) the making of any other payment by the
Borrower or any of its Subsidiaries to Holdings or Parent.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment", as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Scheduled Repayment" shall have the meaning provided in Section 4.02(b).
"Scheduled Repayment Date" shall have the meaning provided in Section
4.02(b).
"SEC" shall have the meaning provided in Section 8.01(a).
"Secondary Letters of Credit" shall mean the Secondary Letters of Credit
referenced in Section 5.16 of the Stock Purchase Agreement, issued in compliance
with the requirements of said Section 5.16 (together with any replacements
thereof at any time issued in accordance with said Section 5.16 of the Stock
Purchase Agreement).
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"Second Tier IP Subsidiary" shall mean a Domestic Wholly-Owned Subsidiary
of the Intellectual Property Subsidiary which engages in no substantial business
or activities other than in connection with the assets and business transferred
to it by the Intellectual Property Subsidiary as contemplated by clause (y) of
the definition of Intellectual Property Subsidiary contained herein.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning provided in Section 5.08.
"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage and, after the execution and delivery thereof, each
Additional Mortgage and each Additional Security Document.
"Senior Subordinated Note Documents" shall mean the Senior Subordinated
Notes, the Senior Subordinated Note Indenture and all other documents executed
and delivered with respect to the Senior Subordinated Notes or Senior
Subordinated Note Indenture.
"Senior Subordinated Note Indenture" shall mean the Indenture, dated as of
December 7, 1995, between the Borrower and the Senior Subordinated Note
Indenture Trustee, as in effect on the Original Effective Date and as thereafter
amended from time to time in accordance with the requirements thereof and of
this Agreement.
"Senior Subordinated Note Indenture Trustee" shall mean Marine Midland
Bank.
"Senior Subordinated Notes" shall mean the Borrower's 10% Senior
Subordinated Notes due 2003 issued pursuant to the Senior Subordinated Note
Indenture.
"Shareholders' Agreements" shall have the meaning provided in the Original
Credit Agreement.
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"Significant Subsidiary" shall mean each Subsidiary of the Borrower that
is a "significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X under
the Securities Act and the Exchange Act (as such regulation is in effect on the
Restatement Effective Date).
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Borrower or any Subsidiary thereof
in connection with a Receivables Facility which are reasonably customary in an
accounts receivable transaction.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Start Date" shall mean, with respect to any Margin Adjustment Period, the
first day of such Margin Adjustment Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met, provided that the
"Stated Amount" of each Letter of Credit denominated in a currency other than
Dollars shall be, on any date of calculation, the Dollar Equivalent of the
maximum amount available to be drawn in the respective currency thereunder
(determined without regard to whether any conditions to drawing could then be
met).
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement, dated
as of October 12, 1995, among Pechiney S.A., Pechiney International, Howmet
Cercast S.A. and Holdings.
"Subsidiaries Guaranty" shall have the meaning provided in Section 5.06.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Domestic Wholly-Owned Subsidiary
(other than a Receivables Subsidiary) of the Borrower on the Restatement
Effective Date and each Subsidiary which executes a guarantee after the
Restatement Effective Date pursuant to Section 8.12.
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"Subsidiary Pledgor" shall mean each Domestic Wholly-Owned Subsidiary
(other than a Receivables Subsidiary) of the Borrower on the Restatement
Effective Date and each Subsidiary which after the Restatement Effective Date
executes a pledge agreement pursuant to Section 8.12.
"Supermajority Banks" of any Tranche shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if (x) all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto are
terminated and (y) the percentage "50%" contained therein were changed to
"66-2/3%."
"Swingline Bank" shall mean The First National Bank of Chicago and its
successors and assigns.
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first paragraph
of this Agreement.
"Tax Letter of Credit" shall mean the letter of credit issued in
accordance with the requirements of Section 7.09 of the Stock Purchase
Agreement, substantially on the terms set forth in Exhibit 7.09 to the Stock
Purchase Agreement, supporting the payment of the obligations under Article VII
of the Stock Purchase Agreement (together with any replacements thereof
delivered in accordance with Section 5.16 of the Stock Purchase Agreement).
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement entered into
between Holdings, Parent and the Borrower pursuant to Section 5.20 of the
Original Credit Agreement.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Taxpayers" shall have the meaning provided in Section 7.09.
"Term Loan" shall have the meaning provided in Section 1.01(a).
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"Term Loan Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Term Loan Commitment", as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Section 1.13 or 13.04.
"Term Loan Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Term Loan Commitment
of such Bank at such time and the denominator of which is the Total Term Loan
Commitment at such time.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Date" shall mean, with respect to any Margin Adjustment Period, the
last day of the most recent fiscal quarter or year, as the case may be, of the
Borrower ended immediately prior to the Start Date for such Margin Adjustment
Period.
"Test Period" shall mean each period of four consecutive fiscal quarters
ending on the last day of a fiscal quarter of the Borrower ended after the
Restatement Effective Date, in each case taken as one accounting period.
"Thiokol" shall mean Thiokol Corporation, a Delaware corporation.
"Thiokol Permitted Holders" shall mean Thiokol and one or more of its
Wholly-Owned Subsidiaries.
"Thiokol Purchase Option" shall mean the option of Thiokol Holdings
Company to purchase the equity interests of the Carlyle Entities pursuant to the
Carlyle/Thiokol Shareholders Agreement.
"Total Commitments" shall mean, at any time, the sum of the Commitments of
each of the Banks.
"Total Outstandings" shall mean, at any time, the sum of (x) the principal
amount of all Loans outstanding at such time and (y) the Letter of Credit
Outstandings at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the Term
Loan Commitments of each of the Banks.
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"Total Unutilized Revolving Loan Commitment" shall mean, at any tune, an
amount equal to the remainder of (x) the then Total Revolving Loan Commitment,
less (y) the sum of the aggregate principal amount of Revolving Loans and
Swingline Loans outstanding plus the then aggregate amount of Letter of Credit
Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Tranche" shall mean the respective facility and commitments utilized in
making Loans hereunder, with their being three separate Tranches i.e., Term
Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean (i) the amendment and restatement of the Original
Credit Agreement in the form of this Agreement as provided herein, (ii) the
incurrence of the Loans hereunder on the Restatement Effective Date and (iii)
the consummation of the Refinancing.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated benefits under the Plan as
of the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No.87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided for in Section 2.04(a).
"Unutilized Revolving Loan Commitment" with respect to any Bank, at any
time, shall mean such Bank's Revolving Loan Commitment at such time less the sum
of (i) the aggregate outstanding principal amount of Revolving Loans made by
such Bank and (ii) such Bank's Adjusted Percentage of the Letter of Credit
Outstandings in respect of Letters of Credit issued under this Agreement.
"Voting Stock" means any class or classes of capital stock of Holdings
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
Holdings.
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"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Agents.
12.01 Appointment. The Banks hereby designate The First National Bank of
Chicago as Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" shall include The First National Bank of Chicago (and/or
any of its affiliates) in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Credit
Documents. The Banks hereby designate Bankers Trust Company as Syndication Agent
and Citicorp USA, Inc. as Documentation Agent to act as specified herein and in
the other Credit Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agents to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Agents by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. Each of the Agents may perform any of its
duties hereunder by or through its respective officers, directors, agents,
employees or affiliates.
12.02 Nature of Duties. No Agent shall have any duties or responsibilities
except those expressly set forth in this Agreement and the Security Documents.
Neither any Agent nor any of their respective officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of each Agent shall be mechanical and administrative in nature; no
Agent shall have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein or therein.
12.03 Lack of Reliance on the Agents. Independently and without reliance
upon any Agent, each Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith
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and (ii) its own appraisal of the creditworthiness of Holdings and its
Subsidiaries and, except as expressly provided in this Agreement, no Agent shall
have any duty or responsibility, either initially or on a continuing basis, to
provide any Bank or the holder of any Note with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter. No Agent shall be responsible to
any Bank or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings and its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of Holdings and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
12.04 Certain Rights of the Agents. If any Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Banks; and such Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against any Agent as a result of
such Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.
12.05 Reliance. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
such Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by such Agent.
12.06 Indemnification. (a) To the extent any Agent is not reimbursed and
indemnified by the Borrower the Banks will reimburse and indemnify such Agent,
in proportion to their respective "percentages" as used in determining the
Required Banks (but in any event calculated as if there were no Defaulting
Banks), for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by such Agent in performing its respective duties hereunder or under any other
Credit Document, in any way relating to or arising out of this Agreement or any
other Credit Document; provided that no Bank shall be liable for any portion of
such liabili-
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ties, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct.
(b) Any Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Credit Document (except actions expressly
required to be taken by it hereunder or under the Credit Documents) unless it
shall first be indemnified to its satisfaction by the Banks pro rata against any
and all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
12.07 Each Agent in its Individual Capacity. With respect to its
obligation to make Loans under this Agreement, each Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Banks", "Required Banks", "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Each Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if they were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower or any other Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
12.08 Holders. The Administrative Agent shall deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agents. (a) The Administrative Agent or the
Collateral Agent may resign from the performance of all its functions and duties
hereunder and/or under the other Credit Documents at any time by giving 15
Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent or Collateral Agent, as the case may be, pursuant to clauses (b) and (c)
below or, in the case of the Administrative Agent, as otherwise provided below.
Each other Agent may resign from the performance of all of its functions and
duties hereunder and/or under the other Credit Documents at any time after the
Restatement Effective Date, by giving notice to the Borrower, the Administrative
Agent and the Banks. Such resignation shall take effect upon delivery of such
notice.
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(b) Upon any such notice of resignation by the Administrative Agent or
Collateral Agent, as the case may be, the Required Banks shall appoint a
successor Administrative Agent or Collateral Agent, as the case may be,
hereunder or thereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent or Collateral Agent, as the case
may be, shall not have been so appointed within such 15 Business Day period, the
Administrative Agent or Collateral Agent, as the case may be, with the consent
of the Borrower (which shall not be unreasonably withheld or delayed), shall
then appoint a commercial bank or trust company with capital and surplus of not
less than $500,000,000 as successor Administrative Agent or Collateral Agent, as
the case may be, who shall serve as Administrative Agent or Collateral Agent, as
the case may be, hereunder or thereunder until such time, if any, as the Banks
appoint a successor Administrative Agent or Collateral Agent, as the case may
be, as provided above.
(d) In the case of the Administrative Agent only, if no successor
Administrative Agent has been appointed pursuant to clause (b) or (c) above by
the 25th Business Day after the date such notice of resignation was given by the
Administrative Agent, the Administrative Agent's resignation shall become
effective and the Managing Agents (if one or more so agrees), or if there are no
Managing Agents or no Managing Agent so agrees, then the Required Banks, shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Administrative Agent as provided above.
(e) Upon a resignation of any Agent pursuant to this Section 12.09, such
Agent shall remain indemnified to the extent provided in this Agreement and the
other Credit Documents and the provisions of this Section 12 shall continue in
effect for the benefit of such Agent for all of its actions and inactions while
serving as such Agent.
12.10 Removal of the Administrative Agent. The Administrative Agent may be
removed at any time upon obtaining the consent of the Borrower and those Banks
that would constitute the Required Banks under, and as defined in, this
Agreement if the percentage "50%" contained therein were changed to "66-2/3%".
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agents (including, without limitation,
the reasonable fees and disbursements of White & Case and local counsel) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relat-
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ing hereto or thereto, of the Agents in connection with their syndication
efforts with respect to this Agreement and of the Agents in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Agents); (ii) pay and
hold each of the Banks harmless from and against any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify the Agents and
each Bank, and each of their respective officers, directors, trustees,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' and consultants'
fees and disbursements) incurred by, imposed on or assessed against any of them
as a result of, or arising out of, or in any way related to, or by reason of,
(a) any investigation, litigation or other proceeding (whether or not the Agents
or any Bank is a party thereto) related to the entering into and/or performance
of this Agreement or any other Credit Document or the use of any Letter of
Credit or the proceeds of any Loans hereunder or the consummation of any
transactions contemplated herein (including, without limitation, the
Transaction), or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents, or (b) the
actual or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property at any time
owned or operated by Holdings or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned or operated by Holdings or any of its
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against Holdings, any of its Subsidiaries or any Real Property at any time owned
or operated by Holdings or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify, pay or hold harmless the Agents or any Bank set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Holdings or
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the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any tune held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of Holdings, Parent, the Borrower
or any Subsidiary Guarantor (but in any event excluding assets held in trust for
any other Person) against and on account of the Obligations and liabilities of
Holdings, Parent, the Borrower or such Subsidiary Guarantor, as applicable, to
such Bank under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations purchased by such
Bank pursuant to Section 13.06(b), all participations by any Bank in any
Swingline Loans or Letters of Credit as required pursuant to the provisions of
this Agreement and all other claims of any nature or description arising out of
or connected with this Agreement or any other Credit Document, irrespective of
whether or not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. The Borrower agrees that any Bank purchasing participations in one or
more Letters of Credit or Swingline Loans as required by the provisions of this
Agreement, or purchasing participations as required by Section 13.06(b), may, to
the fullest extent permitted by law, exercise all rights (including without
limitation the right of setoff) with respect to such participations as fully as
if such Bank or a direct creditor of the Borrower with respect to such
participations in the amount thereof.
13.03 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telex or tele-copier communication) and mailed, telexed, telecopied or
delivered: if to Holdings, at Holdings' address specified opposite its signature
below; if to Parent, at Parent's address specified opposite its signature below;
if to the Borrower, at the Borrower's address specified opposite its signature
below; if to any Bank, at its address specified opposite its name on Schedule II
below; and if to the Administrative Agent, at its Notice Office; or, as to any
Credit Party or any of the Agents, at such other address as shall be designated
by such party in a written notice to the other parties hereto and, as to each
Bank, at such other address as shall be designated by such Bank in a written
notice to the Borrower and the Agents. All such notices and communications
shall, when mailed, telexed, telecopied or sent by overnight courier, be
effective when deposited in the mails or delivered to the overnight courier,
prepaid and properly addressed for delivery on such or the next Business Day, or
sent by telex or telecopier, except that notices and communications to the
Agents and the Borrower shall not be effective until received by the Agents or
the Borrower, as the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that, no Credit Party may
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the
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prior written consent of all of the Banks and, provided further, that, although
any Bank may grant participations in its rights hereunder, such Bank shall
remain a "Bank" for all purposes hereunder (and may not otherwise transfer or
assign all or any portion of its Commitments hereunder except as provided in
Section 13.04(b)) and the participant shall not constitute a "Bank" hereunder
and, provided further, that no Bank shall grant any participation under which
the participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with one
or more other Banks) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans (or, if prior to the Restatement Effective Date, Term
Loan Commitment) to its parent company and/or any affiliate of such Bank which
is at least 50% owned by such Bank or its parent company or to one or more Banks
or (y) assign all, or if less than all, a portion equal to at least $5,000,000
(or, in connection with assignments by the Managing Agents within 30 days of the
Restatement Effective Date, such lesser amounts as they may determine) in the
aggregate for the assigning Bank or assigning Banks, of such Revolving Loan
Commitments and/or outstanding principal amount of Term Loans (or, if prior to
the Restatement Effective Date, Term Loan Commitment) hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement,
provided that, (i) at such time Schedule I shall be deemed modified to reflect
the Commitments (and/or outstanding Term Loans, as the case may be) of such new
Bank and of the existing Banks, (ii) new Notes will be issued,
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at the Borrower's expense, to such new Bank and to the assigning Bank upon the
request of such new Bank or assigning Bank, such new Notes to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect the revised Commitments (and/or outstanding Term Loans,
as the case may be), (iii) the consent of the Administrative Agent shall be
required in connection with any assignment of all or any portion of Revolving
Loan Commitments (which consent shall not be unreasonably withheld or delayed),
(iv) in the case of assignments pursuant to clause (y) above, the consent of the
Administrative Agent and, in the case of such assignments of Term Loan
Commitments or Revolving Loan Commitments, the prior written consent of the
Borrower shall be required (which consents shall not be unreasonably withheld or
delayed) and (v) the Administrative Agent shall receive at the time of each such
assignment pursuant to preceding clause (y), from the assigning or assignee
Bank, the payment of a non-refundable assignment fee of $3,500. To the extent of
any assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Commitments.
At the time of each assignment pursuant to this Section 13.04(b) to a Person
which is not already a Bank hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Bank shall provide to the Borrower and the
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Bank's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
1.11 or 4.04 from those being charged by the respective assigning Bank prior to
such assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower shall be obligated to pay any other increased costs
of the type described above resulting from changes after the date of the
respective assignment). At the time of any assignment pursuant to this Section
13.04(b), the assigning Bank shall furnish notice thereof to the Administrative
Agent.
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
any Agent or any Bank or any holder of any Note in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and any Agent or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
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which any Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of any Agent or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States (or the
equivalent thereof in any country in which a Foreign Subsidiary is doing
business, as applicable) consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided that, (i) except as otherwise
specifically provided herein, all computations determining compliance with
Sections 9.08 through 9.10, inclusive, shall utilize accounting principles and
policies in conformity with
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those used to prepare the historical financial statements delivered to the Banks
pursuant to Section 7.05(a), except that for all purposes described above in
this clause (i), sales of inventory shall be accounted for on a FIFO (first-in,
first-out) basis as opposed to a LIFO (last-in, first-out) basis (with the
foregoing generally accepted accounting principles, subject to the preceding
proviso, herein called "GAAP") (ii) so long as none of Holdings nor any of its
Subsidiaries have made any payments with respect to the Installment Notes (other
than payments made by Parent to the extent theretofore reimbursed as described
in clause (ii) of Section 10.12), for purposes of the computations described in
preceding clause (i) the Installment Notes shall be treated as if same did not
exist and as if there were no interest expense applicable thereto (although any
payments received in respect thereof or in respect of any promissory notes held
by the Installment Notes Trust shall likewise not be included as income of
Holdings or any of its Subsidiaries) and (iii) so long as none of Holdings nor
any of its Subsidiaries have made any payments with respect to the Parent PIK
Subordinated Notes, for purposes of the computations described in preceding
clause (i) the Parent PIK Subordinated Notes shall be treated as if same did not
exist and as if there were no interest expense applicable thereto.
(b) All computations of interest, Commitment Commission and Fees hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION: VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
HOLDINGS, PARENT AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF HOLDINGS, PARENT AND THE BORROWER HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE
DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AS ITS DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF,
AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
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NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF
FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO
ACT AS SUCH, EACH CREDIT PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND
AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. EACH OF HOLDINGS, PARENT AND THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS, PARENT AND THE BORROWER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
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13.10 Effectiveness. This Agreement shall become effective on the date
(the "Restatement Effective Date") on which (i) each of Holdings, Parent, the
Borrower, each Continuing Bank, each New Bank, the Required Banks (determined
immediately before the occurrence of the Restatement Effective Date) and each
Agent shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent or,
in the case of the Banks, shall have given to the Administrative Agent
telephonic (confirmed in writing), written or telex notice (actually received)
at such office that the same has been signed and mailed to it and (ii) the
conditions contained in Sections 5, 6 and 13.20(c) are met to the satisfaction
of the Administrative Agent and the Required Banks (determined immediately after
the occurrence of the Restatement Effective Date). Unless the Administrative
Agent has received actual notice from any Bank that the conditions contained in
Sections 5 and 6 have not been met to its satisfaction, upon the satisfaction of
the condition described in clause (i) of the immediately preceding sentence and
upon the Administrative Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met,
then the Restatement Effective Date shall have been deemed to have occurred,
regardless of any subsequent determination that one or more of the conditions
thereto had not been met (although the occurrence of the Restatement Effective
Date shall not release the Borrower from any liability for failure to satisfy
one or more of the applicable conditions contained in Section 5, 6 or 13.20(c).
The Administrative Agent will give the Borrower and each Bank prompt written
notice of the occurrence of the Restatement Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Maturity Date, or reduce the rate or
extend the time of payment of interest or Fees thereon, or reduce the principal
amount thereof (except to the extent repaid in cash), (ii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents, (iii) release a Subsidiary
Guarantor which is a Significant Subsidiary from the Subsidiaries Guaranty
(except as expressly provided in the Subsidiaries Guaranty), (iv) amend, modify
or waive any provision of this Section 13.12, (v) reduce the percentage
specified in the definition of Required Banks (it being understood that, with
the consent of the Required Banks,
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additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Banks on substantially the same basis as the
extensions of Term Loans and Revolving Loan Commitments are included on the
Restatement Effective Date) or (vi) amend or modify the definition of
Supermajority Banks (it being understood that, with the consent of the Required
Banks, additional Obligations and Tranches may be included in the determination
of Supermajority Banks on substantially the same basis as the Obligations and
Tranches are included on the Restatement Effective Date) or (vii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement; provided further, that no such change, waiver, discharge
or termination shall (t) increase the Commitments of any Bank over the amount
thereof then in effect without the consent of such Bank (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment shall not
constitute an increase of the Commitment of any Bank, and that an increase in
the available portion of any Commitment of any Bank shall not constitute an
increase in the Commitment of such Bank), (u) without the consent of the
Swingline Bank alter its rights or obligations with respect to Swingline Loans,
(v) without the consent of each Issuing Bank affected thereby, amend, modify or
waive any provision of Section 2 or alter its rights or obligations with respect
to Letters of Credit, (w) without the consent of each Agent affected thereby,
amend, modify or waive any provision of Section 12 as same applies to such Agent
or any other provision as same relates to the rights or obligations of such
Agent, (x) without the consent of the Collateral Agent, amend, modify or waive
any provision relating to the rights or obligations of the Collateral Agent, (y)
without the consent of the Supermajority Banks of the respective Tranche (i.e.,
Supermajority Banks holding Term Loans or Term Loan Commitments), amend, modify
or waive any Scheduled Repayment (except that, if additional Loans are made
pursuant to a given Tranche, the Scheduled Repayments of such Tranche may be
increased on a proportionate basis without the consent otherwise required by
this clause (y)) and (z) if the Scheduled Repayments of Term Loans are being
increased (except for proportionate increases as described in the parenthetical
contained in preceding clause (y)) or the date of any Scheduled Repayment is
being shortened or accelerated, the consent of the Supermajority Banks of each
other Tranche then outstanding shall be required in connection therewith.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vii), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment
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and/or repay in full its outstanding Loans, in accordance with Sections 3.02(b)
and/or 4.01(iv), provided that, unless the Commitments terminated, and Loans
repaid, pursuant to preceding clause (B) are immediately replaced in full at
such time through the addition of new Banks or the increase of the Commitments
and/or outstanding Loans of remaining Banks (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding clause
(B) the Required Banks (determined both (x) before giving effect to the proposed
action and (y) as if the Loans and Commitments being terminated (and not
replaced) were not outstanding) shall specifically consent thereto, provided
further, that in any event the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second proviso
to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery and
termination of this Agreement and the Notes and the making and repayment of the
Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, etc. Notwithstanding anything to
the contrary contained in Sections 1.10, 1.11, 2.05 or 4.04 of this Agreement,
unless a Bank gives notice to the Borrower that it is obligated to pay an amount
under any such Section within one year after the later of (x) the date the Bank
incurs the respective increased costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital or
(y) the date such Bank has actual knowledge of its incurrence of the respective
increased costs, Taxes, loss, expense or liability, reductions in amounts
received or receivable or reduction in return on capital, then such Bank shall
only be entitled to be compensated for such amount by the Borrower pursuant to
said Section 1.10, 1.11, 2.05 or 4.04, as the case may be, to the extent the
costs, Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs one year prior to such Bank giving notice to the
Borrower that it is obligated to pay the respective amounts pursuant to said
Section 1.10, 1.11, 2.05 or 4.04, as the case may be. This Section 13.15 shall
have no applicability to any Section of this Agreement other than said Sections
1.10, 1.11, 2.05 and 4.04.
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13.16 Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of Holdings or the Borrower (other than to
its employees, auditors, advisors or counsel or to another Bank if the Bank or
such Bank's holding or parent company in its sole discretion determines that any
such party should have access to such information, provided such Persons shall
be subject to the provisions of this Section 13.16 to the same extent as such
Bank) any information with respect to Holdings or any of its Subsidiaries which
is now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by Holdings to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public other than by virtue of a breach of
this Section 13.16(a) by the respective Bank, (b) as may be required or
reasonably appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or reasonably
appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (e) to the Agents or the Collateral Agent and (f) to
any prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or any
interest therein by such Bank, provided that such prospective transferee agrees
to be bound by the confidentiality provisions contained in this Section 13.16.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees that
each Bank may share with any of its affiliates (which is not a direct competitor
of Holdings or any of its Subsidiaries) any information related to Holdings or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of Holdings and its Subsidiaries,
provided such Persons shall be subject to the provisions of this Section 13.16
to the same extent as such Bank).
13.17 Register. The Borrower hereby designates the Administrative Agent to
serve as the Borrower's agent, solely for purposes of this Section 13.17, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Banks, the Loans made by each of the Banks and
each repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation, shall
not affect the Borrower's obligations in respect of such Loans. With respect to
any Bank, the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer
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of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Loan,
or as soon thereafter as practicable, the assigning or transferor Bank shall
surrender the Note evidencing such Loan, and thereupon one or more new Notes in
the same aggregate principal amount shall be issued to the assigning or
transferor Bank and/or the new Bank. The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
13.17 except to the extent resulting from the gross negligence or willful
misconduct of the Administrative Agent.
13.18 Intercreditor Agreement. Each Bank hereby authorizes the Collateral
Agent to amend and restate the Intercreditor Agreement and agrees (for itself
and its successors and assigns) to be bound by the terms and provisions thereof.
13.19 Obligation to Make Payments in Dollars. The obligation of the
Borrower to make payment in Dollars of the principal of and interest on the
Notes and any other amounts due hereunder or under any other Credit Document to
the Payment Office of the Administrative Agent as provided in Section 4.03 shall
not be discharged or satisfied by any tender, or any recovery pursuant to any
judgment, which is expressed in or converted into any currency other than
Dollars, except to the extent such tender or recovery shall result in the actual
receipt by the Administrative Agent at its Payment Office on behalf of the Banks
or holders of the Notes of the full amount of Dollars expressed to be payable in
respect of the principal of and interest on the Notes and all other amounts due
hereunder or under any other Credit Document. The obligation of the Borrower to
make payments in Dollars as aforesaid shall be enforceable as an alternative or
additional cause of action for the purpose of recovery in Dollars of the amount,
if any, by which such actual receipt shall fall short of the full amount of
Dollars expressed to be payable in respect of the principal of and interest on
the Notes and any other amounts due under any other Credit Document, and shall
not be affected by judgment being obtained for any other sums due under this
Agreement or under any other Credit Document.
13.20 Addition of New Banks; Termination of Commitments of Non-Continuing
Banks; etc. (a) On and as of the occurrence of the Restatement Effective Date in
accordance with Section 13.10, each New Bank shall become a "Bank" under, and
for all purposes of, this Agreement and the other Credit Documents.
(b) The parties hereto acknowledge that no Original Bank is obligated to
be a Continuing Bank. By their execution and delivery hereof, the Borrower and
the Required
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Banks (determined immediately before the occurrence of the Restatement Effective
Date) consent to the voluntary repayment by the Borrower of all outstanding
Original Loans and other Obligations owing to each Original Bank which is not a
Continuing Bank (each such Bank, a "Non-Continuing Bank") and to the voluntary
termination by the Borrower of the Revolving Loan Commitment (under, and as
defined in, the Original Credit Agreement) of each Non-Continuing Bank, in each
case to be effective on, and contemporaneously with the occurrence of, the
Restatement Effective Date, in each case in accordance with the provisions of
Section 13.20(c).
(c) Notwithstanding anything to the contrary contained in the Original
Credit Agreement or any Credit Document, the Borrower and each of the Banks
hereby agrees that on the Restatement Effective Date, (i) each Bank with a
Revolving Loan Commitment as set forth on Schedule I (after giving effect to the
Restatement Effective Date) shall make that principal amount of Revolving Loans
to the Borrower as is required by Section 1.01, (ii) in the case of each
Continuing Bank, all of such Continuing Bank's Original Loans outstanding on the
Restatement Effective Date (except for Original Tranche A Terms Loans to the
extent converted into Term Loans on the Restatement Effective Date in accordance
with the provisions of Section 1.01(a)) shall be repaid in full, together with
interest on all Original Loans of such Continuing Bank (including without
limitation on Original Tranche A Term Loans then being converted into Term Loans
hereunder) and all accrued Fees (and any other amounts) owing to such Continuing
Bank, and its commitments under the Original Credit Agreement shall be
terminated and replaced by its Term Loan Commitment and/or Revolving Loan
Commitment hereunder, effective on the occurrence of the Restatement Effective
Date, and (iii) in the case of each Non-Continuing Bank, all of such
Non-Continuing Bank's Original Loans outstanding on the Restatement Effective
Date shall be repaid in full on such date, together with interest thereon and
all accrued Fees (and any other amounts) owing to such Non-Continuing Bank, and
the Term Loan Commitment and/or Revolving Loan Commitment (under, and as defined
in, the Original Credit Agreement) of such Non-Continuing Bank, if any, shall be
terminated, effective upon the occurrence of the Restatement Effective Date.
Notwithstanding anything to the contrary contained in the Original Credit
Agreement, this Agreement or any other Credit Document, the parties hereto
hereby consent to the repayments and reductions required above, and agree that
in the event that any Original Bank shall fail to execute a counterpart of this
Agreement prior to the occurrence of the Restatement Effective Date, such
Original Bank shall be deemed to be a Non-Continuing Bank and, concurrently with
the occurrence of the Restatement Effective Date, the Revolving Loan Commitment
(under, and as defined in, the Original Credit Agreement) of such Original Bank,
if any, shall be terminated, all Original Loans of such Original Bank
outstanding on the Restatement Effective Date shall be repaid in full, together
with interest thereon and all accrued Fees (and any other amounts) owing to such
Original Bank, and concurrently with the occurrence of the Restatement Effective
Date, such Original Bank shall no longer constitute a "Bank" under this
Agreement and the other Credit Documents, provided that all indemnities of the
Credit
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Parties under the Original Credit Agreement and the other Credit Documents (as
in effect prior to the Restatement Effective Date) for the benefit of each
Original Bank shall survive in accordance with the terms thereof.
13.21 Post Closing Actions. Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:
(a) Foreign Corporation Stock. The Borrower shall, within 60 days after
the Restatement Effective Date (or such longer period as approved by the
Collateral Agent for the purpose of attaining relevant government approvals
under applicable foreign law), deliver to the Collateral Agent, as Pledgee, the
capital stock constituting Pledged Securities of Howmet S.A. (subject to the 65%
limitation contained in the Pledge Agreement), together with executed and
undated stock powers related thereto; and
(b) Good Standing. The Borrower shall cause Howmet Transport to take all
action so that within 30 days after the Restatement Effective Date (x) Howmet
Transport shall be in good standing in the State of Connecticut and (y) a good
standing certificate for Howmet Transport from the State of Connecticut shall be
delivered to the Administrative Agent.
(c) Financing Statements; Opinions. The Borrower shall, and shall cause
its Subsidiaries to, within ten (10) days after the Restatement Effective Date,
deliver (x) proper financing statements (Form UCC-1) fully executed for filing
under the UCC or other appropriate filing offices of each jurisdiction listed on
Annex B to the Security Agreement but which was not listed on Annex B to the
Security Agreement delivered in connection with the Original Credit Agreement,
(y) an opinion from Latham & Watkins, special counsel to Holdings and its
Subsidiaries, meeting the requirements of Section 5.03(i) and containing
provisions, satisfactory to the Managing Agents, with respect to the creation
and perfection of security interests as a result of the filing of financing
statements described in clause (x) above and (z) to the extent requested by the
Administrative Agent, opinions from local counsel in form and substance
reasonably satisfactory to the Managing Agents, with respect to the creation and
perfection of security interests as a result of the filing of financing
statements described in clause (x) above. Notwithstanding anything to the
contrary contained herein, the Banks hereby waive any Default or Event of
Default arising from the failure to previously disclose the inventory and
equipment locations described in clause (x) of the previous sentence and, until
the tenth day after the Restatement Effective Date, the failure to make the
filings described in clause (x) of the previous sentence.
All conditions precedent and representations contained in this Agreement
and the other Credit Documents shall be deemed modified to the extent necessary
to effect the foregoing (and to permit the taking of the actions described above
within the time periods
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required above, rather than as elsewhere provided in the Credit Documents);
provided, that (x) to the extent any representation and warranty would not be
true because the foregoing actions were not taken on the Restatement Effective
Date, the respective representation and warranty shall be required to be true
and correct in all material respects at the time the respective action is taken
(or was required to be taken in accordance with the foregoing provisions of
Section 13.21 and (y) all representations and warranties relating to the
Security Documents shall be required to be true immediately after the actions
required to be taken by Section 13.21 have been taken (or were required to be
taken). The acceptance of the benefits of each Credit Event shall constitute a
representation, warranty and covenant by the Borrower to each of the Banks that
the actions required pursuant to this Section 13.21 will be taken within the
relevant time periods referred to in this Section 13.21 and that, at such time,
all representations and warranties contained in this Agreement and the other
Credit Documents shall then be true and correct without any modification
pursuant to this Section 13.21.
SECTION 14. Parent Guaranty.
14.01 The Parent Guaranty. In order to induce the Agents and the Banks to
enter into this Agreement and to extend credit hereunder, to induce Banks or any
of their respective Affiliates to enter into the Interest Rate Protection
Agreements or Other Hedging Agreements, and in recognition of the direct
benefits to be received by each Parent Guarantor from the proceeds of the Loans,
the issuance of the Letters of Credit, and the entering into of Interest Rate
Protection Agreements or Other Hedging Agreements, each Parent Guarantor hereby
agrees with the Guaranteed Creditors as follows: each Parent Guarantor hereby,
jointly and severally, unconditionally and irrevocably guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, acceleration or otherwise, of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors. If any or all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors becomes due
and payable hereunder, each Parent Guarantor, jointly and severally, irrevocably
and unconditionally promises to pay such indebtedness to the Guaranteed
Creditors, or order, on demand, together with any and all expenses which may be
incurred by the Guaranteed Creditors in collecting any of the Guaranteed
Obligations. This Parent Guaranty is a guaranty of payment and not of
collection. If claim is ever made upon any Guaranteed Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected in good faith by
such payee with any such claimant (including the Borrower), then and in such
event each Parent Guarantor agrees that any such judgment, decree, order,
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settlement or compromise shall be binding upon such Parent Guarantor,
notwithstanding any revocation of this Parent Guaranty or other instrument
evidencing any liability of the Borrower, and each Parent Guarantor shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
14.02 Bankruptcy. Additionally, each Parent Guarantor, jointly and
severally, unconditionally and irrevocably guarantees the payment of any and all
of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors
whether or not due or payable by the Borrower upon the occurrence of an Event of
Default under Section 10.05, and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money
of the United States.
14.03 Nature of Liability. The liability of each Parent Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the Guaranteed Obligations of the Borrower whether executed by such Parent
Guarantor, any other guarantor or by any other party, and the liability of each
Parent Guarantor hereunder is not affected or impaired by (a) any direction as
to application of payment by the Borrower or by any other party, or (b) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the Guaranteed Obligations of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to any Guaranteed Creditor
on the Guaranteed Obligations which any such Guaranteed Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Parent waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding, or (f) the lack of validity or enforceability of any Credit Document
or any instrument relating thereto.
14.04 Independent Obligation. The obligations of each Parent Guarantor
hereunder are independent of the obligations of any other guarantor, any other
party or the Borrower, and a separate action or actions may be brought and
prosecuted against such Parent Guarantor whether or not action is brought
against any other guarantor, any other party or the Borrower and whether or not
any other guarantor, any other party or the Borrower be joined in any such
action or actions. Each Parent Guarantor waives, to the full extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by the Borrower or other circumstance
which operates to toll any statute of limitations as to the Borrower shall
operate to toll the statute of limitations as to such Parent Guarantor.
14.05 Authorization. Each Parent Guarantor authorizes the Guaranteed
Creditors without notice or demand (except as shall be required by applicable
statute and
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cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly
or indirectly in respect thereof, and the Parent Guaranty herein made shall
apply to the Guaranteed Obligations as so changed. extended, renewed or
altered;
(b) take and hold security for the payment of the Guaranteed Obligations
and sell, exchange, release, surrender, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or
any liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the Borrower,
any other Credit Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether
due or not) of the Borrower to its creditors other than the Guaranteed
Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of each Parent Guarantor or the
Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements;
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of such
Parent Guarantor from its liabilities under this Parent Guaranty;
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<PAGE> 158
(i) release any collateral security for the Guaranteed Obligations; and/or
(j) change its corporate structure.
14.06 Reliance. It is not necessary for any Guaranteed Creditor to inquire
into the capacity or powers of the Borrower or the officers, directors, partners
or agents acting or purporting to act on their behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of the Borrower now or
hereafter owing to each Parent Guarantor is hereby subordinated to the
Guaranteed Obligations of the Borrower owing to the Guaranteed Creditors; and if
the Administrative Agent so requests at a time when an Event of Default exists,
all such indebtedness of the Borrower to such Parent Guarantor shall be
collected, enforced and received by such Parent Guarantor for the benefit of the
Guaranteed Creditors and be paid over to the Administrative Agent on behalf of
the Guaranteed Creditors on account of the Guaranteed Obligations of the
Borrower to the Guaranteed Creditors, but without affecting or impairing in any
manner the liability of such Parent Guarantor under the other provisions of this
Parent Guaranty. Prior to the transfer by each Parent Guarantor of any note or
negotiable instrument evidencing any of the indebtedness of the Borrower to such
Parent Guarantor, such Parent Guarantor shall mark such note or negotiable
instrument with a legend that the same is subject to this subordination. Without
limiting the generality of the foregoing, each Parent Guarantor hereby agrees
with the Guaranteed Creditors that it will not exercise any right of subrogation
which it may at any time otherwise have as a result of this Parent Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Each Parent Guarantor waives any right (except as shall
be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Borrower, any other guarantor or
any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party or (iii) pursue any other
remedy in any Guaranteed Creditor's power whatsoever. Each Parent Guarantor
waives any defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party, other than payment in full of the Guaranteed
Obligations, based on or arising out of the disability of the Borrower, any
other guarantor or any other party, or the validity, legality or
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than payment in full of the Guaranteed Obligations. The Guaranteed Creditors
may, at their election, foreclose on any security held by any Agent, the
Collateral Agent or any other Guaranteed Creditor by one or more judicial or
non-judicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy
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<PAGE> 159
the Guaranteed Creditors may have against the Borrower or any other party, or
any security, without affecting or impairing in any way the liability of either
Parent Guarantor hereunder except to the extent the Guaranteed Obligations have
been paid. Each Parent Guarantor waives any defense arising out of any such
election by the Guaranteed Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of such Parent Guarantor against the Borrower or any other party or any
security.
(b) Each Parent Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Parent Guaranty, and notices of the existence, creation or incurring of
new or additional Guaranteed Obligations. Each Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which such Parent Guarantor assumes and incurs hereunder, and agrees that
neither the Agents nor any Bank shall have any duty to advise such Parent
Guarantor of information known to them regarding such circumstances or risks.
14.09 Maximum Liability. It is the desire and intent of each Parent
Guarantor and the Guaranteed Creditors that this Parent Guaranty shall be
enforced against each Parent Guarantor to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. If, however, and to the extent that, the obligations of either Parent
Guarantor under this Parent Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations of such Parent
Guarantor shall be deemed to be reduced and such Parent Guarantor shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
* * *
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<PAGE> 160
Howmet Corporation Amended and
Restated Credit Agreement
1001 Pennsylvania Avenue, N.W. BLADE ACQUISITION CORP.
Washington, D.C. 20004
Attn: Allan M. Holt
Telephone: (202) 347-2626 By /s/ Allen M. Holt
Telecopy: (202) 347-9250 --------------------------
Title:
with a copy to:
Bruce Rosenblum, Esq.
Latham & Watkins
1001 Pennsylvania Avenue, Suite 1300
Washington, DC 20004
<PAGE> 161
Howmet Corporation Amended and
Restated Credit Agreement
475 Steamboat Road HOWMET HOLDINGS CORPORATION
Greenwich, CT 06830
Attn: Jeffrey A. Jankowski
Telephone: (203) 625-8744 By /s/ Jeffrey A. Jankowski
Telecopy: (203) 861-4746 --------------------------
Title: Treasurer
with a copy to:
Bruce Rosenblum, Esq.
Latham & Watkins
1001 Pennsylvania Avenue, Suite 1300
Washington, DC 20004
and
Allan M. Holt
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
<PAGE> 162
Howmet Corporation Amended and
Restated Credit Agreement
475 Steamboat Road HOWMET CORPORATION
Greenwich, CT 06830
Attn: Jeffrey A. Jankowski
Telephone: (203) 625-8744 By /s/ Jeffrey A. Jankowski
Telecopy: (203) 861-4746 --------------------------
Title: Treasurer
with a copy to:
Bruce Rosenblum, Esq.
Latham & Watkins
1001 Pennsylvania Avenue, Suite 1300
Washington, DC 20004
and
Allan M. Holt
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
<PAGE> 163
Howmet Corporation Amended and
Restated Credit Agreement
130 Liberty Street BANKERS TRUST COMPANY,
New York, New York 10006 Individually, as a Managing Agent
Telephone No.: (212) 250-1724 and as Syndication Agent
Telecopier No.: (212) 250-7218
Attention: Mr. Dana F. Klein
By /s/ DANA KLEIN
--------------------------
Title: DANA KLEIN
VICE PRESIDENT
<PAGE> 164
Howmet Corporation Amended and
Restated Credit Agreement
399 Park Avenue, 6th Floor CITICORP USA, INC.,
New York, New York 10043 Individually, as a Managing Agent
Telephone No.: (212) 559-4659 and as Documentation Agent
Telecopier No.: (212) 793-1290
Attention: Mr. Timothy L. Freeman
By /s/ Timothy L. Freeman
--------------------------
Title: Attorney-In-Fact
<PAGE> 165
Howmet Corporation Amended and
Restated Credit Agreement
One First National Plaza, Suite 0362 THE FIRST NATIONAL BANK OF CHICAGO,
Chicago, Illinois 60670 Individually as a Managing Agent
Telephone No.: (312) 732-8142 and as Administrative Agent
Telecopier No.: (312) 732-3885
Attention: Mr. David G. Dixon
By /s/ Amy R. Fahey
--------------------------
Title: Vice President
<PAGE> 166
Howmet Corporation Amended and
Restated Credit Agreement
ABN AMRO Bank N.V.
San Francisco International Branch
101 California Street, Suite 4550 By: ABN AMRO North America, Inc.
San Francisco, CA 94111 as agent
Telephone: (415) 984-3702
Telecopier No.: (415) 362-3524
Attention: Ms. Gina Brusatori By /s/ Gina M. Brusatori
--------------------------
Title: Gina M. Brusatori
VP and Director
By /s/ Dianne D. Waggoner
--------------------------
Title: Dianne D. Waggoner
GVP and Director
<PAGE> 167
Howmet Corporation Amended and
Restated Credit Agreement
430 Park Avenue, 14th Floor BANK OF MONTREAL
New York, New York 10022
Telephone: (212) 605-1637
Telecopier No.: (212) 605-1451
Attention: Ms. Joanna Bellocq By /s/ Joanna S. Bellocq
--------------------------
Title: Director
<PAGE> 168
Howmet Corporation Amended and
Restated Credit Agreement
One Wall Street, 22nd Floor THE BANK OF NEW YORK
New York, New York 10286
Telephone: (212) 635-6863
Telecopier No.: (212) 635-6999
Attention: Mr. Ken Sneider By /s/ Ken Sneider
--------------------------
Title: Vice President
<PAGE> 169
Howmet Corporation Amended and
Restated Credit Agreement
One Liberty Plaza THE BANK OF NOVA SCOTIA
New York, New York 10006
Telephone: (212) 225-5011
Telecopier No.: (212) 225-5090
Attention: Mr. James Trimble By /s/ James Trimble
--------------------------
Title: Senior Relationship
Manager
<PAGE> 170
Howmet Corporation Amended and
Restated Credit Agreement
180 Montgomery Street BANQUE NATIONALE DE PARIS
San Francisco, CA 94104
Telephone: (415) 956-0707 ext. 206
Telecopier No.: (415) 296-8954
Attention: Mr. Guy Gibb By /s/ D. Guy Gibb
--------------------------
Title: D. Guy Gibb
Vice President
By /s/ Jeffrey S. Kajisa
--------------------------
Title: Jeffrey S. Kajisa
Assistant Vice President
<PAGE> 171
Howmet Corporation Amended and
Restated Credit Agreement
1301 Avenue of the Americas CREDIT LYONNAIS NEW YORK BRANCH
New York, New York 10019
Telephone: (212) 261-7286
Telecopier No.: (212) 459-3176
Attention: Mr. Michael Regan
By /s/ Frederick Haddad
--------------------------
Title: Frederick Haddad
Senior Vice President
<PAGE> 172
Howmet Corporation Amended and
Restated Credit Agreement
633 West 5th Street - 64th Floor CREDIT SUISSE
Los Angeles, CA 90071
Telephone: (213) 955-8276
Telecopier No.: (213) 955-8245
Attention: Ms. Debbie Shea
By /s/ Mark A. Sampson
--------------------------
Title: Mark A. Sampson
Associate
By /s/ Deborah A. Shea
--------------------------
Title: Deborah A. Shea
Associate
<PAGE> 173
Howmet Corporation Amended and
Restated Credit Agreement
75 Wall Street, 29th Floor DRESDNER BANK AG,
New York, New York 10005 NEW YORK BRANCH AND
Telephone: (212) 429-2198 GRAND CAYMAN BRANCH
Telecopier No.: (212) 429-2129
Attention: Mr. Andrew Mittag
By /s/ Andrew Mittag
--------------------------
Title: Vice President
By illegible
--------------------------
Title: AT
<PAGE> 174
Howmet Corporation Amended and
Restated Credit Agreement
One Federal Street, MSN-MA-OF-0308 FLEET NATIONAL BANK
Boston, MA 02211
Telephone: (617) 346-0574
Telecopier No.: (617) 346-0585
Attention: Mr. Robert Rubino
By /s/ Robert Rubino
--------------------------
Title: Vice President
<PAGE> 175
Howmet Corporation Amended and
Restated Credit Agreement
333 South Hope Street
Suite 3900 THE FUJI BANK LIMITED
Los Angeles, CA 90071 LOS ANGELES AGENCY
Telephone: (213) 253-4143
Telecopier No. (213) 253-4198
Attention: Mr. Hidetsugu Onishi By illegible
--------------------------
Title: Joint General Manager
<PAGE> 176
Howmet Corporation Amended and
Restated Credit Agreement
300 South Grand Avenue, Suite 3800 MELLON BANK, N.A.
Los Angeles, CA 90071
Telephone: (213) 680-7354
Telecopier No.: (213) 680-7366
Attention: Mr. Lawrence Ivey By /s/Lawrence Ivey
--------------------------
Title: Vice President
<PAGE> 177
Howmet Corporation Amended and
Restated Credit Agreement
515 South Figueroa Street, Suite 400 THE SAKURA BANK, LIMITED
Los Angeles, CA 90071 LOS ANGELES AGENCY
Telephone: (213) 489-6295
Telecopier No.: (213) 623-8692
Attention: Mr. Fernando Buesa By /s/ Fernando Buesa
--------------------------
Title: ???
By /s/ Ofusa Sato
--------------------------
Title: Senior Vice President &
Assistant General Manager
<PAGE> 178
Howmet Corporation Amended and
Restated Credit Agreement
555 South Flower Street, 11th Floor BANK OF AMERICA ILLINOIS
Department Number 5618
Los Angeles, California 90071
Telephone: (213) 228-6379
Telecopier No.: (213) 228-2756 By /s/ Lori Y. Kannegieter
Attention: Ms. Lori Y. Kannegieter --------------------------
Title: Managing Director
<PAGE> 179
SCHEDULE III
REAL PROPERTY
OWNED PROPERTY
COMPANY LOCATION
CIRAL S.N.C. Zone de la Presare, Evron, France
Howmet Corporation* Winsted, 145 Price Road, (Town of Winchester,
Connecticut)
Howmet Corporation* 555 Benston Road
1600 South Warner Street
One Misco Drive
Whitehall (Whitehall, Michigan)
Howmet Corporation* Wichita Falls (Casting) (6200 Central Freeway,
Wichita Falls, Texas)
Howmet Corporation 68-78, rue du Moulin de Cage, 92230 Gennevilliers,
France
Howmet Corporation* Morristown, 5650 Commerce Boulevard, (City of
Morristown, Tennessee)
Howmet Corporation* LaPorte, 1110 East Lincoln Way, (LaPorte, Indiana)
Howmet Corporation* Hampton, One Howmet Drive, (City of Hampton,
Virginia)
Howmet Corporation* Dover (Lots 31 & 32 - Rockaway
Road, Lots 29, 30, 36, 38 & 39 - 10 Roy
Street, Rockaway Township, New Jersey)
Howmet Corporation, Inc.* North Haven (30 Corporate Drive, Town of North
Haven, Connecticut)
Howmet Refurbishment, Inc. 2201 E.L. Anderson Blvd., Claremore, OK
- ----------
* Mortgaged Property
<PAGE> 180
Howmet Corporation, Inc.* Wichita Falls (Refurb.) (3101 Hammon Road,
Wichita Falls, Texas)
Howmet S.A. 26 Rue de Polonge
Le Creusot, France, 71200
Howmet S.A. X.A.C. des Grands Pres
14160 Dives sur Mer, France
Howmet S.A. 68-78, rue du Moulin de Cage, 92230
Gennevilliers, France
Howmet-Tempcraft, Inc. * (3960 South Marginal Road, Cleveland, Ohio)
Howmet Limited Exeter EX27LL and 7LG (County of Devon,
U.K.) (2)
Howmet Cercast (Canada), Inc. 3905 Industriel Boulevard, Montreal, Quebec,
Canada
Turbine Components Corporation* (Nos. 1, 2, 4, and 20-24 Commercial Street,
Branford, Connecticut)
LEASED PROPERTY (FROM THIRD PARTIES)
- - Sales Offices:
99 East River Drive, East Hartford, Connecticut - Lessor: H.B.
Associates II; Lessee; Howmet Sales, Inc.
1208 East Broadway, Tempe, Arizona - Lessor: Tempe Executive
Partnership; Lessee: Howmet Sales, Inc.
4500 Lake Forest Drive, Suite 522, Cincinnati, Ohio - Lessor: Heitman,
Ohio Management Inc.; Lessee: Howmet Sales, Inc.
- - Advanced Refurbishment Center, North Haven Pilgrim's Harbour,
Wallingford, Connecticut - Lessor: Louis Dinkel; Lessee: Howmet
Refurbishment, Inc.
- - Dover, Apartment Leases:
Rustic Ridge Apartments, Apt. 512, and Apt. G10 Rockaway Township,
Dover, New Jersey - Lessor: Rustic Ridge Associates; Lessee: Howmet
Corp.
- - Exeter Lease Agreements:
- ------------
* Mortgaged Property
2
<PAGE> 181
Suite A, Picton House, Hussar Court, Waterlooville, Hampshire - Lessor:
County Estates (Hampshire) Limited; Lessee: Howmet Management Services
Inc.; and Surety: Howmet Ltd.
Falcon Way, Sowton Industrial Estate, Exeter Devon - Lessor: The Canada
Life Assurance Company (U.K) Ltd; Lessee: Howmet Ltd.
3 & 4 Bridford Road, Exeter, Devon - Lessor: Vapron Properties Limited;
Lessee: Howmet Ltd.
- - Denville, Warehouse Lease (66 Ford Road, Block 62101, Lot 5, Denville,
New Jersey) - Lessor; W.P. Realty Co.; Lessee: Howmet Turbine
Components Corporation.
- - Tulsa, Apartment Lease (740-A Heritage Village, Claremore, Oklahoma)
Lessor: Ted Riley et al; Lessee: Howmet Corporation
- - Dives sur Mer, Capital Lease; Lessor: Sofia Mur; Lessee: Howmet S.A.
- - Pomona (Sigma Casting) (4120 West Valley Boulevard, Pomona, California)
- Lessor: CH Ranch Co.; Lessee: Sigma Casting Corporation
- - Chatre La Foret, Capital Lease - Lessor: le District du Pays d'Evron;
Lessee: CIRAL S.N.C.
- - Hampton (Sublease Agreement) (609 Howmet Drive, Hampton, Virginia) -
Lessor; William Hamner; Lessee: National Welders Supply Company;
Sublessee: Howmet Corporation
- - Wichita Falls (Refurbishment), Lease Agreement (2021 Elmwood Avenue,
Apt. 118, Wichita Falls, Texas) - Lessor: Brentwood - Timberlane;
Lessee: Howmet Corporation (Emmett Scully)
- - Cercast Inc., Lease Agreements:
3905 Industrial Boulevard, Montreal North, Quebec - Lessor: 119620
Canada Inc.; Lessee: Cercast Inc.
- - Howmet Cercast (Canada), Inc., Lease Agreements:
10770 Alfred Avenue, Montreal North, Quebec - Lessor: Herbert Stoll;
Lessee: Howmet Cercast (Canada), Inc.
10768 Alfred Avenue, Montreal North, Quebec - Lessor: Gestion Cerela
LTD; Lessee: Howmet Cercast (Canada), Inc.
3
<PAGE> 182
9987 Paris Street, Montreal North, Quebec- Lessor: Franco Rabbim;
Lessee: Howmet Cercast (Canada), Inc.
10039 London Street, Montreal North, Quebec - Lessor: Gestion Cerela
LTD; Lessee: Howmet Cercast (Canada), Inc.
10049 London Street, Montreal North Quebec - Lessor: Herb Stoll;
Lessee: Howmet Cercast (Canada), Inc.
9950 and 9932 London Street and 3897 Industrial Boulevard, Montreal
North, Quebec - Lessor: Morena Giuseppina; Lessee; Howmet Cercast
(Canada), Inc.
10024 London Street, Montreal North, Quebec - Lessee: Les Guissepe
Cappadoro Inc.; Sublessee: Howmet Cercast (Canada), Inc.
9845-9999 Paris Street. Montreal North, Quebec - Lessee: 119620 Canada,
Inc.; Sublessee: Howmet Cercast (Canada), Inc.
10035 Paris Street, Montreal North, Quebec - Lessee: Les Guissepe
Cappadoro Inc.; Sublessee: Howmet Cercast (Canada), Inc.
- - Ceramet Lease Agreement (Avenue C, Lehigh Valley Industrial Park #1,
Bethlehem, Pennsylvania) - Lessor: Valenta Trust U.T.D.; Lessee:
Ceramet, Inc.
- - Cercor, Lease Agreement (Halton Hills, Ontario) - Lessors: Allan T.
Rice and Barry H. Hadley; Lessee: Howmet Cercast (Canada), Inc. (as
successor by amalgamation to Cercor, Inc.)
- - Sigma, Lease Agreement (925 South Charlie Road, City of Industry,
California) - Lessor: Valenta Trust U.T.D.; Lessee: Sigma Casting
Corporation.
- - Sigma, Lease Agreement (1001) South Charlie Road, City of Industry,
California) - Lessor: John Wasserbacher; Lessee: Sigma Casting
Corporation
- - Cercon, Lease Agreement (201-203 Consolidated Drive, Hilisboro, Texas)
- Lessor: 119620 Canada, Ltd.; Lessee: Cercon Casting Corporation
- - Georgetown, Halton Hills Ontario Lease - Lessor: Allan T. Rice and
Barry H. Hadley; Lessee: Cercor Inc.
- - Osaka and Terai Real Estate Documents
LEASED PROPERTIES (TO THIRD PARTIES)
- - R-H Component Technologies Lease (Property in Rogers County, Oklahoma)
- Lessor: Howmet Refurbishment, Inc.; Lessee: R-H Component
Technologies
4
<PAGE> 183
- - LaPorte, Austenal Farm Lease (State Road 2 and Boyd Blvd. , LaPorte,
Indiana) - Lessor: Howmet Corporation; Lessee: Glenn Griffin
- - 10620 Ste-Gertrude Street, Montreal North, Quebec - Sublessor: Howmet
Cercast (Canada), Inc.; Sublessee: Les Industries Robillard & Fils
Limitee
- - 4970 Amiens Street, Montreal North, Quebec - Sublessor: Howmet Cercast
(Canada) Inc.; Sublessee: Superior Packaging Inc.
5
<PAGE> 184
SCHEDULE IV
LIABILITIES
Howmet Corporation has been or may be named a potentially responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act and similar state statutes, at fourteen on-site and off-site locations
relating to the investigation and/or remediation of environmental contamination
at certain properties. In addition, Howmet Corporation is remediating similar
environmental contamination at five European facilities. Based on management's
best current estimates of potential liability, management believes that Howmet's
reserves (approximately $9.0 million at September 29, 1996) are adequate under
current laws and regulations. In addition, as part of the December 13, 1995
acquisition, Pechiney International, S.A. and Pechiney S.A. indemnified Blade
Acquisition Corp. , and Blade Acquisition Corp. assigned such indemnification
rights to Howmet Corporation, for any environmental liabilities originating
prior to December 13, 1995 (the acquisition closing date), which exceed the
Company's reserves of $6.0 million as of June 30, 1995.
Howmet Holdings Corporation could have contingent liability exposure
for environmental contamination and related costs associated with certain
discontinued mining operations owned and/or operated until the early 1960's.
These liabilities include approximately $24 million in remediation and natural
resource damage liabilities at the Blackbird Mine Site in Idaho and
approximately $4.0 million in investigation and remediation costs at the Holden
Mine Site in Washington. However, Pechiney International and Pechiney have
agreed to fully indemnify Howmet Holdings Corporation with respect to such
matters. Furthermore, the liability relating to the Blackbird Mine site is
secured by letters of credit in favor of the U.S. Environmental Protection
Agency. A Pechiney company is the reimbursement party for these letters of
credit.
A MAN GHH claim involving failure of first stage high pressure blades
on the land- based-THM-1304 engine due to quartz rod residue in cooling passages
could result in a liability of $300,000.
There are twelve separate but similar lawsuits and other proceedings
brought by former employees of Howmet's Wichita Falls facilities alleging that
their discharge or denial of benefits was due to discrimination in violation of
federal and state laws including age and sex discrimination and workers
compensation claim retaliation, and in one case, Goff v. Howmet, injury due to
negligence. Howmet believes it has meritorious defenses in all of these cases.
From time to time when Howmet Corporation develops patentable
technology in coordination with another company, an issue arises as to the
inventorship of the invention proposed to be patented. There is no instance in
which Howmet's management believes such issue will have a material effect on its
financial position or operations.
<PAGE> 185
SCHEDULE II
BANK ADDRESSES
Bankers Trust Company 130 Liberty Street, 30th Floor
New York, New York 10006
Telephone No.: (212) 250-1724
Telecopier No.: (212) 250-7218
Attention: Mr. Dana F. Klein
Citicorp USA, Inc. 399 Park Avenue, 6th Floor
New York, New York 10043
Telephone No.: (212) 559-4659
Telecopier No.: (212) 793-1290
Attention: Mr. Timothy L. Freeman
The First National Bank One First National Plaza, Suite 0362
of Chicago Chicago, Illinois 60670
Telephone No.: (312) 732-8142
Telecopier No.: (312) 732-3885
Attention: Mr. David G. Dixon
Credit Lyonnais New York Branch 1301 Avenue of the Americas
New York, New York 10019
Telephone No.: (212) 261-7286
Telecopier No.: (212) 459-3176
Attention:
Fleet National Bank One Federal Street, MSN-MA-OF-0308
Boston, MA 02211
Telephone No.: (617) 346-0574
Telecopier No.: (617) 346-0585
Attention: Kerry McElhiney
Bank of America Illinois 555 South Flower Street, 11th Floor
Suite 5618
Los Angeles, California 90071
Telephone No.: (213) 228-6379
Telecopier No.: (213) 228-2756
Attention: Ms. Lori Y. Kannegieter
<PAGE> 186
SCHEDULE II
Page 3
The Bank of Nova Scotia One Liberty Plaza
New York, New York 10006
Telephone No.: (212) 225-5011
Telecopier No.: (212) 225-5090
Attention: Mr. James Trimble
The Bank of New York One Wall Street, 22nd Floor
New York, New York 10286
Telephone No.: (212) 635-6863
Telecopier No.: (212) 635-6999
Attention: Mr. Ken Sneider
The Fuji Bank Limited 333 South Hope Street, Suite 3900
Los Angeles Agency Los Angeles, CA 90071
Telephone No.: (213) 253-4143
Telecopier No.; (213) 253-4198
Attention: Mr. Hidetsugu Onishi
The Sakura Bank Limited 515 South Figueroa Street, Suite 400
Los Angeles Agency Los Angeles, CA 90071
Telephone No.: (213) 489-6295
Telecopier No.: (213) 623-8692
Attention: Mr. Fernando Buesa
Mellon Bank, N.A. 300 South Grand Avenue, Suite 3800
Los Angeles, CA 90071
Telephone No.: (213) 680-7354
Telecopier No.: (213) 680-7366
Attention: Mr. Lawrence Ivey
<PAGE> 187
SCHEDULE II
Page 4
Banque Nationale de Paris 180 Montgomery Street
San Francisco, CA 94104
Telephone No.: (415) 956-0707 ext. 206
Telecopier No.: (415) 296-8954
Attention: Mr. Guy Gibb
Credit Suisse 633 West 5th Street - 64th Floor
Los Angeles, CA 90071
Telephone No.: (213) 955-8276
Telecopier No.: (213) 955-8245
Attention: Ms. Debbie Shea
ABN AMRO Bank N.V. 101 California Street, Suite 4550
San Francisco, CA 94111
Telephone No.: (415) 984-3702
Telecopier No.: (415) 362-3524
Attention: Ms. Gina Brusatori
Bank of Montreal 430 Park Avenue, 14th Floor
New York, New York 10022
Telephone No.: (212) 605-1637
Telecopier No.: (212) 605-1451
Attention: Ms. Joanna Bellocq
Dresdner Bank AG, 75 Wall Street, 29th Floor
New York Branch and New York, New York 10005
Grand Cayman Branch Telephone No.: (212) 429-2198
Telecopier No.: (212) 429-2129
Attention: Mr. Andrew Mittag
Mr. Nicholas Kalogeropoulos
Mr. Vince Dolan
<PAGE> 188
SCHEDULE VI
TAX MATTERS
WAIVERS:
A. U.S. Federal Income Taxes
Special Consent to Extend the Time to Assess Tax (Form 872-A) for the
1990, 1991, 1992 and 1993 taxable years signed by Howmet Holdings
Corporation and Subsidiaries (10/8/96).
B. Connecticut
Consent to Extend the Statute of Limitations for the imposition of
Corporation Business Tax for the 1987 to 1992 taxable years to be
signed by Howmet Holdings Corporation shortly. Current waiver, signed
5/31/96, expires 12/31/96.
C. Michigan
Consent to the Suspension of the Running of the Statute of Limitations
for the imposition of sales and use tax for the period July 1, 1991 to
March 31, 1993 to March 31, 1997 signed by Howmet Corporation
(5/10/96).
D. Texas
Agreement to Extend Period of Limitation for the imposition of 1 992
Franchise Tax to December 31, 1996 signed by Howmet Corporation
(5/7/96).
AUDITS:
A. Michigan
Notice of Intent to Assess issued 10/15/96 for the imposition of Single
Business Tax for the 1991, 1992 and 1993 taxable years for Howmet
Corporation. Total assessment of $1,112,348 will be appealed.
<PAGE> 189
Schedule VII
ERISA
In the event of a termination of the Howmet Corporation Salaried
Employees Pension Plan, the Borrower's unfunded liability is estimated to be in
the $15 million range. Howmet Corporation has no present intention of
terminating that plan nor ceasing to make contributions under it.
<PAGE> 190
SCHEDULE VIII
SUBSIDIARIES
Howmet Limited
Howmet Management Services, Inc.1/2/
Howmet Foreign Sales Corp.
Howmet-Tempcraft, Inc.1/2/
Howmet Transport Services, Inc.1/2/
Howmet Sales, Inc.1/2/
Howmet Refurbishment, Inc.1/2/
Turbine Components Corporation1/2/
Howmet S.A.
Financiere d'Ocquier, S.A.
Ciral SNC
Ciral Italy SRL
Howmet Cercast (Canada), Inc. (f/k/a 3203816 Canada Ltd.)
Howmet Cercast (USA), Inc.1/2/
Howmet Thermatech Canada, Inc.1/2/
Blade Receivables Corporation
1/ Subsidiary Pledgor
2/ Subsidiary Guarantor
<PAGE> 191
Exhibit IX
HOWMET STRUCTURE ORGANIZATIONAL CHART
<PAGE> 192
SCHEDULE X
LABOR RELATIONS
Union Activity
- - At Howmet Ltd. the following unions are represented: the Amalgamated
Engineering Union, the Transport and General Workers Union, the
Electrical, Electronic, Telecommuni- cations and Plumbing Union, the
GMB-APEX and the Manufacturing, Science and Finance Union.
- - At Howmet S.A. the following unions are represented: the Confederation
Generale des Cadres ("CFE/CGC"), the Confederation Generale du Travail
("CGT"), the Confederation Francaise du Travail ("CFTD"), and the
Confederation Francaise des Travailleurs Chretiens ("CFTC").
- - At CIRAL S.N.C., the CFDT is represented.
- - At the Muskegon County Operations there is a collective bargaining
agreement with the following unions: Local No. 1243 United Automobile,
Aerospace and Agricultural Implement Workers of America and its
International Union.
- - At the Le Creusot facility of Howmet, S.A. there have been two hour
work stoppages in sympathy to the call by the CGT for a national
strike.
Arbitration and Representation
- - There have been arbitration proceedings at the Howmet Corporation and
Cercast U.S. facilities in Texas under the Occupational Injury benefit
Plan for Texas Employees of Howmet Corporation and Howmet Cercast
(USA), Inc., a voluntary program established in lieu of workers'
compensation.
- - At the Dover, New Jersey alloy facility, the Teamsters Union attempted
to organize the employees. An election was held on January 19, 1996 in
which the union was rejected by a vote of 66 to 12.
- - At the LaPorte, Indiana casting facility in June, 1996, the United Auto
Workers began handbilling the employees. Over several months they
attempted to organize the employees. This proved to be of no avail and
they ceased the activity.
- - At the Hampton, Virginia casting facility, the International
Association of Machinists attempted to organize the employees. As a
result of an election concluding on November 2, 1996, the union was
rejected 513 to 202.
<PAGE> 193
Schedule X
Labor Relations
Page 2 of 2
- - At the Advanced Refurbishment facility in North Haven, Connecticut, the
International Association of Machinists submitted a petition for an
election on November 15,1996. It is expected that an election will be
Conducted at the end of December, 1996 or the beginning of January,
1997.
Labor and Union Contracts
- - Agreement between Howmet Corporation Covering its Muskegon County
Operations and Local No.1243 United Automobile, Aerospace and
Agricultural Implement Workers of America and its International Union.
- - Collective Bargaining Agreement between Howmet, Ltd. and the
Amalgamated Engineering Union, Transport and General Workers Union,
Electrical, Electronic, Telecommunications and Plumbing Union, GMB-APEX
and the Manufacturing, Science and Finance Union, January 1, 1996.
- - Collective Bargaining Agreements between Howmet S.A. and the CFEICGC,
the CGT, the CFDT and the CFTC, dated December 30, 1993, January 18,
1994, December 22, 1994, January 24, 1995, as amended on March 30.1995
(with the CFDT and the CGT only), January 27, 1995 and May 31, 1995.
<PAGE> 194
SCHEDULE XI
EXISTING INDEBTEDNESS
HOWMET GROUP FINANCING AGREEMENTS
Surviving Financial Obligations
- - $250,000 First Chicago Irrevocable Standby Letter of Credit from Howmet
Corporation to the State of Connecticut*
Debt Value: Face Value of Letter of Credit
- - Guaranty by Howmet Corporation of $2,000,000 or 50% of the Short-Term
Promissory Note from R-H Components Technologies, L.C. to Citibank,
N.A., March 23, 1994
Debt Value: $2,250,000
- - Guaranty by Howmet Corporation of 50% of the indebtedness of
Komatsu-Howmet Ltd.
Debt Value: Y1,135,977,000**
- - $100,000 American Express Financial Services credit line to support
Howmet Corporation's travel advance program, June 7, 1993
Debt Value: $32,826
- - $5,000,000 Visa Procurement Card Credit Agreement with First Bank for
Howmet Corporation, November 29, 1993
Debt Value: $272,785
- - $1,000,000 Visa Procurement Card Credit Agreement with First Bank for
Howmet Refurbishment, Inc., November 29, 1993
Debt Value: $25,672
- - $3,400,000 Irrevocable Letter of Credit, by First Chicago for Travelers
Insurance Company, on behalf of Howmet Corporation*
Debt Value: Face Value of Letter of Credit
- - $25,000 Irrevocable Letter of Credit, January 1995, for Morristown
Power & Light Co. (Tennessee) on behalf of Howmet Corporation*
Debt Value: Face Value of Letter of Credit
- ----------
* These Letters of Credit have been drawn pursuant to the Credit
Agreement
** The Borrower will be indemnified for 50% of any liabilities arising
from these guarantees.
<PAGE> 195
- - $50,000 First Chicago Irrevocable Letter of Credit for Turbine
Components Corporation*
Debt Value: Face Value of Letter of Credit
Cercast Group Financing Agreements
Surviving Financing Obligation
- - Can$60,000 Letter of Credit issued by the Bank of Montreal to Currant
Canada Inc. on the order of Howmet Cercast (Canada), Inc. , for custom
requirements dated May 1995
Debt Value: Face Value of Letter of Credit
Surviving Financial Obligation Giving Rise to a Price Reduction
- - Capital Lease Agreement between CIRAL, S.N.C. and Le District du Pays
d'Evron, dated March 23, 1992
Debt Value: Fr1,194,000
- - Fr37,400,000 (original amount) 12.4% capital lease agreement between
Howmet S.A. and C.C. Bail, Societe de Credit Bail Immoblier. dated
December 29, 1989, re: Dives sur Mer Factory1/
Debt Value: Fr8,898,000
- - Can$750,000 Howmet Cercast (Canada), Inc. Financement from the Societe
Innovatech du Grand Montreal
Debt Value: Can$750,000
1/ Le Magnesium Industriel has been merged in Microfusion S.A., now Howmet
S.A. C.C. Bail has assigned the lease to Sofia Mur.
* These Letters of Credit will be replaced with Letters of Credit Drawn
pursuant to the Credit Agreement.
2
<PAGE> 196
<TABLE>
<CAPTION>
BLADE ACQUISTION CORPORATION/HOWMET CORPORATION INSURANCE PROGRAM AS OF 11-1-96 Schedule XII
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
POLICY POLICY LIMITS
COVERAGE NUMBER PERIOD CARRIER BROKER (000)
-------- ------ ------ ------- ------ ------
AIRCRAFT PRODUCTS AW677595
LIABILITY: 7/l/96/ Bowring Aviation 500,000
6/30/97 ABC underwriters M&M
ALL RISK 01020025 6/l/96/ Arkwright 1,263,831
(Property & Bus. Interruption) 5/31/97 50,000
AUTOMOBILE LIAB. UC2J-CAP-185K838-0-TIL-96 7/l/96/ Travelers Ferguson 1,000
(TX) UC2EE-CAP-185K839-2-TRI-96 6/30/97
CARGO LIABILITY 651-63-99 7/l/96/ CHUBB/ Ferguson 200
6/30/97 Federal
CRIME 8091-82-70-D 9/l/96/ Federal Johnson & 10,000
8/31/97 Higgins
DIRECTORS & 8146-29-04 12/13/95/ CHUBB/ Johnson & 25,000
OFFICERS 12/12/96 Federal Higgins
FIDUCIARY 8146-29-04 12/13/95/ CHUBB Johnson & 15,000
12/12/96 Higgins
GENERAL LIABILITY UC2JSLS-185K841-1-TIL-96 7/1/96/ Travelers Ferguson 1,000
(non-aircraft prod) UC2JSLS-l85K8515-TIL-97 6/30/97 1,500(Products)
1412120 Guardian Ins Ferguson
MISC. CASUALTY 8077-94-27-C 3/30/95 Federal Johnson & 15,000
3/29/98 Higgins
EXCESS LIABILITY 7973-77-05 7/l/96/ Chubb Ferguson 25,000
07XN25148589SC 6/30/97 AETNA 25,000
35271685 Chubb DIC
WORKERS' (NJ) UC2J-UB-185K844796 Travelers
COMPENSATION (CA) UC2J-UB-185K845996 7/l/96/ Retro/deductable Ferguson Statutory
(ALL OTHERS) UC2J-UB-185K842396 6/30/97 in house accrual
EXCESS-WORKERS' (included in above cost)
COMPENSATION
TEXAS EXCESS INDEMN NTXO119557 11-1-96/ RELIANCE NATIONAL (INC 6,857TX TAX)
11-1-97 TOTAL PREMIUM
</TABLE>
<TABLE>
<S> <C>
DEDUCTIBLE PREMIUM
---------- -------
None $542.500
Brokerage $90,000
1 0,000 to $615,922
CDN $41,914
500,000 in house re $175,000
traveler ex $17,750
brokerage $15,000
$207,750
2.500/ $8,060
7,500
100,000 $38,425
500,000 $165,000
transaction chg $50,000
0/20,000 $37,942
500,000 in house re $225,000
950,000 traveler ex $31,250
brokerage $15,000
$271,250
$3,395
None $33,200
3 YEAR POLICY
None $153,000
None $39,000
$5,000
500,000 in house re $2,750,000
traveler ex $546,238
brokerage $221,085
$3,517,323
300.000 $148,247
$5,967,928
</TABLE>
<PAGE> 197
SCHEDULE XIII
EXISTING LIENS
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Automat Services LaTouraine Coffee Co. 1509490 05/10/93 Sec. of State, NJ Specific
T/A Howmet Corp. 520 Secaucus Road Equipment
1 Roy Street Secaucus, NJ 07096
Dover, NJ 07801
Howmet Corp. CFE Equipment Corp. 910531616 05/29/91 Sec. of State, VA Specific
#1 Howmet Dr. 818 Widgeon Rd. Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
ASSOCIATES COMMERCIAL CORP.
ECC Financial Group
1301 East Ninth St.
Cleveland, OH 44114
Howmet Corp. CFE Equipment Corporation 74436 06/03/91 Clerk of Circuit Court, Specific
#1 Howmet Dr. 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
ASSOCIATES COMMERCIAL CORP.
ECC Financial Group
1301 E. Ninth St.
Cleveland, OH 44114
Howmet Corp. ReFerb Co. C+L Leasing 91015126 01/28/91 Sec. of State, TX Specific
6202 Central Frwy N. 1505 Luna Rd. Equipment
Wichita Falls, TX 76307 Carrollton, TX 75006
Howmet Corporation CFE Equipment Corporation 910431307 04/26/91 Sec. of State, TX Specific
1 Howmet Dr. 818 Widgeon Rd. Equipment
Hampton, VA 23661 Norfolk, VA 23513
</TABLE>
<PAGE> 198
SCHEDULE XIII
page 2
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation CFE Equipment Corporation 74295 04/30/91 Clerk of Circuit Court, Specific
1 Howmet Dr. 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
ECC Financial Group
Corporation
1301 East Ninth St.
Cleveland, OH 44144
Howmet Corporation CFE Equipment Corporation 78200 01/31/94 Clerk of Circuit Court, Specific
1 Howmet Drive 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 78201 01/31/94 Clerk of Circuit Court, Specific
1 Howmet Drive 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 77866 11/01/93 Clerk of Circuit Court, Specific
1 Howmet Drive 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
</TABLE>
<PAGE> 199
SCHEDULE XIII
page 3
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation CFE Equipment Corporation 80406 09/21/95 Clerk of Circuit Court, Specific
1 Howmet Drive 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 9509137145 09/13/95 Sec. of State, VA Specific
1 Howmet Drive 818 Widgeon Rd. Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
8001 Ridgepoint Drive
Irving, TX 75063-3117
Howmet Corporation CFE Equipment Corporation 77798 10/21/93 Clerk of Circuit Court, Specific
1 Howmet Drive 818 Widgeon Rd. Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation Digital Equipment Corporation 1772213 3/31/92 Sec. of State, IN Specific
1110 E. Lincoln Way 10101 Alliance Road Equipment
La Porte, IN 46350 Cincinnati, OH 45242
</TABLE>
<PAGE> 200
SCHEDULE XIII
page 4
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Acclaim Leasing, Inc. 1047401 02/28/94 Sec. of State, CT Specific
145 Price Road 3233 N. Arlington Hts. Rd. 203 Equipment
Winsted, CT 06098 Arlington Hts., IL 60004
ASSIGNEE
Colonial Pacific Leasing
7659 Mohawk Street
Tualatin, OR 97062
Howmet Corporation Citizens Bank C594215 5/6/92 Sec. of State, MI Specific
1500 S. Warner Street POB 230049 Equipment
Whitehall, MI 49461 Grand Rapids, MI 49523
Howmet Corporation Leasing Technologies 1018 02/15/94 Town Clerk, Specific
2175 Steamboat Road International, Inc. Winsted, CT Equipment
Greenwich, CT 06836 1266 Main Street
Stamford, CT 06902
Howmet Corporation AT&T Credit Corporation 921934 05/09/91 Sec. of State, CT Specific
475 Steamboat Road 2 Gatehall Drive Equipment
Greenwich, CT 06830 Parsippany, NJ 07054
Howmet Corporation Anderson & Co. Arthur 52859B 2/23/95 Sec. of State, MI Specific
475 Steamboat Road 400 Renaissance Center Equipment
Greenwich, CT 06830 Detroit, MI 48243
Howmet Corporation NationsBanc Leasing Corporation 024477 05/09/94 County Clerk, Specific
475 Steamboat Road 2059 Northlake Parkway, 2 N Oklahoma County, OK Equipment
Greenwich, CT 06830 Tucker, GA 30084
Howmet Corporation AT&T Credit Corporation 94224365 11/21/94 Sec. of State, TX Specific
475 Steamboat Road 2 Gatehall Drive Equipment
Greenwich, CT 06830 Parsippany, NJ 07054
Howmet Corporation AT&T Credit Corporation 93035973 02/25/93 Sec. of State, TX Specific
475 Steamboat Road 2 Gatehall Drive Equipment
Greenwich, CT 06830 Parsippany, NJ 07054
</TABLE>
<PAGE> 201
SCHEDULE XIII
page 5
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation CIT Group Equipment Financing 34133B 8/10/93 Sec. of State, MI Specific
475 Steamboat Road Inc. Assignment Equipment
Greenwich, CT 06830 1400 Renaissance Dr.
Park Ridge, IL 60068
Howmet Corporation Meridian Leasing Corp. C782539 11/29/93 Sec. of State, MI Specific
475 Steamboat Road Equipment
Greenwich, CT 06830
Howmet Corporation Meridian Leasing Corp. C661075 11/30/92 Sec. of State, MI Specific
475 Steamboat Road 570 Lane Cook Rd. Equipment
Greenwich, CT 06830 Ste. 300
Deerfield, IL 60015
Howmet Corporation NationsBanc Leasing 78545 05/04/94 Clerk of Circuit Court, Specific
475 Steamboat Road Corporation
Greenwich, CT 06830 2059 Northlake Parkway, 2 N Hampton City, VA Equipment
Tucker, GA 30084
Howmet Corporation CIT Group Equipment Financing 40208B 2/23/94 Sec. of State, MI Specific
475 Steamboat Road Inc. Assignment Equipment
Greenwich, CT 06830 1400 Renaissance Dr.
Park Ridge, IL 60068
Howmet Corporation NationsBanc Leasing Corporation 1910012 4/25/94 Sec. of State, IN Specific
475 Steamboat Road 2059 Northlake Parkway, 2 N Equipment
Greenwich, CT 06830 Tucker, GA 30084
Howmet Corporation NationsBanc Leasing Corporation AK95850 5/2/94 Sec. of State, OH Specific
475 Steamboat Road 2059 Northlake Parkway, 2 N Equipment
Greenwich, CT 06830 Tucker, GA 30084
Howmet Corporation CIT Group Equipment 34136B 8/10/93 Sec. of State, MI Specific
475 Steamboat Road Financing Inc. Assignment Equipment
Greenwich, CT 06830 1400 Renaissance Dr.
Park Ridge, IL 60068
Howmet Corporation NationsBanc Leasing Corporation 9405027501 05/02/94 Sec. of State, VA Specific
475 Steamboat Road 2059 Northlake Parkway, 2 N Equipment
Greenwich, CT 06830 Tucker, GA 30084
</TABLE>
<PAGE> 202
SCHEDULE XIII
page 6
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation NationsBanc Leasing 94084109 04/29/94 AT&T Credit Specific
475 Steamboat Road Corporation Corporation Equipment
Greenwich, CT 06830 2059 Northlake
Parkway, 2 N
Tucker, GA 30084
Howmet Corporation NationsBanc Leasing 010404 05/02/94 Sec. of State, OH Specific
475 Steamboat Road Corporation 050294 Equipment
Greenwich, CT 06830 2059 Northlake Parkway, 2 N 06902
Tucker, GA 30084 AK95851
Howmet Corporation Leasing Technologies 1046060 02/14/94 Sec. of State, CT Specific
475 Steamboat Road International, Inc. Equipment
Greenwich, CT 06830 1266 Main Street
Stamford, CT 06902
Howmet Corporation Yale Financial Services, Inc. 75866 06/15/92 Clerk of Circuit Court, Specific
475 Steamboat Road P O Box 2160 Hampton City, VA Equipment
Greenwich, CT 06830 Flemington, NJ 08822
Howmet Corporation Yale Financial Services, Inc. 920620372 06/12/92 Sec. of State, VA Specific
475 Steamboat Road P O Box 2160 Equipment
Greenwich, CT 06830 Flemington, NJ 08822
Howmet Corporation Oak Brook Master Trust C782541 11/29/93 Sec. of State, MI Specific
475 Steamboat Road c/o Network Securities Equipment
Greenwich, CT 06830 Dallas, TX 75244
Howmet Corporation Yale Financial Services, Inc. 969719 06/15/92 Sec. of State, CT Specific
475 Steamboat Road P O Box 2160 Equipment
Greenwich, CT 06830 Flemington, NJ 08822
Howmet Corporation Leasing Technologies 1046062 02/14/94 Sec. of State, CT Specific
475 Steamboat Road International, Inc. Equipment
Greenwich, CT 06830 1266 Main Street
Stamford, CT 06902
Howmet Corporation NationsBanc Leasing 307445 05/04/94 Sec. of State, TN Specific
475 Steamboat Road Corporation Equipment
Greenwich, CT 06830 2059 Northlake Parkway,
2 North
Tucker, GA 30084
</TABLE>
<PAGE> 203
SCHEDULE XIII
page 7
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Meridian Leasing Corp. C630067 8/24/92 Sec. of State, MI Specific
475 Steamboat Road 570 Lane Cook Rd. Equipment
Greenwich, CT 06830 Ste. 300
Deerfield, IL 60015
Howmet Corporation NationsBanc Leasing 1055627 04/29/94 Sec. of State, CT Specific
475 Steamboat Road Corporation Equipment
Greenwich, CT 06830 2059 Northlake Parkway, 2 N
Tucker, GA 30084
Howmet Corporation NationsBanc Leasing 1004506 04/05/93 Sec. of State, CT Specific
475 Steamboat Road Corporation Equipment
Greenwich, CT 06830 2059 Northlake Parkway,
2 North Tucker, GA 30084
Howmet Corporation NationsBanc Leasing 1568782 05/04/94 Sec. of State, NJ Specific
475 Steamboat Road Corporation Equipment
Greenwich, CT 06830 2059 Northlake Parkway, 2 N
Tucker, GA 30084
Howmet Corporation Nationsbanc Leasing 9506660513 3/1/95 Sec. of State, CA Specific
475 Steamboat Road Corporation Equipment
Greenwich, CT 06830 2300 Northlake Centre Drive
Suite 300
Tucker, GA 30084
Howmet Corporation NationsBanc Leasing 1055628 4/29/94 Sec. of State, CT Specific
475 Steamboat Road Corporation Equipment
Greenwich, CT 06830 2059 Northlake Parkway, 2 N
Tucker, GA 30084
Howmet Corporation Leasing Technologies 1021 02/15/94 Town Clerk, Specific
475 Steamboat Road International, Inc. Winsted, CT Equipment
Greenwich, CT 06830 1266 Main Street
Stamford, CT 06902
ASSIGNEE
CoreStates Bank, N.A.
1500 Market Street
Philadelphia, PA 19102
</TABLE>
<PAGE> 204
SCHEDULE XIII
page 8
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation NationsBanc Leasing Corp. C837324 5/3/94 Sec. of State, MI Specific
475 Steamboat Road 2059 North Lake Parkway Equipment
Greenwich, CT 06830 Tucker, GA 30084
Howmet Corporation AT&T Credit Corporation 22365 03/23/90 County Clerk, Specific
475 Steamboat Road 4 Gatehall Drive Morris County, NJ Equipment
Greenwich, CT 06830 Parsippany, NJ 07054
Howmet Corporation AT&T Credit Corporation 028161 02/18/92 Sec. of State, TX Specific
475 Steamboat Road 2 Gatehall Drive Equipment
Greenwich, CT 06830 Parsippany, NJ 07054
Howmet Corporation AT&T CREDIT CORPORATION 1505131 04/13/93 Sec. of State, NJ Specific
475 Steamboat Road 2 GATEHALL DRIVE Equipment
Greenwich, CT 06830 PARIPPANY, NJ 07054
Howmet Corporation Xerox Corporation 92241770 12/14/92 Sec. of State, TX Specific
6200 Central Freeway 222 W. Las Colinas Blvd. Equipment
Wichita Falls, TX Irving, Texas 75039
76305
Howmet Corporation Digital Equipment 92153573 08/03/92 Sec. of State, TX Specific
6200 Central Freeway Corporation Equipment
Wichita Falls, TX 10101 Alliance Road
U76307-1616 Cincinnati, OH 45242
ASSIGNEE
Leasetec Corporation
1401 Pearl Street
Boulder, CO 80302
</TABLE>
<PAGE> 205
SCHEDULE XIII
page 9
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation BellSouth Communication 9305117216 05/10/93 Sec. of State, VA Specific
Castings Division Systems, Inc. Equipment
One Howmet Drive 1936 Blue Hills Drive, NE Original
Hampton, VA 23661 Roanoke, VA 24012 Filing
ASSIGNEE 890711205
Bellsouth Financial Services
Corporation
1800 Century Boulevard, N.E.,
Suite 1400
Atlanta, Georgia 30345
Howmet Corporation CFE Equipment Corporation 930310165 03/01/93 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th
Cleveland, OH 44114
</TABLE>
<PAGE> 206
SCHEDULE XIII
page 10
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation CFE Equipment Corporation 921211384 12/07/92 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 921211382 12/07/92 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 921211383 12/07/92 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 921211382 12/07/92 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th
Cleveland, OH 44114
</TABLE>
<PAGE> 207
SCHEDULE XIII
page 11
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation CFE Equipment Corporation 76845 03/02/93 Clerk of Circuit Court, Specific
One Howmet Drive 818 Widgeon Road Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 9310297188 10/29/93 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation Ingersoll-Rand Company DBA 80017 06/06/95 Clerk of Circuit Court, Specific
One Howmet Drive Ingersoll-Rand Air Center Hampton City, VA Equipment
Hampton, VA 23661 540 Southlake Boulevard
Richmond, VA 23236
ASSIGNEE
Associates Leasing, Inc.
P.O. Box 23407
Louisville, KY 40213-0407
Howmet Corporation CFE Equipment Corporation 76532 12/08/92 Clerk of Circuit Court, Specific
One Howmet Drive 818 Widgeon Road Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
</TABLE>
<PAGE> 208
SCHEDULE XIII
page 12
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation CFE Equipment Corporation 77657 09/27/93 Clerk of Circuit Court, Specific
One Howmet Drive 818 Widgeon Road Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 940126715 01/26/94 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 930920729 09/20/93 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 76533 12/08/92 Clerk of Circuit Court, Specific
One Howmet Drive 818 Widgeon Road Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
</TABLE>
<PAGE> 209
SCHEDULE XIII
page 13
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Ingersoll-Rand Company DBA 9508187051 08/18/95 Sec. of State, VA Specific
One Howmet Drive Ingersoll-Rand Air Center Equipment
Hampton, VA 23661 540 Southlake Boulevard
Richmond, VA 23236
ASSIGNEE
Associates Leasing, Inc.
P.O. Box 23407
Louisville, KY 40213-0407
Howmet Corporation CFE Equipment Corporation 9401267151 01/26/94 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 76534 12/08/92 Clerk of Circuit Court, Specific
One Howmet Drive 818 Widgeon Road Hampton City, VA Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
Howmet Corporation CFE Equipment Corporation 9310207295 10/20/93 Sec. of State, VA Specific
One Howmet Drive 818 Widgeon Road Equipment
Hampton, VA 23661 Norfolk, VA 23513
ASSIGNEE
Associates Leasing Inc.
1301 E. 9th St.
Cleveland, OH 44114
</TABLE>
<PAGE> 210
SCHEDULE XIII
page 14
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation State Bank Lacrosse C81364 3/1/94 Sec. of State, MI Specific
One Misco Drive 401 Main St. Equipment
Whitehall, MI 49461 La Crosse, WI 54601
Howmet Corporation State Bank Lacrosse C741152 7/26/93 Sec. of State, MI Specific
One Misco Drive Equipment
Whitehall, MI 49461
Howmet Corporation U.S. Leasing 042992 3/8/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation State Bank Lacrosse C813363 3/194 Sec. of State, MI Specific
One Misco Drive 401 Main St. Equipment
Whitehall, MI 49461 La Crosse, WI 54601
Howmet Corporation U.S. Leasing 051764 3/22/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation State Bank Lacrosse C813361 3/1/94 Sec. of State, MI Specific
One Misco Drive 401 Main St. Equipment
Whitehall, MI 49461 La Crosse, WI 54601
Howmet Corporation U.S. Leasing 9306257739 6/25/93 Sec. of State, VA Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing AMENDM 2/15/94 Sec. of State, TX Specific
One Misco Drive International, Inc. ENT Equipment
Whitehall, MI 49461 733 Front Street 94620111
San Francisco, CA 94111
AMENDMENT Original
USL Capital Corporation Filing
229860
</TABLE>
<PAGE> 211
SCHEDULE XIII
page 15
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation State Bank of Lawler C587770 4/20/92 Sec. of State, MI Specific
One Misco Drive 308 Grove St. Assignment Equipment
Whitehall, MI 49461 Lawler, IA 52154
Howmet Corporation U.S. Leasing 93036027 2/26/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 93209216 11/2/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. A-000475 5/17/92 County Clerk, Specific
One Misco Drive 678 Front St., NW Oklahoma County, Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original OK
Filing
ASSIGNEE 022013
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation U.S. Leasing 93228094 12/2/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 1862451 12/6/93 Sec. of State, IN Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 197067 10/13/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation Old Kent Bank & Trust Co. C538762 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
</TABLE>
<PAGE> 212
SCHEDULE XIII
page 16
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation U.S. Leasing 77364 6/28/93 Clerk of Circuit Specific
One Misco Drive International, Inc. Court Equipment
Whitehall, MI 49461 733 Front Street Hampton City, VA
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 120533 6/23/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. 1411395 2/21/92 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
ASSIGNEE
Delta Capital IV, Inc.
678 Front Street NW
Grand Rapids, MI 49504
Howmet Corporation Old Kent Bank & Trust Co. C538768 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
Howmet Corporation Alpha Financial Group, Inc. C430046 12/19/90 Sec. of State, MI Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. C202472 4/5/89 Sec. of State, MI Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation United.States Leasing Corp. 36665B 11/3/93 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. 901230199 12/21/90 Sec. of State, VA Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
</TABLE>
<PAGE> 213
SCHEDULE XIII
page 17
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 940852 10/3/91 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 934621
Commerica Bank
211 West Fort Street
Detroit, MI 48275-1131
Howmet Corporation Alpha Financial Group, Inc. 920321374 3/17/92 Sec. of State, VA Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 901230199
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Alpha Financial Group, Inc. 923188 5/3/91 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Old Kent Bank & Trust Co. C538765 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
Howmet Corporation Alpha Financial Group, Inc. Same as 3/25/92 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW above - Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 1386808
ASSIGNEE
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
</TABLE>
<PAGE> 214
SCHEDULE XIII
page 18
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 1411395 8/8/91 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation U.S. Leasing 37928B 12/14/93 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation Old Kent Bank & Trust Co. C538767 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
Howmet Corporation Old Kent Bank & Trust Co. C538761 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
Howmet Corporation NCC Leasing Inc. C7795B 12/10/90 Sec. of State, MI Specific
One Misco Drive 1601 Main St. Equipment
Whitehall, MI 49461 Dayton, OH 45479
Howmet Corporation Alpha Financial Group, Inc. 1397940 5/6/91 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation USL Capital Corp. 48069B 10/19/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation Old Kent Bank & Trust Co. C538766 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
</TABLE>
<PAGE> 215
SCHEDULE XIII
page 19
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Old Kent Bank & Trust Co. C538763 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
Howmet Corporation Old Kent Bank & Trust Co. C538769 11/15/91 Sec. of State, MI Specific
One Misco Drive 1 Vanderburg Center Equipment
Whitehall, MI 49461 Grand Rapids, MI 49503
Howmet Corporation USL Capital Corp. 402098 2/23/95 Sec. of State, TN Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation U.S. Leasing 93229860 12/6/93 Sec. of State, TX Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 1584289 7/27/94 Sec. of State, NJ Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 1599597 10/20/94 Sec. Of State, NJ Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 59248B 8/9/95 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 52831B 2/23/95 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 39913B 2/11/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Amendment Equipment
Whitehall, MI 49461 San Francisco, CA 94111
</TABLE>
<PAGE> 216
SCHEDULE XIII
page 20
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation USL Capital Corp. 80291 8/22/91 Clerk of Circuit Specific
One Misco Drive 733 Front Street Court, Equipment
Whitehall, MI 49461 San Francisco, CA 94111 Hampton City, VA
Howmet Corporation USL Capital Corp. 4894923 2/11/94 Sec. of State, IN Specific
One Misco Drive 733 Front Street Amendment Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 40712B 3/11/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. 1377467 12/28/90 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation USL Capital Corp. 59249B 8/9/95 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. A-000474 3/17/92 County Clerk, Specific
One Misco Drive 678 Front St., NW Olklahoma Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original County, OK
Filing
ASSIGNEE 007514
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Alpha Financial Group, Inc. 1386808 2/28/91 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
ASSIGNED ON LATER DATE - SEE
BELOW
</TABLE>
<PAGE> 217
SCHEDULE XIII
page 21
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 007514 02/15/91 County Clerk, Specific
One Misco Drive 678 Front St., NW Olklahoma Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 County, OK
Howmet Corporation USL Capital Corp. 1945005 10/19/94 Sec. of State, IN Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 49019B 11/15/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 45173B 7/25/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. 9104903 5/28/91 Sec. of State, NV Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation USL Capital Corp. 79170 10/20/94 Clerk of Circuit Specific
One Misco Drive 733 Front Street Court, Equipment
Whitehall, MI 49461 San Francisco, CA 94111 Hampton City, VA
Howmet Corporation USL Capital Corp. 39139B 1/19/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 39214B 1/24/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation U.S. Leasing 29974B 4/12/93 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
</TABLE>
<PAGE> 218
SCHEDULE XIII
page 22
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation U.S. Leasing 34386B 8/19/93 Sec. of State, MI Specific
One Misco Drive International, Inc Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 29098B 3/23/93 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 28714B 3/9/93 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 32561B 6/23/94 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation United States Leasing Corp. 37639B 12/3/93 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation U.S. Leasing 28456B 2/26/93 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. 910510359 5/3/91 Sec. of State, VA Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation U.S. Leasing 93039233 3/1/93 Sec. of State, CA Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
Howmet Corporation U.S. Leasing 28458B 2/26/93 Sec. of State, MI Specific
One Misco Drive International, Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
</TABLE>
<PAGE> 219
SCHEDULE XIII
page 23
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation USL Capital Corp. 42230B 4/28/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 244131 12/22/94 Sec. of State, TX Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 9410257819 10/24/94 Sec. of State, VA Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 078250 4/25/94 Sec. of State, TX Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 94218543 11/14/94 Sec. of State, TX Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 44059B 6/20/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 011133 1/21/94 Sec. of State, TX Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation USL Capital Corp. 42123B 4/26/94 Sec. of State, MI Specific
One Misco Drive 733 Front Street Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation United States Leasing 36031B 10/14/93 Sec. of State, MI Specific
One Misco Drive Int Inc. Equipment
Whitehall, MI 49461 733 Front Street
San Francisco, CA 94111
</TABLE>
<PAGE> 220
SCHEDULE XIII
page 24
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation USL Capital Corp. 950808 8/8/95 Sec. of State, VA Specific
One Misco Drive 733 Front Street 7704 Equipment
Whitehall, MI 49461 San Francisco, CA 94111
Howmet Corporation Alpha Financial Group, Inc. 022013 5/3/91 County Clerk, Specific
One Misco Drive 678 Front St., NW Oklahoma County, Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 OK
Howmet Corporation Dana Commercial Credit Corp. C460742 3/25/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. 103733 9/16/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Comerica Bank C809013 2/16/94 Sec. of State, MI Specific
One Misco Drive Continuatio Equipment
Whitehall, MI 49461 n
Howmet Corporation Dana Commercial Credit Corp. C966181 5/3/95 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C901622 11/194 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. 101586 4/15/91 Muskegon Specific
One Misco Drive 1300 Indian Wood Circle County, MI Equipment
Whitehall, MI 49461 Maumee, OH 43537
</TABLE>
<PAGE> 221
SCHEDULE XIII
page 25
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Dana Commercial Credit Corp. J03125 7/27/92 Muskegon Specific
One Misco Drive 1300 Indian Wood Circle County, MI Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. J03422 8/31/92 Muskegon Specific
One Misco Drive 1300 Indian Wood Circle County, MI Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C621583 7/28/92 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. 102479 6/14/91 Muskegon Specific
One Misco Drive 1300 Indian Wood Circle County, MI Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. 101588 4/15/91 Muskegon Specific
One Misco Drive 1300 Indian Wood Circle County, MI Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C468115 4/15/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. 103257 8/12/91 Muskegon Specific
One Misco Drive 1300 Indian Wood Circle County, MI Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C514592 9/3/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C519147 9/17/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
</TABLE>
<PAGE> 222
SCHEDULE XIII
page 26
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Dana Commercial Credit Corp. C490189 6/14/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C631837 8/28/92 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Dana Commercial Credit Corp. C508472 8/13/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Comerica Bank Detroit C439150 1/18/91 Sec. of State, MI Specific
One Misco Drive 211 West Fort Street Assignment Equipment
Whitehall, MI 49461 Detroit, MI 48275-1135
Howmet Corporation Alpha Financial Group, Inc. 640709 3/26/92 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 91028357
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Alpha Financial Group, Inc. 91155984 8/9/91 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 1688629 12/16/90 Sec. of State, IN Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 91028357 2/15/91 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
</TABLE>
<PAGE> 223
SCHEDULE XIII
page 27
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 1699234 2/14/91 Sec. of State, IN Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 1731573 8/8/91 Sec. of State, IN Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 1770142 3/19/92 Sec. of State, IN Specific
One Misco Drive 678 Front St., NW Assignment Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Bankers Leasing Assn Inc. C561504 1/31/92 Sec. of State, MI Specific
One Misco Drive 4201 Lake Cook Rd. Equipment
Whitehall, MI 49461 Northbrook, IL 60062
Howmet Corporation Alpha Financial Group, Inc. 50165854 10/21/91 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 91155984
Delta Capital IV, Inc.
678 Front Street NW
Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 1714189 5/2/91 Sec. of State, IN Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 91092039 5/13/91 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
</TABLE>
<PAGE> 224
SCHEDULE XIII
page 28
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 640711 03/16/92 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 91092039
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Alpha Financial Group, Inc. 911010665 10/03/91 Sec. of State, VA Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 91011560
Delta Capital IV, Inc.
678 Front Street NW
Grand Rapids, MI 49504
Howmet Corporation Clarklift of Detroit Inc. D018544 10/4/95 Sec. of State, MI Specific
One Misco Drive 2045 Austin Equipment
Whitehall, MI 49461 Troy, MI 48083
Howmet Corporation Comerica Bank C523292 03/16/92 Sec. of State, MI Specific
One Misco Drive 211/311 Fort St. Assignment Equipment
Whitehall, MI 49461 Detroit, MI 48226
Howmet Corporation Alpha Financial Group, Inc. 640547 03/16/92 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 90259316
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
</TABLE>
<PAGE> 225
SCHEDULE XIII
page 29
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 1741292 10/4/91 Sec. of State, IN Specific
One Misco Drive 678 Front St., NW Assignment Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 90259316 12/14/90 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. C445497 2/6/91 Sec. of State, MI Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 48135
Howmet Corporation Dana Commercial Credit Corp. 103689 9/3/91 Muskegon County, MI Specific
One Misco Drive 1900 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Leasetec Corp. C590293 4/27/92 Sec. of State, MI Specific
One Misco Drive 1401 Pearl Street Equipment
Whitehall, MI 49461 Boulder, CO 80302
Howmet Corporation Alpha Financial Group Inc. C472142 4/25/91 Sec. of State, MI Specific
One Misco Drive 678 Front St. NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 48135
Howmet Corporation Leasetec Corp. C611877 6/29/92 Sec. of State, MI Specific
One Misco Drive 1401 Pearl Street Equipment
Whitehall, MI 49461 Boulder, CO 80302
Howmet Corporation Leasetec Corp. C572588 3/5/92 Sec. of State, MI Specific
One Misco Drive 1401 Pearl Street Equipment
Whitehall, MI 49461 Boulder, CO 80302
</TABLE>
<PAGE> 226
SCHEDULE XIII
page 30
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 1397940 03/25/92 Sec. of State, NJ Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
ASSIGNEE
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Dana Commercial Credit Corp. C621584 7/28/92 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation Hovinga Business Systems, Inc. C740087 7/23/93 Sec. of State, MI Specific
One Misco Drive 2780 44th St. SW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49509
Howmet Corporation Dana Commercial Credit Corp. J03124 7/27/92 Muskegon County, MI Specific
One Misco Drive 1900 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
Howmet Corporation IMC Associates, Inc. 103598 8/22/91 Muskegon County, MI Specific
One Misco Drive 1050 W. Western Equipment
Whitehall, MI 49461 Suite 204
Muskegon, MI 49441
Howmet Corporation Hovinga Business Systems, Inc. C596422 5/13/92 Sec. of State, MI Specific
One Misco Drive 2780 44th St. SW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49509
Howmet Corporation Alpha Financial Group, Inc. 910811560 08/08/91 Sec. of State, VA Specific
One Misco Drive 678 Front St. NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
</TABLE>
<PAGE> 227
SCHEDULE XIII
page 31
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Midamerica Bank C903510 11/7/94 Sec. of State, MI Specific
One Misco Drive 178 N Iowa Equipment
Whitehall, MI 49461 POB 120
Dodgeville, WI 53533
Howmet Corporation Alpha Financial Group, Inc. 913513 02/15/91 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Data Sales Co., Inc. C703999 4/9/93 Sec. of State, MI Specific
One Misco Drive 3450 W. Burnsville Pkwy. Equipment
Whitehall, MI 49461 Burnsville, MN 55337
Howmet Corporation Alpha Financial Group, Inc. C503687 7/30/91 Sec. of State, MI Specific
One Misco Drive 678 Front St. NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 910221248 02/15/91 Sec. of State, VA Specific
One Misco Drive 678 Front St. NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 959536 03/19/92 Sec. of State, CT Specific
One Misco Drive 678 Front St. NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 934621
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
</TABLE>
<PAGE> 228
SCHEDULE XIII
page 32
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Alpha Financial Group, Inc. 959239 03/16/92 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 905620
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Data Sales Co., Inc. 1397940 04/29/92 Specific
One Misco Drive 12117 Riverwood Drive Equipment
Whitehall, MI 49461 Burnsville, MN 55337
ASSIGNEE
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Leastec Corp. C570974 3/2/92 Sec. of State, MI Specific
One Misco Drive 1401 Pearl Street Equipment
Whitehall, MI 49461 Boulder, CO 80302
Howmet Corporation Data Sales Co. C569579 2/26/92 Sec. of State, MI Specific
One Misco Drive 12117 Riverwood Dr. Assignment Equipment
Whitehall, MI 49461 Burnsville, MN 55337
Howmet Corporation Alpha Financial Group, Inc. 905620 12/14/90 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
</TABLE>
<PAGE> 229
SCHEDULE XIII
page 33
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Homet Corporation Alpha Financial Group, Inc. 959534 03/19/92 Sec. of State, CT Specific
One Misco Drive 678 Front St. NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 923188
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Homet Corporation Alpha Financial Group, Inc. Assignment 03/16/92 Sec. of State, NV Specific
One Misco Drive 678 Front St., NW to 91-04903 Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Homet Corporation Alpha Financial Group, Inc. 934621 08/12/91 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Homet Corporation Data Sales Co., Inc. C703997 04/9/93 Sec. of State, MI Specific
One Misco Drive 3450 W. Burnsville Pkwy. Equipment
Whitehall, MI 49461 Burnsville, MN 55337
Homet Corporation Data Sales Co., Inc. 962641 04/16/92 Sec. of State, CT Specific
One Misco Drive 12117 Riverwood Drive Equipment
Whitehall, MI 49461 Burnsville, MN 55337 Original
Filing
ASSIGNEE 934621
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Homet Corporation Delta Capital II, Inc. C439149 01/18/91 Sec. of State, MI Specific
One Misco Drive 678 Front St., SW Assignment Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
</TABLE>
<PAGE> 230
SCHEDULE XIII
page 34
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Data Sales Co., Inc. 658290 04/21/92 Sec. of State, TX Specific
One Misco Drive 12117 Riverwood Drive Equipment
Whitehall, MI 49461 Burnsville, MN 55337 Original
Filing
ASSIGNEE 91028357
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Alpha Financial Group, Inc. Original 03/16/92 Sec. of State, TX Specific
One Misco Drive 678 Front St., NW Filing Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 90187289
ASSIGNEE
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Data Sales Co. C569578 02/26/92 Sec. of State, MI Specific
One Misco Drive 12117 Riverwood Dr. Assignment Equipment
Whitehall, MI 49461 Burnsville, MN 55337
Howmet Corporation Data Sales Co. C568733 02/24/92 Sec. of State, MI Specific
One Misco Drive 12117 Riverwood Dr. Assignment Equipment
Whitehall, MI 49461 Burnsville, MN 55337
Howmet Corporation Dana Commercial Credit Corp C468114 04/15/91 Sec. of State, MI Specific
One Misco Drive 1300 Indian Wood Circle Equipment
Whitehall, MI 49461 Maumee, OH 43537
</TABLE>
<PAGE> 231
SCHEDULE XIII
page 35
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Delta Capital IV, Inc. 911010666 10/03/91 Sec. of State, VA Specific
One Misco Drive 678 Front Street NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 910811560
Comerica Bank
211 West Fort Street
Detroit, MI 48275-1131
Howmet Corporation Data Sales Co., Inc. C703998 04/09/93 Sec. of State, MI Specific
One Misco Drive 3450 W. Burnsville Pkwy. Equipment
Whitehall, MI 49461 Burnsville, MN 55337
Howmet Corporation Delta Capital IV, Inc. C523291 10/04/91 Sec. of State, MI Specific
One Misco Drive 678 Front St., NW Assignment Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Delta Capital IV, Inc. 1411395 02/21/92 Sec. of State, NJ Specific
One Misco Drive 678 Front Street NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
ASSIGNEE
Comerica Bank
211 West Fort Street
Detroit, MI 48275-1131
Howmet Corporation Delta Capital IV, Inc. 50165855 10/21/91 Sec. of State, TX Specific
One Misco Drive 678 Front Street NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 91155984
Comerica Bank
211 West Fort Street
Detroit, MI 48275-1131
</TABLE>
<PAGE> 232
SCHEDULE XIII
page 36
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Data Sales Co., Inc. 000679 04/17/92 County Clerk, Specific
One Misco Drive 12117 Riverwood Drive Oklahoma County, OK Equipment
Whitehall, MI 49461 Burnsville, MN 55337 Original
Filing
ASSIGNEE 007514
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Data Sales Co., Inc. 658289 03/21/92 Sec. of State, TX Specific
One Misco Drive 12117 Riverwood Drive Equipment
Whitehall, MI 49461 Burnsville, MN 55337 Original
Filing
ASSIGNEE 91092039
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Data Sales Co., Inc. Same as 04/29/92 Sec. of State, NJ Specific
One Misco Drive 12117 Riverwood Drive above Equipment
Whitehall, MI 49461 Burnsville, MN 55337 1386808
ASSIGNEE
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Alpha Financial Group, Inc. 959535 03/19/92 Sec. of State, CT Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 913513
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
</TABLE>
<PAGE> 233
SCHEDULE XIII
page 37
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Data Sales Co., Inc. 000678 04/17/92 County Clerk, Specific
One Misco Drive 12117 Riverwood Drive Oklahoma County, OK Equipment
Whitehall, MI 49461 Burnsville, MN 55337 Original
Filing
ASSIGNEE 022013
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Alpha Financial Group, Inc. 9104903 05/28/91 Sec. of State, NV Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504
Howmet Corporation Alpha Financial Group, Inc. 4064 03/16/92 Sec. of State, NV Specific
One Misco Drive 678 Front St., NW Equipment
Whitehall, MI 49461 Grand Rapids, MI 49504 Original
Filing
ASSIGNEE 9104903
Data Sales Co., Inc.
12117 Riverwood Drive
Burnsville, MN 55337
Howmet Corporation Data Sales Co., Inc. Original 04/16/92 Sec. of State, NV Specific
One Misco Drive 12117 Riverwood Drive Filing Equipment
Whitehall, MI 49461 Burnsville, MN 55337 9104903
ASSIGNEE
State Bank of Lawler
P.O. Box 269
Lawler, IA 52154
Howmet Corporation Yale Financial Services, 1626947 03/30/95 Sec. of State, NJ Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
</TABLE>
<PAGE> 234
SCHEDULE XIII
page 38
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Yale Financial Services, 1600179 10/27/94 Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
Howmet Corporation Yale Financial Services, 1612562 03/31/95 Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
Howmet Corporation Yale Financial Services, 1584221 10/28/94 Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
Howmet Corporation Yale Financial Services, 1612562 03/31/95 Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
Howmet Corporation Yale Financial Services, 1621748 03/02/95 Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
Howmet Corporation Yale Financial Services, 1611585 03/02/95 Specific
Roy Street Inc. Equipment
Dover, NJ 07801 15 Junction Rd.
Flemington, NJ 08822
Howmet Sales Scot Leasing Co. AM16616 09/22/95 Specific
4500 Lake Forest Dr. 6860 Ashfield Dr. Equipment
#522 Cincinnati, OH 45242
Cincinnati, OH 45242
Howmet Sales Scot Leasing Co. 131184 09/22/95 Specific
4500 Lake Forest Dr. 6860 Ashfield Dr. Equipment
#522 Cincinnati, OH 45242
Cincinnati, OH 45242
HOWMET CORP XEROX CORPORATION 1567147 04/27/94 Specific
1 ROY STREET 835 Hope Street Equipment
DOVER, N.J. 07801 P.O. Box 4901, MS 1-1
Stamford, CT. 06907
</TABLE>
<PAGE> 235
SCHEDULE XIII
page 39
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
HOWMET CORP XEROX CORPORATION 1567145 04/27/94 Sec. of State, NJ Specific
1 Roy Street 835 Hope Street Equipment
Dover, NJ 07801 P.O. Box 4901, MS 1-1
Stamford, CT. 06907
HOWMET CORP. Pitney Bowes Credit 1470183 08/20/92 Sec. of State, NJ Specific
Roy St. Corporation Equipment
Dover, NJ 07801 201 Merritt Seven
Norwalk, CT 06856
HOWMET CORPORATION CORESTATE BANK, N.A. 1018 10/11/94 Town Clerk, Specific
2175 Steamboard Road 1500 Market Street (Assignment) Winsted, CT Equipment
Greenwich, CT 06836 Philadelphia, PA 19102
ASSIGNEE
LEASING TECHNOLOGIES
INTERNATIONAL, INC.
1266 Main Street
Stamford, CT 06902
HOWMET CORPORATION American Business Credit 94220388 11/10/94 Sec. of State, TX Specific
3101 Hammon Road Corporation Equipment
Wichita Falls, TX 550 Cochituate Rd
76307 PO Box 9104
Framingham, MA 01701
HOWMET CORPORATION GTE Leasing Corporation 1016759 06/14/93 Sec. of State, CT Specific
475 Steamboat Road 11711 N Meridian St., Equipment
Greenwich, CT 06830 Ste. 510
Carmel, IN 46032
HOWMET CORPORATION GTE Leasing Corporation 1016758 06/14/93 Sec. of State, CT Specific
475 Steamboat Road 11711 N meridian St., Equipment
Greenwich, CT 06830 Ste. 510
carmel, IN 46032-4548
</TABLE>
<PAGE> 236
SCHEDULE XIII
page 40
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation Corestates Bank, N.A. 1021 10/11/94 Town Clerk, Specific
475 Steamboat Road 1500 Market Street (Assignment) Winsted, CT Equipment
Greenwich, CT 06830 Philadelphia, PA 19102
ASSIGNEE
Leasing Technologies
International, Inc.
1266 Main Street
Stamford, CT 06902
Howmet Corporation Caterpillar Financial 1606697 02/24/95 Sec. of State, CT Specific
475 Steamboat Road Services Corporation Equipment
Greenwich, CT 06830 901 Warrenville Road #304
Lisle, IL 60532
Howmet Corporation Corestates Bank, N.A. 1581135 10/07/94 Sec. of State, CT Specific
475 Steamboat Road 1500 Market Street Equipment
Greenwich, CT 06830 Philadelphia, PA 19102 Original
Filing
ASSIGNEE 1046060
Leasing Technologies
International, Inc.
1266 Main Street
Stamford, CT 06902
Howmet Corporation Corestates Bank, N.A. 1601946 01/31/95 Sec. of State, CT Specific
475 Steamboat Road 1500 Market Street Equipment
Greenwich, CT 06830 Philadelphia, PA 19102 Original
Filing
ASSIGNEE 1046062
Leasing Technologies
International, Inc.
1266 Main Street
Stamford, CT 06902
</TABLE>
<PAGE> 237
SCHEDULE XIII
page 41
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation NCC Leasing, Inc. 925401 10/18/91 Sec. of State, TN Specific
5650 Commerce 1601 South Main Street Equipment
Boulevard Dayton, Ohio 45409
Morristown, TN 37814
Howmet Corporation Shieldalloy Metalurigical Corp. 1628441 04/06/95 County Clerk Specific
Alloy Division 12 West Boulevard Morris County, NJ Equipment
P.O. Box 371 Newfield, NJ 08344 (alloys)
Dover, NJ 07801
Howmet Corporation Shieldalloy Metalurigical Corp. 022934 04/05/95 County Clerk Specific
Alloy Division 12 West Boulevard Morris County, NJ Equipment
P.O. Box 371 Newfield, NJ 08344 (alloys)
Dover, NJ 07801
Howmet Corporation Bellsouth Financial 940701 07/01/94 Sec. of State, VA Specific
Castings Division Services Corporation 7171 Equipment
One howmet Drive 1800 Century Blvd., N.E.,
Hampton, VA 23661 Suite 1400 Original
Atlanta, GA 30345 Filing
890711205
CONTINUATION
Howmet Corporation Bellsouth Financial 78804 06/08/94 Clerk of Circuit Court, Specific
Castings Division Services Corporation Hampton City, VA Equipment
One howmet Drive 1800 Century Blvd.,
Hampton, VA 23661 N.E., Suite 1400
Atlanta, GA 30345 Original
Filing
CONTINUATION 71689
Howmet Corporation NCC Leasing, Inc. 911220348 12/12/91 Sec. of State, VA Specific
Hampton Casting 1601 South Main Street Equipment
Division Dayton, Ohio 45409
One Howmet Drive
Hampton, VA 23661
</TABLE>
<PAGE> 238
SCHEDULE XIII
page 42
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Howmet Corporation NCC Leasing, Inc. 75335 02/03/91 Clerk of Circuit Court, Specific
Howmet Casting 1601 S. Main Street Hampton City, VA Equipment
Division Dayton, OH 45409
One Howmet Drive
Hampton, VA 23661
Howmet Corporation Bellsouth Communication 890711205 07/07/89 Sec. of State, VA Specific
One Howmet Drive Systems, Inc.
Hampton, VA 23661 1936 Blue Hills Dr., N.E. Equipment
Roanoke, VA 24012
Howmet Corporation ABCC 1039812 12/21/93 Sec. of State, CT Specific
Price Road 11201 Danka Circle North Equipment
Winsted, CT 06098 St. Petersburg, FL 33716
Howmet Corporation NCC Leasing, Inc. 1431962 12/16/91 Sec. of State, NJ Specific
Roy Street 1601 South Main Street Equipment
Dover, NJ 07801 Dayton, OH 45409
Howmet Corporation Bellsouth Communication 71689 07/05/89 Clerk of Circuit Court, Specific
Castings Division Systems, Inc. Hampton City, VA Equipment
One Howmet Drive 1936 Blue Hills Drive, NE
Hampton, VA 23661 Roanoke, VA 24012
Howmet Refurbishment, Charter Leasing Corporation 1577262 9/26/94 Sec. of State, CT Specific
Inc. 800 E. Northwest Highway Equipment
30 Corporate Drive Palatine, IL 60067
North Haven, CT
04673-3254
Howmet Sales, Inc. Scot Leasing Co. 131184 9/22/95 Hamilton County, OH Specific
Equipment
Howmet Turbine Darr Equipment Co. 030470 02/18/92 Sec. of State, TX Specific
Components EquipmentK
Corporation
</TABLE>
<PAGE> 239
SCHEDULE XIII
page 43
<TABLE>
<CAPTION>
DEBTOR SECURED PARTY/COMMENTS FILE # FILING DATE JURISDICTION COLLATERAL
<S> <C> <C> <C> <C> <C>
Turbine Components Compressor Engineering 1603225 02/06/95 Sec. of State, CT Specific
Corporation Company, Inc. Equipment
1 Commercial St. West Ave. & Stran Rd.
Branford, CT 06405 P.O. Box 538
Milford, CT 06460
ASSIGNEE
Associates Commercial
Corporation
P.O. Box 23407
Louisville, KY 40223-0407
Turbine Components The Bank of New Haven 1068006 08/05/94 Sec. of State, CT Specific
Corporation 209 Church Street Equipment
4 Commercial St. New Haven, CT 06510
Branford, CT 06405
Turbine Components SNET Systems, Inc. 908372 01/09/91 Sec. of State, CT Specific
PO Box 431 6 Devine St. Equipment
Branford, CT 06405 North Haven, CT 06473
Turbine Components SNET Credit, Inc. 1020881 07/16/93 Sec. of State, CT Specific
Corporation 6 Devine ST Equipment
4 Commercial St. North Haven, CT 06473
Branford, CT 06405
</TABLE>
<PAGE> 240
Schedule XIV
MANAGEMENT FEES
- - Management Agreement between Alexander Insurance Managers and Howmet
Insurance Company, Inc. dated November 11, 1996-- $20,000 per year
- - Foreign Sales Corporation Services Agreement dated December, 1984 among
Howmet Foreign Sales Corporation, Howmet Turbine Components Corporation
and Chase Trade, Inc. -- $15,500 per year.
- - Service Agreement dated December 5, 1996 between Nevada Corporate
Management, Inc. and Blade Receivables Corporation --$16,000 per year.
<PAGE> 241
EXHIBIT A
NOTICE OF BORROWING
_______, 19__
The First National Bank of Chicago, as
Administrative Agent for the Banks
party to the Credit Agreement
referred to below
One First National Plaza
Chicago, Illinois 60670
Attention: Mr. Thomas Both
Ladies and Gentlemen:
The undersigned, Howmet Corporation (the "Borrower"), refers to the
Credit Agreement, dated as of December 13, 1995 and amended and restated as of
December 5, 1996 (as amended from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined), among Blade
Acquisition Corp., Howmet Holdings Corporation, the Borrower, various Banks from
time to time panty thereto, Bankers Trust Company, Citicorp USA, Inc. and The
First National Bank of Chicago, as Managing Agents, Bankers Trust Company, as
Syndication Agent, Citicorp USA, Inc., as Documentation Agent and you, as
Administrative Agent for such Banks, and hereby gives you notice, irrevocably,
pursuant to Section 1.03(a) of the Credit Agreement, that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________________. 1/
(ii) The aggregate principal amount of the Proposed Borrowing
is $__________________
(iii) The Proposed Borrowing is to consist of [Term Loans]
[Revolving Loans] [Swingline Loans].
- ----------
1/ Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each case,
after the date hereof.
<PAGE> 242
EXHIBIT A
Page 2
(iv) The Loans to be made pursuant to the Proposed Borrowing
shall be initially maintained as [Base Rate Loans] [Eurodollar Loans].
(v) The initial Interest Period for the Proposed Borrowing is
_________ month(s).2/
The undersigned hereby certifies that the following statements
are true and correct on the date hereof, and will be true and correct on the
date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Documents are and will be true and correct in all material respects,
both before and after giving effect to the Proposed Borrowing and to
the application of the proceeds thereof, as though made on such date
(it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified
date); and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
HOWMET CORPORATION
By__________________________
Name:
Title:
- ----------
2/ To be included for a Proposed Borrowing of Eurodollar Loans.
<PAGE> 243
EXHIBIT B-1
TERM NOTE
$_____________ New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to ________________________ or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of ________________________________ DOLLARS ($ ) or, if
less, the then unpaid principal amount of all Term Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 244
EXHIBIT B-1
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By__________________________________
Title:
<PAGE> 245
EXHIBIT B-2
REVOLVING NOTE
$_____________ New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to _______________________ or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of ______________________________________ DOLLARS ($ ) or, if
less, the then unpaid principal amount of all Revolving Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of December 13, 1995 and amended and restated as of December
5, 1996, among Blade Acquisition Corp., Howmet Holdings Corporation, the
Borrower, the lenders from time to time party thereto (including the Bank),
Bankers Trust Company, Citicorp USA, Inc. and The First National Bank of
Chicago, as Managing Agents, Bankers Trust Company, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and The First National Bank of
Chicago, as Administrative Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). This Note is secured by the Security
Documents (as defined in the Agreement) and is entitled to the benefits of the
Guaranties (as defined in the Agreement). As provided in the Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
<PAGE> 246
EXHIBIT B-2
Page 2
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By__________________________________
Title:
<PAGE> 247
EXHIBIT B-3
SWINGLINE NOTE
$10,000,000 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to THE FIRST NATIONAL BANK OF CHICAGO or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Swingline Expiry Date (as defined in the Agreement
referred to below) the principal sum of TEN MILLION DOLLARS ($10,000,000) or, if
less, the then unpaid principal amount of all Swingline Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and the other Credit Documents (as defined in the Agreement).
This Note is secured by the Security Documents (as defined in the Agreement) and
is entitled to the benefits of the Guaranties (as defined in the Agreement). As
provided in the Agreement, this Note is subject to voluntary prepayment and
mandatory repayment prior to the Swingline Expiry Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
<PAGE> 248
EXHIBIT B-3
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By______________________________
Title:
<PAGE> 249
EXHIBIT C
LETTER OF CREDIT REQUEST
No. (1) Dated (2)
The First National Bank of Chicago, as Administrative Agent under the Credit
Agreement (as amended, modified or supplemented from time to time, the "Credit
Agreement"), dated as of December 13, 1995 and amended and restated as of
December 5, 1996, among Blade Acquisition Corp., Howmet Holdings Corporation,
Howmet Corporation, the Banks from time to time party thereto, Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent, and The First National Bank of Chicago, as Administrative
Agent
One First National Plaza
Chicago, Illinois 60670
Attention: _________________________
[Name and Address of applicable Issuing Bank]
Attention: ___________________________
Dear Sirs:
We hereby request that [name of proposed Issuing Bank], in its
individual capacity, issue a [Standby] [Trade] Letter of Credit for the account
of the undersigned on
- ----------
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
<PAGE> 250
EXHIBIT C
Page 2
(3) (the "Date of Issuance") in the aggregate stated amount of (4). The
requested Letter of Credit shall be denominated in (5).
For purposes of this Letter of Credit Request, unless otherwise defined
herein, all capitalized terms used herein which are defined in the Credit
Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be (6), and such
Letter of Credit will be in support of (7) and will have a stated expiration
date of (8).
We hereby certify that:
(1) the representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the Date
of Issuance, both before and after giving effect to the issuance of the
Letter of Credit requested hereby (it being understood and agreed that
any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date); and
(3) Date of Issuance which shall be at least five Business Days after the
date of this Letter of Credit Request (or such shorter period as is
acceptable to the respective Issuing Bank).
(4) Aggregate initial stated amount of Letter of Credit.
(5) Specify Dollars or such other currency which is acceptable to the
Issuing Bank.
(6) Insert name and address of beneficiary.
(7) Insert description of LIC Supportable Indebtedness and describe
obligation to which it relates in the case of Standby Letters of Credit
and a description of the commercial transaction which is being
supported in the case of Trade Letters of Credit.
(8) Insert last date upon which drafts may be presented which may not be
later than (i) in the case of Trade Letters of Credit, the earlier of
(x) the date which occurs 12 months after the Date of Issuance or (y)
the Maturity Date or (ii) in the case of Standby Letters of Credit, the
earlier of (x) the date which occurs 12 months after the Date of
Issuance, or, if any such Standby Letter of Credit is extended for
successive periods of up to 12 months, a date not beyond the tenth
Business Day prior to the Maturity Date or (y) the Maturity Date.
<PAGE> 251
EXHIBIT C
Page 3
(2) no Default or Event of Default has occurred and is continuing nor,
after giving effect to the issuance of the Letter of Credit requested hereby,
would such a Default or an Event of Default occur.
Copies of all relevant documentation with respect to the supported
transaction are attached hereto.
HOWMET CORPORATION
By____________________________
Title:
<PAGE> 252
EXHIBIT D
Section 4.04(b)(ii) Certificate
Reference is hereby made to the Credit Agreement, dated as of December
13, 1995 and amended and restated as of December 5, 1996, among Blade
Acquisition Corp., Howmet Holdings Corporation, Howmet Corporation, the Banks
party thereto from time to time, Bankers Trust Company, Citicorp USA, Inc. and
The First National Bank of Chicago, as Managing Agents, Bankers Trust Company,
as Syndication Agent, Citicorp USA, Inc., as Documentation Agent, and The First
National Bank of Chicago, as Administrative Agent (the "Credit Agreement").
Pursuant to the provisions of Section 4.04(b)(ii) of the Credit Agreement, the
undersigned hereby certifies that it is not a "bank" as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By____________________________
Title:
<PAGE> 253
EXHIBIT E-1
[LETTERHEAD] LATHAM & WATKINS
December 5, 1996
TO THE FINANCIAL INSTITUTIONS LISTED ON ATTACHMENT A HERETO
Re: Credit Agreement dated as of December 13, 1995 and amended and
restated as of December 5, 1996 among Blade Acquisition Corp.,
Howmet Holdings Corporation, Howmet Corporation, the various
Banks party thereto from time to time, Bankers Trust Company,
Citicorp USA, Inc. and The First National Bank of Chicago, as
Managing Agents, Bankers TrustCompany, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and The First
National Bank of Chicago, as Administrative Agent
Ladies and Gentlemen:
We have acted as special counsel to Blade Acquisition Corp., a
Delaware corporation ("Holdings"), Howmet Holdings Corporation (f/k/a Pechiney
Corporation), a Delaware corporation ("Parent"), Howmet Corporation, a Delaware
corporation (the "Borrower"), and the Howmet Subsidiaries (as defined herein)
(collectively with Holdings, Parent and the Borrower, the "Howmet Entities") in
connection with that certain Credit Agreement dated as of December 13, 1995 and
amended and restated as of December 5, 1996 (the "Credit Agreement") among
Holdings, Parent, the Borrower, the various banks from time to time party
thereto (the "Banks"), Bankers Trust Company, Citicorp USA, Inc. and The First
National Bank of Chicago, as Managing Agents, Bankers Trust Company, as
Syndication Agent. Citicorp USA, Inc., as Documentation Agent and The First
National Bank of Chicago, as Administrative Agent.
This opinion is rendered to you pursuant to Section 5.03(i) of
the Credit Agreement. Capitalized terms defined in the Credit Agreement, used
herein and not otherwise defined herein, shall have the meanings given them in
the Credit Agreement. In addition, the term "Howmet Subsidiaries" shall mean
those Subsidiaries of the Borrower which are listed on Schedule 1 to this
opinion. As used in this opinion, the "NYUCC" shall mean the Uniform Commercial
Code as now in effect in the State
<PAGE> 254
LATHAM & WATKINS
TO THE FINANCIAL INSTITUTIONS
LISTED ON ATTACHMENT A HERETO
December 5, 1996
Page 2
of New York and the "California UCC" shall mean the Uniform Commercial Code as
now in effect in the State of California.
As such counsel, we have examined such matters of fact and
questions of law as we have considered appropriate for purposes of rendering the
opinions expressed below, except where a statement is qualified as to knowledge
or awareness, in which case we have made no or limited inquiry as specified
below. We have examined, among other things, the following:
(a) the Credit Agreement;
(b) the Term Notes;
(c) the Revolving Notes;
(d) the Swingline Note;
(e) the Subsidiaries Guaranty;
(f) the Pledge Agreement;
(g) the Security Agreement;
(h) a photocopy of the UCC-1 financing statements naming
each Credit Party listed on Schedule 2 to this
opinion ("Schedule 2") as debtor and the Collateral
Agent as secured party, together with all schedules
and exhibits to such financing statements, to be
filed in the offices listed on Schedule 2
(collectively, the "Financing Statements");
(i) the amended Mortgages;
(j) the Senior Subordinated Note Documents;
(k) the certificate of incorporation and by-laws of each
of the Howmet Entities (collectively, the "Governing
Documents");
(l) the Receivables Documents;
(m) resolutions of each of the Howmet Entities regarding
the transactions contemplated by the Operative
Documents (as defined below); and
<PAGE> 255
TO THE FINANCIAL INSTITUTIONS
LISTED ON ATTACHMENT A HERETO
December 5, 1996
Page 3
(n) such other originalsor copies of such records,
documents or other instruments as in our judgment
are necessary or appropriate to enable us to
render the opinions expressed below.
The documents described in subsections (a)-(g) above are referred to
herein collectively as the "Operative Documents." The documents described in
subsections (a)-(i) are referred to herein collectively as the "Loan Documents."
We have been furnished with, and with your consent have relied upon
certificates of officers of the Borrower with respect to certain factual
matters. In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary.
We aree opining herein as to the effect on the subject transactions
only of the federal laws of the United States, t he internal laws of the States
of New York and the General Corporation Law of the State of Delaware, and with
respect to our opinionss in paragraphs 9 and 10, the laws of the State of
California, and we express no opinion with respect to the applicability thereto,
or the effect thereon, of the laws of any other jurisdiction or, in the case of
Delaware, any other laws, or as to any matters of municipal law or laws of any
locl agencies within any state.
Our opinions set forth in paragraph 4 below are based upon our
consideration of only those statutes, rules andd regulations that, in our
experience, are normally applicable to borrowers and guarantors in secured loan
transactions. Whenever a statement herein is qualified by "to the best of our
knowledge" or a similar phrase, it is intended to indicate that those attorneys
in this firm who have rendered legal services in connection with the Loan
Documents do not have current actual knowledge of the inaccuracy of such
statement. However, except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine the accuracy of any such
statement, and no inference that we have any knowledge of any matteers
pertaining to such statement should be drawn from our representation of any of
the Howmet Entities.
Subject to the foregoing and other matters set forth herein, and in
reliance thereon, it is our opinion that, as of the date hereof:
1. Holdings has been duly incorporated and is validly existing and in
good standing under the laws of the State of Delaware with corporate poer and
authority to enter into the Loan Documents to which it is a party and perform
its obligations thereunder.
2. The execution, delivery and performance of the Loan Documents have
been duly authorized by all necessary corporate action of Holdings and the Loan
Documents have been duly executed and delivered by Holdings.
<PAGE> 256
LATHAM & WATKINS
TO THE FINANCIAL INSTITUTIONS
LISTED ON ATTACHMENT A HERETO
December 5, 1996
Page 4
3. Each of the Operative Documents to which any of the Howmet
Entities is a party constitutes a legally valid and binding obligation of such
party, enforceable against such party in accordance with its terms.
4. The execution and delivery of the Loan Documents by each of
the Howmet Entities and the borrowing of the loans and the granting of liens
pursuant to the Loan Documents by each of the Howmet Entities do not: (a)
violate any federal or New York statute, rule or regulation applicable to any of
the Howmet Entities, (including, without limitation, Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System), (b) result in the breach
of or default under the Receivables Documents or the Senior Subordinated Note
Documents, and (c) to the best of our knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by any of the
Howmet Entities under any federal or New York statute, rule or regulation
applicable to any such party except the filing or recordation of the Financing
Statements and other documents necessary to perfect the security interest of the
Collateral Agent in the Collateral. The execution and delivery of the Loan
Documents by Holdings and the borrowings of the loans and the granting of liens
pursuant to the Loan Documents by Holdings will not violate the provisions of
the Governing Documents. No opinion is expressed in clauses (a) and (c) of this
paragraph 4 as to the application of Section 548 of the federal Bankruptcy Code
and comparable provisions of state law or of any antifraud laws.
5. None of the Howmet Entities is an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
6. None of the Howmet Entities is a "holding company" or a
"subsidiary company" or an "affiliate" of a "holding company" or of a
"Subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7. Assuming that all Indebtedness incurred by the Borrower
under the Credit Agreement is incurred as described in Section 5.15 of the
Credit Agreement, such Indebtedness shall constitute "Senior Indebtedness" for
purposes of the Senior Subordinated Note Indenture.
8. The provisions of the Security Agreement in effect prior to
the Restatement Effective Date created a valid security interest in favor of the
Collateral Agent for the benefit of the Secured Creditors (as defined in the
Security Agreement) in that portion of the collateral described in the Security
Agreement that is subject to Article 9 of the NYUCC (the "Collateral") as
security for the payment, to the extent set forth therein, of all obligations of
the Company to the Banks under the Operative Documents and the amendment and
restatement of each of the Credit Agreement and the Security Agreement will not
impair the validity of such security interests.
9. The Financing Statements are in appropriate form for filing
in the offices listed on Schedule 2 to this opinion. Upon the proper filing of
the Financing Statements in such offices, the security interest in favor of the
Collateral Agent for the benefit of the Secured Creditors (as defined in the
Security Agreement) in the Collateral described in the Financing Statements will
be perfected to the
<PAGE> 257
LATHAM & WATKINS
TO THE FINANCIAL INSTITUTIONS
LISTED ON ATTACHMENT A HERETO
December 5, 1996
Page 5
extent a security interest in such Collateral can be perfected by filing a
financing statement under the provisions of the NYUCC and the California UCC.
10. Assuming that the security interests in the Collateral
were duly and validly perfected immediately prior to the Restatement Effective
Date, no additional filings in the state of California are required to perfect
such security interests under the California UCC as a result of the amendment
and restatement of each of the Credit Agreement and the Security Agreement.
The opinions expressed in paragraph 3 do not include any
opinions with respect to the perfection or priority of any security interest or
lien. The opinions expressed in paragraph 3 and our opinions expressed in
paragraphs 8, 9 and 10 as to the creation, validity and perfection of the
security interests and liens referred to therein are further subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors;
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
(c) the unenforceability under certain circumstances
under law or court decisions of provisions providing for the indemnification of
or contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the
payment of attorney's fees, except to the extent that a court determines such
fees to be reasonable.
Our opinions in paragraphs 8, 9 and 10 are also subject to the
following assumptions, exceptions, limitations and qualifications:
(i) we express no opinion as to the priority of any security
interest or lien;
(ii) we express no opinion as to the creation, validity or
perfection of any security interest that is not governed by, or that is excluded
from coverage by, Article 9 of the NYUCC or the California UCC;
(iii) we have assumed that the applicable Howmet Entity has
"rights" in the Collateral and that "value" has been given as contemplated by
Section 9-203 of the NYUCC or Section 9203 of the California UCC;
<PAGE> 258
LATHAM & WATKINS
TO THE FINANCIAL INSTITUTIONS
LISTED ON ATTACHMENT A HERETO
December 5, 1996
Page 6
(iv) we have assumed that none of the Collateral consists of
consumer goods, crops growing or to be grown, timber to be cut, minerals or the
like (including oil and gas) or accounts resulting from the sale of minerals or
the like at the wellhead or the minehead, beneficial interests in a decedent's
estate, items which are subject to a statute or treaty of the United States
which provides for a national or international registration or a national or
international certificate of title or which specifies a place of filing
different from that specified in the NYUCC or the California UCC for filing of
the security interest, or any other items excluded from the coverage of Section
9-104 of the NYUCC or Section 9104 of the California UCC;
(v) we call your attention to the fact that the perfection of
a security interest in "proceeds" (as defined in the NYUCC and California UCC)
of collateral is governed and restricted by Section 9-306 of the NYUCC and
Section 9306 of the California UCC;
(vi) we note that the law is not well developed with respect
to the specificity of description necessary to create a valid security interest
in personal property. To ensure that a sufficient description has been provided,
the personal property intended to be subject to the security interest should be
identified by serial, account or other identification numbers or by some other
method of specific identification. However, the more general description of the
personal property used in the Security Agreement and in the Financing Statements
to be filed in connection therewith is consistent with that commonly used by
major lenders in New York and, although the matter is not free from doubt, in
our opinion should be held by courts in New York to be sufficient to create a
security interest in the personal property described therein; however, we
express no opinion as to whether the phrase "all personal property" or similarly
general phrases would be held to describe any particular item or items of
collateral;
(vii) we call to your attention the fact that under the NYUCC
and the California UCC, with certain limited exceptions, the effectiveness of
the Financing Statements will lapse five (5) years after the date of filing
thereof and your security interest will become unperfected, unless a
continuation statement is filed within six (6) months prior to the end of such
five-year period. We also call to your attention the fact that perfection of
security interests under the NYUCC or the California UCC in any of the
Collateral will be terminated as to any Collateral acquired by the applicable
Howmet Entity more than four (4) months after the applicable Howmet Entity
changes its name, identity, address or corporate structure to such an extent as
to make the Financing Statements seriously misleading, unless a new appropriate
financing statement or an appropriate amendment to each of the Financing
Statements indicating the new name, identity or corporate structure of the
applicable Howmet Entity, is properly filed before the expiration of four (4)
months after such change; and
(viii) we call to your attention the fact that the security
interests in the Collateral owned by Howmet Refurbishment, Inc., a Delaware
corporation ("Howmet Refurbishment") were not duly perfected prior to the
Restatement Effective Date and therefore, our opinion in paragraph 10 does not
apply to any security interests in the Collateral owned by Howmet Refurbishment.
<PAGE> 259
LATHAM & WATKINS
TO THE FINANCIAL INSTITUTIONS
LISTED ON ATTACHMENT A HERETO
December 5, 1996
Page 7
To the extent that the obligations of any of the Howmet
Entities may be dependent upon such matters, we have also assumed for purposes
of this opinion: all parties to the Loan Documents other than Holdings are duly
incorporated, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation; all parties to the Loan Documents
other than Holdings have the requisite corporate power and authority to execute
and deliver the Loan Documents and to perform their respective obligations under
the Loan Documents to which they are a party; the Loan Documents to which such
parties other than Holdings are a party have been duly authorized, executed and
delivered by such parties; and the Loan Documents constitute the legally valid
and binding obligations of all parties to the Loan Documents other than the
Howmet Entities, enforceable against each such party in accordance with their
terms. We express no opinion as to compliance by any parties to the Loan
Documents with any state or federal laws or regulations applicable to the
subject transactions because of the nature of their business.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted to or
relied upon by any other person or entity for any purpose, without our prior
written consent. At your request, we hereby consent to reliance hereon by any
future participants or assigns of all or any part of your interests in the
Credit Agreement that are Eligible Transferees as expressly permitted by Section
13.04 of the Credit Agreement; provided that this opinion speaks only as of the
date hereof and to its addressees and that we have no responsibility or
obligation to update this opinion, to consider its applicability or correctness
to other than its addressees, or to take into account changes in law. facts or
any other development of which we may later become aware.
Very truly yours,
/s/ LATHAM & WAKINS
<PAGE> 260
LATHAM & WATKINS
Attachment A
------------
Bankers Trust Company
130 Liberty Street
New York, New York 10006
The First National Bank of Chicago
One First National Plaza, Suite 0362
Chicago, IL 60670
Citicorp USA, Inc.
399 Park Avenue, 6th Floor
New York, New York 10043
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
Fleet National Bank
One Federal Street, MSN-MA-OF-0308
Boston, MA 02211
Bank of America, Illinois
555 South Flower Street, 11th Floor
Suite 5618
Los Angeles, California 90071
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
The Bank of New York
One Wall Street, 22nd Floor
New York, New York 10286
The Fuji Bank Limited, Los Angeles Agency
333 South Hope Street, Suite 3900
Los Angeles, CA 90071
The Sakura Bank, Limited, Los Angeles Agency
515 South Figueroa Street, Suite 400
Los Angeles, CA 90071
Mellon Bank, N.A.
300 South Grand Avenue, Suite 3800
Los Angeles, CA 90071
<PAGE> 261
LATHAM & WATKINS
Banque Nationale de Paris
180 Montgomery Street
San Francisco, CA 94104
Credit Suisse
633 West 5th Street - 64th Floor
Los Angeles, CA 90071
ABN Amro Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111
Bank of Montreal
430 Park Avenue, 14th Floor
New York, New York 10022
Dresdner Bank AG, New York Branch
and Grand Cayman Branch
75 Wall Street, 29th Floor
New York, New York 10005
<PAGE> 262
LATHAM & WATKINS
Schedule 1
----------
HOWMET SUBSIDIARIES
Howmet Management Services, Inc.
Howmet-Tempcraft, Inc.
Howmet Transport Services, Inc.
Howmet Sales, Inc.
Howmet Refurbishment Inc.
Turbine Components Corporation
Howmet Cercast (USA), Inc.
Howmet Thermatech Canada, Inc.
<PAGE> 263
LATHAM & WATKINS
Schedule 2
----------
Debtor State Office
- ------ ----- ------
Howmet Corporation NY Secretary of State
Howmet Corporation NY Nassau County
Howmet Refurbishment, Inc. NY Secretary of State
Howmet Refurbishment, Inc. NY Rockland County
Howmet Refurbishment, Inc. CA Secretary of State
<PAGE> 264
EXHIBIT E-2
-----------
[LOGO] HOWMET CORPORATION
- --------------------------------------------------------------------------------
475 Steamboat Road
Greenwich, CT 06836-1960
Tel. 203/661-4600
ROLAND A. PAUL
Vice President and
General Counsel
December 5, 1996
TO THE FINANCIAL INSTITUTIONS LISTED ON ATTACHMENT A HERETO
Re: Amended and Restated Credit Agreement dated as of
December 5, 1996 among Blade Acquisition Corp.,
Howmet Holdings Corporation, Howmet Corporation,
the Banks party thereto from time to time, Bankers
Trust Company, Citicorp USA, Inc. and The First
National Bank of Chicago, as Managing Agents,
Bankers Trust Company, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and The
First National Bank of Chicago, as Administrative
Agent
Ladies and Gentlemen:
I am furnishing this opinion to you in my capacity as General Counsel for Howmet
Holdings Corporation ("Parent"), Howmet Corporation (the "Company") and the
Howmet Subsidiaries (as defined herein) (collectively with the Parent and the
Company, the "Howmet Entities") in connection with that certain Amended and
Restated Credit Agreement dated as of December 5, 1996 (the "Amended Credit
Agreement") among Blade Acquisition
1
<PAGE> 265
Corp., Howmet Holdings Corporation, and Howmet Corporation, various banks from
time to time party thereto (the "Banks"), Bankers Trust Company, Citicorp USA,
Inc. and The First National Bank of Chicago, as Managing Agents, Bankers Trust
Company, as Syndication Agent, Citicorp USA, Inc., as Documentation Agent and
The First National Bank of Chicago, as Administrative Agent (the "Administrative
Agent").
This opinion is rendered to you pursuant to Section 5.03 of the Credit
Agreement. Capitalized terms defined in the Credit Agreement, used herein and
not otherwise defined herein, shall have the meanings given them in the Credit
Agreement. In addition, the term "Howmet Subsidiaries" shall mean those
Subsidiaries of the Company which are listed on Schedule 1 to this opinion.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case I have made no or limited inquiry as specified below. I
have examined, among other things, the following:
(a) the Amended Credit Agreement;
(b) the Term Note;
(c) the Revolving Note;
(d) the Swingline Note;
(e) the Subsidiary Guaranty;
(f) the Pledge Agreement;
(g) the Security Agreement;
(h) the Mortgage Amendments
(i) the Certificate of Incorporation and Bylaws of each of the
Howmet Entities (the "Governing Documents");
2
<PAGE> 266
To the Financial Institutions
Listed on Attachment A Hereto
December 5, 1996
(j) resolutions regarding the above-referenced transactions of
each of the Howmet Entities; and
(k) such other originals or copies of such records, documents
or other instruments as in my judgment are necessary or appropriate to
enable me to render the opinions expressed below.
The documents described in subsections (a)-(k) above are referred to
herein collectively as the "Loan Documents."
I have obtained and relied upon such certificates and assurances from
public officials and corporate officers as I have deemed necessary.
I am opining herein as to the effect on the subject transactions only
of the federal laws of the United States, the internal laws of the States of New
York and Connecticut, and the General Corporation Law of the State of Delaware,
and I express no opinion with respect to the applicability thereto, or the
effect thereon, of the laws of any other jurisdiction or, in the case of
Delaware, any other laws, or as to any matters of municipal law or laws of any
other local agencies within any state.
My opinions set forth in paragraph 3 below are based upon my
consideration of only those statutes, rules and regulations which, in my
experience, are normally applicable to borrowers and guarantors in secured loan
transactions. Whenever a statement herein is qualified by "to the best of my
knowledge" or a similar phrase, it is intended to indicate that I have no
current actual knowledge of the inaccuracy of such statement. However, except as
otherwise expressly indicated, I have not undertaken any independent
investigation to determine the accuracy of any such statement, and no inference
that I have any
3
<PAGE> 267
To the Financial Institutions
Listed on Attachment A Hereto
December 5, 1996
knowledge of any matters pertaining to such statement should be drawn from my
representation of the Howmet Entities.
Subject to the foregoing and other matters set forth herein, and in
reliance thereon, it is my opinion that, as of the date hereof:
1. Each of the Parent, the Company and the Howmet Subsidiaries has been
duly incorporated and is validly existing and in good standing under the laws of
its state of incorporation with corporate power and authority to enter into the
Loan Documents to which it is a party and perform its obligations thereunder.
Based solely on certificates from public officials, I confirm that the Parent,
the Company and the Howmet Subsidiaries are qualified to do business in the
states identified on Schedule 2 to this opinion.
2. The execution, delivery and performance of the Loan Documents have
been duly authorized by all necessary corporate action of each of the Parent,
the Company and the Howmet Subsidiaries, and the Loan Documents have been duly
executed and delivered by each of the Parent, the Company and the Howmet
Subsidiaries.
3. The execution and delivery of the Loan Documents by each of the
Parent, the Company and the Howmet Subsidiaries, the borrowing of the loans and
the granting of liens pursuant to the Loan Documents by the Parent, the Company
and the Howmet Subsidiaries do not: (a) violate the provisions of any of the
Governing Documents or (b) result in the breach of or a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of the material
properties or assets or any of the Howmet Entities pursuant to the terms of, any
of the indentures, notes, loan agreements or other agreements relating to the
incurrence of Indebtedness for borrowed money by
4
<PAGE> 268
To the Financial Institutions
Listed on Attachment A Hereto
December 5, 1996
the Howmet Entities, or any other material agreements or instruments to which
one or more of the Howmet Entities are parties (the "Material Agreements"); or
(d) to my knowledge, conflict with or result in any breach of any applicable
writ, injunction or decree of any court or governmental body.
4. On the date hereof and after giving effect to the Transaction, the
authorized common stock of the Parent shall consist of 1,000 shares, of which 10
shares are issued and outstanding and have been delivered to the Collateral
Agent pursuant to the Pledge Agreement. All such outstanding shares have been
duly and validly issued, are fully paid and nonassessable and have been issued
free of preemptive rights. To the best of my knowledge, the Parent does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
5. On the date hereof and after giving effect to the Transaction, the
authorized common stock of the Company shall consist of 1,000 shares, of which
10 shares are issued and outstanding and have been delivered to the Collateral
Agent pursuant to the Pledge Agreement. All such outstanding shares have been
duly and validly issued, are fully paid and nonassessable and have been issued
free of preemptive rights. To the best of my knowledge, the Company does not
have outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
5
<PAGE> 269
To the Financial Institutions
Listed on Attachment A Hereto
December 5, 1996
6. Annex A to the Pledge Agreement sets forth the number of shares of
each Howmet Subsidiary that are issued and held by the respective shareholders
indicated on that annex. Such shares have been duly and validly issued, are
fully paid and nonassessable and, to the best of my knowledge, have been issued
free of preemptive rights. Such shares, to the extent required by the Credit
Agreement, have been delivered to the Collateral Agent pursuant to the Pledge
Agreement, except that 1,623,947 shares of the stock of Howmet, S.A. are in the
process of being delivered to the Collateral Agent.
7. To my knowledge, there are no actions, suits or proceedings pending
against any of the Howmet Entities which could reasonably be expected to have a
material adverse effect on the business, operations (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole.
Without limiting the generality of the foregoing, the opinions
expressed above are subject to the following limitations, exceptions and
assumptions:
In rendering the opinions expressed in paragraph 3 insofar as they
require interpretation of the Material Agreements (i) I have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state, and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions and (iii) I express no
opinion with respect to the effect of any action or inaction by any of the
Parent, the Company or the Howmet Subsidiaries under the Loan Documents or the
Material Agreements which may result in a breach or default under any Material
6
<PAGE> 270
To the Financial Institutions
Listed on Attachment A Hereto
December 5, 1996
Agreement. I advise you that certain of the Material Agreements may be governed
by other laws, that such laws may vary substantially from the law assumed to
govern for purposes of this opinion, and that this opinion may not be relied
upon as to whether or not a breach or default would occur under the law actually
governing such Material Agreements.
To the extent that the obligations of the Parent, the Company and the
Howmet Subsidiaries, as applicable, may be dependent upon such matters, I assume
for purposes of this opinion that: all parties to the Loan Documents other than
the Howmet Entities are duly incorporated, validly existing and in good standing
under the laws of their respective jurisdictions of incorporation; all parties
to the Loan Documents other than the Parent, the Company and the Howmet Entities
have the requisite corporate power and authority to execute and deliver the Loan
Documents and to perform their respective obligations under the Loan Documents
to which they are a party; and the Loan Documents to which such parties other
than the Howmet Entities are a party have been duly authorized, executed and
delivered by such parties and constitute their legally valid and binding
obligations, enforceable against them in accordance with their terms. I express
no opinion as to compliance by any parties to the Loan Documents with any state
or federal laws or regulations applicable to the subject transactions because of
the nature of their business.
7
<PAGE> 271
To the Financial Institutions
Listed on Attachment A Hereto
December 5, 1996
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
/s/ Roland Paul
8
<PAGE> 272
Schedule 1
----------
Howmet Subsidiaries
Name Jurisdiction of Incorporation
- ---- -----------------------------
Howmet Management Services Inc. Delaware
Howmet-Tempcraft Inc. Ohio
Howmet Transport Services Inc. Delaware
Howmet Sales, Inc. Delaware
Howmet Refurbishment Inc. Delaware
Turbine Components Corporation Connecticut
Howmet Cercast (USA), Inc. Delaware
Howmet Thermatech Canada, Inc. Delaware
9
<PAGE> 273
Schedule 2
----------
STATE QUALIFICATIONS
--------------------
Company State
- ------- -----
Howmet Holdings Corporation Delaware
Connecticut
Texas
Oklahoma
Howmet Cercast (U.S.A.), Inc. Delaware
California
Pennsylvania
Texas
Howmet Corporation Delaware
Connecticut
Indiana
Michigan
Nevada
New Jersey
Oklahoma
Tennessee
Texas
Virginia
Howmet Insurance Company, Inc. Vermont
Howmet Management Services, Inc. Delaware
Howmet Refurbishment, Inc. Delaware
Oklahoma
Texas
Michigan
Connecticut
Howmet Sales, Inc. Delaware
Connecticut
Florida
Ohio
Howmet-Tempcraft, Inc. Ohio
Howmet Thermatech (Canada), Inc. Delaware
Howmet Transport Services, Inc. Delaware
Connecticut
Indiana
New Jersey
Turbine Components Corporation Connecticut
<PAGE> 274
Attachment A
------------
Bankers Trust Company
130 Liberty Street
New York, New York 10006
The First National Bank of Chicago
One First National Plaza, Suite 0362
Chicago, IL 60670
Citicorp USA, Inc.
399 Park Avenue, 6th Floor
New York, New York 10043
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
Fleet National Bank
One Federal Street, MSN-MA-OF-0308
Boston, MA 02211
Bank of America, Illinois
555 South Flower Street, 11th Floor
Suite 5618
Los Angeles, California 90071
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
The Bank of New York
One Wall Street, 22nd Floor
New York, New York 10286
The Fuji Bank Limited, Los Angeles Agency
333 South Hope Street, Suite 3900
Los Angeles, CA 90071
The Sakura Bank, Limited, Los Angeles Agency
515 South Figueroa Street, Suite 400
Los Angeles, CA 90071
Mellon Bank, N.A.
300 South Grand Avenue, Suite 3800
Los Angeles, CA 90071
<PAGE> 275
Banque Nationale de Paris
180 Montgomery Street
San Francisco, CA 94104
Credit Suisse
633 West 5th Street - 64th Floor
Los Angeles, CA 90071
ABN Amro Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111
Bank of Montreal
430 Park Avenue, 14th Floor
New York, New York 10022
Dresdner Bank AG, New York Branch
and Grand Cayman Branch
75 Wall Street, 29th Floor
New York, New York 10005
<PAGE> 276
EXHIBIT F
---------
AMENDED AND RESTATED SUBSIDIARIES GUARANTY
GUARANTY, dated as of December 13, 1995 as amended and restated as of
December 5, 1996 (as amended, modified or supplemented from time to time, this
"Guaranty"), made by each of the undersigned (each, a "Guarantor" and, together
with any other entity that becomes a party hereto pursuant to Section 24 hereof,
the "Guarantors"), to THE FIRST NATIONAL BANK OF CHICAGO, as Collateral Agent,
for the benefit of the Creditors (as defined below). Except as otherwise defined
herein, terms used herein and defined in the Credit Agreement (as defined below)
shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Blade Acquisition Corp. ("Holdings"), Howmet Holdings
Corporation (f/k/a Pechiney Corporation) ("Parent"), Howmet Corporation (the
"Borrower"), various lenders party thereto from time to time (the "Banks"),
Bankers Trust Company, Citicorp USA, Inc. and The First National Bank of
Chicago, as Managing Agents, Bankers Trust Company, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and The First National Bank of
Chicago, as Administrative Agent (together with any successor administrative
agent, the "Administrative Agent"), have entered into a Credit Agreement, dated
as of December 13, 1995 and amended and restated as of the date hereof (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Loans to the Borrower and the issuance of, and
participation in, Letters of Credit for the account of the Borrower, all as
contemplated therein (the Banks, the Managing Agents, the Syndication Agent, the
Documentation Agent and the Administrative Agent are herein called the "Bank
Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Banks or any affiliate thereof (each such Bank or affiliate, even if
the respective Bank subsequently ceases to be a Bank under the Credit Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
if any, collectively, the "Other Creditors," and together with the Bank
Creditors, the "Creditors");
WHEREAS, each Guarantor is a Subsidiary of the Borrower;
<PAGE> 277
EXHIBIT F
Page 2
WHEREAS, the Guarantors have heretofore entered into a Subsidiaries
Guaranty, dated as of December 13, 1995 (as amended, modified or supplemented
prior to the date hereof, the "Original Guaranty");
WHEREAS, it is a condition to the making of Loans and issuing of
Letters of Credit under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit pursuant to the
Credit Agreement and the entering into of Interest Rate Protection Agreements or
Other Hedging Agreements and, accordingly, desires to execute this Guaranty in
order to (i) satisfy the conditions described in the preceding paragraph, (ii)
induce (x) the Banks to make Loans and issue Letters of Credit to the Borrower
and (y) the Other Creditors to enter into Interest Rate Protection Agreements or
Other Hedging Agreements with the Borrower and (iii) amend and restate the
Original Guaranty;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit and (y) all other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Bank Creditors under the Credit Agreement (including,
without limitation, indemnities, Fees and interest thereon) and the other Credit
Documents to which the Borrower is a party, whether now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement or any
such other Credit Document and the due performance and compliance with the terms
of the Credit Documents by the Borrower (all such principal, interest,
liabilities and obligations under this clause (i), except to the extent
consisting of obligations or liabilities with respect to Interest Rate
Protection Agreements or Other Hedging Agreements, being herein collectively
called the "Credit Document Obligations"); and (ii) to each Other Creditor the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by the Borrower to one or more Other Creditors under
any Interest
<PAGE> 278
EXHIBIT F
Page 3
Rate Protection Agreements or Other Hedging Agreements, whether now in existence
or hereafter arising, and the due performance and compliance by the Borrower
with all terms, conditions and agreements contained therein (all such
obligations and liabilities being herein collectively called the "Other
Obligations", and together with the Credit Document Obligations are herein
collectively called the "Guaranteed Obligations"), provided that the maximum
amount payable by each Guarantor hereunder shall at no time exceed the Maximum
Amount (as hereinafter defined) of such Guarantor. As used herein, "Maximum
Amount" of any Guarantor means an amount equal to 95% of the amount by which (i)
the present fair saleable value of such Guarantor's assets exceeds (ii) the
total liabilities of such Guarantor (including the maximum amount reasonably
expected to come due in respect of contingent liabilities, other than contingent
liabilities of such Guarantor hereunder). Subject to the proviso in the second
preceding sentence, each Guarantor understands, agrees and confirms that this
Guaranty is a guarantee of payment and not of collection, and that the Creditors
may enforce this Guaranty up to the full amount of the Guaranteed Obligations
against such Guarantor without proceeding against any other Guarantor, the
Borrower, against any security for the Guaranteed Obligations, or under any
other guaranty covering all or a portion of the Guaranteed Obligations.
2. Additionally, but subject to the proviso to the first sentence of
Section 1 hereof, each Guarantor, jointly and severally, unconditionally and
irrevocably, guarantees the payment of any and all Guaranteed Obligations of the
Borrower to the Creditors whether or not due or payable by the Borrower upon the
occurrence in respect of the Borrower of any of the events specified in Section
10.05 of the Credit Agreement, and unconditionally and irrevocably, jointly and
severally, promises to pay such Guaranteed Obligations to the Creditors, or
order, on demand, in lawful money of the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of the Borrower whether executed by such Guarantor, any other Guarantor, any
other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, (1))any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Guaranteed Obligations of the Borrower, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) any payment made to any Creditor on the Guaranteed Obligations
which any Creditor repays the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Creditors as contemplated in Section 6 hereof, or (g) any
invalidity, irregularity or unenforceability of all or part of the Guaranteed
Obligations or of any security therefor.
<PAGE> 279
EXHIBIT F
Page 4
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other Guarantor, any other
guarantor or the Borrower and whether or not any other Guarantor, any other
guarantor of the Borrower or the Borrower be joined in any such action or
actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to
toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives (to the fullest extent permitted by
applicable law) notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives promptness, diligence, presentment,
demand of payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Administrative Agent or any
other Creditor against, and any other notice to, any party liable thereon
(including such Guarantor or any other guarantor or the Borrower).
6. Any Creditor may (except as shall be required by applicable statute
and cannot be waived) at any time and from time to time without the consent of,
or notice to, any Guarantor, without incurring responsibility to such Guarantor,
without impairing or releasing the obligations of such Guarantor hereunder, upon
or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations, any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the
guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or
<PAGE> 280
EXHIBIT F
Page 5
any part thereof to the payment of any liability (whether due or not)
of the Borrower to creditors of the Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Creditors
regardless of what liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or
supplement any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of such other
instruments or agreements;
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty; and/or
(h) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of the Borrower or any of its Subsidiaries or the officers, directors,
partners or agents acting or purporting to act on its
<PAGE> 281
EXHIBIT F
Page 6
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred and is continuing,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Creditors and be paid over to the Creditors on account of the
indebtedness of the Borrower to the Creditors, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Prior to the transfer by any Guarantor of any note
or negotiable instrument evidencing any indebtedness of the Borrower to such
Guarantor, such Guarantor shall mark such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Creditors
that it will not exercise any right of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have
been irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be required by
applicable statute or law and cannot be waived) to require the Creditors to: (i)
proceed against the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party; (ii) proceed against or exhaust any security held
from the Borrower, any other Guarantor, any other guarantor of the Borrower or
any other party; or (iii) pursue any other remedy in the Creditors' power
whatsoever. Each Guarantor waives (to the fullest extent permitted by applicable
law) any defense based on or arising out of any defense of the Borrower, any
other Guarantor, any other guarantor of the Borrower or any other party other
than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Creditors may, at
their election, foreclose on any security held by the Administrative Agent, the
Collateral Agent or the other Creditors by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Creditors may have against the Borrower or any other party,
or any security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid in full. Each Guarantor waives any defense arising out of any such election
by the Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
<PAGE> 282
EXHIBIT F
Page 7
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced only by the
action of the Administrative Agent or the Collateral Agent, in each case acting
upon the instructions of the Required Banks (or, after the date on which all
Credit Document Obligations have been paid in full, the holders of at least a
majority of they outstanding Other Obligations) and that no other Creditor shall
have any right individually to seek to enforce or to enforce this Guaranty or to
realize upon the security to be granted by the Security Documents, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case may be, for the
benefit of the Creditors upon the terms of this Guaranty and the Security
Documents. The Creditors further agree that this Guaranty may not be enforced
against any director, officer, employee, or stockholder of any Guarantor (except
to the extent such stockholder is also a Guarantor hereunder).
12. In order to induce the Banks to make Loans and issue Letters of
Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants and
covenants that:
(a) Such Guarantor (i) is a duly organized and validly
existing corporation in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the corporate power and
authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing
in each jurisdiction where the conduct of its business requires such
qualification except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of
the Borrower, the Borrower and its Subsidiaries taken as a whole or
Holdings and its Subsidiaries taken as a whole.
<PAGE> 283
EXHIBIT F
Page 8
(b) Such Guarantor has the corporate power and authority to
execute, deliver and perform the terms and provisions of this Guaranty
and each other Credit Document to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of each such Credit Document. Such Guarantor has duly
executed and delivered this Guaranty and each other Credit Document to
which it is a party, and each such Credit Document constitutes the
legal, valid and binding obligation of such Guarantor enforceable in
accordance with its terms.
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is
a party, nor compliance by it with the terms and provisions hereof and
thereof, (i) will contravene any provision of any applicable law,
statute, rule or regulation, or any applicable order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Security Documents or the
Receivables Documents) upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement,
or any other material agreement or other instrument to which such
Guarantor or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject or
(iii) will violate any provision of the certificate of incorporation or
by-laws (or equivalent organizational documents) of such Guarantor or
any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as
have been obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the execution,
delivery and performance of this Guaranty or any other Credit Document
to which such Guarantor is a party or (ii) the legality, validity,
binding effect or enforceability of this Guaranty or any other Credit
Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings (private or
governmental) pending or threatened (i) with respect to any Credit
Documents to which such Guarantor is a party or (ii) with respect to
such Guarantor that could reasonably be expected to materially and
adversely affect (a) the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of
Holdings, Parent, the Borrower, Howmet Cercast (U.S.A.), Howmet Cercast
(Canada), the Intellectual Property Subsidiary or any such Person and
its Subsidiaries taken as a
<PAGE> 284
EXHIBIT F
Page 9
whole or (b) the rights or remedies of the Creditors or on the ability
of such Guarantor to perform its respective obligations to the
Creditors hereunder and under the other Credit Documents to which it is
a party.
13. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitments and all Interest Rate
Protection Agreements or Other Hedging Agreements and when no Note or Letter of
Credit remains outstanding and all Guaranteed Obligations have been paid in
full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 8 or 9 of the
Credit Agreement, and so that no Default or Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Creditor in connection with
the enforcement of this Guaranty and any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel (including in-house counsel) employed by any of the Creditors).
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and either (x) the Required Banks (or to the
extent required by Section 13.12 of the Credit Agreement, with the written
consent of each Bank) at all times prior to the time on which all Credit
Document Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time on
which all Credit Document Obligations have been paid in full; provided, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors (as
defined below) of such Class of Creditors (it being understood that the addition
or release of any Guarantor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Guarantor other than the Guarantor so
added or released). For the purpose of this Guaranty the term "Class" shall mean
each class of Creditors, i.e., whether (x) the Bank Creditors as holders of the
Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Banks (or to the extent required by Section
13.12 of the Credit Agreement, each Bank) and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection Agreements or Other Hedging
Agreements.
<PAGE> 285
EXHIBIT F
Page 10
16. Each Guarantor acknowledges that an executed (or conformed) copy of
each of the Credit Documents and Interest Rate Protection Agreements or Other
Hedging Agreements has been made available to its principal executive officers
and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under applicable
law (including, without limitation, Section 151 of the New York Debtor and
Creditor Law) and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default (such term to mean
and include any "Event of Default" as defined in the Credit Agreement or any
payment default under any Interest Rate Protection Agreement or Other Hedging
Agreement continuing after any applicable grace period), each Creditor is hereby
authorized at any time or from time to time, without notice to any Guarantor or
to any other Person, any such notice being expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Creditor to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured. Each Creditor acknowledges and agrees that the
provisions set forth in this Section 17 are subject to the sharing provisions
set forth in Section 13.06 of the Credit Agreement.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
19. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected in good faith by
such payee with any such claimant (including the Borrower), then and in such
event each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so
<PAGE> 286
EXHIBIT F
Page 11
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which any
Guarantor is a party may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, each Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
irrevocably designates, appoints and empowers CT Corporation System, with
offices on the date hereof at 1633 Broadway, New York, New York 10019 as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, each Guarantor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Administrative Agent. Each Guarantor further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such Guarantor at its address
set forth opposite its signature below, such service to become effective 30 days
after such mailing. Nothing herein shall affect the right of' any of the
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
(B) Each Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (A) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that such action or proceeding brought
in any such court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS
OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY,
THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
<PAGE> 287
EXHIBIT F
Page 12
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of (except to Holdings or any of its
Subsidiaries) or liquidated in compliance with the requirements of Section 9.02
of the Credit Agreement (or such sale or other disposition or liquidation has
been approved in writing by the Required Banks) and the proceeds of such sale,
disposition or liquidation are applied in accordance with the provisions of the
Credit Agreement, to the extent applicable, such Guarantor shall be released
from this Guaranty and this Guaranty shall, as to each such Guarantor or
Guarantors, terminate, and have no further force or effect (it being understood
and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock or partnership interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section
21).
22. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
23. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense, and on the same basis as payments are mad
e by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
24. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Administrative Agent.
25. Upon the execution and delivery of this Guaranty by the parties
hereto, the Original Guaranty shall be amended and restated in its entirety by
this Agreement, effective as of the date hereof, with all rights, obligations
and security interests created under or granted pursuant to the Original
Guaranty continuing from the date thereof.
* * *
<PAGE> 288
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address: HOWMET MANAGEMENT
SERVICES, INC., as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul By______________________________
Telephone No.: (203) 625-8770 Title:
Facsimile No.: (203) 625-8771
Address: HOWMET THERMATECH CANADA,
INC., as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul By______________________________
Telephone No.: (203) 625-8770 Title
Facsimile No.: (203) 625-8771
Address: HOWMET-TEMPCRAFT, INC.,
as a Guarantor
475 Steamboat Road
Greenwich, CT
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770 By______________________________
Facsimile No.: (203) 625-8771 Title:
Address: HOWMET TRANSPORT SERVICES,
INC., as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770 By______________________________
Facsimile No.: (203) 625-8771 Title
<PAGE> 289
Address: HOWMET SALES, INC.,
as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul By______________________________
Telephone No.: (203) 625-8770 Title:
Facsimile No.: (203) 625-8771
Address: HOWMET REFURBISHMENT, INC.,
as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul By______________________________
Telephone No.: (203) 625-8770 Title:
Facsimile No.: (203) 625-8771
Address: TURBINE COMPONENTS CORPORA-
TION, as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul By______________________________
Telephone No.: (203) 625-8770 Title:
Facsimile No.: (203) 625-8771
Address: HOWMET CERCAST (USA), INC.,
as a Guarantor
475 Steamboat Road
Greenwich, CT 06830
Attention: Mr. Roland A. Paul By______________________________
Telephone No.: (203) 625-8776 Title:
Facsimile No.: (203) 625-8771
<PAGE> 290
Accepted and Agreed to:
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative
Agent and Collateral Agent
By______________________________
Title:
<PAGE> 291
EXHIBIT G
---------
AMENDED AND RESTATED PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 13, 1995 and amended and
restated as of December 5, 1996 (as amended, modified or supplemented from time
to time, this "Agreement") made by each of the undersigned (each a "Pledgor"
and, together with any other entity that becomes a party hereto pursuant to
Section 23 hereof, the "Pledgors"), to THE FIRST NATIONAL BANK OF CHICAGO, as
Collateral Agent (the "Pledgee"), for the benefit of the Secured Creditors (as
defined below). Except as otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Blade Acquisition Corp., Howmet Holdings Corporation (f/k/a
Pechiney Corporation), Howmet Corporation (the "Borrower"), various lenders from
time to time party thereto (the "Banks"), Bankers Trust Company, Citicorp USA,
Inc. and The First National Bank of Chicago, as Managing Agents (the "Managing
Agents"), Bankers Trust Company, as Syndication Agent (the "Syndication Agent"),
Citicorp USA, Inc., as Documentation Agent (the "Documentation Agent"), and The
First National Bank of Chicago, as Administrative Agent (together with any
successor administrative agent, the "Administrative Agent"), have entered into a
Credit Agreement, dated as of December 13, 1995 and amended and restated as of
the date hereof (as amended, modified or supplemented from time to time, the
"Credit Agreement"), providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein (as used herein, the
term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced,
restated or supplemented from time to time, and including any agreement
extending the maturity of, or restructuring the Indebtedness under such
agreement or any successor agreements) (the Banks, the Managing Agents, the
Syndication Agent, the Documentation Agent, the Administrative Agent and the
Pledgee are herein called the "Bank Creditors");
<PAGE> 292
EXHIBIT G
Page 2
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Banks or any affiliate thereof (each such Bank or affiliate, even if
the respective Bank subsequently ceases to be a Bank under the Credit Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
if any, collectively, the "Other Creditors," and together with the Bank
Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Parent Guaranty, each Parent Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of all the Guaranteed Obligations as described therein;
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
WHEREAS, the Pledgors have heretofore entered into a Pledge Agreement,
dated as of December 13, 1995 (as amended, modified or supplemented prior to the
date hereof, the "Original Pledge Agreement");
WHEREAS, it is a condition to the making of Loans and the issuance of
Letters of Credit under the Credit Agreement that each Pledgor shall have
executed and delivered this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of Loans
and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, each Pledgor desires to enter into this Agreement in order to
(I) satisfy the conditions described in the preceding paragraph and (ii) amend
and restate the Original Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Pledgor, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for
the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) of such
Pledgor to the Bank Creditors, whether now
<PAGE> 293
EXHIBIT G
Page 3
existing or hereafter incurred under, arising out of, or in connection with the
Credit Agreement and the other Credit Documents to which such Pledgor is a party
(including without limitation (x) in the case of the Borrower, all such
obligations and indebtedness of the Borrower under the Credit Agreement and (y)
in the case of each other Pledgor, all such obligations and indebtedness under
the Guaranty to which such Pledgor is a party) and the due performance and
compliance by such Pledgor with all of the terms, conditions and agreements
contained in the Credit Agreement and such other Credit Documents (all such
obligations and liabilities under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Interest Rate
Protection Agreements or Other Hedging Agreements, being herein collectively
called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) owing by such Pledgor to the Other
Creditors under, or with respect to, any Interest Rate Protection Agreement or
Other Hedging Agreement, whether such Interest Rate Protection Agreement or
Other Hedging Agreement is now in existence or hereafter arising, and the due
performance and compliance by such Pledgor with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities described in
this clause (ii) being herein collectively called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve the
Collateral (as hereinafter defined) or preserve its security interest in the
Collateral (to the extent provided for in the Credit Documents);
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of such Pledgor referred to in
clauses (i), (ii) and (iii) above, after an Event of Default (as such term is
defined in the Security Agreement) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, or of any exercise by
the Pledgee of its rights hereunder, together with reasonable attorneys' fees
and court costs; and
(v) all amounts paid by any Secured Creditor as to which such Secured
Creditor has the right to reimbursement under Section 11 of this Agreement.
All such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations,"it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above,
<PAGE> 294
EXHIBIT G
Page 4
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein: (i) the
term "Stock" shall mean (x) with respect to corporations incorporated under the
laws of the United States or any State or territory thereof (each a "Domestic
Corporation"), all of the issued and outstanding shares of capital stock of any
Domestic Corporation at any time owned by each Pledgor and (y) with respect to
corporations not Domestic Corporations (each a "Foreign Corporation"), all of
the issued and outstanding shares of capital stock at any time owned by any
Pledgor of any Foreign Corporation, provided that, subject to Section 8.16 of
the Credit Agreement, such Pledgor shall not be required to pledge hereunder,
and nothing herein shall be deemed to constitute a pledge hereunder of, more
than 65% of the total combined voting power of all classes of capital stock of
any Foreign Corporation entitled to vote; (ii) the term "Notes" shall mean all
promissory notes from time to time issued to, or held by, each Pledgor,
provided, that, except as provided in the last sentence of this Section 2, no
Pledgor shall be required to pledge hereunder, and nothing herein shall be
deemed to constitute a pledge hereunder of, any promissory notes issued to such
Pledgor (A) by any direct or indirect Subsidiary of the Borrower which is a
Foreign Corporation or (B) by any employee of the Borrower issued in the
ordinary course of business so long as not more than $600,000 of such employee
loans are outstanding at any one time; provided, however, if more than $600,000
of such employee loans are outstanding, Pledgor shall deliver to Pledgee all
notes representing such loans, except up to $100,000 in notes of $25,000 or
less; and (iii) the term "Securities" shall mean all of the Stock and Notes.
Each Pledgor represents and warrants that on the date hereof (i) each Subsidiary
of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto;
(ii) the Stock held by such Pledgor consists of the number and type of shares of
the stock of the corporations as described in Annex A hereto; (iii) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex A hereto; (iv) the Notes held by
such Pledgor consist of the promissory notes described in Annex B hereto where
such Pledgor is listed as the Lender; and (v) on the date hereof, such Pledgor
owns no other Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations of such Pledgor and for the
purposes set forth in Section 1 hereof, each Pledgor hereby (i) grants to the
Pledgee a security interest (subject to Permitted Liens) in all of the
Collateral (as defined herein) owned by such Pledgor, (ii) pledges and deposits
as security (subject to Permitted Liens) with the Pledgee the Securities owned
by such Pledgor on the date hereof, and delivers to the Pledgee certificates or
instruments therefor, duly endorsed in blank by such Pledgor in the case of
Notes and accompanied by undated stock powers duly executed in blank by such
Pledgor (and accompanied by any transfer tax stamps required in connection with
the pledge
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of such Securities) in the case of Stock, or such other instruments of transfer
as are reasonably acceptable to the Pledgee and (iii) hypothecates mortgages,
charges and sets over to the Pledgee all of such Pledgor's right, title and
interest in and to such Securities (and in and to the certificates or
instruments evidencing such Securities) (subject to Permitted Liens), to be held
by the Pledgee upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If any Pledgor shall acquire (by
purchase, stock dividend or otherwise) any additional Securities at any time or
from time to time after the date hereof, such Pledgor will promptly thereafter
pledge and deposit such Securities (or certificates or instruments representing
such Securities) as security (subject to Permitted Liens) with the Pledgee and
deliver to the Pledgee certificates or instruments therefor, duly endorsed in
blank in the case of such Notes, and accompanied by undated stock powers duly
executed in blank by such Pledgor (and accompanied by any transfer tax stamps
required in connection with the pledge of such Securities) in the case of such
Stock, or such other instruments of transfer as are reasonably acceptable to the
Pledgee, and will promptly thereafter deliver to the Pledgee a certificate
executed by a principal executive officer of such Pledgor describing such
Securities and certifying that the same has been duly pledged with the Pledgee
hereunder. Subject to Section 8.16 of the Credit Agreement, no Pledgor shall be
required at any time to pledge hereunder any Stock which is more than 65% of the
total combined voting power of all Classes of Capital Stock of any Foreign
Subsidiary entitled to vote.
3.3. Uncertificated Securities. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2 hereof, if any Securities (whether
now owned or hereafter acquired) are uncertificated securities, the relevant
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8- 321 of the
New York Uniform Commercial Code, if applicable). Each Pledgor further agrees to
take such actions as the Pledgee deems reasonably necessary or desirable to
effect the foregoing and to permit the Pledgee to exercise any of its rights and
remedies hereunder.
3.4. Definitions of Pledged Stock; Pledged Notes; Pledged Securities
and Collateral. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock;" all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes;" all Pledged Stock and Pledged Notes together are called the "Pledged
Securities;" and the Pledged Securities, together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have
the right to appoint one or more sub-agents for the purpose of retaining
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physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing an Event of Default and (i) the
Obligations shall have been accelerated or (ii) the Pledgee shall have given the
applicable Pledgor written notice that the Pledgee has elected to exercise such
rights, each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Securities owned by it, and to give
consents, waivers or ratifications in respect thereof, provided, that no vote
shall be cast or any consent, waiver or ratification given or any action taken
which would violate or be inconsistent with any of the terms of this Agreement,
the Credit Agreement, any other Credit Document or any Interest Rate Protection
Agreement or Other Hedging Agreement (collectively, the "Secured Debt
Agreements"). All such rights of each Pledgor to vote and to give consents,
waivers and ratifications shall cease in case an Event of Default has occurred
and is continuing and (i) the Obligations shall have been accelerated or (ii)
the Pledgee shall have given the applicable Pledgor written notice that the
Pledgee has elected to exercise such rights, and Section 7 hereof shall become
applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have
occurred and be continuing an Event of Default, all cash dividends and
distributions payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the respective Pledgor. The
Pledgee shall be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional stock or other securities (other
than cash) paid or distributed by way of dividend or otherwise, as the
case may be, in respect of the Pledged Stock;
(ii) all other or additional stock or other securities paid or
distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassifica-tion, combination of shares or similar
rearrangement; and
(iii) all other or additional stock or other securities or
property which may be paid in respect of the Collateral by reason of
any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by any
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Pledgor contrary to the provisions of this Section 6 and Section 7 hereof shall
be received in trust for the benefit of the Pledgee, shall be segregated from
other property or funds of such Pledgor and shall be promptly paid over to the
Pledgee as Collateral in the same form as so received (with any necessary
endorsement).
7. REMEDIES IN CASE OF EVENTS OF DEFAULT. If there shall have occurred
and be continuing an Event of Default, then and in every such case, the Pledgee
shall be entitled to (i) exercise all of the rights, powers and remedies
(whether vested in it by this Agreement, any other Secured Debt Agreement or by
law) for the protection and enforcement of its rights in respect of the
Collateral, (ii) exercise all the rights and remedies of a secured party under
the Uniform Commercial Code and (iii) without limitation, exercise the following
rights, which each Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(d) to vote all or any part of the Pledged Stock (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifica-tions in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(each Pledgor hereby irrevocably constituting and appointing the
Pledgee the proxy and attorney-in-fact of such Pledgor, with full power
of substitution to do so); and
(e) at any time and from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' prior notice of the time and
place of any such sale shall be given to such Pledgor. The Pledgee
shall not be obligated to make any such sale of Collateral regardless
of whether any such notice of sale has theretofore been given. Each
Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of
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redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling the Collateral and
any other security for the Obligations or otherwise. At any such sale,
unless prohibited by applicable law, the Pledgee on behalf of the
Secured Creditors may bid for and purchase all or any part of the
Collateral so sold free from any such right or equity of redemption.
Neither the Pledgee nor any other Secured Creditor shall be liable for
failure to collect or realize upon any or all of the Collateral or for
any delay in so doing nor shall any of them be under any obligation to
take any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and remedy
of the Pledgee provided for in this Agreement or any other Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. No notice to or demand
on any Pledgor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Pledgee or any other Secured Creditor to any other or further
action in any circumstances without notice or demand. The Secured Creditors
agree that this Agreement may be enforced only by the action of the Pledgee
acting upon the instructions of the Required Banks (or, after the date on which
all Credit Document Obligations have been paid in full, the holders of at least
the majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Pledgee or the holders of at least a majority of the outstanding Other
Obligations, as the case may be, for the benefit of the Secured Creditors upon
the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Pledgee hereunder, shall be applied to the payment of the
Obligations in the manner provided in Section 7.4 of the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain jointly
and severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
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10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify and hold harmless the Pledgee in such capacity and each other Secured
Creditor and their respective successors, assigns, employees, agents and
servants (individually an "Indemnitee," and collectively the "Indemnitees") from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse each Indemnitee for all costs and expenses, including reasonable
attorneys' fees, in each case growing out of or resulting from this Agreement or
the exercise by any Indemnitee of any right or remedy granted to it hereunder or
under any other Secured Debt Agreement (but excluding any claims, demands,
losses, judgments and liabilities or expenses to the extent incurred by reason
of gross negligence or willful misconduct of such Indemnitee). In no event shall
the Pledgee be liable, in the absence of gross negligence or willful misconduct
on its part, for any matter or thing in connection with this Agreement other
than to account for moneys actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of any Pledgor under this
Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that
it will join with the Pledgee in executing and, at such Pledgor's own expense,
file and refile under the Uniform Commercial Code or other applicable law such
financing statements, continuation statements and other documents in such
offices as the Pledgee may reasonably deem necessary and wherever required by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem necessary to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance
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of an Event of Default, in the Pledgee's reasonable discretion to take any
action and to execute any instrument which the Pledgee may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with this
Agreement all items of the Collateral at any time received under this Agreement.
It is expressly understood and agreed by each Secured Creditor that by accepting
the benefits of this Agreement each such Secured Creditor acknowledges and
agrees that the obligations of the Pledgee as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement. The
Pledgee shall act hereunder on the terms and conditions set forth herein and in
Section 12 of the Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose
of, grant any option with respect to, or mortgage, pledge or otherwise encumber
any of the Collateral or any interest therein (except as may be permitted in
accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. Each
Pledgor represents, warrants and covenants that (i) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Pledged
Securities pledged by it hereunder, subject to no Lien (except the Lien created
by this Agreement and other Permitted Liens); (ii) it has full corporate power,
authority and legal right to pledge all the Pledged Securities pledged by it
pursuant to this Agreement; (iii) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms;
(iv) no consent of any other party (including, without limitation, any
stockholder or creditor of such Pledgor or any of its Subsidiaries) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required to be obtained by such Pledgor in connection with the
execution, delivery or performance of this Agreement, the validity or
enforceability of this Agreement, the perfection or enforceability of the
Pledgee's security interest in the Collateral or except for compliance with or
as may be required by applicable securities laws, the exercise by the Pledgee of
any of its rights or remedies provided herein; (v) the execution, delivery and
performance of this Agreement by such Pledgor will not violate any provision of
any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or foreign,
applicable to such Pledgor, or of the certificate of incorporation or by-laws
(or equivalent organizational documents) of such Pledgor or of any securities
issued by such Pledgor or any of its Subsidiaries, or of any mortgage,
indenture, lease, deed of trust, loan agreement, credit agreement or other
material agreement, contract, or instrument to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such Pledgor or
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any of its Subsidiaries or upon any of their respective assets and will not
result in the creation or imposition of (or the obligation to create or impose)
any lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (vi) all the shares of
Stock have been duly and validly issued, are fully paid and non-assessable and
are subject to no options to purchase or similar rights; (vii) each of the
Pledged Notes constitutes, or when executed by the obligor thereof will
constitute, the legal, valid and binding obligation of such obligor, enforceable
in accordance with its terms; and (viii) the pledge, assignment and delivery to
the Pledgee of the Securities (other than uncertificated securities) pursuant to
this Agreement creates a valid and perfected first priority Lien in the
Securities, and the proceeds thereof, subject to no other Lien (other than
Permitted Liens) or to any agreement purporting to grant to any third party a
Lien on the property or assets of the Pledgor which would include the
Securities. Each Pledgor covenants and agrees that it will defend the Pledgee's
right, title and security interest in and to the Securities and the proceeds
thereof against the claims and demands of all persons whomsoever in accordance
with the Credit Documents; and such Pledgor covenants and agrees that it will
have like title to and right to pledge any other property at any time hereafter
pledged to the Pledgee as Collateral hereunder and will likewise defend the
right thereto and security interest therein of the Pledgee and the Secured
Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any Subsidiary
of any Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If there shall have occurred and be
continuing an Event of Default then, and in every such case, upon receipt by any
Pledgor from the Pledgee of a written request or requests that such Pledgor
cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected
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with respect to all or any part of the Pledged Stock, such Pledgor as soon as
practicable and at its expense will cause such registration to be effected (and
be kept effective) and will cause such qualification and compliance to be
declared effected (and be kept effective) as may be so requested and as would
permit or facilitate the sale and distribution of such Pledged Stock, including,
without limitation, registration under the Securities Act of 1933, as then in
effect (or any similar statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with any other government requirements, provided, that the Pledgee shall furnish
to such Pledgor such information regarding the Pledgee as such Pledgor may
reasonably request in writing and as shall be required in connection with any
such registration, qualification or compliance. Such Pledgor will cause the
Pledgee to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, will
furnish to the Pledgee such number of prospectuses, offering circulars or other
documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee, each other Secured Creditor and all
others participating in the distribution of such Pledged Stock against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to such Pledgor by the Pledgee or such other
Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7
hereof, and such Pledged Securities or the part thereof to be sold shall not,
for any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as the Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration. Without
limiting the generality of the foregoing, in any such event the Pledgee, in its
sole and absolute discretion (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale; and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion, in
good faith deems reasonable under the circumstances,
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notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as defined
below), this Agreement and the security interest created hereby shall terminate
(provided that all indemnities set forth herein including, without limitation,
in Section 11 hereof shall survive any such termination), and the Pledgee, at
the request and expense of any Pledgor, will execute and deliver to such Pledgor
a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Pledgor (without recourse and without any representation or warranty) such
of the Collateral as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement, together with any moneys at the time held
by the Pledgee or any of its sub-agents hereunder. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitments and all
Interest Rate Protection Agreements or Other Hedging Agreements have been
terminated, no Note under the Credit Agreement is outstanding (and all Loans
have been repaid in full), all Letters of Credit have been terminated and all
Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is sold (except to
Holdings or any of its Subsidiaries) in connection with a sale permitted by
Section 9.02 of the Credit Agreement or otherwise released pursuant to the
Credit Agreement or at the direction of the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement) and the proceeds of such.
sale or sales or from such release are applied in accordance with the provisions
of Section 4.02 of the Credit Agreement, to the extent required to be so
applied, the Pledgee, at the request and expense of any Pledgor, will duly
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral (and releases therefor) as is
then being (or has been) so sold or released and has not theretofore been
released pursuant to this Agreement.
(c) At any time that a Pledgor desires that the Pledgee assign,
transfer and deliver Collateral (and releases therefor) as provided in Section
18(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by a
principal executive officer of such Pledgor stating that the release of the
respective Collateral is permitted pursuant to such Section 18(a) or (b).
(d) The Pledgee shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance with
this Section 18.
19. NOTICES, ETC. All notices and communications hereunder shall be
sent or delivered by mail, telex, telecopy or overnight courier service and all
such notices and communications shall, when mailed, telexed, telecopied or sent
by overnight courier, be effective when deposited in the mails or delivered to
the overnight courier, prepaid and
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properly addressed for delivery on such or the next Business Day, or sent by
telex or telecopier, except that notices and communications to the Pledgee shall
not be effective until received by the Pledgee. All notices and other
communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at the address set forth opposite its
signature below;
(b) if to the Pledgee, at:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Mr. David G. Dixon
Telephone No.: (312) 732-8142
Facsimile No.: (312) 732-3885
(c) if to any Bank Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the
Credit Agreement or (y) at such address as such Bank Creditor shall
have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Pledgors and the
Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor directly affected thereby and the
Pledgee (with the written consent of either (x) the Required Banks (or all of
the Banks, to the extent required by Section 13.12 of the Credit Agreement) at
all times prior to the time on which all Credit Document Obligations have been
paid in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full); provided, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall also require the written consent of the Requisite Creditors (as defined
below) of such affected Class. For the purpose of this Agreement, the term
"Class" shall mean each class of Secured Creditors, i.e., whether (i) the Bank
Creditors as holders of the Credit Document Obligations or (ii) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of
<PAGE> 305
EXHIBIT G
Page 15
(i) with respect to the Credit Document Obligations, the Required Banks and (ii)
with respect to the Other Obligations, the holders of 51% of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of and be enforceable by each of the parties hereto and its successors
and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The headings in this Agreement
are for purposes of reference only and shall not limit or define the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument. In
the event that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto.
22. RECOURSE. This Agreement is made with full recourse to the Pledgors
and pursuant to and upon all the representations, warranties, covenants and
agreements on the part of the Pledgors contained herein and in the other Secured
Debt Agreements and otherwise in writing in connection herewith or therewith.
23. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of Holdings that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee.
24. AMENDMENT AND RESTATEMENT. Upon the execution and delivery of this
Agreement by the parties hereto., the Original Pledge Agreement shall be amended
and restated in its entirety by this Agreement, effective as of the date hereof,
with all rights, obligations and security interests created under or granted
pursuant to the Original Pledge Agreement continuing from the date thereof.
* * *
<PAGE> 306
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Addresses:
- ----------
BLADE ACQUISITION CORP..,
1001 Pennsylvania Avenue., N.W. as a Pledgor
Suite 200 South
Washington, D.C. 20004
Attention: Mr. Allan M. Holt
Telephone No.: (202) 347-2626
Facsimile No.: (202) 347-9250 By______________________________
Title:
HOWMET HOLDINGS CORPORATION,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
HOWMET CORPORATION,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
<PAGE> 307
HOWMET MANAGEMENT SERVICES,
INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
HOWMET THERMATECH CANADA, INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
HOWMET-TEMPCRAFT, INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
HOWMET TRANSPORT SERVICES, INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
<PAGE> 308
HOWMET SALES, INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
HOWMET REFURBISHMENT, INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
TURBINE COMPONENTS CORPORATION,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
HOWMET CERCAST (USA), INC.,
475 Steamboat Road as a Pledgor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By______________________________
Title:
<PAGE> 309
THE FIRST NATIONAL BANK OF
One First National Plaza CHICAGO, as Pledgee
Chicago, Illinois 60670
Attention: Mr. David Dixon
Telephone No.: (312) 732-8142
Facsimile No.: (312) 732-3885 By______________________________
Title:
<PAGE> 310
ANNEX A
to
Pledge Agreement
----------------
LIST OF STOCK
-------------
I. Blade Acquisition Corp.
Percentage of
Outstanding
Name of Issuing Number of Shares of Voting
Corporation Type of Shares Voting Shares Capital Stock
- ----------- -------------- ------------- -------------
Howmet Holdings(1) Common par 10 100%
Corporation value $1 per
(f/k/a Pechiney share
Corporation)
II. Howmet Holdings Corporation
Percentage of
Outstanding
Name of Issuing Number of Shares of Voting
Corporation Type of Shares Voting Shares Capital Stock
- ----------- -------------- ------------- -------------
a) Howmet Corporation Common par 10 100%
value $1.00 per
share
b) Howmet Insurance(2) Common par 100,000 100%
Company, Inc. value $1.00 per
share
- ----------
(1) New shares required, shares pledged to FNBC are those of Pechiney
Corporation.
(2) Issued to Pechiney Corporation currently, and stock power is granted by
Pechiney.
<PAGE> 311
ANNEX A
Page 2
III. Howmet Corporation
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Capital Stock
- ----------- -------------- ------------- -------------
a) Howmet Foreign Common par 10 100%*
Sales Corp. value $1.00 per
share
b) Howmet Limited Common par 1,000,002 99.99%*
value (pound)1.00
per share
c) Howmet Management Common par 10 100%
Services, Inc. value $1.00 per
share
d) Howmet Common par 10 100%
Refurbishment, Inc. value $1.00 per
share
e) Howmet Sales, Inc. Common par 10 100%
value $1.00 per
share
f) Howmet Thermatech Common par 10 100%
Canada, Inc. value $1.00 per
share
g) Howmet Transport Common par 10 100%
Services, Inc. value $1.00 per
share
h) Howmet-Tempcraft, Common non- 83 100%
Inc. par
- ----------
* Pledgee is limited to 65% of the common stock.
<PAGE> 312
ANNEX A
Page 3
i) Howmet S.A. Common par 2,903,281(3) 99.99%(4)
value Fr 100.00
per share
j) Blade Receivables Common 1,000 100%
Corporation
k) Howmet Cercast Common per 10 100%
(USA), Inc. value $1.00 per
share
- ----------
(3) Includes 70 shares issued to Board of Directors.
(4) Pledgee is limited to 65% of the common stock. Pursuant to French law, no
physical stock certificates will be delivered.
<PAGE> 313
ANNEX A
Page 4
IV. Howmet Management Services. Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
V. Howmet Thermatech Canada. Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
VI. Howmet-Tempcraft, Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
<PAGE> 314
ANNEX A
Page 5
VII. Howmet Transport Services. Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
VIII. Howmet Sales. Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
IX. Howmet Refurbishment, Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
Turbine Components Class A 1,572 100%
Corporation common par
value $10.00
per share
<PAGE> 315
ANNEX A
Page 6
Turbine Components Class B 7,388 100%
Corporation common par
value $1.00 per
share
X. Turbine Components Corporation
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
XI. Howmet Cercast (USA), Inc.
Percentage of
Outstanding
Name of Issuing Number of Voting Shares of
Corporation Type of Shares Voting Shares Voting Capital Stock
- ----------- -------------- ------------- --------------------
None
<PAGE> 316
ANNEX B
to
Pledge Agreement
----------------
LIST OF NOTES
-------------
I. Blade Acquisition Corp.
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
II. Howmet Holdings Corporation
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
III. Howmet Corporation
<TABLE>
<CAPTION>
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
<S> <C> <C>
Howmet Holdings Corporation(1) $598,500,000 2,010
(f/k/a Pechiney Corporation)
</TABLE>
IV. Howmet Management Services. Inc
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
(1) Note pledged to FNBC is executed by Howmet Holdings Acquisition Corp. in
favor of Howmet Holdings Acquisition Corp. and assignment of note is by
Howmet Acquisition Corp. to FNBC.
<PAGE> 317
ANNEX B
Page 2
V. Howinet Thermatech Canada, Inc.
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
VI. Howmet-Tempcraft, Inc.
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
VII. Howmet Transport Services. Inc.
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
VIII. Howmet Sales, Inc.
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
<PAGE> 318
ANNEX B
Page 3
IX. Howmet Refurbishment. Inc.
<TABLE>
<CAPTION>
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
<S> <C> <C>
Turbine Components Corporation $200,000 None
Turbine Components Corporation $250,000 None
Turbine Components Corporation $350,000 None
</TABLE>
X. Turbine Components Corporation
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
XI. Howmet Cercast (USA), Inc.
Principal Amount Maturity Date
Obligor (if any) (if any)
- ------- -------- --------
None
<PAGE> 319
EXHIBIT H
---------
AMENDED AND RESTATED SECURITY AGREEMENT
among
BLADE ACQUISITION CORP.,
HOWMET HOLDINGS CORPORATION,
HOWMET CORPORATION,
CERTAIN SUBSIDIARIES AND AFFILIATES OF
HOWMET CORPORATION,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Collateral Agent
Dated as of December 13, 1995
and
Amended and Restated as of December 5, 1996
<PAGE> 320
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTERESTS ............................................. 2
1.1. Grant of Security Interests ................................ 2
1.2. Power of Attorney .......................................... 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES
AND COVENANTS ................................................. 3
2.1. Necessary Filings .......................................... 3
2.2. No Liens ................................................... 4
2.3. Other Financing Statements ................................. 4
2.4. Chief Executive Office; Records ............................ 4
2.5. Location of Inventory and Equipment ........................ 5
2.6. Recourse ................................................... 5
2.7. Trade Names; Change of Name ................................ 5
ARTICLE III SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS; ACQUISITION LETTERS
OF CREDIT .................................................... 6
3.1. Additional Representations and Warranties .................. 6
3.2. Maintenance of Records ..................................... 6
3.3. Direction to Account Debtors; Contracting Parties; etc ..... 7
3.4. Modification of Terms; etc ................................. 7
3.5. Collection ................................................. 8
3.6. Instruments ................................................ 8
3.7. Acquisition Letters of Credit .............................. 8
3.8. Installment Notes Trust .................................... 9
3.9. Further Actions ............................................ 10
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS ...................... 10
4.1. Additional Representations and Warranties .................. 10
4.2. Licenses and Assignments ................................... 10
4.3. Infringements .............................................. 10
4.4. Preservation of Marks ...................................... 11
4.5. Maintenance of Registration ................................ 11
4.6. Future Registered Marks .................................... 11
4.7. Remedies ................................................... 11
(i)
<PAGE> 321
Page
----
ARTICLE V SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS .......................... 12
5.1. Additional Representations and Warranties .................. 12
5.2. Licenses and Assignments ................................... 12
5.3. Infringements .............................................. 12
5.4. Maintenance of Patents or Copyrights ....................... 13
5.5. Prosecution of Patent or Copyright Application ............. 13
5.6. Other Patents or Copyrights ................................ 13
5.7. Remedies ................................................... 13
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL .......................... 14
6.1. Protection of Collateral Agent's Security .................. 14
6.2. Warehouse Receipts Non-negotiable .......................... 14
6.3. Further Actions ............................................ 14
6.4. Financing Statements ....................................... 14
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT
OF DEFAULT ................................................... 15
7.1. Remedies; Obtaining the Collateral Upon Default ................ 15
7.2. Remedies; Disposition of the Collateral ........................ 16
7.3. Waiver of Claims ............................................... 17
7.4. Application of Proceeds ........................................ 18
7.5. Remedies Cumulative ............................................ 20
7.6. Discontinuance of Proceedings .................................. 21
ARTICLE VIII INDEMNITY ................................................... 21
8.1. Indemnity .................................................. 21
8.2. Indemnity Obligations Secured by Collateral; Survival ...... 23
ARTICLE IX DEFINITIONS ................................................... 23
ARTICLE X MISCELLANEOUS .................................................. 29
10.1. Notices ................................................... 29
10.2. Waiver; Amendment ......................................... 29
10.3. Obligations Absolute ...................................... 30
10.4. Successors and Assigns .................................... 30
10.5. Headings Descriptive ...................................... 30
10.6. Governing Law ............................................. 31
10.7. Assignor's Duties ......................................... 31
10.8. Termination; Release ...................................... 31
10.9. Counterparts .............................................. 32
(ii)
<PAGE> 322
Page
----
10.10. Severability ............................................. 32
10.11. The Collateral Agent ..................................... 32
10.12. Benefit of: Agreement .................................... 32
10.13. Additional Assignors ..................................... 32
10.14. Amendment and Restatement ................................ 33
ANNEX A Schedule of Chief Executive Offices and
Other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Schedule of Marks
ANNEX E Schedule of Patents and Applications
ANNEX F Schedule of Copyrights and Applications
ANNEX G Assignment of Security Interest in United
States Trademarks and Patents
ANNEX H Assignment of Security Interest in
United States Copyrights
ANNEX I Schedule of Acquisition Letters of Credit
(iii)
<PAGE> 323
EXHIBIT H
---------
AMENDED AND RESTATED SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 13, 1995 and amended and
restated as of December 5, 1996, among each of the undersigned (each an
"Assignor" and, together with any other entity that becomes a party hereto
pursuant to Section 10.13 hereof, the "Assignors") and The First National Bank
of Chicago, as Collateral Agent (the "Collateral Agent"), for the benefit of the
Secured Creditors (as defined below). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Blade Acquisition Corp., Howmet Holdings Corporation (f/k/a
Pechiney Corporation), Howmet Corporation (the "Borrower"), various lenders from
time to time party thereto (the "Banks"), Bankers Trust Company, Citicorp USA,
Inc. and The First National Bank of Chicago, as Managing Agents (the "Managing
Agents"), Bankers Trust Company, as Syndication Agent (the "Syndication Agent"),
Citicorp USA, Inc., as Documentation Agent (the "Documentation Agent") and The
First National Bank of Chicago, as Administrative Agent (together with any
successor administrative agent, the "Administrative Agent"), have entered into a
Credit Agreement, dated as of December 13, 1995 and amended and restated as of
the date hereof (as amended, modified or supplemented from time to time, the
"Credit Agreement"), providing for the making of Loans and the issuance of, and
participation in, Letters of Credit, as contemplated therein (as used herein,
the term "Credit Agreement" means the Credit Agreement described above in this
paragraph as the same may be amended, modified, extended, renewed, replaced,
restated or supplemented from time to time, and including any agreement
extending the maturity of, or restructuring the Indebtedness under such
agreement or any successor agreement) (the Banks, the Managing Agents, the
Syndication Agent, the Documentation Agent, the Administrative Agent and the
Collateral Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Banks or any affiliate thereof (each such Bank or affiliate, even if
the respective Bank subsequently ceases to be a Bank under the Credit Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
if any, collectively, the "Other Creditors," and together with the Bank
Creditors, the "Secured Creditors");
<PAGE> 324
EXHIBIT H
Page 2
WHEREAS, pursuant to the Parent Guaranty, each Parent Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of all Guaranteed Obligations as described therein;
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
WHEREAS, the Assignors have heretofore entered into a Security
Agreement, dated as of December 13, 1995 (as amended, modified or supplemented
prior to the date hereof, the "Original Security Agreement");
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of Letters of Credit under the Credit Agreement that each Assignor
shall have executed and delivered this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans and the issuance of Letters of Credit under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging Agreements
and, accordingly, each Assignor desires to execute this Agreement to (i) satisfy
the conditions described in the preceding paragraph and (ii) amend and restate
the Original Security Agreement;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Assignor, the receipt and sufficiency of which are hereby
acknowledged, each Assignor hereby makes the following representations and
warranties to the Collateral Agent for the benefit of the Secured Creditors and
hereby covenants and agrees with the Collateral Agent for the benefit of the
Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority (subject to any
Permitted Liens) in all of the right, title and interest of such Assignor in, to
and under all of the following, whether now existing or hereafter from time to
time acquired: (i) each and every Receivable, (ii) all Contracts, together with
all Contract Rights arising thereunder, (iii) all Inventory, (iv) all Equipment,
(v) all Marks,
<PAGE> 325
EXHIBIT H
Page 3
together with the registrations and right to all renewals thereof, and the
goodwill of the business of such Assignor symbolized by the Marks, (vi) all
Patents and Copyrights, and all reissues, renewals or extensions thereof, (vii)
all computer programs of such Assignor and all intellectual property rights
therein and all other proprietary information of such Assignor, including, but
not limited to, trade secrets, (viii) all Acquisition Letters of Credit and all
rights of such Assignor with respect thereto, (ix) all rights of such Assignor
with respect to the Installment Notes Trust and under the Installment Notes
Trust Documents, (x) all other Goods, General Intangibles, Chattel Paper,
Documents, Instruments and other assets of such Assignor, (xi) the Cash
Collateral Account and all moneys, securities and Instruments deposited or
required to be deposited in such Cash Collateral Account and (xii) all Proceeds
and products of any and all of the foregoing (all of the above, collectively,
the "Collateral"). Notwithstanding the foregoing, the term "Collateral" shall
not include any Receivables Facility Asset that is transferred to the
Receivables Subsidiary pursuant to the Receivables Documents.
(b) The security interest of the Collateral Agent under this Agreement
extends to all Collateral of the kind which is the subject of this Agreement
which any Assignor may acquire at any time during the continuation of this
Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all moneys and claims for moneys due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may reasonably deem to be necessary or advisable to protect the
interests of the Secured Creditors, which appointment as attorney is coupled
with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been accomplished or will be accomplished within 10 Business
Days from the date hereof and upon such filings,
<PAGE> 326
EXHIBIT H
Page 4
registrations or recordations, the security interest granted to the Collateral
Agent pursuant to this Agreement in and to the Collateral creates a perfected
security interest therein prior to the rights of all other Persons therein and
subject to no other Liens (other than Permitted Liens) and is entitled to all
the rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction to perfected security
interests, in each case to the extent that the Collateral consists of the type
of property in which a security interest may be perfected by filing a financing
statement under the Uniform Commercial Code as enacted in any relevant
jurisdiction or in the United States Patent and Trademark Office or the United
States Copyright Office.
2.2. No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any other Person (other than Permitted
Liens), and such Assignor shall defend the Collateral to the extent of its
rights therein against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than in respect of Permitted Liens), and so long
as the Total Commitment has not been terminated or any Letter of Credit or Note
remains outstanding or any of the Obligations remain unpaid or any Interest Rate
Protection Agreement or Other Hedging Agreement remains in effect or any
Obligations are owed with respect thereto, such Assignor will not execute or
authorize to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed or to
be filed in respect of and covering the security interests granted hereby by
such Assignor or as permitted by the Credit Agreement.
2.4. Chief Executive Office; Records. The chief executive office of
such Assignor is located, as of the date hereof, at the address or addresses
indicated on Annex A hereto for such Assignor. Such Assignor Will not move its
chief executive office except to such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.4. All
documents evidencing all Receivables and Contract Rights and Trade Secret Rights
of such Assignor and the only original books of account and records of such
Assignor relating thereto are, and will continue to be, kept at such chief
executive office, at one or more of the other record locations set forth on
Annex A hereto or at such new locations as such Assignor may establish in
accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above or such new
location
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established in accordance with the last sentence of this Section 2.4. No
Assignor shall establish new locations for such offices until (i) it shall have
given to the Collateral Agent not less than 15 days' prior written notice of its
intention to do so, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new location, it shall have taken all action,
reasonably satisfactory to the Collateral Agent, to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect and (iii) the
Collateral Agent shall have received evidence that all other actions (including,
without limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and maintain
the perfection and priority of) the security interest granted hereby (subject to
Permitted Liens).
2.5. Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof by each Assignor is located at one of the locations
shown on Annex B hereto for such Assignor. Each Assignor agrees that all
Inventory and Equipment now held or subsequently acquired by it shall be kept at
(or shall be in transport to) any one of the locations shown on Annex B hereto,
or such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.5. Any Assignor may establish a new location for
Inventory and Equipment if (i) it shall have given to the Collateral Agent not
less than 15 days' prior written notice of its intention so to do, clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may reasonably request, (ii) with respect to
such new location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect and (iii) the Collateral Agent shall have received
evidence that all other actions (including, without limitation, the payment of
all filing fees and taxes, if any, payable in connection with such filings) have
been taken, in order to perfect (and maintain the perfection and priority of)
the security interest granted hereby (subject to Permitted Liens).
2.6. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Credit Documents, in the Interest Rate Protection Agreements or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex C
hereto for such Assignor. No Assignor shall change its legal name or assume or
operate in any jurisdiction under any
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trade, fictitious or other name except those names listed on Annex C hereto for
such Assignor and new names established in accordance with the last sentence of
this Section 2.7. No Assignor shall assume or operate in any jurisdiction under
any new trade, fictitious or other name until (i) it shall have given to the
Collateral Agent not less than 15 days' prior written notice of its intention so
to do, clearly describing such new name and the jurisdictions in which such new
name shall be used and providing such other information in connection therewith
as the Collateral Agent may request, (ii) with respect to such new name, it
shall have taken all action to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect and (iii) the Collateral Agent shall have
received evidence that all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection and
priority of) the security interest granted hereby (subject to Permitted Liens).
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS;
ACQUISITION LETTERS OF CREDIT
3.1. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that each such Receivable, and all records, papers and
documents delivered to the Collateral Agent relating thereto (if any) are what
they purport to be, and that all papers and documents (if any) relating thereto
(i) will represent the genuine, legal, valid and binding obligation of the
account debtor evidencing indebtedness unpaid and owed by the respective account
debtor arising out of the performance of labor or services or the sale or lease
and delivery of the merchandise listed therein, or both, (ii) will be the only
original writings evidencing and embodying such obligation of the account debtor
named therein (other than copies created for general accounting purposes), (iii)
will evidence true and valid obligations, enforceable in accordance with their
respective terms and (iv) will be in compliance and will conform in all material
respects with all applicable federal, state and local laws and applicable laws
of any relevant foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense satisfactory and complete records of its Receivables
and Contracts, including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection during
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such Assignor's normal business hours, at such Assignor's own cost and expense,
at any and all reasonable times and intervals and to such extent as the
Collateral Agent may request. Upon the occurrence and during the continuance of
an Event of Default, at the reasonable request of the Collateral Agent, such
Assignor shall, at its own cost and expense, deliver all tangible evidence of
its Receivables and Contract Rights (including, without limitation, all
documents evidencing the Receivables and all Contracts) and such books and
records to the Collateral Agent or to its representatives (copies of which
evidence and books and records may be retained by such Assignor) at a reasonable
place designated by the Collateral Agent. Upon the occurrence and during the
continuance of an Event of Default, if the Collateral Agent so directs, such
Assignor shall legend, in form and manner reasonably satisfactory to the
Collateral Agent, its Receivables and the Contracts, as well as books, records
and documents (if any) of such Assignor evidencing or pertaining to such
Receivables and Contracts with an appropriate reference to the fact that such
Receivables and Contracts have been assigned to the Collateral Agent and that
the Collateral Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon the
occurrence and during the continuance of an Event of Default, if the Collateral
Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on
account of the Receivables and Contracts to be made directly to the Cash
Collateral Account, (y) that the Collateral Agent may, at its option, directly
notify the obligors with respect to any Receivables and/or under any Contracts
to make payments with respect thereto as provided in the preceding clause (x)
and (z) that the Collateral Agent may enforce collection of any such Receivables
and Contracts and may adjust, settle or compromise the amount of payment
thereof, in the same manner and to the same extent as such Assignor. Without
notice to or assent by any Assignor, the Collateral Agent may apply any or all
amounts then in, or thereafter deposited in, the Cash Collateral Account in the
manner provided in Section 7.4 of this Agreement. The reasonable costs and
expenses (including attorneys' fees) of collection, whether incurred by an
Assignor or the Collateral Agent, shall be borne by the relevant Assignor.
3.4. Modification of Terms; etc. Except in the ordinary course of
business and except as may be permitted by and in accordance with the provisions
of the Credit Agreement, no Assignor shall rescind or cancel any indebtedness
evidenced by any Receivable or under any Contract, or modify any term thereof or
make any adjustment with respect thereto, or extend or renew the same, or
compromise or settle any dispute, claim, suit or legal proceeding relating
thereto, or sell any Receivable or Contract, or interest therein, without the
prior written consent of the Collateral Agent. Each Assignor will use its best
efforts to duly fulfill all obligations on its part to be fulfilled under or in
connection with the Receivables and Contracts and will do nothing to impair the
rights of the Collateral Agent in the Receivables or Contracts.
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3.5. Collection. Each Assignor shall cause to be collected from the
account debtor named in each of its Receivables or obligor under any Contract,
as and when due (including, without limitation, amounts which are delinquent,
such amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Receivable or Contract, and apply promptly upon receipt thereof all such amounts
as are so collected to the outstanding balance of such Receivable or under such
Contract, except that, prior to the occurrence of an Event of Default, any
Assignor may allow in the ordinary course of business as adjustments to amounts
owing under its Receivables and Contracts (i) an extension or renewal of the
time or times of payment, or settlement for less than the total unpaid balance,
which such Assignor finds appropriate in accordance with reasonable business
judgment and (ii) a refund or credit due as a result of returned or damaged
merchandise or improperly performed services or for other reasons which such
Assignor finds appropriate in accordance with reasonable business judgment. The
reasonable costs and expenses (including, without limitation, attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any Instrument
(other than Instruments not required to be delivered to the Pledgee under
Section 2 of the Pledge Agreement) constituting Collateral which is in the
principal amount in excess of $25,000 individually or $100,000 in the aggregate,
such Assignor will within 10 Business Days notify the Collateral Agent thereof,
and upon request by the Collateral Agent will promptly deliver such Instrument
to the Collateral Agent appropriately endorsed to the order of the Collateral
Agent as further security hereunder.
3.7. Acquisition Letters of Credit. (a) Annex I hereto is a true and
complete list, as of the Restatement Effective Date, of each Acquisition Letter
of Credit. On the Restatement Effective Date, true and correct photocopies of
each Acquisition Letter of Credit issued on or prior to the Restatement
Effective Date shall have been delivered to the Collateral Agent, together with
(for each Acquisition Letter of Credit), an appropriately completed Transfer
Instruction (in the form of Exhibit B to the respective Acquisition Letter of
Credit) executed by the respective Assignor which is a beneficiary under such
Acquisition Letter of Credit, whereby such Assignor designates the Collateral
Agent as a transferee in accordance with the provisions of the respective
Acquisition Letter of Credit (with any such executed Transfer Instruction,
together with any such executed Transfer Instruction executed and delivered
pursuant to following clause (b) being herein called a "Transfer Instruction").
(b) If at any time any additional Acquisition Letter of Credit is
issued, or any replacement letter of credit is issued for an Acquisition Letter
of Credit or any substitute letter of credit is issued therefor, then all
actions shall be taken with respect thereto, in any event to be completed within
five Business Days after the issuance of the
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respective additional, replacement or substitute letter of credit, as would have
been required to be taken pursuant to preceding clause (a) if such letter of
credit bad been issued on the Restatement Effective Date. If at any time the
Collateral Agent requests same, the respective Assignor shall also deliver to
the Collateral Agent any additional or modified Transfer Instructions, executed
by the Assignor which is a beneficiary under the respective Acquisition Letter
of Credit, as may be reasonably requested by the Collateral Agent from time to
time.
(c) Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent is authorized to (x) deliver to the respective
issuer(s) Transfer Instructions with respect to any or all of the Acquisition
Letters of Credit, whereby the Collateral Agent shall become a direct
beneficiary under such Acquisition Letter of Credit or Acquisition Letters of
Credit and/or (y) directly make any drawing permitted to be made by the
respective Assignor which is a beneficiary under any Acquisition Letter of
Credit, in each case in accordance with the terms and conditions thereof. To the
extent any drawing under any Acquisition Letter of Credit is in respect of
amounts previously paid by the respective Assignor or on its behalf, then, and
so long as any Event of Default has occurred and is continuing, the Collateral
Agent shall be entitled to directly receive the proceeds of any drawing which
would otherwise be paid to any Assignor, and shall hold all cash received in
connection therewith as Collateral hereunder. The proceeds of any other drawings
under any Acquisition Letter of Credit shall be applied in accordance with the
requirements of the respective Acquisition Letter of Credit. Without limiting
the right of the Collateral Agent to take any of the foregoing actions, upon the
occurrence and during the continuance of any Event of Default, upon the request
of the Collateral Agent, each Assignor shall deliver to the Collateral Agent any
original Acquisition Letters of Credit then held by such Assignor.
(d) To the extent proceeds of any drawing under any Acquisition Letter
of Credit are deposited into any trust or escrow arrangement other than the
Installment Notes Trust, the Assignor shall take such, action as is reasonably
requested by the Collateral Agent to create, establish and perfect a security
interest in such trust or escrow arrangement.
3.8. Installment Notes Trust. At any time when any Event of Default has
occurred and is continuing, the Collateral Agent shall be entitled to directly
receive (and the respective Assignor shall direct the trustee thereunder to make
all payments owing to any Assignor pursuant to the Installment Notes Trust
directly to the Collateral Agent) any payments owing to any Assignor pursuant to
the terms of the Installment Notes Trust, in each case to the extent such
payments constitute reimbursement for amounts previously paid by any Assignor.
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3.9. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments, Acquisition Letters
of Credit and other property or rights covered by the security interest hereby
granted, as the Collateral Agent may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of or
otherwise has the right to use the Marks listed in Annex D hereto for such
Assignor and that, to the best of each Assignor's knowledge, said listed Marks
include all United States marks and applications for registrations of United
States marks in the United States Patent and Trademark Office that such Assignor
owns as of the date hereof and that said registrations are valid, subsisting and
have not been cancelled. Each Assignor further warrants that it is aware of no
third party claim that any aspect of such Assignor's present or contemplated
business operations, infringes or will infringe any trademark, service mark or
trade name. Each Assignor represents and warrants that it is the true and lawful
owner of or otherwise has the right to use all U.S. trademark registrations and
applications listed in Annex D hereto and that said registrations are valid,
subsisting, have not been cancelled and that such Assignor is not aware of any
third-party claim that any of said registrations is invalid or unenforceable, or
is not aware that there is any reason that any of said registrations is invalid
or unenforceable, or is not aware that there is any reason that any of said
applications will not pass to registration. Each Assignor hereby grants to the
Collateral Agent an absolute power of attorney to sign, upon the occurrence and
during the continuance of an Event of Default, any document which may be
required by the United States Patent and Trademark Office in order to effect an
absolute assignment of all right, title and interest in each Mark, and record
the same.
4.2. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Significant Mark absent prior written approval of
the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
Significant Mark, or with respect to any party claiming that
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such Assignor's use of any Significant Mark violates in any material respect any
property right of that party. Each Assignor further agrees, unless otherwise
agreed by the Collateral Agent, to prosecute any Person infringing any
Significant Mark owned by such Assignor in accordance with reasonable business
practices.
4.4. Preservation of Marks. Each Assignor agrees to use its Significant
Marks in interstate commerce during thee time in which this Agreement is in
effect, sufficiently to preserve such Marks as trademarks or service marks under
the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required to maintain trademark
registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its registered Significant Marks, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent.
4.6. Future Registered Marks. If any Mark registration issues hereafter
to any Assignor as a result of any application now or hereafter pending before
the United States Patent and Trademark Office, within 30 days of receipt of such
certificate, such Assignor shall deliver to the Collateral Agent a copy of such
certificate, and an assignment for security in such Mark, to the Collateral
Agent and at the expense of such Assignor, confirming the assignment for
security in such Mark to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof.
4.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions; (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and the goodwill of the
business associated therewith, together with all trademark rights and rights of
protection to the same, vested in the Collateral Agent for the benefit of the
Secured Creditors, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged
and notarized and record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; (iii)
in connection with the exercise of any of the other remedies provided for in
this Agreement or any other Security Document, direct such Assignor to refrain,
in which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and, if requested by the Collateral Agent,
change such Assignor's corporate
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name to eliminate therefrom any use of any Mark; and (iv) direct such Assignor
to execute such other and further documents that the Collateral Agent may
reasonably request to further confirm the foregoing and to transfer ownership of
the Marks and registrations and any pending trademark application in the United
States Patent and Trademark Office to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner or licensee of all
rights in (i) all United States trade secrets and proprietary information
necessary to operate the business of such Assignor (the "Trade Secret Rights"),
(ii) the Patents listed in Annex E hereto for such Assignor and that said
Patents include, to the best of each Assignor's knowledge, all United States
patents and applications for United States patents that such Assignor owns as of
the date hereof and (iii) the Copyrights listed in Annex F hereto for such
Assignor and that said Copyrights constitute, to the best of each Assignor's
knowledge, all the United States copyrights registered with the United States
Copyright Office and applications to United States copyrights that such Assignor
now owns. Each Assignor further warrants that it has no knowledge of any third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any patent or any copyright or such
Assignor has misappropriated any trade secret or proprietary information. Each
Assignor hereby grants to the Collateral Agent, an absolute power of attorney to
sign, upon the occurrence and during the continuance of any Event of Default,
any document which may be required by the United States Patent and Trademark
Office or United States Copyright Office, as the case may be, in order to effect
an absolute assignment of all right, title and interest in each Patent and
Copyright, and to record the same.
5.2. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement, each Assignor hereby agrees not to divest itself of any right
under any Significant Patent or Significant Copyright absent prior written
approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe in any Significant
Patent or Significant Copyright or to any claim that the practice of any
Significant Patent or the use of any Significant Copyright violates any property
right of a third party, or with respect to any misappropriation of any Trade
Secret Right or any claim that practice of any Trade Secret Right violates any
property right of
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a third party. Each Assignor further agrees, absent direction of the Collateral
Agent to the contrary, diligently to prosecute any Person infringing any
Significant Patent or Significant Copyright or any Person misappropriating any
Trade Secret Right to the extent that such Assignor reasonably believes that
such infringement is material to its business.
5.4. Maintenance of Patents or Copyrights. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required to
maintain in force rights under each Significant Patent or Significant Copyright,
absent prior written consent of the Collateral Agent.
5.5. Prosecution of Patent or Copyright Application. At its own
expense, each Assignor shall diligently prosecute all applications for (i)
Patents listed in Annex E hereto and (ii) Copyrights listed in Annex F hereto,
in each case for such Assignor.
5.6. Other Patents or Copyrights. Within 30 days of the acquisition or
issuance of a Patent or Copyright or of filing of an application for a Patent or
Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of
said certificate or registration of, or application for, said Patent or
Copyright, as the case may be, with an assignment for security as to such Patent
or Copyright, as the case may be, to the Collateral Agent and at the expense of
such Assignor, confirming the assignment for security, the form of such
assignment for security to be substantially the same as the form attached
hereto.
5.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions; (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) in connection with the exercise of
any of the other remedies provided for in this Agreement or any other Security
Document, take and practice or sell the Patents and Copyrights; (iii) in
connection with the exercise of any of the other remedies provided for in this
Agreement or any other Security Document, direct such Assignor to refrain, in
which event such Assignor shall refrain, from practicing the Patents and
Copyrights directly or indirectly; and (iv) direct such Assignor to execute such
other and further documents as the Collateral Agent may request further to
confirm the foregoing and to transfer ownership of the Patents and Copyrights to
the Collateral Agent for the benefit of the Secured Creditors.
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ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Credit Agreement; all policies or certificates with
respect to such insurance (and any other insurance maintained by such Assignor)
(i) shall be endorsed to the Collateral Agent's satisfaction for the benefit of
the Collateral Agent (including, without limitation, by naming the Collateral
Agent as additional insured or loss payee), (ii) shall state that such insurance
policies shall not bee cancelled or revised without at least 30 days' prior
written notice thereof by the insurer to the Collateral Agent and (iii) shall
provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured Creditors. The
Collateral Agent shall, at the time such proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such Assignor shall request that such
warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as
such term is used in Section 7-104 of the Uniform Commercial Code as in effect
in any relevant jurisdiction or under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
reasonably deems appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and deliver
to the Collateral Agent such financing statements, in form reasonably acceptable
to the
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Collateral Agent, as the Collateral Agent may from time to time request or as
are necessary or desirable in the opinion of the Collateral Agent to establish
and maintain a valid, enforceable and first priority perfected security interest
in the Collateral as provided herein and in the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses relating to its Collateral. Each Assignor hereby authorizes the
Collateral Agent to file any such financing statements without the signature of
such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and
may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of such Assignor in respect of such Collateral;
(iii) withdraw all moneys, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof,
or direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;
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(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent that is reasonable under the circumstances, in which event such
Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place
or places so designated by the Collateral Agent and there
delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2
hereof;
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition;
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents and Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine; and
(vii) take any of the actions specified in Sections 3.7(c)
and/or 3.8;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case maybe, for the
benefit of the Secured Creditors upon the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the neces-
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sity of gathering at the place of sale the property to be sold, and in general
in such manner, at such time or times, at such place or places and on such terms
as the Collateral Agent may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the Collateral
may be sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Collateral Agent or after any overhaul or repair at
the expense of the relevant Assignor which the Collateral Agent shall determine
to be commercially reasonable. Any such disposition which shall be a private
sale or other private proceedings permitted by such requirements shall be made
upon not less than 10 days' written notice to the relevant Assignor specifying
the time at which such disposition is to be made and the intended sale price or
other consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of the relevant Assignor or any nominee of
such Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' written notice to
the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction not less than 10 days prior thereto in two newspapers
in general circulation in the City of New York. To the extent permitted by any
such requirement of law, the Collateral Agent and the other Secured Creditors
may bid for and become the purchaser of the Collateral or any item thereof,
offered for sale in a commercially reasonable manner in accordance with this
Section without accountability to the relevant Assignor. If, under mandatory
requirements of applicable law, the Collateral Agent shall be required to make
disposition of the Collateral within a period of time which does not permit the
giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law. Each Assignor agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales of all
or any portion of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at
such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLI- CABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, and each
Assignor hereby further waives, to the extent permitted by law:
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(i) all damages occasioned by the Collateral Agent's taking of
possession of any of the Collateral except any damages which are the
direct result of the Collateral Agent's gross negligence or willful
misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement, the Mortgages or
Additional Security Documents require proceeds of collateral under such Security
Documents to be applied in accordance with the provisions of this Agreement, the
Pledgee or Mortgagee under such other Security Document) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the
Collateral Agent of the type provided in clauses (iii) and (iv) of the
definition of Obligations;
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share (as defined below) of the
amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary
<PAGE> 341
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Page 19
Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e) hereof, with each Secured Creditor receiving an amount
equal to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro
Rata Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i), (ii) and (iii) and
following the termination of this Agreement pursuant to Section 10.8
hereof, to the relevant Assignor or, to the extent directed by such
Assignor or a court of competent jurisdiction, to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the
Credit Document Obligations, all principal of, and interest on, all Loans, all
Unpaid Drawings theretofore made (together with all interest accrued thereon),
and the aggregate Stated Amounts of all Letters of Credit issued under the
Credit Agreement, and all Fees and (ii) in the case of the Other Obligations,
all amounts due under the Interest Rate Protection Agreements or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
attorneys' fees) and similar obligations and liabilities) and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations (with the amount to be applied by any
Secured Creditor to its Primary Obligations to be applied (x) first, to interest
and (y) second, to any other Primary Obligations) and (ii) second, to their
Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata
Share of any distribution would result in overpayment to such Secured Creditor,
such excess amount shall instead be distributed in respect of the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of the other Secured
Creditors, with each Secured Creditor whose Primary Obligations or Secondary
Obligations, as the case may be, have not been paid in full to receive an amount
equal to such excess amount multiplied by a fraction the numerator of which is
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
such Secured Creditor and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
<PAGE> 342
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(d) Each of the Secured Creditors agrees and acknowledges that if the
Bank Creditors are to receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all outstanding Loans and Unpaid Drawings with respect to such
Letters of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Bank Creditors, as cash security for the repayment of
Obligations owing to the Bank Creditors as such. If any amounts are held as cash
security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit, and after the application of
all such cash security to the repayment of all Obligations owing to the Bank
Creditors after giving effect to the termination of all such Letters of Credit,
if there remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the Collateral Agent for distribution in accordance with
Section 7.4(a) hereof.
(e) Except as set forth in Section 7.4(c) hereof, all payments required
to be made to the Bank Creditors hereunder shall be made to the Administrative
Agent under the Credit Agreement for the account of the Bank Creditors and all.
payments required to be made to the Other Creditors hereunder shall be made
directly to the respective Other Creditor.
(f) For purposes of applying payments received in accordance with this
Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Obligations owed to the Bank Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Bank Creditor or an Other Creditor)
to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, and the Collateral
Agent, in acting hereunder, shall be entitled to assume that (x) no Secondary
Obligations are owing to any Bank Creditor or Other Creditor and (y) no Interest
Rate Protection Agreement or Other Hedging Agreement, or Other Obligations in
respect thereof, are in existence.
(g) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the sums referred to in
clause (a) of this Section 7.4 with respect to the relevant Assignor.
7.5. Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, the Interest
Rate Protection Agreements or Other Hedging Agreements, the other Credit
Documents or now or hereafter
<PAGE> 343
EXHIBIT H
Page 21
existing at law, in equity or by statute and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time or simultaneously and as often and in such order as may be
deemed expedient by the Collateral Agent. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of the exercise of one
shall not be deemed a waiver of the right to exercise any other or others. No
delay or omission of the Collateral Agent in the exercise of any such right,
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. No notice to or
demand on any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand. In the event that the Collateral Agent
shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Collateral Agent may recover
expenses, including attorneys' fees, and the amounts thereof shall be included
in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees, agents and
servants (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including attorneys' fees and expenses) (for the purposes of this Section 8.1
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any Interest Rate Protection
Agreement or Other Hedging Agreement, any other Credit Document or any other
document executed in connection herewith or therewith
<PAGE> 344
EXHIBIT H
Page 22
or in any other way connected with the administration of the transactions
contemplated hereby or thereby or the enforcement of any of the terms of, or the
preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant tb this Section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence or
willful misconduct of such Indemnitee. Each Assignor agrees that upon written
notice by any Indemnitee of the assertion of such a liability, obligation,
damage, injury, penalty, claim, demand, action, suit or judgment, the relevant
Assignor shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof; each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filling of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b) hereof,
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any other Credit
Document or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement or any other Credit Document.
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
<PAGE> 345
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8.2. Indemnity Obligations Secured by Collateral; Survival. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and the payment of all other
Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Acquisition Letters of Credit" shall mean all letters of credit issued
in connection with the Stock Purchase Agreement, together with any replacements
issued therefor or letters of credit issued in substitution thereof, and shall
include all "Acquisition Letters of Credit" as defined in the Credit Agreement.
"Administrative Agent" shall have the meaning provided in the recitals
to this Agreement.
"Agreement" shall mean this Security Agreement, as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Banks" shall have the meaning provided in the recitals to this
Agreement.
"Borrower" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
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"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreement or Other Hedging Agreement), but excluding any contract to
the extent that the terms thereof prohibit (after giving effect to any approvals
or waivers) the assignment of, or granting a security interest in, such
contract.
"Copyrights" shall mean any United States or foreign copyright owned by
any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office or the equivalent thereof in any foreign country, as
well as any application for a United States copyright registration now or
hereafter made with the United States Copyright Office by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals to
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now
<PAGE> 347
EXHIBIT H
Page 25
or hereafter owned by any Assignor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any United
States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration of any trademarks
and service marks, or the equivalent thereof in any foreign country, in the
United States Patent and Trademark Office and any trade dress including logos
and/or designs used by any Assignor in the United States or any foreign country.
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Page 26
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, now existing or hereafter incurred under, arising out of or in
connection with any Credit Document to which it is a party and the due
performance and compliance by each Assignor with the terms of each such Credit
Document (all such obligations and liabilities under this clause (i), except to
the extent consisting of obligations or indebtedness with respect to Interest
Rate Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations"); (ii) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
of each Assignor now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging
Agreement with the Secured Creditors including, in the case of Assignors other
than the Borrower, all obligations of such Assignor under the Subsidiaries
Guaranty in respect of Interest Rate Protection Agreements or Other Hedging
Agreements (all such obligations and liabilities under this clause (ii) being
herein collectively called the "Other Obligations"); (iii) any and all sums
advanced by the Collateral Agent in order to preserve the Collateral or preserve
its security interest in the Collateral; (iv) in the event of any proceeding for
the collection or enforcement of any indebtedness, obligations, or liabilities
of any Assignor referred to in clauses (i) and (ii) above, after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, or of any exercise by the Collateral Agent of
its rights hereunder, together with reasonable attorneys' fees and court costs;
and (v) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 8.1 of this Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States or foreign patent now or
hereafter made by any Assignor.
"Primary Obligations" shall have the meaning provided in Section 7.4(b)
of this Agreement.
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"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (b) all other writings
related in any way to the foregoing, provided, in each case, that the term
Receivable shall not include any Receivable that is transferred to the
Receivables Subsidiary pursuant to the Receivables Documents.
"Receivables Documents" shall mean all documentation relating to any
Receivables Facility, including without limitation the Receivables Pooling
Agreement and the documentation delivered in connection therewith (including any
documentation relating to a series of certificates or purchased interests issued
and sold pursuant thereto).
"Receivables Facility" shall have the meaning assigned such term in the
Credit Agreement, provided that, in connection with any amendment or replacement
of a Receivables Facility, the amended or replacement facility shall constitute
a "Receivables
<PAGE> 350
EXHIBIT H
Page 28
Facility" for purposes hereof (and the definition of Receivables Documents
contained herein) regardless of whether the Receivables Amendment Conditions are
satisfied in connection therewith.
"Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Significant Copyrights" shall mean those Copyrights which the Assignor
believes in its reasonable judgment to be material to its business and any
Copyright which the failure to maintain would have a material adverse effect
upon the value of the Copyrights taken as a whole.
"Significant Marks" shall mean those Marks which the relevant Assignor
believes in its reasonable judgment to be material to its business and any Mark
which the failure to maintain or to keep valid and subsisting would have a
material adverse effect upon the value of the Marks taken as a whole.
"Significant Patents" shall mean those Patents which the relevant
Assignor believes in its reasonable judgment to be material to its business and
any Patent which the failure to maintain would have a material adverse effect
upon the value of the Patents taken as a whole.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement,
dated as of October 12, 1995, among Pechiney S.A., Pechiney International,
Howmet Cercast S.A. and Blade Acquisition Corp.
"Termination Date" shall have the meaning provided in Section 10.8 of
this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1 of
this Agreement.
<PAGE> 351
EXHIBIT H
Page 29
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at its address set forth opposite its
signature below;
(b) if to the Collateral Agent:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Mr. David G. Dixon
Telephone No.: (312) 732-8142
Facsimile No.: (312) 732-3885
(c) if to any Bank Creditor (other than the Collateral Agent), at such
address as such Bank Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby and the
Collateral Agent (with the consent of either (x) the Required Banks or, to the
extent required by Section 13.12 of the Credit Agreement, all of the Banks, at
all times prior to the time on which all Credit Document Obligations have been
paid in full or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time on which all Credit Document Obligations
have been paid in full); provided, that any change, waiver, modifica- tion or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall also
require the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this
<PAGE> 352
EXHIBIT H
Page 30
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Bank Creditors as holders of the Credit Document Obligations or
(y) the Other Creditors as the holders of the Other Obligations. For the purpose
of this Agreement, the term "Requisite Creditors" of any Class shall mean each
of (x) with respect to the Credit Document Obligations, the Required Banks and
(y) with respect to the Other Obligations, the holders of at least a majority of
all obligations outstanding from time to time under the Interest Rate Protection
Agreements or Other Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b)any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement or Other Hedging Agreement; (c) any
renewal, extension, amendment or modification of or addition or supplement to or
deletion from any Credit Document or any Interest Rate Protection Agreement or
Other Hedging Agreement or any security for any of the Obligations; (d) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument including, without limitation, this
Agreement; (e) any furnishing of any additional security to the Collateral Agent
or its assignee or any acceptance thereof or any release of any security by the
Collateral Agent or its assignee; or (f) any limitation on any party's liability
or obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; whether or not any Assignor shall have notice or knowledge of
any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon each
Assignor and its successors and assigns and shall inure to the benefit of the
Collateral Agent and each other Secured Creditor and their respective successors
and assigns; provided, that no Assignor may transfer or assign any or all of its
rights or obligations hereunder without the prior written consent of the
Collateral Agent. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement, the other Credit Documents and the Interest Rate
Protection Agreements or Other Hedging Agreements regardless of any
investigation made by the Secured Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
<PAGE> 353
EXHIBIT H
Page 31
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitments and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been repaid in full), and all Letters of Credit
have been terminated and all Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is sold (except to
Holdings or any of its Subsidiaries) in connection with a sale permitted by
Section 9.02 of the Credit Agreement or otherwise released at the direction of
the Required Banks (or all Banks if required by Section 13.12 of the Credit
Agreement) and the proceeds of such sale or sales or from such release are
applied in accordance with the provisions of Section 4.02 of the Credit
Agreement, to the extent required to.be so applied, such Collateral will be sold
free and clear of the Liens created by this Agreement and the Collateral Agent,
at the request and expense of the Assignor, will dulY assign, transfer and
deliver to the Assignor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and has not theretofore been released pursuant to this Agreement and
will promptly execute and deliver to such Assignor a proper instrument or
instruments (including UCC termination statements on form UCC-3) acknowledging
the release of such Collateral pursuant to this Agreement.
<PAGE> 354
EXHIBIT H
Page 32
(c) At any time that the Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a) or (b), as the case may be, it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer of such Assignor stating that the release of the respective
Collateral is permitted pursuant to such Section 10.8(a) or (b), as the case may
be.
(d) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as a result of any release of Collateral by it in
accordance with this Section 10.8.
10.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
10.10. Severability. My 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 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.
10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement and Section 12 of the Credit
Agreement. The Collateral Agent shall act hereunder and thereunder on the terms
and conditions set forth herein and in Section 12 of the Credit Agreement.
10.12. Benefit of Agreement. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
10.13. Additional Assignors. It is understood and agreed that any
Subsidiary that is required to execute a counterpart of this Agreement after the
date hereof pursuant to the Credit Agreement shall automatically become an
Assignor hereunder by executing a counterpart hereof and delivering the same to
the Collateral Agent.
<PAGE> 355
EXHIBIT H
Page 33
10.14. Amendment and Restatement. Upon the execution and delivery of
this Agreement by the parties hereto, the Original Security Agreement shall be
amended and restated in its entirety by this Agreement, effective as of the date
hereof, with all rights, obligations and security interests created under or
granted pursuant to the Original Security Agreement continuing from the date
thereof.
***
<PAGE> 356
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
Addresses:
BLADE ACQUISITION CORP.,
1001 Pennsylvania Avenue, N.W. as an Assignor
Washington, D.C. 20004
Attention: Mr. Allan M. Holt
Telephone No.: (202) 347-2626
Facsimile No.: (202) 347-9250
By_________________________
Title:
HOWMET HOLDINGS CORPORATION,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771
By_________________________
Title:
HOWMET CORPORATION,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771
By_________________________
Title:
<PAGE> 357
HOWMET MANAGEMENT SERVICES,
475 Steamboat Road INC., as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By________________________
Title:
HOWMET THERMATECH CANADA,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771
By________________________
Title:
HOWMET-TEMPCRAFT, INC.,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By________________________
Title:
HOWMET TRANSPORT SERVICES, INC.,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By________________________
Title:
<PAGE> 358
HOWMET SALES, INC.,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By___________________________
Title:
HOWMET REFURBISHMENT, INC.,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By___________________________
Title:
TURBINE COMPONENTS CORPORATION,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By____________________________
Title:
HOWMET CERCAST (USA), INC.,
475 Steamboat Road as an Assignor
Greenwich, CT 06830
Attention: Mr. Roland A. Paul
Telephone No.: (203) 625-8770
Facsimile No.: (203) 625-8771 By_____________________________
Title:
<PAGE> 359
THE FIRST NATIONAL
BANK OF CHICAGO,
One First National Plaza as Collateral Agent
Chicago, Illinois 60670
Attention: Mr. David G. Dixon
Telephone No.: (312) 732-8142
Facsimile No.: (312) 732-3885 By_________________________
Title:
<PAGE> 360
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
<PAGE> 361
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
<PAGE> 362
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
<PAGE> 363
ANNEX D
to
SECURITY AGREEMENT
SCHEDULE OF MARKS
<PAGE> 364
ANNEX E
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS AND APPLICATIONS
<PAGE> 365
ANNEX F
to
SECURITY AGREEMENT
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
<PAGE> 366
ANNEX G
to
SECURITY AGREEMENT
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Name of Assignor], a __________ corporation (the
"Assignor") with principal offices at ______________________________ hereby
assigns and grants to The First National Bank of Chicago as Collateral Agent,
with principal offices at One First National Plaza, Chicago, Illinois 60670 (the
"Assignee"), a security interest in (I) all of the Assignor's right, title and
interest in and to the United States trademarks, trademark registrations and
trademark applications (the "Marks") set forth on Schedule A attached hereto,
(ii) all of the Assignor's right, title and interest in and to the United States
patents and pending patent applications (the "Patents") set forth on Schedule B
attached hereto, in each case together with (iii) all Proceeds (as such term is
defined in the Security Agreement referred to below) and products of the Marks
and Patents, (iv) the goodwill of the businesses with which the Marks are
associated and (v) all causes of action arising prior to or after the date
hereof for infringement of any of the Marks and Patents or unfair competition
regarding the same.
THIS ASSIGNMENT OF SECURITY INTEREST is made to secure the satisfactory
performance and payment of all the Obligations of the Assignor, as such term is
defined in the Security Agreement among the Assignor, the other assignors from
time to time party thereto and the Assignee, dated as of December 13, 1995 and
<PAGE> 367
ANNEX G
Page 2
amended as of December 5, 1996 (as amended from time to time, the "Security
Agreement"). Upon the occurrence of the Termination Date (as defined in the
Security Agreement), the Assignee shall, upon such satisfaction, execute,
acknowledge, and deliver to the Assignor an instrument in writing releasing the
security interest in the Marks and Patents acquired under this Assignment of
Security Interest.
This Assignment of Security Interest has been granted in conjunction
with the security interest granted to the Assignee under the Security Agreement.
The rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment of
Security Interest are deemed to conflict with the Security Agreement, the
provisions of the Security Agreement shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Assignment of
Security Interest as of the - day of __________, 199__.
[NAME OF ASSIGNOR], Assignor
By________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Collateral Agent, Assignee
By_______________________
Name:
Title:
<PAGE> 368
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ____, 199_, before me personally came
_________________________ who, being by me duly sworn, did state as follows:
that [s]he is ________________ of [Name of Assignor], that [s]he is authorized
to execute the foregoing Assignment of Security Interest on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
___________________
Notary Public
<PAGE> 369
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ____, 199_, before me personally came
______________________________ who, being by me duly sworn, did state as
follows: that [s]he is ____________________ of The First National Bank of
Chicago that [s]he is authorized to execute the foregoing Assignment of Security
Interest on behalf of said national banking association and that [s]he did so by
authority of the Board of Directors of said national banking association.
___________________
Notary Public
<PAGE> 370
SCHEDULE A
MARK REG. NO. REG. DATE
<PAGE> 371
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
<PAGE> 372
ANNEX H
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Assignor], a ______________ corporation (the
"Assignor"), having its chief executive office at ____________________________,
is the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and
applications for registration set forth in Schedule A attached hereto;
WHEREAS, THE FIRST NATIONAL BANK OF CHICAGO, as
Collateral Agent, having its principal offices at One First National Plaza,
Chicago, Illinois 60670 (the "Assignee"), desires to acquire a security interest
in, and lien upon, all of Assignor's right, title and interest in and to
Assignor's copyrights and copyright registrations and applications therefor; and
WHEREAS, the Assignor is willing to assign and grant to the Assignee a
security interest in, and lien upon, the copyrights and copyright registrations
and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the sufficiency
and receipt of which is hereby acknowledged, and subject to the terms and
conditions of the Security Agreement, dated as of December 13, 1995 and amended
and restated as of December 5, 1996, made by the Assignor, the other assignors
from time
<PAGE> 373
ANNEX H
Page 2
to time party thereto and the Assignee (as amended from time to time, the
"Security Agreement"), the Assignor hereby assigns and grants to the Assignee a
security interest in, and lien upon, all of Assignor's right, title and interest
in and to Assignor's copyrights and copyright registrations and applications
therefor set forth in Schedule A attached hereto (the "Copyrights"), together
with (i) all Proceeds (as such term is defined in the Security Agreement
referred to below) of the Copyrights, and (ii) all causes of action arising
prior to or after the date hereof for infringement of any Copyright.
This Assignment of Security Interest is made to secure the satisfactory
performance and payment of all Obligations (as such term is defined in the
Security Agreement) of the Assignor and shall be effective as of the date of the
Security Agreement. Upon the occurrence of the Termination Date (as such term is
defined in the Security Agreement), the Assignee shall, upon such satisfaction,
execute, acknowledge, and deliver to Assignor an instrument in writing releasing
the security interest in the Copyrights acquired under this Assignment of
Security Interest.
This Assignment of Security Interest has been granted in conjunction
with the security interest granted to the Assignee under the Security Agreement.
The rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that
<PAGE> 374
ANNEX H
Page 3
any provisions of this Assignment are deemed to conflict with Security
Agreement, the provisions of the Security Agreement shall govern.
<PAGE> 375
ANNEX H
Page 4
IN WITNESS WHEREOF, the undersigned have executed this Assignment of
Security Interest at New York, New York as of the __ day of ____________, 199_ .
[NAME OF ASSIGNOR] , Assignor
By__________________________
Name:
Title:
THE FIRST NATIONAL
BANK OF CHICAGO, as
Collateral Agent, Assignee
By__________________________
Name:
Title:
<PAGE> 376
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of ________, 199_ before me personally came
________________, who being duly sworn, did depose and say that [s]he is
____________________ of [Name of Assignor], that [s]he is authorized to execute
the foregoing Assignment of Security Interest on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said corporation.
_____________________
Notary Public
<PAGE> 377
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of ________, 199_ before me personally came
________________, who being duly sworn, did depose and say that [s]he is
________________ of The First National Bank of Chicago, that [s]he is authorized
to execute the foregoing Assignment of Security Interest on behalf of said
national banking association and that [s]he did so by authority of the Board of
Directors of said national banking association.
_____________________
Notary Public
<PAGE> 378
SCHEDULE A
COPYRIGHTS
Any copyrights which Assignor now owns or hereafter acquires, including
any copyright registrations or applications.
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
------- ---- ---------------
<PAGE> 379
ANNEX I
SCHEDULE OF ACQUISITION LETTERS OF CREDIT
<PAGE> 380
Exhibit I
[Letterhead of CT Corporation System]
December 5, 1996
To the Administrative Agent and the Banks party to the Credit Agreement referred
to below:
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement, dated as of December 13,
1995 and amended and restated as of December 5, 1996, among Blade Acquisition
Corp. ("Holdings"), Howmet Holdings Corporation ("Parent" and together with
Holdings, the "Parent Guarantors"), Howmet Corporation (the "Borrower"), the
Banks party thereto from time to time, Bankers Trust Company, Citicorp USA, Inc.
and The First National Bank of Chicago , as Managing Agents, Bankers Trust
Company, as Syndication Agent, Citicorp USA. Inc., as Documentation Agent and
The First National Bank of Chicago, as Administrative Agent (as such Credit
Agreement may be modified, supplemented or amended from time to time, the
"Credit Agreement") and (ii) the Subsidiaries Guaranty, dated as of December 13,
1995 and amended and restated as of December 5, 1996, among certain subsidiaries
of the Borrower (collectively, the "Subsidiary Guarantors") (as such
Subsidiaries Guaranty may be modified, supplemented or amended from time to
time, the "Subsidiaries Guaranty").
Each of the Borrower and the Parent Guarantors, pursuant to Section
13.08 of the Credit Agreement, and each Subsidiary Guarantor pursuant to Section
20 of the Subsidiaries Guaranty has, on an annual basis, designated, appointed
and empowered the undersigned, CT Corporation System, with offices currently
located at 1633 Broadway. New York, New York 10019, as its authorized designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such legal action or proceeding
with respect to the Credit Agreement or any other Credit Document (as defined in
the Credit Agreement) in the courts of the State of New York or of the United
States of America for the Southern District of New York.
The undersigned hereby informs you that it accepts such appointment as
agent as set forth in the above-referenced Sections of the respective Credit
Documents and agrees
<PAGE> 381
Exhibit I
Page 2
with you that the undersigned (i) shall inform the Administrative Agent promptly
in writing of any change of its address in New York City, (ii) shall perform its
obligations as such process agent in accordance with the provisions of such
Sections and (iii) shall forward promptly to the Borrower, the respective Parent
Guarantor or the respective Subsidiary Guarantor, as the case may be, any legal
process received by the undersigned in its capacity as process agent.
As process agent, the undersigned, and its successor or successors,
agree to discharge the above-mentioned obligations and will not refuse
fulfillment of such obligations under the above-referenced Sections of the
respective Credit Documents.
Our acceptance of this designation and our continued representation is
contingent upon our receipt of timely payment of our charges for this service.
Very truly yours,
CT CORPORATION SYSTEM
By_____________________________
Name:
Title:
<PAGE> 382
EXHIBIT J
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, Chief Financial Officer of Blade Acquisition Corp.,
do hereby certify on behalf of Blade Acquisition Corp. that:
1. This Certificate is furnished to the Banks pursuant to Section 5.13
of the Credit Agreement, dated as of December 13, 1995 and amended and restated
as of December 5, 1996 among Blade Acquisition Corp. ("Holdings"), Howmet
Holdings Corporation (f/k/a Pechiney Corporation), Howmet Corporation (the
"Borrower"), various Lenders from time to time party thereto (the "Banks"),
Bankers Trust Company, Citicorp USA, Inc. and The First National Bank of
Chicago, as Managing Agents (the "Managing Agents"), Bankers Trust Company, as
Syndication Agent (the "Syndication Agent"), Citicorp USA, Inc. , as
Documentation Agent (the "Documentation Agent"), and The First National Bank of
Chicago, as Administrative Agent (together with any successor administrative
agent, the "Administrative Agent") (such Credit Agreement, as in effect on the
date of this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall have
the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of (i)
Holdings and its Subsidiaries (on a consolidated basis) and (ii) the
Borrower and its Subsidiaries, (on a consolidated basis), as
applicable, would change hands between a willing buyer and a willing
seller, within a commercially reasonable period of time, each having
reasonable knowledge of the relevant facts, with neither being under
any compulsion to act.
(b) "Present Fair Saleable Value"
The amount that could be obtained by an independent willing seller from
an independent willing buyer if the assets of each of (i) Holdings and
its Subsidiaries (on a consolidated basis) and (ii) the Borrower and
its
<PAGE> 383
EXHIBIT J
Page 2
Subsidiaries (on a consolidated basis), as applicable, are sold with reasonable
promptness under normal selling conditions in a current market.
(c) "New Financing"
The Indebtedness incurred or to be incurred by the Borrower and its
Subsidiaries under the Credit Documents (assuming the full utilization
by the Borrower of the Total Commitments under the Credit Agreement)
and the other Documents and all other financings contemplated by the
Documents, in each case after giving effect to the Transaction and the
incurrence of all financings contemplated therewith.
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities) that would
be recorded in accordance with generally accepted accounting principles
("GAAP") of each of (i) Holdings and its Subsidiaries (on a
consolidated basis) and (ii) the Borrower and its Subsidiaries (on a
consolidated basis), in each case, at December 5, 1996 after giving
effect to the Transaction, determined in accordance with GAAP
consistently applied, together with, (x) the net change in long-term
debt (including current maturities) between December 31, 1995 and the
date hereof and (y) without duplication, the amount of all New
Financing.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely to result
from pending litigation, asserted claims and assessments, guaranties,
uninsured risks and other contingent liabilities of each of (i)
Holdings and its Subsidiaries (on a consolidated basis) and (ii) the
Borrower and its Subsidiaries (on a consolidated basis), as applicable,
after giving effect to the Transaction (exclusive of such contingent
liabilities to the extent reflected in Stated Liabilities).
(f) "Will be able to pay its Stated Liabilities and Identified Contingent
Liabilities, as they mature"
For the period from the date hereof through December 5, 2001, each of
(i) Holdings and its Subsidiaries (on a consolidated basis) and (ii)
the Borrower and its Subsidiaries (on a consolidated basis), as
applicable, will have sufficient assets and cash flow to pay their
respective Stated Liabilities and
<PAGE> 384
EXHIBIT J
Page 3
Identified Contingent Liabilities as those liabilities mature or otherwise
become payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through December 5, 2001,
each of (i) Holdings and its Subsidiaries (on a consolidated
basis) and (ii) the Borrower and its Subsidiaries (on a
consolidated basis), as applicable after consummation of the
Transaction and all Indebtedness (including the Loans) being
incurred or assumed and Liens created by the Borrower and its
Subsidiaries in connection therewith, is a going concern and
has sufficient capital to ensure that it will continue to be a
going concern.
3. For purposes of this Certificate, I, or officers of the
Borrowers under my direction and supervision, have performed the following
procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements referred to in
Section 7.05(a) of the Credit Agreement.
(b) I have reviewed the unaudited consolidated financial
statements for Holdings and its Subsidiaries referred to in
Section 5.14(a) of the Credit Agreement.
(c) I have made inquiries of certain officials of Holdings and its
Subsidiaries, who have responsibility for financial and
accounting matters regarding (i) the existence and amount of
Identified Contingent Liabilities associated with the business
of Holdings and its Subsidiaries and (ii) whether the
unaudited consolidated financial statements referred to in
paragraph (b) above are in conformity with GAAP applied on a
basis substantially consistent with that of the audited
financial statements as at December 31, 1995.
(d) I have knowledge of and have reviewed to my satisfaction the
Credit Documents and the other Documents, and the respective
Schedules and Exhibits thereto.
(e) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of Holdings and its
Subsidiaries, who have responsibility for legal,
financial and accounting matters as to the existence
and estimated liability with respect to all
contingent liabilities known to them;
<PAGE> 385
EXHIBIT J
Page 4
2. confirmed with officers of Holdings and its Subsidiaries,
that, to the best of such officers' knowledge, (i) all
appropriate items were included in Stated Liabilities or the
listing of Identified Contingent Liabilities and that (ii) the
amounts relating thereto were the maximum estimated amount of
liabilities reasonably likely to result therefrom as of the
date hereof; and
3. I hereby certify that, to the best of my knowledge,
liabilities that may arise from any pending litigation,
asserted claims and assessments, guarantees, uninsured risks
and other contingent liabilities of Holdings and its
Subsidiaries (exclusive of such contingent liabilities to the
extent reflected in Stated Liabilities) , as of the date
hereof are not reasonably likely to have a material adverse
effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects
of (i) Holdings and its Subsidiaries (on a consolidated basis)
or (ii) the Borrower and its Subsidiaries (on a consolidated
basis).
(f) I have examined the Projections relating to the Borrower and its
Subsidiaries which have been delivered to the Banks on the date hereof
and considered the effect thereon of any changes since the date of the
preparation thereof on the results projected therein. After such
review, I hereby certify that in my opinion the Projections are
reasonable and attainable, and that the Projections support the
conclusions contained in paragraph 4 below.
(g) I have made inquiries of certain officers of Holdings and its
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause either of (i)
Holdings and its Subsidiaries (on a consolidated basis) or (ii) the
Borrower and its Subsidiaries (on a consolidated basis), after giving
effect to the Transaction and the related financing transactions
(including the incurrence of the New Financing), to (i) have assets
with a Fair Value or Present Fair Saleable Value that are less than the
sum of Stated Liabilities and Identified Contingent Liabilities; (ii)
have Unreasonably Small Capital; or (iii) not be able to pay its Stated
Liabilities and Identified Contingent Liabilities as they mature or
otherwise become payable.
<PAGE> 386
EXHIBIT J
Page 5
4. Based on and subject to the foregoing, I hereby certify on behalf of
each of (i) Holdings and its Subsidiaries (on a consolidated basis), and (ii)
the Borrower and its Subsidiaries (on a consolidated basis) that, after giving
effect to the Transaction and the related financing transactions (including the
incurrence of the New Financing), it is my informed opinion that (a) the Fair
Value and Present Fair Saleable Value of the assets of each of (i) Holdings and
its Subsidiaries (on a consolidated basis) and (ii) the Borrower and its
Subsidiaries (on a consolidated basis), exceed its Stated Liabilities and
Identified Contingent Liabilities; (b) each of (i) Holdings and its Subsidiaries
(on a consolidated basis), and (ii) the Borrower and its Subsidiaries (on a
consolidated basis), does not have Unreasonably Small Capital; and (c) each of
(i) Holdings and its Subsidiaries (on a consolidated basis) and (ii) the
Borrower and its Subsidiaries (on a consolidated basis) will be able to pay its
Stated Liabilities and Identified Contingent Liabilities, as they mature or
otherwise become payable.
<PAGE> 387
IN WITNESS WHEREOF, I have hereto set my hand this ___ day of December,
1996.
BLADE ACQUISITION CORP.
By_________________________
Name:
Title:
<PAGE> 388
EXHIBIT K
ASSIGNMENT AND ASSUMPTION AGREEMENT
Date __________, 19
Reference is made to the Credit Agreement described in Item 2 of Annex
I hereto (as such Credit Agreement may hereafter be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless defined in
Annex I hereto, terms defined in the Credit Agreement are used herein as therein
defined. ____________ (the "Assignor") and ___________ (the "Assignee") hereby
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
tinder the Credit Agreement as of the date hereof which represents the
percentage interest specified in Item 4 of Annex I hereto (the "Assigned Share")
of all of the outstanding rights and obligations under the Credit Agreement
relating to the facilities listed in Item 4 of Annex I hereto, including,
without limitation, [(x) in the case of any assignment of all or any portion of
the Total Term Loan Commitment, all rights and obligations with respect to the
Assigned Share of such Total Term Loan Commitment,]1/ (y) in the case of any
assignment of outstanding Term Loans, all rights and obligations with respect to
the Assigned Share of such Term Loans and (z) in the case of any assignment of
all or any portion of the Total Revolving Loan Commitment, all rights and
obligations with respect to the Assigned Share of such Total Revolving Loan
Commitment and of any outstanding Revolving Loans and Letters of Credit. After
giving effect to such sale and assignment, the Assignee's Revolving Loan
Commitment[, Term Loan Commitment]2/ and the amount of the outstanding Term
Loans owing to the Assignee will be as set forth in Item 4 of Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim: (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement
1/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Term Loan Commitment.
2/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Term Loan Commitment.
<PAGE> 389
EXHIBIT K
Page 2
or the other Credit Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Holdings, Parent, the
Borrower or any of its Subsidiaries or the performance or observance by
Holdings, Parent, the Borrower or any of its Subsidiaries of any of their
obligations tinder the Credit Agreement or the other Credit Documents to which
they are a party or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement: (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Bank or Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement: (iii) confirms that it
is an Eligible Transferee under Section 13.04(b) of the Credit Agreement; (iv)
appoints and authorizes the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Credit Documents as are delegated to the
Administrative Agent and the Collateral Agent, as the case may be, by the terms
thereof, together with such powers as are reasonably incidental thereto: (v)
represents that it is not a direct competitor of the Borrower or any of its
Subsidiaries; (vi) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement are required
to be performed by it as a Bank]: and (vii) to the extent legally entitled to do
so, attaches the forms described in Section 13.04(b) of the Credit Agreement]3/.
Each Assignee further represents that at least one of the following statements
concerning each source of funds to be used by it to make the purchase and
assumption hereunder (a "Source") is accurate on and as of the Settlement Date:
(a) the Source is an insurance company pooled separate account
that is maintained solely in connection with the Assignee's fixed
contractual obligations under which the amounts payable. or credited,
to an employee benefit plan and to any participant or beneficiary of
such plan (including any annuitant) are not affected in any manner by
the investment performance of the separate account; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction Class
Exemption ("PTCE") 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTCE 91-38
(issued July 12, 1991) and, except as the Assignee has
- ----------
3/ Include if the Assignee is organized under the laws of a jurisdiction outside
of the United States.
<PAGE> 390
EXHIBIT K
Page 3
disclosed to the Assignor in writing pursuant to this clause (b), no
employee benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source is an "investment fund" managed by a "qualified
professional asset manager" or "QPAM" (as defined in Part V of PTCE
84-14, issued March 13, 1984), no employee benefit plan's assets that
are included in such investment fond, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(l) of
PTCE 84-14) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by
such QPAM, the conditions of Part I(c) and (g) of PTCE 84-14 are
satisfied, and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fond have been disclosed to the Assignor in writing pursuant to this
clause (c); or
(d) the Source is a governmental plan; or
(e) the Source is an "insurance company general account," as
such term is defined in the Department of Labor Prohibited Transaction
Class Exemption 95- 60 (issued July 12, 1995) ("PTCE 95-60") and as of
the date of this Agreement there is no "employee benefit plan" with
respect to which the aggregate amount of such general account's
reserves and liabilities for the contracts held by or on behalf of such
"employee benefit plan" and all other "employee benefit plans"
maintained by the same employer (and affiliates thereof as defined in
Section V(a)(l) of PTCE 95-60) or by the same employee organization (in
each case determined in accordance with the provisions of PTCE 95-60)
exceeds 10% of the total reserves and liabilities of such general
account (as determined under PTCE 95-60) (exclusive of separate account
liabilities) plus surplus as set forth in the National Association of
Insurance Commissioners Annual Statement filed with the state of
domicile of such Assignee; or
(f) the Source is not an "employee benefit plan" as defined in
Title I, Section 3(3) of ERISA or a "plan" as defined in Section
4975(c) of the Code (collectively a "plan").
As used herein, the terms "employee benefit plan," "governmental plan" and
"separate account" shall have the respective meanings assigned to such terms in
Section 3 of ERISA.
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee. an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
This Assignment and Assumption shall be effective, unless otherwise specified in
Item 5 of Annex I hereto (the
<PAGE> 391
EXHIBIT K
Page 4
"Settlement Date"), upon the receipt of the consent of the Administrative Agent
to the extent required by Section 13.04(b) of the Credit Agreement, receipt by
the Administrative Agent of the administrative fee referred to in such Section
13.04(b), and the registration of the transfer as provided by Section 13.17 of
the Credit Agreement,
5. Upon the Settlement Date of this Assignment and Assumption, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Assumption Agreement. have the rights and obligations of a
Bank thereunder and under the other Credit Documents and (ii) the Assignor
shall, to the extent provided in this Assignment and Assumption Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Credit Documents except with respect to indemnification
provisions under the Credit Agreement (including without limitation, Sections
1.10, 1.11, 2.05, 4.04, 13.01 and 13.06).
6. It is agreed that the Assignee shall be entitled to (x) all interest
on the Assigned Share of the Loans at the rates specified in Item 6 of Annex I;
(y) all Commitment Commission (if applicable) on the Assigned Share of the Total
Revolving Loan Commitment and/or Total Term Loan Commitment (if not theretofore
terminated) at the rate specified in Item 7 of Annex I hereto; and (z) all
Letter of Credit Fees (if applicable) on the Assignee's participation in all
Letters of Credit at the rate specified in Item 8 of Annex I hereto, which, in
each case, accrue on and after the Settlement Date, such interest and, if
applicable, Commitment Commission and Letter of Credit Fees, to be paid by the
Administrative Agent directly to the Assignee. It is further agreed that all
payments of principal made on the Assigned Share of the Loans which occur on and
after the Settlement Date will be paid directly by the Administrative Agent to
the Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor
an amount specified by the Assignor in writing which represents the Assigned
Share of the principal amount of the respective Loans made by the Assignor
pursuant to the Credit Agreement which are outstanding on the Settlement Date.
and which are being assigned hereunder. The Assignor and the Assignee shall make
all appropriate adjustments in payments under the Credit Agreement for periods
prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 392
EXHIBIT K
Page 5
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR]
of ________, 19 as Assignor
By___________________________
Title;
[NAME OF ASSIGNEE]
as Assignee
By___________________________
Title:
Acknowledged:
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By____________________________
Title: 4/
- ----------
4/ The consent (not to be unreasonably withheld or delayed) of the
Administrative Agent is required for any assignment of Revolving Loan
Commitments, and for assignments pursuant to Section 13.04(b)(y) of the Credit
Agreement.
<PAGE> 393
EXHIBIT K
Page 6
[The undersigned hereby consents to the assignment set forth in this Agreement:
HOWMET CORPORATION,
as Borrower
By___________________________
Title: ] 5/
- ----------
5/ The consent (not to be unreasonably withheld or delayed) of the Borrower is
required for assignments of Term Loan Commitments or Revolving Loan Commitments
made pursuant to Section 13.04(b)(y) of the Credit Agreement.
<PAGE> 394
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: Howmet Corporation.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of December 13, 1995 and amended and
restated as of December 5, 1996. among Blade Acquisition Corp., Howmet
Holdings Corporation, Howmet Corporation, the Banks party thereto from
time to time, Bankers Trust Company, Citicorp USA, Inc. and The First
National Bank of Chicago, as Managing Agents, Bankers Trust Company, as
Syndication Agent, Citicorp USA, Inc., as Documentation Agent and The
First National Bank of Chicago, as Administrative Agent.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
<TABLE>
<CAPTION>
Outstanding Revolving
[Term Loan Principal of Loan
Commitment Term Loans Commitment
a. Aggregate Amount for all Banks
<S> <C> <C> <C>
$______________ $______________ $______________
b. Assigned share ______________% ______________% ______________%
c. Amount of Assigned Share $_____________]6/ $______________ $______________
</TABLE>
5. Settlement Date:
- ----------
6/ This column should be deleted in the case of Assignment and Assumption
Agreements executed after the termination of the Total Term Loan Commitment.
<PAGE> 395
Annex I
Page 2
6. Rate of Interest As set forth in Section 1.08 of the Credit
to the Assignee; Agreement (unless otherwise agreed to by the
Assignor and the Assignee) 7/
7. Commitment
Commission: As set forth in Section 3.01(a) of the
Credit Agreement (unless otherwise agreed to
by the Assignor and the Assignee) 8/
8. Letter of Credit As set forth in Section 3.01(b) of the
Fees to the Credit Agreement (unless otherwise agreed to
Assignee: by the Assignor and the Assignee) 9/
- ----------
7/ The Borrower and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the Credit
Agreement, with the Assignor and Assignee effecting the agreed upon sharing of
the interest through payments by the Assignee to the Assignor.
8/ Insert "Not Applicable" in lieu of text if no portion of the Total Revolving
Loan Commitment is being assigned. The Borrower and the Administrative Agent
shall direct the entire amount of the Commitment Commission to the Assignee at
the rate set forth in Section 3.01(a) of the Credit Agreement, with the Assignor
and the Assignee effecting the agreed upon sharing of Commitment Commission
through payment by the Assignee to the Assignor.
9/ Insert "Not Applicable" in lieu of text if no portion of the Total Revolving
Loan Commitment is being assigned. Otherwise, the Borrower and the
Administrative Agent shall direct the entire amount of the Letter of Credit Fees
to the Assignee at the rate set forth in Section 3.01(b) of the Credit
Agreement, with the Assignor and the Assignee effecting the agreed upon sharing
of Letter of Credit Fees through payment by the Assignee to the Assignor.
<PAGE> 396
Annex I
Page 3
9. Notice:
ASSIGNOR;
______________________
______________________
______________________
______________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE;
______________________
______________________
______________________
______________________
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
______________________
______________________
______________________
______________________
Attention:
Reference:
<PAGE> 397
Annex I
Page 4
ASSIGNEE:
______________________
______________________
______________________
______________________
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_____________________ By____________________
_____________________ ____________________
(Print Name and Title) (Print Name and Title)
<PAGE> 398
EXHIBIT L
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of December 13, 1995 and amended and
restated as of December 5, 1996 (as amended, modified or supplemented from time
to time, this "Agreement"), is executed and delivered by THE FIRST NATIONAL BANK
OF CHICAGO as Collateral Agent under the Security Agreement referred to
hereinbelow (in such capacity, together with its successors in such capacity,
the "Collateral Agent"), and MANUFACTURERS AND TRADERS TRUST COMPANY, as trustee
under the Pooling and Servicing Agreement referred to hereinbelow (in such
capacity, the "Trustee").
BACKGROUND
A. Howmet Corporation ("Howmet") and certain of its subsidiaries
(collectively with Howmet, the "Operating Companies") and the Collateral Agent,
are parties to that certain Security Agreement dated as of December 13, 1995 and
amended and restated as of the date hereof, (as amended, modified or
supplemented and in effect from time to time, the "Security Agreement") for the
benefit of certain creditors of the Operating Companies ("Operating Company
Creditors") party to the credit agreement referred to therein (the "Credit
Agreement").
B. The Operating Companies have entered into that certain Receivables
Purchase Agreement (as amended, modified or supplemented and in effect from time
to time, the "Purchase Agreement"), dated as of December 13, 1995, by and
between the Operating Companies and Blade Receivables Corporation ("Finco"),
pursuant to which each of the Operating Companies will sell to Finco
substantially all Receivables that it now owns and from time to time hereafter
will own, and Howmet may from time to time enter into one or more Contribution
Agreements (each, a "Contribution Agreement") with Finco, pursuant to which
Howmet will contribute to Finco some or all of its Receivables.
C. Contemporaneously with the sale or contribution of Receivables to
Finco pursuant to the Purchase Agreement and any Contribution Agreement, Finco
transferred the Receivables and the other Specified Assets (as defined below) to
the Trustee pursuant to that certain Pooling and Servicing Agreement (as
amended, supplemented, amended and restated, or otherwise modified and in effect
from time to time, the "Pooling and Servicing Agreement") dated as of December
13, 1995 among Finco, Howmet, as initial Servicer, and the Trustee.
<PAGE> 399
EXHIBIT L
Page 2
D. Contemporaneously with the execution and delivery of the Purchase
Agreement and the Pooling and Servicing Agreement, and from time to time
thereafter, securities ("Certificates") representing beneficial interests in, or
obligations secured by, such Specified Assets were or will be issued. Certain of
the Certificates may be sold by Finco to investors ("Investors") and/or pledged
to secure loans or other extensions of credit made to Finco by lenders (the
"Lenders"), all as further provided by the Transaction Documents (as defined
below).
E. The Collateral Agent and the Trustee have heretofore entered into an
Intercreditor Agreement, dated as of December 13, 1995 (as amended, modified or
supplemented prior to the date hereof, the "Original Intercreditor Agreement").
F. The execution and delivery of the Original Intercreditor Agreement
was a condition precedent to the effectiveness of the Purchase Agreement, the
Pooling and Servicing Agreement and the other Transaction Documents.
G. The requisite parties to the Credit Agreement have authorized the
Collateral Agent to amend and restate the Original Intercreditor Agreement in
the form of this Agreement, as required by Section 13.18 of the Credit
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. (a) Capitalized terms not defined herein that
are defined in Appendix A to the Pooling and Servicing Agreement shall for the
purposes of this Agreement (including the recitals hereof) have the meanings
ascribed to such terms in such Appendix A; provided that the term "Transaction
Documents" shall include all supplements to the Pooling and Servicing Agreement
and all credit agreements and all other agreements pursuant to which loans or
other extensions of credit evidenced or secured by Certificates are from time to
time made.
(b) In addition, the following terms shall have the meanings
specified below:
"Bank Collateral" means all property and interests in property
(other than Specified Assets) now or hereafter acquired by any
Operating Company in or upon which a security interest, lien or
mortgage is granted by such Operating Company to the Collateral Agent
under the Security Agreement or any other collateral document executed
in connection with the Credit Agreement.
<PAGE> 400
EXHIBIT L
Page 3
"Specified Assets" means the Purchased Receivables, the
Contributed Receivables and the Related Assets, as more fully described
in Section 1.1 of the Purchase Agreement.
2. Authorization. The Collateral Agent confirms that the terms
of the Credit Agreement (i) authorize the Collateral Agent to execute, deliver
and perform this Agreement, and (ii) provide for all of the parties to the
Credit Agreement to be bound by this Agreement.
3. Release of Transferred Assets Collateral. The Collateral
Agent hereby releases all liens and security interests of any kind whatsoever
which the Collateral Agent (or any trustee or agent acting on its behalf) holds
in Specified Assets, to the extent that such Specified Assets would otherwise
constitute Bank Collateral. It is understood and agreed that the Collateral
Agent shall have no rights to or in any such proceeds that are Specified Assets.
The Collateral Agent agrees, upon the reasonable request of the Trustee, to
execute and deliver to the Trustee such UCC partial release statements and other
documents and instruments, and do such other acts and things, as the Trustee may
reasonably request in order to evidence the release provided for in this Section
3; provided, however, that failure to execute and deliver any such partial
release statements, documents or instruments, or to do such acts and things,
shall not affect or impair the release provided for in this Section 3.
4. Separation of Collateral. (a) The Trustee hereby agrees
promptly to return to Howmet (for the benefit of itself and the other Operating
Companies) funds or other property other than Specified Assets (or proceeds
thereof) which constitute Bank Collateral (or proceeds thereof); provided, that
Howmet or the Collateral Agent shall have identified such Bank Collateral or
proceeds in writing to the Trustee or an Authorized Officer of the Trustee
otherwise has actual knowledge of the identity of such Bank Collateral or
proceeds; and provided further that if the Collateral Agent shall so request in
a written notice to the Trustee, the Trustee shall return such funds and
property to the Collateral Agent instead of to Howmet. For purposes of
maintaining the perfection of the Collateral Agent's lien thereon, the
Collateral Agent hereby appoints the Trustee as its agent in respect of such
funds or other property.
(b) The Collateral Agent hereby agrees to promptly return to the
Trustee any funds or other property which constitute Specified Assets (or
proceeds thereof), provided, that the Trustee shall have identified such
Specified Assets or proceeds in writing to the Collateral Agent or an authorized
officer of the Collateral Agent otherwise has actual knowledge of the identity
of such Specified Assets or proceeds. For purposes
<PAGE> 401
EXHIBIT L
Page 4
of maintaining the perfection of the Trustee's interests therein, the Trustee
hereby appoints the Collateral Agent as its agent with respect to such Specified
Assets and proceeds.
(c) All payments made by an Obligor that is obligated to make payment
with respect to both Specified Assets and other Receivables shall be applied
against the specified Receivables, if any, that are designated by such Obligor.
In the absence of such designation, such payment shall be applied against the
oldest outstanding Receivables owed by such Obligor.
(d) Unless the Trustee and Collateral Agent agree otherwise, neither
the Trustee nor the Collateral Agent shall send any notice to an Obligor
directing it to remit payments in respect of any Receivable to any account other
than the Lockbox Accounts or the Concentration Accounts.
(e) In the event that any of the Specified Assets (or proceeds thereof)
become commingled with any Bank Collateral (or proceeds thereof), then the
Collateral Agent and the Trustee shall, in good faith, cooperate with each other
to separate the Specified Assets (and proceeds thereof) from such Bank
Collateral (and proceeds thereof); provided, however, that in the case of any
assets, if such separation is not possible, the parties hereto agree to share
the proceeds of such property proportionately according to the interests of the
Collateral Agent and the Trustee therein; provided, further, that the
out-of-pocket costs and expenses incurred by the parties hereto to effect such
separation and/or sharing (including without limitation fees and expenses of
auditors and attorneys) shall be shared by the parties hereto proportionately
according to the benefit of such separation and/or sharing to the Collateral
Agent and the Trustee (and the parties for which each of them acts) to the
extent that such costs and expenses are not reimbursed or otherwise borne by the
Operating Companies (it being understood that nothing in this Agreement shall
limit the obligation of the Operating Companies to make such reimbursement or
bear such costs and expenses in accordance with the terms of the Credit
Agreement, the Security Agreement and the Transaction Documents); and provided,
further, that this Section 4(e) shall not require any party to this Agreement to
take any action which it believes, in good faith, may prejudice its ability to
realize the value of, or to otherwise protect, its interests (and the interests
of the parties for which it acts).
5. Additional Agreements with Seller Parties. The Collateral
Agent agrees, represents and warrants, on behalf of itself and the other parties
to the Credit
<PAGE> 402
EXHIBIT L
Page 5
Agreement (excluding the Operating Companies; the Collateral Agent and such
parties being herein called the "Seller Parties") as follows:
(a) The Seller Parties shall not (i) challenge the transfers
of Specified Assets from any Operating Company to Finco, whether on the
grounds that such transfers were disguised financings or fraudulent
conveyances or otherwise, so long as such transfers are carried out in
all material respects in accordance with the Transaction Documents, or
(ii) assert that any Operating Company and Finco should be
substantively consolidated.
(b) Notwithstanding any prior termination of this Agreement,
the Seller Parties shall not, with respect to Finco, institute or join
any other Person in instituting a proceeding of the type referred in
the definition of "Event of Bankruptcy," so long as any Security or any
obligation to a Lender shall be outstanding or there shall not have
lapsed one year plus one day since the last day on any such Security or
obligation shall have been outstanding. The foregoing will not limit
the rights of Seller Parties to file any claim or otherwise take any
action with respect to any such insolvency proceedings that may be
instituted against Finco by a Person other than a Seller Party.
(c) No Seller Party shall assign its rights or obligations
under the Credit Agreement to any other Person unless such Person shall
have agreed in writing to be bound by the terms of this Agreement as if
it were a party hereto.
(d) Subject to any applicable restrictions in the Transaction
Documents, the Trustee may (but shall not be required to) enter into
one or more premises of any Operating Company, whether leased or owned,
at any time during reasonable business hours, without force or process
of law and without obligation to pay rent or compensation to such
Operating Company, Finco or the Seller Parties and may use any
equipment located thereon relating to Records and may have access and
use of such Records and any other property to which such access and use
are granted under the Transaction Documents, in each case provided that
such uses are for the purposes of enforcing the Trustee's rights with
respect to the Specified Assets.
6. Additional Agreements of Trustee. The Trustee agrees,
represents and warrants as follows:
<PAGE> 403
EXHIBIT L
Page 6
(a) The Trustee shall not (I) challenge the transfers of the
Bank Collateral (other than Specified Assets) from any Operating
Company to the Collateral Agent, whether on the grounds that such
transfers were disguised financings or fraudulent conveyances or
otherwise, so long as such transfers are carried out in all material
respects in accordance with the Credit Agreement, the Security
Agreement and related documents, or (ii) assert that any Operating
Company and Finco should be substantively consolidated.
(b) The Trustee shall not assign its rights or obligations
under the Transaction Documents to any other Person unless such Person
shall have agreed in writing to be bound by the terms of this Agreement
as if it were a party hereto.
(c) The Trustee does not have any security or other interest
in any portion of the Bank Collateral (including, without limitation,
Receivables) that do not constitute Specified Assets.
7. Reliance. Each of Finco, the Trustee, all Lenders, all
Investors and all Seller Parties may rely on this Agreement as if such Person
were a party hereto. This Agreement shall remain in effect until the termination
of the Trust in accordance with the terms of the Pooling Agreement.
8. Miscellaneous. (a) No delay upon the part of any party to
this Agreement and the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any such party of
any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No waiver, amendment or other
modification, or consent with respect to, any provision of this Agreement shall
be effective unless the same shall be in writing and shall be signed by the
Collateral Agent and the Trustee.
(b) This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
one which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(c) This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions) of
the State of New York.
<PAGE> 404
EXHIBIT L
Page 7
(d) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors and assigns.
(e) All notices and other communications for hereunder shall, unless
otherwise stated herein, be in writing (including telecommunications and
communications by facsimile copy) and mailed, transmitted or delivered, as to
each party hereto at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective upon receipt or (i) in the case of notice by mail, three
business days after being deposited in the mails, postage prepaid, and (ii) in
the case of notice by facsimile copy, upon the earlier to occur of (A)
completion of transmission and telephone confirmation of receipt or (B) the
recipient's close of business on the date of transmission.
(f) Upon the execution and delivery of this Agreement by the parties
hereto, the Original Intercreditor Agreement shall be amended and restated in
its entirety by this Agreement, effective as of the date hereof, with all rights
and obligations created under or granted pursuant to the Original Intercreditor
Agreement continuing from the date thereof.
<PAGE> 405
EXHIBIT L
Page 8
IN WITNESS WHEREOF, the Collateral Agent and the Trustee have caused
this Agreement to be executed and delivered as of the day first above written.
THE FIRST NATIONAL BANK OF
CHICAGO, as Collateral Agent
By:
Name:_______________________________
Title:______________________________
One First National Plaza
Chicago, Illinois 60670
<PAGE> 406
EXHIBIT L
Page 9
MANUFACTURERS AND TRADERS
TRUST COMPANY, as Trustee
By:
Name:________________________________
Title:_______________________________
One M&T Plaza
7th Floor
Buffalo, New York 14203
<PAGE> 407
EXHIBIT L
Page 10
ACKNOWLEDGED AND AGREED:
BLADE RECEIVABLES CORPORATION
By:____________________________
Name:_______________________
Title:______________________
HOWMET CORPORATION
By:____________________________
Name:_______________________
Title:______________________
HOWMET CERCAST (U.S.A.), INC., as Seller
By:____________________________
Name:_______________________
Title:______________________
HOWMET REFURBISHMENT, INC., as Seller
By:____________________________
Name:_______________________
Title:______________________
<PAGE> 408
EXHIBIT L
Page 11
HOWMET-TEMPCRAFT, INC., as Seller
By:____________________________
Name:_______________________
Title:______________________
TURBINE COMPONENTS CORPORATION, as Seller
By:____________________________
Name:_______________________
Title:______________________
<PAGE> 409
DOCUMENTS TO BE DELIVERED ON OR BEFORE THE RESTATEMENT EFFECTIVE DATE
I. OPERATIVE DOCUMENTS:
2. Notice of Borrowing (Section l.03(a)) (Ex. A):
(a) Term Loan;
(b) Revolving Loan.
<PAGE> 410
NOTICE OF BORROWING
December 2, 1996
The First National Bank of Chicago, as
Administrative Agent for the Banks
party to the Credit Agreement
referred to below
One First National Plaza
Chicago, Illinois 60670
Attention: John Beirne
Ladies and Gentlemen:
The undersigned, Howmet Acquisition Corp., (the "Borrower") Howmet
Corporation (as successor by merger to Howmet Acquisition Corp., the
'Borrower"), refers to the Credit Agreement, dated as of December 13,1995 (as
amended from time to time, the "Credit Agreement"), the terms defined therein
being used herein as therein defined), among Blade Acquisition Corp., Howmet
Holdings Acquisition Corp., the Borrower, various Banks from time to time party
thereto, Bankers Trust Company, Citicorp USA, Inc. and The First National Bank
of Chicago, as Managing Agents, Bankers Trust Company, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and you, as Administrative Agent for
such Banks, and hereby gives you notice, irrevocably, pursuant to Section
1.03(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is December 5,
1996.*
(ii) The aggregate principal amount of the Proposed Borrowing is
$175,000,000.00.
(iii) The Proposed Borrowing is to consist of a Term Loan.
(iv) The Loan to be made pursuant to the Proposed Borrowing shall
be maintained as a Eurodollar Loan.
(v) The initial Interest Period for the Proposed Borrowing is till
December 31,1996.
<PAGE> 411
-2-
The undersigned hereby certifies that the following statements are true
and correct on the date hereof, and will be true and correct on the date of the
Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Documents are and will be true and correct in all material respects, both before
and after giving effect to the Proposed Borrowing and to the application of the
proceeds thereof, as though made on such date (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date); and
(B) no Default or event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Name: Jeffrey A. Jankowski
Title: Treasurer
* Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each case,
after the date hereof.
** Eurodollar Loans may not be incurred prior to the earlier of (x) the 60th day
after the Initial Borrowing Date and (y) the Syndication Date.
*** To be included for a Proposed Borrowing of Eurodollar Loans.
<PAGE> 412
NOTICE OF BORROWING
(REVISED)
December 2, 1996
The First National Bank of Chicago, as
Administrative Agent for the Banks
party to the Credit Agreement
referred to below
One First National Plaza
Chicago, Illinois 60670
Attention: John Beirne
Ladies and Gentlemen:
The undersigned, Howmet Acquisition Corp., (the "Borrower") Howmet
Corporation (as successor by merger to Howmet Acquisition Corp., the
'Borrower"), refers to the Credit Agreement, dated as of December 13,1995 (as
amended from time to time, the "Credit Agreement"), the terms defined therein
being used herein as therein defined), among Blade Acquisition Corp., Howmet
Holdings Acquisition Corp., the Borrower, various Banks from time to time party
thereto, Bankers Trust Company, Citicorp USA, Inc. and The First National Bank
of Chicago, as Managing Agents, Bankers Trust Company, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and you, as Administrative Agent for
such Banks, and hereby gives you notice, irrevocably, pursuant to Section
1.03(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "Proposed Borrowing") as
required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is December 5,
1996.*
(ii) The aggregate principal amount of the Proposed Borrowing is
$10,000,000.00.
(iii) The Proposed Borrowing is to consist of a Revolving Loan.
(iv) The Loan to be made pursuant to the Proposed Borrowing shall
be initially maintained as follows:
A. $5,000,000.00 Base Rate Loan
B. $5,000,000.00 Eurodollar
(v) The initial Interest Period for the Proposed Eurodollar
portion of the Borrowing is December 31, 1996.
<PAGE> 413
-2-
The undersigned hereby certifies that the following statements are true
and correct on the date hereof, and will be true and correct on the date of the
Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Documents are and will be true and correct in all material respects, both before
and after giving effect to the Proposed Borrowing and to the application of the
proceeds thereof, as though made on such date (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date); and
(B) no Default or event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Name: Jeffrey A. Jankowski
Title: Treasurer
* Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each case,
after the date hereof.
** Eurodollar Loans may not be incurred prior to the earlier of (x) the 60th day
after the Initial Borrowing Date and (y) the Syndication Date.
*** To be included for a Proposed Borrowing of Eurodollar Loans.
<PAGE> 414
DOCUMENTS TO BE DELIVERED ON OR BEFORE THE RESTATEMENT EFFECTIVE DATE
I. OPERATIVE DOCUMENTS:
3. Term Notes. (Section 1.05(a)) (Ex. B-1)
<PAGE> 415
TERM NOTE
$ 8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation
(the "Borrower"), hereby promises to pay to BANK OF NOVA SCOTIA or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
($8,500,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit
Agreement, dated as of December 13, 1995 and amended and restated as of December
5, 1996, among Blade Acquisition Corp., Howmet Holdings Corporation, the
Borrower, the lenders from time to time party thereto (including the Bank),
Bankers Trust Company, Citicorp USA, Inc. and The First National Bank of
Chicago, as Managing Agents, Bankers Trust Company, as Syndication Agent,
Citicorp USA, Inc., as Documentation Agent and The First National Bank of
Chicago, as Administrative Agent (as from time to time in effect, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). This Note is secured by the Security
Documents (as defined in the Agreement) and is entitled to the benefits of the
Guaranties (as defined in the Agreement). As provided in the Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
<PAGE> 416
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 417
TERM NOTE
$8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to BANQUE NATIONALE DE PARIS or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
($8,500,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 418
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 419
TERM NOTE
$ 8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to THE FUJI BANK LIMITED, LOS ANGELES AGENCY
or its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The First National Bank
of Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of EIGHT MILLION. FIVE HUNDRED THOUSAND DOLLARS
($8,500,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 420
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 421
TERM NOTE
$ 8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to MELLON BANK, N.A. or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000.00) or,
if less, the then unpaid principal amount of all Term Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 422
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 423
TERM NOTE
$ 8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to BANK OF AMERICA ILLINOIS
or its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The First National Bank
of Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
($8,500,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 424
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 425
TERM NOTE
$14,000,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to CITICORP USA, INC. or
its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The First National Bank
of Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of FOURTEEN MILLION DOLLARS ($14,000,000.00) or, if
less, the then unpaid principal amount of all Term Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 426
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 427
TERM NOTE
$ 12,250,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to ABN/AMRO BANK N.V. or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of TWELVE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($12,250,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 428
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 429
TERM NOTE
$12,250,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to BANK OF MONTREAL or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of TWELVE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($12,250,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 430
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 431
TERM NOTE
$12,250,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to CREDIT LYONNAIS, NEW YORK BRANCH or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of TWELVE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($12,250,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 432
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 433
TERM NOTE
$12,250,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware
corporation (the "Borrower"), hereby promises to pay to CREDIT SUISSE or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of TWELVE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($12,250,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp.; Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 434
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 435
TERM NOTE
$12,250,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN ISLAND BRANCH or its registered assigns (the "Bank"), in lawful
money of the United States of America in immediately available funds, at the
office of The First National Bank of Chicago (the "Administrative Agent")
located at One First National Plaza, Chicago, IL 60670 on the Maturity Date (as
defined in the Agreement referred to below) the principal sum of TWELVE MILLION
TWO HUNDRED FIFTY THOUSAND DOLLARS ($12,250,000.00) or, if less, the then unpaid
principal amount of all Term Loans (as defined in the Agreement) made by the
Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
<PAGE> 436
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 437
TERM NOTE
$ 12,250,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to FLEET NATIONAL BANK or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of TWELVE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($12,250,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 438
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 439
TERM NOTE
$ 8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to THE BANK OF NEW YORK or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000.00) or,
if less, the then unpaid principal amount of all Term Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 440
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 441
TERM NOTE
$ 8,500,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to SAKURA BANK, LIMITED, LOS ANGELES AGENCY
or its registered assigns (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of The First National Bank
of Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS
($8,500,000.00) or, if less, the then unpaid principal amount of all Term Loans
(as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 442
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 443
TERM NOTE
$14,000,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to THE FIRST NATIONAL BANK OF CHICAGO or its
registered assigns (the "Bank"), in lawful money of the United States of America
in immediately available funds, at the office of The First National Bank of
Chicago (the "Administrative Agent") located at One First National Plaza,
Chicago, IL 60670 on the Maturity Date (as defined in the Agreement referred to
below) the principal sum of FOURTEEN MILLION DOLLARS ($14,000,000.00) or, if
less, the then unpaid principal amount of all Term Loans (as defined in the
Agreement) made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 444
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 445
TERM NOTE
$14,000,000.00 New York, New York
December 5, 1996
FOR VALUE RECEIVED, HOWMET CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to BANKERS TRUST COMPANY or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of The First National Bank of Chicago
(the "Administrative Agent") located at One First National Plaza, Chicago, IL
60670 on the Maturity Date (as defined in the Agreement referred to below) the
principal sum of FOURTEEN MILLION DOLLARS ($14,000,000.00) or, if less, the then
unpaid principal amount of all Term Loans (as defined in the Agreement) made by
the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
dated as of December 13, 1995 and amended and restated as of December 5, 1996,
among Blade Acquisition Corp., Howmet Holdings Corporation, the Borrower, the
lenders from time to time party thereto (including the Bank), Bankers Trust
Company, Citicorp USA, Inc. and The First National Bank of Chicago, as Managing
Agents, Bankers Trust Company, as Syndication Agent, Citicorp USA, Inc., as
Documentation Agent and The First National Bank of Chicago, as Administrative
Agent (as from time to time in effect, the "Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE> 446
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
HOWMET CORPORATION
By: /s/Jeffrey A. Jankowski
------------------------------
Title: Treasurer
<PAGE> 1
BLADE RECEIVABLES MASTER TRUST
CLASS A CERTIFICATES SERIES 1996-1
CLASS B CERTIFICATES SERIES 1996-1
DESK COPIES OF
PROGRAM DOCUMENTS
FOR
HOWMET CORPORATION
April 18, 1996
FIRST CHICAGO CAPITAL MARKETS, INC.
CREDIT SUISSE
<PAGE> 2
CONTENTS
<PAGE> 3
PROJECT BLADE - TAKEOUT
DESK SET
APRIL 18, 1996
Key To Parties and Counsel
--------------------------
BRC Blade Receivables Corporation
CS Credit Suisse
FNBC The First National Bank of Chicago
HRAW&G Hodgson Russ Andrews Woods & Goodyear
HCI Howmet Cercast (U.S.A.), Inc.
Howmet Howmet Corporation
HRI Howmet Refurbishment, Inc.
HTI Howmet-Tempcraft, Inc.
KKB&R Kummer Kaempfer Bonner & Renshaw
L&W Latham & Watkins
Trustee Manufacturers and Traders Trust Company
PHJ&W Paul, Hastings, Janofsky & Walker
PW Price Waterhouse, LLP
TCC Turbine Components Corporation
VRC Valuation Research Corporation
VSS&P Vorys, Sater, Seymour & Pease
DOCUMENT TAB NUMBER
I. Operative Documents
1. Blade Receivables Master Trust Amended and
Restated Pooling and Servicing Agreement ........................ 1
EXHIBIT A Form of Lockbox Account Letter Agreement
EXHIBIT B Form of Concentration Account Letter
Agreement
EXHIBIT C Form of Monthly Servicer's Certificate
EXHIBIT D Annual Agreed-Upon Procedures
EXHIBIT E Form of Transferor Certificate
EXHIBIT F Form of Certificate to be Given by
Certificate Owner
EXHIBIT G Form of Certificate to be Given by
Euroclear or Cedel
EXHIBIT H Form of Certificate to be Given by
Transferee of Beneficial Interest in a
Regulation S Temporary Book-Entry
Certificate
EXHIBIT I Form of Transfer Certificate for
Exchange or Transfer from 144A Book-
Entry Certificate to Regulation S Book-
Entry Certificate
<PAGE> 4
EXHIBIT J Form of Placement Agent Exchange
Instructions
EXHIBIT K Form of Certificate to be Delivered upon
Exchange or Registration of Transfer of
Definitive 144A Certificates
EXHIBIT L Form of Transfer Certificate for
Exchange or Transfer from Regulation S
Temporary Book-Entry Certificate to Rule
144A Book-Entry Certificate
SCHEDULE 1 Account Banks - Lockbox Banks
Account Banks - Concentration Account
Bank
APPENDIX A Definitions
2. Series 1996-1 Supplement to Amended and
Restated Pooling and Servicing Agreement ........................ 2
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
EXHIBIT B Form of Daily Report
EXHIBIT C Form of Monthly Report
3. Amended and Restated Receivables
Purchase Agreement .............................................. 3
EXHIBIT A Form of Buyer Note
EXHIBIT B Form of Seller Assignment Certificate
EXHIBIT C Form of Contribution Agreement
SCHEDULE 1 Litigation and Other Proceedings
SCHEDULE 2 Changes in Financial Condition
SCHEDULE 3 Offices of the Sellers where Records are
Maintained
SCHEDULE 4 Legal Names, Trade Names and Names Under
Which the Companies Do Business
4. Certificate Purchase Agreement
(Series 1996-1, Class A) ........................................ 4
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX X Index of Additional Defined Terms
-ii-
<PAGE> 5
5. Certificate Purchase Agreement
(Series 1996-1, Class B) ........................................ 5
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX X Index of Additional Defined Terms
6. Series 1996-1 Certificate (Class A) ............................. 6
7. Series 1996-1 Certificate (Class B) ............................. 7
8. Guaranty of Howmet .............................................. 8
9. Intercreditor Agreement ......................................... 9
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PROJECT BLADE - TAKEOUT
BLADE RECEIVABLES MASTER TRUST
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
<PAGE> 7
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions .............................. page 1
SECTION 1.2 Transitional Matters ..................... page 1
ARTICLE II CONVEYANCE OF ASSETS
SECTION 2.1 Creation of the Trust;
Conveyance of Certain
Assets ................................... page 1
SECTION 2.2 Acceptance by Trustee .................... page 3
SECTION 2.3 Representations and Warranties
of Tranferor Relating to
the Transferred Assets ................... page 3
SECTION 2.4 No Assumption of Obligations
Relating to Receivables,
Related Transferred Assets
or Contracts ............................. page 5
SECTION 2.5 Conveyance of Purchased
Interests by the Trust ................... page 5
ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1 Acceptance of Appointment;
Other Matters ............................ page 6
SECTION 3.2 Duties of Servicer and
Transferor ............................... page 7
SECTION 3.3 Lockbox Accounts;
Concentration Accounts ................... page 10
SECTION 3.4 Servicing Compensation ................... page 13
SECTION 3.5 Records of Servicer and
Reports to be Prepared by
Servicer ................................. page 14
SECTION 3.6 Monthly Servicer's Certificate ........... page 16
SECTION 3.7 Servicing Report of
Independent Public
Accountants; Forms 10-Q
and 10-K ................................. page 16
SECTION 3.8 Rights of Trustee ........................ page 17
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SECTION 3.9 Ongoing Responsibilities of
Howmet .................................. page 19
SECTION 3.10 Further Action Evidencing
Transfers ............................... page 20
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS
AND PURCHASERS; ALLOCATIONS
SECTION 4.1 Rights of Certificateholders and
Purchasers ............................... page 20
SECTION 4.2 Establishment of Transaction
Accounts ................................. page 21
SECTION 4.3 Trust-Level Calculations and
Funds Allocations ........................ page 23
SECTION 4.4 Investment of Funds in
Transaction Accounts ..................... page 23
SECTION 4.5 Attachment of Transaction
Accounts ................................. page 24
ARTICLE V DISTRIBUTIONS AND REPORTS
ARTICLE VI THE CERTIFICATES
SECTION 6.1 The Certificates ........................ page 24
SECTION 6.2 Authentication of Certificates .......... page 25
SECTION 6.3 Registration of Transfer and
Exchange of Certificates ................ page 25
SECTION 6.4 Mutilated, Destroyed, Lost or
Stolen Certificates ..................... page 28
SECTION 6.5 Persons Deemed Owners ................... page 28
SECTION 6.6 Appointment of Paying Agent ............. page 29
SECTION 6.7 Access to List of
Certificateholders' Names
and Addresses ........................... page 30
SECTION 6.8 Authenticating Agent .................... page 30
SECTION 6.9 Tax Treatment ........................... page 32
SECTION 6.10 Issuance of Additional Series
of Certificates and Sales
of Purchased Interests .................. page 32
SECTION 6.11 Book-Entry Certificates ................. page 37
SECTION 6.12 Notices to Clearing Agency .............. page 44
SECTION 6.13 Definitive Certificates ................. page 44
SECTION 6.14 Letter of Representations ............... page 45
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ARTICLE VII TRANSFEROR
SECTION 7.1 Representations and Warranties
of Transferor Relating to
Transferor and the
Transaction Documents .................... page 45
SECTION 7.2 Covenants of Transferor .................. page 48
SECTION 7.3 Indemnification by Transferor ............ page 55
ARTICLE VIII SERVICER
SECTION 8.1 Representations and Warranties
of Servicer .............................. page 57
SECTION 8.2 Covenants of Servicer .................... page 59
SECTION 8.3 Merger or Consolidation of or
Assumption of the
Obligations of Servicer .................. page 60
SECTION 8.4 Indemnification by Servicer .............. page 61
SECTION 8.5 Servicer Liability ....................... page 62
SECTION 8.6 Limitation on Liability of
Servicer and Others ...................... page 62
ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1 Early Amortization Events ................ page 63
SECTION 9.2 Remedies ................................. page 63
SECTION 9.3 Additional Rights Upon the
Occurrence of Certain
Events ................................... page 63
ARTICLE X SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults ....................... page 64
SECTION 10.2 Trustee to Act; Appointment of
Successor ............................... page 66
SECTION 10.3 Notification of Servicer
Default; Notification of
Appointment of Successor
Servicer ................................ page 68
ARTICLE XI TRUSTEE
SECTION 11.1 Duties of Trustee ....................... page 69
SECTION 11.2 Certain Matters Affecting
Trustee ................................. page 72
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SECTION 11.3 Limitation on Liability of
Trustee ................................ page 74
SECTION 11.4 Trustee May Deal with Other
Parties ................................ page 75
SECTION 11.5 Servicer To Pay Trustee's Fees
and Expenses ........................... page 75
SECTION 11.6 Eligibility Requirements for
Trustee ................................ page 76
SECTION 11.7 Resignation or Removal of
Trustee ................................ page 77
SECTION 11.8 Successor Trustee ...................... page 77
SECTION 11.9 Merger or Consolidation of
Trustee ................................ page 78
SECTION 11.10 Appointment of Co-Trustee or
Separate Trustee ....................... page 78
SECTION 11.11 Tax Returns ............................ page 80
SECTION 11.12 Trustee May Enforce Claims
Without Possession of
Certificates ........................... page 80
SECTION 11.13 Suits for Enforcement .................. page 81
SECTION 11.14 Rights of Required Investors
To Direct Trustee ...................... page 81
SECTION 11.15 Representations and
Warranties of Trustee .................. page 81
SECTION 11.16 Maintenance of Office or
Agency ................................. page 82
ARTICLE XII TERMINATION
SECTION 12.1 Termination of Trust ................... page 82
SECTION 12.2 Final Distribution ..................... page 83
SECTION 12.3 Rights Upon Termination of
the Trust .............................. page 84
SECTION 12.4 Optional Repurchase of
Investor Interests ..................... page 85
SECTION 12.5 Defeasance and
Refinancing of Certificates ............ page 85
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment, Waiver, Etc .................. page 86
SECTION 13.2 Actions by Certificateholders
and Purchasers .......................... page 88
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SECTION 13.3 Limitation on Rights of
Certificateholders ..................... page 89
SECTION 13.4 Limitation on Rights of
Purchasers ............................. page 90
SECTION 13.5 Governing Law .......................... page 91
SECTION 13.6 Notices ................................ page 91
SECTION 13.7 Severability of Provisions ............. page 92
SECTION 13.8 Certificates Nonassessable and
Fully Paid ............................. page 92
SECTION 13.9 Nonpetition Covenant ................... page 93
SECTION 13.10 No Waiver; Cumulative
Remedies ............................... page 93
SECTION 13.11 Counterparts ........................... page 93
SECTION 13.12 Third-Party Beneficiaries .............. page 93
SECTION 13.13 Integration ............................ page 94
SECTION 13.14 Binding Effect; Assignability;
Survival of Provisions ................. page 94
SECTION 13.15 Limitation on Liability of
Certain Persons ........................ page 94
SECTION 13.16 Recourse to Transferred Assets ......... page 95
SECTION 13.17 Submission to Jurisdiction ............. page 95
SECTION 13.18 Waiver of Jury Trial ................... page 96
SECTION 13.19 Certain Partial Releases ............... page 96
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EXHIBITS
EXHIBIT A Form of Lockbox Account Letter Agreement
EXHIBIT B Form of Concentration Account Letter Agreement
EXHIBIT C Form of Monthly Servicer's Certificate
EXHIBIT D Annual Agreed-Upon Procedures
EXHIBIT E Form of Transferor Certificate
EXHIBIT F Form of Certificate to be Given by Certificate Owner
EXHIBIT G Form of Certificate to be Given by Euroclear or Cedel
EXHIBIT H Form of Certificate to be Given by Transferee of
Beneficial Interest in a Regulation S Temporary
Book-Entry Certificate
EXHIBIT I Form of Transfer Certificate for Exchange or
Transfer from 144A Book-Entry Certificate to
Regulation S Book-Entry Certificate
EXHIBIT J Form of Placement Agent Exchange Instructions
EXHIBIT K Form of Certificate to be Delivered upon
Exchange or Registration of Transfer of
Definitive 144A Certificates
EXHIBIT L Form of Transfer Certificate for Exchange
or Transfer from Regulation S Temporary Book-Entry
Certificate to Rule 144A Book-Entry Certificate
SCHEDULES
SCHEDULE 1 Account Banks - Lockbox Banks
Account Banks - Concentration Account Bank
APPENDIX
APPENDIX A Definitions
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This AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of
April 18, 1996 (this "Agreement"), is made among BLADE RECEIVABLES CORPORATION,
a Nevada corporation ("Transferor"), HOWMET CORPORATION, a Delaware corporation
("Howmet"), and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as Trustee.
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used in this Agreement have
the meanings that Appendix A assigns to them, and this Agreement shall be
interpreted in accordance with Part B of Appendix A.
SECTION 1.2 Transitional Matters. The Pooling and Servicing Agreement
dated as of December 13, 1995 (the "Existing Pooling Agreement") among the
parties to this Agreement shall be amended and restated in its entirety to read
as set forth in this Agreement. Each reference to the Existing Pooling Agreement
in any document shall (unless the context otherwise requires) be deemed to refer
to the Existing Pooling Agreement as amended and restated by this Agreement.
ARTICLE II CONVEYANCE OF ASSETS
SECTION 2.1 Creation of the Trust; Conveyance of Certain Assets. (a)
Transferor confirms the transfer, assignment, set over, grant and conveyance to
Trustee under the Existing Pooling Agreement, and hereby transfers, assigns,
sets over, grants and otherwise conveys to Trustee, in its capacity as
representative of the Certificateholders and the Purchasers, without recourse
(except as expressly provided herein), all of its right, title and interest in,
to and under, (i) each Receivable (including each Contributed Receivable) that
has been or is hereafter transferred by the Sellers to Transferor (each, a
"Transferred Receivable"), (ii) all Related Assets, (iii) all of Transferor's
rights to receive payment or pursue remedies under the Seller Transaction
Documents (the property described in clauses (ii) and (iii) being called the
"Related Transferred Assets"), (iv) all funds from time to time on deposit in
each of the Transaction Accounts (including funds deposited in a Transaction
Account in connection with the issuance of any prefunded Series) and all funds
from time to time on deposit in each of the Bank Accounts representing
Collections on, or other proceeds of, the foregoing and, in each case, all
certificates and instruments, if any, from time to time evidencing such funds,
all investments made with such funds, all claims thereunder or in connection
therewith and all interest, dividends, monies, instruments, securities and other
property from time to time received, receivable or otherwise distributed in
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respect of or in exchange for any or all of the foregoing, (v) any Enhancements
obtained for the benefit of any Series or Purchased Interest and (vi) all moneys
due or to become due and all amounts received or receivable with respect to any
of the foregoing and all proceeds of the foregoing. Such property, whether now
existing or hereafter acquired, shall constitute the assets of the Trust
(collectively, the "Transferred Assets"). The foregoing transfer, assignment,
setover, grant and conveyance to the Trust is made to Trustee, on behalf of the
Trust, and each reference in this Agreement to such transfer, assignment,
setover and conveyance shall be construed accordingly.
(b) In connection with the transfer described in subsection (a),
Transferor and Servicer have recorded and filed or caused to be recorded and
filed, as an expense of Servicer paid out of the Servicing Fee, financing
statements with respect to the Transferred Assets meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the transfer and assignment of the Transferred Assets to the Trust.
In connection with the transfer described in subsection (a), Transferor and
Servicer further agree to deliver to Trustee each Transferred Asset (including
any original documents or instruments included in the Transferred Assets as are
necessary to effect such transfer) in which the transfer of an interest is
perfected under the UCC or otherwise by possession. Transferor or Servicer shall
deliver each such Transferred Asset to Trustee, as an expense of Servicer paid
out of the Servicing Fee, immediately upon the transfer of any such Transferred
Asset to Trustee pursuant to subsection (a).
(c) In connection with the transfer described above in subsection (a),
Servicer shall, on behalf of Transferor, as an expense of Servicer paid out of
the Servicing Fee, on or prior to the date hereof, mark the master data
processing records evidencing the Receivables with the following legend:
"CERTAIN RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO BLADE
RECEIVABLES CORPORATION ("BRC") PURSUANT TO A RECEIVABLES PURCHASE
AGREEMENT, DATED AS OF DECEMBER 13, 1995, AND AMENDED AND RESTATED AS
OF APRIL 18, 1996, AMONG HOWMET CORPORATION ("HOWMET"), CERTAIN OF ITS
SUBSIDIARIES AND BRC; AND SUCH RECEIVABLES HAVE BEEN TRANSFERRED TO THE
BLADE RECEIVABLES MASTER TRUST PURSUANT TO A POOLING AND SERVICING
AGREEMENT, DATED AS OF DECEMBER 13, 1995, AND AMENDED AND RESTATED AS
OF APRIL 18, 1996, AMONG BRC, AS TRANSFEROR, HOWMET, AS INITIAL
SERVICER, AND
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MANUFACTURERS AND TRADERS TRUST COMPANY, AS TRUSTEE."
(d) Upon the request of Transferor, Trustee will cause Certificates in
authorized denominations evidencing the entire interest in the Trust to be duly
authenticated and delivered to or upon the order of Transferor pursuant to
Section 6.2. Pursuant to the Transferor Certificate, Transferor shall be
entitled to receive current and deferred transfer payments at the times and in
the amounts specified in the various Supplements and PI Agreements executed from
time to time.
(e) If the transfer, assignment, set-over, grant and conveyance
described in subsection (a) of this Section 2.1 are deemed to create a security
interest in any of the property described in that Section, Transferor hereby (i)
grants to the Trustee, for the benefit of the Trustee, the Certificateholders
and the Purchasers, a security interest in that property (which shall be deemed
to be a first perfected security interest and shall secure Transferor's
obligations under the Transaction Documents, the Certificates and the Purchased
Interests), and (ii) agrees that this Agreement shall constitute a security
agreement under applicable law.
SECTION 2.2 Acceptance by Trustee. Trustee hereby acknowledges its
acceptance on behalf of the Trust of all right, title and interest to the
Transferred Assets and declares that it shall maintain such right, title and
interest, upon the trust herein set forth, for the benefit of all
Certificateholders and Purchasers, on the terms and subject to the conditions
hereinafter set forth.
SECTION 2.3 Representations and Warranties of Transferor Relating to
the Transferred Assets.
(a) Representations and Warranties. At the time that any Receivable or
Related Asset is transferred by Transferor to the Trust, Transferor hereby
represents and warrants that:
(i) Valid Transfer. Each transfer of Receivables and other
Transferred Assets by Transferor to the Trust pursuant to this
Agreement constitutes a valid transfer and assignment to the Trust of
all right, title and interest of Transferor in, to and under such
Receivables and the Related Transferred Assets, free and clear of any
Adverse Claim (other than any Permitted Adverse Claim), and constitutes
either an absolute transfer of such property to the Trust or a grant of
a first priority perfected security interest in such property to the
Trust, in
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either case enforceable against creditors of, and purchasers from,
Transferor and the Sellers.
(ii) Quality of Title. (A) Immediately before each transfer to
be made by Transferor hereunder, each Receivable and Related
Transferred Asset that was then to be transferred to the Trust
hereunder was owned by Transferor free and clear of any Adverse Claim
(other than any Permitted Adverse Claim); and, within two Business Days
of the First Issuance Date, Transferor and Servicer will make, or
caused to be made, all filings and take all other action under
applicable law in each relevant jurisdiction in order to protect and
perfect the Trust's interest in such Receivables, such Related
Transferred Assets and the funds in the Transaction Accounts against
all creditors of, and purchasers from, Transferor and the Sellers.
(B) No effective financing statement or other instrument
similar in effect that covers all or part of any Transferred
Receivable, any Related Transferred Asset, any other Transferred Asset
or any interest in any proceeds thereof is on file in any recording
office except financing statements as to which termination statements
or releases are filed on the First Issuance Date or within two Business
Days after the First Issuance Date and except any filings relating to
any Permitted Adverse Claim.
(C) No acquisition of any Receivable or Related Transferred
Asset by Transferor or the Trust constitutes a fraudulent transfer or
fraudulent conveyance under the United States Bankruptcy Code or
applicable state bankruptcy or insolvency laws or is otherwise void or
voidable or subject to subordination under similar laws or principles
or for any other reason.
(iii) Governmental Approvals. With respect to each Transferred
Receivable and Related Transferred Asset, all consents, licenses,
approvals or authorizations of, or notices to or registrations,
declarations or filings with, any Governmental Authority required to be
obtained, effected or made by the Sellers, Servicer or Transferor in
connection with the conveyance of such Transferred Receivable and
Related Transferred Asset by the Sellers to Transferor, or by
Transferor to the Trust, have been duly obtained, effected or given and
are in full force and effect.
(iv) Eligible Receivables. (A) On the date on which any Seller
transfers a Receivable to Transferor, and Transferor transfers such
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Receivable to the Trust, unless otherwise identified by Servicer in the
Daily Report for such date, such Receivable is an Eligible Receivable,
and (B) on the date of each Daily Report or Monthly Report that
identifies a Receivable as an Eligible Receivable, such Receivable is
an Eligible Receivable.
(b) Notice of Breach. The representations and warranties set forth in
subsection (a) shall survive the transfer of the Transferred Receivables and the
Related Transferred Assets to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties set forth in
subsection (a), the party discovering the breach shall give written notice to
the others within four Business Days following the discovery; provided, however
that if such breach arises from a Seller's failure to perform its obligations
under the Purchase Agreement and such failure is of the type that may be cured
by settlement of a Seller Non-Complying Receivables Adjustment or Seller
Dilution Adjustment under Sections 3.1 and 3.5 of the Purchase Agreement, and
such settlement shall have (in fact) been made within the time limit specified
under such sections, then no breach shall be deemed to have occurred under this
Agreement. Trustee's obligations in respect of discovering any breach are
limited as provided in Section 11.2(g).
SECTION 2.4 No Assumption of Obligations Relating to Receivables,
Related Transferred Assets or Contracts. The transfer, assignment, set over,
grant and conveyance described in Section 2.1 does not constitute and is not
intended to result in a creation or an assumption by the Trust, Trustee or any
Investor Certificateholder of any obligation of Servicer, Transferor, any Seller
or any other Person in connection with the Transferred Receivables or the
Related Transferred Assets or under the related Contracts or any other agreement
or instrument relating thereto. None of Trustee, the Trust, any Investor
Certificateholder or any Purchaser shall have any obligation or liability to any
Obligor.
SECTION 2.5 Conveyance of Purchased Interests by the Trust. Pursuant to
the terms of a PI Agreement, Trustee, on behalf of the Trust, from time to time
may sell, transfer, assign, set over and otherwise convey Purchased Interests to
a Purchaser or an Agent for the account of a Purchaser; and Trustee, on behalf
of the Trust, is authorized and directed (subject to the applicable terms of
Section 6.10), upon the written request of Transferor, to enter into one or more
PI Agreements in the form annexed to each such written request. Pursuant to a PI
Agreement, Collections allocated to Purchased Interests may be reinvested and
such Purchased Interests may be recomputed, each from time to time as provided
therein.
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ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1 Acceptance of Appointment; Other Matters.
(a) Designation of Servicer. The servicing, administering and
collection of the Transferred Receivables and the Related Transferred Assets
shall be conducted by the Person designated as Servicer hereunder from time to
time in accordance with this section. Until Trustee gives a Termination Notice
to Howmet pursuant to Section 10.1, Howmet is designated (and agrees to act) as
Servicer.
(b) Delegation of Certain Servicing Activities. In the ordinary course
of business, Servicer may at any time delegate its duties hereunder with respect
to the Transferred Receivables and the Related Transferred Assets to any Person.
Each Person to whom any such duties are delegated in accordance with this
Section is called a "Sub-Servicer". Notwithstanding any such delegation,
Servicer shall remain liable for the performance of all duties and obligations
of Servicer pursuant to the terms of this Agreement and the other Transaction
Documents. The fees and expenses of any Sub-Servicers shall be as agreed between
Servicer and the Sub-Servicers from time to time and none of the Trust, Trustee,
any Certificateholder or any Purchaser shall have any responsibility therefor.
Upon any termination of a Servicer pursuant to Section 10.1, all Sub-Servicers
designated pursuant to this subsection by such Servicer shall automatically be
terminated.
(c) Termination. The designation of Servicer (and each Sub-Servicer)
under this Agreement shall automatically terminate upon termination of the Trust
pursuant to Section 12.1.
(d) Resignation of Servicer. Howmet shall not resign as Servicer unless
it determines that (i) the performance of its duties is no longer permissible
under applicable law and (ii) there is no reasonable action that it could take
to make the performance of its duties permissible under applicable law. If
Howmet determines that it must resign for the reasons stated above, it shall,
prior to the tendering of its resignation, deliver to Trustee an Opinion of
Counsel confirming the satisfaction of the conditions set forth in clause (i) of
the preceding sentence. No resignation by Howmet shall become effective until a
Successor Servicer shall have assumed the responsibilities and obligations of
Servicer in accordance with Section 10.2; provided, however, that if Howmet is
prevented by law from continuing to serve as Servicer, Trustee shall assume the
responsibilities and obligations of Servicer in accordance with Section 10.2.
Trustee shall give prompt notice to the Rating Agencies of the appointment of
any Successor Servicer.
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SECTION 3.2 Duties of Servicer and Transferor.
(a) Duties of Servicer in General. Servicer shall service the
Transferred Receivables and the Related Transferred Assets and, subject to the
terms and provisions of this Agreement, shall have full power and authority,
acting alone or through any Sub-Servicer, to do any and all things in connection
with such servicing that it may deem necessary or appropriate. Trustee shall
execute and deliver to Servicer any powers of attorney or other instruments or
documents that are prepared by Servicer and stated in an Officer's Certificate
to be, and shall furnish Servicer with any documents in its possession,
necessary or appropriate to enable Servicer to carry out its servicing duties.
Servicer shall exercise the same care and apply the same policies with respect
to the collection and servicing of the Transferred Receivables and the Related
Transferred Assets that it would exercise and apply if it owned such Receivables
and the Related Transferred Assets, all in substantial compliance with
applicable law and in accordance with the Credit and Collection Policy.
Servicer shall take or cause to be taken (and shall cause each
Sub-Servicer (if any) to take or cause to be taken) all such actions as Servicer
deems reasonably appropriate to collect each Transferred Receivable and Related
Transferred Asset, all in accordance with applicable law and the Credit and
Collection Policy.
Without limiting the generality of the foregoing and subject to the
next preceding paragraph and Section 10.1, Servicer or its designee is hereby
authorized and empowered, unless such power and authority is revoked by Trustee
on account of the occurrence of a Servicer Default, (i) to instruct Trustee to
make withdrawals and payments from the Transaction Accounts as set forth in this
Agreement, (ii) to execute and deliver, on behalf of the Trust for the benefit
of the Certificateholders and Purchasers, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Transferred Receivables
and the Related Transferred Assets, (iii) to make any filings, reports, notices,
applications and registrations with, and to seek any consents or authorizations
from, the Securities and Exchange Commission and any state securities authority
on behalf of the Trust as may be necessary or appropriate to comply with any
federal or state securities laws or reporting requirements or other laws or
regulations, and (iv) to the extent permitted under and in compliance with the
Credit and Collection Policy and with all applicable laws, rules, regulations,
judgments, orders and decrees of courts and other governmental authorities
(whether federal, state, local or foreign) and all other tribunals, to commence
or settle collection proceedings with
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respect to the Transferred Receivables and otherwise to enforce the rights and
interests of the Trust and the Certificateholders and Purchasers in, to and
under the Transferred Receivables or Related Transferred Assets (as applicable).
(b) Identification and Transfer of Collections. Servicer shall cause
Collections and all other Transferred Assets that consist of cash or cash
equivalents to be deposited into the Bank Accounts and the Transaction Accounts
pursuant to the terms and provisions of Section 3.3 and Article IV. Following
notification from any Seller to Servicer or discovery by Servicer that
collections of any receivable or other asset that is not a Collection of a
Transferred Receivable or a Related Transferred Asset have been deposited into a
Bank Account or the Master Collection Account, Servicer shall cause all such
collections to be segregated, apart and in different accounts, from the Bank
Accounts and the Transaction Accounts. Servicer and, to the extent applicable,
Trustee shall hold all such funds in trust, separate and apart from such
Person's other funds. On each Business Day, after such misdirected collections
have been reasonably identified by Servicer to Trustee, Servicer shall instruct
Trustee to, and Trustee shall, turn over to the appropriate Lockbox Bank,
applicable Seller or other applicable Howmet Person (or their designees) all
such misdirected collections less all reasonable and appropriate out-of-pocket
costs and expenses, if any, incurred by Servicer in collecting such receivables.
All payments made by an Obligor that is obligated to make payments with
respect to both Receivables included in the Transferred Assets and Receivables
not included in the Transferred Assets shall be applied against the Receivables,
if any, that are designated by such Obligor by reference to the applicable
invoice as the Receivables with respect to which such payments should be
applied. In the absence of such designation, such payments shall be applied
first against the oldest outstanding Receivables owed by such Obligor.
Following notification from a Lockbox Bank that any item has been
returned or is uncollected and that such Lockbox Bank has not been otherwise
reimbursed pursuant to the terms of the applicable Lockbox Agreement for any
amounts it credited to the relevant Lockbox Account (and then transferred to the
Master Collection Account), Servicer shall instruct Trustee to, and Trustee
shall, turn over to such Lockbox Bank Collections in such amount from
Collections on deposit in the Master Collection Account (and such payments shall
have priority over any distributions to Certificateholders and Purchasers).
(c) Modification of Receivables, Etc. So long as no Servicer Default
shall have occurred and be continuing, Servicer may adjust, and may permit
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each Sub-Servicer to adjust, in accordance with Section 3.2(a) and the Credit
and Collection Policy, the Unpaid Balance of any Transferred Receivable, or
otherwise modify the terms of any Transferred Receivable or amend, modify or
waive any term or condition of any Contract related thereto, all as it may
determine to be appropriate to maximize collection thereof. Servicer shall, or
shall cause the applicable Sub-Servicer to, write off Transferred Receivables
from time to time in accordance with the Credit and Collection Policy.
(d) Documents and Records. At any time when Howmet is not Servicer,
Transferor, to the extent that it is entitled to do so under the Purchase
Agreement, shall, upon the request of the then-acting Servicer, cause each
Seller to deliver to Servicer, and Servicer shall hold in trust for Transferor
and Trustee in accordance with their respective interests, all Records that
evidence or relate to the Transferred Receivables and Related Transferred Assets
of such Seller.
(e) Certain Duties to the Sellers. Servicer, if other than Howmet,
shall, as soon as practicable after a demand by any Seller, deliver to the
Seller all documents, instruments and records in its possession that evidence or
relate to accounts receivable of the Seller or other Howmet Persons that are not
Transferred Receivables or Related Transferred Assets, and copies of all
documents, instruments and records in its possession that evidence or relate to
Transferred Receivables and Related Transferred Assets.
(f) Identification of Eligible Receivables. The initial Servicer will
(i) establish and maintain such procedures as are necessary for determining no
less frequently than each Business Day whether each Transferred Receivable
qualifies as an Eligible Receivable, and for identifying, on any Business Day,
all Transferred Receivables that are not Eligible Receivables, and (ii) include
in each Dally Report information that shows whether, and to what extent, the
Receivables described in such Dally Report are Eligible Receivables.
(g) Authorization to Act as Transferor's Agent. Without limiting the
generality of subsection (a), Transferor hereby appoints Servicer as its agent
for the following purposes: (i) specifying accounts to which payments are to be
made to Transferor, (ii) making transfers among, and deposits to and withdrawals
from, all deposit accounts of Transferor for the purposes described in the
Transaction Documents, and (iii) arranging payment by Transferor of all fees,
expenses and other amounts payable by Transferor pursuant to the Transaction
Documents. Transferor irrevocably agrees that (A) it shall be bound by all
actions taken by Servicer pursuant to the preceding sentence, and (B) Trustee
and the banks holding all deposit accounts of Transferor are entitled to accept
submissions, determinations, selections,
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specifications, transfers, deposits and withdrawal requests, and payments from
Servicer on behalf of Transferor.
(h) Grant of Power of Attorney. Transferor and Trustee hereby each
grant to Servicer a power of attorney, with full power of substitution, to take
in the name of Transferor and Trustee all steps that are necessary or
appropriate to endorse, negotiate, deposit or otherwise realize on any writing
of any kind held or transmitted by Transferor or transmitted or received by
Trustee (whether or not from Transferor) in connection with any Transferred
Receivable or Related Transferred Asset. The power of attorney that Transferor
and Trustee have granted to Servicer may be revoked by Trustee, and shall be
revoked by Transferor, on the date on which Trustee shall be entitled to
exercise the powers granted to Trustee pursuant to Section 3. 8(b). In
exercising its power granted hereby, Servicer shall take directions from
Trustee, if any, arising out of the exercise of the rights granted under Section
11.14.
(i) Turnover of Collections. If Servicer, Transferor or any of their
respective agents or representatives shall at any time receive any cash, checks
or other instruments constituting Collections, such recipient shall segregate
such payments and hold such payments in trust for Trustee and shall, promptly
upon receipt (and in any event within two Business Days following receipt),
remit all such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Bank Account or the Master Collection Account.
(j) Annual Statement as to Compliance. Servicer will deliver to Trustee
and each Rating Agency on or before March 31 of each year, beginning with March
31, 1997 an Officer's Certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Pooling Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Pooling
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and remedies therefor being pursued.
SECTION 3.3 Lockbox Accounts; Concentration Accounts. (a) Each Lockbox
Account shall be subject to a Lockbox Agreement substantially in the form of
Exhibit A (or such other form acceptable to the Trustee). Unless instructed
otherwise by Servicer (or, after the occurrence and continuance of an Early
Amortization Event, Trustee), each Lockbox Bank shall be instructed by Servicer
to remit, on a daily basis (but subject to the Lockbox Bank's
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customary funds availability schedule), all amounts deposited in the Lockbox
Accounts maintained with it to a Concentration Account or the Master Collection
Account. Any Concentration Account shall be maintained in the name of Trustee on
behalf of the Trust pursuant to a Concentration Account Agreement substantially
in the form of Exhibit B (or such other form acceptable to the Trustee). Except
as provided in this Agreement and the applicable Account Agreements, none of any
Seller, Transferor, Servicer, or any Person claiming by, through or under any
Seller, Transferor or Servicer shall have any control over the use of, or any
right to withdraw any item or amount from, any Lockbox Account or Concentration
Account. Servicer and Trustee are each hereby irrevocably authorized and
empowered, as Transferor's attorney-in-fact, to endorse any item deposited in a
lockbox or presented for deposit in any Lockbox Account or Concentration Account
requiring the endorsement of Transferor, which authorization is coupled with an
interest and is irrevocable. Each Lockbox Account shall be an Eligible Deposit
Account.
(b) Servicer shall instruct (or shall cause each Seller to instruct)
all Obligors to make all payments due to Transferor or any Seller relating to or
constituting Collections (or any proceeds thereof) (i) to lockboxes maintained
at the Lockbox Banks for deposit in a Lockbox Account or a Concentration Account
or (ii) directly to a lockbox Account. If Transferor or any Seller receives any
Collections or any other payment of proceeds of any other Related Transferred
Asset, Servicer shall instruct such recipient to (x) segregate such payment and
hold it in trust for the benefit of Trustee, and (y) as soon as practicable, but
no later than the second Business Day following receipt of such item by such
Person, deposit such payment in a Bank Account or the Master Collection Account.
Servicer shall, and shall instruct Transferor and the applicable Seller to, use
reasonable efforts to prevent the deposit of any amounts other than Collections
in any Lockbox Account or Concentration Account. If Servicer is notified by any
Seller that any amount other than Collections has been deposited in any Lockbox
Account or Concentration Account, Servicer shall promptly instruct the
appropriate Account Bank and Trustee to segregate such amount, and shall direct
such Account Bank or Trustee (as appropriate) to turn over such amounts to such
Seller or other Howmet Person (or their designees) to whom such amounts are
owed.
(c)(i) Servicer may, from time to time after the First Issuance Date,
designate a new account as a Lockbox Account or a Concentration Account, and
such account shall become a Lockbox Account or Concentration Account (and the
bank at which such account is maintained shall become a Lockbox Bank or a
Concentration Account Bank for purposes of this Agreement); provided that
Trustee shall have received not less than 15 Business Days' (or
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such shorter number of days as is acceptable to the Trustee) prior written
notice of the account and/or the bank that are proposed to be added as a Bank
Account or an Account Bank (as applicable) and, not less than ten Business Days
prior to the effective date of any such proposed addition, Trustee shall have
received (x) counterparts of a Lockbox Agreement or a Concentration Account
Agreement, as applicable, with each new Account Bank, duly executed by such new
Account Bank and all other parties thereto and (y) copies of all other
agreements and documents signed by the new Account Bank or such other parties
with respect to any new Lockbox Account or Concentration Account, as applicable.
(ii) Servicer may, from time to time after the First Issuance Date,
terminate an account as a Lockbox Account or a Concentration Account or a bank
as an Account Bank; provided that (x) no such termination shall occur unless
Trustee shall have received not less than ten Business Days' (or such shorter
number of days as is acceptable to the Trustee) prior written notice of the
account and/or the bank that are proposed to be terminated as a Bank Account or
an Account Bank (as applicable) and, not less than ten Business Days' (or such
shorter number of days as is acceptable to the Trustee) prior to the effective
date of any such proposed termination, Trustee shall have received counterparts
of an agreement, duly executed by such Account Bank and reasonably satisfactory
in form and substance to Trustee, pursuant to which such Account Bank agrees
that, if it receives any funds or items that constitute Collections on or after
the effective date of the termination of such Bank Account or the effective date
of its termination as an Account Bank (as the case may be), such Account Bank or
former Account Bank (as applicable) shall cause such funds and items to be
delivered in the form received to another lockbox or transferred to another
Lockbox Account, Concentration Account or the Master Collection Account promptly
after such Account Bank or former Account Bank (as applicable) discovers that it
has received any such funds or items, and (y) notwithstanding clause (x),
Transferor and Servicer may at any time establish alternative collection
procedures that do not require the use of Lockbox Accounts with the consent of
each Agent and any Enhancement Provider and upon satisfaction of the
Modification Condition.
(d) Servicer shall instruct each Concentration Account Bank (if any),
to transfer on a daily basis (subject to such Concentration Account Bank's
customary funds availability schedule) in same day funds to the Master
Collection Account all collected funds on deposit in the Concentration Account
maintained with such Concentration Account Bank. All such transfers shall be
made in accordance with the relevant Concentration Account Agreement.
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SECTION 3.4 Servicing Compensation. As full compensation for its
servicing activities hereunder and under any Supplement or PI Agreement, and as
reimbursement for any expense incurred by it in connection therewith, Servicer
shall be entitled to receive a monthly servicing fee (the "Servicing Fee") in
respect of each Series and Purchased Interest, payable in arrears on each
Distribution Date in respect of each Distribution Period (or portion thereof)
during which that Series or Purchased Interest is outstanding. The Servicing Fee
in respect of any Series or Purchased Interest shall be payable solely as
provided in the related Supplement or PI Agreement.
Unless otherwise provided in the applicable Supplement or PI Agreement,
the Servicing Fee payable with respect to any Series or Purchased Interest shall
be calculated as follows. At any time when Howmet or any of its affiliates is
Servicer, the Servicing Fee for any Distribution Period for any Series of
Certificates or Purchased Interest shall be equal to one-twelfth of the product
of (a) 2%, multiplied by (b) the aggregate Unpaid Balance of the Transferred
Receivables as measured on the first Business Day of that Distribution Period,
multiplied by (c) the applicable Series Collection Allocation Percentage. If
Howmet ceases to be Servicer, the Servicing Fee for a Successor Servicer that is
not a Howmet Person for any Distribution Period shall be an amount equal to the
greater of (i) the amount calculated pursuant to the preceding sentence and (ii)
an alternative amount specified by such Servicer not exceeding the sum of (x)
110% of the aggregate reasonable costs and expenses incurred by such Servicer
during such Distribution Period in connection with the performance of its
obligations under this Agreement and the other Transaction Documents, and (y)
the other costs and expenses that are to be paid out of the Servicing Fee, as
described in the next sentence; provided that, without the consent of Trustee
and the Required Investors, the amount provided for in clause (x) shall not
exceed one-twelfth of 2% of the aggregate Unpaid Balance of the Transferred
Receivables as measured on the first Business Day of such Distribution Period.
The fees, costs and expenses of Trustee, the Paying Agent, any authenticating
agent, the Lockbox Banks, the Concentration Account Banks and the Transfer Agent
and Registrar, and certain other costs and expenses payable from the Servicing
Fee pursuant to other provisions of this Agreement, and all other fees and
expenses that are not expressly stated in this Agreement, any Series Supplement
or any PI Agreement to be payable by the Trust or Transferor, other than
Federal, state, local and foreign income and franchise taxes, if any, or any
interest or penalties with respect thereto, of the Trust, shall be paid out of
the Servicing Fee and shall be paid by Servicer from the funds that constitute
the Servicing Fee.
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SECTION 3.5 Records of Servicer and Reports to be Prepared by Servicer.
(a) Keeping of Records and Books of Account. Servicer shall maintain at
all times accurate and complete books, records and accounts relating to the
Transferred Receivables, Related Transferred Assets and Contracts of each Seller
and all Collections thereon in which timely entries shall be made. Servicer
shall maintain and implement administrative and operating procedures (including
an ability to generate duplicates of Records evidencing Transferred Receivables
and the Related Transferred Assets in the event of the destruction of the
originals thereof), and shall keep and maintain all documents, books, records
and other information that Servicer deems reasonably necessary for the
collection of all Transferred Receivables and Related Transferred Assets.
(b) Receivables Reviews. Servicer shall provide Trustee access to the
documentation regarding the Transferred Receivables when Trustee is required, in
connection with the enforcement of the rights of Certificateholders or the
Purchasers or by applicable statutes or regulations, to review such
documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to
Servicer's normal security and confidentiality procedures, (iv) at reasonably
accessible offices in the continental United States of America designated by
Servicer and (v) upon five Business Days' prior notice; provided that no notice
shall be required if an Early Amortization Event shall have occurred and be
continuing; provided further, that the number of reviews conducted by Trustee,
absent an Early Amortization Event or an Unmatured Early Amortization Event, may
be limited by the terms of a Supplement (or related Certificate Purchase
Agreement) or PI Agreement.
(c) Daily Reports. Prior to 11:00 a.m., New York City time, on each
Business Day, Servicer shall prepare and deliver to Trustee and any Agent a
report relating to each outstanding Series and Purchased Interest, substantially
in the form specified by the applicable Supplement or PI Agreement or in such
other form as is reasonably acceptable to Trustee and Servicer (each such report
being a "Daily Report") setting out, among other things, the Base Amount and
Series Collection Allocation Percentage for that Series or Purchased Interest as
of the end of business on the preceding Business Day; provided that if, on any
Business Day, Servicer is unable to prepare and deliver a Daily Report to
Trustee because of acts of God or the public enemy, riots, acts of war, acts of
terrorism, epidemics, fire, failure of communication lines, equipment or power
failure, computer systems failure, flood, embargoes, weather, earthquakes or
other unanticipated disruptions of Servicer's ability to monitor the origination
and/or preparation of Receivables,
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then (x) the Base Amount for purposes of each outstanding Series and Purchased
Interest shall be the lowest Base Amount shown in the related Daily Reports
delivered during the immediately preceding month (such amount, an "Estimated
Base Amount") and (y) the Series Collection Allocation Percentage for that
Series or Purchased Interest shall be the one most recently reported. Servicer
may use an Estimated Base Amount and the most recently reported Series
Collection Allocation Percentage to prepare the Daily Report until the earlier
to occur of (i) the day upon which disruption no longer prevents Servicer from
preparing the Daily Report using the actual data required by the Daily Report
and delivering it to Trustee, and (ii) the sixth Business Day following the
commencement of such disruption. Notwithstanding the foregoing, on an Exempt
Holiday, Servicer may elect to not deliver a Daily Report for such day, provided
that (i) Servicer shall have given Trustee at least one Business Days' prior
written notice of such election, (ii) funds in the Lockbox Accounts are
transferred to a Concentration Account or the Trustee, and funds in the
Concentration Accounts are transferred to the Trustee, on such day
notwithstanding such election, (iii) no funds in any of the Transaction Accounts
will be transferred to Transferor on such day, (iv) one or more of the Sellers
shall not be open for business on such day, and (v) if any Exempt Holiday is an
Interest Payment Date (as defined in any Supplement or PI Agreement), Servicer
shall have given Trustee sufficient instructions (as determined by the Trustee)
to make all payments to Holders required on such date. "Exempt Holiday" means
(i) any of six Business Days between December 24 of one year and January 1 of
the next year, and (ii) any of five other days selected by Servicer during any
year.
(d) Monthly Report. On each Report Date, Servicer shall prepare and
deliver to Trustee and the Rating Agencies a report relating to each outstanding
Series and Purchased Interest, substantially in the form specified by the
applicable Supplement or PI Agreement or in such other form as is reasonably
acceptable to Trustee and Servicer (each such report being a "Monthly Report").
(e) Notice of Seller Change Events; Supplements to Monthly Reports.
Sections 1.7 and 1.8 of the Purchase Agreement describe circumstances under
which (i) additional Sellers may be added to the Program and (ii) a Seller may
terminate its status as Seller under the Program (each such event being a
"Seller change Event"). Those Sections of the Purchase Agreement require Howmet
to give written notice to Transferor of the occurrence of a Seller Change Event
not less than 30 days (or such shorter period as is acceptable to Trustee) prior
to the occurrence thereof, and Transferor hereby agrees to give prompt written
notice of its receipt of any such notice to Trustee and the Rating Agencies. If
the notice is given to Trustee, within five Business Days
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after the receipt of the notice by Trustee (or such later date, as specified in
the notice, on which the applicable Seller Change Event shall become effective),
Servicer shall deliver to Trustee and the Rating Agencies a supplement to the
Monthly Report then in effect for each outstanding Series or Purchased Interest,
which supplement shall show (A) the calculation or recalculation of the Required
Receivables and the "Applicable Reserve Ratio" (as defined in the applicable
Supplement or PI Agreement) to reflect the addition of accounts receivable
originated by any Person that is being added to the Program as a Seller, and the
exclusion of any Transferred Receivables originated by any such Person that is
terminating its status as a Seller (as applicable), and (B) the Loss Discount
and the Purchase Discount for any such Person that is being added to the Program
as a Seller. For purposes of all calculations hereunder and under the Purchase
Agreement, the Required Receivables and (if applicable) the Loss Discount and
the Purchase Discount for the relevant Person shown in such supplement shall
supersede and/or supplement the calculation of such items in the then
outstanding Monthly Report, effective as of the fifth Business Day following
Trustee's receipt of such notice (or such later date, as specified in such
notice, on which the applicable Seller Change Event shall become effective).
SECTION 3.6 Monthly Servicer's Certificate. On each Report Date,
Servicer shall deliver to Trustee, the Paying Agent, Transferor and the Rating
Agencies a certificate of an Authorized Officer of Servicer substantially in the
form of Exhibit C, with such additions as may be required by any Supplement.
SECTION 3.7 Servicing Report of Independent Public Accountants; Forms
10-Q and 10-K. (a)(i) On or before 120 days after the end of each fiscal year of
Transferor (beginning with the end of Transferor's fiscal year 1997), Servicer
shall, as an expense of Servicer paid out of the Servicing Fee, cause Ernst &
Young or another firm of nationally recognized independent public accountants
(which may also render other services to Servicer, the Sellers or Transferor) to
furnish a report to Trustee, Servicer, the Rating Agencies and Transferor (which
report shall be addressed to Trustee and shall relate to Transferor's most
recently ended fiscal year). The accountants' report shall set forth the results
of their performance of the procedures described in Exhibit D with respect to
the Monthly Reports and Daily Reports delivered to Trustee pursuant to Section
3.5 during the prior fiscal year.
(ii) Each accountants' report shall state that the accountants have
compared the amounts contained in the Monthly Reports and a sample randomly
selected from all Daily Reports delivered to Trustee during the period covered
by the report with the records (including computer records) from which the
amounts were derived and that, on the basis of such
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comparison, the amounts are in agreement with the documents and records, except
for such exceptions as they believe to be immaterial and such other exceptions
as shall be set forth in the report. Except as provided otherwise in a
Supplement, a copy of the accountants' report may be obtained by any Investor
Certificateholder by a request in writing to Trustee addressed to the Corporate
Trust Office.
(b) In the event that Servicer is required to file Quarterly Reports on
Form 10-Q, Annual Reports on Form 10-K or Reports on Form 8-K with the SEC,
Servicer shall provide each of the Rating Agencies with copies of such reports
promptly after such reports have been filed with the SEC.
SECTION 3.8 Rights of Trustee.
(a) Trustee has the exclusive dominion and control over the Bank
Accounts, and Transferor shall take any action that Trustee may reasonably
request to effect or evidence such dominion and control. At any time following
the occurrence of a Servicer Default, Trustee is hereby authorized to give
notice to the Account Banks, as provided in the Account Agreements, of the
revocation of Servicer's authority to give instructions or take any other
actions with respect to the Bank Accounts that Servicer would otherwise be
authorized to give or to take.
(b) At any time following the designation of a Servicer other than
Howmet until a Successor Servicer (if other than Trustee) has been appointed:
(i) Trustee may direct any Obligors of Transferred Receivables
to pay all amounts payable under any Transferred Receivable or any
Related Transferred Assets directly to Trustee or its designee;
provided that Trustee shall provide each affected Seller with a copy of
such notice at least two Business Days prior to sending it to any
Obligor and consult in good faith with each such Seller as to the text
of the notice.
(ii) Trustee may direct any Seller to make payment of all
amounts payable by such Seller to Transferor under any Transaction
Document to which the Seller is a party directly to Trustee or its
designee.
(iii) Transferor and Servicer shall, at Trustee's request and
as an expense of Servicer paid out of the Servicing Fee, give notice of
the Trust's ownership of the Transferred Receivables and the Related
Transferred Assets to each Obligor and direct that payments be made
directly to Trustee or its designee.
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(iv) Transferor shall, and shall cause the Sellers to, at
Trustee's request, (A) assemble all of the Records that are necessary
or appropriate to collect the Transferred Receivables and Related
Transferred Assets, and shall make the same available to Trustee at one
or more places selected by Trustee or its designee, (B) segregate all
cash, checks and other instruments received by it from time to time
constituting Collections in a manner acceptable to Trustee and shall,
promptly upon receipt (and, subject to Section 3.2(i), in no event
later than the second Business Day following receipt), remit all such
cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to a Bank Account or the Master Collection
Account and (C) permit, upon not less than two Business Days' prior
written notice, any Successor Servicer and its agents, employees and
assignees access to their respective facilities and their respective
Records.
(c) Each of Transferor and Servicer hereby authorizes Trustee, from
time to time after the designation of a Servicer other than Howmet, to take any
and all steps in Transferor's name and on behalf of Transferor and Servicer that
are necessary or appropriate, in the reasonable determination of Trustee, to
collect all amounts due under any and all Transferred Receivables or Related
Transferred Assets, including endorsing the name of Transferor or the applicable
Seller on checks and other instruments representing Collections and enforcing
such Transferred Receivables and the Related Transferred Assets.
(d) Transferor hereby irrevocably appoints Trustee to act as
Transferor's attorney-in-fact, with full authority in the place and stead of
Transferor and in the name of Transferor or otherwise, from time to time after
the designation of a Servicer other than Howmet, to take (subject to Section
11.14 hereof) any action and to execute any instrument or document that Trustee,
in its reasonable determination, may deem necessary to accomplish the purposes
of this Agreement, including:
(i) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any Transferred Receivable or any Related
Transferred Asset;
(ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper in connection with clause (i);
(iii) to file any claims or take any action or institute any
proceedings that Trustee in its reasonable determination may deem
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necessary or appropriate for the collection of any of the Transferred
Receivables or any Related Transferred Asset or otherwise to enforce
the rights of Trustee and the Certificateholders with respect to any of
the Transferred Receivables or any Related Transferred Asset; and
(iv) to perform the affirmative obligations of Transferor
under any Transaction Document.
Transferor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 3.9 Ongoing Responsibilities of Howmet Anything herein to the
contrary notwithstanding:
(a) If at any time Howmet shall not be Servicer, it shall
deliver all Collections received or deemed received by it or its
Subsidiaries to Trustee no later than two Business Days after receipt
or deemed receipt thereof and Trustee shall distribute such Collections
to the same extent as if such Collections had actually been received
from the related Obligor on the applicable dates. So long as Howmet or
any of its Subsidiaries shall hold any Collections or deemed
Collections required to be paid to Trustee, each of them shall hold
such amounts in trust (and separate and apart from its own funds) and
shall clearly mark its records to reflect such trust. Howmet hereby
grants to Trustee an irrevocable power of attorney, with full power of
substitution, coupled with an interest, upon the occurrence of a
Servicer Default, to take in the name of Howmet all steps necessary or
appropriate to endorse, negotiate or otherwise realize on any writing
or other right of any kind held or transmitted by Howmet or transmitted
and received by Trustee (whether or not from Howmet) in connection with
any Transferred Receivable or Related Transferred Asset.
(b) In addition, if at any time Howmet shall not be Servicer,
it shall act (if the Successor Servicer so requests) as the data
processing agent of Servicer and, in such capacity, Howmet shall
conduct (and shall cause any other necessary Persons to conduct) the
data processing functions of the administration of the Transferred
Receivables, the Related Transferred Assets and the Collections thereon
in substantially the same way that Howmet (or its Sub-Servicers)
conducted such data processing functions while Howmet acted as
Servicer. Howmet and each such other Person shall be entitled to
reasonable compensation for such service to be paid from the Servicing
Fee.
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(c) Notwithstanding any termination of Howmet as Servicer
hereunder, Howmet shall continue to indemnify Trustee on the terms set
out in Section 11.5 with respect to circumstances existing, or actions
taken or omitted, prior to such termination.
SECTION 3.10 Further Action Evidencing Transfers. Servicer shall cause
all financing statements and continuation statements and any other necessary
documents relating to the right, title and interest of Trustee in and to the
Transferred Assets to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
right, title and interest of Trustee hereunder in and to all property comprising
the Transferred Assets. Servicer shall deliver to Trustee file-stamped copies
of, or filing receipts for, any document recorded, registered or filed as
provided above, as soon as available following such recording, registration or
filing. Transferor shall cooperate fully with Servicer in connection with the
obligations set forth above and will execute any and all documents that are
reasonably required to fulfill the intent of this section.
If Transferor or Servicer falls to perform any of its agreements or
obligations under any Transaction Document and does not remedy such failure
within the applicable cure period, if any, then Trustee or its designee may (but
shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of Trustee or its designee
incurred in connection therewith shall be payable by Servicer as provided in
Section 11.5 and (if applicable) by Transferor as provided in Section 73.
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND PURCHASERS; ALLOCATIONS
SECTION 4.1 Rights of Certificateholders and Purchasers. Each Series of
Investor Certificates shall collectively represent a fractional undivided
beneficial interest (as to any Series, the "Series Interest") in the Trust, and
the amount of that undivided beneficial interest shall equal the Series
Collection Allocation Percentage for that Series from time to time. Each
Certificate within a Series shall represent a partial ownership interest in the
related Series Interest, representing the right to receive, to the extent
necessary to make the required payments with respect to that Certificate at the
times and in the amounts specified in this Article IV and in the related
Supplement, the portion of Collections allocable to Investor Certificateholders
of such Series pursuant to this Agreement and such Supplement, funds on deposit
in the Transaction Accounts allocable to Investor Certificateholders of such
Series and funds available pursuant to any related Enhancement. Each "Purchased
Interest"
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shall represent a fluctuating undivided ownership interest in the Transferred
Assets, purchased pursuant to the PI Agreement related thereto, that shall
include the right to receive, to the extent necessary to make required payments
to Purchasers at the time and in the amounts specified in the related PI
Agreement, the portion of Collections allocable to such Purchased Interest
pursuant to this Agreement and the PI Agreement, funds on deposit in the Master
Collection Account allocable to the Purchased Interest pursuant to this
Agreement and the PI Agreement and funds available pursuant to any related
Enhancement. Unless the applicable Supplement or PI Agreement provides
otherwise, the Investor Certificates of any Series or class and any Purchased
Interest shall not represent any interest in any funds allocable to, or
Enhancement for the benefit of, any other Series or Purchased Interest. The
"Transferor Certificate" shall represent an interest in the Trust (the
"Transferor Interest") consisting of the right to receive current and deferred
transfer payments in respect of the various Series and Purchased Interests
outstanding from time to time at the times and in the amounts specified in the
related Supplements and PI Agreements.
SECTION 4.2 Establishment of Transaction Accounts. (a) On or prior to
the date of this Agreement, Trustee has established, and until the Trust is
terminated Trustee shall (except as expressly permitted or required below)
maintain, in the name of Trustee and for the benefit of the Certificateholders
and Purchasers, the following accounts:
(i) account no. 185590981, which shall be called the "Master
Collection Account" and into which all Collections and all other
Transferred Assets consisting of cash or cash equivalents shall be
transferred on a daily basis from the Bank Accounts;
(ii) account no. 185591070, which shall be called the
"Carrying Cost Account" and into which funds shall be allocated from
time to time to cover carrying costs of each Series and Purchased
Interest (including interest payable on, and the Servicing Fee
allocated to, each Series and Purchased Interest);
(iii) account no. 185591161, which shall be called the
"Equalization Account" and into which funds will from time to time be
transferred from the Master Collection Account to compensate for
fluctuations in the Base Amounts for the outstanding Series and
Purchased Interests; and
(iv) account no. 185591252, which shall be called the
"Principal Funding Account" and into which funds will from time to
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time be transferred in anticipation of distributions to Investor
Certificateholders or Purchasers on account of their respective
principal investments.
(b) In addition, if an Early Amortization Period occurs with respect to
any Series or Purchased Interest, Trustee shall establish an additional account
which shall be called the "Holdback Account" and into which funds that would
otherwise be remitted by Trustee to the Transferor in respect of the Transferor
Certificate will be deposited if and to the extent so provided in the related
Supplement or PI Agreement.
(c) The Master Collection Account, the Carrying Cost Account, the
Equalization Account, the Principal Funding Account, any Holdback Account and
any additional accounts required by any Supplement or PI Agreement to be
established (unless otherwise indicated in such Supplement or PI Agreement) are
collectively called the "Transaction Accounts." Each of the Transaction Accounts
shall be established and maintained as an Eligible Deposit Account and shall
bear a designation clearly indicating that funds deposited therein are held for
the benefit of the Certificateholders and the Purchasers. If any Transaction
Account ceases to be an Eligible Deposit Account, Servicer shall cause Trustee
to open a substitute Transaction Account that is an Eligible Deposit Account and
transfer the funds in the existing Transaction Account to the substitute
Transaction Account, and thereafter all references in any Transaction Document
to the original Transaction Account shall be deemed instead to refer to the
substitute Transaction Account.
(d) The Master Collection Account, the Carrying Cost Account, the
Equalization Account, the Principal Funding Account and any Holdback Account
shall be held by Trustee for the benefit of all Certificateholders and
Purchasers. However, there shall be established within each of the Carrying Cost
Account, the Equalization Account, the Principal Funding Account and any
Holdback Account an administrative sub-account for each outstanding Series and
Purchased Interest. Funds allocated to the Carrying Cost Account, the
Equalization Account, the Principal Funding Account and any Holdback Account
pursuant to any Supplement or PI Agreement shall be allocated to the applicable
Series' or Purchased Interest's sub-account and shall be available solely to the
holders of the Certificates in that Series or the Purchaser of that Purchased
Interest, as applicable, except to the extent that such funds are subsequently
reallocated to another Series or Purchased Interest, or the Transferor, in
accordance with the terms of the applicable Supplement or Purchase Agreement and
this Agreement. Any additional Transaction Accounts established pursuant to any
Supplement or PI Agreement shall be held by Trustee for the benefit of only the
related Series or Purchased Interest.
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(e) Trustee shall possess (for its benefit and for the benefit of the
Certificateholders and the Purchasers) all right, title and interest in and to
all funds on deposit from time to time in each of the Transaction Accounts and
in all proceeds thereof. The Transaction Accounts shall be under the sole
dominion and control of Trustee for the benefit of the applicable
Certificateholders and/or Purchasers. Each of Servicer and Trustee agrees that
it shall have no right of setoff against, and no right otherwise to deduct from,
any funds held in any of the Transaction Accounts or the Bank Accounts for any
amount owed to it by the Trust, any party hereto or any Certificateholder or
Purchaser.
SECTION 4.3 Trust-Level Calculations and Funds Allocations.
(a) Allocation of Daily Collections. On each Business Day, Servicer
shall determine the amount of collected funds received in the Master Collection
Account (other than (i) funds transferred to the Master Collection Account
pursuant to any Supplement or PI Agreement and (ii) funds that are required to
be returned to Howmet Persons (or their designees) pursuant to Sections 3.2(b)
and 3.3(1))) since the preceding Business Day and shall allocate to each
outstanding Series and Purchased Interest a share of such funds in an amount
equal to the product of the applicable Series Collection Allocation Percentage
and the amount of such funds. The portion of such funds allocated to any Series
or Purchased Interest shall be further allocated and otherwise dealt with in
accordance with the terms of the related Supplement or PI Agreement. In
addition, funds initially allocated to a Series or Purchased Interest on any
Business Day that are designated as Shared Investor Collections shall be
reallocated to other Series or Purchased Interests pro rata based upon the
respective Shortfalls (if any) of the other Series and Purchased Interests.
(b) Allocation of Write-Offs and Dilution. In each Monthly Report
relating to a Series or Purchased Interest that is in an Early Amortization
Period, Servicer shall calculate the amount of (1) Write-Offs (net of
Recoveries) and (ii) Dilutions as to which no settlement payment has been made
pursuant to Section 3.3 of the Purchase Agreement, in each case during the
related Calculation Period (or the portion of that Calculation Period failing in
the Early Amortization Period) and shall allocate to such Series or Purchased
Interest a portion of the amounts referred to in clauses (i) and (ii) equal to
the product of each such amount and the related Series Loss Allocation
Percentage.
SECTION 4.4 Investment of Funds in Transaction Accounts. On any day
when funds on deposit in any Transaction Account exceed $10,000 (after giving
effect to the allocations of such funds required by this Article IV and the
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various Supplements and PI Agreements), and at such other times as investment is
practicable, Trustee, at the direction of Servicer, shall invest and reinvest
monies on deposit in such Transaction Account (in the name of Trustee) in such
Eligible Investments as are specified in a notice from Servicer, subject to the
restrictions set forth hereinafter. All Eligible Investments made from funds in
any Transaction Account, and the interest, dividends and income received thereon
and therefrom and the net proceeds realized on the sale thereof, shall be
deposited in such Transaction Account. Trustee may liquidate an Eligible
Investment prior to maturity if such liquidation would not result in a loss of
all or part of the principal portion of such Eligible Investment or if, prior to
the maturity of such Eligible Investment, a default occurs in the payment of
principal, interest or any other amount with respect to such Eligible
Investment. In the absence of negligence of Trustee or willful misconduct by
Trustee, Trustee shall have no liability in connection with investment losses
incurred on Eligible Investments. It is intended for income tax purposes that
the income earned through investment of funds in the Transaction Accounts shall
be treated as income of Transferor.
SECTION 4.5 Attachment of Transaction Accounts. If Trustee receives
written notice that any Transaction Account has or will become subject to any
writ, judgment, warrant of attachment, execution or similar process, Trustee
shall (notwithstanding any other provision of the Transaction Documents)
promptly notify Transferor, Servicer and the Certificateholders thereof, and
shall not deposit or transfer funds into such Transaction Account but shall
cause funds otherwise required to be deposited into such Transaction Account to
be held in another account pending distribution of such funds in the manner
required by the Transaction Documents.
ARTICLE V DISTRIBUTIONS AND REPORTS
DISTRIBUTIONS SHALL BE MADE, AND REPORTS SHALL BE PROVIDED, TO
CERTIFICATEHOLDERS AS SET FORTH IN THE APPLICABLE SUPPLEMENT.
ARTICLE VI THE CERTIFICATES
SECTION 6.1 The Certificates. The Investor Certificates in each Series
shall be substantially in the forms contemplated by the Supplements pursuant to
which the Investor Certificates are issued, and the Transferor Certificate shall
be substantially in the form of Exhibit E. Upon issuance, all Certificates shall
be executed and delivered by Transferor to Trustee for authentication and
redelivery as provided in Sections 6.2 and 6.10. Except to the extent provided
otherwise in an applicable Supplement, Investor
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Certificates shall be issued in minimum denominations of $1,000,000 and in
integral multiples of $100,000 and shall not be subdivided for resale into
Certificates smaller than a Certificate, the initial offering price for which
would have been at least $1,000,000.
Each Certificate issued as a Definitive Certificate shall be executed
by manual or facsimile signature on behalf of Transferor by its President or any
Vice President or by any attorney-in-fact duly authorized to execute the
Definitive Certificate on behalf of any such officer. The Definitive
Certificates shall be authenticated on behalf of the Trust by manual signature
of a duly authorized signatory of Trustee. Definitive Certificates bearing the
manual or facsimile signature of the individual who was, at the time when the
signature was affixed, authorized to sign on behalf of Transferor or the Trust
(as applicable) shall be valid and binding, notwithstanding that the individuals
or any of them ceased to be so authorized prior to the authentication and
delivery of the Definitive Certificates or does not hold such office on the date
of issuance of such Definitive Certificates. No Definitive Certificates shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on the Definitive Certificate a certificate of
authentication substantially in the form provided for herein executed by or on
behalf of Trustee by the manual signature of a duly authorized signatory, and
the certificate of authentication upon any Definitive Certificate shall be
conclusive evidence, and the only evidence, that the Definitive Certificate has
been duly authenticated and delivered hereunder and is entitled to the benefits
of this Agreement. Except as otherwise provided in the applicable Supplement,
all Definitive Certificates shall be dated the date of their authentication.
As provided in any Supplement, Investor Certificates of any Series may
be issued and sold pursuant to an exemption from the Securities Act. Any Series
sold pursuant to Rule 144A, Regulation S or another exemption under the
Securities Act may be delivered in hook-entry form as provided in Sections 6.12
and 6.13.
SECTION 6.2 Authentication of Certificates. Contemporaneously with the
initial assignment and transfer of Receivables and other Transferred Assets to
the Trust, Trustee shall authenticate and deliver the Transferor Certificate to
Transferor. On each Issuance Date, upon the order of Transferor, Trustee shall
authenticate and deliver to Transferor the Series of Certificates that are to be
issued originally on such Issuance Date pursuant to the applicable Supplement.
SECTION 6.3 Registration of Transfer and Exchange of Certificates. (a)
Trustee, as agent for Transferor, shall keep, or shall cause to be kept, at
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the office or agency to be maintained in accordance with the provisions of
Section 11.16, a register in written form or capable of being converted into
written form within a reasonable time (the "Certificate Register") in which,
subject to such reasonable regulations as it may prescribe, a transfer agent and
registrar (which may be Trustee) (the "Transfer Agent and Registrar") shall
provide for the registration of the Certificates and of transfers and exchanges
of the Certificates as herein provided. Transferor hereby appoints Trustee as
the initial Transfer Agent and Registrar.
Transferor, or Trustee as agent for Transferor, may revoke the
appointment as Transfer Agent and Registrar and remove the then-acting Transfer
Agent and Registrar if Trustee or Transferor (as applicable) determines in its
sole discretion that the then-acting Transfer Agent and Registrar has failed to
perform its obligations under this Agreement in any material respect. The
then-acting Transfer Agent and Registrar shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' prior written notice to Trustee,
Transferor and Servicer; provided that such resignation shall not be effective
and the then-acting Transfer Agent and Registrar shall continue to perform its
duties as Transfer Agent and Registrar until Trustee has appointed a successor
Transfer Agent and Registrar reasonably acceptable to Transferor and such
successor has given Trustee written notice that it accepts the appointment. The
provisions of Sections 11.1 through 11.5 shall apply to the Transfer Agent and
Registrar as if all references to "Trustee" in the applicable provisions of
Sections 11.1 through 11.5 were references to the Transfer Agent and Registrar.
It is intended that the registration of Certificates that is described
in this Section comply with the registration requirements contained in Section
163 of the Internal Revenue Code.
(b) No transfer of all or any part of the Transferor Certificate shall
be made unless (i) either Transferor or any other Holder of the Transferor
Certificate shall have given the Rating Agencies and Trustee prior written
notice of the proposed transfer, (ii) the Modification Condition shall have been
satisfied in connection with the proposed transfer and (iii) either Transferor
or any other Holder of the Transferor Certificate shall have delivered to
Trustee, the Rating Agencies, each Purchaser and each Enhancement Provider a Tax
Opinion for each outstanding Series of Investor Certificates, Purchased Interest
and Enhancement (provided that the opinion delivered to any Purchaser or Credit
Enhancer shall be limited to the Tax Opinion required by the related Purchased
Interest or Series) with respect to such transfer.
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(c) Subject to the requirements of subsection (e), if applicable,
having been fulfilled, upon surrender for registration of transfer of any
Certificate, and, in the case of Investor Certificates, at any office or agency
of the Transfer Agent and Registrar maintained for such purpose, Transferor
shall execute, and Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the
appropriate class and Series that are in authorized denominations of like
aggregate fractional interest in the related Series Interest that bear numbers
that are not contemporaneously outstanding.
At the option of an Investor Certificateholder, its Investor
Certificates may be exchanged for other Investor Certificates of the same class
and Series (and bearing the same interest rate as the Investor Certificate
surrendered for registration of exchange) of authorized denominations of like
aggregate fractional interests in the related Series Interest and being numbers
that are not contemporaneously outstanding, upon surrender of the Investor
Certificates to be exchanged at any such office or agency. Whenever any Investor
Certificates are so surrendered for exchange, Transferor shall execute, and
Trustee shall authenticate and deliver, the appropriate number of Investor
Certificates of the class and Series that the Investor Certificateholder making
the exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to Trustee or the Transfer
Agent and Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in a writing delivered to the Transfer Agent
and Registrar.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Transfer Agent and Registrar may require the
Certificateholder to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Investor Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be cancelled and disposed of in a manner satisfactory to Trustee.
(d) Certificates may be surrendered for registration of transfer or
exchange at the office of the Transfer Agent and Registrar designated in Section
13.6.
(e) Unless otherwise provided in the applicable Supplement,
Certificateholders holding Definitive Certificates shall not sell, transfer or
otherwise dispose of the -Certificates unless the sale, transfer or disposition
is being made pursuant to an exemption from the registration requirements of the
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Securities Act and applicable state securities laws and, prior to the proposed
sale, transfer or disposition, the Certificateholder and the proposed transferee
each provide Trustee and Transferor with representations and, if requested by
Trustee or Transferor, an Opinion of Counsel concerning the proposed sale,
transfer or disposition and the availability of the exemption.
(f) The Investor Certificates shall bear such restrictive legends as
shall be set forth in the applicable Supplements.
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Transfer Agent and Registrar, or
the Transfer Agent and Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar and Trustee such security or indemnity as may be
required by them and Transferor to hold each of them, the Trust and Transferor
harmless, then, in the absence of notice to Trustee that such Certificate has
been acquired by a bona fide purchaser, Transferor shall execute and, upon the
request of Transferor, Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like class, Series, tenor, terms and principal amount and bearing
a number that is not contemporaneously outstanding. In connection with the
issuance of any new Certificate under this section, Trustee or the Transfer
Agent and Registrar may require the payment by the Certificateholder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the reasonable fees and
expenses of Trustee and Transfer Agent and Registrar) connected therewith. Any
duplicate Certificate issued pursuant to this section shall constitute
conclusive and indefeasible evidence of ownership of an interest in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with any and all
Certificates of the same class and Series that are duly issued hereunder.
SECTION 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, Transferor, Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article V and
for all other purposes whatsoever, and none of Transferor, Trustee, the Paying
Agent, the Transfer Agent and Registrar or any agent of any of them shall be
affected by any notice to the contrary; provided that, in determining whether
the Holders of the requisite principal amount or Stated Amount (as applicable)
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of Certificates or Purchased Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates and
Purchased Interests owned by Transferor, Servicer or any Affiliate thereof shall
be disregarded and deemed not to be outstanding, except that, in determining
whether Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates and
Purchased Interests that Trustee knows to be so owned shall be so disregarded.
Certificates and Purchased Interests so owned that have been pledged in good
faith shall not be disregarded and may be regarded as outstanding if the pledgee
establishes to the satisfaction of Trustee the pledgee's right so to act with
respect to such Certificates or Purchased Interests and that the pledgee is not
Transferor, Servicer or an Affiliate thereof.
SECTION 6.6 Appointment of Paying Agent. The Paying Agent initially
shall be Trustee. Transferor hereby appoints the Paying Agent as its agent to
make distributions to Certificateholders pursuant to the applicable Supplements
and to report the amounts of the distributions to Trustee. Any Paying Agent
shall have the revocable power to withdraw funds from the Master Collection
Account for the purpose of making the distributions. Trustee or, at any time
when Trustee is also the Paying Agent, Transferor may revoke such power of the
Paying Agent and remove the Paying Agent if Trustee or Transferor (as
applicable) determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
prior written notice to Trustee, Transferor, Servicer and the Rating Agencies.
Any resignation of the Paying Agent or removal of Trustee as the Paying Agent,
and, in either case, appointment of a successor Paying Agent, shall not become
effective until the appointment has been accepted by the successor Paying Agent.
If no successor Paying Agent shall have been appointed and shall have accepted
appointment within 30 days after the giving of the notice of the resignation of
the Paying Agent or the removal of Trustee as the Paying Agent, as applicable,
the Paying Agent may petition any court of competent jurisdiction to appoint a
successor Paying Agent. In the event of the removal of the Paying Agent (other
than Trustee), Trustee, without further action, shall automatically be appointed
the successor Paying Agent. Upon the resignation or removal of any Paying Agent,
Trustee shall appoint a successor Paying Agent (which shall be a batik or trust
company) reasonably acceptable to Transferor, which appointment shall be
effective on the date on which the Person so appointed gives Trustee written
notice that it accepts the appointment. Trustee shall cause the successor Paying
Agent or any additional Paying Agent appointed by Trustee to execute and deliver
to Trustee an instrument in which it shall agree with Trustee that, as Paying
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Agent, it will hold all sums, if any, held for payment to the Certificateholders
and Purchasers in trust for the benefit of the Certificateholders and Purchasers
entitled thereto until the sums shall be paid to the Certificateholders and
Purchasers. The Paying Agent shall return all unclaimed funds to Trustee, and
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to Trustee. The provisions of Sections 11.1 through 11.5 shall
apply to the Paying Agent as if all references in the applicable provisions
thereof to "Trustee" were references to the Paying Agent.
SECTION 6.7 Access to List of Certificateholders' Names and Addresses.
Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to Transferor, Servicer, any Seller or the Paying Agent, within two
Business Days after receipt by Trustee of a written request therefor from
Servicer or the Paying Agent, a list in the form Servicer or the Paying Agent
may reasonably require of the names and addresses of the Certificateholders as
of the most recent Distribution Date. If any Holder or group of Holders of
Investor Certificates in any Series evidencing not less than 10% of the
aggregate unpaid principal amount of the Series (the "Applicant") applies in
writing to Trustee, and the application states that the Applicant desires to
communicate with other Certificateholders with respect to their rights under
this Agreement, any Supplement or the Certificates and is accompanied by a copy
of the communication that the Applicant proposes to transmit, then Trustee,
after having been adequately indemnified by the Applicant for its costs and
expenses, shall afford or shall cause the Transfer Agent and Registrar to afford
the Applicant access during normal business hours to the most recent list of
Certificateholders held by Trustee, within five Business Days after the receipt
of the application and indemnification. The list shall be as of a date no more
than 45 days prior to the date of receipt of the Applicant's request.
Every Certificateholder, by receiving and holding a Certificate, agrees
with Trustee that neither Trustee, the Transfer Agent and Registrar, Transferor,
Servicer, any Seller nor any of their respective agents shall be held
accountable by reason of the disclosure of any information as to the names and
addresses of the Certificateholders hereunder, regardless of the sources from
which the information was derived.
SECTION 6.8 Authenticating Agent. (a) Trustee may appoint one or more
authenticating agents with respect to the Certificates that shall be authorized
to act on behalf of Trustee in authenticating the Certificates in connection
with the issuance, delivery, registration of transfer, exchange or repayment of
the Certificates. Either Trustee or the authenticating agent, if any, then
appointed and acting on behalf of Trustee shall authenticate the
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Certificates. Whenever reference is made in this Agreement to the authentication
of Certificates by Trustee or Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of Trustee by an
authenticating agent and a certificate of authentication executed on behalf of
Trustee by an authenticating agent. Each authenticating agent must be acceptable
to Transferor.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any document or any further act on the part of Trustee,
the authenticating agent or any other Person.
(c) Ah authenticating agent may at any time resign by giving written
notice of resignation to Trustee and Transferor. Trustee may at any time
terminate the agency of an authenticating agent by giving notice of termination
to the authenticating agent and Transferor. Upon receiving a notice of
resignation or upon a termination, or in case at any time an authenticating
agent shall cease to be acceptable to Trustee or Transferor, Trustee may
promptly appoint a successor authenticating agent. Any successor authenticating
agent, upon acceptance of its appointment, shall become vested with all the
rights, powers and duties of its predecessor, with like effect as if originally
named as an authenticating agent. No successor authenticating agent shall be
appointed unless acceptable to Transferor.
(d) Servicer agrees to pay to each authenticating agent (if any), as an
expense of Servicer paid Out of the Servicing Fee, reasonable compensation from
time to time for services performed under this section.
(e) The provisions of Sections 11.1, 11.2, 11.3 and 11.4 shall be
applicable to any authenticating agent as if the references in the applicable
provisions thereof to "Trustee" were references to the authenticating agent.
(f) Pursuant to an appointment made under this section, the
Certificates may have endorsed thereon, in lieu of Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
"This is one of the Certificates described in the Supplement
dated as of April 18, 1996.
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MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
By:___________________
as Authenticating Agent
for Trustee,
By:____________________
Authorized Officer."
SECTION 6.9 Tax Treatment. It is the intent of Transferor and the
Investor Certificateholders that, for purposes of Federal, applicable state and
local income and franchise and other taxes measured by or imposed on income, the
Investor Certificates will be treated as evidence of indebtedness secured by the
Transferred Assets and the Trust will not be characterized as an association
taxable as a corporation. The provisions of this Agreement and all related
Transaction Documents shall be construed to further that intent. Transferor, by
entering into this Agreement, and each Investor Certificateholder, by its
acceptance of its Investor Certificate, agree to treat the Investor Certificates
as indebtedness for purposes of Federal and applicable state and local income
and franchise and other taxes measured by or imposed on income. Except to the
extent otherwise required by applicable law or any Governmental Authority,
Trustee hereby agrees to treat the Trust as a security device only, and shall
not file tax returns or obtain an employer identification number on behalf of
the Trust.
SECTION 6.10 Issuance of Additional Series of Certificates and Sales of
Purchased Interests. (a) Transferor may from time to time issue and direct
Trustee to authenticate one or more classes of any newly issued Series of
Investor Certificates (a "New Issuance"). In addition, to the extent permitted
for any Series of Investor Certificates as specified in the related Supplement,
the Investor Certificateholders of the Series may tender their Investor
Certificates to Trustee, and Transferor may allocate a portion of the Transferor
Interest pursuant to the terms and conditions set forth in the Supplement, in
exchange for one or more newly issued Series of Investor Certificates (an
"Investor Exchange"). New Issuances and Investor Exchanges collectively are
referred to as "Issuances".
(b) Transferor may direct Trustee to authenticate an Issuance by
notifying Trustee, in writing, at least five Business Days (or such shorter
period as shall be acceptable to Trustee) in advance (an "Issuance Notice") of
the date upon which the Issuance is to occur (an "Issuance Date"). Any Issuance
Notice shall state the designation of any Series to be issued on the Issuance
Date and, with respect to each class or Series: (i) its initial invested amount
(or the method for calculating the initial invested amount), (ii) its interest
rate (or the method for allocating interest payments or other cash flows
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to the Series), if any, and (iii) the Enhancement Provider, if any, with respect
to the Series.
(c) On the Issuance Date, Transferor shall deliver to Trustee for
authentication under Section 6.2, and Trustee shall authenticate and deliver any
such class or classes of Series of Investor Certificates only upon delivery to
it (and, in the case of item (iv) below, each Rating Agency, Purchaser and any
Enhancement Provider) of the following:
(i) a Supplement satisfying the criteria set forth in
subsection (d) and in form reasonably satisfactory to Trustee executed
by Transferor and Servicer and specifying the principal terms of the
Series;
(ii) the applicable Enhancement, if any;
(iii) the agreement, if any, pursuant to which the Enhancement
Provider agrees to provide the Enhancement, if any;
(iv) a Tax Opinion for each outstanding Series of Investor
Certificates, Purchased Interest and Enhancement (provided that the
opinion delivered to any Purchaser or Enhancement Provider shall be
limited to the Tax Opinion required by the related Purchased Interest
or Series) with respect to such Issuance;
(v) evidence that the Modification Condition has been
satisfied with respect to such Issuance;
(vi) an Officer's Certificate of Transferor that on the
Issuance Date, after giving effect to the Issuance (and the repayment,
on the date of the Issuance Date, of any existing Investor Certificates
with funds (including proceeds of sale of the new Series) on deposit in
the Principal Funding Account), any requirements set out in the
Supplement with respect to any then-outstanding Series with respect to
the amount of Certificates that may not, by their terms, be transferred
has been satisfied;
(vii) an Officer's Certificate of Servicer stating that no
Early Amortization Event or Unmatured Early Amortization Event has
occurred and is continuing and that Servicer does not reasonably expect
that the Issuance would result in an Early Amortization Event or an
Unmatured Early Amortization Event;
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(viii) in the case of an Investor Exchange, any Investor
Certificates that are being exchanged in connection therewith;
(ix) any other documents, certificates and Opinions of Counsel
as may be required by the applicable Supplement; and
(x) an Officer's Certificate of Servicer to the effect that
all conditions specified in clauses (i) through (ix) of this subsection
(c) have been satisfied.
Upon satisfaction or waiver of the conditions for any Issuance, Trustee shall
cancel any Investor Certificates that are to be cancelled in connection with
such Issuance and issue, as provided above, the new Series of Investor
Certificates dated the Issuance Date. Any such Series of Investor Certificates.
shall be substantially in the form specified in the related Supplement and shall
bear, upon its face, the designation for the Series to which it belongs, as
selected by Transferor. There is no limit to the number of Issuances that may be
made under this Agreement.
(d) In conjunction with an Issuance, the parties hereto shall execute a
Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include: (i) its name or
designation, (ii) the initial invested amount or the method of calculating the
initial invested amount, (iii) the applicable interest rate (or formula for the
determination thereof), (iv) the Issuance Date, (v) the rating agency or
agencies rating the Series, if any, (vi) the name of the Clearing Agency, if
any, (vii) the interest payment date or dates and the date or dates from which
interest shall accrue, (viii) the method of allocating Collections with respect
to Transferred Receivables for the Series and. if applicable, with respect to
any paired Series and the method by which the principal amount of Investor
Certificates of the Series shall amortize or accrete and the method for
allocating write-offs, (ix) the names of any accounts to be used by the Series
and the terms governing the operation of any such account, (x) the terms of any
Enhancement with respect to the Series, (xi) the Enhancement Provider, if
applicable, (xii) the base rate applicable to the Series, (xiii) the terms on
which the Certificates of the Series may be repurchased or remarketed to other
investors, (xiv) any deposit into any account provided for the Series, (xv) the
number of classes of the Series, and if more than one class, the rights and
priorities of each class, (xvi) whether any fees, breakage payments or early
termination payments will be included in the funds available to be paid for the
Series, (xvii) the subordination of the Series to any other Series, (xviii)
whether the Series will be a part of a group or subject to being paired with any
other Series, (xix) whether the Series will be prefunded and (xx) any other
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relevant terms of the Series. The terms of the Supplement may modify or amend
the terms of this Agreement or the Purchase Agreement (including the related
definitions) solely as applied to the new Series.
(e) Except as specified in any Supplement for the related Series, all
Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Enhancement provided for any Series shall not be available for any other Series)
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the related Supplement.
(f) Transferor may from time to time direct Trustee, on behalf of the
Trust, to sell one or more Purchased Interests pursuant to, and direct Trustee
to enter into, a PI Agreement. No Purchased Interest shall represent any
interest in any Enhancement for the benefit of any Series, any class of Investor
Certificates or any other Purchased Interest, any Transaction Account
established pursuant to any Supplement or the PI Agreement relating to any other
Purchased Interest except to the extent set forth in the PI Agreement with
respect to such other Purchased Interest. Each PI Agreement may provide that no
Investor Certificateholder, Purchaser under any other PI Agreement or
Enhancement Provider shall be a third-party beneficiary thereof or have any
benefit or any legal or equitable right, remedy or claim under the PI Agreement.
(g) On or before the date of the initial sale of a Purchased Interest
(a "Purchase Date") pursuant to a particular PI Agreement, the parties hereto
and the related Purchaser will execute and deliver a PI Agreement that will
specify the terms of the Purchased Interest. The obligation of Trustee to
execute and deliver the related PI Agreement is subject to the satisfaction or
waiver of the following conditions:
(i) on or before the tenth Business Day (or a shorter period
as shall be acceptable to the parties) immediately preceding the
related Purchase Date, Transferor shall have given Trustee, Servicer,
each Rating Agency (if any rated Investor Certificates are
outstanding), each Purchaser and each Enhancement Provider (if any)
written notice of the sale of the Purchased Interest and the Purchase
Date;
(ii) Transferor shall have delivered to Trustee the related PI
Agreement, in form satisfactory to Trustee, each executed by each party
thereto other than Trustee;
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(iii) the Modification Condition shall have been satisfied
with respect to the sale;
(iv) the sale will not contravene any provision of this
Agreement, any Supplement, any agreement pursuant to which any
Enhancement is provided or any PI Agreement (or any agreement related
thereto);
(v) Trustee shall have received an Officer's Certificate of
Servicer stating that no Early Amortization Event or an Unmatured Early
Amortization Event has occurred and is continuing and that Servicer
does not reasonably expect the sale to result in an Early Amortization
Event or an Unmatured Early Amortization Event;
(vi) Transferor shall have delivered to Trustee, each Rating
Agency, each Purchaser and any Enhancement Provider, a Tax Opinion for
each outstanding Series of Investor Certificates, Purchased Interest
and Enhancement (provided that the opinion delivered to any Purchaser
or Enhancement Provider shall be limited to the Tax Opinion required by
the related Purchased Interest or Series), dated the Purchase Date,
with respect to the sale; and
(vii) Transferor shall have delivered to Trustee an Officer's
Certificate, dated the Purchase Date for such Purchased Interest, to
the effect that all conditions set forth in clauses (i) and (iv) of
this subsection (g) for the sale of the Purchased Interest and the
execution and delivery of the related PI Agreement have been satisfied.
Upon satisfaction or waiver of the above conditions, Trustee shall execute and,
at the written direction of Transferor, deliver the related PI Agreement and any
related documents that Transferor shall reasonably request. The terms of the PI
Agreement may modify or amend the terms of this Agreement or the Purchase
Agreement (including the related definitions) solely as applied to the new
Purchased Interest.
(h) Transferor may from time to time direct Trustee to extend any PI
Agreement, subject to the satisfaction or waiver of the following conditions:
(i) on or before the tenth Business Day (or a shorter period
as shall be acceptable to the parties) immediately preceding the date
of the extension, Transferor shall have given Trustee, Servicer, the
Rating Agency and any Enhancement Provider written notice of the
extension and the date on which the extension shall occur;
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(ii) Transferor shall have delivered to Trustee the required
agreements, certificates, documents and filings, in form satisfactory
to Trustee, executed by each party thereto other than Trustee;
(iii) the extension will not (A) contravene any provision of
this Agreement, any Supplement, any agreement pursuant to which any
Enhancement is provided or any PI Agreement (or any agreement related
thereto) or (B) constitute, or result in the occurrence of, an Early
Amortization Event or an Unmatured Early Amortization;
(iv) Transferor shall have delivered to the Trust, the Rating
Agency, each Purchaser and any Enhancement Provider a Tax Opinion for
each outstanding Series of Investor Certificates, Purchased Interest
and Enhancement (provided that the opinion delivered to any Purchaser
or Enhancement Provider shall be limited to the Tax Opinion required by
the related Purchased Interest or Series), dated the date of the
extension, with respect to the extension;
(v) Transferor shall have delivered to Trustee an Officer's
Certificate, dated the date of the extension, to the effect that all
conditions set forth in clauses (i) and (iii) of this subsection (h)
for the extension of such PI Agreement and the execution and delivery
of the related documents has been satisfied; and
(vi) the Modification Condition shall have been satisfied.
SECTION 6.11 Book-Entry Certificates. (a) If provided in any
Supplement, the Investor Certificates of any Series, upon original issuance,
will be issued in the form of one or more Book-Entry Certificates, to be
delivered to the applicable Clearing Agency, by, or on behalf of, Transferor.
The Investor Certificates in any Series that are issued as Book-Entry
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of the Clearing Agency, and no Certificate Owner will
receive a Definitive Certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.13. Unless and
until Definitive Certificates have been issued to Certificate Owners pursuant to
Section 6.13:
(i) the provisions of this section shall be in full force and
effect;
(ii) Transferor, Servicer, the Paying Agent, the Transfer
Agent and Registrar and Trustee may deal with the Clearing Agency and
the
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Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this section
conflict with any other provisions of this Agreement, the provisions of
this section shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between the
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 6.13, the initial Clearing Agency will make
bock-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal and interest on the Investor
Certificates to the Clearing Agency Participants.
(b) Investor Certificates that are sold to Qualified Institutional
Buyers in reliance on Rule 144A under the Securities Act shall be represented by
one or more Book-Entry Certificates (the "144A Book-Entry Certificates"), in
registered form, without coupons, which will be deposited upon the order of
Transferor on the Issuance Date with Trustee as custodian for, and registered in
the name of, a nominee of the Clearing Agency.
(c) Investor Certificates that are sold in offshore transactions in
reliance on Regulation S shall be represented initially by one or more temporary
Bock-Entry Certificates (the "Regulation S Temporary Book-Entry Certificates").
The Regulation S Temporary Book-Entry Certificates shall be exchanged on the
later of (i) 40 days (or such longer period of time, if any, required under
Regulation S) after the later of (A) the Issuance Date and (B) the completion of
the distribution of the Certificates, as certified by the Lead Placement Agent
and (ii) the date on which the requisite certifications are due to and provided
to Trustee (the later of clauses (i) and (ii) is referred to as the "Exchange
Date") for permanent Bock-Entry Certificates (the "Unrestricted Regulation S
Book-Entry Certificates," and together with the Regulation S Temporary
Book-Entry Certificates, the "Regulation S Book-Entry Certificates"). The
Regulation S Temporary Book-Entry Certificates for any Series shall be issued in
registered form, without coupons, and deposited upon the order of Transferor
with Trustee as custodian for, and registered in the name of, a nominee of the
Clearing Agency for credit to the account of the depositaries for Euroclear and
Cedel, which depositaries shall, on behalf of Euroclear and Cedel, hold the
interests on behalf of account holders (each a
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"Member Organization"), which have rights in respect of the Certificates
credited to their securities accounts with Euroclear or Cedel from time to time.
(d) A Certificate Owner holding an interest in a Regulation S Temporary
Book-Entry Certificate may receive payments in respect of the Certificates on
the Regulation S Temporary Book-Entry Certificate only after delivery to
Euroclear or Cedel, as the case may be. of a written certification substantially
in the form of a certification in the form set forth in Exhibit F, and upon
delivery by Euroclear or Cedel, as the case may be, to the Transfer Agent and
Registrar of a certification or certifications substantially in the form set
forth in Exhibit G. The delivery by a Certificate Owner of the certification
referred to above shall constitute its irrevocable instruction to Euroclear or
Cedel, as the case may be, to arrange for the exchange of the Certificate
Owner's interest in a Regulation S Temporary Book-Entry Certificate for a
beneficial interest in an Unrestricted Regulation S Book-Entry Certificate after
the Exchange Date in accordance with the paragraph below.
After the Exchange Date for any Series in which a Regulation S Temporary
Book-Entry Certificate was issued, one or more Unrestricted Regulation S
Book-Entry Certificates with no outstanding principal amount shall be issued in
registered form, without coupons, and deposited with Trustee as custodian for,
and registered in the name of, a nominee of the Clearing Agency. After (i) the
Exchange Date for the Regulation S Temporary Book-Entry Certificates for any
Series and (ii) receipt by the Transfer Agent and Registrar of written
instructions from Euroclear or Cedel, as the case may be, directing the Transfer
Agent and Registrar to credit or cause to be credited to either Euroclear's or
Cedel's, as the case may be, depositary's account a beneficial interest in the
Unrestricted Regulation S Book-Entry Certificate for such Series in a principal
amount not greater than that of the beneficial interest in the Regulation S
Temporary Book-Entry Certificate for such Series, the Transfer Agent and
Registrar shall instruct the Clearing Agency to reduce the principal amount of
such Regulation S Temporary Book-Entry Certificate and increase the principal
amount of such Unrestricted Regulation S Book-Entry Certificate by the principal
amount of the beneficial interest in such Regulation S Temporary Book-Entry
Certificate being transferred or exchanged, and to credit or cause to be
credited to the account of the depositary for the Clearing Agency, Euroclear or
Cedel (which depositary shall hold interests on behalf of Member Organizations
or Persons who have an account with the Clearing Agency (each, a "Clearing
Agency Participant")), as the case may be, a beneficial interest in such
Unrestricted Regulation S Book-Entry Certificate having a principal amount of
the Regulation S Temporary Book-Entry Certificate that was reduced upon the
transfer or exchange.
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Upon return of the entire principal amount of the Regulation S Temporary
Book-Entry Certificate for any Series to Trustee in exchange for beneficial
interests in the Unrestricted Regulation S Book-Entry Certificate for that
Series, Trustee shall cancel such Regulation S Temporary Book-Entry Certificate
by perforation and shall forthwith destroy it.
(e) Transfers within a single Series between different Book-Entry
Certificates shall be made in accordance with this subsection (e).
(i) For transfer of a beneficial interest in a Regulation S
Book-Entry Certificate for a beneficial interest in a 144A Book-Entry
Certificate, if the Certificateholder of a beneficial interest in an
Unrestricted Regulation S Book-Entry Certificate wishes at any time to
exchange all or part of its beneficial interest in such Unrestricted
Regulation S Book-Entry Certificate, or to transfer all or part of its
beneficial interest in such Unrestricted Regulation S Book-Entry
Certificate to a Person who wishes to take delivery thereof in the form of
a beneficial interest in a 144A Book-Entry Certificate, the
Certificateholder may, subject to the applicable rules and procedures of
Euroclear or Cedel and the Clearing Agency, give directions for the
Transfer Agent and Registrar to exchange or cause the exchange or transfer
or cause the transfer of all or part of its beneficial interest in a
Regulation S Book-Entry Certificate for an equivalent beneficial interest
in a 144A Book-Entry Certificate. Upon receipt by the Transfer Agent and
Registrar of (A) instructions from Euroclear or Cedel, a Clearing Agency
Participant or the Clearing Agency, as the case may be, directing the
Transfer Agent and Registrar to debit (or cause to be debited) a reduction
in a Regulation S Book-Entry Certificate by the amount of the beneficial
interest in such Regulation S Book-Entry Certificate being transferred or
exchanged and to credit (or cause to be credited) an increase in the
appropriate 144A Book-Entry Certificate by an amount equal to the
beneficial interest being exchanged or transferred (such instructions to
contain such information as is necessary for the Clearing Agency to
effectuate such transfer or exchange (including, but not limited to,
information regarding the accounts to be credited and debited)), and (B)
in the case of the transfer of a Regulation S Temporary Book-Entry
Certificate, a certificate in the form of Exhibit L given by the
Certificate Owner, the Transfer Agent and Registrar shall instruct the
Clearing Agency to reduce the appropriate Unrestricted Regulation S
Book-Entry Certificate by the aggregate principal amount of the beneficial
interest being exchanged or transferred, and the Transfer Agent shall
instruct the Clearing Agency, concurrently with the reduction, to increase
the principal amount of the
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appropriate 144A Book-Entry Certificate by the aggregate principal amount
of the beneficial interest being exchanged or transferred, and to take
such other action as is necessary or appropriate to effectuate the
exchange or transfer of such beneficial interest (including, but not
limited to, crediting the increase in the beneficial interest in such 144A
Book-Entry Certificate, or causing such increase to be credited to, the
appropriate account and debiting the decrease in the beneficial interest
in such Regulation S Book-Entry Certificate, or causing such increase to
be debited to, the appropriate account).
(ii) For transfers of a beneficial interest in a 144A Book-Entry
Certificate for a beneficial interest in a Regulation S Book-Entry
Certificate, if a Certificate Owner holding a beneficial interest in a
144A Book-Entry Certificate wishes at any time to exchange all or part of
its beneficial interest in such 144A Book-Entry Certificate for a
beneficial interest in a Regulation S Book-Entry Certificate, or to
transfer all or part of its beneficial interest in such 144A Book-Entry
Certificate to a Person who wishes to take delivery thereof in the form of
a beneficial interest in a Regulation S Book-Entry Certificate, the
Certificateholder may, subject to the applicable rules and procedures of
the Clearing Agency, give directions for the Transfer Agent and Registrar
to exchange or cause the exchange or transfer or cause the transfer of all
or part of its beneficial interest in a Rule 144A Book-Entry Certificate
for an equivalent beneficial interest in a Regulation S Book-Entry
Certificate. Upon receipt by the Transfer Agent and Registrar of (A)
instructions given in accordance with the Clearing Agency's procedures
from a Clearing Agency Participant directing the Transfer Agent and
Registrar to debit (or cause to be debited) a reduction in a 144A
Book-Entry Certificate by the amount of the beneficial interest to be
transferred or exchanged and to credit (or cause to be credited) an
increase in the appropriate Regulation S Book-Entry Certificate in an
amount equal to the beneficial interest being exchanged or transferred,
(B) a written order given in accordance with the Clearing Agency's
procedures containing such information as is necessary for the Clearing
Agency to effectuate such transfer or exchange (including, but not limited
to, information regarding the accounts to be debited and credited) and (C)
certificates in the forms of Exhibits H and I, respectively, given by the
Certificate Owner and the proposed transferee of the interest, the
Transfer Agent and Registrar shall instruct the Clearing Agency to reduce
the appropriate 144A Book-Entry Certificate by the aggregate principal
amount of the beneficial interest being exchanged or transferred and the
Transfer Agent and Registrar shall instruct the Clearing Agency,
concurrently
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with the reduction, to increase the principal amount of the appropriate
Regulation S Book-Entry Certificate by the aggregate principal amount of
the beneficial interest being exchanged or transferred, and to take such
other action as is necessary or appropriate to effectuate the exchange or
transfer of such beneficial interest (including, but not limited to,
crediting the increase in the beneficial interest in such Regulation S
Book-Entry Certificate, or causing such increase to be credited to, the
appropriate account and debiting the decrease in the beneficial interest
in such 144A Book-Entry Certificate, or causing such decrease to be
debited to, the appropriate account).
(iii) Notwithstanding any other provisions of this subsection (e), a
placement agent for the Investor Certificates may exchange beneficial
interests in a Regulation S Temporary Book-Entry Certificate held by it
for beneficial interests in the 144A Book-Entry Certificate after delivery
by such placement agent of instructions for the exchange substantially in
the form of Exhibit J (and such placement agent shall not be required to
comply with any other provision of this subsection (e) in connection with
such exchange). Upon receipt of the instructions provided in the preceding
sentence, the Transfer Agent and Registrar shall instruct the Clearing
Agency to reduce the principal amount of the appropriate Regulation S
Temporary Book-Entry Certificate to be exchanged and shall instruct the
Clearing Agency to increase the principal amount of such appropriate 144A
Book-Entry Certificate and credit or cause to be credited to the account
of the placement agent a beneficial interest in such 144A Book-Entry
Certificate having a principal amount equal to the amount of the
beneficial interest in the Regulation S Temporary Book-Entry Certificate
being exchanged.
(iv) Except as provided herein, all 144A Book-Entry Certificates
(and all Definitive Certificates issued in exchange for a beneficial
interest in a 144A Book-Entry Certificate) and all Definitive Certificates
issued under Rule 144A or Regulation D under the Securities Act shall bear
a legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE
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EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE."
As long as a Definitive Certificate bears such a legend, such
Definitive Certificate may only be transferred or exchanged if such
transfer or exchange would be in compliance with the Securities Act as
evidenced by a letter in the form of Exhibit K that shall be delivered by
the Holder of such Definitive Certificate to the Transfer Agent and
Registrar with any request to transfer or exchange such Definitive
Certificate; provided, however, that if any transfer is not pursuant to
Rule 144A, Rule 144 or Rule 904 under the Securities Act or pursuant to an
effective registration statement, the transferor shall provide Transferor
and Trustee with an opinion of counsel, in form and
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substance satisfactory to Transferor and Trustee, that such transfer would
be in compliance with the Securities Act. Notwithstanding the foregoing, a
Definitive Certificate shall not be required to bear such a legend (and
the Transfer Agent and Registrar shall issue a Definitive Certificate
without such a legend in exchange for a Definitive Certificate that has
such a legend) if (i) such Definitive Certificate is transferred pursuant
to Rule 144 or an effective registration statement under the Securities
Act, and (ii) the Holder of such Definitive Certificate delivers to the
Trustee a certificate substantially in the form of Exhibit K.
SECTION 6.12 Notices to Clearing Agency. Whenever notice or other
communication to the Investor Certificateholders of any Series represented by
Book-Entry Certificates is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificate Owners pursuant to
Section 6.13, Trustee, Servicer and the Paying Agent shall give all such notices
and communications specified herein to be given to the Investor
Certificateholders of the Series to the Clearing Agency.
SECTION 6.13 Definitive Certificates. If (a)(i) Transferor advises Trustee
in writing that Transferor has received notice from the Clearing Agency that the
Clearing Agency is no longer willing or able to discharge its responsibilities
under any Letter of Representations and (ii) Transferor is unable to locate a
qualified successor, (b) Transferor, at its option, advises Trustee in writing
that, with respect to any Series, it elects to terminate the Book-Entry system
through the Clearing Agency or (c) after the occurrence of a Servicer Default,
Certificate Owners representing beneficial interests aggregating not less than
50% of the Invested Amount of the Series advise Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
Book-Entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners of the Series, Trustee shall notify the Clearing
Agency of the occurrence of any such event and of the availability of Definitive
Certificates of the Series to Certificate Owners of the Series requesting the
same. Upon surrender to Trustee of the Book-Entry Certificates for any such
Series by the Clearing Agency accompanied by registration instructions from the
Clearing Agency for registration, Trustee shall authenticate and deliver
Definitive Certificates for that Series to the Certificate Owners of that Series
and the Trustee shall recognize the Holders of such Definitive Certificates as
Certificateholders under this Agreement. Neither Transferor, the Transfer Agent
and Registrar nor Trustee shall be liable for any delay in delivery of the
instructions and may conclusively rely on, and shall be protected in relying on,
any such instructions from the Clearing Agency.
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SECTION 6.14 Letter of Representations. Notwithstanding anything to the
contrary in this Agreement or any Supplement, the parties hereto shall comply
with the terms of each Letter of Representations.
ARTICLE VII TRANSFEROR
SECTION 7.1 Representations and Warranties of Transferor Relating to
Transferor and the Transaction Documents. On the date hereof and on each
Issuance Date and Purchase Date, Transferor hereby represents and warrants for
the benefit of Trustee, the Certificateholders, the Purchasers and the
Enhancement Providers that:
(a) Organization and Good Standing. Transferor is a corporation duly
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to acquire, own and transfer the Receivables and the Related
Transferred Assets.
(b) Due Qualification. Transferor is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in
all jurisdictions in which the ownership or lease of property or the
conduct of its business requires qualification, licenses or approvals and
where the failure so to qualify, to obtain the licenses and approvals or
to preserve and maintain the qualification, licenses or approvals would
have a Material Adverse Effect.
(c) Power and Authority. Transferor has all necessary corporate
power and authority to execute, deliver ad perform its obligations under
this Agreement and the other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, ad each other
Transaction Document to which Transferor is a party when executed and
delivered will constitute, a legal, valid and binding obligation of
Transferor, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
(e) Authorization; No Conflict or Violation. The execution, delivery
and performance of, and the consummation of the transactions
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contemplated by, this Agreement and the other Transaction Documents to be
signed by Transferor and the fulfillment of the terms hereof and thereof
have been duly authorized by ail necessary action and will not (i)
conflict with, violate, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a default under, (A) its Certificate of Incorporation or Bylaws or
(B) any indenture, loan agreement, mortgage, deed of trust or other
material agreement or instrument to which Transferor is a party or by
which it or any of its properties is bound, (ii) result in the creation or
imposition of any Adverse Claim (other than a Permitted Adverse Claim)
upon any of its properties pursuant to the terms of any such contract,
indenture, loan agreement, mortgage, deed of trust, or other agreement or
instrument, other than this Agreement and the other Transaction Documents,
or (iii) conflict with or violate any federal, state, local or foreign law
or any decision, decree, order, rule or regulation applicable to it or any
of its properties of any court or of any federal, state, local or foreign
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties,
which conflict, violation, breach, default or Adverse Claim (other than a
Permitted Adverse Claim), individually or in the aggregate, would have a
Material Adverse Effect.
(f) Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of
Transferor, threatened against it before any court, regulatory body,
arbitrator, administrative agency or other tribunal or governmental
instrumentality and (ii) it is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
government authority that, in the case of clauses (i) and (ii), (A)
asserts the invalidity of this Agreement or any other Transaction
Document, (B) seeks to prevent the transfer of any Receivables or Related
Transferred Assets to the Trust, the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (C) seeks any determination or ruling that
would materially and adversely affect the performance by Transferor of its
obligations under this Agreement or any other Transaction Document or the
validity or enforceability of this Agreement or any other Transaction
Document, (D) seeks to affect materially and adversely the income tax
attributes of the transfers hereunder or the Trust under the United States
Federal income tax system or any applicable state income tax system or (E)
individually or in the aggregate for all such actions, suits, proceedings
and investigations would have a Material Adverse Effect.
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(g) Governmental Approvals. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by Transferor, and all notices to and filings with
any Governmental Authority, that are required to be made by it, in the
case of each of the foregoing in connection with the transfer of
Receivables and Related Transferred Assets to the Trust or the execution,
delivery and performance by it of this Agreement and any other Transaction
Documents to which it is a party and the consummation of the transactions
contemplated by this Agreement, have been obtained or made and are in full
force and effect, except where the failure to obtain or make any such
authorization, consent, order, approval, notice or filing, individually or
in the aggregate for all such failures, would not reasonably be expected
to have a Material Adverse Effect.
(h) Offices. Transferor's principal place of business and chief
executive office is, and since the date of its incorporation has been,
located at the address set forth under Transferor's signature hereto (or
at such other locations, notified to Servicer and Trustee in accordance
with Section 7.2(c), in jurisdictions where all action required by Section
7.2(c) has been taken and completed).
(i) Account Banks. The names and addresses of all the Account Banks
are specified in Schedule 1 or, after the First Issuance Date, have been
provided by Servicer to Trustee pursuant to Section 3.3(c), and the
account numbers of the Bank Accounts at such Account Banks have been
specified in a letter provided on or prior to the First Issuance Date to
Trustee or, after the First Issuance Date, have been provided by Servicer
to Trustee pursuant to Section 3.3(c). The Account Agreements to which
Transferor is a party constitute the legal, valid and binding obligations
of the parties thereto enforceable against such parties in accordance with
their respective terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights
generally and general equitable principles.
(j) Investment Company Act. Transferor is not, and is not controlled
by, an "investment company" registered or required to be registered under
the Investment Company Act of 1940, as amended.
The representations and warranties set forth in this section shall survive
the transfer and assignment of the Transferred Receivables and the other
Transferred Assets to the Trust. Upon discovery by Transferor, Servicer or
Trustee of a breach of any of the foregoing representations and warranties, the
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party discovering the breach shall give written notice to the other parties to
this Agreement within three Business Days following the discovery; provided,
however that if such breach arises from a Seller's failure to perform its
obligations under the Purchase Agreement and such failure is of the type that
may be cured by settlement of a Seller Non-Complying Receivables Adjustment or
Seller Dilution Adjustment under Sections 3.1 and 3.5 of the Purchase Agreement,
and such settlement shall have (in fact) been made within the time limit
specified under such sections, then no breach shall be deemed to have occurred
under this Agreement. Trustee's obligations in respect of discovering any breach
are limited as provided in Section 11.2(g).
SECTION 7.2 Covenants of Transferor. So long as any Investor Certificates
or Purchased Interests remain outstanding (other than any Investor Certificates
or Purchased Interests payment for which has been duly provided for in
accordance with this Agreement), Transferor shall:
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations, judgments, decrees and orders
(including those relating to the Transferred Receivables, the Related
Transferred Assets, the funds in the Transaction Accounts and the related
Contracts and any other agreements related thereto), in each case to the
extent the failure to comply, individually or in the aggregate for all
such failures, would have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualifications would have a Material Adverse Effect.
(c) Location of Offices. Keep its principal place of business and
chief executive office at the address referred to in Section 7.1(h) or,
upon not less than 30 days' (or such shorter number of days as is
acceptable to the Servicer and Trustee) prior written notice given by
Transferor to Servicer and Trustee, at such other location in a
jurisdiction where all action required pursuant to Section 3.10 shall have
been taken and completed. Transferor will at all times maintain its chief
executive offices within the United States of America, and will cause
Servicer to maintain at all times Servicer's chief executive offices
within the United States of America.
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(d) Reporting Requirements of Transferor. Unless Trustee and the
Required Investors shall otherwise consent in writing, furnish to Trustee,
the Investor Certificateholders and the Rating Agencies:
(i) Early Amortization Events. As soon as possible, and in any
event within five Business Days after an Authorized Officer of
Transferor has obtained knowledge of the occurrence of any Early
Amortization Event or any Unmatured Early Amortization Event, a
written statement of an Authorized Officer of Transferor describing
the event and the action that Transferor proposes to take with
respect thereto, in each case in reasonable detail,
(ii) Material Adverse Effect. As soon as possible and in any
event within five Business Days after an Authorized Officer of
Transferor has knowledge thereof, written notice that describes in
reasonable detail any Adverse Claim, other than any Permitted
Adverse Claim, against the Transferred Assets or any other event or
occurrence that, individually or in the aggregate for all such
events or occurrences, has had, or would have a substantial
likelihood of having, in the reasonable, good faith judgment of
Transferor, a Material Adverse Effect,
(iii) Proceedings. As soon as possible and in any event within
five Business Days after an Authorized Officer of Transferor has
knowledge thereof, written notice of (A) any litigation,
investigation or proceeding of the type described in Section 7.1(f)
not previously disclosed to Trustee and (B) any material adverse
development that has occurred with respect to any such previously
disclosed litigation, investigation or proceeding,
(iv) Other. Promptly, from time to time, any other
information, documents, records or reports respecting the
Transferred Receivables or the Related Transferred Assets or any
other information respecting the condition or operations, financial
or otherwise, of Transferor, in each case as Trustee may from time
to time reasonably request in order to protect the interests of
Trustee, the Trust or the Investor Certificateholders under or as
contemplated by this Agreement.
(e) Adverse Claims. Except for any conveyances under the Transaction
Documents, not permit to exist any Adverse Claim (other
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than Permitted Adverse Claims) to or in favor of any Person upon or with
respect to, or cause to be filed any financing statement or equivalent
document relating to perfection that covers, any Transferred Receivable,
related Contract, Related Transferred Asset or other Transferred Asset, or
any interest therein. Transferor shall defend the right, title and
interest of the Trust in, to and under the Transferred Assets, whether now
existing or hereafter created, against all claims of third parties
claiming through or under Transferor.
(f) Extension or Amendment of Receivables; Change in Credit and
Collection Policy or Contracts. Not (i) extend, amend or otherwise modify
the terms of any Transferred Receivable or Contract (except as permitted
by the Credit and Collection Policy) in a manner that would have a
material adverse effect on the Investor Certificateholders or the
Purchasers, or (ii) permit any Seller to make any change in its Credit and
Collection Policy that would have a material adverse effect on the
Investor Certificateholders or the Purchasers; provided that Transferor or
Servicer, as applicable, may change the terms and provisions of the Credit
and Collection Policy if (A) with respect to any material change of
collection policies, the change is made with the prior written approval of
each Agent, if any, and the Modification Condition is satisfied with
respect thereto, (B) with respect to any material change of collection
procedures, the change is made with prior written notice to each Agent and
no material adverse effect on any Series or Purchased Interest would
result, and (C) with respect to any material change in accounting policies
relating to Write-Offs, the change is made in accordance with GAAP; and,
provided further, that Transferor or Servicer may change the terms and the
provisions of a Contract on a prospective basis, and a Seller may enter
into a new Contract, so long as such change or new Contract does not have
a material adverse affect on the validity, enforceability or
collectibility of any then outstanding Transferred Receivable.
(g) Mergers, Acquisitions, Sales, Etc. Not:
(i) except pursuant to the Transaction Documents or m
connection with the transactions contemplated by the Acquisition, as
defined and described in the Offering Memorandum dated November 22,
1995 for the note offering under and pursuant to the Note Indenture,
(A) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest
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in, any other Person, or (B) directly or indirectly, sell, transfer,
assign, convey or lease, whether in one transaction or in a series
of transactions, all or substantially all of its assets, or sell or
assign with or without recourse any Receivables or Related
Transferred Assets (other than as provided in the Transaction
Documents) unless:
(x)(1) the corporation formed by the consolidation or into
which Transferor is merged or the Person that acquires by
conveyance or transfer the properties and assets of Transferor
substantially as an entirety shall be, if Transferor is not
the surviving entity, organized and existing under the laws of
the United States of America or any state thereof or the
District of Columbia, and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to
Trustee, in form satisfactory to Trustee and each Agent, the
performance of every covenant and obligation of Transferor
hereunder, including its obligations under Section 7.3, under
each Supplement and under each PI Agreement, and (2)
Transferor has delivered to Trustee an Officer's Certificate
stating that the consolidation, merger, conveyance or transfer
and the supplemental agreement comply with this section and an
Opinion of Counsel stating that the supplemental agreement is
a valid and binding obligation of the surviving entity
enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in
effect and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at
law or in equity),
(y) the Modification Condition shall have been satisfied with
respect to the consolidation, merger, conveyance or transfer,
and the Transferor's independent director shall have approved
such consolidation, merger, conveyance or transfer,
(z) Transferor shall have delivered to Trustee, each Rating
Agency, each Purchaser and each Enhancement Provider a Tax
Opinion for each outstanding Series of
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Investor Certificates, Purchased Interest and Enhancement
(provided that the opinion delivered to any Purchaser or
Enhancement Provider shall be limited to the Tax Opinion
required by the related Purchased Interest or Series), dated
the date of the consolidation, merger, conveyance or transfer,
with respect thereto, or
(ii) except as contemplated in the Purchase Agreement in
connection with Transferor's purchases of Specified Receivables and
Related Assets from the Sellers, (A) make, incur or suffer to exist
an investment in, equity contribution to, or payment obligation in
respect of the deferred purchase price of property or services from,
any Person, or (B) make any loan or advance to any Person other than
loans to Howmet (which loans shall be made in accordance with
Section 3.3 of the Purchase Agreement).
(h) Change in Name. Not change its corporate name or the name under
or by which it does business, or permit any Seller to change its corporate
name or the name under or by which it does business, unless prior to the
change in name, Transferor shall have filed (or shall have caused to be
filed) any financing statements or amendments as Servicer or Trustee
determines may be necessary to continue the perfection of the Trust's
interest in the Transferred Receivables, the Related Transferred Assets
and the proceeds thereof.
(i) Amendment of Articles of Incorporation; Change in Business. Not
amend Article Sixth, Ninth, Tenth (a), Tenth (d) or Thirteenth (b) of its
Articles of Incorporation, or engage in any business other than as
contemplated by the Transaction Documents, unless the Modification
Condition has been satisfied in connection with the amendment or change in
Transferor's business.
(j) Amendments to Purchase Agreement. Except as expressly provided
otherwise in this Agreement, make no amendment to the Purchase Agreement
that would adversely affect in any material respect the interests of the
Investor Certificateholders, the Purchasers or any Enhancement Provider.
(k) Enforcement of Purchase Agreement. Perform all its obligations
under and otherwise comply with the Purchase Agreement in all material
respects and, if requested by Trustee, enforce, for the
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benefit of the Trust, the covenants and agreements of any Seller in the
Purchase Agreement.
(l) Other Indebtedness. Not (i) create, incur or permit to exist any
Indebtedness, Guaranty or liability or (ii) cause or permit to be issued
for its account any letters of credit or bankers' acceptances, except for
(A) Indebtedness incurred pursuant to any Buyer Note, (B) other
liabilities specifically permitted to be created, incurred or owed by
Transferor pursuant to or in connection with the Transaction Documents,
(C) liabilities for reasonable and customary operating expenses in an
aggregate amount not to exceed $150,000 per calendar quarter, (D)
liabilities under a tax sharing agreement among Howmet and its
Subsidiaries, provided that such agreement is in substantially the form
disclosed to the Trustee prior to the date hereof (or in a form otherwise
acceptable to the Trustee), and (E) liabilities for taxes not yet due and
taxes contested in good faith by proper proceedings, provided that
Transferor has maintained adequate reserves with respect thereto in
accordance with GAAP.
(m) Separate Corporate Existence. Hereby acknowledge that Trustee
and the Investor Certificateholders are, and will be, entering into the
transactions contemplated by the Transaction Documents in reliance upon
Transferor's identity as a legal entity separate from any Seller, Servicer
and any other Person. Therefore, from and after the First Issuance Date,
Transferor shall take all reasonable steps to maintain its existence as a
corporation separate and apart from Servicer, each Seller and any other
Howmet Person. Without limiting the generality of the foregoing,
Transferor shall take such actions as shall be reasonably required in
order that:
(i) Transferor will not incur any material indirect or
overhead expenses for items shared between Transferor and any Howmet
Person that are not reflected in the Servicing Fee, other than
shared items of expenses not reflected in the Servicing Fee, such as
legal, auditing and other professional services, that will be
allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably
related to the actual use or the value of services rendered, it
being understood that Howmet will pay all expenses owing by
Transferor or any Howmet Person relating to the preparation,
negotiation, execution and delivery of the Transaction Documents
(and any amendments, modifications or
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supplements thereto), including, without limitation, legal,
commitment, agency and other fees.
(ii) Transferor will account for and manage its liabilities
separately from those of every other Howmet Person, including
payment of all payroll and administrative expenses and taxes (other
than taxes that are determined or required to be determined on a
consolidated or combined basis) from its own assets.
(iii) Transferor will conduct its business at an office
segregated from the offices of each Howmet Person, which office of
Transferor may consist of office space shared with a Howmet Person,
a portion of which is allocated solely to Transferor.
(iv) Transferor will maintain corporate records, books of
account and stationery separate from those of every Howmet Person.
(v) Any annual financial statements of any Howmet Person that
are made publicly available and which are consolidated to include
Transferor will contain footnotes stating that Howmet and certain of
its Subsidiaries has entered into an agreement with Transferor with
respect to the sale of the Specified Receivables and indicating that
the assets of Transferor will not be available to Howmet or any such
Subsidiary unless Transferor's liabilities have been paid in full.
(vi) Transferor's assets will be maintained in a manner that
facilitates their identification and segregation from those of any
other Howmet Person.
(vii) Transferor shall not, directly or indirectly, be named
and shall not enter into an agreement to be named as a direct or
contingent beneficiary or loss payee on any insurance policy with
respect to any loss relating to the property of a Howmet Person.
(viii) Any transaction between Transferor and any Howmet
Person will be the type of transaction which would be entered into
by a prudent Person in the position of Transferor with a Howmet
Person, and will be on terms that are at least as
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favorable as may be obtained from a Person that is not a Howmet
Person (it being understood and agreed that the transactions
contemplated in the Transaction Documents meet the requirements of
this clause).
(ix) Except to the extent required by law, neither Transferor
nor any Howmet Person will be or will hold itself out to be
responsible for the debts of the other.
(n) Taxes. File or cause to be filed, and cause each Person with
whom it shares consolidated tax liability to file, all Federal, state and
local tax returns that are required to be filed by it, except where the
failure to file such returns would not have a Material Adverse Effect, and
pay or cause to be paid all taxes shown to be due and payable on such
returns or on any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which Transferor shall have
set aside adequate reserves on its books in accordance with GAAP and which
proceedings would not have a Material Adverse Effect.
The covenants set forth in this section shall survive the transfer and
assignment of the Transferred Receivables and the other Transferred Assets to
the Trust. Upon discovery by Transferor, Servicer or Trustee of a breach of any
of the foregoing covenants, the party discovering the breach shall give written
notice to the other parties to this Agreement within three Business Days
following such discovery; provided, however that if such breach arises from a
Seller's failure to perform its obligations under the Purchase Agreement and
such failure is of the type that may be cured by settlement of a Seller
Non-Complying Receivables Adjustment or Seller Dilution Adjustment under
Sections 3.1 and 3.5 of the Purchase Agreement, and such settlement shall have
(in fact) been made within the time limit specified under such sections, then no
breach shall be deemed to have occurred under this Agreement. Trustee's
obligations in respect of discovering any breach are limited as provided in
Section 11.2(g).
SECTION 7.3 Indemnification by Transferor. (a) Transferor hereby agrees to
indemnify the Trust, Trustee and each of the successors, permitted transferees
and assigns of any such Person and all officers, directors, shareholders,
controlling Persons, employees, affiliates and agents of any of the foregoing
(each of the foregoing Persons individually being called an "Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims (whether on account of settlement or otherwise, and whether or not the
relevant Indemnified Party is a party to any action or
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proceeding that gives rise to any Indemnified Losses (as defined below)),
judgments, liabilities and related reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) (all of the foregoing collectively
being called "Indemnified Losses") awarded against or incurred by any of them
that arise out of or relate to Transferor's performance of, or failure to
perform, any of its obligations under or in connection with any Transaction
Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
indemnified against any Indemnified Losses (a) resulting from gross negligence
or willful misconduct on the part of such Indemnified Party (or the gross
negligence or willful misconduct on the part of any of its officers, directors,
employees, affiliates or agents), (b) to the extent they include Indemnified
Losses in respect of Transferred Receivables and reimbursement therefor that
would constitute credit recourse to Transferor for the amount of any Transferred
Receivable or Related Transferred Asset not paid by the related Obligor, (c) to
the extent they are or result from lost profits, (d) to the extent they are or
result from taxes (including interest and penalties thereon) asserted with
respect to (i) distributions on the Investor Certificates, (ii) franchise or
withholding taxes imposed on any Indemnified Party other than the Trust or
Trustee in its capacity as Trustee or (iii) federal or other income taxes on or
measured by the net income of the Indemnified Party and costs and expenses in
defending against the same, (e) resulting from any breach by such Indemnified
Party of its representations, warranties or covenants m the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this Section is
unavailable to an Indemnified Party or is insufficient to hold it harmless, then
Transferor shall contribute to the amount paid by the Indemnified Party as a
result of any loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party on the one hand and Transferor on the other hand, but also the
relative fault of the Indemnified Party (if any) and Transferor and any other
relevant equitable consideration.
(b) Transferor shall be liable to all creditors of the Trust (but not to
the Trust, Trustee, Investor Certificateholders or Purchasers) for all
liabilities of the Trust to the same extent as it would be if the Trust
constituted a partnership under Delaware law and Transferor were a general
partner thereof (to the extent Transferred Assets remaining after Investor
Certificateholders and Purchasers have been paid in full are insufficient to pay
such losses, claims, damages or liabilities). Notwithstanding anything to the
contrary
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herein, any such creditor shall be a third party beneficiary of this Section
7.3. Nothing in this provision shall be construed as waiving any rights or
claims (including rights of recoupment or subrogation) which the Transferor may
have against any third party under this Agreement or applicable laws.
ARTICLE VIII SERVICER
SECTION 8.1 Representations and Warranties of Servicer. On the date hereof
and on each Issuance Date and Purchase Date, Servicer hereby makes, and any
Successor Servicer also shall be deemed to make by its acceptance of its
appointment hereunder, the following representations and warranties for the
benefit of Trustee, the Certificateholders, the Purchasers and the Enhancement
Providers:
(a) Organization and Good Standing. Servicer is a corporation duly
organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all necessary corporate power and
authority to own its properties and to conduct its business as the
properties presently are owned and as the business presently is conducted.
(b) Due Qualification. Servicer is duly qualified to do business and
is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals, in
all jurisdictions in which the servicing of the Transferred Receivables
and the Related Transferred Assets as required by this Agreement requires
qualification, licenses or approvals and where the failure so to qualify,
to obtain the licenses and approvals or to preserve and maintain the
qualification, licenses or approvals would have a material adverse effect
on its ability to perform its obligations as Servicer under this Agreement
or a Material Adverse Effect.
(c) Power and Authority. Servicer has all necessary corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, and each other
Transaction Document to which Servicer is a party when executed and
delivered will constitute, a legal, valid and binding obligation of
Servicer, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
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or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
(e) Authorization; No Conflict or Violation. The execution and
delivery by Servicer of this Agreement and the other Transaction Documents
to which it is a party, the performance by it of its obligations hereunder
and thereunder and the fulfillment by it of the terms hereof and thereof
that are applicable to it have been duly authorized by all necessary
action and will not (i) conflict with, violate, result in any breach of
any of the terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, (A) its Certificate of
Incorporation or Bylaws or (B) any indenture, loan agreement, mortgage,
deed of trust, or other material agreement or instrument to which it is a
party or by which it or any of its properties is bound (excluding any such
agreement that is terminated on or before the First Issuance Date or under
which Servicer has obtained all necessary consents) or (ii) conflict with
or violate any federal, state, local or foreign law or any decision,
decree, order, rule or regulation applicable to it or any of its
properties of any court or of any federal, state, local or foreign
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or any of its properties,
which conflict, violation, breach or default described, individually or in
the aggregate, would have a Material Adverse Effect.
(f) Governmental Approvals. All authorizations, consents, orders and
approvals of, or other action by, any Governmental Authority that are
required to be obtained by Servicer, and all notices to and filings with
any Governmental Authority that are required to be made by it, in the case
of each of the foregoing in connection with the execution, delivery and
performance by it of this Agreement and any other Transaction Documents to
which it is a party and the consummation of the transactions contemplated
by this Agreement, have been obtained or made and are in full force and
effect (other than the filing of the UCC financing statements referred to
in Section 2.3(a)(ii)(A), all of which, at the time required in Section
2.3(a)(ii)(A), will be duly made), except where the failure to obtain or
make such authorization, consent, order, approval, notice or filing,
individually or in the aggregate for all such failures, would not
reasonably be expected to have a Material Adverse Effect.
(g) Litigation and Other Proceedings. (i) There is no action, suit,
proceeding or investigation pending or, to the best knowledge of Servicer,
threatened against it before any court, regulatory body,
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arbitrator, administrative agency or other tribunal or governmental
instrumentality and (ii) it is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
government authority that, in the case of clauses (i) and (ii), (A) seeks
to affect adversely the income tax attributes of the transfers hereunder
or the Trust under the United States federal income tax system or any
state income tax system or (B) individually or in the aggregate for all
such actions, suits, proceedings and investigations would have a Material
Adverse Effect.
(h) Business; Balance Sheet. Since its incorporation, Transferor has
conducted no business other than the purchase of Receivables and Related
Assets from the Sellers under the Existing Purchase Agreement, the
transfer of such Receivables and Related Assets to the Trust (pursuant to
the Existing Pooling Agreement), the offering of Certificates and
Purchased Interests and such other activities as are contemplated by the
Transaction Documents or that are incidental to the foregoing. The balance
sheet of Transferor delivered to Trustee on the date hereof has been
prepared in accordance with GAAP and fairly presents the financial
condition of Transferor (after taking into account on a pro forma basis
the transactions occurring on such date). As of the date hereof, (i)
Transferor has no contingent liabilities other than expense reimbursement
and indemnity provisions of the Series 1995-1 Supplement to the Existing
Pooling Agreement which survive termination thereof, and (ii) Transferor
has not received notice from any party to such Supplement of any claim, or
of such party's intent to make a claim, under such provisions.
The representations and warranties set forth in this section shall survive
the transfer and assignment of the Transferred Receivables and the other
Transferred Assets to the Trust. Upon discovery by Transferor, Servicer or
Trustee of a breach of any of the foregoing representations and warranties, the
party discovering the breach shall give written notice to the other parties to
this Agreement within three Business Days following the discovery. Trustee's
obligations in respect of discovering any breach are limited as provided in
Section 11.2(g).
SECTION 8.2 Covenants of Servicer. So long as any Investor Certificates or
Purchased Interests remain outstanding (other than any Investor Certificates or
Purchased Interests payment for which has been duly provided for in accordance
with this Agreement), Servicer shall:
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(a) Compliance with Laws, Etc. Maintain in effect ail qualifications
required under applicable law in order to service properly the Transferred
Receivables and shall comply in all material respects with all applicable
laws, rules, regulations, judgments, decrees and orders, in each case to
the extent the failure to comply, individually or in the aggregate for all
such failures, would have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would have a Material Adverse Effect.
(c) Notice. As soon as possible (and in any event within five
Business Days after an Authorized Officer has knowledge thereof), furnish
to Transferor, Trustee, the Investor Certificateholders and the Rating
Agencies notice of any of the events described in clauses (i), (ii) and
(iii) of Section 7.2(d).
The covenants set forth in this section shall survive the transfer and
assignment of the Transferred Assets to the Trust. Upon discovery by Transferor,
Servicer or Trustee of a breach of any of the foregoing covenants, the party
discovering the breach shall give written notice to the other parties to this
Agreement within three Business Days following the discovery. Trustee's
obligations in respect of discovering any breach are limited as provided in
Section 11.2(g).
SECTION 8.3 Merger or Consolidation of or Assumption of the Obligations of
Servicer. Servicer shall not consolidate with or merge into any other Person or
convey, transfer or sell all or substantially all of its properties and assets
to any Person, unless (a) Servicer is the surviving entity or, if it is not the
surviving entity, the Person formed by the consolidation or into which Servicer
is merged or the Person that acquires by conveyance, transfer or sale all or
substantially all of the properties and assets of Servicer shall be a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and such corporation
shall expressly assume, by an agreement supplemental hereto, executed and
delivered to Trustee and in form and substance satisfactory to Trustee, the
performance of every covenant and obligation of Servicer hereunder and under the
other Transaction Documents to which Servicer is a party, and (b) Servicer shall
have delivered to Trustee an Officer's Certificate stating that the
consolidation, merger, conveyance, transfer or sale and the supplemental
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agreement comply with this Section 8.3 and an Opinion of Counsel stating that
the supplemental agreement is a valid and binding obligation of the surviving
entity enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity.
SECTION 8.4 Indemnification by Servicer. Servicer hereby agrees to
indemnify each Indemnified Party forthwith on demand, from and against any and
all Indemnified Losses awarded against or incurred by any of them that arise out
of or relate to Servicer's performance of, or failure to perform, any of its
obligations under or in connection with any Transaction Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
indemnified against any Indemnified Losses (a) resulting from gross negligence
or willful misconduct on the part of such Indemnified Party (or the gross
negligence or willful misconduct on the part of any of its officers, directors,
employees, affiliates or agents), (b) to the extent they include Indemnified
Losses in respect of Transferred Receivables and reimbursement therefor that
would constitute credit recourse to Servicer for the amount of any Transferred
Receivable or Related Transferred Asset not paid by the related Obligor, (c) to
the extent they are or result from lost profits, (d) to the extent they are or
result from taxes (including interest and penalties thereon) asserted with
respect to (i) distributions on the Investor Certificates, (ii) franchise or
withholding taxes imposed on any Indemnified Party other than the Trust or
Trustee in its capacity as Trustee or (iii) federal or other income taxes on or
measured by the net income of the Indemnified Party and costs and expenses in
defending against the same, (e) resulting from any breach by such Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnified Party or is insufficient to hold it harmless, then
Servicer shall contribute to the amount paid by the Indemnified Party as a
result of any loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party on the one hand and Servicer on the other hand, but also the
relative fault of the Indemnified Party (if any) and Servicer and any other
relevant equitable consideration.
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SECTION 8.5 Servicer Liability. Servicer shall be liable in accordance
with this Agreement only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein and as set forth herein.
SECTION 8.6 Limitation on Liability of Servicer and Others. No recourse
under or upon any obligation or covenant of this Agreement, any Supplement, any
PI Agreement, any Certificate or any other Transaction Document, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of Servicer or of any successor corporation, either directly or through
Servicer, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Agreement, any Supplement, any PI Agreement, all other
relevant Transaction Documents and the obligations incurred hereunder or
thereunder are solely corporate obligations, and that no such personal liability
whatsoever shall attach to, or is or shall be incurred by the incorporators,
shareholders, officers or directors, as such, of Servicer or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement, any Supplement, any PI Agreement, any of
the Certificates or any other Transaction Documents, or implied therefrom; and
that any and all such personal liability of, either at common law or in equity
or by constitution or statute, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations or covenants contained in this Agreement, any Supplement, any PI
Agreement, any of the Certificates or any other Transaction Documents, or
implied therefrom, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Agreement, any PI Agreement
and any Supplement. Servicer and any director, officer, employee or agent of
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its duties to service the Transferred
Receivables in accordance with this Agreement, any PI Agreement or any
Supplement that in its reasonable opinion may involve it in any expense or
liability. Servicer may, in its sole discretion, undertake any legal action
relating to the servicing, collection or administration of Transferred
Receivables and Related Transferred Assets that it may reasonably deem necessary
or appropriate for the benefit of the Certificateholders and the Purchasers with
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders and Purchasers hereunder.
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ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1 Early Amortization Events. The Early Amortization Events with
respect to each Series and Purchased Interest shall be specified in the related
Supplement or PI Agreement.
SECTION 9.2 Remedies. Upon the occurrence of an Early Amortization Event,
Trustee shall have, in addition to all other rights and remedies available to
Trustee under this Agreement or otherwise, (a) the right to apply Collections as
provided herein, and (b) all rights and remedies provided under all other
applicable laws, which rights, in the case of each and all of the foregoing,
shall be cumulative. Trustee shall exercise the rights at the direction of the
Investor Certificateholders pursuant to (and subject to the limitations
specified in) Section 11.14.
SECTION 9.3 Additional Rights Upon the Occurrence of Certain Events. (a)
If a Bankruptcy Event shall occur with respect to Transferor, this Agreement
(other than this Section 9.3) and the Trust shall be deemed to have terminated
on the day of the Bankruptcy Event. Within seven Business Days of the date of
written notice to Trustee of the Bankruptcy Event, Trustee shall:
(i) publish a notice in an Authorized Newspaper that a Bankruptcy
Event has occurred with respect to Transferor, that the Trust has
terminated, and that Trustee intends to (A) if all amounts owed in respect
of all Investor Certificates and Purchased Interests shall have been paid
in full or if sufficient funds are on deposit in the Transaction Accounts
for such purpose, transfer the Transferred Receivables and Related
Transferred Assets to Transferor or (B) in any other event, sell, dispose
of or otherwise liquidate the Transferred Receivables and the Related
Transferred Assets pursuant to this Agreement in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids (a "Disposition"), and
(ii) send written notice to the Investor Certificateholders and
Purchasers describing the provisions of this section and requesting each
Investor Certificateholder and Purchaser to advise Trustee in writing
whether (A) it wishes Trustee to instruct Servicer not to effectuate a
Disposition, (B) it refuses to advise Trustee as to the specific action
Trustee shall instruct Servicer to take or (C) it wishes Servicer to
effect a Disposition.
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If, after 60 days from the day notice pursuant to subsection (a)(i) is
first published (the "Publication Date"), Trustee shall not have received the
written instruction described in subsection (a)(ii)(A) from Holders
representing at least a majority in interest within the meaning of Internal
Revenue Service Revenue Procedure 94-46 (or subsequent authority promulgated by
the Internal Revenue Service), determined as if the Trust were classified as a
partnership for Federal income tax purposes (a "majority in interest"), of all
Series of Investor Certificates and Purchased Interests, Trustee shall instruct
Servicer to effectuate a Disposition, and Servicer shall proceed to consummate a
Disposition. If, however, Holders representing at least a majority in interest
of all Series of Investor Certificates and Purchased Interests instruct Trustee
not to effectuate a Disposition, the Trust shall be reconstituted and continue
pursuant to the terms of this Agreement.
(b) Notwithstanding the termination of this Agreement and the Trust
pursuant to subsection (a), the proceeds from any Disposition of the Transferred
Receivables and the Related Transferred Assets pursuant to subsection (a) shall
be treated as Collections on the Transferred Receivables and shall be allocated
and deposited in accordance with the provisions of Article IV.
(c) Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this section with respect to competitive bids.
(d) Transferor or any of its Affiliates shall be permitted to bid for the
Transferred Receivables and the Related Transferred Assets. Trustee may obtain a
prior determination from any bankruptcy trustee, receiver or liquidator that the
terms and manner of any proposed Disposition are commercially reasonable.
(e) Notwithstanding the termination of this Agreement and the Trust
pursuant to subsection (a), Trustee shall continue to have the rights described
in Section 9.2 and Article XI, and be subject to direction on terms consistent
with those set out in Section 11.14, pending the completion of any Disposition
and/or the reconstitution of the Trust.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults. Any of the following events shall
constitute a "Servicer Default":
(a) any failure by Servicer in its capacity as Servicer to make any
payment, transfer or deposit required by any Transaction Document
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to be made by it or to give instructions or to give notice to Trustee to
make such payment, transfer or deposit, which failure continues unremedied
for three Business Days,
(b) failure on the part of Servicer in its capacity as Servicer duly
to observe or perform in any material respect any other covenants or
agreements of Servicer set forth in this Agreement or any other
Transaction Document, which failure continues unremedied for a period of
30 days after the date on which written notice of the failure, requiring
the same to be remedied, shall have been given to Servicer by Trustee, or
to Servicer and Trustee by any Investor Certificateholder or Purchaser,
(c) Servicer shall assign its duties under this Agreement, except as
permitted by Sections 3.1(b) and 8.3,
(d) any Daily Report or Monthly Report or any representation,
warranty or certification made by Servicer in any Transaction Document or
in any certificate or other document or instrument delivered pursuant to
any Transaction Document shall prove to have been incorrect in any
material respect when made or delivered and results in a material adverse
effect on any Investor Certificateholder of any Series or any Purchaser,
and which material adverse effect continues for a period of three Business
Days and such material adverse effect has not been cured, or
(e) any Bankruptcy Event shall occur with respect to Servicer.
In the event of any Servicer Default, so long as Servicer Default shall not have
been remedied, Trustee may (and, at the direction of the Required Investors,
shall), by notice then given in writing to Servicer (a "Termination Notice"),
terminate all (but not less than all) the rights (other than rights to any
earned Servicing Fee, indemnity and exculpation, if any, under this Agreement or
any other Transaction Document) and obligations of Servicer as Servicer under
this Agreement and in and to the Transferred Receivables, the Related
Transferred Assets and the proceeds thereof.
As soon as possible, and in any event within five Business Days, after an
Authorized Officer of Servicer has obtained knowledge of the occurrence of any
Servicer Default, Servicer shall furnish Trustee, each Agent and the Rating
Agencies, and Trustee shall promptly furnish each Investor Certificateholder,
notice of such Servicer Default.
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Notwithstanding the foregoing, a delay in or failure in performance
referred to in subsection (a) for a period of ten Business Days after the
applicable grace period, or in subsection (b) or (d) for a period of 30 Business
Days after the applicable grace period, shall not constitute a Servicer Default
if the delay or failure could not have been prevented by the exercise of
reasonable diligence by Servicer and the delay or failure was caused by an act
of God or the public enemy, riots, acts of war, acts of terrorism, epidemics,
flood, embargoes, weather, landslides, fire, earthquakes or similar causes. The
preceding sentence shall not relieve Servicer from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of the
Transaction Documents, and Servicer shall promptly give Trustee, each Agent and
Transferor an Officer's Certificate notifying them of its failure or delay.
SECTION 10.2 Trustee to Act; Appointment of Successor. (a) On and after
Servicer's receipt of a Termination Notice pursuant to Section 10.1, Servicer
shall continue to perform ail servicing functions under this Agreement until the
date specified in the Termination Notice or otherwise specified by Trustee in
writing or, if no such date is specified in the Termination Notice, or otherwise
specified by Trustee, until a date mutually agreed upon by Servicer and Trustee.
Trustee shall, as promptly as possible after the giving of a Termination Notice,
nominate an Eligible Servicer as successor servicer (the "Successor Servicer");
provided that (a) in appointing any Successor Servicer, Trustee shall give due
consideration to any Successor Servicer proposed by any Agent and (b) the
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to Trustee and each Agent. In the event that a Successor
Servicer has not been appointed or has not accepted its appointment at the time
when Servicer ceases to act as Servicer, Trustee without further action shall
automatically be appointed the Successor Servicer. Trustee may delegate any of
its servicing obligations to an affiliate or agent in accordance with Section
3.1(b). If Trustee is prohibited by applicable law from performing the duties of
Servicer hereunder, Trustee may appoint, or may petition a court of competent
jurisdiction to appoint, a Successor Servicer hereunder. Trustee shall give
prompt notice to the Rating Agencies and each Investor Certificateholder upon
the appointment of a Successor Servicer.
(b) After Servicer's receipt of a Termination Notice, and on the
termination date specified in the Termination Notice or selected by Trustee and
Servicer in accordance with subsection (a), all authority and power of Servicer
under this Agreement shall pass to and be vested in the Successor Servicer (a
"Service Transfer"); and, without limitation, Trustee is hereby authorized and
empowered to execute and deliver, on behalf of Servicer, as attorney-in-fact or
otherwise, all documents and instruments, and to do and accomplish all other
acts or things that Trustee reasonably determines are necessary or appropriate
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to effect the purposes of the Service Transfer. Servicer agrees that it will
terminate its activities as Servicer hereunder in a manner that Trustee
indicates will facilitate the transition of the performance of such activities
to the Successor Servicer. Servicer agrees that it shall use reasonable efforts
to assist the Successor Servicer in assuming the obligations to service and
administer the Transferred Receivables and the Related Transferred Assets, on
the terms and subject to the conditions set forth herein, and to effect the
termination of the responsibilities and rights of Servicer to conduct servicing
hereunder, including the transfer to such Successor Servicer of all authority of
Servicer to service the Transferred Receivables and Related Transferred Assets
provided for under this Agreement and all authority over all cash amounts that
shall thereafter be received with respect to the Transferred Receivables or the
Related Transferred Assets. Servicer shall, within five Business Days after the
designation of a Successor Servicer, transfer its electronic records (including
software) relating to the Transferred Receivables, the related Contracts and the
Related Transferred Assets to the Successor Servicer in such electronic form as
the Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Transferred Receivables and the Related
Transferred Assets in the manner and at such times as the Successor Servicer
shall request. To the extent that compliance with this Section shall require
Howmet or any Servicer to disclose to the Successor Servicer information of any
kind that Howmet reasonably deems to be confidential, prior to the transfer
contemplated by the preceding sentence the Successor Servicer shall be required
to enter into such licensing and confidentiality agreements as Howmet shall
reasonably deem necessary to protect its interest. All reasonable costs and
expenses (including attorneys' fees and disbursements) incurred in connection
with transferring the Transferred Receivables, the Related Transferred Assets
and all related Records (including the related Contracts) to the Successor
Servicer and amending this Agreement and the other Transaction Documents to
reflect the succession as Servicer pursuant to this Section shall be paid by the
predecessor Servicer (or, if Trustee serves as Successor Servicer on an interim
basis, the preceding Servicer) within 15 days after presentation of reasonable
documentation of the costs and expenses.
(c) Upon its appointment and acceptance thereof, the Successor Servicer
shall be the successor in all respects to Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities
and duties relating thereto placed on Servicer by the terms and provisions
hereof (and shall carry out such responsibilities and duties in accordance with
standards of reasonable commercial prudence), and all
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references in this Agreement to Servicer shall be deemed to refer to the
Successor Servicer.
(d) Unless otherwise agreed by Transferor and Servicer or Successor
Servicer, all authority and power granted to Servicer or the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to Section 12.1, and shall pass to and be vested in
Transferor and, without limitation, Transferor is hereby authorized and
empowered, on and after the effective date of such termination, to execute and
deliver, on behalf of the Servicer or the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments and to do and
accomplish all other acts or things that Transferor reasonably determines are
necessary or appropriate to effect the purposes of such transfer of servicing
rights. The Servicer or Successor Servicer agrees to cooperate with Transferor
in effecting the termination of the responsibilities and rights of the Servicer
or Successor Servicer to conduct servicing of the Transferred Receivables and
the Related Transferred Assets. The Servicer or Successor Servicer shall, within
five Business Days after such termination, transfer its electronic records
relating to the Transferred Receivables and the Related Transferred Assets to
Transferor in such electronic form as Transferor may reasonably request and
shall transfer all other records, correspondence and documents relating to the
Transferred Receivables and the Related Transferred Assets to Transferor in the
manner and at such times as Transferor shall reasonably request. To the extent
that compliance with this Section shall require the Servicer or Successor
Servicer to disclose to Transferor information of any kind that the Servicer or
Successor Servicer deems to be confidential, Transferor shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer or Successor Servicer shall reasonably deem necessary to protect its
interests. All reasonable costs and expenses (including attorneys' fees and
disbursements) incurred by Trustee, in its capacity as Successor Servicer, in
connection with the termination shall be paid by Transferor within 15 days after
presentation of reasonable documentation of the costs and expenses.
SECTION 10.3 Notification of Servicer Default; Notification of Appointment
of Successor Servicer. Within four Business Days after an Authorized Officer of
Servicer becomes aware of any Servicer Default, Servicer shall give written
notice thereof to Trustee and the Rating Agencies, and Trustee shall, promptly
upon receipt of the written notice, give notice to the Investor
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Purchasers. Upon any termination or appointment of a
Successor Servicer pursuant to this Article X, Trustee shall give prompt written
notice thereof to the Investor Certificateholders at their
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respective addresses appearing in the Certificate Register and to the Purchasers
and the Rating Agencies.
ARTICLE XI TRUSTEE
SECTION 11.1 Duties of Trustee. (a) Trustee undertakes to perform the
duties and only the duties as are specifically set forth in this Agreement. The
provisions of this Article XI shall apply to Trustee solely in its capacity as
Trustee, and not to Trustee in its capacity as Servicer if it is acting as
Servicer. Following the occurrence of a Servicer Default of which a Responsible
Officer has actual knowledge, Trustee shall exercise such of the rights and
powers vested in it by this Agreement and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; provided that if Trustee
shall assume the duties of Servicer pursuant to Section 10.2, Trustee in
performing the duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to trade receivables that it services for
itself or others. Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in, or incidental to the performance of its duties under, the
Transaction Documents.
(b) Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to Trustee
that are specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are substantially in the
form required by this Agreement. Trustee shall give written notice to the Person
who furnished any item of the type listed in the preceding sentence of any lack
of substantial conformity of any such item to the applicable requirements of
this Agreement. In addition, Trustee shall give prompt written notice to the
Investor Certificateholders and each Agent of any lack of substantial conformity
of any such instrument to the applicable requirements of this Agreement
discovered by Trustee that would entitle a specified percentage of the Investor
Certificateholders or the Holders of any Series of Certificates or Purchasers or
Agents to take any action pursuant to this Agreement. Within two Business Days
of its receipt of any Monthly Report, Trustee shall verify the mathematical
computations contained therein and shall notify Servicer and each of the Rating
Agencies of the accuracy of such computations or of any discrepancies therein
(provided that the rounding of numbers will not constitute a discrepancy),
whereupon Servicer shall deliver to the Rating Agencies within 5 Business Days
thereafter a certificate describing the nature and cause of such discrepancies
and the action that Servicer proposes to take with respect thereto. During the
first week of each year, Trustee shall provide the Rating Agencies
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with a certificate, signed by a Responsible Officer, to the effect that Trustee
is not aware of any Early Amortization Event (or, if it is aware of any Early
Amortization Event, specifying the nature of that event).
(c) Subject to subsection (a), no provision of this Agreement shall be
construed to relieve Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided that:
(i) Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of Trustee,
unless it shall be proved that Trustee was negligent. in ascertaining the
pertinent facts,
(ii) Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction (as applicable) of the Majority Investors, the Required
Investors, all Investors, any Agent, or the Required Series Holders
relating to the time, method and place of conducting any proceeding for
any remedy available to Trustee, or exercising any trust or power
conferred upon Trustee, under this Agreement,
(iii) Trustee shall not be charged with knowledge of (A) any failure
by Servicer to comply with the obligations of Servicer referred to in
subsections (a), (b) or (c) of Section 10.1, (B) any breach of the
representations and warranties of Transferor set forth in Section 2.3 or
7.1 or the representations and warranties of Servicer set forth in Section
8.1, (C) any breach of the covenants of Transferor set forth in Section
7.2 or the covenants of Servicer set forth in Section 8.2 or (D) the
ownership of any Certificate or Purchased Interest for purposes of
Section 6.5, in each case unless a Responsible Officer of Trustee
obtains actual knowledge of the matter or Trustee receives written notice
of the matter from Servicer or from any Holder,
(iv) the duties and obligations of Trustee shall be determined
solely by the express provisions of this Agreement, Trustee shall not be
liable except for the performance of the duties and obligations that
specifically shall be set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against Trustee and, in the
absence of bad faith on the part of Trustee, Trustee may conclusively rely
on the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions that are furnished to Trustee
and that conform to the requirements of this Agreement, and
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(v) without limiting the generality of this section or Section 11.2,
Trustee shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement evidencing a security interest in the Transferred
Receivables or the Related Transferred Assets, or to see to the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof (except that Trustee
(x) shall note in its records the date of filing of each UCC financing
statement identified to it in writing as having been filed in connection
with the Transaction Documents, or filed in connection with a predecessor
receivables securitization and amended and/or assigned in connection with
the Transaction Documents, and naming Trustee as secured party or assignee
of the secured party and (y) shall, unless it shall have received an
Opinion of Counsel to the effect that no such filing is necessary to
continue the perfection of Transferor's or Trustee's interests in the
Transferred Receivables and the Related Assets, cause continuation
statements to be filed with respect to each such financing statement not
less than four years and six months and not more than five years after (1)
its filing date and (2) the date of filing of any prior continuation
statement), (B) to see to the payment or discharge of any tax, assessment,
or other governmental charge or any Adverse Claim or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the
Trust, (C) to confirm or verify the contents of any reports or
certificates of Servicer delivered to Trustee pursuant to this Agreement
that are believed by Trustee to be genuine and to have been signed or
presented by the proper party or parties or (D) to ascertain or inquire as
to the performance or observance of any of Transferor's or Servicer's
representations, warranties or covenants or Servicer's duties and
obligations as Servicer.
(d) Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if Trustee
reasonably believes that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require Trustee to
perform, or be responsible for the manner of performance of, any obligations of
Servicer under this Agreement except during the time, if any, that Trustee shall
be the successor to, and be vested with the rights, duties, powers and
privileges of, Servicer in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, Trustee
shall take no action reasonably likely to impair the interests of the Trust in
any
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Transferred Asset now existing or hereafter created or to impair the value of
any Transferred Asset now existing or hereafter created.
(f) Except to the extent expressly provided otherwise in this Agreement,
Trustee shall have no power to vary the Transferred Assets.
(g) In the event that the Paying Agent or the Transfer Agent and Registrar
shall fail to perform any obligation, duty or agreement in the manner or on the
day on which such obligation, duty or agreement is required to be performed by
the Paying Agent or the Transfer Agent and Registrar, as the case may be, under
this Agreement, Trustee shall be obligated, promptly upon its actual knowledge
thereof, to perform the obligation, duty or agreement in the manner so required.
SECTION 11.2 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 11.1:
(a) Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accordance with, any resolution, Officer's
Certificate, opinion of counsel, certificate of auditors or any other
certificate, statement, instrument, instruction, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document and
any information contained therein believed by it to be genuine and to have
been signed or presented to it pursuant to this Agreement by the proper
party or parties including, but not limited to, reports and records
required by Article III,
(b) Trustee may consult with counsel and any opinion of counsel
rendered by counsel reasonably satisfactory to Transferor shall be full
and complete authorization and protection in respect of any action taken
or permitted or omitted by it hereunder in good faith and in accordance
with such opinion of counsel,
(c) Trustee (including in its role as Successor Servicer, if it ever
acts in that capacity) shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation or other proceeding hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders, the Purchasers or any Agent, pursuant to the
provisions of this Agreement, unless such Certificateholders, the
Purchasers or Agent shall have offered to Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; provided that nothing contained herein shall
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relieve Trustee of the obligations, upon the occurrence and continuance of a
Servicer Default that has not been cured, to exercise such of the rights and
powers vested in it by this Agreement and to use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs,
(d) Trustee shall not be personally liable for any action taken, permitted
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement,
(e) Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by the Required Investors;
provided that if the payment within a reasonable time to Trustee of the costs,
expenses, or liabilities likely to be incurred by it in connection with making
such investigation shall be, in the opinion of Trustee, not reasonably assured
to Trustee by the security afforded to it by the terms of this Agreement,
Trustee may require reasonable indemnity against such cost, expense, or
liability as a condition to proceeding with the investigation. The reasonable
expense of every examination shall be paid by Servicer or, if paid by Trustee,
shall be reimbursed by Servicer upon demand,
(f) Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, representatives,
attorneys or a custodian, and Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, representative, attorney or
custodian appointed with due care by it hereunder,
(g) except as may be required by Section 11.1(b) and Section 11.1(c)(v)
hereof, Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Transferred Assets for
the purpose of establishing the presence or absence of defects or for any other
purpose,
(h) whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to Trustee shall be subject to the provisions of this Section 11.2,
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(i) Trustee shall have no liability with respect to the acts or
omissions of Servicer (except and to the extent Servicer is Trustee),
including, but not limited to, acts or omissions in connection with: (A)
the servicing, management or administration of the Transferred Receivables
or the Related Transferred Assets, (B) calculations made by Servicer
whether or not reported to Trustee, and (C) deposits into or withdrawals
from any Bank Accounts or Transaction Accounts established pursuant to the
terms of this Agreement, and
(j) in the event that Trustee is also acting as Paying Agent or
Transfer Agent and Registrar hereunder, the rights and protections
afforded to Trustee pursuant to this Article XI shall also be afforded to
Trustee acting as Paying Agent or as Transfer Agent and Registrar.
SECTION 11.3 Limitation on Liability of Trustee. Trustee shall at no time
have any responsibility or liability for or with respect to the correctness of
the recitals contained herein or in the Certificates (other than the certificate
of authentication on the Certificates) or the Purchased Interests. Except as set
forth in Section 11.15, Trustee makes no representations as to the validity or
sufficiency of this Agreement, any PI Agreement, any Supplement, the
Certificates (other than the certificate of authentication on the Certificates)
or the Purchased Interests, any other Transaction Document or any Transferred
Asset or related document. Trustee shall not be accountable for the use or
application (i) by Transferor of any of the Certificates or the Purchased
Interests or of the proceeds of such Certificates or the Purchased Interests, or
(ii) for the use or application of any funds paid to Transferor or to Servicer
(other than to Trustee in its capacity as Servicer) in respect of the
Transferred Assets or deposited by Servicer in or withdrawn by Servicer from the
Bank Accounts, the Transaction Accounts or any other accounts hereafter
established to effectuate the transactions contemplated herein or in the other
Transaction Documents and in accordance with the terms hereof or thereof.
Except as provided in Section 11.1(c)(v), Trustee shall at no time have
any responsibility or liability for or with respect to the legality, validity,
or enforceability of any ownership or security interest in any Transferred
Asset, or the perfection or priority of such a security interest or the
maintenance of any such perfection or priority, or for the generation of the
payments to be distributed to Certificateholders or Purchasers under this
Agreement, including: (a) the existence and substance of any Transferred Asset
or any related Record or any computer or other record thereof, (b) the validity
of the transfer of any Transferred Asset to the Trust or of any preceding or
intervening transfer, (c) the performance or enforcement of any Transferred
Asset, (d) the compliance by Transferor or Servicer with any warranty or
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representation made under this Agreement or in any other Transaction Document
and the accuracy of any such warranty or representation prior to Trustee's
receipt of actual notice of any noncompliance therewith or any breach thereof,
(e) any investment of monies pursuant to Section 4.4 or any loss resulting
therefrom, (f) the acts or omissions of Transferor, Servicer or any Obligor, (g)
any action of Servicer taken in the name of Trustee, or (h) any action by
Trustee taken at the instruction of Servicer; provided that the foregoing shall
not relieve Trustee of its obligation to perform its duties (including but not
limited to its duties, if any, to act as Servicer in accordance with Section
10.2) under the Agreement in accordance with the terms hereof.
Except with respect to a claim based on the failure of Trustee to perform
its duties under this Agreement or based on Trustee's negligence or willful
misconduct, no recourse shall be had against Trustee in its individual capacity
for any claim (a "Non-Recourse Claim") based on any provision of this Agreement,
any other Transaction Document, the Certificates, the Purchased Interests, any
Transferred Asset or any assignment thereof. Trustee shall not have any personal
obligation, liability, or duty whatsoever to any Certificateholder, any
Purchaser or any other Person with respect to any Non-Recourse Claim, and any
such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity to the Trust or Trustee as provided in this Agreement.
SECTION 11.4 Trustee May Deal with Other Parties. Subject to any
restrictions that may otherwise be imposed by Section 406 of ERISA, Section
4975(e) of the Internal Revenue Code or any other applicable law, Trustee in its
individual or any other capacity may deal with the other parties hereto (other
than Transferor) and their respective affiliates, with the same rights as it
would have if it were not Trustee.
SECTION 11.5 Servicer To Pay Trustee's Fees and Expenses. (a) To the
extent not paid by Servicer to Trustee from funds constituting the Servicing
Fee, Servicer covenants and agrees to pay to Trustee from time to time, and
Trustee shall be entitled to receive, such reasonable compensation as is agreed
upon in writing between Trustee and Servicer (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in connection with the Transaction Documents and
in the exercise and performance of any of the powers and duties hereunder of
Trustee, and Servicer will pay or reimburse Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by Trustee in
accordance with any of the provisions of the Transaction Documents to which it
is a party (including the reasonable fees and expenses
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of its agents, any co-Trustee and counsel) except any expense, disbursement or
advance that may arise from Trustee's negligence or willful misconduct.
(b) In addition, Servicer agrees to indemnify Trustee from, and hold it
harmless against, any and all losses, liabilities, damages, claims or expenses
incurred by Trustee in connection with the Transaction Documents or in the
exercise or performance of any of the powers or duties of Trustee hereunder,
other than those resulting from the negligence or willful misconduct of Trustee.
(c) If Trustee is appointed Successor Servicer pursuant to Section 10.2,
the provisions of this section shall not apply to expenses, disbursements and
advances made or incurred by Trustee in its capacity as Successor Servicer,
which shall be paid out of the Servicing Fee. Servicer's covenant to pay the
fees, expenses, disbursements and advances provided for in this section shall
survive the resignation or removal of Trustee and the termination of this
Agreement.
(d) Trustee shall look solely to Servicer for payment of amounts described
in this Section 11.5, and Trustee shall have no claim for payment of such
amounts against Transferor or the Transferred Assets.
SECTION 11.6 Eligibility Requirements for Trustee. Trustee hereunder shall
at all times: (a) be (i) a banking institution organized under the laws of the
United States, (ii) a member bank of the Federal Reserve System or (iii) any
other banking institution or trust company, incorporated and doing business
under the laws of any State or of the United States, a substantial portion of
the business of which consists of receiving deposits or exercising fiduciary
powers similar to those permitted to national banks under the authority of the
Comptroller of the Currency, and that is supervised and examined by a state or
federal authority having supervision over banks, (b) not be an Enhancement
Provider, (c) have, in the case of an entity that is subject to risk-based
capital adequacy requirements, risk-based capital of at least $250,000,000 or,
in the case of an entity that is not subject to risk-based capital adequacy
requirements, a combined capital and surplus of at least $250,000,000 and (d)
have an unsecured long-term debt rating of at least "A" or its equivalent from
at least one nationally recognized statistical rating agency. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purpose of this section, the combined capital and
surplus of the corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time Trustee shall cease to be eligible in
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accordance with the provisions of this section, Trustee shall resign immediately
in the manner and with the effect specified in Section 11.7.
SECTION 11.7 Resignation or Removal of Trustee. (a) Trustee may at any
time resign and be discharged from its obligations hereunder by giving 30 days'
prior written notice thereof to Transferor, Servicer, the Rating Agencies, the
Investor Certificateholders and the Agents. Upon receiving the notice of
resignation, Transferor shall promptly appoint, subject to satisfaction of the
Modification Condition, a successor Trustee who meets the eligibility
requirements set forth in Section 11.6 by written instrument, in duplicate, one
copy of which shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
shall have accepted appointment within 30 days after the giving of the notice of
resignation, the resigning Trustee, upon notice to each Agent, may petition any
court of competent jurisdiction to appoint a successor Trustee.
(b) If at any time Trustee shall cease to be eligible to be Trustee
hereunder in accordance with the provisions of Section 11.6 hereof and shall
fall to resign promptly after its receipt of a written request therefor by
Servicer, or if at any time Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or if a receiver for Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then Servicer may remove Trustee and, subject to
the consent of each Agent (which consent shall not be unreasonably withheld or
delayed) and satisfaction of the Modification Condition, promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which shall
be delivered to Trustee so removed and one copy to the successor Trustee.
(c) Any resignation or removal of Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.7 shall not become
effective until (i) acceptance of appointment by the successor Trustee as
provided in Section 11.8 hereof, and (ii) such successor Trustee shall have
agreed in writing to be bound by any Intercreditor Agreements then in effect.
SECTION 11.8 Successor Trustee. (a) Any successor Trustee appointed as
provided in Section 11.7 shall execute, acknowledge and deliver to Transferor,
Servicer, the Investor Certificateholders, the Purchasers and the predecessor
Trustee an instrument accepting such appointment hereunder and an instrument
pursuant to which it agrees to be bound by any existing Intercreditor Agreement,
and thereupon the resignation or removal of the predecessor Trustee shall, upon
payment of its fees and expenses and other
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amounts owed to it pursuant to Section 11.5, become effective and the successor
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor Trustee, at the expense of
Servicer, all documents or copies thereof and statements held by it hereunder;
and Transferor and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
vesting and confirming in the successor Trustee all such rights, powers, duties
and obligations. Servicer shall promptly give notice to the Rating Agencies upon
the appointment of a successor Trustee.
(b) No successor Trustee shall accept appointment as provided in this
Section 11.8 unless at the time of the acceptance the successor Trustee shall be
eligible to become Trustee under the provisions of Section 11.6.
(c) Upon acceptance of appointment by a successor Trustee as provided in
this Section 11.8, the successor Trustee shall mall notice of the succession
hereunder to all Investor Certificateholders at their addresses as shown in the
Certificate Register and to each Rating Agency.
SECTION 11.9 Merger or Consolidation of Trustee. Any Person into which
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of Trustee, shall be the successor of Trustee
hereunder, if the Person meets the requirements of Section 11.6, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. Servicer shall
promptly give notice to the Rating Agencies upon any merger or consolidation of
Trustee.
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust may at the time be located, Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons (who may be
an employee or employees of Trustee) to act as a co-Trustee or co-Trustees, or
separate Trustee or separate Trustees, with respect to all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Purchasers, such title to the Trust,
or any part thereof, and, subject to the other provisions of this section, such
powers, duties, obligations, rights and trusts as Trustee may
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consider necessary or appropriate; provided, that such appointment shall be
subject to the prior written consent of Transferor unless an Early Amortization
Event or Servicer Termination Event is continuing; and provided further, that in
any event Trustee will give Transferor and Servicer prior written notice of such
appointment. No co-Trustee or separate Trustee shall be required to meet the
terms of eligibility as a successor Trustee under Section 11.6 and no notice to
Certificateholders, Agents or Purchasers of the appointment of any co-Trustee or
separate Trustee shall be required under Section 11.8.
(b) Every separate Trustee and co-Trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon Trustee shall be conferred or imposed upon and exercised or performed
by Trustee and the separate Trustee or co-Trustee jointly (it being
understood that the separate Trustee or co-Trustee is not authorized to
act separately without Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed (whether as Trustee hereunder or as successor to
Servicer hereunder), Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate Trustee or co-Trustee, but solely at the direction of
Trustee,
(ii) no Trustee or co-Trustee hereunder shall be personally liable
by reason of any act or omission of any other Trustee or co-Trustee
hereunder, and
(iii) Trustee may at any time accept the resignation of or remove
any separate Trustee or co-Trustee.
(c) Any notice, request or other writing given to Trustee shall be deemed
to have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate Trustee and co-Trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to
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the conduct of, affecting the liability of, or affording protection or indemnity
to, Trustee. Every such instrument shall be filed with Trustee and a copy
thereof given to Servicer.
(d) Any separate Trustee or co-Trustee may at any time appoint Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect to this Agreement or
any other Transaction Document on its behalf and in its name. If any separate
Trustee or co-Trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest in
and be exercised by Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee or co-Trustee.
SECTION 11.11 Tax Returns. No Federal income or other tax or informational
return shall be filed on behalf of the Trust unless required by applicable law
or any Governmental Authority. In the event the Trust shall be required to file
tax or informational returns, Servicer shall prepare or shall cause to be
prepared any tax or informational returns required to be filed by the Trust and
shall remit the returns to Trustee for signature at least five Business Days
before the returns are due to be filed. Trustee shall promptly sign and deliver
the returns to Servicer and Servicer shall promptly file the returns. Subject to
the responsibilities of Trustee set forth in any Supplement, Servicer, in
accordance with that Supplement, shall also prepare or shall cause to be
prepared all tax information required by law to be made available to
Certificateholders and Purchasers and shall deliver the information to Trustee
at least five Business Days prior to the date it is required by law to be made
available to the Certificateholders and Purchasers. Trustee, upon request, will
furnish Servicer with all the information known to Trustee as may be reasonably
required in connection with the preparation of all tax or informational returns
on behalf of the Trust and shall, upon request, execute such returns as Trustee
determines are appropriate.
SECTION 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement, the
Certificates, the Purchased Interests or the other Transaction Documents may be
prosecuted and enforced by Trustee without the possession of any of the
Certificates or Purchased Interests or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by Trustee shall be brought
in its own name as Trustee. Any recovery of judgment shall, after provision for
the payment of the reasonable compensation, expenses, disbursements and advances
of Trustee, its agents and counsel, be distributed to the Certificateholders or
Purchasers in respect of which such judgment has been obtained in accordance
with the related Supplement or PI Agreement.
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SECTION 11.13 Suits for Enforcement. If an Early Amortization Event or a
Servicer Default shall occur and be continuing, Trustee, in its discretion may,
subject to the provisions of Sections 11.1 and 11.14, proceed to protect and
enforce its rights and the rights of the Certificateholders or Purchasers under
this Agreement by suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or any other Transaction Document or in aid of the execution of
any power granted in this Agreement or any other Transaction Document or for the
enforcement of any other legal, equitable or other remedy as Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of the
rights of Trustee or the Certificateholders or Purchasers. Nothing herein
contained shall be deemed to authorize Trustee to authorize or consent to or
accept or adopt on behalf of any Certificateholder or Purchaser any plan of
reorganization, arrangement, adjustment or composition affecting the Investor
Certificates or the rights of any Holder thereof, any Purchased Interests or any
Purchaser, or to authorize Trustee to vote in respect of the claim of any
Investor Certificateholder or Purchaser in any such proceeding.
SECTION 11.14 Rights of Required Investors To Direct Trustee. The Required
Investors shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to Trustee, or exercising any
trust or power conferred on Trustee; provided that, subject to Section 11.1,
Trustee may decline to follow any such direction if Trustee, being advised by
counsel, determines that the action so directed may not be taken lawfully, or if
a Responsible Officer or Responsible Officers of Trustee shall determine, in
good faith, that the proceedings so directed would be illegal or involve Trustee
in personal liability or be unduly prejudicial to the rights of the Investor
Certificateholders or Purchasers not giving such direction; and provided
further, that nothing in this Agreement shall impair the right of Trustee to
take any action deemed proper by Trustee and that is not inconsistent with such
direction of the Required Investors.
SECTION 11.15 Representations and Warranties of Trustee. Trustee
represents and warrants that:
(a) it is a banking corporation organized, existing and in good
standing under the laws of New York and satisfies the eligibility
requirements of Section 11.6,
(b) it has full power, authority and right to execute, deliver and
perform the Transaction Documents to which it is a party, and has
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taken all necessary action to authorize the execution, delivery and
performance by it of the Transaction Documents, and
(c) the Transaction Documents to which it is a party have been duly
executed and delivered by Trustee and, in the case of all such Transaction
Documents, are legal, valid and binding obligations of Trustee,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
SECTION 11.16 Maintenance of Office or Agency. Trustee will maintain, at
its address designated pursuant to Section 13.6, an office, offices, agency or
agencies where notices and demands to or upon Trustee in respect of the
Certificates, the Purchased Interests and the Transaction Documents to which it
is a party may be served. Trustee will give prompt written notice to Servicer
and to the Certificateholders and Agents of any change in the location of the
Certificate Register or any such office or agency.
ARTICLE XII TERMINATION
SECTION 12.1 Termination of Trust. (a) If not earlier terminated pursuant
to Section 9.3, the Trust and the respective obligations and responsibilities of
Transferor, Servicer and Trustee created hereby (other than the obligation of
Trustee to make payments to Certificateholders or Purchasers as hereinafter set
forth and the obligations of Servicer contained in Section 11.11) shall
terminate, except with respect to the duties and obligations described in
Sections 3.9(c), 7.3, 8.4, 11.5, 12.2(b), 13.9, 13.15 and 13.16 upon the
earliest to occur of (i) the day on which the Investor Certificateholders, the
Purchasers and Trustee shall have been paid all amounts required to be paid to
them pursuant to this Agreement and Trustee has disposed of all property held
hereunder (including pursuant to Section 12.3) and (ii) the day which is 21
years less one day after the death of the officers and the last survivor of all
the lineal descendants of every officer of the Trustee who are living on the
date hereof.
(b) Notwithstanding the foregoing, the last payment of the principal of
and interest on the Investor Certificates of any Series or any Purchased
Interests shall be due and payable no later than the Final Scheduled Payment
Date for such Series or Purchased Interests. If, on the Distribution Date
immediately prior to the Final Scheduled Payment Date for any Series or
Purchased Interests, Servicer determines that the Invested Amount for such
Series or Purchased Interests on such Final Scheduled Payment Date (after
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giving effect to all changes therein on such date) will exceed zero, Servicer
shall solicit bids for the sale of undivided interests in the Transferred Assets
for a purchase price equal to 110% of the Base Amount (or comparable amount) for
such Series or Purchased Interests on the Final Scheduled Payment Date for the
Series or Purchased Interests (after giving effect to all distributions required
to be made on the Final Scheduled Payment Date for the Series or Purchased
Interests), provided that the undivided interests so transferred shall not
exceed the Series Collection Allocation Percentage (for that Series or Purchased
Interest) of the Transferred Assets held by the Trust as of the date of sale.
Transferor and its Affiliates shall be entitled to participate in and to receive
notice of each bid submitted in connection with the bidding process. Upon the
expiration of the period, Servicer shall determine (x) the Highest Bid and (y)
the Available Final Distribution Amount for such Series or Purchased Interests.
Servicer shall sell such undivided interests in the Transferred Assets on the
Final Scheduled Payment Date for that Series or Purchased Interests to the
bidder with the Highest Bid and shall deposit the proceeds of such sale in the
Master Collection Account for allocation (together with the Available Final
Distribution Amount for such Series or Purchased Interests) to the
Certificateholders of such Series or the Purchasers of such Purchased Interests.
SECTION 12.2 Final Distribution. (a) Servicer shall give Trustee at least
ten days' prior written notice of the date on which the Trust is expected to
terminate in accordance with Section 12.1(a). The notice shall be accompanied by
a certificate of an Authorized Officer of Servicer setting forth the information
specified in Section 3.6 covering the period during the then current calendar
year through the date of the notice. Upon receiving the notification from
Servicer, Trustee shall give the Certificateholders and/or the Agents (as
applicable) written notice as soon as practicable after Trustee's receipt of
notice from Servicer, which notice shall specify (i) the Distribution Date (the
"Final Distribution Date") upon which final payment with respect to the
Certificates is expected to be made and (ii) the amount of any such final
payment. Trustee shall give the notice to the Transfer Agent and Registrar and
the Paying Agent at the time such notice is given to Certificateholders On the
Final Distribution Date, Trustee shall, based upon the Dally Report relating to
the Final Distribution Date, cause to be distributed to the Certificateholders
the amounts distributable to them on the Final Distribution Date pursuant to the
applicable Supplement. Each Certificateholder shall present its Certificate to
Trustee and surrender its Certificate for cancellation at the address of Trustee
set forth in Section 13.6 not more than ten Business Days after the Final
Distribution Date upon which final payment with respect to the Certificates has
been made.
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(b) Notwithstanding the termination of the Trust pursuant to Section
12.1(a), all funds then on deposit in the Master Collection Account shall
continue to be held in trust for the benefit of the Certificateholders and the
Purchasers and the Paying Agent or Trustee shall pay such funds to the
Certificateholders and the Purchasers at the time set forth in Section 12.1(a).
If any Certificateholder or Purchaser does not claim the portion of such funds
to which it is entitled to receive on the Final Distribution Date, interest
shall cease to accrue on its Certificate or Purchased Interest (as applicable)
and Trustee shall hold such funds in trust for such Person, subject to the
further provisions of this Section . In the event that any of the
Certificateholders shall not have claimed their final payment with respect to
their Certificates within six months after the Final Distribution Date, Trustee
shall give a second written notice to the remaining Certificateholders
concerning payment of the final distribution with respect thereto and surrender
of their Certificates for cancellation. If within one year after the second
notice all the Certificates shall not have been surrendered for cancellation,
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds in the Master
Collection Account held for the benefit of such Certificateholders Trustee and
the Paying Agent shall pay to Transferor any monies held by them for the payment
of principal of or interest on the Certificates that remains unclaimed for two
years after the termination of the Trust pursuant to Section 12.1(a). After
payment of the monies to Transferor, Certificateholders entitled to the money
must look to Transferor for payment as unsecured general creditors unless an
applicable abandoned property law designates another Person.
SECTION 12.3 Rights Upon Termination of the Trust. Upon the termination of
the Trust pursuant to Section 12.1 and the surrender of the Transferor
Certificate by Transferor to Trustee, Trustee shall transfer, assign, set over
and otherwise convey to Transferor (without recourse, representation or
warranty), all right, title and interest of the Trust in the Transferred
Receivables, whether then existing or thereafter created, the Related
Transferred Assets and all of the other property and rights previously conveyed
to Trustee hereunder, except for amounts held by Trustee pursuant to Section
12.2(b) and except for the rights of RPA Indemnified Parties (other than
Transferor and its officers, directors, shareholders, controlling Persons,
employees and agents) to indemnification and contribution under Section 9.1 of
the Purchase Agreement. Trustee shall execute and deliver the instruments of
transfer and assignment (including any document necessary to release the
security interest in favor of the Trust (for the benefit of the
Certificateholders and the Purchasers) in the Transferred Receivables and
Related Transferred Assets, to release any filing evidencing or perfecting such
security interest and
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to terminate all powers of attorney created by the Transaction Documents), in
each case without recourse, representation or warranty, that shall be reasonably
requested by Transferor to vest in Transferor all right, title and interest that
Trustee had in the Transferred Assets.
SECTION 12.4 Optional Repurchase of Investor Interests. Any Supplement may
provide that on any Distribution Date occurring on or after the date that the
Invested Amount of the Series governed by such Supplement is reduced to 10% or
less of the initial aggregate principal amount of the Investor Certificates of
such Series, Transferor shall have the option, upon the giving of ten days'
prior written notice to Servicer, Trustee and the Rating Agencies, to repurchase
the undivided interest of such Series in the Trust by depositing into the
Principal Funding Account, on such Distribution Date (the "Repurchase
Distribution Date"), an amount (the "Repurchase Amount") equal to the unpaid
Invested Amount of the Series plus accrued and unpaid interest on the unpaid
principal amount of the Series (and accrued and unpaid interest with respect to
interest amounts that were due but not paid on a prior Distribution Date)
through the day preceding such Distribution Date at the Certificate Rate
applicable to such Series. Upon tender of all outstanding Certificates of the
Series owned by a Certificateholder, Trustee shall then distribute to such
Certificateholder the portion of such amounts owed to such Certificateholder,
together with all other amounts on deposit in the Principal Funding Account with
respect to that Series which are owed to such Certificateholder, on the next
Distribution Date in repayment of the principal amount and all accrued and
unpaid interest owing to such Certificateholder. Following the Repurchase
Distribution Date, the Certificateholders of the Series shall have no further
rights with respect to the Transferred Receivables and Trustee shall execute and
deliver the instruments of transfer and assignment (including any document
necessary to release the security interest in favor of Trustee (for the benefit
of the Certificateholders) in the Transferred Receivables and Related
Transferred Assets and to release any filing evidencing or perfecting the
security interest), in each case without recourse, representation or warranty,
as shall be reasonably requested by Transferor to vest in Transferor all right,
title and interest that Trustee had in the Transferred Assets. In the event that
Transferor falls for any reason to deposit the Repurchase Amount for any Series,
payments shall continue to be made to the Certificateholders of the Series in
accordance with the terms of this Agreement. The provisions, if any, in respect
of the optional repurchase of any Purchased Interest shall be set forth in the
applicable PI Agreement.
SECTION 12.5 Defeasance and Refinancing of Certificates. Any Supplement
may provide that the Certificates issued pursuant to such Supplement may be
defeased or refinanced. The terms and conditions under
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which such Certificates may be defeased or refinanced will be set forth in such
Supplement.
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment, Waiver, Etc. (a) This Agreement and any Supplement
may be amended from time to time by Servicer, Transferor and Trustee by a
written instrument signed by each of them, without the consent of any of the
Certificateholders, the Purchasers or the Agents; provided that such action
shall not adversely affect in any material respect the interests of any
Certificateholder or Purchaser; and provided further, that any amendment of this
Agreement to effect any modification of the Lockbox Account arrangements
pursuant to Section 3.3(c)(ii)(y) shall not require the consent of any of the
Certificateholders, the Purchasers or the Agents. This Agreement and any
Supplement may not be amended unless Transferor shall have delivered the
proposed amendment to each Agent and the Rating Agencies at least ten Business
Days (or such shorter period as shall be acceptable to each of them) prior to
the execution and delivery thereof and the Modification Condition has been
satisfied with respect to such amendment; provided, however, that the
Modification Condition shall not apply to proposed amendments the purpose of
which is to correct any ambiguities or inconsistencies in this Agreement or such
Supplement.
(b) Any PI Agreement may be amended from time to time by the parties
thereto but without the consent of any Investor Certificateholder; provided that
any amendment will not adversely affect in any material respect the interests of
the Certificateholders, as evidenced by an Officer's Certificate of Servicer.
(c) The provisions of this Agreement, any Supplement and any PI Agreement
may also be amended, modified or waived from time to time by Servicer,
Transferor and Trustee with the consent of: (i) in the case of this Agreement or
any Supplement, (A) the Required Series Holders of each affected Series and (B)
if any Purchased Interest shall or would be adversely affected, each Agent of a
Purchaser, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Certificateholders or the Purchasers;
provided that no amendment shall (w) reduce in any manner the amount of or delay
the timing of any distributions to be made to Investor Certificateholders or
deposits of amounts to be so distributed or the amount available under any
Enhancement without the consent of each affected Certificateholder, (x) change
the definition of or the manner of calculating the interest of any Investor
Certificateholder without the consent
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of each affected Investor Certificateholder, (y) reduce the aforesaid percentage
required to consent to any amendment without the consent of each Investor
Certificateholder or (z) adversely affect the rating of any Series or class by
any Rating Agency without the consent of the Holders of Investor Certificates of
the Series or class evidencing not less than 66 2/3% of the aggregate unpaid
principal amount of the Investor Certificates of the Series or class or (ii) in
the case of any PI Agreement, (A) each Agent of a Purchaser and the other
parties thereto and (B) if any Series of Investor Certificates shall or would be
adversely affected, the Required Series Holders of each such adversely affected
Series. It is understood that the consent of the Required Series Holders of any
Series or the Agent of a Purchaser shall not be required for any amendment,
modification or waiver if all amounts owed to the Holders of such Series or such
Purchaser (as the case may be) will be paid (and any commitments of such Holders
or Purchaser will terminate) prior to, or contemporaneously with, the
effectiveness of such amendment, modification or waiver.
Transferor or Trustee shall establish a record date for determining which
Certificateholders may give such waivers and consents. No waiver of any Early
Amortization Event or other default hereunder given at any time shall apply to
any other prior or subsequent Early Amortization Event or default.
(d) Promptly after the execution of any amendment, consent or waiver
described in subsection (b) or (c), Trustee shall furnish written notification
of the substance of the amendment, consent or waiver to each Investor
Certificateholder and each Agent, and Servicer shall furnish written
notification of the substance of the amendment or consent to the Rating Agency
and each Enhancement Provider.
(e) It shall not be necessary for the Certificateholders or Purchasers
under this section to approve the particular form of any proposed consent,
waiver or amendment, but it shall be sufficient if the substance thereof has
been approved. The manner of obtaining any waiver, consent or amendment and of
evidencing the authorization of the execution thereof by the Certificateholders
or Purchasers shall be subject to such reasonable requirements as Trustee may
prescribe.
(f) Notwithstanding anything in this section to the contrary, no amendment
may be made to this Agreement, any Supplement or any PI Agreement that would
adversely affect in any material respect the interests of any Enhancement
Provider without the consent of the Enhancement Provider.
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(g) Any Supplement or PI Agreement executed in accordance with the
provisions of Section 6.10 shall not be considered an amendment to this
Agreement for the purposes of this section.
(h) Prior to the execution of any amendment to this Agreement, Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of the amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery have been satisfied.
Trustee may, but shall not be obligated to, enter into any amendment that
affects Trustee's own rights, duties or immunities under this Agreement.
SECTION 13.2 Actions by Certificateholders and Purchasers. (a) By its
acceptance of Certificates pursuant to this Agreement and the applicable
Supplement, each Certificateholder acknowledges and agrees that, wherever in
this Agreement a provision states that an action may be taken or a notice,
demand or instruction given by any Series of Investor Certificateholders, any
class of Investor Certificateholders or the Investor Certificateholders, the
action, notice or instruction may be taken or given by any Holder of an Investor
Certificate of the Series or class or by any Investor Certificateholder,
respectively, unless the provision requires a specific percentage of the Series
or class of Investor Certificateholders or of all Investor Certificateholders By
its acceptance of Purchased Interests pursuant to this Agreement and the
applicable PI Agreement, each Purchaser acknowledges and agrees that, wherever
in this Agreement a provision states that an action may be taken or a notice,
demand or instruction given by any Purchasers, the action, notice or instruction
may be taken or given by any Purchaser, unless the provision requires a specific
percentage of the Purchasers.
(b) By its acceptance of Certificates pursuant to this Agreement and the
applicable Supplement, each Certificateholder acknowledges and agrees that any
request, demand, authorization, direction, notice, consent, waiver or other act
by the Holder of a Certificate shall bind the Holder and every subsequent Holder
of the Certificate and of any Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by Trustee or Servicer in reliance thereon,
whether or not notation of the action is made upon such Certificate. By its
acceptance of Purchased Interests pursuant to this Agreement and the applicable
PI Agreement, each Purchaser acknowledges and agrees that any request, demand,
authorization, direction, notice, consent, waiver or other act by a Purchaser
shall bind the Purchaser and every subsequent Purchaser of the Purchased
Interest in respect of anything done or omitted to be done by Trustee or
Servicer in reliance thereon.
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(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement, any Supplement or any PI Agreement
to be given or taken by Certificateholders or any Agent for a Purchaser may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by the Certificateholders or any Agent for a Purchaser in person or
by agent duly appointed in writing; and except as herein otherwise expressly
provided, the action shall become effective when the instrument or instruments
are delivered to Trustee and, when required, to Servicer. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement, any Supplement or any PI Agreement
and conclusive in favor of Trustee and Servicer, if made in the manner provided
in this Section 13.2.
(d) The fact and date of the execution by any Certificateholder or any
Agent for a Purchaser of any such instrument or writing may be proved in any
reasonable manner that Trustee deems sufficient.
SECTION 13.3 Limitation on Rights of Certificateholders. (a) The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement, any Supplement or the Trust, nor shall the death or incapacity
entitle such Certificateholder' s legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as expressly
provided otherwise in this Agreement) or in any manner otherwise to control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association, nor shall any
Certificateholder be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provisions
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to the Transaction Documents (except to the
extent any Supplement or related certificate purchase agreement creates
independent and non-duplicative rights), unless the Certificateholder previously
shall have given to Trustee, and unless the Required Investors shall have made,
written request upon Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to Trustee such reasonable
indemnity as it may require against the costs,
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expenses and liabilities to be incurred therein or thereby, and Trustee, for 30
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder, every Purchaser and
Trustee, that no one or more Certificateholders or Purchasers shall have any
right in any manner whatever by virtue of, or by availing itself or themselves
of, any provisions of a Transaction Document to affect, disturb or prejudice the
rights of any other Investor Certificateholder or Purchaser, or to obtain or
seek to obtain priority over or preference to any such other Investor
Certificateholder or Purchaser, except to the extent provided in the Transaction
Documents, or to enforce any right under the Transaction Documents, except in
the manner herein provided and for the equal, ratable and common benefit of all
Investor Certificateholders and Purchasers (subject to the priorities set forth
in the Transaction Documents). For the protection and enforcement of the
provisions of this Section 13.3, each and every Certificateholder, each and
every Purchaser and Trustee shall be entitled to such relief as can be given
either at law or in equity.
(d) By their acceptance of Certificates pursuant to this Agreement and the
applicable Supplement, the Certificateholders agree to the provisions of this
Section 13.3.
SECTION 13.4 Limitation on Rights of Purchasers. (a) The death or
incapacity of any Purchaser shall not operate to terminate this Agreement, any
PI Agreement or the Trust, nor shall the death or incapacity entitle such
Purchaser's legal representatives or heirs to claim an accounting or to take any
action or commence any proceeding in any court for a partition or winding up of
the Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Purchaser shall have any right to vote (except provided otherwise
in this Agreement) or in any manner otherwise to control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Purchased Interests,
be construed so as to constitute the Purchasers from time to tune as partners or
members of an association, nor shall any Purchaser be under any liability to any
third Person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Purchaser shall have any right by virtue of any provisions of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to any Transaction Document (except to the
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extent a PI Agreement creates independent and non-duplicative rights), unless
such Purchaser previously shall have given to Trustee, and unless the Required
Investors shall have made, written request upon Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and Trustee,
for 30 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Purchaser with every other Purchaser, every Certificateholder and Trustee,
that no one or more Purchasers or Certificateholders shall have any right in any
manner whatever by virtue of, or by availing itself or themselves of, any
provisions of a Transaction Document to affect, disturb or prejudice the rights
of any other Investor Certificateholder or a Purchaser, or to obtain or seek to
obtain priority over or preference to any such other Investor Certificateholder
or Purchaser, except to the extent provided in the Transaction Documents, or to
enforce any right under the Transaction Documents, except in the manner herein
provided and for the ratable and common benefit of all Investor
Certificateholders and Purchasers (subject to the priorities set forth in the
Transaction Documents). For the protection and enforcement of the provisions of
this Section 13.4, each and every Certificateholder, each and every Purchaser
and Trustee shall be entitled to such relief as can be given either at law or in
equity.
(d) By their acceptance of Purchased Interests pursuant to this Agreement
and the applicable Supplement, the Purchasers agree to the provisions of this
Section 13.4.
SECTION 13.5 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 13.6 Notices. All demands, notices, instructions and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered, four Business Days after mailing if mailed
by registered mall, return receipt requested, or sent by facsimile transmission
(a) in the case of Transferor, to its address set forth below its signature
hereto, (b) in the case of Howmet, to its address set forth below its signature
hereto, and (c) in the case of Trustee, the Paying Agent or the Transfer Agent
and Registrar, to the address of Trustee set forth on the
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signature pages hereof; or, as to each party, at such other address or facsimile
number as shall be designated by it in a written notice to each other party
given in accordance with this Section 13.6. Except to the extent expressly
provided otherwise in an applicable Supplement, any notice required or permitted
to be mailed to a Certificateholder shall be sent by first-class mail, postage
prepaid, to the address of such Certificateholder as shown in the Certificate
Register. Except to the extent expressly provided otherwise in the applicable PI
Agreement, any notice required or permitted to be mailed to a Purchaser shall be
sent by first-class mail, postage prepaid, to the address of such Purchaser as
shown in the applicable PI Agreement or at such other address designated by such
Purchaser. Except to the extent expressly provided otherwise in an applicable
Supplement or PI Agreement, any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given on the
fourth Business Day after the notice is so mailed, whether or not a
Certificateholder or Purchaser receives the notice. Servicer shall deliver or
make available to the Rating Agencies each certificate and report required to be
prepared, forwarded or delivered pursuant to Section 3.5 (excluding the Daily
Reports) or 3.6 and a copy of any amendment, consent or waiver to this
Agreement, at the address of the Rating Agency set forth above or at the other
address as shall be designated by the Rating Agency in a written notice to
Servicer.
SECTION 13.7 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement,
the Certificates, the Purchased Interests or any of the other Transaction
Documents or the rights of the Certificateholders or the Purchasers.
SECTION 13.8 Certificates Nonassessable and Fully Paid. Except to the
extent otherwise expressly provided in Section 7.3 with respect to Transferor,
it is the intention of the parties to this Agreement that the Certificateholders
shall not be personally liable for obligations of the Trust, that the interests
in the Trust represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever and that
Certificates upon authentication thereof by Trustee pursuant to Section 6.2 are
and shall be deemed fully paid.
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SECTION 13.9 Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, each of Trustee, Servicer, Transferor, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar (and each Investor
Certificateholder or Purchaser by its acceptance of a Certificate or Purchased
Interest) agrees that it shall not, with respect to the Trust or Transferor,
institute or join any other Person in instituting any proceeding of the type
referred to in the definition of "Bankruptcy Event" so long as any Certificates
or Purchased Interests issued by the Trust shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Certificates or Purchased Interests shall have been outstanding. The foregoing
shall not limit the right of Servicer, Transferor, the Paying Agent, the
Authenticating Agent and the Transfer Agent and Registrar to file any claim in
or otherwise take any action with respect to any such insolvency proceeding that
was instituted against Transferor or the Trust by any Person other than
Servicer, Transferor, the Paying Agent, the Authenticating Agent or the Transfer
Agent and Registrar. In addition, each of Servicer, the Paying Agent, the
Authenticating Agent, the Transfer Agent and Registrar and (as to the Trust)
Transferor agree that all amounts owed to them by the Trust or Transferor shall
be payable solely from amounts that become available for such payment pursuant
to this Agreement and the Receivables Purchase Agreement, and no such amounts
shall constitute a claim against the Trust or Transferor to the extent that they
are in excess of the amounts available for their payment.
SECTION 13.10 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of Trustee, the Investor Certificateholders
or the Purchasers, 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 hereunder 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 are
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 13.11 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
SECTION 13.12 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the Certificateholders,
the Purchasers, the Enhancement Providers and their
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respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, nothing contained in this Agreement shall confer any
rights upon any Person that is not a party to, or a permitted assignee of a
party to, this Agreement.
SECTION 13.13 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 13.14 Binding Effect; Assignability; Survival of Provisions. This
Agreement shall be binding upon and inure to the benefit of Transferor, Servicer
and Trustee and their respective successors and permitted assigns; provided,
that Transferor shall not delegate any of its obligations hereunder. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the termination of the Trust pursuant to Section 12.1. The rights and
remedies with respect to (a) any breach of any representation and warranty made
by Transferor in Section 2.3 or Section 7.1, (b)any breach of any representation
and warranty made by Servicer in Section 8.1 and (c) the indemnification and
payment provisions in Sections 3.9, 7.3, 8.4, 11.5 and 12.2(b) shall be
continuing and shall survive any termination of this Agreement.
SECTION 13.15 Limitation on Liability of Certain Persons. No recourse
under or upon any obligation or covenant of this Agreement, any Supplement, any
PI Agreement, any Certificate or any other Transaction Document, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of Transferor or of any successor corporation, either directly or
through Transferor, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Agreement, any Supplement, any PI Agreement, all
other relevant Transaction Documents and the obligations incurred hereunder or
thereunder are solely corporate obligations, and that no such personal liability
whatsoever shall attach to, or is or shall be incurred by the incorporators,
shareholders, officers or directors, as such, of Transferor or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement, any Supplement, any PI Agreement, any of
the Certificates or any other Transaction Documents, or implied therefrom; and
that any and all such personal liability of, either at
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common law or in equity or by constitution or statute, and any and all such
rights and claims against, every such incorporator, shareholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or covenants contained in
this Agreement, any Supplement, any PI Agreement, any of the Certificates or any
other Transaction Documents, or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Agreement, any PI Agreement and any Supplement. Transferor and any
director, officer, employee or agent of Transferor may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. Payments to be made by Transferor
pursuant to this Agreement shall be paid to the extent that funds are available
to make the payments after all amounts to be paid to the Certificateholders and
the Purchasers pursuant to the applicable Supplement and PI Agreement shall have
been paid, and there shall be no recourse to Transferor for all or any part of
any amounts payable pursuant to any Transaction Document if the funds are at any
time insufficient to make all or part of any such payments. The provisions of
this section shall survive the termination of this Agreement.
SECTION 13.16 Recourse to Transferred Assets. The Certificates do not
represent an obligation of, or an interest in, Transferor, any Seller, Servicer,
Trustee or any Affiliate of any of them. Except as expressly provided otherwise
in this Agreement, the Certificates and Purchased Interests are limited in right
of payment to the Transferred Assets.
SECTION 13.17 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK,
NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTION DOCUMENTS, (B) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF THE
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN THE STATE OR FEDERAL COURT,
(C) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF THE ACTION OR PROCEEDING,
AND (D) IN THE CASE OF TRANSFEROR AND HOWMET, IRREVOCABLY APPOINTS THE PROCESS
AGENT AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTY SERVICE OF COPIES
OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS THAT MAY BE SERVED IN ANY
ACTION OR PROCEEDING. THE SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF
THE PROCESS TO TRANSFEROR OR HOWMET IN CARE OF THE PROCESS AGENT AT THE PROCESS
AGENT'S ADDRESS, AND TRANSFEROR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT THE SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF
SERVICE, EACH OF TRANSFEROR AND SERVICER ALSO
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IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF THE PROCESS TO TRANSFEROR OR SERVICER (AS
APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS SECTION SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OR ALL OF THE OTHER PARTIES HERETO OR ANY OF THEIR
RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 13.18 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THE TRANSACTION DOCUMENTS, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF ANY OF THE PARTIES HERETO OR
ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THE TRANSACTION DOCUMENTS,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 13.19 Certain Partial Releases. If any Seller is discontinued as a
Seller pursuant to Section 1.8(a) or 1.8(c) of the Purchase Agreement, Trustee
shall, upon the request (and at the expense) of Howmet, execute and deliver to
Howmet such statements of partial release and/or amendment relating to the UCC-1
financing statements filed against such Seller pursuant to the Purchase
Agreement as shall be prepared by Howmet and provided to Trustee to evidence
such termination; provided that Trustee shall have received (i) an Officer's
Certificate of Servicer to the effect that all conditions to such termination
specified in subclauses (i), (ii) and (iii) of such Section 1.8(a) have been
satisfied (and shall not have received notice from any Investor
Certificateholder, Purchaser or Agent to the contrary) and (ii) an Opinion of
Counsel to the effect that the filing of such statements of partial release
and/or amendment will not impair the validity, perfection or priority of
Transferor's or Trustee's rights in and to (A) any Receivables or Related Assets
conveyed prior to the effective date of such termination or (B) any Receivables
or Related Assets generated by Howmet on or after the effective date of such
termination. In addition, after a termination that complies with the
requirements set Out in the preceding sentence, Trustee shall, upon the request
(and at the expense) of Howmet, execute and deliver to Howmet the termination
statements relating to the UCC-1 financing statements filed against the Seller
pursuant to the Purchase Agreement as shall be prepared by Howmet and provided
to Trustee to evidence the termination; provided that Trustee shall have
received an Officer's Certificate of Servicer to the effect that Trustee no
longer holds any right, title or interest in the Transferred
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Receivables generated by the terminated Seller. In connection with a termination
described in Section 1.8(c) of the Purchase Agreement, Trustee shall, if
demanded by Transferor, convey all of its right, title and interest in all (but
not less than all) of the Transferred Receivables (and Related Transferred
Assets with respect thereto) originated by the terminating Seller to a Person
designated by the terminating Seller, provided that such conveyance by Trustee
shall be made only against receipt by Trustee from the purchaser, in cash, of a
release price of not less than the aggregate Unpaid Balance of the released
Receivables. No such release and conveyance by Trustee shall, however, be
permitted if as a result thereof any Howmet Person would acquire the released
Transferred Receivables.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
Title: Vice President
Address: c/o Nevada Corporate Management, Inc
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION,
as Initial Servicer
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
-------------------------------
Title: Vice President
------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
MANUFACTURERS AND TRADERS TRUST
COMPANY,
as Trustee
By: /s/ Russell T. Whitley
---------------------------------
Name: Russell T. Whitley
------------------------------
Title: ASST. VICE PRESIDENT
------------------------------
Address: 1 M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
Attention: Russell Whitley
Telephone: (716) 842-5602
Facsimile: (716) 8424474
<PAGE> 111
EXHIBIT A
to Pooling Agreement
FORM OF
LOCKBOX ACCOUNT LETTER AGREEMENT
__, 1995
[NAME OF LOCKBOX BANK]
[ADDRESS OF LOCKBOX BANK)
Ladies and Gentlemen:
By this letter agreement, (a) _____________ ("Seller") irrevocably
transfers exclusive ownership and control of its lockbox[es] numbered _________
([each, a] [the] "Lockbox" [and collectively referred to herein as the
"Lockboxes"]) and the corresponding demand deposit account[s] numbered
___________ ([each, a] [the] "Lockbox Account" [and collectively referred to
herein as the "Lockbox Accounts"]) maintained with you to Blade Receivables
Corporation ("BRC"), and (b) BRC irrevocably transfers all of its rights and
title to and interest in the Lockbox[es] and the Lockbox Account[s] acquired
hereby to Manufacturers and Traders Trust Company, as trustee (the "Trustee")
for the benefit of (i) certain holders of certificates and purchased interests
(collectively, the "Holders") issued by the Trustee under a Pooling and
Servicing Agreement, dated as of ____________, 1995 (the "Pooling Agreement"),
among BRC, Howmet Corporation ("Howmet") as initial Servicer, and the Trustee
and (ii) BRC (to the extent of BRC's residual interest in the Transferred Assets
(as defined in the Pooling Agreement). Seller acknowledges and agrees that BRC
is transferring to the Trustee the rights, titles and interests transferred by
Seller to BRC as provided above, and each of Seller and BRC agrees to cooperate
fully with the Trustee and its agents and representatives (including, without
limitation, the Servicer referred to hereinafter) in the exercise of such
rights. The transfers described in this paragraph are effective on and as of the
date of this letter agreement.
By executing this letter agreement, you acknowledge the existence of the
Trustee's right to dominion and control over the Lockbox[es] and the Lockbox
Account[s] and its ownership of and security interest in the Lockbox[es], all
moneys and instruments delivered to the Lockbox[es], the Lockbox Account[s] and
the amounts from time to time on deposit therein, and agree that, from and after
the date hereof, you shall maintain the Lockbox[es] and the Lockbox Account[s]
and shall hold all such moneys and instruments and such amounts for the benefit
and subject to the interests of the Trustee (for the benefit of itself, the
Holders and BRC (to the extent described above)). You also acknowledge that your
<PAGE> 112
execution of this letter agreement is a condition precedent to continued
maintenance of the Lockbox Account[s] with you. The Lockbox Account[s] [is]
[are] to be maintained in the name of "Manufacturers and Traders Trust Company,
as Trustee."
Seller and BRC hereby irrevocably instruct you, and the Trustee, by its
acknowledgement hereof, hereby instructs you, at all times from and after the
date hereof until your receipt of contrary and/or terminating instructions from
the Trustee, to remit, on a daily basis, in immediately available funds, all
available amounts deposited in the Lockbox Account[s] to the following account
(the "Master Collection Account") or such other account as the Trustee or the
Servicer may specify:
Manufacturers and Traders Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
ABA #022000046
CC # 880
For credit to the
Manufacturers and Traders Trust Company, as Trustee
Account No. _________
No such transfer of funds shall either reflect the rounding off of any funds so
transferred or constitute a partial remittance except for (i) amounts applied to
fees and expenses under the terms of this letter agreement, and (ii) amounts
deducted for returned checks that were previously deposited in [a] (the] Lockbox
Account and with respect to which funds were previously transferred to the
Master Collection Account.
All transfers referred to above shall be made by you irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off (except
as expressly permitted otherwise by this letter agreement) and shall be final,
and you agree that you will not seek to recover any amount from the Trustee,
BRC, or the Servicer for any reason once any payment or transfer has been made.
The Trustee's instructions with respect to the Lockbox[es] and the Lockbox
Account[s] may be given through a Servicer that the Trustee may appoint from
time to time and will notify you thereof in writing, and you agree to follow the
instructions of such Servicer with the same effect as if such instructions were
given by the Trustee directly (subject to any limitations on such appointment
imposed by the Trustee that are communicated in writing to you) until such time
as the Trustee notifies you of the revocation of the Servicer's authority to act
for the Trustee. The initial servicer will be Howmet. The Trustee and the
Servicer shall each provide to you a list of their respective employees
authorized to issue instructions and give notices with respect to the
Lockbox(es] and the Lockbox Account(s], which lists may be revised from time to
time, and you shall be entitled to rely on (and to assume) the authority of any
employee of the Trustee or the Servicer identified on such lists, and are hereby
authorized to act on any notice given on behalf of the
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<PAGE> 113
Trustee or the Servicer by any such employee, subject to any limitations on the
appointment of the Servicer and the revocation of the Servicer's authority as
provided above.
Seller and BRC also hereby irrevocably notify you that, at all times from
and after the date hereof until your receipt of contrary and/or terminating
instructions from the Trustee, the Trustee shall be entitled (subject to your
rights set forth herein) to exercise in the place and stead of Seller and BRC
(or either of them) any and all rights of Seller and BRC in respect of or in
connection with the Lockbox[es], this letter agreement and the Lockbox
Account(s], including, without limitation (i) the right to specify that payments
are to be made out of or in connection with the Lockbox Account[s] to different
accounts or at different times than those specified above (subject to your
customary and then-current procedures for lockbox processing) and (ii) the right
to require preparation of duplicate monthly bank statements on the Lockbox
Account(s] for mailing directly to an address specified by the Trustee.
By executing this letter agreement you acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person asserting, claiming or exercising, any right of set-off, banker's
lien or other purported form of claim with respect to the items collected from
the Lockbox[es], the Lockbox Account[s] or any funds from time to time therein
or in transit thereto, and agree to immediately inform the Trustee in writing of
any such action in the future.
By executing this letter agreement, you irrevocably waive and agree not to
assert, any right to setoff against, or otherwise deduct from, any items
collected from the Lockbox[es], the Lockbox Account[s] or any funds from time to
time therein or in transit thereto; provided, however, that you may (i) debit
[a] [the] Lockbox Account for any items deposited in [such] [the] Lockbox
Account that are returned or otherwise not collected in accordance with your
customary practices for the chargeback of returned items and (ii) apply funds in
the Lockbox Account[s] for reimbursement of any fees and expenses incurred by
you in connection with this letter agreement, to the extent that such fees and
expenses are not paid or reimbursed by Seller.
Seller shall pay, or reimburse you for, customary and reasonable fees and
expenses incurred by you in the maintenance and operation of the Lockbox
Account[s] in accordance with this letter agreement. The Trustee will have no
liability to you or the Servicer for any costs, fees or charges under your usual
and customary procedures or this letter agreement.
You also agree that, notwithstanding anything to the contrary herein: (i)
you shall promptly notify all relevant postmasters that the Trustee is
authorized to have access to the Lockbox [es]; and (ii) you shall promptly
notify the Trustee of your failure to receive timely payment of any fee under
this letter agreement.
You may terminate this letter agreement by cancelling the Lockbox
Account[s] and Lockbox[es], which cancellation and termination shall become
effective only upon sixty days'
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<PAGE> 114
prior written notice thereof from you to the Trustee. Upon the termination of
this letter agreement, you will close the Lockbox Account[s] and transfer any
monies remaining therein to the Master Collection Account. You agree that you
shall forward all incoming mail addressed to (any of] the Lockbox[es] or [the]
Lockbox Account[s] and all wire transfers and deposits to (any of] the Lockbox
Account[s] that you receive after such cancellation in the form received to
another lockbox or to another lockbox account or the Concentration Account or to
such other address or account as the Trustee (or the Servicer on behalf of the
Trustee) shall specify, promptly after you discover that you have received any
such mail or transfers. 'This letter agreement may also be terminated upon
written notice to you by the Trustee. Except as expressly set forth in this
paragraph, this letter agreement may not be terminated or amended without the
prior written consent of the Trustee.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, by
facsimile or by overnight courier, to the intended person at the address or
facsimile number of such person set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such person in a written notice to the other parties hereto given in accordance
with the requirements of this paragraph. All notices and other communications
hereunder shall also be provided to the Trustee and shall be addressed as
follows until you receive written notice from the Trustee to the contrary:
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust and Agency Services
Telephone: (716) 842-5602
Facsimile: (716) 842-4474.
All notices and communications provided for hereunder shall be effective,
(i) if personally delivered, when received, (ii) if sent by certified mail, four
business days after having been deposited in the mail, postage prepaid and
properly addressed, (iii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means and (iv) if sent by overnight
courier, two business days after having been given to such courier unless sooner
received by the addressee.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of Seller, BRC, and the Trustee and their
respective successors, transferees and assigns; provided, however, that you may
not assign your rights and duties under this letter agreement without the prior
written consent of the Trustee.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York, not including the choice of law rules
thereof.
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<PAGE> 115
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing five (5) copies of this letter agreement in the space
provided below and returning such copies to us at the address indicated below
for Seller.
Very truly yours,
[NAME OF SELLER]
By:__________________________________
Title:_______________________________
Address: C/O Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski
Telephone: (203) 625-8744
Facsimile: (203) 8614746
BLADE RECEIVABLES CORPORATION
By:__________________________________
Title:_______________________________
Address: C/O Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski
Telephone: (203) 625-8744
Facsimile: (203) 8614746
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<PAGE> 116
The undersigned hereby acknowledges and agrees to the foregoing letter
agreement as of this __ day of ______, 1995.
[NAME OF LOCKBOX BANK]
By:_____________________________________
Title:_____________________________
Address: _________________________
_________________________
Attention: _________________________
Telephone: _________________________
Facsimile: _________________________
The undersigned hereby acknowledges and agrees to the foregoing letter
agreement dated as of the__day of ______,1995
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:_____________________________________
Title:_____________________________
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<PAGE> 117
EXHIBIT B
to Pooling Agreement
FORM OF CONCENTRATION ACCOUNT AGREEMENT
_____________________
[NAME OF CONCENTRATION BANK]
[ADDRESS OF CONCENTRATION BANK]
Ladies and Gentlemen:
By this letter agreement, (a) _____________ ("Seller") irrevocably
transfers exclusive ownership and control of its demand deposit account numbered
__________ the "Concentration Account" maintained with you to Blade Receivables
Corporation ("BRC"), and (b) BRC irrevocably transfers all of its rights and
title to and interest in the Concentration Account acquired hereby to
Manufacturers and Traders Trust Company, as trustee (the "Trustee") for the
benefit of (i) certain holders of certificates and purchased interests
(collectively, the "Holders") issued by the Trustee under a Pooling and
Servicing Agreement, dated as of ____________, 1995 (the "Pooling Agreement"),
among BRC, Howmet Corporation ("Howmet") as initial Servicer, and the Trustee
and (ii) BRC (to the extent of BRC's residual interest in the Transferred Assets
(as defined in the Pooling Agreement). Seller acknowledges and agrees that BRC
is transferring to the Trustee the rights, titles and interests transferred by
Seller to BRC as provided above, and each of Seller and BRC agrees to cooperate
fully with the Trustee and its agents and representatives (including, without
limitation, the Servicer referred to hereinafter) in the exercise of such
rights. The transfers described in this paragraph are effective on and as of the
date of this letter agreement.
By executing this letter agreement, you acknowledge the existence of the
Trustee's right to dominion and control over the Concentration Account and its
ownership of and security interest in the Concentration Account, all moneys and
instruments delivered to the Concentration Account and the amounts from time to
time on deposit therein, and agree that, from and after the date hereof, you
shall maintain the Concentration Account and shall hold all such moneys and
instruments and such amounts for the benefit and subject to the interests of the
Trustee. You also acknowledge that your execution of this letter agreement is a
condition precedent to continued maintenance of the Concentration Account with
you. The Concentration Account is to be maintained in the name of "Manufacturers
and Traders Trust Company, as Trustee."
<PAGE> 118
Seller and BRC hereby irrevocably instruct you, and the Trustee, by its
acknowledgement hereof, hereby instructs you, at all times from and after the
date hereof until your receipt of contrary and/or terminating instructions from
the Trustee, to remit, on a daily basis, in immediately available funds, all
available amounts deposited in the Concentration Account to the following
account (the "Master Collection Account") or such other account as the Trustee
or the Servicer may specify:
Manufacturers and Traders Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
ABA # 022000046
CC # 880
For credit to the
MANUFACTURERS AND TRADERS TRUST COMPANY,
AS TRUSTEE
Account No. ______________
No such transfer of funds shall either reflect the rounding off of any funds so
transferred or constitute a partial remittance except for (i) amounts applied to
fees and expenses under the terms of this letter agreement, and (ii) amounts
deducted for returned checks that were previously deposited in the Concentration
Account and with respect to which funds were previously transferred to the
Master Collection Account.
All transfers referred to above shall be made by you irrespective of, and
without deduction for, any counterclaim, defense, recoupment or set-off (except
as expressly permitted otherwise by this letter agreement) and shall be final,
and you agree that you will not seek to recover any amount from the Trustee, BRC
or the Servicer for any reason once any payment or transfer has been made.
The Trustee's instructions with respect to the Concentration Account may
be given through a Servicer that the Trustee may appoint from time to time and
will notify you thereof in writing, and you agree to follow the instructions of
such Servicer with the same effect as if such instructions were given by the
Trustee directly (subject to any limitations on such appointment imposed by the
Trustee that are communicated in writing to you) until such time as the Trustee
notifies you of the revocation of the Servicer's authority to act for the
Trustee. The initial servicer will be Howmet. The Trustee and the Servicer shall
each provide to you a list of their respective employees authorized to issue
instructions and give notices with respect to the Concentration Account, which
lists may be revised from time to time, and you shall be entitled to rely on
(and to assume) the authority of any employee of the Trustee or the Servicer
identified on such lists, and are hereby authorized to act on any notice given
on behalf of the Trustee or the Servicer by any such employee, subject to any
limitations on the appointment of the Servicer and the revocation of the
Servicer's authority as provided above.
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<PAGE> 119
Seller and BRC also hereby irrevocably notify you that, at all times from
and after the date hereof until your receipt of contrary and/or terminating
instructions from the Trustee, the Trustee shall be entitled (subject to your
rights set forth herein) to exercise in the place and stead of Seller and BRC
(or either of them) any and all of the rights of Seller and BRC in respect of or
in connection with this letter agreement and the Concentration Account,
including, without limitation (i) the right to specify that payments are to be
made out of or in connection with the Concentration Account to different
accounts or at different times than those specified above (subject to your
customary and then-current procedures for account processing) and (ii) the right
to require preparation of duplicate monthly bank statements on the Concentration
Account for mailing directly to an address specified by the Trustee.
By executing this letter agreement you acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person asserting, claiming or exercising any right of set-off, banker's
lien or other purported form of claim with respect to the items collected from
the Concentration Account or any funds from time to time therein or in transit
thereto, and agree to immediately inform the Trustee in writing of any such
action in the future.
By executing this letter agreement, you irrevocably waive and agree not to
assert any right to setoff against, or otherwise deduct from, any items
collected from the Concentration Account or any funds from time to time therein
or in transit thereto; provided, however, that you may (i) debit the
Concentration Account for any items deposited in the Concentration Account that
are returned or otherwise not collected in accordance with your customary
practices for the chargeback of returned items, and (ii) apply funds in the
Concentration Account for reimbursement of any fees and expenses incurred by you
in connection with this letter agreement, to the extent that such fees and
expenses are not paid or reimbursed by WRO.
WRO shall pay, or reimburse you for, customary and reasonable fees and
expenses incurred by you in the maintenance and operation of the Concentration
Account in accordance with this letter agreement. The Trustee will have no
liability to you or the Servicer for any costs, fees or charges under your usual
and customary procedures or this letter agreement. You will not be liable for
any actions taken in accordance with the instructions of the Trustee or the
Servicer.
You also agree that, notwithstanding anything to the contrary herein, you
shall promptly notify the Trustee of your failure to receive timely payment of
any fee under this letter agreement.
You may terminate this letter agreement by cancelling the Concentration
Account, which cancellation and termination shall become effective only upon
sixty days' prior written notice thereof from you to the Trustee. Upon the
termination of this letter agreement, you will close the Concentration Account
and transfer any monies remaining therein to the Master
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<PAGE> 120
Collection Account. You agree that you shall forward all wire transfers and
deposits to the Concentration Account that you receive after such cancellation
in the form received to the Master Collection Account or to such other address
or account as the Trustee (or the Servicer on behalf of the Trustee) shall
specify, promptly after you discover that you have received any such transfers.
This letter agreement may also be terminated upon written notice to you by the
Trustee. Except as expressly set forth in this paragraph, this letter agreement
may not be terminated or amended without the prior written consent of the
Trustee.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, by
facsimile or by overnight courier, to the intended person at the address or
facsimile number of such person set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such person in a written notice to the other parties hereto given in accordance
with the requirements of this paragraph. All notices and other communications
hereunder shall also be provided to the Trustee and shall be addressed as
follows until you receive written notice from the Trustee to the contrary:
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, New York 14203
Attention: Corporate Trust and Agency Services
Telephone: (716) 842-5602
Facsimile: (716) 842-4474.
All notices and communications provided for hereunder shall be effective,
(i) if personally delivered, when received, (ii) if sent by certified mail, four
business days after having been deposited in the mail, postage prepaid and
properly addressed, (iii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means and (iv) if sent by overnight
courier, two business days after having been given to such courier unless sooner
received by the addressee.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of Seller, BRC and the Trustee and their
respective successors, transferees and assigns; provided, however, that you may
not assign your rights and duties under this letter agreement without the prior
written consent of the Trustee.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York, not including the choice of law rules
thereof.
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<PAGE> 121
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing five (5) copies of this letter agreement in the space
provided below and returning such copies to us at the address indicated below
for WRO.
Very truly yours,
[NAME OF SELLER]
By:__________________________________
Title:_____________________________
Address: c/o Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski, Treasurer
Telephone: (203)625-8744
Facsimile: (203)8614746
BLADE RECEIVABLES CORPORATION
By:__________________________________
Title:_____________________________
Address: C/O Howmet Corporation
475 Steamboat Road
Greenwich, CT 06830
Attention: Jeff Jankowski, Treasurer
Telephone: (203)625-8744
Facsimile: (203)861-4746
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<PAGE> 122
The undersigned hereby acknowledges and agrees to the foregoing letter
agreement as of this __ day of November, 1995.
[NAME OF CONCENTRATION BANK]
By:____________________________
Title:_________________________
Address:
Telephone:
Facsimile:
The undersigned hereby acknowledges and agrees to the foregoing letter
agreement dated as of the ___ day of November, 1995.
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
By:_________________________________
Title:______________________________
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<PAGE> 123
EXHIBIT C
to Pooling Agreement
FORM OF
MONTHLY SERVICER'S CERTIFICATE
TO: MANUFACTURERS AND TRADERS TRUST COMPANY
[Paying Agent]
BLADE RECEIVABLES CORPORATION
[Name of Rating Agency]
HOWMET CORPORATION (the "Servicer") hereby certifies that:
(A) This Certificate is being delivered pursuant to Section 3.6 of the
Amended and Restated Pooling and Servicing Agreement, dated as of April 18,
1996, (as the same may be amended, supplemented or otherwise modified from time
to time, the "Pooling Agreement"), among BLADE RECEIVABLES CORPORATION, as
Transferor, Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee.
(B) As of the date of this Certificate, the Authorized Officer (as defined
in the Pooling Agreement) that is executing this Certificate is not aware of the
occurrence and continuance of any Early Amortization Event or Unmatured Early
Amortization Event (each as defined in the Pooling Agreement). [If an Early
Amortization Event or Unmatured Early Amortization Event has occurred and is
continuing, specify each such Early Amortization Event or Unmatured Early
Amortization Event (as applicable) of which the Authorized Officer executing
this Certificate is aware and the nature and status thereof and further certify,
on behalf of the Servicer, that such information is true and accurate in all
material respects.]
IN WITNESS WHEREOF, Servicer has caused this Certificate to be executed by
its duly authorized officer this __ day of _______________, 19 .
HOWMET CORPORATION
By:_____________________________________
Title: _________________________________
<PAGE> 124
EXHIBIT D
to Pooling Agreement
ANNUAL AGREED-UPON PROCEDURES
MONTHLY REPORTS
Select at random four Monthly Reports prepared during the fiscal year and:
1. Compare/reconcile the following Monthly Report items with the
Servicer's original source documents noted below for five selected
operating units (letters refer to the applicable section of the
Monthly Report):
A. Monthly Receivable Activity:
1. Monthly Sales Journal
2. Cash Application Journal
3. Aged Trial Balance
4. Journal entries and related support affecting cash
application or receivables
5. Receivable Write-off Approval List
6. Lockbox Bank Statements and PC generated Lockbox Reports
7. Credit Memo Report
D. Loss Reserve Ratio:
1. Schedule A of the Monthly Report
2. Applicable Daily Report for Cutoff Date
3. Previous Monthly Reports
E. Dilution Reserve Ratio:
1. Section A of the Monthly Report
2. Previous Monthly Reports
G. Carrying Cost Receivables Reserve:
1. Section C of the Monthly Report
2. Carrying Cost Worksheet
H. Loss to Liquidation Ratio:
1. Receivable Write-off Approval List
2. Aged Trial Balance
3. Journal entries and related back-up on write-offs and
recoveries
<PAGE> 125
4. Previous Monthly Reports
I. Discount Rate:
1. Carrying Cost Worksheet
Schedule A. Aged Receivables Ratio:
1. Section A of the Monthly Report
2. Previous Monthly Reports
3. Aged Trial Balance Summary - invoices only, and
2. Recalculate the mathematical accuracy of Sections A,B,C,D,E,F,G,H,J
and K and Schedule A.
For each quarter end date that a Monthly Report is obtained, obtain the accounts
receivable Write-Off Report for five selected operating units and randomly
select a total of five write-offs greater than $1000 individually. Then obtain
the write-off documentation and verify that the write-offs had been approved and
were deleted from the Aged Trial Balance Report.
DAILY REPORTS
Select at random ten Dally Reports prepared during the fiscal year (of which not
more than two shall relate to any single fiscal month) and:
1. Compare/reconcile the following Daily Report items with the
Servicer's original source documents noted below for five selected
operating units (letters refer to the applicable section of the
Daily Report):
A. Daily Receivable Activity:
1. Daily Sales Summary
2. Cash Application Journal
3. Aged Trial Balance
4. Journal entries and related support affecting cash
applications or receivables
5. Receivable Write-off Approval List
6. Lockbox Bank Statement and PC generated Lockbox Reports
B. Net Eligible Receivables Calculation (if not closing period):
1. Ineligible Receivables Program Reports
page 2
<PAGE> 126
C. Excess Concentration Balances:
1. Ineligible Receivables Program Reports
Schedule A (if settlement date):
1. Most recent Monthly Report
2. Daily Report last day prior to settlement date, and
2. Recalculate the mathematical accuracy of sections A-C and Schedule
A.
CREDIT DOCUMENTATION
Select at random two fiscal month ends during the fiscal year and:
1. Direct the Servicer to prepare a Credit File Contents Schedule (the
"Credit Schedule") that summarizes the contents of the credit files
for each customer we select for testing. The Credit Schedule will
include the following information as of the cut-off date selected:
customer name, customer account number, customer statement, approved
credit limit, date of credit limit approval, name and title of
highest authority that approved the credit limit and other
supporting documentation in support of extension of the credit limit
(e.g., Dun & Bradstreet report, customer financial statement and
bank or trade references), and
2. For each customer selected:
A. Compare the customer's account receivables balance with the
approved credit limit to verify that the balance is less than
or equal to the approved limit
B. Compare the customer's account balance per the Credit Schedule
with the balance per the Account Receivable Aged Trial Balance
C. Compare the date of the customer , s most recent invoice
indicated on the customer's statement to the date of the
credit approval to verify that the date of the invoice is the
date of or subsequent to, but within one year of the date of,
credit approval
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<PAGE> 127
D. Note that at least one of the following items is included with
the credit documentation: Dun & Bradstreet Credit Report or
other credit report, bank or trade reference, financial
statements or a memorandum or workpapers regarding credit
evaluation/justification.
For each of the ten Daily Reports selected:
1. Invoices: Obtain the detail Aged Trial Balance Report for five selected
operating units and randomly select a total of 15 different invoices and verify
the invoice date, amount and customer name with a system generated copy of the
invoice;
2. Dilutions and Credits: Obtain the detail Aged Trial Balance Report for
five selected operating units and randomly select a total of 15 different credit
names and verify the credit memo date, amount and customer name with a system
generated copy of the credit memo;
3. Cash Application: Randomly select a total of 15 individual cash
receipts comprising the cash collection amount and verify the bank receipt date
with the receipt date and application amount on the Daily Report, adjusted for
available balances;
4. Ineligible Receivables: Obtain the Aged Trial Balance for five selected
operating units and randomly select a total of ten customers that have balances
over 90 days past due and calculate the customer balances over 90 days past due
as a percentage of the customer's total balance. If this calculated percentage
is more than 50%, determine if the customer is classified as part of the
Ineligible Receivables;
5. Aging Reports: Using the 15 invoices selected in paragraph 1 above,
find that the invoice is in the appropriate aging category on the Aged Trial
Balance; and
6. Purchase Options: Using the 15 invoices selected in paragraph 1 above,
verify the purchase order reference number on the invoice with the purchase
order (if available).
page 4
<PAGE> 128
EXHIBIT E
to Pooling Agreement
FORM OF
TRANSFEROR CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN Effective REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. IN ADDITION TO THE
RESTRICTIONS SET FORTH ABOVE, RESALE, TRANSFER OR DISPOSITION OF THIS
CERTIFICATE IS PROHIBITED TO THE EXTENT SET FORTH IN THE POOLING AGREEMENT (AS
DEFINED BELOW).
<PAGE> 129
BLADE RECEIVABLES MASTER TRUST
TRANSFEROR CERTIFICATE
THIS CERTIFIES THAT BLADE RECEIVABLES CORPORATION is the registered owner
of an interest in the Blade Receivables Master Trust (the "Trust"), which was
created pursuant to the Amended and Restated Pooling and Servicing Agreement,
dated as of April 18, 1996 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Pooling Agreement"), by and among
BLADE RECEIVABLES CORPORATION, a Nevada corporation, as Transferor
("Transferor"), HOWMET CORPORATION, as initial Servicer (in such capacity, the
"Servicer"), and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee (in such
capacity, together with its successors and assigns in such capacity, the
"Trustee"). This Certificate is the duly authorized Transferor Certificate
designated and issued under the Pooling Agreement. To the extent not otherwise
defined herein, capitalized terms have the meanings assigned to them in Appendix
A to the Pooling Agreement. This Certificate is subject to the terms, provisions
and conditions of, and is entitled to the benefits afforded by, the Pooling
Agreement, to which terms, provisions and conditions the holder of this
Certificate by virtue of the acceptance hereof assents and by which the holder
is bound.
This Certificate shall not bear interest.
The Pooling Agreement may be amended and the rights and obligations of the
parties thereto and of the holder of this Certificate modified as set forth in
the Pooling Agreement.
Unless the certificate of authentication hereon shall have been executed
by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the holder hereof to any benefit
under the Pooling Agreement or under any other Transaction Document or be valid
for any purpose.
This Certificate is limited in right of payment to the Transferred Assets.
Transferor may not transfer, assign, exchange or otherwise convey or
pledge, hypothecate or otherwise grant a security interest in this Certificate
or any interest represented hereby except in compliance with the terms,
conditions and restrictions set forth in the Pooling Agreement.
page 2
<PAGE> 130
This Certificate shall be construed in accordance with the laws of the
State of New York, without reference to its conflict of laws principles, and all
obligations, rights and remedies under, or arising in connection with, this
Certificate shall be determined in accordance with the laws of the State of New
York.
This Certificate amends and restates in its entirety the Transferor
Certificate dated December 13, 1995 and issued to Transferor under the Pooling
and Servicing Agreement, dated as of December 13,1995, by and among Transferor,
Servicer and Trustee.
page 3
<PAGE> 131
IN WITNESS WHEREOF, Transferor has caused this Certificate to be executed
by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:________________________________________
Title: _______________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate referred to in the Pooling Agreement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________________
Title: _______________________________
Dated: ________________________, 199_
page 4
<PAGE> 132
EXHIBIT F
to Pooling Agreement
FORM OF CERTIFICATE TO BE GIVEN BY CERTIFICATE OWNER
[Euroclear [Cedel, Societe anonyme
151 Boulevard Jacqmain 67 Boulevard Grand-Duchesse Charlotte
B-1210 Brussels. Belgium] L-1331 Luxembourg]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, (the
"Certificates").
This is to certify that as of the date hereof, and except as set forth
below, the beneficial interest in the Certificates held by you for our account
is owned by persons that are not U.S. persons (as defined in Rule 901 under the
Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned has acquired, or intends
to acquire, a beneficial interest in accordance with your operating procedures
if any applicable Statement herein is not correct on such date. In the absence
of any such notification, it may be assumed that this certification applies as
of such date.
[This certification excepts beneficial interests in and does not relate to
U.S. $_________ principal amount of the Certificates appearing in your books as
being held for our account but that we have sold or as to which we are not yet
able to certify.]
We understand that this certification is required in connection with
certain Securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated: __________________,* By:_________________________,
Account Holder
* Certification must be dated on or after the 15th day before the date of the
Euroclear or Cedel certificate to which the certification relates.
<PAGE> 133
EXHIBIT G
to Pooling Agreement
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, (the
"Certificates").
This is to certify that, based solely on certifications we have received
in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") as of the date
hereof, $__________ principal amount of the Certificates is owned by persons (a)
that are not U.S. persons (as defined in Rule 901 under the Securities Act of
1933, as amended (the "Securities Act")) or (b) who purchased their Certificates
(or interests therein) in a transaction or transactions that did not require
registration under the Securities Act.
We further certify (a) that we are not making available herewith for
exchange any portion of the related Regulation S Temporary Book-Entry
Certificate excepted in such certifications and (b) that as of the date hereof
we have not received any notification from any of our Member Organizations to
the effect that the statements made by them with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
<PAGE> 134
We understand that this certification is required in connection with
certain securities laws of the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy hereof to any interested party in such proceedings.
Date:_________________________* Yours faithfully,
* To be dated no earlier By:__________________________
than the Effective Date. [Morgan Guaranty Trust Company of
New York, Brussels Office, as
Operator of the Euroclear Clearance
System] [Cedel, societe anonyme]
page 2
<PAGE> 135
EXHIBIT H
to Pooling Agreement
FORM OF CERTIFICATE TO BE GIVEN BY TRANSFEREE
OF BENEFICIAL INTEREST IN A REGULATION S TEMPORARY
BOOK-ENTRY CERTIFICATE
[Euroclear [Cedel, societe anonyme
151 Boulevard Jacqmain 67 Boulevard Grand-Duchesse Charlotte
B-1210 Brussels, Belgium] L-1331 Luxembourg]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee, (the
"Certificates").
This is to certify that as of the date hereof, and except as set forth
below , for purposes of acquiring a beneficial interest in the Certificates, the
undersigned certifies that it is not a U.S. person (as defined in Rule 901 under
the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned intends to acquire a
beneficial interest in accordance with your operating procedures if any
applicable statement herein is not correct on such date. In the absence of any
such notification, it may be assumed that this certification applies as of such
date.
We understand that this certification is required in connection with
certain securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated: ___________________, By:_________________________
<PAGE> 136
EXHIBIT I
to Pooling Agreement
FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY CERTIFICATE TO
REGULATION S BOOK-ENTRY CERTIFICATE
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
(the "Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET
CORPORATION and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee,
(the "Certificates").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $___________ principal amount of Certificates
that are held as a beneficial interest in the 144A Book-Entry Certificate (CUSIP
No. ) with DTC in the name of [insert name of transferor] (the "Transferor").
The Transferor has requested an exchange or transfer of the beneficial interest
for an interest in the Regulation S Book-Entry Certificate (CUSIP No. ) to be
held with [Euroclear] [Cedel] through DTC.
In connection with the request and in receipt of the Certificates, the
Transferor does hereby certify that the exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Agreement and the
Certificates and:
(a) pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and accordingly
the Transferor does hereby certify that:
(i) the offer of the Certificates was not made to a person in
the United States of America,
[(ii) at the time the buy order was originated, the transferee
was outside the United States of America or the Transferor and any
person acting on its behalf reasonably believed that the transferee
was outside the United States of America,
<PAGE> 137
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States of
America,] *
(iii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S, as applicable,
(iv) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act. and
(b) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Certificates
are being transferred in a transaction permitted by Rule 144 under the
Securities Act.
This certification and the statements contained herein are made for your
benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Dated: _________________ By:_____________________________
Title: _________________________
* Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
page 2
<PAGE> 138
EXHIBIT J
to Pooling Agreement
FORM OF PLACEMENT AGENT EXCHANGE INSTRUCTIONS
Depository Trust Company
55 Water Street
50th Floor
New York, New York 10041
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
(the "Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET
CORPORATION and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee.
(the "Certificates").
Pursuant to Section 6.11 of the Agreement, ________________________ (the
"Placement Agent") hereby requests that $____________ aggregate principal amount
of the Certificates held by you for our account and represented by the
Regulation S Temporary Book-Entry Certificate (CUSIP No. ) (as defined in the
Agreement) be exchanged for an equal principal amount represented by the 144A
Book-Entry Certificate (CUSIP No. ) to be held by you for our account.
Dated: __________________________ [placement agent]
By:_______________________________
Title: ___________________________
<PAGE> 139
EXHIBIT K
to Pooling Agreement
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF DEFINITIVE 144A CERTIFICATES
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18, 1996 (the
"Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET CORPORATION and
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee (the "Certificates").
This letter relates to $___________ principal amount of Certificates held
in definitive form by _____________ (the "Transferor").
The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Certificate (the "Transfer Certificate"). In
connection with such request, the Transferor hereby certifies that it is
familiar with the Agreement and all other documents governing or relating to the
Certificates and that the transfer of the Transfer Certificate does not require
registration under the Securities Act of 1933, as amended (the "Securities Act")
because:*
[ ] the Transfer Certificate is being acquired for the Transferor's own
account, without transfer.
[ ] the Transfer Certificate is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A) in reliance on Rule 144A or
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act.
[ ] the Transfer Certificate is being transferred in accordance with Rule
144 under the Securities Act, or pursuant to an effective registration statement
under the Securities Act.
_____________________________
* Check applicable box.
<PAGE> 140
[ ] the Transfer Certificate is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 14A, Rule 144 or Rule 904 under the Securities
Act. An opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this letter.
[Transferor]
By:__________________________________
Title:_______________________________
Dated:____________________
<PAGE> 141
EXHIBIT L
to Pooling Agreement
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM REGULATION S
TEMPORARY BOOK-ENTRY CERTIFICATE TO RULE 144A
BOOK-ENTRY CERTIFICATE
[Trustee and Transfer Agent and Registrar]
Re: [Description of Certificates] issued pursuant to the Amended and
Restated Pooling and Servicing Agreement dated as of April 18, 1996
(the "Agreement"), among BLADE RECEIVABLES CORPORATION, HOWMET
CORPORATION and MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee,
(the "Certificates").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $___________ principal amount of Certificates
that are held as a beneficial interest in a Regulation S Temporary Book-Entry
Certificate (CUSIP No. -) (the "Regulation S Certificate "") with DTC in the
name of [insert name of transferor] (the "Transferor"). The Transferor has
requested an exchange or transfer of the beneficial interest in the Regulation S
Certificate for an interest in a 144A Book-Entry Certificate (CUSIP No. -) (the
"144A Certificate"") to be held with [Euroclear] [Cedel] through DTC.
In connection with such request, the Transferor hereby certifies that (a)
its beneficial interest in the Regulation S Certificate is being transferred or
exchanged in accordance with (i) the provisions set forth in the Pooling
Agreement, (ii) Rule 144A under the Securities Act, and (iii) any applicable
securities laws of any state of the United States or any other jurisdiction, and
(b) if the Transferor's beneficial interest is being transferred, such
beneficial interest is being transferred to a transferee that the Transferor
reasonably believes is purchasing the beneficial interest in the 144A
Certificate for its own account or an account with respect to which the
transferee exercises sole investment discretion and the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A
<PAGE> 142
This certification and the statements contained herein are made for your
benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Dated:_____________ By:_______________________________
Title: _____________________
page 2
<PAGE> 143
SCHEDULE 1
to Pooling Agreement
ACCOUNT BANKS - LOCKBOX BANKS
ACCOUNT BANKS - CONCENTRATION ACCOUNT BANK
<PAGE> 144
<TABLE>
<CAPTION>
HOWMETCORP.
TAX ID # 132838093
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS AC TYPE AC # LO# AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Citibank Peter Pellegrine Peter Pellegrine Conrentration 4086-5864 NA Resolutions
Phone # 212 559-9700 Citibank
Fax # 212 7934806 399 Park Avenue Incumbency Forms
10th Fl., Zone 3 Concentration Agree
New York, NY 10022 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of Montreal L. Cynthia Semenic L. Cynthia Semenic Lockbox 4619436 70371 Resolutions
Phone#514-877-8685 Bank of Montreal Incumbency
Fax #514-877-8933 Crop. Banking L/B Agreements
129 St. Jacques 12-FI. Wire Agreements
Montreal, Quebec H2Y-
1L6
- ------------------------------------------------------------------------------------------------------------------------------------
Harris Bank Bill C. Broot Mary Rafacz Pipeline 331-5308 N/A Resolutions
Phone #312-461-7162 Harris Bank Incumbency Forms
Fax #312-461-2117 115 S. LaSalle Street L/B Agreements
12th Floor Wire Agreements
Chicago, IL 60603
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Manhattan Steven Epstein Carolyn V. Weiss Howmet FX91G- 30142 Resolutions
Phone #212-552-1314 Chase Manhattan Bank Wires 455946
Fax #212-582-4786 1 Chase Manhattan Incumbency Forms
Plaza - 50th Fl. L/B Agreements
New York, NY 10081 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
Fleet Bank Kerry McElhiney Linda Hartunian Lockbox 5044-4083 N/A Resolutions
Phone #61 7-282-3064 Fleet Nat'l. Bankof CT. Incumbency Forms
Fax #617-292-2506 1 Landmark Square L/B Agreements
MSN 790 Wire Agreements
Stamford CT 06904
- ------------------------------------------------------------------------------------------------------------------------------------
First interstate Bank John Albanesus John H. Albanesus Lockbox 101133031 600551 Resolutions
Phone #212-836-4136 First interstate Bank 001614265 53509 Incumbency Forms
Fax #212-593-5241 685 3rd Avenue L/B Agreements
Fifth Floor Wire Agreements
New York, NY 10022-
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Michael Daves Blanca Rodriguez Lockbox 1866075276 75280 Resolutions
Blanca Rodriguez Wachovia Corp. Senv. Incumbency Forms
Phone #404-322-1094 181 Peach Tree Street L/B Agreements
Fax #404-322-6894 Atlanta, GA 30303 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------
COMMENT
- ------------
New AC
- ------------
New AC
- ------------
New AC
- ------------
Modified
- ------------
New/Modified
- ------------
Modified
- ------------
Modified
- ------------
</TABLE>
1
<PAGE> 145
<TABLE>
<CAPTION>
HOWMETCORP.
TAX ID # 132838093
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS AC TYPE AC # LO# AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
PNC Michele Weisman Jean Kisling EDI 1264083 N/A Resolutions
Phone #212 559-5361 PNC Incumbency Forms
Fax #212 557-5461 2 PNC Plaza #32 L/B Agreements
620 Liberty Avenue Wire Agreements
Pittsburgh PA 15265
- ------------------------------------------------------------------------------------------------------------------------------------
NBD Steve Kremenski Steve Kremenski Pipeline 03667-73 2414 Resolutions
Phone #313 225-1646 NBD Lockbox 0001- Incumbency Forms
Fax #313-225-2089 611 Woodward Avenue 153701 - L/B Agreements
Detroit Ml 46226 010 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of Montreal L. Cynthia Sememic L. Cynthia Semenic Lockbox 4613-806 70231 Resolutions
Phone #514 877-8685 Bank of Montreal Incumbency Forms
Fax #514 877-8933 Corp. Banking L/B Agreements
129 St. Jacques-12 Fl. Wire Agreements
Montreal, Quebec
H2Y 1 L8
- ------------------------------------------------------------------------------------------------------------------------------------
Harris Bank Bill C. Broot Nary Rafacz Pipeline 292-077-5 71250 Resolutions
Phone #312 461-7162 Harris Bank Lockbox Incumbency Forms
Fax #312 461 -2117 115 5. LaSalle Street L/B Agreements
12WFI. W re Agreements
Chicago, IL 60600
- ------------------------------------------------------------------------------------------------------------------------------------
Chase ManhaNan Steven Epstein Carolyn V. Weiss Howmet FX 91 G- N/A Resolutions
Phone #212 552-1314 Chase ManhaNan Bank Wires 455946
Fax #212 582-4786 1 Chase ManhaNan
Plaza - 50th Floor
New York, NY 10081
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Michael Davis Blanca Rodriguez Lockbox 8735- 75085 Resolutions
Blanca Rodriguez Wachovia Corp. Sent. 071434 951294 Incumbency Form
Phone #404 332-1 094 191 Peach Tree St. L/B Agreements
Fax #404 332-6894 Atlanta GA30003 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
PNC Michele Weisman Jean Kisling EDI 1000-312 N A Resolutions
Phone #212 557-5362 PNC 295 Incumbency Form
Fax #212 557-5461 2 PWC Plaza Fl 32 L/B Agreements
620 Liberty Avenue
Pittsburgh, PA 1 5205 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
HOWMET CERCAST USA
Tax ID # 06-1245785
BANK BANK CONTACTS ADDRESS A/C TYPE A/C # L/B # AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Harris Bank Phone # 312 461-7162 Maw Rafacz Lockbox 290-075-8 71916 Resolutions
Fax #312461-2117 Harris Bank 71966 Incumbency
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------
COMMENT
- ------------
Modified
- ------------
Modified
- ------------
Modified
- ------------
Modified
- ------------
Mod if ed
- ------------
Modified
- ------------
Modified
- ------------
Comments
- ------------
Modified
- ------------
</TABLE>
2
<PAGE> 146
<TABLE>
<CAPTION>
HOWMET CERCAST USA
Tax ID # 06-1245785
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS A/C TYPE A/C # L/B # AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Bill C. Broot 1155 LaSalle Street 71896 L/B Agreements
12WFI Wire Agreements
Chicago, lll 60603
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Michael Davis Blanca Rodriquez Lockbox 1867- 951378 Resolutions
Blanca Rodriquez Wachovia Corp. Serv. 075366 951386 Incumbency Form
Phone #404 332-1094 191 Peach Tree St. 951391 L/B Agreements
Fax #404 332-6894 Atlanta, GA 30303 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
HOWMET TEMPCRAFT
ID # 34-0908274
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS A/C Type A/C # IL/B 3 AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Soceity National Bank John Avallone John Avallone Lockbox 001099- 71284 Resolutions
Phone # 216 689-6351 Key Corp. 4687 Incumbency Forms
Fax# 216 689-4421 127 Public Square L/B Agreements
Mail Code Ohio Wire Agreements
1270725
- ------------------------------------------------------------------------------------------------------------------------------------
TURBINE COMPONENTS
CORP
Tax ID # 06-0863947
- ------------------------------------------------------------------------------------------------------------------------------------
BANK BANK CONTACTS ADDRESS A/C TYPE A/C # L/B # AGREEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Fleet Bank Kerry McElhney Linda Hartman Lockbox 5044-4115 30815 Resolutions
Phone # 617 292-3064 Fleet Natl Bk of CT. Incumbency Forms
Fax # 617-292-2566 1 Landmark Sq. L/B Agreements
MSK 759 Wire Agreements
Stamford CT 06904
- ------------------------------------------------------------------------------------------------------------------------------------
Bank of New Haven Frank Gentilesco Frank Genrilesco Lockbox 1310958 9512 Resolutions
Phone # 203 498-3532 Bank of New Haven Incumbency Forms
430 Forbes Ave L/B agreements
New Haven 06512 Wire Agreements
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------
Comments
- -------------
- -------------
Modified
- -------------
- -------------
COMMENTS
- -------------
New A/C
Modified
L/B
- -------------
- -------------
- -------------
New A/C
- -------------
New A/C
Modified
L/B
- -------------
</TABLE>
3
<PAGE> 147
PROJECT BLADE - TAKEOUT
APPENDIX A
DEFINITIONS
A. Defined Terms. As used in the Purchase Agreement, the Pooling Agreement
or any Supplement:
"Account Agreements" means the Concentration Account Agreements and the
Lockbox Agreements.
"Account Banks"" means the Concentration Account Banks and the Lockbox
Banks.
"Acquisition" means Howmet Acquisition Corporation, a Delaware
corporation.
"Acquisition Loan"" means the loan, in the principal amount of
$100,000,000, made by Transferor to Acquisition, the obligation to repay which
loan has been assumed by Howmet (as successor by merger to Acquisition).
"Adverse Claim" means any claim of ownership interest or any mortgage,
deed of trust, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other) or other security interest.
"Affiliate" means, with respect to a Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Agent" means, with respect to a Series or Purchased Interest, any
Person(s) designated as the agent(s) for the Certificateholders or the Purchaser
in the related Supplement or PI Agreement.
"Aggregate Unpaid Balance" is defined in Section 2. 1(b) of the Purchase
Agreement.
"Amortization Period" is defined, for purposes of any Series or Purchased
Interest, in the related Supplement or PI Agreement.
"Applicant" is defined in Section 6.7 of the Pooling Agreement.
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
<PAGE> 148
"Authorized Officer" means, with respect to Transferor, Servicer or any
Seller, the Chief Executive Officer, the President, the Treasurer, the Chief
Financial Officer, any Vice President and any Assistant Treasurer.
"Available Final Distribution Amount" means, (i) with respect to any
Series, the amount that would be available in the Master Collection Account on
the Final Scheduled Payment Date for the Series for distribution to the
Certificateholders of such Series, and (ii) with respect to any Purchased
Interests, the amount that would be available in the Master Collection Account
on the Final Scheduled Payment Date for the Purchased Interests for distribution
to the Purchasers of such Purchased Interests.
"Bank Accounts" means the Lockbox Accounts and the Concentration Accounts.
"Bankruptcy Event" means, for any Person. any of the following events:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
Like for such Person or any substantial part of its assets, or any similar
action with respect to such Person under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of
debts, and such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of (i) in the case of any Person other than
Transferor, 60 days and (ii) in the case of Transferor, 10 days; or an
order for relief in respect of such Person shall be entered in an
involuntary case under the federal bankruptcy laws or other similar laws
now or hereafter in effect, or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or the like, for
such Person or any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail to, or
admit in writing its inability to, pay its debts generally as they become
due.
"Base Amount" is defined, for purposes of any Series or Purchased
Interest, in the applicable Supplement or PI Agreement.
"Book-Entry Certificates" means certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.11 of
the Pooling Agreement; provided that after the occurrence of a condition
whereupon book-entry registration and transfer are no
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longer permitted and Definitive Certificates are to be issued to the Certificate
Owners. such certificates shall no longer be "Book-Entry Certificates."
"Business Day" means a day (other than a Saturday or Sunday) on which
commercial banks in New York, New York and Chicago, Illinois are not authorized
or required to be closed for business.
"Buyer" is defined in the preamble to the Purchase Agreement.
"Buyer Note" is defined in Section 3.2 of the Purchase Agreement.
"Calculation Period" means a fiscal month of Howmet.
"Carrying Cost Account"is defined in Section 4.2 of the Pooling Agreement.
"Carrying Costs" means, for any period, (a) interest or yield payable with
respect to any Series or Purchased Interest for that period, (b) the aggregate
Servicing Fee for the period in the applicable amount provided for in Section
3.4 of the Pooling Agreement, (c) the operating expenses described in Section
7.2(l) of the Pooling Agreement for the period and (d) other fees, costs and
expenses incurred by Transferor and Trustee for the period and paid to Persons
other than Howmet Persons in connection with their duties under the Transaction
Documents (in the case of Trustee, to the extent not included in the Servicing
Fee).
"Certificate" means any Investor Certificate or the Transferor
Certificate.
"Certificateholder" means the Person in whose name a Certificate is
registered in the Certificate Register.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Certificate Register" means the register maintained pursuant to Section
6.3 of the Pooling Agreement.
"Clearing Agency" means, with respect to any Book-Entry Certificate, any
Person designated as such by Transferor, which person must be registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934.
"Clearing Agency Participant" is defined in Section 6.11(d) of the Pooling
Agreement.
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"Closing Date" means December 13, 1995.
"Collections" means all funds that are received by any Seller, Transferor,
Servicer or Trustee from or on behalf of any Obligor in payment of any amounts
owed (including invoice prices, finance charges, interest and all other charges,
if any) in respect of any Transferred Receivable or Related Asset, or otherwise
applied to repay or discharge any Transferred Receivable (including insurance
payments that any Seller, Transferor or Servicer applies in the ordinary course
of its business to amounts owed in respect of such Transferred Receivable and
net proceeds of sale or other disposition of repossessed goods that were the
subject of such Transferred Receivable).
"Concentration Account" means any bank account that is maintained in
accordance with, and to perform the functions contemplated for Concentration
Accounts in, Section 3.3 of the Pooling Agreement.
"Concentration Account Agreement" means a letter agreement, substantially
in the form of Exhibit B to the Pooling Agreement (or such other form as to
which the Modification Condition has been satisfied), among Transferor,
Servicer, a Concentration Account Bank and Trustee that relates to one or more
Concentration Accounts, as it may be amended, supplemented or otherwise modified
from time to time.
"Concentration Account Banks" means any of the banks at which one or more
Concentration Accounts are maintained from time to time.
"Contra Account" means, at any time and with respect to any Obligor, the
maximum accrued refund, rebate or other incentive payment that such Obligor may
be owed by the Sellers on account of sales incentive programs.
"Contract" means an agreement between a Seller and any Person pursuant to
which such Person is obligated to make payments in respect of any Receivable or
Related Asset.
"Contributed Receivables" means all right, title and interest of Howmet in
the Receivables (and Related Security in connection therewith) contributed by
Howmet to Buyer.
"Contribution Agreement" means any Contribution Agreement, substantially
in the form of Exhibit D to the Purchase Agreement, between Howmet and Buyer, as
it may be amended, supplemented, amended and restated or otherwise modified from
time to time in accordance with the Purchase Agreement and the Pooling
Agreement.
"Corporate Trust Office" means the principal office of Trustee in Buffalo,
New York, at which at any particular time its corporate trust business shall be
principally administered.
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"Credit and Collection Policy" means (a) so long as no Successor Servicer
has been appointed, with respect to any Seller, its credit and collection
policies and practices relating to the Contracts and Receivables of such Seller
that such Seller has provided to Transferor and Trustee prior to the First
Issuance Date, as such credit and collection policies may be modified without
violating Section 6.3(b) of the Purchase Agreement or Section 7.2(f) of the
Pooling Agreement or (b) with respect to any Successor Servicer, its collection
policies and practices with respect to receivables like the Receivables.
"Cut-Off Date" means the last day of any Calculation Period.
"Daily Report" is defined in Section 3.5 of the Pooling Agreement.
"Definitive Certificates" means any Certificate other than a Book-Entry
Certificate.
"DCR" means Duff & Phelps Credit Rating Co.
"Dilution" means any reduction in the balance of a Receivable or check
issued by any Seller to an Obligor on account of discounts, incorrect billings,
credits, rebates, allowances, chargebacks, returned or repossessed goods,
allowances for early payments or any other reduction in the balance of a
Receivable for a reason unrelated to the inability of the Obligor to pay the
Receivable; provided that if the Receivables owed by an Obligor shall have been
reduced by a Contra Account for purposes of determining whether such Receivables
constitute Eligible Receivables, any rebate to such Obligor represented by such
Contra Account shall not be included in Dilution.
"Discount Rate" is defined in Section 2.2(c) of the Purchase Agreement.
"Disposition" is defined in Section 9.3(i) of the Pooling Agreement.
"Distribution Date" means the 15th day of each calendar month (or, if not
a Business Day, the next Business Day).
"Distribution Period" means each period from one Distribution Date to the
next Distribution Date.
"Dollars" means dollars in lawful money of the United States of America.
"Domestic Person" means any Person that has a place of business located in
the United States or Puerto Rico or otherwise is subject to the jurisdiction of
one or more civil courts of the United States (other than by reason of
contractual submission to such jurisdiction).
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"Early Amortization Event" means, with respect to any Series or Purchased
Interest. any event identified as an Early Amortization Event in the related
Supplement or PI Agreement.
"Early Amortization Period" is defined, for purposes of any Series or
Purchased Interest, in the related Supplement or PI Agreement.
"Eligible Deposit Account" means (a) a segregated trust account maintained
at a national bank with a long-term debt rating of at least A (or, in the case
of a Bank Account, BBB) from S&P, (b) a deposit account maintained with a bank
that has an unsecured long-term debt rating of A, or a short-term rating of at
least A-1, from S&P or (c) another deposit account as to which the Modification
Condition has been satisfied.
"Eligible Investments" means any of the following:
(a) deposit accounts that are established and maintained at a
financial institution, the short-term debt securities or certificates of
deposit of which have at the time of investment the highest short-term
debt or certificate of deposit rating (as the case may be) available from
the Rating Agencies (or, if no outstanding Investor Certificates are
rated, such rating available from S&P), and that are held in the name of
Trustee in trust for the benefit of the Certificateholders, subject to the
exclusive custody and control of Trustee and for which Trustee has sole
signature authority; provided that this clause shall not apply to the
Lockbox Accounts or to the Transaction Accounts;
(b) marketable obligations of the United States of America, the full
and timely payment of principal and interest on which is backed by the
full faith and credit of the United States of America, that have a
maturity date not later than the next succeeding Distribution Date;
(c) marketable obligations directly and fully guaranteed by the
United States of America, the full and timely payment of principal and
interest on which is backed by the full faith and credit of the United
States of America, that have a maturity date not later than the next
succeeding Distribution Date;
(d) banker's acceptances, certificates of deposit and other
interest-bearing obligations denominated in Dollars (subject to the
proviso at the end of this definition), that have a maturity date not
later than the next succeeding Distribution Date;
(e) repurchase agreements (i) that are entered into with any
financial institution having the ratings referred to in clause (a) and
(ii) that are secured by a perfected first priority security interest in
an obligation of the type described in clause
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(b) or (c); provided that such obligation may mature later than the next
succeeding Distribution Date if such bank is required to repurchase such
obligation not later than the next succeeding Distribution Date; and
provided further, that (i) the market value of the obligation with respect
to which such bank has a repurchase obligation, determined as of the date
on which such obligation is originally purchased, shall equal or exceed
102% of the repurchase price to be paid by such bank and (ii) Trustee or a
custodian acting on its behalf shall have possession of the instruments or
documents evidencing such obligations;
(f) guaranteed investment contracts entered into with any financial
institution, the short-term debt securities of which have the highest
short-term debt rating available from the Rating Agencies (or, if no
outstanding Investor Certificates are rated, such rating available from
S&P), that, in each case, have a maturity date not later than the next
succeeding Distribution Date;
(g) commercial paper (except for commercial paper issued by any
Howmet Person) rated at the time of investment not less than "A-1 +" or
the equivalent thereof by the Rating Agencies (or, if no outstanding
Investor Certificates are rated, by S&P) and having a maturity date not
later than the next succeeding Distribution Date; and
(h) freely redeemable shares in open-end money market mutual funds
(including such mutual funds that are offered by the Person who is acting
as Trustee or by any agent of such Person) that (i) maintain a constant
net-asset value and (ii) at the time of such investment have been rated
not less than "AAAm" or the equivalent thereof by S&P;
provided that (A) Trustee shall only acquire banker's acceptances and
certificates of deposit of, and enter into repurchase agreements with,
institutions whose short-term obligations have been rated not less than "A-1+"'
or the equivalent thereof by the Rating Agencies (or, if no outstanding Investor
Certificates are rated, by S&P) and whose long-term obligations have been rated
not less than "AA-" by S&P, (B) the securities, banker's acceptances,
certificates of deposit, other obligations and repurchase agreements described
above shall only constitute "Eligible Investments if and to the extent that
Servicer is satisfied that Trustee will have a perfected security interest
therein for the benefit of the Certificateholders and (C) notwithstanding
anything to the contrary herein or in the other Transaction Documents, the term
"Rating Agency," whenever used in this definition of "Eligible Investments",
shall be deemed to not include DCR to the extent that an investment is rated by
S&P, but not by DCR.
"Eligible Obligor" means, for purposes of any Series (unless otherwise
specified in the related Supplement) at any time, an Obligor that satisfies the
following criteria:
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(a) it is a Domestic Person and is not (except as otherwise
specified for any Series in the related Supplement) (i) the United States
government or any of its agencies or instrumentalities or (ii) a state or
local government agency or instrumentality;
(b) it is not a direct or indirect Subsidiary of Howmet or any other
Person with respect to which Howmet or any of its Subsidiaries owns,
directly or indirectly, 50% or more of the entity's equity interests;
(c) with respect to which no Bankruptcy Event had occurred and was
continuing as of the end of the most recent Calculation Period and is
continuing; provided that this clause shall not apply if a bankruptcy
court has approved the Obligor's payment of its obligations on the
Receivables;
(d) as of the end of the most recent Calculation Period, no more
than 50% of all Receivables of the Obligor were (for reasons other than
disputes) aged more than 90 days past their respective due dates;
(e) as of the end of the most recent Calculation Period, none of the
Receivables of the Obligor were evidenced by promissory notes; and
(f) it is not an Obligor with whom the applicable Seller has a "cash
in advance" or "cash on account" arrangement (but may be an Obligor that
the applicable Seller bills in advance in accordance with that Seller's
customary practices, and not on account of concerns about the
creditworthiness of the Obligor).
"Eligible Receivable" means, for purposes of any Series (unless otherwise
specified in the related Supplement) at any time, a Transferred Receivable:
(a) that arises from the sale of goods or services by a Seller in
the ordinary course of its business;
(b) that represents a bona fide obligation resulting from a sale of
goods that have been shipped or services that have been performed and is
due and payable not more than 120 days after the date on which the invoice
for services or merchandise, the sale of which gave rise to such
Receivable, is provided or delivered;
(c) that, as of that time, has not been written off and is not aged
more than 90 days past its original due date;
(d) that constitutes an account or a general intangible for the
payment of money and not an instrument or chattel paper;
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(e) the Obligor of which is an Eligible Obligor;
(f) with regard to which both the representation and warranty of
Transferor in Section 2.3(a)(ii) of the Pooling Agreement and the
representation and warranty of the relevant Seller in Section 5.1(k) of
the Purchase Agreement are true and correct;
(g) the transfer of which (including the sale by the applicable
Seller to Transferor and the transfer by Transferor to the Trust) does not
contravene or conflict with any law, rule or regulation or any contractual
or other restriction, limitation or encumbrance that applies to the
applicable Seller, Transferor or the Trust, and the sale, assignment or
transfer of which, and the granting of a security interest in which, does
not require the consent of the Obligor thereof or any other Person, other
than any such consent that has been obtained;
(h) that is denominated and payable only in Dollars in the United
States of America and is non-interest bearing; provided that a Receivable
shall not be deemed to be interest-bearing solely as a result of the
applicable Seller's imposition of an interest or other charge on any such
Receivable that remains unpaid for some specified period (but such
interest charge or other charge shall not be included in the Unpaid
Balance of a Receivable for purposes of calculating the Base Amount);
(i) that arises under a Contract that has been duly authorized and
that, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity;
(j) that is not subject to any asserted reduction, cancellation, or
refund or any dispute, offset, counterclaim, lien or defense whatsoever
(including any Contra Account or any other potential reduction on account
of any offsetting account payable of Transferor or the applicable Seller
to an Obligor or funds of an Obligor held by Transferor or the Seller);
provided that a Receivable that is subject only in part to any of the
foregoing shall be an Eligible Receivable to the extent not subject to
reduction, cancellation. refund, dispute, offset, counterclaim, lien or
other defense;
(k) that, together with the Contract related thereto, was created in
accordance with, and conforms in all material respects with, all
applicable laws, rules, regulations, orders, judgments, decrees and
determinations of all courts and other governmental authorities (whether
Federal, state, local or foreign and including usury laws);
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(l) that satisfies all applicable requirements of the Credit and
Collection Policy of the applicable Seller; and
(m) that has not been compromised. adjusted, satisfied,
subordinated, rescinded or modified (including by extension of time or
payment or the granting of any discounts, allowances or credits), except
as permitted by Section 7.2(f) of the Pooling Agreement.
"Eligible Servicer" means (a) Howmet, (b) Trustee or (c) an entity that,
at the time of its appointment as Servicer, (i) is servicing a portfolio of
trade receivables, (ii) is legally qualified and has the capacity to service the
Receivables, (iii) has demonstrated the ability to service professionally and
competently a portfolio of trade receivables similar to the Receivables in
accordance with high standards of skill and care, (iv) is qualified to use the
software that is then being used to service the Receivables or obtains the right
to use or has its own software that is adequate to perform its duties under the
Pooling Agreement and (v) as to which the Modification Condition has been
satisfied.
"Enhancement" means, with respect to any Series or Purchased Interest, any
surety bond, letter of credit, guaranteed rate agreement, maturity guaranty
facility, cash collateral account or guaranty, tax protection agreement,
interest rate swap or other contract or agreement for the benefit of
Certificateholders of the Series or Purchaser of the Purchased Interest.
"Enhancement Provider" means the Person providing any Enhancement, other
than any Certificateholders, the Certificates of which are subordinated to any
Series or class of Certificates.
"Equalization Account" is defined in Section 4.2 of the Pooling Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Estimated Base Amount" is defined in Section 3.5 of the Pooling
Agreement.
"Exchange Date" is defined in Section 6.11(c) of the Pooling Agreement.
"Exempt Holiday" is defined in Section 3.5(c) of the Pooling Agreement.
"Exempt Obligor" means an Obligor that is (a) the United States government
or any of its agencies or instrumentalities, (b) a state or local government
agency or instrumentality, (c) Howmet, (d) a direct or indirect Subsidiary of
Howmet, (e) any other Person with respect to which Howmet or any of its
Subsidiaries owns, directly or indirectly, 50% or more of the equity interests
of such Person, and (f) for purposes of any Supplement or PI Agreement, any
other Person specified in such Supplement or PI Agreement as an Exempt Obligor;
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provided that each of the following requirements must be satisfied with respect
to such Obligor (x) such Obligor has been instructed to make all payments in
respect to its receivables to a location other than to any of the Bank Accounts,
(y) such Obligor can reasonably be expected to follow such instructions and (z)
none of the data included in the Daily Reports, Monthly Reports or other
information supplied to the Trustee or Holders includes any information about
such Obligor or its receivables.
"Existing Pooling Agreement" is defined in Section 1.2 of the Pooling
Agreement.
"Existing Purchase Agreement" is defined in the first recital to the
Purchase Agreement.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Final Distribution Date" is defined in Section 12.2(a) of the Pooling
Agreement.
"Final Scheduled Payment Date" is defined, for purposes of any Series, in
the applicable Supplement, and for purposes of any Purchased Interest, in the
applicable PI Agreement.
"First Issuance Date" means December 13, 1995.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity in the United States of
America or any applicable foreign jurisdiction that exercises executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" means any agreement or arrangement by which any Person directly
or indirectly guarantees, endorses, agrees to purchase or otherwise becomes
contingently liable upon any liability of any other Person (other than by
endorsements of instruments in the course of collection) or guarantees the
payment of distributions upon the shares of any other Person.
"Highest Bid" means the highest cash purchase offer for a Series received
by Servicer pursuant to Section 12.1 of the Pooling Agreement.
"Holdback Account" is defined in Section 4.2 of the Pooling Agreement.
"Holder" means the Person in whose name a Certificate is registered in the
Certificate Register or a Person who holds a Purchased Interest.
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"Howmet" means Howmet Corporation, a Delaware corporation.
"Howmet Person" means Howmet and each of its Affiliates (other than
Transferor).
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of Howmet, any qualification or exception to such opinion or certification that
is of a "going concern" or similar nature.
"Indebtedness" of any Person means all of that Person's obligations for
borrowed money, obligations evidenced by bonds, debentures, notes or other
similar instruments, obligations as lessee under leases that are required by
GAAP to be recorded as capitalized leases and obligations to pay the deferred
purchase price of property or services.
"Indemnified Losses" is defined in Section 7.3 of the Pooling Agreement.
"Indemnified Party" is defined in Section 7.3 of the Pooling Agreement.
"Initial Cut-Off Date" means the Business Day immediately preceding the
First Issuance Date.
"Intercreditor Agreement" means an intercreditor agreement, in form and
substance satisfactory to the Trustee, between the Trustee and a secured
creditor of a Seller.
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Invested Amount" is defined, with respect to any Series or Purchased
Interest, in the related Supplement or PI Agreement.
"Investor Certificateholder" means the Person in whose name an Investor
Certificate is registered in the Certificate Register.
"Investor Certificates" means the Certificates issued pursuant to any
Supplement.
"Investor Exchange" is defined in Section 6.10(a) of the Pooling
Agreement.
"Issuance" is defined in Section 6.10(a) of the Pooling Agreement.
"Issuance Date" is defined in Section 6.10(b) of the Pooling Agreement.
"Issuance Notice" is defined in Section 6.10(b) of the Pooling Agreement.
"Lead Placement Agent" means any Person designated as such by Transferor
in connection with the issuance of any Investor Certificates.
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"Letter of Representations" means the agreement among Transferor, Trustee
and the applicable Clearing Agency, with respect to any Book-Entry Certificates,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Lockbox Accounts" means the bank accounts, maintained at those certain
locations described in Schedule 1 to the Pooling Agreement, into which
Collections from Receivables are deposited, and any bank account that is
hereafter created in accordance with, and to perform the functions contemplated
for ""Lockbox Accounts" in, Section 3.3 of the Pooling Agreement.
"Lockbox Agreement" means any of the letter agreements delivered in
connection with the Pooling Agreement and any other letter agreement,
substantially in the form of Exhibit A to the Pooling Agreement (or such other
form as to which the Modification Condition is satisfied), among a Lockbox Bank,
one or more Sellers, Servicer and Trustee that relates to one or more Lockbox
Accounts, as they may be amended, supplemented or otherwise modified from time
to time.
"Lockbox Bank" means any of the banks at which one or more Lockbox
Accounts are maintained from time to time.
"Loss to Liquidation Ratio" means, as calculated in each Monthly Report, a
fraction (a) the numerator of which is the aggregate Unpaid Balance of
Receivables (net of recoveries) that were written off as uncollectible or
(without duplication) converted into promissory notes during the three preceding
Calculation Periods in accordance with the Credit and Collection Policy, and (b)
the denominator of which is the aggregate amount of collections on the
Receivables received during such three Calculation periods.
"Majority Investors" means Holders of Investor Certificates and Purchasers
that collectively evidence more than 50% of the outstanding principal amount of
all Investor Certificates and Purchased Interests.
"Mandatory Terminating Seller" is defined in Section 1.8(c) of the
Purchase Agreement.
"Master Collection Account" is defined in Section 4.2 of the Pooling
Agreement.
"Material Adverse Effect" means, with respect to Transferor, any Howmet
Person, any Servicer and any event or circumstance at any time, a material
adverse effect on (a) the ability of that Person to perform its obligations
under any Transaction Document in any material respect or (b) the validity,
enforceability or collectibility of any Receivables, Related Assets or Contracts
that, individually or in the aggregate, represent or evidence a right to payment
in excess of 5% of the aggregate Unpaid Balance of the Receivables at such time;
provided, that for the purpose of determining whether any Adverse Claim or other
event
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would result in a Material Adverse Effect, the effect of such event or
circumstance shall be considered in the aggregate with the effect of all other
Adverse Claims (including Permitted Adverse Claims) or other events and
circumstances occurring or existing at the time of such determination.
"Member Organization" is defined in Section 6.11(c) of the Pooling
Agreement.
"Modification Condition" means, with respect to any action, that each
Rating Agency has confirmed in writing that such action will not result in a
reduction or withdrawal of the rating of any outstanding Series with respect to
which it is a Rating Agency, or if no outstanding Investor Certificates have
been rated, the Trustee shall have consented in writing to such action;
provided, however, that the definition may be modified by a Supplement or PI
Agreement with respect to the related Series or Purchased Interest and
subsequent Series and Purchased Interests.
"Monthly Report" is defined in Section 3.5(d) of the Pooling Agreement.
"Net Invested Amount" is defined, for purposes of any Series, in the
applicable Supplement.
"New Issuance" is defined in Section 6.10(a) of the Pooling Agreement.
"Noncomplying Receivables and Dilution Adjustment" is defined in Section
3.1(b) of the Purchase Agreement.
"Obligations" means (a) all obligations of Buyer, the Sellers and the
Servicer to the Trustee, the Trust, any other Indemnified Party, the Investor
Certificateholders and their respective successors, permitted transferees and
assigns, arising under or in connection with the Transaction Documents, and (b)
all obligations of a Seller to Buyer, any other RPA Indemnified Party and their
respective successors, transferees and assigns, arising under or in connection
with the Transaction Documents, in each case howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.
"Obligor" means a Person obligated to make payments on a Receivable.
"Officer's Certificate" means, unless otherwise specified in the Pooling
Agreement or in any Supplement, a certificate signed by an Authorized Officer of
Transferor or the initial Servicer, as the case may be, or, in the case of a
Successor Servicer, a certificate signed by the President, any Vice President,
Assistant Treasurer or the financial controller (or an officer holding an office
with equivalent or more senior responsibilities) of such Successor Servicer,
that, in the case of any of the foregoing, is delivered to Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who shall be
reasonably acceptable to Trustee and, if any outstanding Investor Certificates
have been rated and if the Rating Agencies are addressees, the Rating Agencies.
"Paying Agent" means any paying agent appointed pursuant to Section 6.6 of
the Pooling Agreement and shall initially be Trustee.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Adverse Claims" means (a) ownership or security interests
arising under the Transaction Documents, (b) liens for taxes, assessments or
charges of any governmental authority (other than Tax or ERISA Liens) and liens
of landlords, carriers, warehousemen, mechanics and materialmen imposed by law
in the ordinary course of business, in each case (i) for amounts not yet due or
(ii) which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP, provided that the aggregate amount secured
by all liens referred to in this clause (ii) does not exceed $1,000,000 (or for
purposes of any Series or Purchased Interest, any different amount that may be
specified in the applicable Supplement or PI Agreement) and (c) any Tax or ERISA
Lien, the existence of which does not give rise to an Early Amortization Event.
"Permitted Terminating Seller" is defined in Section 1.8(a) of the Pooling
Agreement.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"PI Agreement" means an agreement or agreements executed and delivered in
connection with the sale of a Purchased Interest, as amended, supplemented or
otherwise modified from time to time.
"Pooling Agreement" means the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 among Transferor, as transferor, Howmet,
as Servicer, and Trustee, as it may be amended, supplemented or otherwise
modified from time to time.
"Previously Terminated Seller Amount" is defined in Section 1.8 of the
Purchase Agreement.
"Principal Funding Account" is defined in Section 4.2 of the Pooling
Agreement.
"Private Holder" shall mean, in respect of any Certificate or Purchased
Interest, each holder of a right (including a participation right) to receive
interest, principal or other
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<PAGE> 162
payments with respect to such Certificate or Purchased Interest or any other
right which the Transferor reasonably determines would be treated as an interest
in a partnership within the meaning of Treasury Regulation Section 1.7704-1
assuming the Trust were classified as a partnership for Federal income tax
purposes, other than certificates (or other such interests) with respect to
which an opinion is rendered that such certificates (or other such interests)
will be treated as debt for federal income tax purposes and any holder of a
right to receive any amount in respect of the Transferor Certificate. A Person
holding more than one interest in the Trust, each of which separately would
cause such Person to be a Private Holder, shall be treated as a single Private
Holder. Any Person that owns an interest in a Private Holder that is or would be
a partnership, an S corporation or a grantor trust under the Internal Revenue
Code (as reasonably determined by Transferor) shall be treated as a Private
Holder.
"Pro Forma Financial Data" is defined in Section 5.1(i) of the Purchase
Agreement.
"Process Agent" is defined in Section 10.7 of the Purchase Agreement.
"Program" means the transactions contemplated in the Transaction
Documents.
"Publication Date" is defined in Section 9.3(a) of the Pooling Agreement.
"Purchase" means each purchase of Receivables and Related Assets by
Transferor from a Seller under the Purchase Agreement.
"Purchase Agreement" means the Amended and Restated Receivables Purchase
Agreement, dated as of April 18, 1996, among the Sellers and Transferor, as it
may be amended, supplemented or otherwise modified from time to time.
"Purchase Date" is defined in Section 6.10(g) of the Pooling Agreement.
"Purchase Discount Reserve Ratio" is defined in Section 2.2(b) of the
Purchase Agreement.
"Purchase Price" is defined in Section 2.1(b) of the Purchase Agreement.
"Purchase Price Credit" is defined in Section 3.1(d) of the Purchase
Agreement.
"Purchase Price Percentage" is defined in Section 2.2(a) of the Purchase
Agreement.
"Purchase Termination Date" means the earlier to occur of (a) the date
specified by the Sellers pursuant to Section 8.1 of the Purchase Agreement and
(b) any event referred to in Section 8.2 of the Purchase Agreement.
"Purchased Assets" is defined in Section 1.1 of the Purchase Agreement.
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"Purchased Interest" is defined in Section 4.1 of the Pooling Agreement.
"Purchased Receivables" is defined in Section 1.1 of the Purchase
Agreement.
"Purchaser" means a purchaser, or any owner by permitted assignment, of a
Purchased Interest.
"Rating Agency" means each statistical rating agency, if any, that, at the
request of the Seller or Transferor, has rated any then-issued and outstanding
Series of Investor Certificates.
"Receivable" means, for purposes of any Series (unless otherwise specified
in the related Supplement), any right of any Seller to payment, whether
constituting an account, chattel paper, instrument, general intangible or
otherwise, arising from the sale of goods, services or future services by such
Seller and includes the right to payment of any interest or finance charges and
other obligations with respect thereto; provided that "Receivable" shall not
include any such right to payment from an Exempt Obligor
"Receivables Pool" means at any time all Receivables then held by the
Trust.
"Record Date" means the Business Day that is three Business Days prior to
a Distribution Date.
"Records" means all Contracts, purchase orders, invoices and other
agreements, documents, books, records and other media for the storage of
information (including tapes, disks, punch cards, computer programs and
databases and related property) maintained by Transferor, the Sellers or
Servicer with respect to the Transferred Assets and/or the related Obligors.
"Recoveries" means all Collections received by the Trust in respect of any
Write-Off held by the Trust.
"Regulation S Book-Entry Certificate" is defined in Section 6.11(c) of the
Pooling Agreement.
"Regulation S Temporary Book-Entry Certificate" is defined in Section
6.11(c) of the Pooling Agreement.
"Related Assets" is defined in Section 1.1 of the Purchase Agreement.
"Related Contributed Assets" is defined in Section 2.1 of any Contribution
Agreement.
"Related Purchased Assets" is defined in Section 1.1 of the Purchase
Agreement.
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<PAGE> 164
"Related Security" means, with respect to any Receivable, (a) all of the
applicable Seller's right, title and interest in and to the goods, if any,
relating to the sale that gave rise to the Receivable, (b) all other security
interests or liens and property subject thereto from time to time purporting to
secure payment of the Receivable, whether pursuant to the Contract related to
the Receivable or otherwise, and (c) all letters of credit, guarantees and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of the Receivable, whether pursuant to the Contract related to
the Receivable or otherwise.
"Related Transferred Assets" is defined in Section 2.1(a) of the Pooling
Agreement.
"Report Date" means the Business Day that is three Business Days prior to
a Distribution Date.
"Repurchase Amount" is defined in Section 12.4 of the Pooling Agreement.
"Repurchase Distribution Date" is defined in Section 12.4 of the Pooling
Agreement.
"Required Investors" means Holders of Investor Certificates and Purchasers
that evidence at least 66-2/3% of the total outstanding principal amount of
Investor Certificates and Purchased Interests; provided, however, that the
definition may be modified by a Supplement or PI Agreement with respect to the
related Series or Purchased Interest and subsequent Series and Purchased
Interests.
"Required Receivables" is defined, for purposes of any Series, in the
applicable Supplement.
"Required Series Holders" means with respect to any action to be taken by
Investor Certificateholders of any Series, unless otherwise specified in a
Supplement with respect to the related Series, Investor Certificateholders that
evidence at least 66-2/3% of the principal amount of those Certificates.
"Responsible Officer" means, when used with respect to Trustee, (a) any
officer within the Corporate Trust Office (or any successor group of Trustee),
including any vice president, assistant vice president or any officer or
assistant trust officer of Trustee customarily performing functions similar to
those performed by the persons who hold the office of vice president, assistant
vice president, or assistant secretary and (b,) any other officer within the
Corporate Trust Office with direct responsibility for the administration of the
Pooling Agreement or to whom any corporate trust matter is referred at Trustee's
Corporate Trust Office because of his knowledge of and familiarity with the
particular subject.
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<PAGE> 165
"Revolving Period" means, with respect to any Series, the period before
the commencement of the earliest of any applicable amortization period,
accumulation period or early amortization period (other than a prepayment
accumulation period with respect to a partial prepayment of any such Series) for
any such Series; provided that the Revolving Period for any such Series shall be
suspended during a prepayment accumulation period with respect to a partial
prepayment of any such Series.
"RPA Indemnified Losses" is defined in Section 9.1 of the Purchase
Agreement.
"RPA Indemnified Party" is defined in Section 9.1 of the Purchase
Agreement.
"S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means each Person from time to time party to the Purchase
Agreement as a "Seller."
"Seller Assignment Certificate" means an assignment by a Seller,
substantially in the form of Exhibit C to the Purchase Agreement, evidencing
Transferor's acquisition of the Receivables (excluding the Contributed
Receivables) and Related Assets generated by the Seller, as it may be amended,
supplemented or otherwise modified from time to time.
"Seller Change Event" is defined in Section 3.5(e) of the Pooling
Agreement.
"Seller Dilution Adjustment" is defined in Section 3.5(b) of the Purchase
Agreement.
"Seller Guaranty" means the Guaranty, dated December 13, 1995, by Howmet
of the Obligations of the other Sellers, as it may be amended, supplemented or
otherwise modified from time to time.
"Seller Maturity Date" is defined in Section 3.2 of the Purchase
Agreement.
"Seller Noncomplying Receivable" means a Transferred Receivable that does
not meet the criteria set forth in the definition of Eligible Receivables.
"Seller Noncomplying Receivables Adjustment" is defined in Section 3.5(a)
of the Purchase Agreement.
"Seller Receivables Review" is defined in Section 6.1(c) of the Purchase
Agreement.
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<PAGE> 166
"Seller Transaction Documents" means the Purchase Agreement, the Seller
Assignment Certificates and the Account Agreements.
"Senior Interest" is defined in each Buyer Note.
"Series" means any series of Investor Certificates issued pursuant to
Section 6.10 of the Pooling Agreement.
"Series Collection Allocation Percentage" means, for any Series or
Purchased Interest at any time, the percentage equivalent of a fraction the
numerator of which is the Required Receivables for that Series or Purchased
Interest and the denominator of which is the sum of the Required Receivables for
all then outstanding Series and Purchased Interests.
"Series Interest" is defined in Section 4.1 of the Pooling Agreement.
"Series Loss Allocation Percentage" means, for any Series or Purchased
Interest for purposes of any Monthly Report, the percentage equivalent of a
fraction the numerator of which is the Invested Amount of that Series or
Purchased Interest and the denominator of which is the sum of the Invested
Amounts of all then outstanding Series and Purchased Interests, in each case
determined as of the beginning of the related Calculation Period (or such other
date as may be specified in the related Supplement or PI Agreement).
"Servicer" means at any time the Person then authorized pursuant to
Article III of the Pooling Agreement to service, administer and collect
Receivables and Related Transferred Assets.
"Servicer Default" is defined in Section 10.1 of the Pooling Agreement.
"Service Transfer" is defined in Section 10.2(b) of the Pooling Agreement.
"Servicing Fee" is defined in Section 3.4 of the Pooling Agreement.
"Shared Investor Collections" means any funds identified as such in any
Supplement or PI Agreement.
"Shortfall" is defined, for any Series or Purchased Interest, in the
related Supplement or PI Agreement.
"Specified Assets" is defined in Section 1.1 of the Purchase Agreement.
"Specified Receivables" is defined in Section 1.1 of the Purchase
Agreement.
"Sub-Servicer" is defined in Section 3.1 of the Pooling Agreement.
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<PAGE> 167
"Subsidiary" means, with respect to any Person, any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person.
"Successor Servicer" is defined in Section 10.2(a) of the Pooling
Agreement.
"Supplement" means each supplement to the Pooling Agreement executed by
Transferor, Servicer and Trustee to specify the terms of a Series of
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time.
"Tax or ERISA Lien" means a lien arising under Section 6321 of the
Internal Revenue Code or Section 302(f) or 4068 of ERISA.
"Tax Opinion" means, with respect to any action and any Series of Investor
Certificates or Purchased Interest, an Opinion of Counsel meeting the
requirements specified in the related Supplement or PI Agreement.
"Terminating Seller" is defined in Section 1.8(a) of the Purchase
Agreement.
"Termination Effective Date" is defined in Section 1.8(d) of the Purchase
Agreement.
"Termination Notice" is defined in Section 10.1 of the Pooling Agreement.
"Transaction Accounts" is defined in Section 4.2 of the Pooling Agreement.
"Transaction Documents" means the Purchase Agreement, the Pooling
Agreement, the Seller Guaranty, each Supplement, each PI Agreement, each
Contribution Agreement and each other agreement designated as a Transaction
Document in any Supplement or PI Agreement, as the same may from time to time be
amended, supplemented, amended and restated or otherwise modified in accordance
with the terms of the Transaction Documents.
"Transfer Agent and Registrar" means any transfer agent and registrar
appointed pursuant to Section 6.3 of the Pooling Agreement and shall initially
be Trustee.
"Transferor" means Blade Receivables Corporation, a Nevada corporation.
"Transferor Certificate" is defined in Section 4.1 of the Pooling
Agreement, substantially in the form of Exhibit E to the Pooling Agreement, as
such Exhibit may be amended, supplemented or modified from time to time in
accordance with the terms of the Transaction Documents.
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<PAGE> 168
"Transferor Interest" is defined in Section 4.1 of the Pooling Agreement.
"Transferred Assets" is defined in Section 2.1 of the Pooling Agreement.
"Transferred Receivable" is defined in Section 2.1 of the Pooling
Agreement.
"Trust" means the trust created by the Pooling Agreement, which shall be
known as the Blade Receivables Master Trust.
"Trustee" means Manufacturers and Traders Trust Company, in its capacity
as agent for the Certificateholders and the Purchasers, or its
successor-in-interest, or any successor trustee appointed as provided in the
Pooling Agreement.
"Turnover Days" means, at any time, the product of (a) the sum of the
beginning and ending Unpaid Balances of Receivables during the immediately
preceding Calculation Period divided by two, multiplied by (b) the number of
days in the immediately preceding Calculation Period, divided by the aggregate
amount payable pursuant to invoices giving rise to Receivables that were
generated during the preceding Calculation Period.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction or jurisdictions.
"Unmatured Early Amortization Event" means any event that, with the giving
of notice or lapse of time, or both, would become an Early Amortization Event.
"Unpaid Balance" of any Receivable means at any time the unpaid amount
thereof as shown in the books of Servicer at such time.
"Unrestricted Regulation S Book-Entry Certificate" is defined in Section
6.11(c) of the Pooling Agreement.
"Voluntary Terminating Seller" is defined in Section 1.8(b) of the
Purchase Agreement.
"Write-Off" means any Receivable that, consistent with the applicable
Credit and Collection Policy, has been written off as uncollectible.
"144A Book-Entry Certificate" is defined in Section 6.12(b) of the Pooling
Agreement.
B. Other Interpretative Matters. For purposes of any Transaction Document,
unless otherwise specified therein: (1) accounting terms used and not
specifically defined therein shall be construed in accordance with GAAP; (2)
terms used in Article 9 of the New York
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<PAGE> 169
UCC, and not specifically defined in that Transaction Document, are used therein
as defined in such Article 9; (3) the term "including means "including without
limitation," and other forms of the verb "to include" have correlative meanings;
(4) references to any Person include such Person's permitted successors and
assigns; (5) in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding"; (6) the words "hereof", "herein"
and "hereunder" and words of similar import refer to such Transaction Document
as a whole and not to any particular provision of such Transaction Document; (7)
references to "Section ", "Schedule" and "Exhibit" in such Transaction Document
are references to Sections , Schedules and Exhibits in or to such Transaction
Document; (8) the various captions (including any table of contents) are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of such Transaction Document; and (9) references to any statute
or regulation refer to that statute or regulation as amended from time to time,
and include any successor statute or regulation of similar import.
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<PAGE> 170
PROJECT BLADE - TAKE OUT
SERIES 1996-1 SUPPLEMENT
to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
<PAGE> 171
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS ........................... 1
SECTION 1.1 Definitions .......................................... 1
SECTION 1.2 Modification Condition ............................... 22
SECTION 1.3 Incorporation of Terms ............................... 22
ARTICLE II DESIGNATION .................................................. 23
SECTION 2.1 Designation .......................................... 23
SECTION 2.2 Group I .............................................. 23
SECTION 2.3 Investor Ownership Percentage ........................ 23
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS ..................... 24
SECTION 3.1 Conditions to Issuance ............................... 24
SECTION 3.2 Use of Proceeds ...................................... 24
ARTICLE IV PAYMENTS AND ALLOCATIONS ..................................... 24
SECTION 4.1 Interest; Additional Amounts ......................... 24
SECTION 4.2 Daily Calculations and Group Allocations ............. 25
SECTION 4.3 Allocations of Daily Group Collections
(Other Than in a Group Amortization Period) .... 25
SECTION 4.4 Allocations of Daily Group Collections
During a Group Amortization Period ............. 27
SECTION 4.5 Withdrawals from the Equalization Account
and Principal Funding Account .................. 29
SECTION 4.6 Available Subordinated Amount ........................ 29
SECTION 4.7 Write-Offs and Recoveries ............................ 30
SECTION 4.8 Certain Dilution in a Group Amortization Period ...... 31
SECTION 4.9 Optional Early Pay Out ............................... 32
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations 33
SECTION 4.11 Tax Opinion .......................................... 36
SECTION 4.12 Reset of Benchmark Percentages and
Special Concentration Limits ................... 37
ARTICLE V DISTRIBUTIONS AND REPORTS ..................................... 37
SECTION 5.1 Distributions ......................................... 37
SECTION 5.2 Special Distributions on the Refinancing
Date ........................................... 38
SECTION 5.3 Payments in Respect of Transferor
Certificate .................................... 39
SECTION 5.4 Daily Reports and Monthly Reports ..................... 39
<PAGE> 172
Page
----
SECTION 5.5 Annual Tax Information ............................... 39
SECTION 5.6 Periodic Perfection Certificate ...................... 40
ARTICLE VI EARLY AMORTIZATION EVENTS ................................... 40
SECTION 6.1 Early Amortization Events ............................ 40
SECTION 6.2 Early Amortization Period 43
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES ............... 43
SECTION 7.1 Optional Redemption of Investor Interests ............ 43
SECTION 7.2 Termination .......................................... 44
SECTION 7.3 Indemnification by Transferor ........................ 44
SECTION 7.4 Indemnification by Servicer .......................... 45
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law ........................................ 45
SECTION 8.2 Counterparts ......................................... 45
SECTION 8.3 Severability of Provisions ........................... 46
SECTION 8.4 Amendment, Waiver, Etc. .............................. 46
SECTION 8.5 Trustee .............................................. 46
SECTION 8.6 Instructions in Writing .............................. 46
EXHIBITS
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
EXHIBIT B Form of Daily Report
EXHIBIT C Form of Monthly Report
ii
<PAGE> 173
This SERIES 1996-1 SUPPLEMENT, dated as of April 18, 1996 (this
"Supplement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada
corporation, as Transferor, HOWMET CORPORATION, a Delaware corporation
("Howmet"), as Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of December 13,
1995, as amended and restated in its entirety by the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18, 1996 (as the same may be
further amended, supplemented or otherwise modified from time to time, and as
supplemented hereby, the "Pooling Agreement"), among Transferor, Servicer and
Trustee, Transferor may from time to time direct Trustee to issue and
authenticate, on behalf of the Trust, one or more Series of Certificates in one
or more Groups of Series representing undivided interests in the Transferred
Assets. Certain terms applicable to a Series are to be set forth in a
Supplement. This Supplement is a "Supplement" as that term is defined in the
Pooling Agreement.
Pursuant to this Supplement, Transferor and Trustee shall create a Series
of Certificates and specify certain of their terms.
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS
SECTION 1.1 Definitions. (a) Capitalized terms used and not otherwise
defined herein are used as defined in Appendix A to the Pooling Agreement. This
Supplement shall be interpreted in accordance with the conventions set forth in
Part B of that Appendix A.
(b) Each reference in this Supplement to funds on deposit in the Carrying
Cost Account, the Equalization Account or the Principal Funding Account (or
similar phrase) refers only to funds in the administrative sub-accounts of those
Accounts that are allocated to the Series in Group I. Unless the context
otherwise requires, in this Supplement: (i) each reference to a "Dally Report"
or "Monthly Report" refers to a Dally Report or Monthly Report for Group I; (ii)
each reference to the "Servicing Fee" refers to the Servicing Fee allocable to
Group I; (iii) each reference to the "Series Collection Allocation Percentage"
or the "Series Loss Allocation Percentage" refers to Group I's Series Collection
Allocation Percentage or Series Loss Allocation Percentage, and (iv) each
reference to the Transaction Documents shall include a reference to the
Certificate Purchase Agreements.
(c) Each capitalized term defined below relates only to the Series 1996-1
Certificates and to no other Series of Certificates (except to the extent that
certain of such terms are explicitly used as defined herein in any Supplement
relating to another Series in Group I). Whenever used in this Supplement, the
following words and phrases shall have the following meanings:
<PAGE> 174
"ABR Tranche" means, at any time, the portion of the Series 1996-I
Invested Amount that is designated by Transferor in accordance with a
Certificate Purchase Agreement to accrue interest based on the Alternate Base
Rate.
"Acquisition Amount" is defined in Section 2.3.
"Additional Amounts" means (a) as to the Series 1996-1 Certificates, the
Prepayment Premium and other amounts payable pursuant to Sections 4.3, 4.5, 4.6
and 10.5 of the Class A Certificate Purchase Agreement and amounts payable
pursuant to Sections 4.3, 4.5, 4.6 and 10.5 of the Class B Certificate Purchase
Agreement, and (b) as to any other Series in Group I, any amounts identified as
"Additional Amounts" in the related Supplement.
"Adjusted Eligible Receivables" means, on any Business Day, the result of
(a) the aggregate Unpaid Balance of Eligible Receivables held by the Trust on
that day, minus (b) the Unapplied Cash held by the Trust on that day, plus (c)
the Aggregate Retained Balances, in each case as shown in the Daily Report for
such day.
"Affected Party" shall mean, with respect to any Structured Lender, any
Support Bank of such Structured Lender.
"Aged Receivables Ratio" means, as calculated in each Monthly Report as of
the Cut-Off Date for the related Calculation Period, a fraction (expressed as a
percentage) having (a) a numerator that is the sum of (i) the aggregate Unpaid
Balance of Receivables that remained outstanding 121 to 150 days after their
respective due dates, as determined as of the Cut-Off Date for such Calculation
Period, plus (ii) the aggregate Unpaid Balance of Receivables that were written
off as uncollectible during the most recently ended Calculation Period and that,
if not so written off, would have been outstanding not more than 120 days after
their respective due dates, as determined as of that Cut-Off Date, and (b) a
denominator that is the aggregate amount payable pursuant to invoices giving
rise to Receivables that were generated during the Calculation Period that
occurred five Calculation Periods prior to the most recently ended Calculation
Period. as determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means The First National Bank of Chicago, in its capacity as Agent
under (and as defined in) the Certificate Purchase Agreements, together with its
respective successors in such capacity. The Agent is an "Agent" for purposes of
the Pooling Agreement.
"Aggregate Retained Balances" means, on any Business Day, the aggregate of
the balances retained in Lockbox Accounts or Concentration Accounts for items in
the process of collection but for which funds have not been made available by
the related Lockbox Bank or Concentration Account Bank, provided that (i) no
notice of insufficient funds or similar
2
<PAGE> 175
situation shall exist with respect thereto and (ii) the Unpaid Balance of
Receivables shall have been reduced by an amount equal to such balances.
"Alternate Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest announced, from time to time, by Agent as its
prime commercial rate for United States dollar loans made in the
United States for any day, and
(b) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime commercial
rate announced by the Agent shall become effective without prior notice to
Transferor or the Servicer as of 12:01 a.m., New York City time, on the Business
Day on which each change in the prime commercial rate is announced by the Agent.
The prime commercial rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged by the Agent to any customer. The Agent
may make commercial loans or other loans at rates of interest at, above or below
the prime commercial rate.
"Amortization Period" means the period (x) beginning on the earlier of (i)
the date on which a termination notice is given by the Sellers pursuant to
Section 8.1 of the Purchase Agreement and (ii) the first day of the Calculation
Period that begins on June 1, 2000, and (y) ending on the earlier of (i) the
Expected Final Payment Date and (ii) the date, if any, on which an Early
Amortization Period begins; provided that there will be no Amortization Period
if an Early Amortization Period commences on or prior to the date specified
above for the beginning of the Amortization Period.
"Applicable Ratings Factor" means the Class A Ratings Factor or the Class
B Ratings Factor, as specified in each calculation where the Applicable Ratings
Factor is used.
"Approval Condition" means, with respect to any event or change in the
terms applicable to this Supplement or the Series 1996-I Certificates, such
event or change shall have been approved in writing, prior to becoming
effective, by the Agent and the Majority Class B Purchasers.
"ASA Measuring Period" means, for any Cut-Off Date falling in a Group
Amortization Period, the Calculation Period ending on that Cut-Off Date (or the
portion thereof falling after the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization Period).
"Available Subordinated Amount" means, at any time during a Group
Amortization Period, the amount calculated pursuant to Section 4.6.
3
<PAGE> 176
"Base Amount" means, on any Business Day, the result of the following
formula:
[NER x SCAP x (100%-CBRR)]-CASD-CCRR
where:
NER = the Net Eligible Receivables as reported in the Daily Report for
that Business Day;
SCAP = the Series Collection Allocation Percentage for that Business Day;
CBRR = the Class B Reserve Ratio in effect for that Business Day;
CASD = the Class A Subordination Deficit for that Business Day; and
CCRR = the Carrying Cost Receivables Reserve as reported in the Daily
Report for such day.
"Basic Concentration Limit" means, with respect to a Concentration Unit on
any day, (i) if such Concentration Unit includes a Special Obligor, the Special
Concentration Limit for such Special Obligor, and (ii) otherwise, the
Concentration Limit applicable to the Parent for such Concentration Unit.
"Carrying Cost Receivables Reserve" means, on any Business Day, the result
of:
(a) the Current Carrying Costs; plus
(b) the product of (i) the Class A Invested Amount, multiplied by
(ii) 1.5 times the weighted average of the interest rates on Class A
Certificates, multiplied by (iii) a fraction the numerator of which is the
product of two and the number of Turnover Days and the denominator of
which is 360; plus
(c) the product of (i) the Class B Invested Amount, multiplied by
(ii) 1.5 times the weighted average of the interest rates on the Class B
Certificates, multiplied by (iii) a fraction the numerator of which is the
product of two and the number of Turnover Days and the denominator of
which is 360; plus
(d) the product of (i) the Series Collection Allocation Percentage
on the next preceding Distribution Date, multiplied by (ii) the aggregate
Unpaid Balance of Receivables on the next preceding Distribution Date,
multiplied by (iii) 2%, multiplied by (iv) a fraction the numerator of
which is the product of two and the number of Turnover Days and the
denominator of which is 360; plus
(e) if there is any Series in Group I in addition to the Series
1996-1 Certificates, the Carrying Cost Receivables Reserve Increments for
each such other Series in Group I (as defined, and calculated as provided,
in the related Supplement); minus
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(f) the balance on deposit in the Carrying Cost Account at the
beginning of that Business Day.
"Category One Balance" is defined in Section 4.10.
"Category One Eligibles" is defined in Section 4.10.
"Category One Obligors" means the following persons: Alfa Romeo Avio
S.p.A., ABB Power Generation Ltd., Boeing Canada Technology Ltd., Fiat Avio
S.p.A., General Electric Canada Inc., Hitachi Ltd., KLM Royal Dutch Airlines,
Mitsubishi Heavy Industries America, Inc., Mitsui & Co. USA, Inc., Motoren-Und
Turbinen-Union Munchen GmbH, Pratt & Whitney Canada Inc., Rolls-Royce PLC,
Siemens A.G. KWU, and Walbar of Canada Inc.
"Category Three Balance" is defined in Section 4.10.
"Category Three Eligibles" is defined in Section 4.10.
"Category Three Excess Concentration" is defined in Section 4.10.
"Category Three Obligors" means Foreign Obligors that are not Category One
Obligors or Category Two Obligors.
"Category Two Balance" is defined in Section 4.10.
"Category Two Eligibles" is defined in Section 4.10.
"Category Two Excess Concentration" is defined in Section 4.10.
"Category Two Obligors" means Foreign Obligors (other than Category One
Obligors) with principal places of business in Canada, Germany, Italy,
Netherlands, Switzerland, England or Sweden.
"Certificate Purchase Agreements" means the Class A Certificate Purchase
Agreement and the Class B Certificate Purchase Agreement.
"Certificate Rate" means, at any time, the weighted average of the
interest rates on all outstanding Series 1996-1 Certificates at that time.
"Certificate Spread" means:
(a) with respect to the Class A Certificates, (i) .50% per annum in
the case of Eurodollar Tranches, and (ii) 0% per annum in the case of the
ABR Tranche; and
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(b) with respect to the Class B Certificates, (i) .80% per annum in
the case of the Eurodollar Tranche, and (ii) 0% per annum in the case of
the ABR Tranche.
"Class A Certificate" is defined in Section 2.1. Each Class A Certificate
shall be substantially in the form of Part 1 of Exhibit A.
"Class A Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class A) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class A Certificates and the Agent.
"Class A Concentration Factor" means, as of any Cut-Off Date, the greatest
of:
(i) 1.333 times the "Benchmark Percentage" for purposes of clause
(c) of the definition of "Concentration Limit,"
(ii) two times the "Benchmark Percentage" for purposes of clause (d)
of that definition, and
(iii) the sum of (A) all Special Concentration Limits, if any, plus
(B) the product of (x) the "Benchmark Percentage" for purposes of clause
(e) of the definition of Concentration Limit times (y) the excess of four
over the number of Special Obligors.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made pursuant to the Class A Certificate
Purchase Agreement at or prior to that time, reduced (but not below zero) by (a)
the aggregate amount of all distributions that have been made to the Holders of
the Class A Certificates on account of principal, and (b) the amount of all
Investor Write-Offs that have been applied to reduce the Class A Invested Amount
(net of Investor Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the Class A Invested Amount).
"Class A Minimum Reserve Ratio" means the sum, as of any Cut-Off Date, of
(a) the Class A Concentration Factor for that Cut-Off Date plus (b) the product
of the average of the Dilution Ratios for the period of 12 preceding Calculation
Periods ending on that Cut-Off Date, multiplied by the Dilution Horizon Variable
for that Cut-Off Date.
"Class A Purchases" means Purchases made in respect of Class A
Certificates.
"Class A Ratings Factor" means 2.0.
"Class A Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class A Ratings Factor.
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"Class A Required Reserves" means, at any time, the product of (a) the Net
Eligible Receivables multiplied by (b) the Class A Reserve Ratio multiplied by
(c) the Series Collection Allocation Percentage.
"Class A Reserve Ratio" means, during any Distribution Period, the greater
of (a) the Class A Minimum Reserve Ratio and (b) the Class A Required Reserve
Ratio, each as calculated in the Monthly Report required to be delivered on the
Report Date immediately prior to the start of that Distribution Period; provided
that during the period from the date hereof to the first Distribution Date
thereafter the Class A Reserve Ratio shall be 26.01%.
"Class A Subordination Deficit" means, on any Business Day, the positive
result (if any) of (a) the Class A Required Reserves, minus (b) the sum of (i)
the Class B Required Reserves plus (ii) the outstanding principal amount of all
Subordinated Classes (all calculated as of the beginning of that Business Day);
provided that at any time when no Senior Class is outstanding the Class A
Subordination Deficit shall equal zero.
"Class B Certificate" is defined in Section 2.1. Each Class B Certificate
shall be substantially in the form of Part 2 of Exhibit A.
"Class B Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class B) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class B Certificates and the Agent.
"Class B Concentration Factor" means, as of any Cut-Off Date, the greatest
of:
(i) the "Benchmark Percentage" for purposes of clause (c) of the
definition of "Concentration Limit,"
(ii) 1.5 times the "Benchmark Percentage" for purposes of clause (d)
of the definition of "Concentration Limit," and
(iii) the sum of (A) all Special Concentration Limits, if any, plus
(B) the product of (x) the "Benchmark Percentage" for purposes of clause
(e) of the definition of Concentration Limit times the excess (if any) of
2.75 over the number of Special Obligors.
"Class B Invested Amount" means, at any time, the sum of the purchase
prices paid for Class B Purchases made pursuant to (and as defined in) the Class
B Certificate Purchase Agreement at or prior to that time, reduced (but not
below zero) by (a) the aggregate amount of all distributions that have been made
to the Holders of the Class B Certificates on account of principal, and (b) the
amount of all Investor Write-Offs that have been applied to reduce
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the Class B Invested Amount (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to reinstate the Class B
Invested Amount).
"Class B Minimum Reserve Ratio" means the sum, as of any Cut-Off Date, of
(a) the Class B Concentration Factor for that Cut-Off Date plus (b) the product
of the average of the Dilution Ratios for the period of 12 preceding Calculation
Periods ending on that Cut-Off Date, multiplied by the Dilution Horizon Variable
for that Cut-Off Date; provided that in no event shall the Class B Minimum
Reserve Ratio be less than 15%.
"Class B Purchases" means Purchases made in respect of Class B
Certificates.
"Class B Ratings Factor" means 1.5.
"Class B Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class B Ratings Factor.
"Class B Required Reserves" means, at any time, the product of (a) the Net
Eligible Receivables multiplied by (b) the Class B Reserve Ratio multiplied by
(c) the Series Collection Allocation Percentage.
"Class B Reserve Ratio" means, during any Distribution Period, the greater
of (a) the Class B Minimum Reserve Ratio and (b) the Class B Required Reserve
Ratio, each as calculated in the Monthly Report required to be delivered on the
Report Date immediately prior to the start of that Distribution Period, provided
that during the period from the date hereof to the first Distribution Date
thereafter the Class B Reserve Ratio shall be 21.01%.
"Class Invested Amount" means (a) with respect to Class A, the Class A
Invested Amount, (b) with respect to Class B, the Class B Invested Amount and
(c) with respect to any other Senior Class or Subordinated Class of
Certificates, the amount identified as its "Class Invested Amount" in the
Supplement for such Senior Class or Subordinated Class of Certificates.
"Concentration Limit" means:
(a) 100% for any Tier-1 Obligor;
(b) 100% for any Tier-2 Obligor;
(c) 15% for any Tier-3 Obligor;
(d) 10% for any Tier-4 Obligor; and
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(e) 4% for any Tier-5 Obligor
Each of the percentages above is called a "Benchmark Percentage".
"Concentration Unit Excess Concentration" is defined in Section 4.10.
"Concentration Unit" means, on any day, each Obligor and its Affiliates,
if any, that are Obligors; it being understood that each Obligor shall belong to
only one Concentration Unit, and that a single Obligor can be a Concentration
Unit.
"Current Carrying Costs" means, during any Distribution Period, the sum of
(i) the amount of interest on the Series 1996-1 Certificates that will be
payable on the next Interest Payment Date and any other Interest Payment Date
falling not later than one week after such Interest Payment Date, (ii) the
amount of the Servicing Fee that will be payable on or before the next
Distribution Date plus (iii) the Current Carrying Costs Increments for each
other Series in Group I (as defined, and calculated as provided in, the
Supplement for each such Series.)
"Daily Group Collections" is defined in Section 4.2.
"Deferred Portion" means, on any day with respect to Group I, the portion
of the Acquisition Amount for the Series of Certificates in Group I as to which
payment has been deferred, which portion shall equal the product of (a) the
Series Collection Allocation Percentage times (b) the sum of the following
amounts (as shown in the Dally Report for such day): (i) the Excess
Concentration Balances, plus (ii) the aggregate unpaid balance of Receivables
that are not Eligible Receivables (including any such Receivables that are
ineligible due to the attachment of Adverse Claims), plus (iii) the Carrying
Cost Receivables Reserve, plus (iv) the Class B Reserve Ratio times the Net
Eligible Receivables, plus (v) the Class A Subordination Deficit (it being
understood that the Deferred Portion may vary from day to day); provided that
the Deferred Portion shall be fixed as of the Group Amortization Calculation
Date.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
giving rise to Receivables and generated during the two Calculation Periods
ending on the most recent Cut-Off Date (as of that Cut-Off Date) and (b) a
denominator equal to the Adjusted Eligible Receivables as of the most recent
Cut-Off Date.
"Dilution Ratio" means, as calculated in each Monthly Report as of the
most recent Cut-Off Date, a fraction (expressed as a percentage) having (a) a
numerator equal to the aggregate amount of Dilution on the Receivables occurring
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated during the second preceding Calculation
Period (so that, for example, if the Calculation Period
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specified in clause (a) corresponded to the March fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the January fiscal
month).
"Dilution Reserve Ratio" means as calculated in each Monthly Report, the
result (expressed as a percentage) calculated in accordance with the following
formula:
{(ARF x ADR) + [(HDR-ADR) x (HDR/ADR)]} x DHV
where:
ADR = the average of the Dilution Ratios during the period of 12
consecutive Calculation Periods ending on the related Cut-Off Date;
ARF = the Applicable Ratings Factor;
DHV = the Dilution Horizon Variable; and
HDR = the highest average of the Dilution Ratios for any two consecutive
Calculation Periods within the 12 consecutive Calculation Periods
ending on the related Cut-Off Date.
"Distribution Period" means a period from and including a Distribution
Date to but excluding the next Distribution Date.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 6.2 and ending on the day on which the Series Invested
Amount has been reduced to zero. The term "Early Amortization Period" means each
of the Early Amortization Period and any period identified as an "Early
Amortization Period" in the Supplement for any other Series in Group I.
"Eurodollar Tranche" means, during any Interest Period, any portion of the
Series 1996-1 Invested Amount that is designated by Transferor in accordance
with a Certificate Purchase Agreement to accrue interest based on the
Reserve-Adjusted Eurodollar Rate.
"Excess Concentration Balances" means, on any day, the sum of (i) the sum
of the Concentration Unit Excess Concentrations for all Groups, plus (ii) the
Category Two Excess Concentration, plus (iii) the Category Three Excess
Concentration, plus (iv) the Total Foreign Concentration Excess.
"Excess Foreign Obligor Balances" is defined in Section 4.10.
"Expected Final Payment Date" means December 15, 2000.
"Federal Funds Rate" means (a) the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the day (or, if the day is
not a Business Day, the immediately
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preceding Business Day) by the Federal Reserve Bank of New York; provided that
if the rate is not so published for any Business Day, the rate for purposes of
this clause will be the average of the quotations for the day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it, pius (b) 100 basis points.
"Final Scheduled Payment Date" means December 15, 2001.
"First Step Excess" is defined in Section 4.10.
"First Step Residual" is defined in Section 4.10.
"Foreign Obligor" is defined in Section 4.10.
"Fourth Step Excess" is defined in Section 4.10.
"Fully Funded Date" means the first date falling in a Group Amortization
Period or when all Series in Group I are in a Series Amortization Period and on
which there are funds on deposit in the Carrying Cost Account and the Principal
Funding Account that, in the aggregate, equal or exceed the Investor Repayment
Amount and any Servicing Fee payable to anyone other than a Howmet Person on the
first Distribution Date falling after that date.
"Group Amortization Calculation Date" means the day before a Group
Amortization Period begins.
"Group Amortization Period" means the period (if any) commencing on the
first day on which all outstanding Series in Group I are in Early Amortization
Periods.
"Group Initial Invested Amount" means, at any time, the sum of the Series
Initial Invested Amounts of each Series in Group I at that time.
"Group Invested Amount" means, at any time, the sum of the Series Invested
Amounts of each Series in Group I at that time.
"Group I" means a group of Series, including Series 1996-1 and each other
Series that is identified in its Supplement as belonging to Group I.
"Guarantor" means Howmet, in its capacity as the guarantor under the
Seller Guaranty.
"Holdback Account Termination Date" is defined in Section 4.4.
"Holder" means a Holder (as defined in the Pooling Agreement) of a
Certificate in any Series in Group I.
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"Howmet" is defined in the preamble.
"Howmet Credit Agreement" means the Credit Agreement dated as of December
13, 1995 among Blade Acquisition Corp., Howmet Holdings Acquisition Corp.,
Howmet Acquisition Corp., the financial institutions named therein and The First
National Bank of Chicago, as Administrative Agent and a Managing Agent, Bankers
Trust Company, as Syndication Agent and a Managing Agent, and Citicorp USA,
Inc., as Documentation Agent and a Managing Agent. as the same may from time to
time be amended or supplemented.
"Intercreditor Provisions" means the following provisions of the Howmet
Credit Agreement (as such Agreement was in effect on the Closing Date): Section
9.12 and the definitions of Intercreditor Agreement, Investor Certificates,
Purchased Interest, Receivables Amendment Conditions, Receivables Bridge
Facility, Receivables Documents, Receivables Facility, Receivables Facility
Assets, Receivables Maximum Funded Amount, Receivables Pooling Agreement,
Receivables Purchasers, Receivables Stated Amount and Receivables Subsidiary.
"Interest Payment Date" means (a) as to the Series 1996-1 Certificates,
any date upon which interest is payable with respect to the ABR Tranche or any
Eurodollar Tranche, as specified in Section 4.1, and (b) as to any interest
payable on any other Series in Group I, the date specified as the "Interest
Payment Date" in the related Supplement.
"Interest Period" means
(a) for Class A Certificates, (i) as to the ABR Tranche (if any)
from time to time, (x) the period from the date hereof to, but excluding,
the first subsequent Distribution Date and (y) each Distribution Period
thereafter and (ii) as to each Eurodollar Tranche (if any) from time to
time, each period from the date upon which that Eurodollar Tranche was
first designated as such pursuant to the Class A Certificate Purchase
Agreement (or the end of the next preceding Interest Period for the
Eurodollar Tranche, if there has been one) to the date that is one month,
two months or three months, at the option of Transferor, thereafter; and
if any Interest Period for a Eurodollar Tranche would otherwise end on a
day that is not a Business Day, the Eurodollar Tranche shall instead end
on the next Business Day (or, if the next Business Day falls in the next
calendar month, then on the next preceding Business Day); and
(b) for Class B Certificates, (i) as to the ABR Tranche (if any)
from time to time, (x) the period from the date hereof to, but excluding,
the first subsequent Distribution Date and (y) each Distribution Period
thereafter and (ii) as to the Eurodollar Tranche (if any) from time to
time, each period from the date upon which the Eurodollar Tranche was
first designated as such pursuant to the Class B Certificate Purchase
Agreement (or the end of the next preceding Interest Period for
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the Eurodollar Tranche, if there has been one) to the date that is one
month, two months or three months, at the option of Transferor,
thereafter; and if any Interest Period for the Eurodollar Tranche would
otherwise end on a day that is not a Business Day, the Eurodollar Tranche
shall instead end on the next Business Day (or, if the next Business Day
falls in the next calendar month, then on the next preceding Business
Day).
"Invested Amount" means, at any time:
(a) for purposes of calculating the Series Loss Allocation
Percentage for Group I, the Group Invested Amount; and
(b) for purposes of the application of Sections 6.13 and 12.4 of the
Pooling Agreement to the Series 1996-1 Certificates, the Series 1996-1
Invested Amount.
"Investor Allocable Dilution" means, for any ASA Measuring Period, the
product of the aggregate amount of Dilution for that ASA Measuring Period as to
which neither the applicable Seller nor the Guarantor has made any payment
required by Section 3.1 of the Purchase Agreement or the Seller Guaranty on
account of Seller Dilution Adjustments, multiplied by the Series Loss Allocation
Percentage as of the beginning of that ASA Measuring Period, multiplied by the
Investor Allocation Percentage as of the first Business Day of that ASA
Measuring Period.
"Investor Allocable Dilution Adjustments" is defined in Section 4.8.
"Investor Allocable Loss Amount" means, for any ASA Measuring Period, the
product of the Loss Amount for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the beginning of
that ASA Measuring Period.
"Investor Allocable Recoveries" means, for any ASA Measuring Period, the
product of the Net Recoveries for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the first
Business Day of that ASA Measuring Period.
"Investor Allocation Percentage" means:
(x) on any Business Day that does not fall in a Series Amortization
Period, a fraction (expressed as a percentage, which in any event may not
exceed 100%) (a) the numerator of which is the Net Invested Amount as of
that Business Day, and (b) the denominator of which is the Base Amount as
of that Business Day;
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(y) on any Business Day falling in any Series Amortization Period, a
fraction (expressed as a percentage, which in any event may not exceed
100%) (a) the numerator of which is the Net Invested Amount as of the
beginning of the Series Amortization Period, and (b) the denominator of
which is the Base Amount as of that Business Day; and
(z) on any Business Day falling in the Group Amortization Period, a
fraction (expressed as a percentage, which in any event may not exceed
100%) (a) the numerator of which is the Net Invested Amount as of the
Group Amortization Calculation Date, and (b) the denominator of which is
the Base Amount as of the Group Amortization Calculation Date.
"Investor Ownership Percentage" means, on any day with respect to Group I,
a fraction (expressed as a percentage, which in any event may not exceed 100%),
(x) the numerator of which is the Acquisition Amount on such day and (y) the
denominator of which is the product of (a) the Series Collection Allocation
Percentage times (b) the excess of (i) the Unpaid Balance of Receivables on such
day over (ii) the Unapplied Cash on such day; provided that the Investor
Ownership Percentage shall be fixed as of the Group Amortization Calculation
Date; and provided further that if the Investor Ownership Percentage is being
calculated on any day when a Series in Group I is in an accumulation,
amortization or early amortization period, the Investor Ownership Percentage
shall not be less than the Investor Ownership Percentage immediately prior to
the commencement of such period.
"Investor Repayment Amount" means, on any Business Day, the sum of (a) the
principal amount of the Series 1996-1 Certificates and all other Series in Group
I then outstanding, plus (b) the interest and any Additional Amounts known to be
payable on the Series 1996-1 Certificates and all other Series in Group I on or
before the first Distribution Date falling after that date.
"Investor Write-Offs" means, as calculated in any Monthly Report relating
to a Calculation Period falling completely or partially in a Group Amortization
Period:
(a) if the Available Subordinated Amount is greater than zero at the
end of the related ASA Measuring Period, zero; and
(b) if the Available Subordinated Amount is zero at the end of the
related ASA Measuring Period (taking into account any reduction in the
Available Subordinated Amount shown in such Monthly Report), the excess
(if any) of (x) the sum of the Investor Allocable Loss Amount and the
Investor Allocable Dilution minus Investor Allocable Recoveries for the
related ASA Measuring Period, over (y) the Available Subordinated Amount
as of the beginning of that ASA Measuring Period.
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"Loss Amount" means, with respect to any ASA Measuring Period, an amount
equal to the positive difference (if any) of (a) the amount of Receivables held
by Trust that became Write-Offs during that ASA Measuring Period, minus (b) the
amount of Recoveries received during that ASA Measuring Period.
"Loss Reserve Ratio" means, as calculated in each Monthly Report, the
result (expressed as a percentage) of (a) the Applicable Ratings Factor
multiplied by (b) the highest average of the Aged Receivables Ratio for any
three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
multiplied by (c) a fraction having (i) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise to Receivables
generated during the four Calculation Periods preceding or ending on the most
recent Cut-Off Date, and (ii) a denominator equal to the Adjusted Eligible
Receivables, as of the most recent Cut-Off Date, multiplied by (d) the Payment
Term Multiplier.
"Majority Class B Purchasers" is defined in Section 8.1 of the Class B
Certificate Purchase Agreement.
"Net Eligible Receivables" means, at any time, (a) the Adjusted Eligible
Receivables, minus (b) the Excess Concentration Balances; it being understood
that the amount of Eligible Receivables will be reduced by Adverse Claims that
attach to Receivables otherwise satisfying the requirements of the definition of
Eligible Receivable.
"Net Invested Amount" means, on any Business Day, the Group Invested
Amount, minus the balance on deposit in the Equalization Account and the
Principal Funding Account with respect to Series in Group I.
"Net Recoveries" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of Recoveries
received in that ASA Measuring Period minus (b) the amount of Receivables that
became Write-Offs in that ASA Measuring Period.
"Note Indenture" means the Indenture dated as of December 13, 1995 by and
between Howmet, as successor to the obligations thereunder of Howmet
Acquisition Corp., and Marine Midland Bank, as Trustee, under and pursuant to
which certain senior subordinated notes have been issued, as the same may at any
time be amended or supplemented.
"Parent" means, with respect to any Concentration Unit, the Domestic
Person in such Concentration Unit that owns or controls (directly or indirectly)
the largest number of other Obligors in such Concentration Unit; provided that
if there is no Domestic Person in such Concentration Unit, "Parent" shall mean
the Obligor in such Concentration Unit that owns or controls (directly or
indirectly) the largest number of other Obligors in such Concentration Unit.
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"Past Due Receivables Ratio" means, as calculated in each Monthly Report
as of the Cut-Off Date, a faction (expressed as a percentage) having (a) a
numerator that is the aggregate Unpaid Balance of Receivables that remain
outstanding 61 to 91 days after their respective due dates, as determined as of
such Cut-Off Date, and (b) a denominator that is the aggregate Unpaid Balance of
Receivables as of such Cut-Off Date.
"Payment Term" shall mean, with respect to any Receivable, the number of
days between its invoice date and its due date.
"Payment Term Multiplier" shall mean (a) 1.0, if the Payment Term Variable
is less than 41. (b) 1.17, if the Payment Term Variable is equal to or more than
41 but less than 51, (c) 1.25, if the Payment Term Variable is equal to or more
than 51 but less than 61, and (d) 1.5, if the Payment Term Variable is equal to
or more than 61 but less than 91; provided, however, that if the Payment Term
Variable equals or exceeds 91, the Payment Term Multiplier for such Receivable
shall be determined by calculating the sum of (x) 1.5, and (y) 0.05, for each
5-day increment by which the Payment Term Variable exceeds 91, it being
understood that the same number shall apply for all Payment Term Variables that
fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each Monthly Report
as of the most recently ended Cut-Off Date, the quotient of:
(x) the sum of (1) the product of the Outstanding Balance of each
Receivable as of such Cut-Off Date times (2) the Payment Term with respect
to such Receivable; divided by
(y) the aggregate Outstanding Balance of all Receivables as of such
Cut-Off Date.
"Prepayment Accumulation Period" means a period beginning on the day that
Transferor gives a Prepayment Notice to Trustee of a prepayment of the Series
1996-1 Certificates pursuant to Section 4.9 (and does not notify Trustee that it
intends to cause the Series Interest to be conveyed as described in subsection
4. 9(b)) and ending on the earlier to occur of (a) the day when amounts
sufficient for that prepayment have been accumulated pursuant to Section 4.3 and
r the end of the Revolving Period for the Series 1996-1 Certificates.
"Prepayment Notice " is defined in Section 4.9.
"Prepayment Premium" means, with respect to any prepayment pursuant to
Section 4.9 or 7.1 or as a result of an Early Amortization Event, the net
present value (as of the date of such prepayment) of the amount of interest that
would have accrued on the amount of principal prepaid from the date of
prepayment through the one year anniversary of the date
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hereof at an interest rate equal to the applicable Certificate Spread in respect
of the Eurodollar Tranche(s), discounted to such prepayment date at a rate per
annum, compounded monthly, equal to the Reserve Adjusted Eurodollar Rate in
effect on the date on which notice of prepayment is given to the Holders of the
Series 1996-1 Certificates being prepaid.
"Principal Deposit Amount" means, with respect to any Series in any
Calculation Period falling in a Series Amortization Period, the amount
determined in accordance with the Supplement for that Series. The Principal
Deposit Amounts for the Series Amortization Periods that may apply to the Series
1996-1 Certificates are:
(a) for any Calculation Period falling in the Amortization Period or
the Early Amortization Period for the Series 1996-1 Certificates, the
Series 1996-1 Invested Amount; and
(b) for any Calculation Period falling in a Prepayment Accumulation
Period for the Series 1996-1 Certificates, the amount of principal to be
prepaid.
"Principal Payment Date" means (a) for the Series 1996-1 Certificates, (i)
any date on which any prepayment is to be made pursuant to Section 4.9, (ii) the
end of each Interest Period in respect of the next maturing Eurodollar Tranche
and/or ABR Tranche, in such order as the Agent shall select so as to minimize
"breakage costs," (iii) each Distribution Date falling in an Early Amortization
Period (beginning with the Distribution Date falling in the Calculation Period
after the Calculation Period in which the Early Amortization Period begins) and
(iv) any Distribution Date falling after the commencement of the Amortization
Period, and (b) for any other Series in Group I, each date specified as a
"Principal Payment Date" in the related Supplement. The Refinancing Date is not
a Principal Payment Date.
"Purchase" means any Purchase as defined in either of the Certificate
Purchase Agreements.
"Reference Bank" means The First National Bank of Chicago.
"Refinancing Date" is defined in subsection 4.9(b).
"Required Purchasers" is defined in Section 9.9 of the Certificate
Purchase Agreements.
"Required Receivables" means, on any Business Day, collectively for all
Series in Group I:
(a) So long as a Group Amortization Period has not commenced, the
result of the following formula:
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GIIA+CCRR R
--------- x ---
(1-CARR) NER
where:
CARR = the Class A Reserve Ratio in effect for that Business Day;
CCRR = the Carrying Cost Receivables Reserve as reported in the Daily
Report for that Business Day;
GIIA = the Group Initial Invested Amount;
NER = the Net Eligible Receivables as reported in the Daily Report
for that Business Day; and
R = the aggregate Unpaid Balance of Receivables held by Trustee
as reported in the Daily Report for that Business Day.
(b) If a Group Amortization Period has commenced, the result of the
following formula:
AGIIA + ASA + UCCRR
where:
AGIIA = the adjusted Group Initial Invested Amount on that Business
Day (which shall equal the Group Initial Invested Amount,
reduced (but not below zero) by the amount of all Investor
Write-Offs (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to
reinstate the Group Invested
Amount));
UCCRR = the Unfunded Carrying Cost Receivables Reserve on that
Business Day; and
ASA = the Available Subordinated Amount on that Business Day.
"Required Series Holders" means the Required Purchasers.
"Reserve-Adjusted Eurodollar Rate" means for any Interest Period, the rate
per annum obtained by dividing (i) the arithmetic average (rounded upward to the
nearest 1/100 of one percent) of the offered quotation, if any, to first class
banks in the interbank Eurodollar market by the Reference Bank for U.S. dollar
deposits of amounts in same day funds comparable to the principal amount of the
Investor Certificate of the Reference Bank with maturities comparable to such
Interest Period as of approximately 10:00 a.m. (New York time) on the second
Business Day prior to the first day of that Interest Period by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements
(including any marginal, emergency, supplemental, special or other reserves)
applicable on
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such second preceding Business Day to any member bank of the Federal Reserve
System m respect of "Eurocurrency liabilities" as defined in Regulation D of the
Federal Reserve Board (or any successor category of liabilities under Regulation
D).
"Revolving Period" means, with respect to any Series in Group I, the
period beginning on the Closing Date and ending on the day before the first day
of an accumulation period, an amortization period or an early amortization
period (other than a prepayment accumulation period with respect to a partial
prepayment of such Series) for such Series; provided that the Revolving Period
for such Series shall be suspended during a prepayment accumulation period with
respect to a partial prepayment of such Series.
"Second Step Excess" is defined in Section 4.10.
"Second Step Residual" is defined in Section 4.10.
"Senior Class" means each of Class A and each class of any other Series in
Group I that is identified in its Supplement as a Senior Class.
"Series Allocable Dilution Adjustments" means, for any ASA Measuring
Period, the product of the aggregate amount of payments pursuant to Section 3.1
of the Purchase Agreement or pursuant to the Seller Guaranty on account of
Seller Dilution Adjustments received during that ASA Measuring Period relating
to Dilution that occurred prior to that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period.
"Series Amortization Period" means (a) as to Series 1996-1, the
Amortization Period, any Prepayment Accumulation Period and any Early
Amortization Period and (b)as to any other Series in Group I any period
identified in the related Supplement as a "Series Amortization Period."
"Series Invested Amount" means (a) as to the Series 1996-1 Certificates,
the Series 1996-1 Invested Amount, and (b) as to any other Series in Group I,
the amount determined as such in accordance with the Supplement for that Series.
"Series Initial Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Initial Invested Amount, and (b) as to any other
Series in Group I, the amount determined as such in accordance with the
Supplement for that Series; provided that from and after the date on which the
Series Invested Amount for any Series is reduced to zero, the Series Initial
Invested Amount for that Series will also equal zero.
"Series 199&1 Certificates" means the Class A Certificates and the Class B
Certificates.
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"Series 1996-1 Holder" means a Holder of a Series 1996-1 Certificate.
"Series 1996-1 Initial Invested Amount" means (i) during the Revolving
Period for the Series 1996-1 Certificates, the Series 1996-1 Invested Amount,
and (ii) thereafter, the Series 1996-1 Invested Amount as of the last day of the
Revolving Period; provided that after the principal amount of the Series 1996-1
Certificates and interest and any Additional Amounts known to be payable in
respect of such Series are reduced to zero, the Series 1996-1 Initial Invested
Amount will equal zero.
"Series 1996-1 Invested Amount" means, at any time, the sum of the Class A
Invested Amount plus the Class B Invested Amount.
"Special Concentration Limit" means:
(i) with respect to the Tier-5 Obligor that owes the highest
aggregate Unpaid Balance of Eligible Receivables, 7%; and
(ii) with respect to the Tier-5 Obligor that owes the second highest
aggregate Unpaid Balance of Eligible Receivables, 5%.
"Special Obligor" means, at any time, the two Tier-5 Obligors that owe the
highest aggregate Unpaid Balances of Receivables and are designated in the most
recent Monthly Report as "Special Obligors"; provided that in the case of any
Obligor (other than Westinghouse Electric Corp.), the Approval Condition shall
have been satisfied with request to such designation.
"Specified Rating Agency" means S&P.
"Stated Amount" means as to any Certificate, the maximum principal amount
that may be required to be funded by the Holder of such Certificate.
"Structured Lender" shall mean Falcon Asset Securitization Corporation,
Alpine Securitization Corp. and any other Holder of a Certificate (x) whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and (y) which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement similar to that set forth in Section 13.9 of the
Pooling Agreement in order to maintain such rating.
"Subordinated Class" means each of Class B and each class of any other
Series in Group I that is identified in its Supplement as a Subordinated Class.
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"Support Bank" shall mean any bank or other financial institution
extending or having a commitment to extend funds to or for the account of any
Structured Lender (including by agreement to purchase an assignment of, or
participation in, the Certificate held by such Person) under a liquidity or
credit support agreement which relates to the Certificate purchased by such
Structured Lender.
"Third Step Excess" is defined in Section 4.10.
"Third Step Residual" is defined in Section 4.10.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper rating
from the Specified Rating Agency of at least "A-1+" (or its equivalent) or (b) a
senior actual or implied debt rating from the Specified Rating Agency of at
least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-I Obligor) that has
(a) a commercial paper rating from the Specified Rating Agency of at least "A-1"
(or its equivalent) or (b) a senior actual or implied debt rating from the
Specified Rating Agency of at least "A+" (or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a
Tier-2 Obligor) that has (a) a commercial paper rating from the Specified Rating
Agency of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Specified Rating Agency of at least "BBB+"(or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a Tier-2
Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from the
Specified Rating Agency of at least "A-3" (or its equivalent) or (b) a senior
actual or implied debt rating from the Specified Rating Agency of at least
"BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a Tier-2
Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Total Dollar Limit" is defined in Section 4.10.
"Total Foreign Concentration Excess" is defined in Section 4.10.
"Tranche" means each of the ABR Tranche and each Eurodollar Tranche.
"Transferor Indemnified Losses" is defined in Section 7.3.
"Transferor Indemnified Party" is defined in Section 7.3.
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"Transferor Payment Percentage" means, on any Business Day, the difference
of 100% minus the Investor Allocation Percentage on that Business Day.
"Unapplied Cash" means, on any Business Day, available funds received in
the Master Collection Account and reflected in the Daily Report for that
Business Day that have not been applied as Collections on a particular
Receivable on or prior to the time as of which that Daily Report is prepared.
"Unfunded Carrying Cost Receivables Reserve" means, on any Business Day
falling in a Group Amortization Period, the difference (but not less than zero)
of (a) the Carrying Cost Receivables Reserve as of the Group Amortization
Calculation Date, minus (b) the aggregate Collections deposited into the
Carrying Cost Account during the portion of the Group Amortization Period up to
and including that Business Day.
"Unmatured Early Amortization Event" means an event that, with the giving
of notice or lapse of time (or both) will constitute an Early Amortization
Event.
SECTION 1.2 Modification Condition. (a) For so long as the Series 1996-1
Certificates remain outstanding, for purposes of the Transaction Documents the
definition of the term "Modification Condition" shall be as follows:
"Modification Condition" means, with respect to any action, that (i)
each Rating Agency has confirmed in writing that such action will not
result in a reduction or withdrawal of the rating of any outstanding
Series or Purchased Interest that was rated by such Rating Agency, and
(ii) if any Series or Purchased Interest has not been rated, the Required
Series Holders for that Series or the Agent for such Purchased Interest
(as the case may be) shall have consented in writing to such action.
(b) For so long as the Series 1996-1 Certificates remain outstanding, for
purposes of the Transaction Documents the term "Required Investors" shall be as
follows:
"Required Investors" means the Required Series Holders for each
Series and the Agent for each Purchased Interest."
SECTION 1.3 Incorporation of Terms. The terms of the Pooling Agreement are
incorporated in this Supplement as if set forth in full herein. As supplemented
by this Supplement, the Pooling Agreement is in all respects ratified and
confirmed and both together shall be read, taken and construed as one and the
same agreement. If the terms of this Supplement and the terms of the Pooling
Agreement conflict, the terms of this Supplement shall control with respect to
the Series 1996-1 Certificates.
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ARTICLE II DESIGNATION
SECTION 2.1 Designation. There is hereby created a Series to be known as
the "Series 1996-1 Certificates," consisting of two classes: the $47,500,000
Variable Rate Class A, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class A Certificates), which shall be a Senior Class; and the $7,500,000
Variable Rate Class B, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class B Certificates"), which shall be a Subordinated Class. Subject to the
conditions set forth in Article III, Trustee shall authenticate and deliver the
Class A Certificates and the Class B Certificates, to or upon the order of
Transferor in the aggregate principal amount indicated for each above.
Notwithstanding the terms of Section 61 of the Pooling Agreement, the Class A
Certificates will be issued in minimum denominations of $5,000,000 and in
integral multiples of $1,000,000 and the Class B Certificates will be issued in
minimum denominations of $2,500,000 and in integral multiples of $500,000.
SECTION 2.2 Group I. The Series 1996-1 Certificates are included in Group
I. Consequently, the Series 1996-1 Certificates will share a single Series
Collection Allocation Percentage (determined using the Required Receivables as
defined herein), a single Series Loss Allocation Percentage (determined using
the Invested Amount as defined herein), and if a Group Amortization Period
occurs, a single Available Subordinated Amount (determined as provided herein)
with the other Series in Group I. Collections, Investor Allocable Dilution,
Investor Allocable Loss Amounts and Investor Write-Offs will be allocated
collectively to Group I in accordance with such shared Series Collection
Allocation Percentage and Series Loss Allocation Percentage, as applicable, and
will be further allocated among Series included in Group I (and the various
Senior Classes and Subordinated Classes) in accordance with this Supplement. The
Servicing Fee with respect to all Series in Group I shall be paid in accordance
with this Supplement and shall be determined in accordance with Section 3.4 of
the Pooling Agreement using the collective Series Collection Allocation
Percentage for Group I. The Series in Group I share a collective Series
Interest, the amount of which equals the shared Series Collection Allocation
Percentage for Group I.
Subsection 12.1(b) of the Pooling Agreement shall not apply to any Series
in Group I and shall be superseded for all such Series by Section 7.2 of this
Supplement. All terms of this Supplement applying generally to Group I shall
survive the repayment in full or other termination of the Series 1996-1
Certificates until such time as all Series in Group I have been repaid in full
and any revolving purchase commitments made by the Holders relating to
Certificates in any such Series have been terminated (or, if earlier, on the
Final Scheduled Payment Date for the last Series in Group I). Such terms of
general applicability include all of Article IV (excluding Sections 4.1 and
4.9), Article V, Section 7.2 and Article VIII and all related definitions.
SECTION 2.3 Investor Ownership Percentage. The Investor Certificates in
Group I represent an undivided interest in the portion of the Transferred Assets
allocable to Group I,
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which undivided interest (expressed as a percentage) shall equal the Investor
Ownership Percentage. The amount payable on any day by the Holders of such
Investor Certificates for the acquisition of such undivided interest (the
"Acquisition Amount") shall equal the Group Invested Amount plus the Deferred
Portion (it being understood that the Acquisition Amount may vary from day to
day); provided that Acquisition Amount shall be fixed as of the Group
Amortization Calculation Date.
The Deferred Portion of the Acquisition Amount shall be subject to a
holdback and shall be paid to the extent (and only to the extent) Daily Group
Collections are not required to pay amounts described in clauses first through
fourth of Section 4.3 or Section 4.4 (as applicable), it being understood that
the Holders of Series 1996-1 Certificates shall not be liable to pay any portion
of the Deferred Portion not paid out of Dally Series Collections.
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS
SECTION 3.1 Conditions to Issuance. Trustee will not authenticate the
Series 1996-1 Certificates unless all conditions to the issuance of the Series
1996-1 Certificates under Section 6.10 of the Pooling Agreement shall have been
satisfied or waived by the Purchasers.
SECTION 3.2 Use of Proceeds. The proceeds from the issuance of the Series
1996-1 Certificates shall be used first to repay the Series 1995-1 Certificates
in full and second for general corporate purposes of Transferor (including, but
not limited to, purchasing Receivables, repaying indebtedness and/or making
distributions to Howmet).
ARTICLE IV PAYMENTS AND ALLOCATIONS
SECTION 4.1 Interest; Additional Amounts.
(a) Subject to Section 4.1 of the Class A Certificate Purchase
Agreement, Transferor may from time to time allocate the outstanding
principal amount under the Class A Certificates to an ABR Tranche and up
to four Eurodollar Tranches. Subject to Section 4.1 of the Class B
Certificate Purchase Agreement, Transferor may from time to time allocate
the outstanding principal amount under the Class B Certificates to an ABR
Tranche and a Eurodollar Tranche. Interest on an ABR Tranche shall be
payable on each Distribution Date, and interest on a Eurodollar Tranche
shall be payable at the end of the applicable Interest Period, except that
interest on the amount of any principal repaid on any other date shall be
payable on the date of the repayment. If, any such day is not a Business
Day, interest shall instead be due on the next Business Day (or, if the
next Business Day falls in the next calendar month, then on the next
preceding Business Day).
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(b) Interest on a Eurodollar Tranche shall accrue during any
Interest Period at a rate per annum equal to the Reserve Adjusted
Eurodollar Rate plus the applicable Certificate Spread and shall be
calculated on the basis of actual days over a year of 360 days.
(c) Interest on an ABR Tranche shall accrue at the Alternate Base
Rate in effect from time to time plus the applicable Certificate Spread
and shall be calculated on the basis of actual days over a year of 365 or
366 days, as the case may be.
(d) Interest with respect to the Series 1996-1 Certificates due but
not paid on any Distribution Date or the last day of an Interest Period,
as the case may be, will bear additional interest on the amount at 2% per
annum above the Alternate Base Rate to the extent permitted by law, which
additional interest shall be due on demand.
(e) Additional Amounts shall also be payable with respect to the
Series 1996-1 Certificates as specified in the Certificate Purchase
Agreements and to the extent (but only to the extent) that funds become
available for payment of such Additional Amounts in accordance with
Sections 4.2, 4.3 and 4.4.
SECTION 4.2 Daily Calculations and Group Allocations. On each Business
Day, Servicer shall calculate the Series Collection Allocation Percentage for
Group I (and, if necessary for that calculation, the Required Receivables), the
Current Carrying Costs and, prior to the Group Amortization Period, the Base
Amount. On each Business Day prior to the Group Amortization Period, Servicer
shall also determine whether the Net Invested Amount is greater than, equal to
or less than the Base Amount.
Pursuant to Section 4.3 of the Pooling Agreement, Servicer shall allocate
the Series Collection Allocation Percentage of available funds received in the
Master Collection Account (other than any Shared Investor Collections) since the
preceding Business Day's allocation to the shared Series Interest of Group I.
The portion of funds so allocated, together with any funds released from the
Equalization Account or any Principal Funding Account in accordance with Section
4.5 on that Business Day, are called the "Daily Group Collections."
SECTION 4.3 Allocations of Daily Group Collections (Other Than in a Group
Amortization Period). On each Business Day (other than an Exempt Holiday or a
Business Day falling in a Group Amortization Period or after the Fully Funded
Date), Servicer shall allocate the Dally Group Collections (or, if less, the
aggregate amount of Dally Group Collections required to fund the items described
in priorities first through fourth below) to the following purposes, in the
priority indicated (and to the extent of Daily Group Collections available):
first, to the Carrying Cost Account until the amount allocated to
the Carrying Cost Account equals the Current Carrying Costs;
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second, if the Net Invested Amount is greater than the Base Amount,
to the Equalization Account in an amount sufficient to reduce the Net
Invested Amount to an amount equal to the Base Amount; provided that
during a Series Amortization Period in respect of any Series, funds that
would otherwise be required to be deposited in the Equalization Account
pursuant to this priority second shall instead be deposited in the
sub-account of the Principal Funding Account for such Series (and, if
there is more than one such Series, shall be divided ratably between such
sub-accounts, on the basis of the respective Principal Deposit Amounts of
each such Series), but the amount deposited in any such sub-account shall
in no event cause the balance therein to exceed the applicable Principal
Deposit Amount (and any remaining amount not deposited in any sub-account
of the Principal Funding Account because of this limitation shall be
shared among the other sub-accounts for such Series in Group I (ratably as
described above), in each case to the extent that it will not cause the
balance therein to exceed the applicable Principal Deposit Amount, and any
remaining amount shall be deposited in the Equalization Account); and
provided further that no deposit shall be made to a sub-account of the
Principal Funding Account pursuant to the immediately preceding proviso
(and such proviso shall not apply notwithstanding the existence of a
Series Amortization Period) unless, after giving effect thereto, the Net
Invested Amount would equal the Base Amount;
third, during any Series Amortization Period, to the applicable
sub-account of the Principal Funding Account until the amount on deposit
in that sub-account equals the applicable Principal Deposit Amount;
provided that
(i) the amount allocated to all Investor Certificates. in the
aggregate pursuant to this priority third on any Business Day shall
not exceed the product of (x) the Investor Ownership Percentage,
multiplied by (y) the excess of the Dally Group Collections over the
amounts allocated on that Business Day pursuant to priorities first
and second, and
(ii) if more than one Series in Group I is in a Series
Amortization Period, the amount so allocated shall be divided
ratably between such subaccounts, on the basis of the respective
Principal Deposit Amounts of each such Series, but the amount
deposited in any such sub-account shall in no event cause the
balance therein to exceed the applicable Principal Deposit Amount
for any such Series (and any remaining amount not deposited in any
sub-account of the Principal Funding Account because of this
limitation shall be shared among the other sub-accounts for Series
in Group I (ratably as described above), in each case to the extent
that it will not cause the balance therein to exceed the Principal
Deposit Amount for any such other Series); and
fourth, to hold in the Master Collection Account the amount, if any,
necessary to pay on the next Distribution Date all Additional Amounts
payable to the Holders.
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On such Business Day, Servicer shall allocate and pay the remainder of
Daily Group Collections to make current and/or deferred transfer payments to
Transferor in respect of the Transferor Certificate, provided that Transferor
may, from time to time, direct Servicer to direct Trustee to hold all or part of
the funds to be paid pursuant to this sentence in the Master Collection Account
to be applied as Daily Group Collections on the following Business Day.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in priorities second through fourth, and in the
preceding paragraph, in the order of priority set forth therein.
In addition, if, on any day, funds on deposit in the Master Collection
Account and available (as described in the first paragraph of this Section ) for
allocation under priority fourth are less than the amount of the obligations
described therein, then the available Collections shall be allocated by Servicer
to the holders of such obligations pro rata according to the respective amounts
of such obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily Group
Collections shall be paid to Transferor as deferred transfer payments.
SECTION 4.4 Allocations of Daily Group Collections During a Group
Amortization Period. On each Business Day (other than an Exempt Holiday) falling
in a Group Amortization Period and prior to or on the Fully Funded Date,
Servicer shall allocate the Daily Group Collections to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account to the extent that the balance
therein is less than the amount of Current Carrying Costs (other than any
Servicing Fee payable to any Howmet Person) payable on the Distribution
Date relating to the Calculation Period during which such Business Day
falls;
second, to the Principal Funding Account and to Transferor (or,
prior to the Holdback Account Termination Date, to the Holdback Account)
in the following amounts:
(a) the amount to he transferred to the Principal Funding
Account shall equal the product of (i) the Investor Allocation
Percentage, multiplied by (ii) the excess of the Daily Group
Collections over the amount allocated on that Business Day pursuant
to priority first, provided that the aggregate amount so deposited
shall in no event exceed the lesser of (x) the Group Invested Amount
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<PAGE> 200
and (y) the Investor Ownership Percentage times the aggregate Unpaid
Balance of Receivables as of the Group Amortization Calculation
Date; and
(b) the amount to be transferred to Transferor (or, prior to
the Holdback Account Termination Date, to the Holdback Account)
shall equal the product of (i) the Transferor Payment Percentage,
multiplied by (ii) the excess of the Daily Group Collections over
the amount allocated on that Business Day pursuant to priority
first;
the amount allocated to the Principal Funding Account pursuant to clause
(a) of this priority second shall be divided among the sub-accounts for
each Series in Group I as follows:
(1) first such amount shall be divided among the sub-accounts
for each Series that has an outstanding Senior Class, on the basis
of the respective Principal Deposit Amounts of each such Senior
Class, but the amount deposited in any such sub-account shall in no
event cause the balance therein to exceed the Principal Deposit
Amount of any such Senior Class; and
(2) any remaining amount shall he divided among the
sub-accounts for each Series that has an outstanding Subordinated
Class, on the basis of the respective Principal Deposit Amounts of
each such Subordinated Class, but the amount deposited in any such
sub-account shall in no event cause the balance therein to exceed
the Principal Deposit Amount of any such Subordinated Class;
third, to hold in the Master Collection Account the amount necessary
to pay on the next Distribution Date all Additional Amounts payable to the
Holders;
fourth, to pay any Servicing Fee payable to any Howmet Person on the
Distribution Date relating to the Calculation Period during which such
Business Day falls; and
fifth, the balance to Transferor, provided that prior to the
Holdback Account Termination Date, amounts payable to Transferor pursuant
to this priority fifth shall be deposited into the Holdback Account and
held as provided below.
The "Holdback Account Termination Date" shall be the earlier to occur of
(i) the date that falls twelve months after the beginning of the Group
Amortization Period and (Ii) the Fully Funded Date. If at any time prior to the
Holdback Account Termination Date, the amount of funds on deposit in the
Holdback Account exceeds the difference of (1) the Investor Repayment Amount
minus (2) the amount of funds then held in the Carrying Cost Account and the
Principal Funding Account that are available to pay the Investor Repayment
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<PAGE> 201
Amount, then the amount of such excess funds shall be released from the Holdback
Account and paid to Transferor as deferred transfer payments. On each Business
Day in a Group Amortization Period prior to the Holdback Account Termination
Date, Servicer shall calculate the aggregate Investor Allocable Dilution for the
Group Amortization Period as to which no Series Allocable Dilution Adjustments
have been received. Such amount (or, if less. the aggregate amount of funds in
the Holdback Account) shall be transferred to the Master Collection Account and
applied to the items listed in the first paragraph of this Section as priorities
first through fifth, in that order (except that no such funds shall be allocated
to Transferor or the Holdback Account pursuant to priority second and the amount
allocable to the Principal Funding Account shall not be limited by application
of the Investor Allocation Percentage). On the Holdback Account Termination
Date, all remaining funds in the Holdback Account shall be paid to Transferor.
If, on any day, funds on deposit in the Master Collection Account and
available (as described in the first paragraph of this Section , for allocation
under priority third are less than the amount of the obligations described
therein, then the available Collections shall be allocated by Servicer to the
holders of such obligations pro rata according to the respective amounts of such
obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily Group
Collections shall be paid to Transferor in respect of the Transferor Certificate
as deferred transfer payments.
SECTION 4.5 Withdrawals from the Equalization Account and Principal
Funding Account. On any Business Day (other than an Exempt Holiday) prior to the
Group Amortization Period on which no Early Amortization Event or Unmatured
Early Amortization Event has occurred with respect to any Series in Group I,
Servicer may instruct Trustee in writing to withdraw funds from the Equalization
Account and apply such funds as Daily Group Collections, so long as the Net
Invested Amount would not exceed the Base Amount after giving effect to such
transfer and application. On the first day of any Series Amortization Period or
Group Amortization Period, Servicer shall instruct Trustee to withdraw the
entire balance in the Equalization Account and apply the same as Daily Group
Collections on that day. On the first day of the Group Amortization Period,
Servicer shall instruct Trustee likewise to withdraw the entire balance in the
Principal Funding Account and apply the same as Daily Group Collections on that
day.
SECTION 4.6 Available Subordinated Amount. (a) If a Group Amortization
Period begins, Servicer shall promptly calculate the Available Subordinated
Amount as of the Group Amortization Calculation Date and report such amount in
the Daily Report for the first day in the Group Amortization Period. Servicer
shall also calculate the Available Subordinated Amount as of each Cut-Off Date
falling in the Group Amortization Period, such calculation to be reflected in
the related Monthly Report.
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(b) The Available Subordinated Amount as of the Group Amortization
Calculation Date shall equal the product of (x) the Investor Allocation
Percentage, multiplied by (y) the result of:
(i) the product of the Unpaid Balance of Receivables held by Trustee
at the opening of business on the Group Amortization Calculation Date,
multiplied by the Series Collection Allocation Percentage on that date;
minus
(ii) the sum of (A) the lesser of the Base Amount and the Net
Invested Amount and (B) the Carrying Cost Receivables Reserve at the
opening of business on the Group Amortization Calculation Date.
(c) The Available Subordinated Amount, as of any Cut-Off Date in the Group
Amortization Period, shall equal the result of:
(i) the Available Subordinated Amount as of the preceding Cut-Off
Date (or as of the Group Amortization Calculation Date, in the case of the
first Cut-Off Date falling in the Group Amortization Period); minus
(ii) the Investor Allocable Loss Amount with respect to the ASA
Measuring Period ending on that Cut-Off Date; minus
(iii) any Investor Allocable Dilution with respect to the ASA
Measuring Period ending on that Cut-Off Date; plus
(iv) subject to Sections 4.7 and 4.8, the Investor Allocable
Recoveries and Investor Allocable Dilution Adjustments with respect to the
ASA Measuring Period ending on that Cut-Off Date.
(d) Notwithstanding the foregoing, in no event shall the Available
Subordinated Amount at any time be less than zero or greater than the initial
Available Subordinated Amount calculated pursuant to subsection (b).
SECTION 4.7 Write-Offs and Recoveries. (a) In each Monthly Report required
to be delivered during the Group Amortization Period, Servicer shall calculate
the Investor Write-Offs and the Investor Allocable Recoveries for the most
recently ended ASA Measuring Period.
(b) If the Investor Write-Offs calculated in any Monthly Report exceed
zero, the Group Invested Amount shall be reduced by the amount of the Investor
Write-Offs with effect on the related Distribution Date. Any such reduction
shall be allocated to the Class Invested Amounts of all outstanding Subordinated
Classes (ratably in accordance with such Class Invested Amounts) until all such
Class Invested Amounts have been reduced to zero.
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Any remaining reduction shall be allocated to the Class Invested Amounts of all
outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts).
(c) If the Group Invested Amount has been reduced on account of any
Investor Write-Offs, then any Investor Allocable Recoveries with respect to any
Calculation Period ending after the reduction takes place shall be applied to
reinstate the Group Invested Amount, to the extent of such prior reductions that
have not previously been reinstated, with effect on the related Distribution
Date. Any such reinstatement shall be allocated to the Class Invested Amounts of
all outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts) until all prior reductions to such Class Invested Amounts on account of
Investor Write-Offs have been reinstated. Any remaining reinstatement shall be
allocated to the Class Invested Amounts of all outstanding Subordinated Classes
(ratably in accordance with such Class Invested Amounts).
(d) If Investor Allocable Recoveries are applied pursuant to subsection
(c) to reinstate the Group Invested Amount on any Distribution Date, then
Investor Allocable Recoveries shall be applied to increase the Available
Subordinated Amount on the same Distribution Date only to the extent of the
excess, if any, of the Investor Allocable Recoveries, minus the amount of
Investor Allocable Recoveries so applied.
(e) The outstanding principal amount of any Senior Class or Subordinated
Class shall be reduced by any reduction, and increased by any reinstatement, of
its Class Invested Amount pursuant to this Section 4.7 or Section 4.8, in the
amount of such reduction or reinstatement.
SECTION 4.8 Certain Dilution in a Group Amortization Period. (a) In each
Monthly Report required to be delivered during the Group Amortization Period,
Servicer shall calculate the Investor Allocable Dilution and the Series
Allocable Dilution Adjustments for the most recently ended ASA Measuring Period.
(b) If the Investor Allocable Dilution calculated in any Monthly Report is
greater than zero, and there are funds in the Holdback Account, then those funds
(up to an amount equal to the amount of the Investor Allocable Dilution) shall
be allocated (i) first, in accordance with priority first of the first paragraph
of Section 4.4, (ii) second, to the Principal Funding Account (in accordance
with clauses (1) and (2) of priority second of the first paragraph of Section
4.4) until the Net Invested Amount is reduced to zero and (iii) third, in
accordance with priorities third through fifth of the first paragraph of Section
4.4, in that priority.
(c) If the Available Subordinated Amount or the Group Invested Amount has
been reduced on account of any Investor Allocable Dilution, then (i) any Series
Allocable Dilution Adjustments with respect to any Calculation Period ending
after the reduction takes place and (ii) any additional funds deposited in the
Holdback Account (the "Investor Allocable Dilution
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Adjustments") shall be allocated (x) first, to reinstate the Group Invested
Amount (with the same allocation among Senior Classes and Subordinated Classes
as is described in subsection 4.7(c)), and (y) second, to reinstate the
Available Subordinated Amount, in each case to the extent not previously
reinstated pursuant to Section 4.7 or this Section 4.8. Any funds so allocated
on any day shall be allocated (i) first, in accordance with priority first of
the first paragraph of Section 4.4, (ii) second, to the Principal Funding
Account (in accordance with clauses (1) and (2) of priority second of the first
paragraph of Section 4.4) until the Net Invested Amount is reduced to zero and
(iii) third, in accordance with priorities third through fifth of the first
paragraph of Section 4.4, in that priority.
SECTION 4.9 Optional Early Pay Out. (a) On any Business Day falling in the
Revolving Period, Transferor may provide notice to Trustee of its intention to
accumulate funds to cause the Series 1996-1 Certificates to be prepaid in full
or (as provided in the next sentence) in part. There may be a single partial
prepayment of Class A Certificates, provided that (i) such prepayment (in the
aggregate for all Class A Certificates) shall not exceed $10,000,000, (ii) such
prepayment shall be made after the first anniversary of the date hereof, and
(iii) the amount prepaid shall reflect a reduction in the Unpaid Balance of
Receivables due to the sale of a Seller (or all or substantially all of its
assets) or the loss of a major customer by the Sellers. When amounts sufficient
for such prepayment have been accumulated, Transferor may provide notice to
Trustee (the "Prepayment Notice") of the date, at least three business days
after the date of such Prepayment Notice, when the prepayment shall occur.
Trustee shall notify the affected Holders promptly upon receiving such
Prepayment Notice. In the event of any such prepayment of the Series 1996-1
Certificates occurring at any time during the one-year period commencing on the
date hereof, the Holders of such Series 1996-1 Certificates shall be entitled to
receive a Prepayment Premium. Except as expressly provided in this subsection
4.9(a), the Series 1996-1 Certificates may not be partially prepaid. The Series
1996-1 Certificates, once prepaid, may not be reinstated.
(b) Commencing upon the date specified in the notice to the Trustee
referred to in subsection (a) (until an amount equal to the amount to be
prepaid, plus the related Prepayment Premium, if any, and other applicable
Additional Amounts have been accumulated), amounts shall be set aside for
purposes of that prepayment in accordance with Section 4.3, except that no such
amounts shall be set aside if Transferor notifies Trustee that Transferor
intends to cause the Series 1996-1 Certificates to be prepaid by causing the
portion of the Series Interest for Group I attributable to the Series 1996-1
Certificates to be conveyed to one or more Persons (who may be the Holders of a
new Series issued substantially contemporaneously with such prepayment) for a
cash purchase price in an amount equal to the sum of (i) the outstanding
principal amount of the Series 1996-1 Certificates, plus (ii) to the extent not
available in the Carrying Cost Account, accrued and unpaid interest on the
Series 1996-1 Certificates through the day of such prepayment (the "Refinancing
Date"), plus (iii) to the extent not available from funds set aside pursuant to
priority fourth of Section 4.3, the Additional Amounts, if any, owed with
respect to the
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Series 1996-1 Certificates. No such conveyance shall, however, be permitted if
as a result thereof, Transferor, Howmet or any of their Affiliates would acquire
such portion of the Series Interest or the underlying Receivables. In the case
of any such conveyance, the purchase price shall be deposited in the Principal
Funding Account and shall be distributed to the Agent, for further distribution
to the Holders, on the Refinancing Date in accordance with the terms of Section
5.2. Upon deposit of the purchase price in the Principal Funding Account, the
Series 1996-1 Holders shall have no further rights with respect to the
Transferred Assets.
(c) Any prepayment pursuant to this Section 4.9 shall be made on the later
to occur of (i) the date specified in the notice of prepayment and (ii) the date
on which sufficient funds (including funds to cover any related Additional
Amounts) have been accumulated pursuant to Section 4.3 or 4.4 or obtained by a
conveyance described in subsection 4.9(b).
(d) The Class B Certificates may not be prepaid until the Class A
Certificates have been repaid in full. In addition no Class B Certificates (or
Certificates in any other Subordinated Class) may be prepaid if any Senior Class
is outstanding and, after giving effect to that payment, the Net Invested Amount
would exceed the Base Amount.
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations. (a)
Notwithstanding clause (a) of the definition of Eligible Obligor, Persons that
are not Domestic Persons (such Persons being "Foreign Obligors") may be Eligible
Obligors.
(b) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) whether the members of the Concentration Unit are Domestic
Persons, Category One Obligors, Category Two Obligors or Category Three
Obligors.
(ii) such Concentration Unit's Basic Concentration Limit times the
Adjusted Eligible Receivables for such day (such product being such
Concentration Unit's "Total Dollar Limit").
(iii) the aggregate Unpaid Balance of Eligible Receivables owed by
Domestic Persons in such Concentration Unit.
(iv) an amount (whether positive or negative) equal to (A) the Total
Dollar Limit for such Concentration Unit minus (B) the amount determined
pursuant to clause (iii). Any such positive sum is the "First Step
Residual." The absolute value of any such negative sum is the "First Step
Excess. "
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(v) an amount (the "Category One Balance") equal to the aggregate
Unpaid Balance of Eligible Receivables owed by Category One Obligors in
such Concentration Unit.
(vi) an amount equal to 4% of the Adjusted Eligible Receivables on
such day.
(vii) the lesser of (A) the First Step Residual (or, if there is no
First Step Residual, zero) and (B) the amount determined pursuant to
clause (vi).
(viii) an amount (the "Second Step Excess") equal to (A) the
Category One Balance minus (B) the amount determined pursuant to clause
(vii); provided that if such sum is a negative number, the Second Step
Excess will be zero.
(ix) an amount (the "Second Step Residual") equal to (A) the First
Step Residual minus (B) the Category One Balance plus (C) the Second Step
Excess; provided that if such sum is a negative number, the Second Step
Residual will be zero.
(x) an amount (the "Category Two Balance") equal to the aggregate
Unpaid Balance of Eligible Receivables owed by Category Two Obligors in
such Concentration Unit.
(xi) an amount equal to 2% of Adjusted Eligible Receivables on such
day.
(xii) the lesser of (A) the Second Step Residual and (B) the amount
determined pursuant to clause (xi).
(xiii) an amount (the "Third Step Excess") equal to (A) the Category
Two Balance minus (B) the amount determined pursuant to clause (xii);
provided that if such sum is a negative number, the Third Step Excess will
be zero.
(xiv) an amount (the "Third Step Residual") equal to (A) the Second
Step Residual minus (B) the Category Two Balance plus (C) the Third Step
Excess; provided that if such sum is a negative number, the Third Step
Residual will be zero.
(xv) an amount (the "Category Three Balance") equal to the aggregate
Unpaid Balance of Eligible Receivables owed by Category Three Obligors in
such Concentration Unit.
(xvi) the lesser of (A) the Third Step Residual and (B) the amount
determined pursuant to clause (xi).
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(xvii) an amount (the "Fourth Step Excess") equal to (A) the
Category Three Balance minus (B) the amount determined pursuant to clause
(xvi); provided that if such sum is a negative number, the Fourth Step
Excess will be zero.
(xviii) the sum of the First Step Excess, the Second Step Excess,
the Third Step Excess and the Fourth Step Excess, such sum being the
"Concentration Unit Excess Concentration" for such Concentration Unit.
(c) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) an amount (the "Category One Eligibles") equal to (A) the
Category One Balance for such Concentration Unit minus (B) the Second Step
Excess (if any) for such Concentration Unit; provided that if such sum is
a negative number, the Category One Eligibles will be zero.
(ii) an amount (the "Category Two Eligibles") equal to (A) the
Category Two Balance minus (B) the Third Step Excess (if any) for such
Concentration Unit; provided that if such sum is a negative number, the
Category Two Eligibles will be zero.
(iii) an amount (the "Category Three Eligibles") equal to (A) the
Category Three Balance minus (B) the Fourth Step Excess for such
Concentration Unit; provided that if such sum is a negative number, the
Category Three Eligibles will be zero.
(d) On each Business Day, Servicer shall determine:
(i) the sum of the Category One Eligibles for all Concentration
Units.
(ii) the sum of the Category Two Eligibles for all Concentration
Units.
(iii) the sum of the Category Three Eligibles for all Concentration
Units.
(iv) an amount (the "Category Two Excess Concentration") equal to
(A) the amount determined pursuant to clause (ii) minus (B) 10% of the
Adjusted Eligible Receivables on such day; provided that if such sum is a
negative number, the Category Two Excess Concentration shall be zero.
(v) an amount (the "Category Three Excess Concentration") equal to
(A) the amount determined pursuant to clause (iii) minus (B) 5% of the
Adjusted Eligible Receivables on such day; provided that if such sum is a
negative number the Category Three Excess Concentrations shall be zero.
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(vi) the sum of the amounts in clauses (i), (ii) and (iii).
(vii) the sum of the Category Two Excess Concentration and the
Category Three Excess Concentration.
(viii) the sum of (A) the amount determined pursuant to clause (vi)
minus the amount determined pursuant to clause (vii).
(ix) an amount (the "Total Foreign Concentration Excess") equal to
(A) the amount determined pursuant to clause (viii), minus (B) 35% of the
Adjusted Eligible Receivables; provided that if such sum is a negative
number, the Total Foreign Concentration Excess shall be zero.
(e) With respect to (i) all Category One Obligors or Category Two
Obligors, and (ii) each Category Three Obligor that owes Eligible Receivables in
excess of $1,000,000 or that is located in a jurisdiction where Obligors owe an
aggregate amount of Eligible Receivables in excess of $2,000,000, Servicer and
Transferor shall, and shall cause the Sellers to, take all actions reasonably
necessary to perfect and/or protect Transferor's and/or the Trustee's interests
in such Receivables under the laws of the jurisdiction in which such Obligors
are located.
(f) Within the four weeks following each anniversary of the Closing Date,
Servicer shall (i) cause counsel satisfactory to the Required Purchasers, at the
expense of Howmet, to contact local counsel in each jurisdiction in which
Obligors referred to in clause (e) are located, for purposes of determining
whether there has been a change in the laws of such jurisdiction regarding the
assignment of Receivables and (ii) take such actions as are required under
Section 4.10(e) with respect to any such change. Nothing in this Section 4.10(f)
shall limit the obligations of Servicer and Transferor under Section 4.10(e) at
any other time.
(g) Contemporaneously with the delivery of each Monthly Report, Servicer
shall provide Trustee with a certificate, signed by an appropriate officer,
showing (i) any Obligor that is not a Domestic Person and either owes
Receivables in an aggregate amount exceeding $1,000,000 as of the most recent
Cut-Off Date or is a party to a contract with a Seller expiring more than one
year after such Cut-Off Date, and (ii) any jurisdiction outside the United
States in which Obligors owe an aggregate amount of Receivables exceeding
$2,000,000, determined as of such Cut-Off Date.
(h) All documents executed and delivered to, or for the benefit of,
Trustee pursuant to this Section shall be Transaction Documents for all purposes
(including for purposes of Section 6.1).
SECTION 4.11 Tax Opinion. If any Tax Opinion is required to be delivered
in connection with the Series 1996-1 Certificates, the term "Tax Opinion" shall
have the meaning specified below:
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"Tax Opinion" means, with respect to any action, an Opinion of Counsel to
the effect that, for Federal income tax and applicable state income and
franchise tax purposes, (a) such action will not cause the Investor Certificates
of Series 1996-1 debt or partnership interests, (b) such action will not cause
the Trust to be treated as other than an association (or publicly traded
partnership) taxable as a corporation, (c) such action should not be treated as
a taxable event to any Series 1996-1 Investor Certificateholder or Certificate
Owner.
SECTION 4.12 Reset of Benchmark Percentages and Special Concentration
Limits. Transferor may from time to time (i) increase or decrease any Benchmark
Percentage used in the definition of Concentration Limit, (ii) change the
percentages specified in the definition of Special Concentration Limit with
respect to the two Tier-5 Obligors that owe the highest aggregate Unpaid
Balances of Eligible Receivables, or (iii) designate an additional Obligor as a
"Special Obligor," in each case (other than the designation of Westinghouse
Electric Corp. as a Special Obligor) if the Approval Condition is satisfied. It
is understood and agreed that any such changes in the Benchmark Percentages or
the Special Concentration Limits or the addition of a Special Obligor may change
the calculation of the Class A Concentration Factor, the Class B Concentration
Factor, the Class A Minimum Reserve Ratio and the Class B Minimum Reserve Ratio.
ARTICLE V DISTRIBUTIONS AND REPORTS
SECTION 5.1 Distributions. On each Distribution Date and, with respect to
clause (b), on each Principal Payment Date, other than a Distribution Date that
is also a Refinancing Date, Trustee shall, in accordance with instructions set
out in the applicable Daily Report, distribute to the Holders, the following
amounts:
(a) accrued and unpaid interest on the ABR Tranches and any
additional interest payable to the Series 1996-1 Holders pursuant to
Section 4.1 or to the Holders of any other Series in Group I, to the
extent funds are available for such payment in the Carrying Cost Account
(and in the event of any shortfall, such interest shall be paid first to
each Senior Class, ratably in accordance with the total amount of interest
owed to each Senior Class, and second to each Subordinated Class, ratably
in accordance with the total amount of interest owed to each Subordinated
Class);
(b) on each Principal Payment Date, all funds deposited in each
sub-account of the Principal Funding Account on or prior to the most
recent Cut-Off Date shall be distributed in reduction of the related
Series Invested Amounts; all such amounts on deposit in the Series 1996-1
sub-account of the Principal Funding Account shall be paid to the Holders
of Class A Certificates until they have been paid or provided for in full
before any such amounts are paid to the Holders of Class B Certificates,
and no such amounts shall be paid to the Holders of any Subordinated
Certificates on any day if (i) any Senior Class will remain outstanding
after that date and (ii) the Invested
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Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day);
(c) if, on the Expected Final Payment Date or any Distribution Date
falling in a Group Amortization Period, the funds on deposit in the
Carrying Cost Account (less any Servicing Fee payable on that day to
anyone other than a Howmet Person) will be equal to or greater than the
Invested Amount (after giving effect to all distributions required by
subsections (a) and (b)), then an amount equal to such remaining Invested
Amount shall he withdrawn from the Carrying Cost Account and distributed
in reduction of the Invested Amount; and
(d) any Additional Amounts payable with respect to Certificates in
any Series in Group I to the extent that funds have been allocated for
those Additional Amounts pursuant to priority fourth of Section 4.3 or
priority third of Section 4.4 (and in the event of any shortfall,
Additional Amounts shall be paid first to each Senior Class, ratably in
accordance with the total Additional Amounts owed to each Senior Class,
and second to each Subordinated Class, ratably in accordance with the
total Additional Amounts owed to each Subordinated Class).
On each Distribution Date, Trustee shall also, in accordance with
instructions set out in the applicable Dally Report, distribute the Servicing
Fee to the Servicer to the extent that funds are available for that purpose in
the Carrying Cost Account.
On each Interest Payment Date (other than any Distribution Date, which
shall be governed by subsection (a) above), Trustee shall, in accordance with
instructions set out in the applicable Daily Report, distribute interest payable
on that date to the Holders of any Series in Group I, to the extent funds are
available for such payment in the Carrying Cost Account (and in the event of any
shortfall, any such interest shall be paid first to each Senior Class, ratably
in accordance with the total amount of interest owed to each Senior Class, and
second to each Subordinated Class, ratably in accordance with the total amount
of interest owed to each Subordinated Class).
Any amounts payable to the Holders of Class A Certificates pursuant to
this Section shall be paid to the Agent, and the Agent shall distribute such
amounts to such Holders. Amounts payable to a Holder of Class B Certificates
pursuant to this Section shall be paid to such Holder.
SECTION 5.2 Special Distributions on the Refinancing Date. On the
Refinancing Date, Trustee shall, in accordance with instructions set out in the
applicable Daily Report, distribute to the Holders the following amounts:
(a) all interest accrued on the Certificates in any Series in Group
I through the Refinancing Date, to the extent funds are available for such
payment in the Carrying
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Cost Account or have been deposited in the Principal Funding Account
pursuant to Section 4.9;
(b) all funds deposited in the Principal Funding Account pursuant to
Section 4.9, provided that no such amounts shall be paid to the Holders of
the Class B Certificates on any day if (i) any Senior Class will remain
outstanding after that date and (ii) the Net Invested Amount exceeds the
Base Amount on that day (after giving effect to all payments and
allocations made pursuant to Section 4.3 on that day); and
(c) any Additional Amounts to the extent that funds for those
Additional Amounts have been allocated pursuant to priority fourth of
Section 4.3 or priority third of Section 4.4 or deposited in the Principal
Funding Account pursuant to Section 4.9.
Amounts payable to Holders of Class A Certificates pursuant to this
Section shall be paid to the Agent, and the Agent shall distribute such amounts
to such Holders. Amounts payable to a Holder of Class B Certificates pursuant to
this Section shall be paid to such Holder. Promptly following receipt of the
amounts payable to the Holders of Certificates pursuant to this Section , such
Holders shall tender such Certificates to the Trustee.
SECTION 5.3 Payments in Respect of Transferor Certificate. On each day on
which funds are allocated for this purpose pursuant to Sections 4.3 and 4.4 (and
subject to the terms of Section 4.4 relating to the Holdback Account), Trustee
shall, in accordance with instructions set out in the applicable Daily Report,
distribute to Transferor, in respect of the Transferor Certificate, all funds
allocated for that purpose in accordance with those Sections. In addition, after
the Group Invested Amount has been repaid in full and all interest and
Additional Amounts owed to the Holders have been paid, any additional funds on
deposit in the Carrying Cost Account, the Equalization Account or the Principal
Funding Account shall similarly be paid to Transferor in respect of the
Transferor Certificate.
SECTION 5.4 Daily Reports and Monthly Reports. Each Daily Report and
Monthly Report shall be substantially in the applicable form set out in Exhibit
B or C or in such other form as may be required by any other Supplement relating
to a Series in Group I or otherwise satisfactory to Servicer and Trustee and
consistent with the terms of this Supplement, each such other Supplement and the
Pooling Agreement. Copies of each Monthly Report shall be provided free of
charge by the Trustee to purchasers of Series 1996-1 Certificates in connection
with the initial distribution thereof and may be obtained free of charge upon
request from the Trustee (and presentation of a confirmation evidencing the
purchase of such beneficial interest) by subsequent purchasers.
SECTION 5.5 Annual Tax Information. On or before February 15 of each
calendar year, beginning with calendar year 1997, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to each Person who at any time
during the preceding calendar year was
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a Holder the information for the preceding calendar year, or the applicable
portion thereof during which the Person was a Holder, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable such Holders to prepare their Federal income tax returns.
Servicer's obligations under the preceding sentence shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent to the specified Persons pursuant to the Pooling
Agreement or any requirements of the Internal Revenue Code as from time to time
in effect. Notwithstanding anything to the contrary contained in this Agreement,
Trustee shall, to the extent required by applicable law, from time to time
furnish to the appropriate Persons a Form 1099-INT within the period required by
applicable law.
SECTION 5.6 Periodic Perfection Certificate. On or before December 1 of
each calendar year, beginning with calendar year 1996, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to Trustee and the Agent an
Officer's Certificate setting forth a list of all changes in (a) the name,
identity or corporate structure of Transferor or any Seller and (b) the chief
executive office of Transferor or any Seller (or in the place of business of
Transferor or any Seller that has only one place of business) that have taken
place since the date of the Officer's Certificate most recently delivered
pursuant to this Section 5.6 (or since the Closing Date, in the case of the
first such Officer's Certificate to be delivered), or indicating that no such
events have taken place, and stating in each case what filings of UCC financing
statements, or amendments thereto, relating to the Transaction Documents have
been made in connection with each such event (identifying the date and filing
index numbers for each). Any financing statement identified in such an Officer's
Certificate delivered to Trustee shall be deemed to have been identified to
Trustee in writing for purposes of subsection 11.1(c)(v) of the Pooling
Agreement. If any such new UCC financing statements are filed, Servicer shall
cause Trustee to be named as secured party (in the case of any filing against
Transferor) or assignee of the secured party (in the case of any filing against
a Seller). Notwithstanding the foregoing, if any "Event of Default" or
"Potential Event of Default" under (and as defined in) the Howmet Credit
Agreement occurs, Servicer shall deliver an Officer's Certificate covering the
matters described above to Trustee and Agent not later than 10 days after the
occurrence of such event, and for so long as any such event remains outstanding,
Servicer shall deliver such an Officer's Certificate on the last Business Day
falling in each of March, June, September and December.
ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.1 Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event":
(a)(i) failure on the part of Transferor or Servicer to make any
payment of the principal amount of the Series 1996-1 Certificates when
due, or to make any payment of any interest on the Series 1996-1
Certificates or to make any deposit required by
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the terms of any Transaction Document on or before two Business Days after
the date such payment or deposit is required to be made, or to make any
other payment, except any payment of the Servicing Fee to a Howmet Person,
required by the terms of any Transaction Document on or before three
Business Days after the date such payment is required to be made; or (ii)
failure on the part of any Seller to duly observe or perform subsection
6.1(f), 6.1(h), 6.1(j), 6.3(a), 6.3(b), 6.3(c) or 6.3(e) of the Purchase
Agreement or Transferor to duly observe or perform subsection 7.2(c),
7.2(e), 7.2(f), 7.2(h), 7.2(i), 7.2(j) or 72{k) of the Pooling Agreement
or clause (i) or (ii) of subsection 7.2(d) of the Pooling Agreement, which
failure has a substantial likelihood of having a Material Adverse Effect
and continues unremedied for a period of five Business Days; or (iii)
failure on the part of Transferor, Servicer or any Seller duly to observe
or perform any other covenant or agreement set forth in any Transaction
Document, which failure has a substantial likelihood of having a Material
Adverse Effect and continues unremedied for a period of 30 days; or (iv)
Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in subsection
5.1(d), 5.1(k), 5.1(o) or 5.1(r) of the Purchase Agreement or by
Transferor in subsection 2.3(a)(i), 2.3(a)(ii) or 7.1(i) of the Pooling
Agreement shall prove to have been incorrect in any material respect when
made, and continues to be incorrect in any material respect for a period
of five Business Days, or any other representation or warranty made by
Transferor, Servicer or any Seller in any Transaction Document shall prove
to have been incorrect in any material respect when made, and continues to
be incorrect in any material respect for a period of 30 days; provided
that a mistake in the representation of a Receivable as an Eligible
Receivable or the breach of a representation and warranty with respect to
a Receivable shall not constitute an Early Amortization Event unless and
until the applicable Seller has failed to make the cash payments (if any)
owed under Sections 3.1 and 3.5 of the Purchase Agreement in respect of
such mistake or breach (it being understood that certain of such mistakes
or breaches may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Transferor,
Servicer, Guarantor or any Seller, or Transferor shall become unable, for
any reason, to transfer Receivables or other Transferred Assets to the
Trust in accordance with the provisions of this Agreement and the Pooling
Agreement; provided that if, at the time any event that would, with the
passage of time, become a Bankruptcy Event occurs as a result of a
bankruptcy proceeding being filed against Transferor or any Seller, then,
on and after the day on which the bankruptcy proceeding is filed until the
earlier to occur of the dismissal of the proceeding and the commencement
of an Early Amortization Period, Transferor shall not purchase Receivables
and Related Assets from the affected Seller or, if Transferor is the
subject of the proceeding, transfer Receivables and Related Transferred
Assets to the Trust;
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(d) the Trust or Transferor shall be required to be registered as an
"investment company" under and within the meaning of the Investment
Company Act of 1940, as amended;
(e) the Net Invested Amount exceeds the Base Amount for a period of
two or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have been
remedied;
(g) Howmet shall cease to own, directly or indirectly, 100% of the
issued and outstanding capital stock of Transferor;
(h) the Internal Revenue Service or the PBGC shall have filed one or
more Tax or ERISA Liens against the assets of Transferor or any Seller
(including Receivables) in an aggregate amount exceeding $250,000 unless
such amounts (i) are bonded in a manner that satisfies the Approval
Condition or (ii) relate to taxes in an aggregate amount not exceeding
$1,000,000 which are contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being maintained under
GAAP;
(i) the cessation of, or the failure to create, a valid
first-priority perfected ownership or security interest in favor of
Trustee in the Receivables or the rights of Transferor under the Purchase
Agreement, which cessation or failure has a substantial likelihood of
having a Material Adverse Effect;
(j) the Series 1996-1 Invested Amount is not paid in full on the
Expected Final Payment Date;
(k) Transferor's net worth (as calculated in accordance with GAAP)
shall at any time be less than 17% of the aggregate Unpaid Balance of the
Receivables at such time and such condition continues for five consecutive
Business Days; provided that for purposes of calculating Transferor's net
worth, any and all amounts owed to Transferor by any Howmet Person shall
be excluded from such calculation;
(l) any foreclosure or similar proceeding in respect of any adverse
claim on any Buyer Note or the Transferor's common stock shall have been
commenced; or title to any Buyer Note or Transferor's common stock shall
pass to the holders of such adverse claim, it being understood that the
grant of a security interest in the stock of Transferor or any Buyer Note
to a creditor of a Seller that is party to an Intercreditor Agreement
shall not be an Early Amortization Event;
(m) the average of the Aged Receivables Ratio for any three
consecutive Calculation Periods shall be greater than 2.50%;
42
<PAGE> 215
(n) the average of the Past Due Receivables Ratio for any three
consecutive Calculation Periods shall exceed 5.75%;
(o) the average of the Dilution Ratio for any three consecutive
Calculation Periods shall be greater than 6.75%; or
(p) the Intercreditor Provisions shall be amended without written
notice thereof having been provided to the Agent no later than five
Business Days prior to the effective date of such amendment.
SECTION 6.2 Early Amortization Period. Upon the occurrence and continuance
of any Early Amortization Event described in subsection 6.1(c), an Early
Amortization Period shall commence without any notice or other action on the
part of Trustee or the Series 1996-1 Holders, immediately upon the occurrence of
such Early Amortization Event, except that if an Early Amortization Event
described in subsection 6.1(c) occurs as the result of the occurrence of a
Bankruptcy Event with respect to one or more Sellers, the Receivables originated
by which made up less than 10% of the aggregate Unpaid Balance of Receivables
held by the Trust as of the date of the commencement of the proceeding that gave
rise to the first such Bankruptcy Event, then an Early Amortization Period shall
not commence unless Required Series Holders declare it to have commenced. Upon
the occurrence and continuance of any other Early Amortization Event, after the
applicable grace period, if any, and if the action or event that gave' rise to
such Early Amortization Event has not been waived by the Required Series
Holders, Trustee may (and, at the direction of the Required Series Holders,
shall) by notice then given in writing to Transferor and Servicer, declare that
an Early Amortization Period has commenced as of the date of Transferor's
receipt of the notice. In the event of any prepayment of the Series 1996-1
Certificates prior to the first anniversary of the date hereof as a result of
the occurrence of an Early Amortization Event, the Holders thereof shall be
entitled to receive a Prepayment Premium.
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES
SECTION 7.1 Optional Redemption of Investor Interests. On any Distribution
Date occurring during an Early Amortization Period with respect to the Series
1996-1 Certificates on or after the date that the Series 1996-1 Invested Amount
is reduced to 10% or less of the sum of the Stated Amounts for the Series 1996-1
Certificates, Transferor shall have the option to redeem the Series 1996-1
Series Interest. The purchase price will be an amount equal to the Invested
Amount plus accrued and unpaid interest (and accrued and unpaid interest with
respect to interest that was due but not paid on any prior Distribution Date)
through the day preceding the Distribution Date at the applicable interest rate
(as specified in Section 4.1) plus the aggregate amount by which the Invested
Amount has been reduced on account of Investor Write-Offs (and not subsequently
reinstated) plus (if such redemption occurs prior to the first anniversary of
the date hereof) the applicable Prepayment Premium. Upon the tender of the
outstanding Certificates of the Series by the Holders to Trustee,
43
<PAGE> 216
Trustee shall distribute the amounts, together with all funds on deposit in the
Principal Funding Account that are allocable to the Series 1996-1 Certificates,
to the Holders of the Series on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Holders. Following
any redemption, the Holders of the Series shall have no further rights with
respect to the Transferred Assets. In the event that Transferor falls for any
reason to deposit in the Principal Funding Account the aggregate purchase price
for the Series 1996-1 Certificates, payments shall continue to be made to the
Holders of the Series in accordance with the terms of the Pooling Agreement and
this Supplement.
SECTION 7.2 Termination. Notwithstanding Section 12.1 of the Pooling
Agreement, the last payment of the principal of and interest on the Certificates
of any Series in Group I shall be due and payable no later than the Final
Scheduled Payment Date for that Series. If, on the Distribution Date immediately
prior to the Final Scheduled Payment Date for any such Series, Servicer
determines that the Series Invested Amount for the Series on the applicable
Final Scheduled Payment Date (after giving effect to all changes therein on such
date) will exceed zero, Servicer shall, as soon as practicable, solicit bids for
the sale of interests in the Receivables in an amount equal to the product of
(i) the outstanding balance of Receivables, times (ii) the Series Collection
Allocation Percentage, times (iii) the Investor Allocation Percentage, times
(iv) a fraction the numerator of which is the applicable Series Invested Amount
and the denominator of which is the Group Invested Amount. Transferor shall be
entitled to participate in and to receive notice of each bid submitted in
connection with the bidding process. Upon the expiration of the period, Servicer
shall determine (x) the highest bid for such Receivables and (y) the Available
Final Distribution Amount for the Series. Servicer shall sell the interests in
the Transferred Assets on the Final Scheduled Payment Date for the applicable
Series to the bidder with the Highest Bid and shall deposit the proceeds of such
sale in the Master Collection Account for allocation to the Holders. The
priorities specified in Section 5.1 shall apply to any such distribution.
SECTION 7.3 Indemnification by Transferor. Transferor hereby agrees to
indemnify the Trust, Trustee, each Holder of a Series 1996-1 Certificate and
each of the successors, permitted transferees and assigns of any such Person and
all officers, directors, shareholders, controlling Persons, employees,
affiliates and agents of any of the foregoing (each of the foregoing Persons
individually being called a "Transferor Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims (whether on account
of settlements or otherwise, and whether or not the relevant Transferor
Indemnified Party is a party to any action or proceeding that gives rise to any
Transferor Indemnified Losses (as defined below)), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing collectively being called "Transferor
Indemnified Losses") awarded against or incurred by any of them that arise out
of or relate to this Agreement, any other Transaction Document or any of the
transactions contemplated herein or therein or the use of proceeds herefrom or
therefrom (including any Transferor Indemnified Losses (i) relating to any
Adverse Claim, without regard to whether
44
<PAGE> 217
such Adverse Claim was a Permitted Adverse Claim, or (ii) arising from any
failure to make any filing or obtain any consent as required by the Federal
Assignment of Claims Act with respect to any Receivables).
Notwithstanding the foregoing, in no event shall any Transferor
Indemnified Party be indemnified for any Transferor Indemnified Losses (a)
resulting from gross negligence or willful misconduct on the part of such
Transferor Indemnified Party (or the gross negligence or willful misconduct on
the part of any of its officers, directors, employees, affiliates or agents),
(b) to the extent they include Transferor Indemnified Losses in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Transferor for the amount of any Receivable or Related Transferred Asset not
paid by the related Obligor, (c) to the extent they are or result from lost
profits, (d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) distributions on the Series
1996-1 Certificates, (ii) franchise or withholding taxes imposed on any
Transferor Indemnified Party other than the Trust or the Trustee in its capacity
as Trustee or (iii) federal or other income taxes on or measured by the net
income of such Transferor Indemnified Party and costs and expenses in defending
against the same, (e) resulting from any breach by such Transferor Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to a Transferor Indemnified Party or is insufficient to hold a
Transferor Indemnified Party harmless, then Transferor shall contribute to the
amount paid by the Transferor Indemnified Party as a result of any loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Transferor Indemnified Party on the one hand
and Transferor on the other hand, but also the relative fault of such Transferor
Indemnified Party (if any) and Transferor and any other relevant equitable
considerations.
SECTION 7.4 Indemnification by Servicer. Servicer agrees that the Agent
and each Holder of a Series 1996-1 Certificate shall be an "Indemnified Party"
for purposes of Section 8.4 of the Pooling Agreement.
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF TIE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 8.2 Counterparts. This Supplement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
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<PAGE> 218
SECTION 8.3 SEVERABILITY OF PROVISIONS. If any one or more of the
provisions or terms of this Supplement shall for any reason whatsoever be held
invalid, then the unenforceable provision(s) or term(s) shall be deemed
severable from the remaining provisions or terms of this Supplement and shall
in no way affect the validity or enforceability of the other provisions or
terms of this Supplement.
SECTION 8.4 AMENDMENT, WAIVER, ETC. This Supplement may be amended,
subject to SECTION 13.1 of the Pooling Agreement and SECTION 10.1 of each
Certificate Purchase Agreement, from time to time by Servicer, Transferor and
Trustee by a written instrument signed by each of them
SECTION 8.5 TRUSTEE. Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or suffciency of this Supplement
or for or in respect of the recitals contained herein, all of which recitals
are made solely by Transferor and Servicer.
SECTION 8.6 INSTRUCTIONS IN WRITING. All instructions given by Servicer to
Trustee pursuant to this Supplement shall be in writing, and may be included in
a Daily Report or Monthly Report.
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<PAGE> 219
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
-------------------------------
Title: Vice President
------------------------------
Address: c/o Nevada Corporate
Management, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION, as Servicer
By: /s/ Roland Paul
---------------------------------
Name: Roland Paul
-------------------------------
Title: Vice President
------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 8614746
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ Russell T. Whitley
---------------------------------
Name: Russell T. Whitley
-------------------------------
Title: ASST. VICE PRESIDENT
------------------------------
Address: One M&T Plaza, 7th Floor
Buffalo, New York 14203
Attention: Russell Whitley
Facsimile: (716) 8424474
<PAGE> 220
EXHIBIT A - Part 1
to the Series 1996-1 Supplement
FORM OF CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND
<PAGE> 221
WILL NOT BECOME A PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. [If this representation cannot be
made, Transferor, Servicer or the Trustee may require the legend to contain
additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
<PAGE> 222
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: Maximum Principal Amounts
$____________________
THIS CERTIFIES THAT __________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18,1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Transferor"), HOWMET
CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation, as trustee (together with its
successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-I Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class A, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been executed
by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
3
<PAGE> 223
By its acceptance of this Certificate, each Holder hereof (a) acknowledges
that it is the intent of Transferor, and agrees that it is the intent of the
Holder that, for purposes of Federal, applicable state and local income and
franchise and other taxes measured by or imposed on income, the Class A, Series
1996-1 Certificates (including this Certificate) will be treated as evidence of
indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be executed
by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:______________________________
Title: __________________________
4
<PAGE> 224
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in the
Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________
Title: _______________________
Dated: ____________, 1996
5
<PAGE> 225
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ----------- ------------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
<PAGE> 226
EXHIBIT A - Part 2
to the Series 1996-1 Supplement
FORM OF CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
<PAGE> 227
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot be made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
<PAGE> 228
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B. SERIES 1996-1 CERTIFICATE
Date: $________________
THIS CERTIFIES THAT _________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and are
therefore subordinated to the Class A, Series 1996-1 Certificates, Series 1996-1
Certificates and Certificates in any other Senior Class that may be issued from
time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been executed
by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a) acknowledges
that it is the intent of Transferor, and agrees that it is the intent of the
Holder that, for purposes of Federal, applicable state and local income
3
<PAGE> 229
and franchise and other taxes measured by or imposed on income, the Class B,
Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be executed
by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:___________________________________
Title: _______________________________
4
<PAGE> 230
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in the
Pooling Agreement, as supplemented by the Supplement
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: ____________________________________
Title: _________________________________
Dated: ____________, 1996
5
<PAGE> 231
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ------------ ------------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
<PAGE> 232
EXHIBIT B
Form of Daily Report
<PAGE> 233
PURCHASES AND REPAYMENTS
Principal
Amount of Outstanding
Purchase Principal
<TABLE>
<CAPTION>
AMOUNT PURCHASED REPAID BALANCE STATED AMOUNT
---------------- ------ ------- -------------
<S> <C> <C> <C> <C> <C>
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 234
EXHIBIT B
FORM OF DAILY REPORT
<PAGE> 235
BLADE RECEIVABLES CORPORATION
DAILY REPORT
- --------------------------------------------------------------------------------
* Unprotected items must be hand input *
- --------------------------------------------------------------------------------
* All amounts labeled "less" must be input as negative *
- --------------------------------------------------------------------------------
* DO NOT DELETE ROWS OR COLUMNS!! *
- --------------------------------------------------------------------------------
BLADE RECEIVABLES CORPORATION DAILY REPORT
Pre-Liquidation
Daily Report Date 15-Apr-96 27-Mar-97
Preceding Daily Report Date 12-Apr-96 09:15 AM
Prepared by
-----------------
page 1
<TABLE>
<CAPTION>
A. DAILY RECEIVABLES ACTIVITY HOWMET
TOTAL
-----
<S> <C>
1. BEGINNING DAILY RECEIVABLES BALANCE 90,651,196
2. Plus: New Invoices 2,370,337
3. Less: Cash Collections Applied to Reduce Receivables Balance (5,875,318)
(including New Checks in the Process of Collection)
4. Less: Dilution (121,492)
5. Less: Write-offs 0
6. Less: Misc. Adjustments (Non-Dilutive) 0
7. ENDING DAILY RECEIVABLES BALANCE 87,024,723
===========
B. NET ELIGIBLE RECEIVABLES
1. ENDING DAILY RECEIVABLES BALANCE 87,024,723
Less: Accounts of Ineligible Obligors
2. Less: Bankrupt accounts (4,096)
3. Less: Federal/State Government accounts 0
4. Less: "Cash in advance" or "cash on account" customers (26,189)
5. Less: Ineligible due to notes receivable 0
6. Less: Accounts with over 50% of unpaid balance > 90 days from Due Date (826,109)
Less: Specific Ineligible Receivables
7. Less: Receivables > 90 days from due date (5,671,092)
8. Less: Receivables with original due date >120 days from date invoice is delivered 0
9. Less: Receivables otherwise not eligible (due to denomination in currency other than 0
dollars, invalid contract, change in business, breach of
warranty, consent requirement, violation of law, improper
modification, etc.)
10. Less: Balance of disputed invoices (or, if less, the aggregate amount of disputes) (2,711,217)
11. Less: Contra balances (weekly) (205,059)
12. INELIGIBLE RECEIVABLES (9,443,761)
13. ELIGIBLE RECEIVABLES 77,580,962
14. Less: Unapplied Cash (balance in MCA not applied to Receivables) 491,536
15. Plus: Aggregate Retained Balances ( balances in lockbox and concentration
accounts for which there has been a reduction in receivables balance) 0
16. ADJUSTED ELIGIBLE RECEIVABLES 77,089,426
17. Less: Excess Concentration Balances (See attached supporting calculations) 0
18. Less: Adverse Claims 0
19. NET ELIGIBLE RECEIVABLES 77,089,426
</TABLE>
<PAGE> 236
C. CARRYING COST RECEIVABLES RESERVE
Carrying Cost Receivables Reserve = (C.1) + (C.2) + (C.7) - (C.11)
<TABLE>
<S> <C>
1. Current Carrying Costs (i.e. Interest and Servicing fee due on next interest payment date 456,335
and any interest payment date ending within a week thereof)
2. ESTIMATED FUTURE INTEREST (C.3 x(C.4 x C.5) X C.6) 1,249,507
3. Invested Amount (see E.1) 60,000,000
4. Volatility Factor (GIVEN BY RATING AGENCY) 1.50
5. Certificates Rate (Benchmark rate plus spread) 5.9500%
</TABLE>
<TABLE>
<CAPTION>
$ Outstanding LIBOR rate ABR rate Spread Base Rate:
<S> <C> <C> <C> <C> <C>
Series 1996-1 Certificates (LIBOR Tranche A) 47,500,000 5.4102% 0.5000% 5.9102%
Series 1996-1 Certificates (LIBOR Tranche B) 7,500,000 5.4023% 0.8000% 6.2023%
Series 1996-1 Certificates (LIBOR Tranche C) 0 5.5000% 0.5000% 0.0000%
Series 1996-1 Certificates (LIBOR Tranche D) 0 5.5000% 0.5000% 0.0000%
Series 1996-1 Certificates (ABR Tranche) 0 8.2500% 0 0.0000%
Total 55,000,000
</TABLE>
<TABLE>
<S> <C> <C>
6. (2 X Turnover days Dvd. by 360) 0.2333
Turnover Days 42
7. ESTIMATED FUTURE SERVICING ( C.8 x C.9 x C.10 x C.6) 444,733
8. Series Collection Allocation Percentage (on next preceeding distribution date (see E.9)) 100.00%
9. Aggregate unpaid balance of Receivables held by Trust on next preceeding 0
Distribution date (from monthly report) ................................... 95,300,000
10. Percentage 2.00%
11. Carrying Cost Account beginning balance (see preceding day's Daily Report K.6) 428,544
12. CARRYING COST RECEIVABLES RESERVE 1,722,031 1,722,031
</TABLE>
<PAGE> 237
<TABLE>
<CAPTION>
D. NET INVESTED AMOUNT
<S> <C> <C>
1. Outstanding Principal Amount of Certificates (see E.1) 55,000,000
2. Less: Amount in Equalization Account (see yesterday's L.11) (9,932,393)
3. Less: Amount in Principal Funding Account (see yesterday's M.5) 0
------------
4. NET INVESTED AMOUNT 45,067,607
E. SERIES COLLECTION ALLOCATION PERCENTAGE
1. INITIAL INVESTED AMOUNT 55,000,000
2. Carrying Cost Receivables Reserve (see C.12)) 1,722,031
3. One minus Class B Reserve Ratio (see F.1) 78.99%
4. Ending Daily receivables balance (see A.7) 87,024,723
5. Net Eligibles Receivables (see B.21) 77,089,426
6. REQUIRED RECEIVABLES FOR SERIES 1996-1 ((E.1 + E.2) / E.3) x (E.4 / E.5)) 81,063,901
7. Required Receivables for all other series 0
8. REQUIRED RECEIVABLES FOR ALL SERIES (E.6 + E.7) 81,063,901
9. SERIES COLLECTION ALLOCATION PERCENTAGE (E.6 / E.8) 100.0%
F. BASE AMOUNT AND ASSET SURPLUS / SHORTFALL
1. Memo: "Class B Reserve Ratio" (see effective Settlement Statement) 21.01%
2. NET ELIGIBLE RECEIVABLES (from B.21) 77,089,426
3. Times: Series Collection Allocation Percentage (see E.9) 100.0% 77,089,426
4. Times: 100% less "Class B Reserve Ratio" 78.99% 60,892,938
------------
5. Less: Class A Subordination Deficit (see effective Settlement Statement) --
6. Less: Carrying Cost Receivables Reserve (see C.(12)) 1,722,031.18
----------
7. BASE AMOUNT 59,170,906
----------
8. Less: Net Invested Amount (see D.4) 45,067,607
9. ASSET SURPLUS/SHORTFALL 14,103,300
==========
G. CARRYING COST CASH REQUIRED AMOUNT
1. Current Carrying Costs (See C.1) 456,335
2. CARRYING COST CASH REQUIRED AMOUNT (see G.1) 456,335
3. Beginning Balance in Carrying Cost Account (see C.11) 428,544
4. Carrying Cost Account Surplus (Deficit) (G.3-G.2) (27,791)
============
</TABLE>
<PAGE> 238
<TABLE>
<CAPTION>
H. DAILY CASH ALLOCATIONS
<S> <C>
1. Amount Transferred from Concentration Account to Master Collection 2,726,390
Account
2. Plus: Funds held in Master Collection Account pursuant to 0
clause (i) of Fifth Priority (prior Day)
3. Plus: Excess funds released from Carrying Cost Account (see G.4 0
(if positive))
4. Plus: Release of funds from Equalization Account (see L.6) 9,712,788
5. Plus: Reinvestment earnings (interest in Trust Accounts) 0
-----------
6. FUNDS AVAILABLE FOR ALLOCATION 12,439,178
===========
<CAPTION>
Amounts Allocated
required funds (from
per priority H.6 above) Excess/Shortfall
------------ ---------- ----------------
<S> <C> <C> <C>
First, Allocation to Carrying Cost Account 27,791 27,791 0
(until funds allocated thereto equals
CARRYING COST CASH REQUIRED AMOUNT from
G.4 above (if negative))
Second, Prior to Series Amortization Period, If 0 0 0
Net Invested Amount exceeds the Base Amount,
allocation to Equalization Account in an amount
sufficient to reduce the Net Invested Amount to
an amount equal to the Base Amount In early Series
Amortization Period, allocation to a sub-account of
the Principal Funding Account for the related series.
Third, During any Series Amortization Period, to the applicable 0 0 0
sub-account of the Principal Funding Account until the
amount on deposit in the account equals the applicable
Principal Deposit Account
Fourth, Held for payments of other amounts payable to the holders of 0 0
the Series 1995-1 Certificates on the next distribution date.
Fifth, (i) Cash set aside in MCA as requested by BRC 0 0
(ii) Payment to BRC 0 12,411,386
<S> <C>
I. INVESTED AMOUNT
1. BEGINNING INVESTED AMOUNT (yesterday's ending amount) 55,000,000
2. Less: Principal Payments 0
3. Less: Reductions on Account of write-offs or dilution 0
------------
4. ENDING INVESTED AMOUNT 55,000,000
============
J. MASTER COLLECTION ACCOUNT (MCA)
1. BEGINNING MCA BALANCE (yesterday's (J.11) ending balance) 0
2. Plus: Cash Collections (see H.1) 2,726,390
3. Plus: Excess cash released from Carrying Cost Account (see G.4) 0
4. Plus: Excess funds reallocated to MCA from Equalization Account (see L.6) 9,712,788
5. Plus: Reinvestment earnings (seeH.5) 0
6. Less: Cash allocated to Carrying Cost Account (see First priority) (27,791)
7. Less: Cash allocated to Principal Funding Account (see Second priority) 0
8. Less: Cash allocated to Equalization Account or Principal Funding Account
(see Third priority) 0
9 Less: Payments made pursuant to Fourth priority 0
10. Less: Payment to BRC (see Fifth priority (clause II)) (12,411,386)
-----------
11. ENDING MCA BALANCE 0
===========
K. CARRYING COST ACCOUNT
1. BEGINNING CARRYING COST ACCOUNT BALANCE (yesterday's ending balance)
(see C.11) 428,544
2. Plus: Cash allocated today pursuant to First priority in Daily Cash
Allocations (see I. First priority) 27,791
3. Less: Payment of interest on Certificates (on Distribution or Interest
Payment Date) 0
4. Less: Payment of Servicing Fee and other Carrying Costs 0
5. Less: Release of any excess cash for today's daily allocation (see G.4
(if positive)) 0
-----------
6. ENDING CARRYING COST ACCOUNT BALANCE 456,335
===========
</TABLE>
<PAGE> 239
L. EQUALIZATION ACCOUNT
<TABLE>
<CAPTION>
DETERMINATION OF AMOUNT REQUIRED TO BE DEPOSITED INTO EQUALIZATION ACCOUNT TODAY
<S> <C>
1. Amount required to be deposited into Equalization Account today (F.8 (if negative)) 0
2. Cash available for deposit into Equalization Account today (H.6 minus First Priority) 12,411,386
------------
3. Amount actually deposited into Equalization Account today (minimum of L.1, L.2) 0
DETERMINATION OF SURPLUS OF FUNDS IN EQUALIZATION ACCOUNT TODAY
4. Asset Surplus [see F.8 (if positive)] 14,103,300
5. Beginning Equalization Account Balance (see L.7) 9,712,788
------------
6. EXCESS FUNDS IN EQUALIZATION ACCOUNT (if F.8>0, then the lesser of L.4 and L.5) 9,712,788
------------
EQUALIZATION ACCOUNT BALANCE
7. BEGINNING EQUALIZATION ACCOUNT BALANCE (Yesterday's ending balance (L.11)) 9,712,788
8. Plus: Today's deposit to Equalization Account (see L.3) 0
9. Less: Excess funds reallocated from Equalization Account to Master Collection Acct (see L.6) 9,712,788
10. Less: Cash reallocated from Equalization Acct to Principal Funding Acct (pursuant to 4.5 of Supplement) 0
11. ENDING EQUALIZATION ACCOUNT BALANCE (L.7 + L.8 - L.9 - L.10) 0
============
M. PRINCIPAL FUNDING ACCOUNT
1. BEGINNING PRINCIPAL FUNDING ACCOUNT BALANCE (yesterday's ending balance (M.5)) 0.00
2. Plus: Cash allocated to Principal Funding Account (see Second, and Third priorities) 0.00
3. Less: Prepayment of Certificates 0.00
4. Plus: Cash reallocated from Equalization Account to Principal Funding Account (see L.10) 0.00
5. ENDING PRINCIPAL FUNDING ACCOUNT BALANCE 0.00
============
N. NONCOMPLYING RECEIVABLES AND DILUTION ADJUSTMENTS AND SELLER ADJUSTMENTS
1. Seller Dilution Adjustments (see A.4) (121,492)
2. Seller Noncomplying Receivables Adjustments 0
3. Minus Customer payment (if any) BRC received yesterday on account of Seller 0
4. Noncomplying Receivables that have already been adjusted 0
5. Minus Previous 5 Days Noncomplying Receivables and Dilution Adjustments 0
6. NONCOMPLYING RECEIVABLES AND DILUTION ADJUSTMENTS (121,492)
O. PURCHASE PRICE
1. New Invoices (as of the close of business on the preceding business day) (from A.2) 2,370,337
2. Purchase Price Percentage (see effective Monthly Report) 98.69%
3. Purchase Price = Net New Invoices (see O.1) x Purchase Price Percentage (see O.2) 2,339,285
4. Minus Noncomplying Receivables and Dilution Adjustments (see N.5) (121,492)
5. Purchase Price Payable (O.3 - O.4) 2,217,794
6. Payment of Purchase Through Reduction of Acquisition Loan 0
7. Payment of Purchase Price through Cash consideration (see H. fifth) 12,411,386
8. Payment of Purchase Price through increase in Buyer Note (10,193,593)
9. Total Consideration for Purchase of New Receivables 2,217,794
</TABLE>
<PAGE> 240
P. NET WORTH TEST
<TABLE>
<S> <C>
YES / NO
1. Net Worth of Transferor at least 17% of Total Receivables --------
Yes
--------
<CAPTION>
Q BUYER NOTES
<S> <C>
1. BEGINNING BUYER NOTES PRINCIPAL BALANCE 0
2. Plus: Increase in BUYER NOTE principal balance for payment of Purchase Price (see O.9) (10,193,593)
3. Less: Decrease in BUYER NOTE principal balance (but not below zero) if O.9 < 0 0
5. ENDING BUYER NOTE PRINCIPAL BALANCE (10,193,593)
<CAPTION>
SERVICER'S INSTRUCTIONS TO TRUSTEE SCHEDULE A
I. Cash Flows Summary
- ----------------------
<S> <C>
1. Funds to be allocated to Carrying Cost Account from Master Collection Account (see J.6) 27,791
2. Payment of Carrying Costs from Carrying Cost Account (on Distribution or Interest Payment Date)
0
(a) Interest on Series 1996-1 Certificates (on Distribution or Interest Payment Date) (see II-A below) 0
3. Funds to be allocated to Principal Funding Account from Master Collection Account (see J.7) 0
4. Payments of Additional Amounts (see II-A) 0
5. Funds to be allocated to Equalization Account from Master Collection Account (see J.8) 0
6. Funds to be reallocated to Master Collection Account from Equalization Account (see L.9) 9,712,788
7. Funds to be allocated to Principal Funding Account from Equalization Account (see L.10) 0
8. Payment to Transferor from Master Collection Account (see J.10) (12,411,386)
9. Funds to be allocated to MCA from Carrying Cost Account (K.5) 0
<CAPTION>
II-A. Summary of Cash Flows to Agent
- -------------------------------------
Principal Interest Other Breakage Total
--------- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C>
1. 0 0 0 0 0
<CAPTION>
III. Summary Wire Transfer Instructions for Trustee
<S> <C>
1. From Master Collection Acct # to Carrying Cost Acct # 27,791
2. From Master Collection Acct # to Principal Funding Acct # 0
3. From Master Collection Acct # to Equalization Acct # 0
4. From Master Collection Acct # to Transferor Acct # 12,411,386
5. From Carrying Cost Acct # to Servicer Acct # 0
6. From Carrying Cost Acct # to Agent Acct # 0
7. From Equalization Acct # to Master Collection Acct # 9,712,788
8. From Equalization Acct # to Principal Funding Acct # 0
9. From Principal Funding Acct # to Agent Acct # 0
10. Funds to be allocated to MCA from Carrying Cost Account (G.4) 0
</TABLE>
<PAGE> 241
EXHIBIT C
Form of Monthly Report
<PAGE> 242
MONTHLY REPORT
- ----------------------------------------------------------------------------
* Unprotected items must be hand input *
- ----------------------------------------------------------------------------
* All amounts labeled "less" must be input as negative *
- ----------------------------------------------------------------------------
MONTHLY REPORT
Report Date 31-Mar-96 27-Mar-97
Preceding Report Date 26-Feb-96 09:17 AM
Prepared by
-------------------
<TABLE>
<CAPTION>
A. MONTHLY RECEIVABLES ACTIVITY
TOTAL
-----
<S> <C>
1. BEGINNING MONTHLY RECEIVABLES BALANCE 101,866
2. Plus: New Invoices 80,362
3. Less: Cash Collections (84,975)
4. Less: Total Dilution (1,953)
5. Less: Write-offs 0
6. ENDING MONTHLY RECEIVABLES BALANCE 95,300
B. TURNOVER DAYS
1. Turnover Days = ( ( a + b ) / 2 x c (days in fiscal month) ) / d
(a). Aggregate Receivables Balance as of beginning of most recent Calculation Period (see A.1) 101,866
(b). Aggregate Receivables Balance as of most recent Cut-Off Date (see A. 6) 95,300
(c). Days in Fiscal Month 35
(d). Aggregate Invoices generated during preceding Calculation Period (see A.2) 80,362
2. TURNOVER DAYS (TD) 43
C. INVESTOR CERTIFICATES
1. INVESTED AMOUNT
Series 1996-1 A Certificates $ 47,500,000
Series 1996-1 B Certificates 7,500,000
------------
Total Invested Amount $ 55,000,000
2. INTEREST RATES (AS OF MOST RECENT DISTRIBUTION DATE):
Series 1996-1 Certificates (LIBOR Tranche A)
Series 1996-1 Certificates (LIBOR Tranche B)
Series 1996-1 Certificates (ABR Tranche)
Certificate Spread for Tranche A LIBO Rate Loans 0.80%
Certificate Spread for Tranche B LIBO Rate Loans 0.50%
Certificate Spread for ABR Loans 0.00%
</TABLE>
<PAGE> 243
D. CLASS A LOSS RESERVE RATIO
<TABLE>
<CAPTION>
TOTAL
-----
<S> <C>
1. LOSS RESERVE RATIO = ( a x b x ( c / d) ) x p
where:
(a) the Applicable Ratings Factor 2.00
(b) highest 3-mon. average of the "Aged Receivables Ratio" 1.564%
for any three consecutive Calculation
Periods that occurred during the
preceding 12 calculation periods ending
on most recent Cut-Off Date (See L)
(c) Sum of total Receivables generated for the preceeding four prior Calculation Periods 273,209,000
(d) Adjusted Eligible Receivables on most recent Cut Off Date
(see line B.16 of Daily Report for most recent Cut-Off Date) 80,230,778
(p) Payment Term Multiplier (See L) 1
-----------
2. CLASS A LOSS RESERVE RATIO 10.650%
-----------
<CAPTION>
E. CLASS A DILUTION RESERVE RATIO TOTAL
-----
-----------
<S> <C>
1. DILUTION RESERVE RAT. = = { ( a x b ) + [ ( c - b ) x ( c / b ) ] } x d 13.78%
-----------
where:
[a] = the Applicable Ratings Factor 2.00
[b] = the average of the Dilution Ratios during the 12 consecutive Calculation Periods 3.33%
ending on the related Cut-Off Date
[c] = the highest Dilution Ratio for any Calculation Period within the 12 consecutive Calculation 4.12%
Periods ending on the related Cut-Off Date, and
[d] = the Dilution Horizon Variable for such Seller Group (total Receivables generated during the 1.806
two Calculation Periods ending on a most recent Cut-Off Date divided by Adjusted Eligible
Receivables on most recent Cut-Off Date (see line B.16 of Daily Report for most recent cut-
off date))
<CAPTION>
F. CLASS A RESERVE RATIO
THE CLASS A RESERVE RATIO EQUALS THE GREATER OF (i) CLASS A MINIMUM REQUIRED
RESERVE RATIO, AND (ii) THE SUM OF THE LOSS RESERVE RATIO AND DILUTION RESERVE
RATIO.
TOTAL
-----
<S> <C>
1. Class A Minimum Required Reserve Ratio = = a + (b x c) 26.01%
where:
(a) = the "Concentration Factor" for the Cut-Off 20.00%
Date (which equals the greatest of (i) 1.3333
times the "Benchmark Percentage" then in effect
for purposes of clause (3) of the definition of
Excess Concentration Balances, (ii) two
times the "Benchmark Percentage" for
purposes of clause (4) of that
definition, (iii) the sum of (A) all
Special Concentration Limits, then in
effect with respect to Tier-5
Obligors, plus (B) the product of the
"Benchmark Percentage" then in effect
for purposes of clause (5) of the
definition of Class A Incremental
Concentration Balance times the
excess of four over.
the number of Special Obligors.
(b) average of "Dilution Ratios" over the preceding 12 Calculation Periods 3.33%
(c) Dilution Horizon Variable (see E.1(d)) 1.806
Provided that the Minimum Required Reserve Ratio shall not be less than 20%
2. Loss Reserve Ratio + Dilution Reserve Ratio
where:
(a) Loss Reserve Ratio (from D1 above) equals 10.65%
(b) Dilution Reserve Ratio (from E1 above) equals 13.78%
3. CLASS A REQUIRED RESERVE RATIO (SUM OF RESERVE RATIOS) 24.43%
-----------
4. CLASS A RESERVE RATIO (GREATER OF F1 AND F3) 26.01%
-----------
</TABLE>
<PAGE> 244
G. CLASS B LOSS RESERVE RATIO
<TABLE>
<CAPTION>
TOTAL
-----
<S> <C>
1. LOSS RESERVE RATIO = ( a x b x ( c / d) ) x p
where:
(a) the Applicable Ratings Factor 1.50
(b) highest 3-mon. average of the "Aged Receivables Ratio" 1.564%
for any three consecutive Calculation
Periods that occurred during the
preceding 12 calculation periods ending
on most recent Cut-Off Date (See L)
(c) Sum of total Receivables generated for the preceeding four prior Calculation Periods 273,209,000
(d) Adjusted Eligible Receivables on most recent Cut Off Date
(see line B.16 of Daily Report for most recent Cut-Off Date) 80,230,778
(p) Payment Term Multiplier (See L) 1
-----------
2. CLASS B LOSS RESERVE RATIO 7.990%
-----------
H. CLASS B DILUTION RESERVE RATIO TOTAL
-----
-----------
1. DILUTION RESERVE RAT. = = { ( a x b ) + [ ( c - b ) x ( c / b ) ] } x d 10.78%
-----------
where:
[a] = the Applicable Ratings Factor 1.50
[b] = the average of the Dilution Ratios during the 12 consecutive Calculation Periods 3.33%
ending on the related Cut-Off Date
[c] = the highest Dilution Ratio for any Calculation Period within the 12 consecutive Calculation 4.12%
Periods ending on the related Cut-Off Date, and
[d] = the Dilution Horizon Variable for such Seller Group (total Receivables generated during the 1.806
two Calculation Periods ending on a most recent Cut-Off Date divided by Adjusted Eligible
Receivables on most recent Cut-Off Date (see line B.16 of Daily Report for most recent cut-
off date))
I. CLASS B RESERVE RATIO
THE CLASS B RESERVE RATIO EQUALS THE GREATER OF (i) CLASS B MINIMUM REQUIRED
RESERVE RATIO, AND (ii) THE SUM OF THE LOSS RESERVE RATIO AND DILUTION RESERVE
RATIO.
TOTAL
1. Class B Minimum Required Reserve Ratio = = a + (b x c) 21.01%
where:
(a) = the "Concentration Factor" for the Cut-Off Date
(which equals the greatest of (i) the "Benchmark Percentage" 15.00%
then in effect for purposes of clause
(c) of the definition of Excess
Concentration Balances, (ii) 1.5
times the "Benchmark Percentage" for
purposes of clause (d) of that
definition, (iii) the sum of (A) all
Special Concentration Limits, then in
effect with respect to Tier-5
Obligors, plus (B) the product of the
"Benchmark Percentage" then in effect
for purposes of clause (e) of the
definition of Excess Concentration
Balances times the excess of 2.75
over the number of Special Obligors.
(b) average of "Dilution Ratios" over the preceding 12 Calculation Periods 3.33%
(c) Dilution Horizon Variable (see H.1(d)) 1.806
Provided that the Minimum Required Reserve Ratio shall not be less than 15%
2. Loss Reserve Ratio + Dilution Reserve Ratio
where:
(a) Loss Reserve Ratio (from G1 above) equals 7.99%
(b) Dilution Reserve Ratio (from H1 above) equals 10.78%
3. CLASS B REQUIRED RESERVE RATIO (SUM OF RESERVE RATIOS) 18.77%
-----------
4. CLASS B RESERVE RATIO (GREATER OF I1 AND I3) 21.01%
-----------
</TABLE>
<PAGE> 245
J. CLASS A SUBORDINATION DEFICIT
THE CLASS A SUBORDINATION DEFICIT EQUALS THE POSITIVE RESULT (IF ANY) OF (a)
CLASS A REQUIRED RESERVE PLUS (b) THE CLASS A INCREMENTAL CONCENTRATION BALANCE,
MINUS THE SUM OF THE CLASS B REQUIRED RESERVE PLUS THE OUTSTANDING PRINCIPAL
AMOUNT OF ALL SUBORDINATED CLASSES.
<TABLE>
<S> <C>
1. Class A Reserve Ratio (See F.4.) 26.01%
2. Class A Incremental Concentration Balance 0.000%
3. Class B Reserve Ratio (See I.4.) 21.01%
4. Outstanding Principal - Subordinated Classes (See C) $ 7,500,000
Subordinated Classes (expressed as a percentage of total Invested Amount) 13.64%
5. Sum of Class B Required Reserve and Subordinated Classes (Sum J3 and J4) 34.65%
SUBORDINATION DEFICIT (J3 LESS J5 IF POSITIVE) 0.00%
</TABLE>
K. LIQUIDATION EVENTS
1. EARLY AMORTIZATION EVENT (SEE SECTION 6.1 OF THE SERIES 1996-1 SUPPLEMENT TO
THE POOLING AND SERVICING AGREEMENT)
-------------
Triggered ? NO
-------------
If yes, explain below.
2. SERVICER DEFAULTS (SEE SECTION 10.1 OF THE POOLING AND SERVICING AGREEMENT)
-------------
Triggered ? NO
-------------
If yes, explain below.
3. RECEIVABLE PERFORMANCE TRIGGERS
-------------
3 month average "Aged Receivables Balance" > 2.50% ? NO
-------------
3 month average ratio of 61-90 days past due to -------------
Receivables Pool > 5.75% ? NO
-------------
-------------
3 month average Dilution Ratio > 6.75% ? NO
-------------
<PAGE> 246
L. AGED RECEIVABLES RATIO
<TABLE>
<CAPTION>
TOTAL 121 TO
- ----- 150 DAYS NET
PAST DUE WRITE-OFFS INVOICE
-------- ---------- -------
<S> <C> <C> <C>
PRECEDING CUT-OFF DATE 1,158,000 0 80,362,000
2ND PREC. CUT-OFF DATE 64,518,000
3RD PREC. CUT-OFF DATE 57,076,000
4TH PREC. CUT-OFF DATE 71,253,000
5TH PREC. CUT-OFF DATE 50,239,000
<S> <C> <C>
AGED RECEIVABLES RATIO = Receivables 121 to 150 days past due as of the
(preceding Calculation Period) most recent Cut-Off Date plus "Write-Offs" = 1,158,000
---------------------------------------------------------------------- ----------
Invoices generated during the Calculation Period 5 months prior 50,239,000
---------------
= 2.3050%
---------------
<CAPTION>
AGED RECEIVABLES RATIO: TOTAL
- ----------------------- -----
<S> <C>
Preceding Calculation Period (from above) 2.3050%
2nd Preceding Calculation Period (from preceding Settlement Statement) 1.3780%
3rd Preceding Calculation Period (from 2nd preceding Settlement Statement) 1.0089%
PRECEDING MONTH'S 3-MONTH ROLLING AVERAGE OF AGED RECEIVABLES RATIO 1.5640%
2nd preceding month's 3-month average of Aged Receivables Ratio 1.1918%
3rd " 1.1783%
4th " 1.2600%
5th " 1.1789%
6th " 1.2528%
7th " 1.2681%
8th " 1.4164%
9th " 1.5290%
10th " 1.4770%
11th " 1.3368%
12th " 1.2444%
----------
HIGHEST 3-MONTH AVERAGE OVER PAST 12 MONTHS 1.564%
----------
----------
PAYMENT TERM MULTIPLIER (refer to weighted average payment terms) 1
----------
<CAPTION>
Weighted Average Payment Terms Payment Term Multiplier Current Weighted Average Payment Term
- ------------------------------ ----------------------- -------------------------------------
<S> <C> <C>
Less Than 41 Days 1 39.43
41 to 50 Days 1.17
51-60 Days 1.25
Up to 90 Days 1.5
</TABLE>
<PAGE> 247
M. DILUTION RATIO SCHEDULE B
<TABLE>
<CAPTION>
TOTAL
- -----
<S> <C>
Dilution Ratio = Total Dilution in Calculation Period 1,948,000
-------------------------------------------------------------------
Total invoices generated during the Preceeding Calculation Period 57,076,000
---------------
= 3.413%
---------------
767,000
<CAPTION>
Rolling Avg.
1 Month 2 Month
Dilution Dilution
Dilution Ratio Ratio Ratio
- -------------- ----- -----
<S> <C> <C>
PRECEDING MONTH'S DILUTION RATIO (FROM ABOVE) 3.413% 3.213%
2nd preceding month's Dilution Ratio 3.013% 2.814%
3rd 2.615% 2.647%
4th 2.679% 2.222%
5th 1.765% 2.182%
6th 2.599% 3.577%
7th 4.555% 4.118%
8th 3.680% 4.036%
9th 4.391% 4.062%
10th 3.733% 3.584%
11th 3.434% 3.747%
12th 4.059% 3.839%
13th 3.618%
(a) AVERAGE DILUTION RATIO OVER THE LAST 12 MONTHS 3.328%
(b) HIGHEST 2-MO. ROLLING AVERAGE OF DILUTION RATIO OVER THE MOST RECENT 12 MONTHS 4.118%
N. PURCHASE PRICE CALCULATION
Purchase Price Percentage = 100% - (Loss Discount + Purchase Discount Reserve Ratio) 98.69%
Loss Discount = Loss to Liquidation Ratio = a / b 0.000%
a) aggregate unpaid balance of Receivables ( net of recoveries ) written
off or evidenced by promissory notes during the three preceeding Calculation Periods
b) aggregate Collections during three preceeding Calculation Periods
-------------
Loss Discount 0.000%
-------------
Net Write Offs/Promissory Notes Collections
------------------------------- -----------
Preceding Month 0 63,235,000
2nd Preceding Month 0 55,609,000
3rd Preceding Month 0 57,640,000
PURCHASE DISCOUNT RESERVE RATIO = ( TD/360 X DR ) +PD 1.313%
TD = Turnover Days for Receivables originated during the preceeding Calculation Period 42.936
DR = a fraction, the numerator of which is 12 times accrued Carrying Costs for the preceeding
Calculation Period and the denominator of which is the unpaid balance of Receivables
as of the last day of the preceeding Calculation Period 6.0%
Carrying Costs = 475,008
EOM Receivables = 95,300,000
PD = 0.60% 0.60%
</TABLE>
<PAGE> 248
PROJECT BLADE - TAKEOUT
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
dated as of April 18, 1996
between
HOWMET CORPORATION
and
CERTAIN SUBSIDIARIES OF HOWMET CORPORATION
as Sellers
and
BLADE RECEIVABLES CORPORATION
as Buyer
<PAGE> 249
TABLE OF CONTENTS
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement to Purchase and Sell....................................2
SECTION 1.2 Timing of Purchase................................................3
SECTION 1.3 Consideration for Purchases.......................................3
SECTION 1.4 No Recourse.......................................................3
SECTION 1.5 No Assumption of Obligations Relating to Receivables, Related
Assets or Contracts...............................................3
SECTION 1.6 True Sales........................................................3
SECTION 1.7 Addition of Sellers...............................................4
SECTION 1.8 Termination of Status as a Seller.................................4
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price.....................................6
SECTION 2.2 Definitions and Calculations Related to Purchase Price
Percentage........................................................7
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments...........................................8
SECTION 3.2 The Buyer Notes..................................................11
SECTION 3.3 Application of Collections and Other Funds.......................11
SECTION 3.4 Servicing of Receivables and Related Assets......................12
SECTION 3.5 Adjustments for Noncomplying Receivables, Dilution and Cash
Discounts........................................................12
SECTION 3.6 Payments and Computations, Etc...................................13
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase.........................13
SECTION 4.2 Certification as to Representations and Warranties...............14
SECTION 4.3 Effect of Payment of Purchase Price..............................15
<PAGE> 250
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Sellers ................ 15
SECTION 5.2 Representations and Warranties of Buyer ...................... 21
ARTICLE VI
GENERAL COVENANTS OF THE SELLERS
SECTION 6.1 Affirmative Covenants ........................................ 21
SECTION 6.2 Reporting Requirements ....................................... 24
SECTION 6.3 Negative Covenants ........................................... 26
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SPECIFIED ASSETS
SECTION 7.1 Rights of Buyer .............................................. 29
SECTION 7.2 Responsibilities of the Sellers .............................. 29
SECTION 7.3 Further Action Evidencing Purchases .......................... 30
SECTION 7.4 Collection of Receivables; Rights of Buyer and Its Assignees.. 31
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by the Sellers ................................... 32
SECTION 8.2 Automatic Termination ........................................ 32
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Sellers ................................... 33
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments,' Waivers, Etc .................................... 35
SECTION 10.2 Notices, Etc ................................................. 35
SECTION 10.3 Cumulative Remedies .......................................... 36
SECTION 10.4 Binding Effect; Assignability; Survival of Provisions ........ 36
SECTION 10.5 Governing Law ................................................ 36
SECTION 10.6 Costs, Expenses and Taxes .................................... 37
SECTION 10.7 Submission to Jurisdiction ................................... 37
ii
<PAGE> 251
SECTION 10.8 Waiver of Jury Trial ......................................... 38
SECTION 10.9 Integration .................................................. 38
SECTION 10.10 Counterparts ................................................. 38
SECTION 10.11 Acknowledgment and Consent ................................... 38
SECTION 10.12 No Partnership or Joint Venture .............................. 39
SECTION 10.13 No Proceedings ............................................... 39
SECTION 10.14 Severability of Provisions ................................... 39
SECTION 10.15 Limitation on Liability of Certain Persons ................... 39
EXHIBITS
EXHIBIT A Form of Buyer Note
EXHIBIT B Form of Seller Assignment Certificate
EXHIBIT C Form of Contribution Agreement
SCHEDULES
SCHEDULE 1 Litigation and Other Proceedings
SCHEDULE 2 Changes in Financial Condition
SCHEDULE 3 Offices of the Sellers where Records are Maintained
SCHEDULE 4 Legal Names, Trade Names and Names Under which the
Companies Do Business
ii
<PAGE> 252
This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of
April 18, 1996 (this "Agreement"), is made among HOWMET CORPORATION, a
Delaware corporation ("Howmet"), certain subsidiaries of Howmet that are listed
on the signature pages hereto or that become party hereto in accordance with the
terms hereof (together with Howmet, the "Sellers"), and BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Buyer"). Except as otherwise defined herein,
capitalized terms have the meanings assigned to them in Appendix A to the
Amended and Restated Pooling and Servicing Agreement, dated as of April 18,
1996, among Buyer, as Transferor, Howmet, as Servicer, and Manufacturers and
Traders Trust Company, as Trustee, and this Agreement shall be interpreted in
accordance with the conventions set forth in Part B of such Appendix A.
WHEREAS, the Sellers and Buyer entered into a Receivables Purchase
Agreement dated as of December 13, 1995 (the "Existing Purchase Agreement"),
pursuant to which the Sellers agreed to sell Receivables that they owned on
December 13, 1995, and from time to time thereafter owned, to Buyer, and Buyer
agreed to purchase such Receivables from the Sellers from time to time;
WHEREAS, (i) Buyer, Howmet and the Trustee entered into the Existing
Pooling Agreement pursuant to which Buyer transferred its interest in the
Receivables to the Trust and (ii) the Pooling Agreement amends and restates the
Existing Pooling Agreement in its entirety;
WHEREAS, pursuant to the Pooling Agreement, Buyer intends to transfer
its interests in the Receivables sold pursuant hereto, together with Receivables
contributed to Buyer by Howmet from time to time, to the Trust in order to,
among other things, finance its purchases of Receivables hereunder; and
WHEREAS, the Sellers and Buyer wish to amend and restate the Existing
Purchase Agreement in its entirety, effective upon the date hereof, to read as
set forth in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
<PAGE> 253
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement to Purchase and Sell. On the terms and subject to
the conditions set forth in this Agreement (including the conditions to
purchases set forth in Article IV), each Seller agrees to sell, transfer,
assign, set over and otherwise convey to Buyer and Buyer agrees to purchase from
each Seller, at the times set forth in Section 1.2, all of such Seller's right,
title and interest in, to and under:
(a) each Receivable of such Seller that existed and were owing
to such Seller as at the closing of such Seller's business on the
Initial Cut-Off Date,
(b) each Receivable created by such Seller (other than
Contributed Receivables) that arises during the period from and
including the closing of such Seller's business on the Initial Cut-Off
Date to but excluding the earlier to occur of (i) the Purchase
Termination Date and (ii) the Termination Effective Date (if any) for
such Seller,
(c) all Related Security with respect to all Receivables
(other than Contributed Receivables) of such Seller,
(d) all proceeds of the foregoing, including all funds
received by any Person in payment of any amounts owed (including
invoice prices, finance charges, interest and all other charges, if
any) in respect of any Receivable described above (other than a
Contributed Receivable) or Related Security with respect to any such
Receivable, or otherwise applied to repay or discharge any such
Receivable (including insurance payments that a Seller or the Servicer
applies in the ordinary course of its business to amounts owed in
respect of any such Receivable (it being understood that property
insurance covering inventory is not so applied and is not included in
this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or
other collateral or property of any Obligor or any other party directly
or indirectly liable for payment of such Receivables, and
(e) all Records relating to any of the foregoing.
As used herein, (i) "Purchased Receivables" means the items listed
above in clauses (a) and (b), (ii) "Related Purchased Assets" means the items
listed above in clauses (c), (d) and (e), (iii) "Related Assets" means the
Related Purchased Assets and the Related Contributed Assets, (iv) "Purchased
Assets" means the Purchased Receivables and the Related Purchased Assets, (v)
"Specified Assets" means the Purchased Receivables, the Contributed Receivables
and the Related Assets, and (vi) "Specified Receivables" means the Purchased
Receivables and the Contributed Receivables. It is understood and agreed that
page 2
<PAGE> 254
Howmet may (but shall not be required to) contribute Receivables and Related
Assets to Buyer from time to time, pursuant to one or more Contribution
Agreements substantially in the form of Exhibit D hereto.
SECTION 1.2 Timing of Purchases.
(a) Initial Closing Date Purchases. All of the Purchased Assets of the
Sellers that existed at the closing of Howmet's business on the Initial Cut-Off
Date were sold automatically to Buyer on the Closing Date.
(b) Regular Purchases. Except to the extent otherwise provided in
Section 8.1, 8.2 or (with respect to any Seller) Section 1.8, after the closing
of Howmet's business on the Initial Cut-Off Date until the closing of Howmet's
business on the Business Day immediately preceding the Purchase Termination
Date, all Receivables and the Related Assets of the Sellers shall be deemed to
have been sold to Buyer pursuant hereto immediately (and without further action
by any Person) upon the creation of the Receivable, unless the Receivable and
Related Assets are contributed to Buyer at such time pursuant to a Contribution
Agreement.
SECTION 1.3 Consideration for Purchases. On the terms and subject to
the conditions set forth in this Agreement, Buyer agrees to make Purchase Price
payments to the Sellers in accordance with Article III.
SECTION 1.4 No Recourse. Except as specifically provided in this
Agreement, the sale and purchase of Purchased Assets under this Agreement shall
be without recourse to the Sellers; it being understood that (i) each Seller
shall be liable to Buyer for all representations. warranties, covenants and
indemnities made by such Seller pursuant to the terms of this Agreement, all of
which obligations are limited so as not to constitute recourse to such Seller
for the credit risk of the Obligors, and (ii) Howmet shall be liable to Buyer to
the extent specified in the Seller Guaranty.
SECTION 1.5 No Assumption of Obligations Relating to Receivables.
Related Assets or Contracts. None of Buyer, the Servicer nor the Trustee shall
have any obligation or liability to any Obligor or other customer or client of a
Seller (including any obligation to perform any of the obligations of such
Seller under any Receivable, related Contracts or any other related purchase
orders or other agreements). No such obligation or liability is intended to be
assumed by Buyer, the Servicer or the Trustee hereunder, and any assumption is
expressly disclaimed.
SECTION 1.6 True Sales. The Sellers and Buyer intend the transfers of
the Specified Assets hereunder to be true sales by the Sellers to Buyer that are
absolute and irrevocable and that provide Buyer with the full benefits of
ownership of such Specified Assets, and none of the Sellers nor Buyer intends
the transactions contemplated hereunder to be, or for any purpose to be
characterized as, loans from Buyer to any Seller.
page 3
<PAGE> 255
SECTION 1.7 Addition of Sellers. Any Subsidiary of Howmet may become a
Seller hereunder and sell its accounts receivable and property of the types that
constitute Related Assets hereunder to Buyer if the Modification Condition is
satisfied with respect to such addition. Howmet and its Subsidiary that is
proposed to be added as a Seller shall give to Buyer, the Trustee and the Rating
Agencies not less than 30 days' (or such shorter number of days as is acceptable
to Trustee) prior written notice of the effective date of the addition of the
Subsidiary as a Seller. Once the notice has been given, any addition of a
Subsidiary of Howmet as a Seller pursuant to this section shall become effective
on the first Business Day following the expiration of the notice period (or such
later date as may be specified in the notice) on which (i) the Modification
Condition has been satisfied, (ii) Howmet has given the notice described in
Section 3.5(e) of the Pooling Agreement to Buyer, (iii) the Servicer shall have
delivered to the Trustee a supplement to the Monthly Report then in effect as
described in Section 3.5(e) of the Pooling Agreement and Howmet shall have
confirmed in writing to the Trustee that the Seller Guaranty covers Obligations
of such Subsidiary, and (iv) such Subsidiary and the parties hereto shall have
executed and delivered the agreements, instruments and other documents and the
amendments or other modifications to the Transaction Documents, in form and
substance reasonably satisfactory to Buyer and the Trustee, that Buyer or the
Trustee reasonably determines are necessary or appropriate to effect the
addition.
SECTION 1.8 Termination of Status as a Seller. (a) At any time when
more than one Person is a Seller, a Seller may terminate its obligation to sell
its Receivables and Related Assets to Buyer if such Seller (a "Terminating
Seller") is either a Voluntary Terminating Seller or a Mandatory Terminating
Seller.
(b) A "Voluntary Terminating Seller" is a Seller that satisfies the
following requirements:
(i) such Seller shall have given Buyer, the Trustee and the
Rating Agencies not less than 30 days' (or such shorter period as is
acceptable to the Trustee) prior written notice of its intention to
terminate its obligation to sell its Receivables and Related Assets to
Buyer (the date on which such notice is given being the "Terminating
Seller Notice Date"),
(ii) an Authorized Officer of the Terminating Seller shall
have certified that the termination by the Terminating Seller of its
status as a Seller will not have a Material Adverse Effect,
(iii) both immediately before and after giving effect to the
termination by the Terminating Seller, no Early Amortization Event or
Unmatured Early Amortization Event shall have occurred and be
continuing or shall reasonably be expected to occur, and
page 4
<PAGE> 256
(iv) either (x) such Seller is a Permitted Terminating Seller
or (y) the Modification Condition is satisfied with respect to the
termination by such Seller.
"Permitted Terminating Seller" means a Voluntary Terminating Seller
that satisfies the following requirements:
(x) the aggregate Unpaid Balance of such Seller's Receivables
on the Cut-Off Date immediately preceding its Terminating Seller Notice
Date would not exceed 20% of the aggregate Unpaid Balance of all
Receivables (calculated as of such Cut-Off Date), and (y) the aggregate
Unpaid Balance of such Seller's Receivables on such Cut-Off Date,
together with the Previously Terminated Seller Amount in respect of the
Sellers terminated pursuant to this subsection 1.8(b) at any time
during the one-year period ending on such Cut-Off Date, would not
exceed 25 % of the sum of the Previously Terminated Seller Amount and
the aggregate Unpaid Balance of all Receivables (calculated as of such
Cut-Off Date) .
"Previously Terminated Seller Amount" means, on any day, the aggregate
Unpaid Balance of Receivables originated by all Permitted Terminating Sellers
previously terminated pursuant to this subsection 1.8(b), calculated with
respect to any Seller as of the Cut-Off Date immediately preceding its
Terminating Seller Notice Date.
(c) A "Mandatory Terminating Seller" is a Seller that has ceased to be
a Subsidiary of Howmet or that has sold all or substantially all of its assets
to any Person (other than a Howmet Person). Howmet shall give Buyer, the Trustee
and the Rating Agencies not less than 10 days' (or such shorter period as is
acceptable to the Trustee) prior written notice of circumstances that would
cause a Seller to become a Mandatory Terminating Seller.
(d) Each Terminating Seller shall have a "Termination Effective Date,"
determined as follows. The Termination Effective Date for a Voluntary
Terminating Seller shall be the first date on which the conditions specified in
subsection 1.8(b) are satisfied. The Termination Effective Date for a Mandatory
Terminating Seller shall be the date on which such Seller ceases to be a
Subsidiary of Howmet or has sold all or substantially all of its assets to any
Person (other than a Howmet Person). As of the Termination Effective Date for
any Terminating Seller, such Terminating Seller shall be relieved of its
obligation to sell, and Buyer shall be relieved to its obligation to buy,
Receivables (and Related Assets with respect thereto) originated by such
Terminating Seller on or after such date. Such Terminating Seller shall not be
relieved of its other Obligations, to the extent such Obligations relate to
Receivables (and Related Assets with respect thereto) originated prior to such
Termination Effective Date, except that (i) any Mandatory Terminating Seller
shall not be bound by subsection 6.3(d) on and after its Termination Effective
Date, and (ii) a Terminating Seller shall be released from all of its
Obligations after the aggregate Unpaid Balance of Receivables originated by such
Seller and included in the Receivables Pool is reduced to zero (whether by sale,
payment or write-off of such Receivables, provided that
page 5
<PAGE> 257
any write-offs are made in a manner consistent with such Seller's prior
practices and the Credit and Collection Policy). Notwithstanding such release,
the Obligations of such Terminating Seller under Section 9.1 shall be deemed to
survive for purposes of the Seller Guaranty, and Howmet shall remain liable
under the Seller Guaranty for any claims that would have arisen under Section
9.1 against such Terminating Seller but for such release.
(e) A Terminating Seller may require Buyer to exercise its rights under
Section 13.19 of the Pooling Agreement to cause the Trustee to convey all of its
right, title and interest in all (but not less than all) of the Specified
Receivables (and Related Assets with respect thereto) originated by such
Terminating Seller to a Person designated by such Terminating Seller against
receipt, in cash, of a release price (the "Release Price") of not less than the
aggregate Unpaid Balance of the released Receivables. Any such Terminating
Seller, upon receipt by the Trustee of the Release Price, shall be released from
all of its Obligations. No such release and conveyance shall, however, be
permitted if as a result thereof, any Howmet Person would acquire any of such
Terminating Seller's Specified Receivables. Notwithstanding such release, the
Obligations of such Terminating Seller under Section 9.1 shall be deemed to
survive for purposes of the Seller Guaranty, and Howmet shall remain liable
under the Seller Guaranty for any claims that would have arisen under Section
9.1 against such Terminating Seller but for such release.
(f) A Terminating Seller may (i) sell its Buyer Note to Howmet or any
other Seller for a purchase price equal to the present value of the outstanding
principal amount thereof or (ii) transfer its Buyer Note to Howmet as a
dividend.
ARTICLE II
CALCULATION OF PURCHASE PRICE
SECTION 2.1 Calculation of Purchase Price. (a) On each Business Day
(including the Closing Date), the Servicer shall deliver to Buyer, the Trustee
and How met a Daily Report with respect to Buyer's purchases of Receivables from
the Sellers:
(i) that are to be made on the Closing Date (in the case of
the Daily Report to be delivered on the Closing Date) or
(ii) that were made on the immediately preceding Business Day
(in the case of each subsequent Daily Report).
(b) On each day when Receivables are purchased by Buyer from a Seller
pursuant to Article I, the "Purchase Price " to be paid to such Seller on such
day for the Purchased Receivables and Related Purchased Assets that are to be
sold by such Seller on such day shall be determined in accordance with the
following formula:
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PP = AUB x PPP
where:
PP = the aggregate Purchase Price for the Purchased Receivables
and Related Purchased Assets to be purchased from such Seller
on such day,
AUB = the "Aggregate Unpaid Balance" of the Purchased Receivables
that are to be purchased from such Seller on such day. For
purposes of this calculation, "Aggregate Unpaid Balance" shall
mean (i) for purposes of calculating the Purchase Price to be
paid to such Seller on the Closing Date, the sum of the Unpaid
Balance of each Purchased Receivable generated by such Seller,
as measured as at the closing of such Seller's business on the
Initial Cut-Off Date, and (ii) for purposes of calculating the
Purchase Price on each Business Day thereafter, the sum of the
Unpaid Balance of each Purchased Receivable to be purchased
from such Seller on such day, calculated at the time of such
Receivable's sale to Buyer, and
PPP = the Purchase Price Percentage applicable to the Purchased
Receivables to be purchased from such Seller on such day, as
determined pursuant to Section 2.2.
SECTION 2.2 Definitions and Calculations Related to Purchase Price
Percentage.
(a) "Purchase Price Percentage" for the Purchased Receivables to be
sold by a Seller on any day during a Distribution Period shall mean the
percentage determined in accordance with the following formula:
PPP = 100% - (LLR + PDRR)
where:
PPP = the Purchase Price Percentage in effect during such
Distribution Period,
LLR = the Loss to Liquidation Ratio (expressed as a percentage) in
effect during such Distribution Period, and
PDRR = the Purchase Discount Reserve Ratio (expressed as a
percentage) in effect during such Distribution Period, as
determined on such day pursuant to subsection (below.
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The Purchase Price Percentage, the Loss to Liquidation Ratio and the Purchase
Discount Reserve Ratio shall be recomputed by the Servicer on each Report Date,
in each case as of the then most recent Cut-Off Date, and shall become effective
on the next Distribution Date.
(b) "Purchase Discount Reserve Ratio" for the Purchased Receivables to
be sold by a Seller on any day during a Distribution Period shall mean a
percentage determined in accordance with the following formula:
PDRR = (TD/360 x DR) + PD
where:
PDRR = the Purchase Discount Reserve Ratio in effect during such
Distribution Period,
TD = the Turnover Days during the Calculation Period preceding
the first day of such Distribution Period,
DR = the Discount Rate (expressed as a percentage) in effect
during such Distribution Period as determined pursuant to
subsection (c) below, and
PD = a profit discount equal to 0.60%.
(c) "Discount Rate" for the Purchased Receivables to be sold by a
Seller on any day during a Distribution Period shall mean a fraction (expressed
as a percentage) having (i) a numerator equal to 12, multiplied by an amount
equal to the accrued Carrying Costs for the Calculation Period preceding the
first day of such Distribution Period, and (ii) a denominator equal to the
aggregate Unpaid Balance of the Purchased Receivables as of the last day of the
Calculation Period preceding the first day of such Distribution Period.
ARTICLE III
PAYMENT OF PURCHASE PRICE; SERVICING, ETC.
SECTION 3.1 Purchase Price Payments. (a) On the Closing Date and on the
Business Day following each day on which any Purchased Receivables and Related
Assets are purchased by Buyer pursuant to Article I, on the terms and subject to
the conditions of this Agreement, Buyer shall pay to the Sellers such Purchase
Price for such Receivables and Related Assets purchased on such day by Buyer by
(i) in the case of the Purchase Price for Purchased Receivables originated by
Howmet, by reducing the outstanding principal amount of the Acquisition Loan by
the amount of such Purchase Price, (ii) making a cash payment to
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Servicer (for the account of the Sellers) to the extent that Buyer has cash
available to make the payment pursuant to Section 3.3 and (iii) if the Purchase
Price to be paid for the Purchased Receivables and Related Assets of any Seller
exceeds the amount of any cash payment for the account of such Seller on such
day pursuant to clause (ii), by automatically increasing the principal amount
outstanding under such Seller's Buyer Note by the amount of the excess; provided
that the Purchase Price owed to each Seller (other than Howmet) on the Closing
Date shall be paid by increasing the principal amount outstanding under each
such Seller's Buyer Note by the amount of the Purchase Price for such Seller's
Receivables; and provided further, that Buyer shall not make any cash payments
in respect of Purchased Receivables originated by Howmet pursuant to clause (ii)
until the outstanding principal amount of the Acquisition Loan has been reduced
to zero.
The obligation of Buyer to pay the Purchase Price for Purchased
Receivables that has been deferred pursuant to the preceding paragraph shall be
evidenced by Buyer Notes. Howmet and each other Seller agree that, prior to the
Seller Maturity Date, Buyer shall he required to make payments in respect of the
payment obligations evidenced by the Buyer Notes only to the extent that it has
cash available under Section 3.3.
(b) Except as provided in a Supplement or PI Agreement, on each
Business Day, the "Noncomplying Receivables and Dilution Adjustment" shall be
equal to the sum of (A) the aggregate Seller Dilution Adjustments in respect of
all Sellers, if any, for the immediately preceding Business Day, as shown in the
Daily Report for such day, plus (13) the aggregate Seller Noncomplying
Receivables Adjustments in respect of all Sellers, if any, for the immediately
preceding Business Day, as shown in the Daily Report for such day, in the case
of each of clauses (A) and (B), as the amounts are determined pursuant to
Section 3.5. If the Noncomplying Receivables and Dilution Adjustment is positive
on any day, Buyer shall reduce the Purchase Price payable to each Seller on such
day pursuant to subsection (a) above by the amount of the Noncomplying
Receivables and Dilution Adjustment that is attributable to such Seller.
(c) If on any day the sum of the Seller Dilution Adjustments and the
Seller Noncomplying Receivables Adjustments attributable to any Seller (as
determined pursuant to Section 3.5) exceeds the Purchase Price payable by Buyer
to such Seller pursuant to subsection (a) above on such day, or if such day
falls on or after the earlier of (i) the Purchase Termination Date and (ii) the
Termination Effective Date (if any) for such Seller, then the principal amount
of such Seller's Buyer Note shall be reduced automatically by the amount of such
excess.
(d) If, on any day prior to the Purchase Termination Date, the
principal amount of a Seller's Buyer Note is zero and such Seller is not a
Terminating Seller, then the amount of the excess of the sum of the Seller
Dilution Adjustments and the Seller Noncomplying Receivables Adjustments
attributable to such Seller (as determined pursuant to Section 3.5) on such day
over the Purchase Price payable by Buyer to Servicer (for the account of such
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Seller) on such day pursuant to subsection (a) above (the "Purchase Price
Credit") shall be credited against the Purchase Price payable by Buyer for
subsequent Purchases of Receivables and Related Assets of such Seller by Buyer.
If any such Purchase Price Credit has not been fully applied on or prior to the
fifth Business Day after the creation of such Purchase Price Credit, then, on
the Business Day that follows the end of the five Business Day period, such
Seller shall pay to Servicer (for the account of Buyer) in cash the remaining
unapplied amount of the Purchase Price Credit (and each such payment shall be
deemed a Collection in accordance with Section 3.5).
(e) If, on any day on or after the Purchase Termination Date, or, with
respect to any Seller, the date such Seller becomes a Terminating Seller, the
principal amount of any Seller's Buyer Note has been reduced to zero, an amount
equal to the sum of any Seller Dilution Adjustments and the Seller Noncomplying
Receivables Adjustments, if any, in respect of such Seller (as determined
pursuant to Section 3.5) shall be paid by such Seller to Servicer (for the
account of Buyer) in cash on the next succeeding Business Day (and each such
payment shall be deemed a Collection in accordance with Section 3.5).
(f) Amounts received by Servicer pursuant to this Section 3.1 for the
account of Sellers shall be allocated among the Sellers in accordance with
Section 3.3. Servicer shall maintain a bookkeeping account (the "Seller
Account") for purposes of tracking:
(i) the Purchase Price payable to each Seller in respect of
Purchased Receivables sold by it to Buyer (including the extent to
which cash and non-cash payments made by Buyer should be allocated to
each Seller),
(ii) the extent to which such Purchase Price should be reduced
on account of such Seller's Seller Dilution Adjustments and the Seller
Noncomplying Receivables Adjustments (including any allocation of a
Purchase Price Credit),
(iii) the extent to which payments (whether cash or non-cash)
by Buyer in respect of a negative Noncomplying Receivables and Dilution
Adjustment should be allocated to each Seller, and
(iv) cash payments made to and by each Seller in respect of
the items described above.
Servicer shall maintain sufficient records with respect to the Seller
Account such that, on any day, it would be able to calculate each of the items
set forth above. Intercompany accounts resulting from the items described above
and any payments made by Howmet pursuant to the Seller Guaranty will be settled
in accordance with the intercompany cash management system customarily employed
by Howmet and its Subsidiaries.
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SECTION 3.2 The Buyer Notes. (a) On the date hereof, Buyer will deliver
to each Seller a promissory note, substantially in the form of Exhibit A,
payable to the order of each such Seller (each such promissory note, as the same
may be amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
herein called a "Buyer Note"), that is subordinated to all Senior Interests now
or hereafter arising under or in connection with the Pooling Agreement. Each
Buyer Note is payable in full on the date that is twelve months after the date
on which all Investor Certificates and Purchased Interests have been repaid in
full and the Revolving Periods for all Investor Certificates and Purchased
Interests have terminated (the "Seller Maturity Date"). Each Buyer Note bears
interest at a rate per annum equal to the higher of the applicable federal
mid-term rate and applicable federal short-term rate in effect under Section
1274(d) of the Internal Revenue Code (the "Applicable Federal Rate"), determined
as of each Cut-Off Date. Buyer may prepay all or part of the outstanding balance
of any Buyer Note from time to time without any premium or penalty, unless the
prepayment would result in a default in Buyer's payment of any other amount
required to be paid by it under any Transaction Document.
(b) Howmet shall make all appropriate recordkeeping entries with
respect to the Buyer Notes or otherwise to reflect the payments on and
adjustment of the Buyer Notes. Howmet's books and records shall constitute
rebuttable presumptive evidence of the principal amount of and accrued interest
on each Buyer Note at any time. Each Seller hereby irrevocably authorizes Howmet
to mark its Buyer Note "CANCELED" and return it to Buyer upon the final payment
thereof.
SECTION 3.3 Application of Collections' and Other Funds. If, on any
day, Buyer receives any distributions on account of the Transferor Certificate
pursuant to the Pooling Agreement, Buyer shall apply the funds as follows:
(a) first, to pay its existing expenses and to set aside funds
for the payment of expenses that are then accrued (including operating
expense and amounts due under its tax sharing agreement with Howmet),
(b) second, to repay amounts owed by Buyer to each Terminating
Seller under its Buyer Note,
(c) third, to pay the Purchase Price as adjusted pursuant to
Section 3.1 for Receivables and Related Assets purchased by Buyer from
the Sellers (other than Howmet) on such day (in the case of the Closing
Date) or the next preceding Business Day,
(d) fourth, to repay amounts owed by Buyer to the Sellers
(other than Terminating Sellers and Howmet) under the Buyer Notes of
such Sellers,
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(e) fifth, to pay the Purchase Price as adjusted pursuant to
Section 3.1 for Receivables and Related Assets purchased by Buyer from
Howmet on such day (in the case of the Closing Date) or the next
Business Day,
(f) sixth, to repay amounts owed by Buyer to Howmet under
Howmet's Buyer Note,
(g) seventh, to pay amounts owed pursuant to Section 3. 1(f),
and
(h) eighth, to make loans to Howmet or to declare and pay
dividends to Howmet to the extent permitted by law and the Transaction
Documents.
SECTION 3.4 Servicing of Receivables and Related Assets. Consistent
with Buyer's ownership of the Specified Receivables and the Related Assets, as
between the parties to this Agreement, Buyer shall have the sole right to
service, administer and collect the Specified Receivables, to assign the right
and to delegate the right to others. Without limiting the generality of Section
10.11, each Seller hereby acknowledges and agrees that Buyer shall assign to the
Trustee for the benefit of the Investor Certificate holders and the Purchasers
the rights and interests sold and assigned by the Sellers to Buyer hereunder and
agrees to cooperate fully with the Servicer and the Trustee in the exercise of
the rights. As more fully described in Section 7.4(b) and in the Pooling
Agreement, the Trustee may exercise the rights in the place of Buyer (as
assignee or otherwise) only after the designation of a Servicer other than
Howmet pursuant to Section 10.2 of the Pooling Agreement. At Trustee's request,
each Seller will (A) assemble all of the Records that are necessary or
appropriate to collect the Specified Receivables and Related Assets, and shall
make the same available to Trustee at one or more places selected by Trustee or
its designee, (B) segregate all cash, checks and other instruments received by
it from time to time constituting Collections in a manner acceptable to Trustee
and shall, promptly upon receipt (and in no event later than the second Business
Day following receipt), remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to a Bank Account or the
Master Collection Account and (c) permit, upon not less than two Business Days'
prior written notice, any Successor Servicer and its agents, employees and
assignees access to such Seller's facilities and Records.
SECTION 3.5 Adjustments for Noncomplying Receivables. Dilution and Cash
Discounts. (a) if at any time any of Buyer, the Servicer, the Trustee or a
Seller shall determine that any Receivable identified by the Servicer as an
Eligible Receivable on the date of Purchase thereof by Buyer or the contribution
thereof to Buyer was in fact a Seller Noncomplying Receivable on such date, or
that any of the representations and warranties made by the related Seller in
Section 5.1 (k) with respect to such Receivable was not true on such date, such
Seller shall be deemed to have received on the date of such determination a
Collection of such Receivable in an amount equal to the Unpaid Balance of such
Receivable (the sum of all such amounts for such Seller on any day being called
the "Seller
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Noncomplying Receivables Adjustment" for such Seller for such day), and such
Seller Noncomplying Receivables Adjustment shall be settled in the mariner
provided for in Section 3.1.
(b) If on any day the aggregate Unpaid Balance of any Specified
Receivable sold or contributed to Buyer on or before such date by a Seller is
reduced in any manner described in the definition of "Dilution" (the total of
the reductions being called the "Seller Dilution Adjustment" for the Seller for
such day), then such Seller shall be deemed to have received on such day a
Collection of such Receivable in the amount of the Seller Dilution Adjustment
and such Seller Dilution Adjustment shall be settled in the manner provided in
Section 3.1.
SECTION 3.6 Payments and Computations, Etc. (a) All amounts to be paid
by a Seller to Buyer hereunder shall be paid in accordance with the terms hereof
no later than 1:00 p. m., New York City time, on the day when due in Dollars in
immediately available funds to an account that Buyer shall from time to time
specify in writing. Payments received by Buyer after such time shall be deemed
to have been received on the next Business Day. In the event that any payment
becomes due on a day that is not a Business Day, then the payment shall be due
on the next Business Day. Each Seller shall, to the extent permitted by law, pay
to Buyer, on demand, interest on all amounts not paid when due hereunder at 2%
per annum above the interest rate on each such Seller's Buyer Note in effect on
the date the payment was due; provided, however, that the interest rate shall
not at any time exceed the maximum rate permitted by applicable law. All
computations of interest payable hereunder shall be made on the basis of a year
of 360 days for the actual number of days (including the first but excluding the
last day) elapsed.
(b) All amounts to be paid by Buyer to a Seller hereunder shall be paid
no later than 2:00 p. m., New York City time, on the day when due in Dollars in
immediately available funds to an account that Howmet shall from time to time
specify in writing. In the event that any payment becomes due on a day that is
not a Business Day, then such payment shall be due on the next Business Day. In
the event that any payment of interest is not made by Buyer to any Seller on the
date that such payment becomes due, the amount of such Seller's Buyer Note shall
be automatically increased by the amount of such interest in lieu of such
payment.
ARTICLE IV
CONDITIONS TO PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial
purchase hereunder is subject to the conditions precedent that (i) each of the
conditions precedent to the execution, delivery and effectiveness of each other
Transaction Document (other than a condition precedent in any other Transaction
Document relating to the effectiveness of this
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Agreement) shall have been fulfilled to the satisfaction of Buyer, (ii)
Acquisition shall have been merged into Howmet and Howmet shall have assumed all
obligations of Acquisition, and (iii) Buyer shall have received (or in the case
of subsection (f) below, shall have delivered) each of the following, on or
before the date hereof, each (unless otherwise indicated) dated the date hereof
and each in form and substance satisfactory to Buyer:
(a) Seller Assignment Certificates. A Seller Assignment
Certificate from each Seller in the form of Exhibit C, duly completed,
executed and delivered by such Seller,
(b) Resolutions. A copy of the resolutions of the Board of
Directors of each Seller approving this Agreement and the other
Transaction Documents to be delivered by it hereunder and the
transactions contemplated hereby and thereby and addressing such other
matters as may be required by Buyer, certified by its Secretary or
Assistant Secretary, each as of a recent date acceptable to Buyer,
(c) Good Standing Certificate of each Seller: Certificates as
to Foreign Qualification of each Seller. A good standing certificate
for each Seller, issued by the Secretary of State of the jurisdiction
of its incorporation and of each state in which such Seller transacts
business, is required to be in good standing and where the failure to
be in good standing would have a Material Adverse Effect,
(d) Incumbency Certificate. A certificate of the Secretary or
Assistant Secretary of each Seller certifying, as of a recent date
reasonably acceptable to Buyer, the names and true signatures of the
officers authorized on such Seller's behalf to sign the Transaction
Documents to be delivered by such Seller (on which certificate Buyer,
the Trustee and the Servicer may conclusively rely until such time as
Buyer shall receive from such Seller (with a copy to the Trustee and
the Servicer), a revised certificate meeting the requirements of this
subsection),
(e) Other Transaction Documents. Original copies, executed by
each of the parties thereto in such reasonable number as shall be
specified by Buyer, of each of the other Transaction Documents to be
executed and delivered in connection herewith,
(f) Buyer Notes. The Buyer Notes, executed by Buyer, and
(g) License Agreements. Duly executed and counterparts of a
letter agreement pertaining to the software license agreement between
Howmet and any third party vendor adding Buyer as a licensee,
permitting use of the licensed material by a substitute Servicer.
SECTION 4.2 Certification as to Representations and Warranties. Each
Seller, by accepting the Purchase Price paid for each Purchase, shall be deemed
to have certified with
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respect to the Purchased Receivables and Related Assets to be sold by it on such
day, and Howmet, upon a contribution of Receivables and Related Assets to Buyer
pursuant to a Contribution Agreement, shall be deemed to have certified with
respect to such Receivables and Related Assets to be contributed on such day,
that its representations and warranties contained in Article V (excluding, with
respect to any day alter the date hereof, Section 5.1(i)) are true and correct
on and as of such day, with the same effect as though made on and as of such
day.
SECTION 4.3 Effect of Payment of Purchase Price. Upon the payment of
the Purchase Price (whether in cash or by an increase in any Buyer Note pursuant
to Section 3.1) for any Purchase, title to the Purchased Receivables and the
Related Assets included in the Purchase shall vest in Buyer, whether or not the
conditions precedent to the Purchase were in fact satisfied; provided, however,
that Buyer shall not be deemed to have waived any claim it may have under this
Agreement for the failure by a Seller in fact to satisfy any such condition
precedent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Sellers. In order to
induce Buyer to enter into this Agreement and to make purchases hereunder, each
Seller hereby makes the representations and warranties set forth in this section
with respect to itself at the times and to the extent set forth in Section 4.2
(it being understood that only How met makes the representations and warranties
set forth below with respect to any Contribution Agreement and the Contributed
Receivables and the Related Assets relating thereto) .
(a) Organization and Good Standing. Such Seller is a
corporation duly organized and validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has full
power and authority to own its properties and to conduct its business
as the properties presently are owned and the business presently is
conducted. Such Seller had at all relevant times, and now has, all
necessary power, authority, and legal right to own and sell (and, in
the case of Howmet, contribute) its Receivables and the Related Assets.
(b) Due Qualification. Such Seller is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires qualification,
licenses or approvals and where the failure so to qualify, to obtain
the licenses and approvals or to preserve and maintain the
qualification, licenses or approvals would have a Material Adverse
Effect.
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(c) Power and Authority: Due Authorization. Such Seller has
(i) all necessary power and authority to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party,
(B) perform its obligations under this Agreement and the other
Transaction Documents to which it is a party, and (c) sell and assign
(and, in the case of Howmet, contribute) its Receivables and the
Related Assets on the terms and subject to the conditions herein and
therein provided and (ii) duly authorized by all necessary action such
sale and assignment (and, in the case of Howmet, contribution), and the
execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party and the consummation of
the transactions provided for in this Agreement and the other
Transaction Documents to which it is a party.
(d) Valid Sale: Binding Obligations. Each sale of Receivables
and Related Assets made by such Seller pursuant to this Agreement (and,
in the case of Howmet, each contribution of Receivables and Related
Assets made to Buyer pursuant to any Contribution Agreement) shall
constitute a valid sale (except in the case of Contributed
Receivables), transfer, and assignment of all of such Seller's right,
title and interest in, to and under such Receivables and the Related
Assets of such Seller to Buyer that is perfected and of first priority
under the UCC and otherwise, enforceable against creditors of, and
purchasers from, such Seller and free and clear of any Adverse Claim
(other than any Permitted Adverse Claim or any Adverse Claim arising
solely as a result of any action taken by Buyer hereunder or by the
Trustee under the Pooling Agreement); and this Agreement constitutes,
and each other Transaction Document to which such Seller is a party
when duly executed and delivered will constitute, a legal, valid and
binding obligation of such Seller, enforceable against it in accordance
with its terms, except as enforceability may he limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(e) No Conflict or Violation. The execution, delivery and
performance of, and the consummation of the transactions contemplated
by, this Agreement and the other Transaction Documents to be signed by
such Seller and the fulfillment of the terms hereof and thereof will
not (i) conflict with, violate, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, (A) its Certificate of Incorporation
or Bylaws or (B) any indenture, loan agreement, mortgage, deed of trust
or other material agreement or instrument to which such Seller is a
party or by which it or any of its properties is bound, (ii) result in
the creation or imposition of any Adverse Claim (other than a Permitted
Adverse Claim) upon any of the Receivables or Related Assets other than
pursuant to this Agreement and the other Transaction Documents, or
(iii) conflict with or violate any federal, state, local or foreign law
or any decision, decree, order, rule or regulation applicable to it or
any of its properties of any court or of any federal, state, local or
foreign regulatory body, administrative agency or other governmental
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instrumentality having jurisdiction over it or any of its properties,
which conflict, violation, breach, default or Adverse Claim,
individually or in the aggregate, would have a Material Adverse Effect.
(f) Litigation and Other Proceedings. Except as described in
Schedule 1, (i) there is no action, suit, proceeding or investigation
pending or, to the best knowledge of such Seller, threatened against it
before any court, regulatory body, arbitrator, administrative agency or
other tribunal or governmental instrumentality and (ii) it is not
subject to any order, judgment, decree, injunction, stipulation or
consent order of or with any court or other government authority that,
in the case of each of clauses (i) and (ii), (A) asserts the invalidity
of this Agreement or any other Transaction Document, (B) seeks to
prevent the sale (or, in the case of Howmet, contribution) of any
Receivables or Related Assets by such Seller to Buyer, the issuance of
the applicable Seller Assignment Certificate or the consummation of any
of the transactions contemplated by this Agreement or any other
Transaction Document, (c) seeks any determination or ruling that would
materially and adversely affect the performance by such Seller of its
obligations under this Agreement or any other Transaction Document or
the validity or enforceability of this Agreement or any other
Transaction Document, (d) seeks to affect adversely the income tax
attributes of the purchases hereunder or the applicable Seller
Assignment Certificate, in the case of each of the foregoing whether
under the United States Federal income tax system or any state income
tax system, or (e) individually or in the aggregate for all such
actions, suits, proceedings and investigations would have a Material
Adverse Effect.
(g) Government Approvals. All authorizations, consents, orders
and approvals of, or other action by, any Governmental Authority that
are required to be obtained by such Seller, and all notices to and
filings (except, in respect of enforceability against any Obligor that
is the United States government or any of its agencies or
instrumentalities, any filings under the Federal Assignment of Claims
Act and any consents required by states with respect to any Specified
Receivables arising from any state or local government agency or
instrumentality, so long as such Receivables are not reported as
Eligible Receivables), with any Governmental Authority that are
required to be made by it, in the case of each of the foregoing in
connection with the conveyance of Specified Receivables and Related
Assets or the due execution, delivery and performance by such Seller of
this Agreement, such Seller's Seller Assignment Certificate or any
other Transaction Document to which it is a party and the consummation
of the transactions contemplated by this Agreement, have been obtained
or made and are in full force and effect, except where the failure to
obtain or make any such authorization, consent, order, approval, notice
or filing, individually or in the aggregate for all such failures,
would not reasonably be expected to have a Material Adverse Effect.
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(h) Bulk Sales Act. No transaction contemplated by this
Agreement or any other Transaction Document requires compliance with,
or will be subject to avoidance under, any bulk: sales act or similar
law.
(i) Financial Condition. The Pro Forma Financial Data, copies
of which have been furnished to Buyer and the Trustee, fairly present
in all material respects the pro forma financial position, results of
operations and cash flows of Howmet and its consolidated Subsidiaries
at the dates and for the periods to which they relate and have been
prepared in accordance with GAAP applied on a consistent basis, except
as otherwise stated therein (except, in the case of quarterly financial
statements, for the omission of footnotes and ordinary year-end
adjustments, none of which, individually or in the aggregate, would be
material). Since September 30, 1995 through to the date hereof (and
except as contemplated in the Pro Forma Financial Data), there has been
no material adverse change in the condition (financial or otherwise),
or the earnings, business affairs or business prospects of Howmet and
its consolidated Subsidiaries, whether or not arising in the ordinary
course of business. "Pro Forma Financial Data" means the pro forma
consolidated financial data included in the offering memorandum, dated
November 22, 1995 with respect to the proposed offering of Senior
Subordinated Notes due 2003 to be issued by Howmet pursuant to the Note
Indenture.
(j) Margin Regulations. No use of any funds obtained by such
Seller under this Agreement will conflict with or contravene any of
Regulations G, T, U and X promulgated by the Federal Reserve Board from
time to time.
(k) Quality of Title.
(i) Immediately before each Purchase (and, in the
case of Howmet, each contribution to be made to Buyer under
any Contribution Agreement), each Receivable and Related Asset
of such Seller that is then to be transferred to Buyer, and
the related Contracts, shall be owned by such Seller free and
clear of any Adverse Claim (other than any Permitted Adverse
Claim or any Adverse Claim arising solely as the result of any
action taken by Buyer hereunder or by the Trustee under the
Pooling Agreement); provided that the existence of an Adverse
Claim that is released on the First Issuance Date (upon
application of the proceeds of the issuance of Certificates on
that date) shall not constitute a breach of this
representation and warranty; and such Seller shall have made
all filings and shall have taken all other action under
applicable law in each relevant jurisdiction in order to
protect and perfect the ownership interest of Buyer and its
successors in the Specified Receivables and Related Assets
against all creditors of, and purchasers from, such Seller.
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(ii) Whenever Buyer makes a purchase hereunder from
such Seller (or accepts a contribution from How met under any
Contribution Agreement), Buyer shall have acquired a valid and
perfected first priority ownership interest in each Specified
Asset sold by such Seller or contributed by Howmet on such
date, free and clear of any Adverse Claim (other than any
Permitted Adverse Claim or any Adverse Claim arising solely as
the result of any action taken by Buyer hereunder or by the
Trustee under the Pooling Agreement) .
(iii) No effective financing statement or other
instrument similar in effect that covers all or part of any
Receivable originated by such Seller, any interest therein or
any Related Asset with respect thereto is on file in any
recording office except (x) such as may be filed (A) in favor
of such Seller in accordance with the Contracts, (B) in favor
of Buyer pursuant to this Agreement or any Contribution
Agreement and (c) in favor of the Trustee, for the benefit of
the Certificate holders and Purchasers, in accordance with the
Pooling Agreement, (y) such as may have been identified to
Buyer prior to the Closing Date and termination statements
relating to which have been placed with LEXIS Document
Services, or a similar service, for filing on the First
Issuance Date or the first Business Day thereafter, and (z)
such as may be filed with respect to Receivables (and Related
Assets with respect thereto) that are not Specified
Receivables in favor of Persons bound by an Intercreditor
Agreement. No effective financing statement or instrument
similar in effect relating to perfection that covers any
inventory of such Seller that might give rise to Receivables
is on file in any recording office except for (so long as an
Intercreditor Agreement is in effect) financing statements or
instruments in favor of creditors of such Seller bound by such
Intercreditor Agreement.
(iv) No Purchase by Buyer from such Seller (or, in
the case of Howmet, contribution to Buyer) constitutes a
fraudulent transfer or fraudulent conveyance under the United
States Bankruptcy Code or applicable state bankruptcy or
insolvency laws or is otherwise void or voidable or subject to
subordination under similar laws or principles or for any
other reason.
(v) Each Purchase by Buyer from such Seller
constitutes a true and valid sale of Purchased Receivables and
Related Assets under applicable state law and true and valid
assignments and transfers for consideration (and not merely a
pledge of such Receivables and Related Assets for security
purposes), enforceable against the creditors of such Seller,
and none of the Specified Receivables or Related Assets
transferred to Buyer hereunder or under any Contribution
Agreement shall constitute property of such Seller.
(l) Eligible Receivables. (i) On the date of each Purchase of
Receivables hereunder from such Seller (or in the case of How met,
contribution from How met),
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each such Receivable, unless otherwise identified to Buyer and the
Trustee by the Servicer in the Daily Report for such date, is an
Eligible Receivable, and (ii) on the date of each Daily Report or
Monthly Report that identifies a Receivable originated by such Seller
as an Eligible Receivable, such Receivable is an Eligible Receivable.
(m) Accuracy of Information. All written information furnished
on and alter the Closing Date by or on behalf of such Seller to Buyer,
the Servicer or the Trustee pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein
shall not contain any untrue statement of a material fact or omit to
state material facts necessary to make the statements made not
misleading, in each case on the date the statement was made and in
light of the circumstances under which the statements were made or the
information was furnished.
(n) Offices. The principal place of business and chief
executive office of such Seller is located at the address set forth
under such Seller's signature hereto, and any other location which has
been such Seller's principal place of business or chief executive
office during the past four months or in which such Seller keeps (or
has kept during the past four months) Records, Contracts, purchase
orders and agreements related to the Specified Receivables or Related
Assets (and all original documents relating thereto) is specified in
Schedule 3 (or at such other locations, notified to the Servicer and
the Trustee in accordance with Section 6.1(f), in jurisdictions where
all action required pursuant to Section 7.3 has been taken and
completed).
(o) Account Banks and Payment Instructions. The names and
addresses of all the banks, together with the account numbers of the
accounts at the banks, into which Collections are paid have been
accurately identified to Buyer in a letter from such Seller to Buyer
dated the Closing Date or have been specified in the notices as shall
have been delivered thereafter pursuant to Section 6.3(c). Each Account
Bank has executed and delivered an Account Agreement to Buyer and the
Trustee. Such Seller has instructed all Obligors to submit all payments
on the Specified Receivables and Related Assets directly to one of the
Lockbox Accounts. Any payments not made directly to the Account Banks
will be forwarded to the Account Banks within two Business Days.
(p) Compliance with Applicable Laws. Such Seller is in
compliance with the requirements of all applicable laws, rules,
regulations and orders of all Governmental Authorities (federal, state,
local or foreign, and including environmental laws), a violation of any
of which, individually or in the aggregate for all such violations,
would have a Material Adverse Effect.
(q) Legal Names. Except as set forth in Schedule 4 or
permitted by Section 6.3(e), since November 30, 1989 such Seller (i)
has not been known by any
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legal name other than its corporate name as of the date hereof, nor has
such Seller been the subject of any merger or other corporate
reorganization since November 30, 1989 that resulted in a change of
name, identity or corporate structure, and (ii) uses no trade names
other than its actual corporate name.
(r) Investment Company Act. Such Seller is not, and is not
controlled by, an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended.
(s) Taxes. Such Seller has filed or caused to be filed all tax
returns and reports required by law to have been filed by it and has
paid all taxes, assessments and governmental charges thereby shown to
be owing, except any such taxes, assessments or charges (i) that are
being diligently contested in good faith by appropriate proceedings,
(ii) for which adequate reserves in accordance with GAAP shall have
been set aside on its books and (iii) with respect to which no Adverse
Claim, except Permitted Adverse Claims, has been imposed upon any
Receivables or Related Assets.
SECTION 5.2 Representations and Warranties of Buyer. From the date
hereof until the Purchase Termination Date, Buyer hereby represents and warrants
that (a)(i) this Agreement has been duly authorized, executed and delivered by
Buyer and (ii) constitutes the legal, valid and binding obligation of Buyer,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law, and (b) the execution, delivery and performance
of this Agreement does not violate any applicable law or any agreement to which
Buyer is a party or by which its properties are bound.
ARTICLE VI
GENERAL COVENANTS OF THE SELLERS
SECTION 6.1 Affirmative Covenants. Subject to Section 1.8, from the
Closing Date until the first day following the Purchase Termination Date on
which all Obligations of the Sellers shall have been finally and fully paid and
performed and the Invested Amount for each Series or Purchased Interest shall
have been reduced to zero, unless Buyer shall otherwise give its prior written
consent, each Seller hereby agrees that it will perform the covenants and
agreements set forth in this section.
(a) Compliance with Laws. Etc. Such Seller will comply in all
material respects with all applicable laws, rules, regulations,
judgments, decrees and orders
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(including those relating to the Specified Receivables, the Related
Assets, the related Contracts of such Seller and any other agreements
related thereto), in each case to the extent the failure to comply,
individually or in the aggregate for all such failures, would have a
Material Adverse Effect.
(b) Preservation of Corporate Existence. Such Seller will
preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and
remain qualified in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualifications would have a Material
Adverse Effect.
(c) Receivables Reviews. Such Seller shall, during regular
business hours upon not less than five Business Days' prior notice,
permit Buyer and its agents or representatives, at the expense of such
Seller, (i) to examine and make copies of and abstracts from, and to
conduct accounting reviews of, all Records in the possession or under
the control of such Seller relating to the Specified Receivables or
Related Assets generated by such Seller, and (ii) to visit the offices
and properties of such Seller for the purpose of examining the
materials described in clause (i) above, and to discuss matters
relating to any Specified Receivables or any Related Assets of such
Seller or such Seller's performance hereunder with any of the
Authorized Officers of such Seller or, with the prior consent of an
Authorized Officer of such Seller, with employees of such Seller having
knowledge of such matters (the examinations set forth in the foregoing
clauses (i) and (ii) being herein called a "Seller Receivables Review")
. Buyer and its agents or representatives shall be entitled to conduct
Seller Receivables Reviews whenever Buyer, in its reasonable judgment,
deems it appropriate; provided, that prior to the occurrence and
continuance of an Early Amortization Event, Buyer (or its agent or
representative) shall give such Seller at least five Business Days'
prior notice of any Seller Receivables Review, and Buyer shall have the
right to request a Seller Receivables Review not more than twice in any
calendar year.
(d) Keeping of Records and Books of Account. Such Seller shall
maintain and implement administrative and operating procedures
(including an ability to recreate records evidencing its Specified
Receivables and Related Assets in the event of the destruction of the
originals thereof), and shall keep and maintain all documents, books,
records and other information that, in the reasonable determination of
Buyer and the Trustee, are necessary or advisable in accordance with
prudent industry practice and custom for transactions of this type for
the collection of all Specified Receivables and the Related Assets.
Upon the reasonable request of Buyer made at any time after the
occurrence and continuance of a Servicer Default, such Seller will
deliver copies of all books and records maintained with respect to its
Specified Assets pursuant to this subsection (d) to the Trustee. Such
Seller shall maintain at all times
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accurate and complete books, records and accounts relating to the
Specified Receivables, Related Assets and Contracts and all Collections
thereon in which timely entries shall be made. Such books and records
shall be marked to indicate the sales (and, in the case of Howmet,
contributions) of all Specified Receivables and Related Assets
hereunder (and, in the case of any contribution, under the related
Contribution Agreement) and shall include (i) all payments received and
all credits and extensions granted with respect to the Specified
Receivables and (ii) the return, rejection, repossession, or stoppage
in transit of any merchandise, the sale of which has given rise to a
Specified Receivable.
(e) Performance and Compliance with Receivables and Contracts.
Such Seller will, at its expense, timely and fully perform and comply
with all provisions, covenants and other promises required to be
observed by it under the Contracts of such Seller related to the
Specified Receivables and Related Assets, in each case to the extent
that failure to perform or comply would have a Material Adverse Effect.
(f) Location of Records and Offices. Such Seller will keep its
principal place of business and chief executive office, and the offices
where it keeps all Records related to the Specified Receivables and the
Related Assets (and all original documents relating thereto), at the
addresses referred to in Schedule 3 or, upon not less than 30 days'
prior written notice given by such Seller to Buyer, the Trustee and the
Rating Agencies, at such other locations in jurisdictions where all
action required by Section 7.3 shall have been taken and completed.
(g) Credit and Collection Policies. Such Seller will comply in
all material respects with its Credit and Collection Policy in regard
to each Specified Receivable of such Seller and the Related Assets and
the Contracts related to each such Receivable, where the failure so to
comply, individually or in the aggregate for all such failures, would
have a Material Adverse Effect.
(h) Separate Corporate Existence of Buyer. Such Seller hereby
acknowledges that the Trustee, on behalf of the Trust, is entering into
the transactions contemplated by the Transaction Documents in reliance
upon Buyer's identity as a legal entity separate from such Seller and
the other Howmet Persons. Therefore, from and after the date hereof
until the first day following the Purchase Termination Date on which
all Obligations shall have been fully paid and performed and the
Invested Amount for each Series or Purchased Interest shall have been
reduced to zero, such Seller will take all reasonable steps to continue
its identity as a separate legal entity from Buyer and to make it
apparent to third Persons that such Seller is an entity with assets and
liabilities distinct from those of Buyer and that Buyer is not a
division of such Seller.
(i) Payment Instructions to Obligors. Such Seller will
instruct all Obligors to submit all payments in respect of Specified
Receivables either (i) to one of the
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lockboxes maintained at the Lockbox Banks for deposit in a Lockbox
Account or to a Concentration Account or (ii) directly to one of the
Lockbox Accounts.
(j) Segregation of Collections. Such Seller shall use
reasonable efforts to minimize the deposit of any funds other than
Collections into any of the Lockbox Accounts and, to the extent that
any such funds nevertheless are deposited into any of the Lockbox
Accounts, shall promptly identify any such funds, or shall cause the
funds to be so identified, to Buyer, the Servicer and the Trustee
(following which notice, Buyer shall cause the Servicer to return all
the funds to such Seller).
(k) Identification of Eligible Receivables. Such Seller will
(i) establish and maintain such procedures as are necessary for
determining no less frequently than each Business Day whether each
Receivable qualifies as an Eligible Receivable, and for identifying, on
any Business Day, all Receivables to be sold (or, in the case of
Howmet, contributed) on that date that are not Eligible Receivables,
and (ii) except as permitted in Section 3.5(c) of the Pooling
Agreement, notify Buyer prior to the occurrence of a Purchase (and, in
the case of Howmet, prior to a contribution of Receivables and Related
Assets) if a Receivable to be sold hereunder (or, in the case of
Howmet, contributed under the related Contribution Agreement) will, to
such Seller's knowledge, not be an Eligible Receivable as of the date
of such Purchase or contribution.
(l) Accuracy of Information. All written information furnished
on and after the Closing Date by or on behalf of such Seller to Buyer,
the Servicer or the Trustee pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein
shall not contain any untrue statement of a material fact or omit to
state material facts necessary to make the statements made not
misleading, in each case on the date the statement was made and in
light of the circumstances under which the statements were made or the
information was furnished.
(m) Taxes. File or cause to be filed, and cause each Person
with whom it shares consolidated tax liability to file, all Federal,
state and local tax returns that are required to be filed by it (except
where the failure to file such returns does not have a substantial
likelihood of having a Material Adverse Effect) and pay or cause to be
paid all taxes shown to be due and payable on taxes or assessments
(except only such taxes or assessments the validity of which are being
contested in good faith by appropriate proceedings and with respect to
which such Seller shall have set aside adequate reserves on its books
in accordance with GAAP and which proceedings do not have a substantial
likelihood of having a Material Adverse Effect).
SECTION 6.2 Reporting Requirements. Subject to Section 1.8, from the
Closing Date until the first day following the Purchase Termination Date on
which all Obligations of
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the Sellers shall have been finally and fully paid and performed and the
Invested Amount for each Series or Purchased Interest shall have been reduced to
zero, such Seller agrees that it will, unless Buyer and the Trustee shall
otherwise give prior written consent, and (with respect to the notices described
below in subsections (c) and (d)) unless the Modification Condition has been
satisfied), furnish to Buyer and the Trustee (and, in the case of the notices
described below in subsections (c), (d) and (f), to the Rating Agencies):
(a) Quarterly Financial Statements. Within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of
Howmet, copies of the unaudited consolidated balance sheets of Howmet
and its consolidated Subsidiaries as at the end of the fiscal quarter
and the related unaudited statements of earnings and cash flows, in
each case for the fiscal quarter and for the period from the beginning
of the fiscal year through the end of such fiscal quarter, prepared in
accordance with GAAP consistently applied throughout the periods
reflected therein and certified (subject to year end adjustments and
the omission of footnotes) by the chief financial officer or chief
accounting officer of Howmet.
(b) Annual Financial Statements. As soon as possible and in
any event within 90 days after the end of each fiscal year of Howmet, a
copy of the consolidated balance sheet of Howmet and its consolidated
Subsidiaries as at the end of the fiscal year and the related
statements of earnings, stockholders' equity and cash flows of Howmet
and its consolidated Subsidiaries for the fiscal year, setting forth in
each case in comparative form the corresponding figures for the
preceding fiscal year and prepared in accordance with GAAP consistently
applied throughout the periods reflected therein, certified, without
Impermissible Qualification, by Ernst & Young, Price Waterhouse L.L.P.
or any other independent certified public accountants of a nationally
recognized standing in the United States of America as shall be
selected by Howmet.
(c) Early Amortization Events. As soon as possible, and in any
event within five Business Days after an Authorized Officer of such
Seller has obtained knowledge of the occurrence of any Early
Amortization Event or any Unmatured Early Amortization Event, a written
statement of an Authorized Officer of such Seller describing the event
and the action that such Seller proposes to take with respect thereto,
in each case in reasonable detail.
(d) Material Adverse Effect. As soon as possible and in any
event within five Business Days after an Authorized Officer of such
Seller has knowledge thereof, written notice that describes in
reasonable detail any event or occurrence that, individually or in the
aggregate for all such events or occurrences, has had, or that would
have a substantial likelihood of having, a Material Adverse Effect.
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(e) Proceedings. As soon as possible and in any event within
five Business Days after an Authorized Officer of such Seller has
knowledge thereof, written notice of (i) any litigation, investigation
or proceeding of the type described in Section 5.1(f) not previously
disclosed to Buyer and (ii) any judgment, settlement or other final
disposition with respect to any such previously disclosed litigation,
investigation or proceeding.
(f) Other. Promptly, from time to time, (i) such other
information, documents, records or reports respecting the Specified
Receivables or the Related Assets or (ii) such other publicly available
information respecting the condition or operations, financial or
otherwise, of such Seller, in each case as Buyer may from time to time
reasonably request in order to protect the interests of Buyer, the
Trustee or the Certificate holders under or as contemplated by this
Agreement.
SECTION 6.3 Negative Covenants. Subject to Section 1.8, from the
Closing Date until the first day following the Purchase Termination Date on
which ail Obligations of the Sellers shall have been finally and fully paid and
performed and the Invested Amount for each Series or Purchased Interest shall
have been reduced to zero, unless Buyer shall otherwise give its prior written
consent, each Seller hereby agrees that it will perform the covenants and
agreements set forth in this section.
(a) Sales. Liens. Etc. Except as otherwise provided herein or
in the Pooling Agreement, such Seller will not (i)(A) sell, assign (by
operation of law or otherwise) or otherwise transfer to any Person, (B)
pledge any interest in, (C) grant, create, incur, assume or permit to
exist any Adverse Claim (other than Permitted Adverse Claims) to or in
favor of any Person upon or with respect to, or (D) cause to be filed
any financing statement or equivalent document relating to perfection
with respect to any of its Specified Assets or any Contract related to
any Specified Receivable, or upon or with respect to any lockbox or
account to which any Collections of any such Receivable or any Related
Assets are sent or any interest therein, or (ii) assign to any Person
any right to receive income from or in respect of any of the foregoing.
In the event that such Seller falls to keep any of its Specified Assets
free and clear of any Adverse Claim (other than a Permitted Adverse
Claim, any Adverse Claims arising hereunder, and other Adverse Claims
permitted by any other Transaction Document), Buyer may (without
limiting its other rights with respect to such Seller's breach of its
obligations hereunder) make reasonable expenditures necessary to
release the Adverse Claim. Buyer shall be entitled to indemnification
for any such expenditures pursuant to the indemnification provisions of
Article IX. Alternatively, Buyer may deduct such expenditures as an
offset to the Purchase Price owed to such Seller hereunder.
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Such Seller will not pledge or grant any security interest in its
inventory, any Buyer Note or the capital stock of Buyer unless prior to any
pledge or grant such Seller, Buyer, the Trustee and the person for whose
benefits the pledge or grant is being made have entered into an Intercreditor
Agreement.
(b) Extension or Amendment of Receivables: Change in Credit and
Collection Policy or Contracts. Such Seller will not, (i) without the prior
written consent of Buyer and the Trustee, which consent will not be unreasonably
withheld, extend, amend or otherwise modify the terms of any Specified
Receivable or Contract in a manner that would have a Material Adverse Effect or
(ii) change the terms and provisions of the Credit and Collection Policy with
respect to its Specified Assets in any material respect unless (x) with respect
to collection policies, the change is made with the prior written approval of
the Trustee, Buyer and each Agent and the Modification Condition is satisfied
with respect thereto, (y) with respect to collection procedures, the change is
made with prior written notice to the Trustee, Buyer and each Agent and no
Material Adverse Effect would result and (z) with respect to accounting policies
relating to Specified Receivables that have become Write-Offs, the change is
made in accordance with GAAP; provided that such Seller may change the terms and
the provisions of a Contract on a prospective basis, and a Seller may enter into
a new Contract, so long as such change or new Contract does not have a material
adverse affect on the validity, enforceability or collectibility of any then
outstanding Specified Receivable.
(c) Change in Payment Instructions to Obligors. Such Seller will not
(i) add or terminate any bank as an Account Bank from those listed in the letter
referred to in Section 5.1(o) unless, prior to any such addition or termination,
Buyer, the Trustee and the Rating Agencies shall have received not less than ten
Business Days' prior written notice of the addition or termination and, not less
than ten Business Days prior to the effective date of any such proposed addition
or termination, Buyer and the Trustee shall have received (A) counterparts of
the applicable type of Account Agreement with each new Account Bank, duly
executed by such new Account Bank and all other parties thereto and (B) copies
of all other agreements and documents signed by the Account Bank and such other
parties with respect to any new Bank Account, all of which agreements and
documents shall be reasonably satisfactory in form and substance to Buyer and
the Trustee, or (ii) make any change in its instructions to Obligors, given in
accordance with Section 5.1(o), regarding payments to be made to such Seller or
payments to be made to any Account Bank in respect of Specified Receivables,
other than changes in the instructions that direct Obligors to make payments to
another Bank Account at such Account Bank or another Account Bank or to the
Master Collection Account.
(d) Mergers. Acquisitions. Sales. etc. Except for (i) mergers or
consolidations in which such Seller is the surviving Person, (ii) mergers or
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consolidations of a subsidiary of Howmet into such Seller or (iii) mergers or
consolidations in which the surviving Person expressly assumes the performance
of this Agreement and the Modification Condition shall have been satisfied with
respect to the consolidation or merger, the Seller will not be a constituent
corporation to any merger or consolidation. Such Seller will give the Trustee
and the Rating Agencies notice of any such permitted merger or consolidation
promptly following completion thereof. Unless the Modification Condition is
satisfied, such Seller will not, directly or indirectly, transfer, assign,
convey or lease, whether in one transaction or in a series of transactions, all
or substantially all of its assets or sell or assign, with or without recourse,
any Receivables or Related Assets, in each case other than pursuant to this
Agreement or any Contribution Agreement.
(e) Change in Name. Such Seller will not (i) change its corporate name
or (ii) change the name under or by which it does business in any manner that
would or may make any financing statement filed by such Seller in accordance
herewith seriously misleading within the meaning of Section 9-402(7) of an
applicable enactment of the UCC, in each case unless such Seller shall have
given Buyer, the Servicer and the Trustee (and, if any outstanding Investor
Certificates are rated, the Rating Agencies) 30 days' prior written notice
thereof and unless, prior to any change in name, such Seller shall have taken
and completed all action required by Section 7.3.
(f) Articles of Incorporation. Such Seller will not cause Buyer to
amend Article SIXTH, NINTH, TENTH(a), TENTH(d) or THIRTEENTH(b) of its Articles
of Incorporation without the Trustee's prior written consent, which consent will
not be unreasonably withheld or delayed.
(g) Amendments to Transaction Documents. Such Seller will not amend or
otherwise modify or supplement any Transaction Document to which it is a party
unless (i) Buyer shall have given its prior written consent to each amendment,
modification or supplement and (ii) the Modification Condition shall have been
satisfied.
(h) Accounting for Purchases. Such Seller shall prepare its financial
statements in accordance with GAAP, and any financial statements that are made
publicly available and which are consolidated to include Buyer will contain
footnotes stating that such Seller has sold or contributed its Receivables to
Buyer and that the assets of Buyer will not be available to How met and its
subsidiaries unless Buyer's liabilities have been paid in full. Unless required
by GAAP, such Seller shall not prepare any financial statements that account for
the transactions contemplated in this Agreement in any manner other than as a
sale of the Purchased Assets by such Seller to Buyer, or in any other respect
account for or treat the transactions contemplated in this Agreement (including
but not limited to accounting and, where taxes are not
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consolidated, for tax reporting purposes) in any manner other than as a sale of
the Purchased Assets by such Seller to Buyer.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SPECIFIED ASSETS
SECTION 7.1 Rights of Buyer. (a) Subject to Section 7.4(b), each Seller
hereby authorizes Buyer, the Servicer and/or their respective designees to take
any and all steps in such Seller's name and on behalf of such Seller that Buyer,
the Servicer and/or their respective designees determine are reasonably
necessary or appropriate to collect all amounts due under any and all Specified
Assets, including endorsing the name of such Seller on checks and other
instruments representing Collections and enforcing such Seller's rights under
such Specified Assets.
(b) Except as set forth in Section 3.1 with respect to Seller
Noncomplying Receivables, Buyer shall have no obligation to account for any
Specified Asset to any Seller. Buyer shall have no obligation to account for, or
to return Collections, or any interest or other finance charge collected with
respect to the Specified Assets, to any Seller, irrespective of whether such
Collections and charges are in excess of the Purchase Price for the Purchased
Assets.
(c) Buyer shall have the unrestricted right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with the Specified
Assets, and all of Buyer's right, title and interest in, to and under this
Agreement and any Contribution Agreement, on whatever terms Buyer shall
determine, pursuant to the Pooling Agreement or otherwise.
(d) Buyer shall have the sole right to retain any gains or profits
created by buying, selling or holding the Specified Assets and shall have the
sole risk of and responsibility for losses or damages created by such buying,
selling or holding.
SECTION 7.2 Responsibilities of the Sellers. Anything herein to the
contrary notwithstanding, each Seller hereby agrees:
(a) to deliver directly to the Servicer (for Buyer's account),
within two Business Days after receipt thereof, any Collections that it
receives, in the form so received, and agrees that all such Collections
shall be deemed to be received in trust for Buyer and shall be
maintained and segregated separate and apart from all other funds and
moneys of such Seller until delivery of such Collections to the
Servicer,
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(b) to perform all of its obligations hereunder and under the
Contracts related to the Specified Receivables and Related Assets to
the same extent as if the Specified Receivables had not been sold
hereunder, and the exercise by Buyer or its designee or assignee of
Buyer's rights hereunder or in connection herewith shall not relieve
such Seller from any of its obligations under the Contracts or Related
Assets related to the Specified Receivables,
(c) that such Seller hereby grants to Buyer an irrevocable
power of attorney, with full power of substitution, coupled with an
interest, to take in the name of such Seller all steps necessary or
advisable to endorse, negotiate or otherwise realize on any writing or
other right of any kind held or transmitted by such Seller or
transmitted or received by Buyer (whether or not from such Seller) in
connection with any Specified Asset, and
(d) to the extent that such Seller does not own the computer
software that such Seller uses to account for Specified Receivables,
such Seller shall use reasonable efforts to provide Buyer and the
Trustee with such licenses, sublicenses and/or assignments of contracts
as Buyer or the Trustee shall require with regard to all services and
computer hardware or software used by such Seller that relate to the
servicing of the Specified Assets.
SECTION 7.3 Further Action Evidencing Purchases. Subject to Section
1.8, each Seller agrees that from time to time, at its expense, it will
promptly, upon reasonable request by Buyer, Servicer or Trustee, execute and
deliver all further instruments and documents, and take all further action, in
order to perfect, protect or more fully evidence the purchase by Buyer or
contribution to Buyer of the Specified Receivables and the Related Assets under
this Agreement or any Contribution Agreement (as applicable), or to enable Buyer
to exercise or enforce any of its rights under any Transaction Document. Each
Seller further agrees that from time to time, at its expense, it will promptly
take all action that Buyer, the Servicer or the Trustee may reasonably request
in order to perfect, protect or more fully evidence the purchase or contribution
of the Specified Receivables and the Related Assets or to enable Buyer or the
Trustee (as the assignee of Buyer) to exercise or enforce any of its rights
hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of Buyer, each Seller will:
(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as Buyer or the Trustee may reasonably
determine to be necessary or appropriate, and
(b) mark the master data processing records evidencing the
Receivables with the following legend:
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"CERTAIN RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO BLADE
RECEIVABLES CORPORATION ("BRC") PURSUANT TO A RECEIVABLES
PURCHASE AGREEMENT, DATED AS OF DECEMBER 13, 1995, AND AMENDED
AND RESTATED AS OF APRIL 18, 1996, AMONG HOWMET CORPORATION
("HOWMET"), CERTAIN OF ITS SUBSIDIARIES AND BRC; AND SUCH
RECEIVABLES HAVE BEEN TRANSFERRED TO THE BLADE RECEIVABLES
MASTER TRUST PURSUANT TO A POOLING AND SERVICING AGREEMENT,
DATED AS OF DECEMBER 13,1995, AND AMENDED AND RESTATED AS OF
APRIL 18, 1996, AMONG BRC, AS TRANSFEROR, HOWMET, AS THE
INITIAL SERVICER, AND MANUFACTURERS AND TRADERS TRUST COMPANY,
AS TRUSTEE."
Each Seller hereby authorizes Buyer or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Related Assets of such
Seller, in each case whether now existing or hereafter generated by such Seller.
Except for material performance obligations of such Seller to any Obligor
hereunder or under any of the Contracts for the Specified Receivables, if (i)
such Seller falls to perform any of its agreements or obligations under this
Agreement and does not remedy the failure within the applicable cure period, if
any, and (ii) Buyer in good faith reasonably believes that the performance of
such agreements and obligations is necessary or appropriate to protect its
interests under this Agreement, then Buyer or its designee may (but shall not be
required to) perform, or cause performance of, such agreement or obligation and
the reasonable expenses of Buyer or its designee or assignee incurred in
connection with such performance shall be payable by such Seller as provided in
Section 9.1.
SECTION 7.4 Collection of Receivables; Rights of Buyer and Its
Assignees. (a) Each Seller hereby transfers to the Trustee (as transferee of
Buyer's interest in the Specified Assets) the ownership of, and the exclusive
dominion and control over, each of the Bank Accounts and all related Iockboxes
owned by such Seller, and such Seller hereby agrees to take any further action
that Buyer or the Trustee may reasonably request in order to effect or complete
the transfer. Each Seller further agrees to use reasonable efforts to prevent
funds other than proceeds of the Specified Assets from being deposited in any
Bank Account.
(b) Buyer may, at any time after an Early Amortization Event or
Servicer Default, direct the Obligors of Specified Receivables, or any of them,
to pay all amounts payable under any Specified Asset directly to the Trustee or
its designees. Furthermore, each Seller shall, at the request of Buyer and at
such Seller's expense, promptly give notice of the Trust's interest in the
Specified Receivables of the Obligor and the Related Assets to each such Obligor
and direct that payments be made directly to the Trustee or its designee, which
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notice shall be acceptable in form and substance to Buyer. In addition, each
Seller hereby authorizes Buyer to lake any and all steps in such Seller's name
and on its behalf that are necessary or desirable, in the reasonable
determination of Buyer, to collect all amounts due under any and all Specified
Assets, including endorsing such Seller's name on checks and other instruments
representing Collections and enforcing the Specified Assets and the Contracts
related to the Specified Receivables. The Trustee may exercise any of the
foregoing rights in the place of Buyer (as assignee or otherwise) at any time
following the designation of a Servicer other than Howmet pursuant to Section
10.2 of the Pooling Agreement.
(c) At any time when (i) an Early Amortization Event shall have
occurred and remain continuing or (ii) a Servicer other than Howmet has been
designated pursuant to Section 10.2 of the Pooling Agreement, each Seller shall,
at Buyer's request, assemble all of the Records that evidence the Specified
Receivables and Related Assets originated by such Seller and the Contracts
related to such Receivables, or that are otherwise necessary or desirable to
collect the Specified Receivables or Related Assets, and make the same available
to Buyer or the Trustee at a place selected by the Trustee or its designee.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by the Sellers. Prior to the commencement of an
Amortization Period or an Early Amortization Period in respect of any Series or
Purchased Interest, the Sellers may terminate all of their agreements to sell
Receivables hereunder to Buyer by giving Buyer and the Trustee not less than 30
days' prior written notice (or such shorter time as is acceptable to the
Trustee) of their election not to continue to sell Receiveable to Buyer;
provided that such notice must be given as to all Sellers; and provided further,
that such notice shall specify the effective date of such termination. The
Trustee shall notify the Certificate holders of all Series within five Business
Days of receiving any such termination notice. The Amortization Period for each
Series of Investor Certificates and Purchased Interest shall commence on the
effective date specified in such termination notice.
SECTION 8.2 Automatic Termination. Unless otherwise agreed to by the
Sellers and Buyer in writing, the agreement of each Seller to sell Receivables
hereunder, and the agreement of Buyer to purchase Receivables from such Seller
hereunder, shall terminate automatically upon the commencement of an
Amortization Period or an Early Amortization Period in respect of the last
Series or Purchased Interest (as the case may be) to remain outstanding out of
all Series and Purchased Interests; provided, however, that, notwithstanding
anything to the contrary m this Agreement, if at any time prior to the
commencement of any such Amortization Period or Early Amortization Period, any
event
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that would, with the passage of time, become a Bankruptcy Event occurs as a
result of a bankruptcy proceeding being filed against a Seller, then on and
after the date on which such bankruptcy proceeding is filed until the dismissal
of the proceeding Buyer shall not purchase Receivables and Related Purchased
Assets from such Seller.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Sellers. Without limiting any other
rights that any RPA Indemnified Party (as defined below) may have hereunder or
under applicable law, each Seller agrees to indemnify Buyer, each of its
successors, permitted transferees and assigns, and all officers, directors,
shareholders, controlling Persons, employees and agents of any of the foregoing
(each of the foregoing Persons being individually called a "RPA Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims (whether on account of settlements or otherwise), judgments, liabilities
and related reasonable costs and expenses (including reasonable attorneys' fees
and disbursements) awarded against or incurred by any of them arising out of or
as a result of any of the following (all of the foregoing being collectively
called "RPA Indemnified Losses"):
(a) any representation or warranty made in writing by such
Seller (or any of its Authorized Officers) under any of the Transaction
Documents, any Monthly Report, any Daily Report or any other
information or report delivered by or on behalf of such Seller or the
Servicer with respect to such Seller or the Receivables or Related
Assets originated by such Seller (including without limitation any
representation, warranty, information or report relied upon by Buyer in
connection with the offering or sale of any Certificate or Purchased
Interest), that contained any untrue statement of a material fact or
omitted to state material facts necessary to make the statements not
misleading when made,
(b) the failure by such Seller to comply with any applicable
law, rule or regulation with respect to any Specified Receivable or any
Related Asset or to comply with any Contract related thereto, or the
nonconformity of any Specified Receivable, the related Contract or any
Related Assets with any such applicable law, rule or regulation,
(c) the failure to vest and maintain vested in Buyer a first
priority perfected ownership interest in the Specified Receivables
originated by such Seller, the Related Assets, the related Collections
and the proceeds of each of the foregoing, free and clear of any
Adverse Claim (other than an Adverse Claim created in favor of Buyer
pursuant to this Agreement or in favor of the Trustee pursuant to the
Pooling Agreement), whether existing at the time of the sale of such
Receivable or at any time
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thereafter and without regard to whether such Adverse Claim was a
Permitted Adverse Claim,
(d) any failure of such Seller to perform its duties or
obligations in accordance with the provisions of the Transaction
Documents,
(e) any products liability claim, personal injury or property
damage suit, environmental liability claim or any other claim or action
by a party other than Buyer of whatever sort, whether sounding in tort,
contract or any other legal theory, arising out of or in connection
with the goods or services that are the subject of any Specified Assets
with respect thereto or Collections thereof,
(f) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Specified Assets or Collections originated by or otherwise
attributable to such Seller, whether at the time of any sale or at any
subsequent time,
(g) any dispute, claim, offset or defense (other than the
discharge in bankruptcy) of an Obligor to the payment of any Specified
Receivable originated by such Seller or Related Asset, or purported
Specified Receivable or Related Asset, including a defense based on
such Receivable's or the related Contract's not being a legal, valid
and binding obligation of the Obligor enforceable against it in
accordance with its terms, and
(h) any tax or governmental fee or charge (other than
franchise taxes and taxes on or measured by the net income of Buyer or
any of its assignees), all interest and penalties thereon or with
respect thereto, and all reasonable out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in defending
against the same, that may arise by reason of the purchase or ownership
of the Specified Receivables originated by such Seller or any Related
Asset connected with any such Receivables.
Notwithstanding the foregoing (and with respect to clause (ii) below, without
prejudice to the rights that Buyer may have pursuant to the other provisions of
this Agreement or the provisions of any of the other Transaction Documents), in
no event shall any RPA Indemnified Party be indemnified for any RPA Indemnified
Losses (i) resulting from gross negligence or willful misconduct on the part of
the RPA Indemnified Party, (ii) to the extent the same includes losses in
respect of Receivables and reimbursement therefor that would constitute credit
recourse to such Seller for the amount of any Receivable or Related Asset not
paid by the related Obligor, (iii) resulting from the action or omission of the
Servicer (unless the Servicer is a Howmet Person), (iv) to the extent the same
are or result from lost profits, (v) to the extent the same are or result from
taxes on or measured by the net income
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of the RPA Indemnified Party, (vi) resulting from any breach by such RPA
Indemnified Party of its representations, warranties and covenants in the
Transaction Documents, and (vii) to the extent the same constitute
consequential, special or punitive damages.
If for any reason the indemnification provided above in this section is
unavailable to a RPA Indemnified Party or is insufficient to hold a RPA
Indemnified Party harmless, then such Seller shall contribute to the maximum
amount payable or paid to the RPA Indemnified Party as a result of the loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the RPA Indemnified Party on the one hand
and such Seller on the other hand, but also the relative fault of the RPA
Indemnified Party (if any) and such Seller and any other relevant equitable
considerations.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments; Waivers, Etc. (a) The provisions of this
Agreement may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and signed by Buyer and each
Seller (with respect to an amendment) or by Buyer (with respect to a waiver or
consent by it) and, in the case of any amendment, modification or waiver, to the
extent provided in Section 7. 2(j) of the Pooling Agreement, by the Trustee, and
then any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. If any outstanding Investor
Certificates have been rated, this Agreement shall not be amended unless Buyer
shall have delivered the proposed amendment to the Rating Agencies at least ten
Business Days (or such shorter period as shall be acceptable to each of them)
prior to the execution and delivery thereof and the Modification Condition has
been satisfied with respect to such amendment.
(b) No failure or delay on the part of Buyer, any RPA Indemnified
Party, or the Trustee or any other third party beneficiary referred to in
Section 10.11(a) in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on any Seller in any case shall
entitle it to any notice or demand in similar or other circumstances. No waiver
or approval by Buyer or the Trustee under this Agreement shall, except as may
otherwise be stated in the waiver or approval, be applicable to subsequent
transactions. No waiver or approval under this Agreement shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mall, postage prepaid,
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by facsimile or by overnight courier, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall he designated by
the party in a written notice to the other parties hereto given in accordance
with this section. Copies of ail notices and other communications provided for
hereunder shall he delivered to the Trustee and to each Rating Agency at its
address for notices set forth in the Pooling Agreement. All notices and
communications provided for hereunder shall be effective, (a) if personally
delivered, when received, (b) if sent by certified mall, four Business Days
after having been deposited in the mall, postage prepaid and properly addressed,
(c) if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means and (d) if sent by overnight courier, two Business Days after
having been given to the courier unless sooner received by the addressee.
SECTION 10.3 Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, each Seller hereby authorizes Buyer, at any time and from time to
time, to the fullest extent permitted by law, to set-off, against any
Obligations of any Seller to Buyer that are then due and payable or that are not
then due and payable from a Seller to Buyer but have then accrued, any and all
indebtedness or other obligations at any time owing to any Seller by Buyer to or
for the credit or the account of any Seller or that are not then due and payable
from Buyer to a Seller but have then accrued.
SECTION 10.4 Binding Effect; Assignability; Survival of Provisions.
Subject to Section 1.8, this Agreement shall be binding upon and inure to the
benefit of Buyer and the Sellers and their respective successors and permitted
assigns. No Seller may assign any of its rights hereunder or any interest herein
without the prior written consent of Buyer, the Trustee and the Rating Agencies;
provided, however, that a Terminating Seller may assign its Buyer Note as
provided in Section 1.8. Except as provided in Section 1.8, this Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
first date following the Purchase Termination Date, but not later than the date
on which the Trust is terminated pursuant to Section 12.1 of the Pooling
Agreement, on which all Obligations shall have been finally and fully paid and
performed or such other time as the parties hereto shall agree and as to which
the Trustee (at the direction of the Majority Investors) shall have given its
prior written consent, which consent shall not be unreasonably withheld or
delayed. The rights and remedies with respect to any breach of any
representation and warranty made by a Seller pursuant to Article V and the
indemnification and payment provisions of Article IX and Section 10.6 shall be
continuing and shall survive any termination of this Agreement.
SECTION 10.5 Governing Law. "THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF
BUYER IN THE
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RECEIVABLES AND THE RELATED ASSETS ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
SECTION 10.6 Costs, Expenses and Taxes. Subject to Section 1.8, in
addition to the obligations of the Sellers under Article IX, the Sellers agree
jointly and severally to pay on demand:
(a) all reasonable out-of-pocket and other costs and expenses
in connection with the enforcement of this Agreement, the Seller
Assignment Certificates or the other Transaction Documents by Buyer or
any successor in interest to Buyer, and
(b) all stamp and other taxes and fees payable or determined
to be payable in connection with the execution and delivery, and the
filing and recording, of this Agreement or the other Transaction
Documents, and agrees to indemnify each RPA Indemnified Party against
any liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.
SECTION 10.7 Submission to Jurisdiction. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW
YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION
DOCUMENTS, AND HEREBY (A) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF THE
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN THE STATE OR FEDERAL COURT,
(B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF THE ACTION OR PROCEEDING,
AND (C) BUYER, IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS AGENT"),
WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK 10019,
ATTENTION: FRIEDA DAWSON, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS
PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS
THAT MAY BE SERVED IN ANY ACTION OR PROCEEDING. THE SERVICE MAY BE MADE BY
MAILING OR DELIVERING A COPY OF THE PROCESS TO BUYER OR THE APPLICABLE SELLER IN
CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND BUYER AND
EACH SELLER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO
ACCEPT THE SERVICE ON ITS BEHALF.
AS AN ALTERNATIVE METHOD OF SERVICE, BUYER AND EACH SELLER ALSO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF THE PROCESS TO BUYER OR A SELLER (AS
APPLICABLE) AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS SECTION SHALL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY PARTY HERETO TO BRING ANY ACTION OR
PROCEEDING AGAINST THE OTHER PARTY OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY
OTHER JURISDICTION.
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SECTION 10.8 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THE TRANSACTION DOCUMENTS OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE PARTIES HERETO
OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THE TRANSACTION DOCUMENTS,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
SECTION 10.9 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 between the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
SECTION 10.10 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which together shall constitute one and the same agreement.
SECTION 10.11 Acknowledgment and Consent. (a) The Sellers acknowledge
that, contemporaneously herewith, Buyer is selling, transferring, assigning,
setting over and otherwise conveying to the Trust all of Buyer's right, title
and interest in, to and under the Specified Assets, this Agreement and all of
the other Transaction Documents pursuant to Sections 2.1 and 2.4 of the Pooling
Agreement. The Sellers hereby consent to the sale, transfer, assignment, set
over and conveyance to the Trust by Buyer of all right, title and interest of
Buyer in, to and under the Specified Assets, this Agreement and the other
Transaction Documents, and all of Buyer's rights, remedies, powers and
privileges, and all claims of Buyer against the Sellers, under or with respect
to this Agreement and the other Transaction Documents (whether arising pursuant
to the terms of this Agreement or otherwise available at law or in equity),
including (i) the right of Buyer, at any time, to enforce this Agreement against
the Sellers and the obligations of the Sellers hereunder, (ii) the right to
appoint a successor to the Servicer at the times and upon the conditions set
forth in the Pooling Agreement, and (iii) the right, at any time, to give or
withhold any and all consents, requests, notices, directions, approvals,
demands, extensions or waivers under or with respect to this Agreement, any
other Transaction Document or the obligations in respect of the Sellers
thereunder to the same extent as Buyer may do. Each of the parties hereto
acknowledges and agrees that the Trustee and the Trust are third party
beneficiaries of the rights of Buyer arising hereunder and under the other
Transaction Documents to which any Seller is a party. Each Seller hereby
acknowledges and agrees that it has no claim to or interest in any of the Bank
Accounts or the Trust Accounts.
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(b) The Sellers hereby agree to execute all agreements, instruments and
documents, and to take all other action, that Buyer or the Trustee reasonably
determines is necessary or appropriate to evidence its consent described in
subsection (a) above. To the extent that Buyer, individually or through the
Servicer, has granted or grants powers of attorney to the Trustee under the
Pooling Agreement, the Sellers hereby grant a corresponding power of attorney on
the same terms to Buyer. The Sellers hereby acknowledge and agree that Buyer, in
all of its capacities, shall assign to the Trustee for the benefit of the
Certificate holders the powers of attorney and other rights and interests
granted by the Sellers to Buyer hereunder and agrees to cooperate fully with the
Trustee in the exercise of the rights.
SECTION 10.12 No Partnership or Joint Venture. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and agent or of partnership
or of joint venture.
SECTION 10.13 No Proceedings. Each Seller hereby agrees that it will
not institute against Buyer or the Trust, or join any other Person in
instituting against Buyer or the Trust, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of Event of Bankruptcy) so
long as any Investor Certificates issued by the Trust shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such Investor Certificates shall have been outstanding. The foregoing shall
not limit the right of a Seller to file any claim in or otherwise take any
action with respect to any insolvency proceeding that was instituted against
Buyer or the Trust by any Person other than a Seller or any other Howmet Person
(provided that no such action may be taken by a Seller until such proceeding has
continued undismissed, unstayed and in effect for a period of 10 days).
SECTION 10.14 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any of the other
Transaction Documents shall for any reason whatsoever be held invalid, then the
unenforceable covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Agreement or the other Transaction Documents (as applicable) and shall in no way
affect the validity or enforceability of the other provisions of this Agreement
or any of the other Transaction Documents.
SECTION 10.15 Limitation on Liability of Certain Persons. No recourse
under or upon any obligation or covenant of this Agreement or any other
Transaction Document, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of Buyer or any Seller or of any
successor corporation, either directly or through Buyer or any such Seller,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Agreement, all other relevant Transaction Documents and the
obligations incurred hereunder or thereunder are solely corporate obligations,
and that no such personal liability whatsoever
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shall attach to, or is or shall be incurred by the incorporators, shareholders,
officers or directors, as such, of Buyer or any Seller or of any successor
corporation, or any of them, by reason of the obligations, covenants or
agreements contained in this Agreement or any other Transaction Documents, or
implied therefrom; and that any and all such personal liability of, either at
common law or in equity or by constitution or statute, and any and all such
rights and claims against, every such incorporator, shareholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations or covenants contained in
this Agreement or any other Transaction Documents, or implied therefrom, are
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Agreement. Buyer and each Seller and any director,
officer, employee or agent of Buyer and any such Seller may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The provisions of this section
shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
HOWMET CORPORATION,
as Seller
By: ________________________________________
Title: _____________________________________
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
HOWMET CERCAST (U.S.A.), INC.,
as Seller
By:_________________________________________
Title: _____________________________________
Address c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
HOWMET REFURBISHMENT, INC.,
as Seller
By:_________________________________________
Title: _____________________________________
Address: c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
<PAGE> 293
HOWMET-TEMPCRAFT, INC.,
as Seller
By:_________________________________________
Title: _____________________________________
Address. c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
TURBINE COMPONENTS CORPORATION,
as Seller
By: ________________________________________
Title:______________________________________
Address c/o Howmet Corporation
475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Telephone: (203) 661-4600
Facsimile: (203) 861-4746
BLADE RECEIVABLES CORPORATION,
as the Buyer
By:_________________________________________
Title: _____________________________________
Address: c/o Nevada Corporate Management,
Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Telephone: (702) 892-3772
Facsimile: (702) 892-3906
<PAGE> 294
EXHIBIT A
to Purchase Agreement
FORM OF BUYER NOTE
____________, 1996
FOR VALUE RECEIVED, the undersigned, BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Buyer"), promises to pay to
________________________, a ______________ corporation ("Seller," and together
with its successors and assigns, the "Holder"), on the terms and subject to the
conditions set forth in this promissory note (this "Note") and in the Amended
and Restated Receivables Purchase Agreement of even date herewith (the
"Agreement") between Buyer, Howmet Corporation, a Delaware corporation
("Howmet"), and certain other subsidiaries of Howmet, an amount equal to the
aggregate deferred Purchase Price for Receivables owed by Buyer to the Seller
pursuant to Article m of the Agreement. Such amount, as shown in the records of
Servicer, will be rebuttable presumptive evidence of the principal amount and
interest owing under this Note.
1. Purchase Agreement. This Note is a Buyer Note described in, and is
subject to the terms and conditions set forth in, the Agreement. Reference is
hereby made to the Agreement for a statement of certain other rights and
obligations of Buyer and the Seller.
2. Rules of Construction; Definitions. Certain rules of construction
governing the interpretation of this Note are set forth in Appendix A to the
Pooling Agreement (as defined in the Agreement) and, except as otherwise
specifically provided herein, capitalized terms used but not defined herein have
the meanings ascribed to them in such Appendix A. In addition, as used herein,
the following terms have the following meanings:
"Bankruptcy Proceedings" means any dissolution, winding up,
liquidation, readjustment, reorganization or other similar" event
relating to Buyer, 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
Buyer or any sale of all or substantially all of the assets of Buyer;
provided, however, that none of the following shall constitute a
"Bankruptcy Proceeding" so long as no Bankruptcy Event shall have
occurred with respect to Buyer and is continuing: (i) the commencement
of an amortization period, accumulation period or early amortization
period, (ii) the allocation and distribution of Collections and other
amounts during an amortization period, accumulation period or early
amortization period in accordance with the terms of the Pooling
Agreement and (iii) the liquidation, dissolution and winding up of
Buyer during an amortization period, accumulation period or early
amortization period in accordance with the Pooling Agreement after the
termination of the Pooling Agreement in accordance with Section 12.1
thereof.
<PAGE> 295
"Final Maturity Date" means the date occurring one year and
one day after the Final Scheduled Payment Date of the latest maturing
Series or Purchased Interest from time to time outstanding.
"Highest Lawful Rate" has the meaning set forth in paragraph
9.
"Junior Liabilities" means all obligations of Buyer to the
Holder under this Note.
"Reference Rate" means, with respect to any day occurring in a
Calculation Period, the Applicable Federal Rate in effect on such day.
"Senior Interests" means all obligations of Buyer to the
Trustee, the Investor Certificate holders or the Purchasers under or in
connection with the Transaction Documents, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become
due, including without limitation interest or other amounts due or to
become due after an Event of Bankruptcy.
"Subordination Provisions" means, collectively, the provisions
of paragraph 7.
3. Interest. Subject to the Subordination Provisions, Buyer promises to
pay interest on the aggregate unpaid principal amount of this Note outstanding
on each day at an adjustable rate per annum equal to the Reference Rate in
effect on such day.
4. Interest Payment Dates. (a) Subject to the Subordination Provisions,
Buyer shall pay accrued interest on this Note on each Distribution Date and on
the Final Maturity Date. Buyer also shall pay accrued interest on the principal
amount of each prepayment hereof on the date of such prepayment.
(b) Notwithstanding the provisions of paragraph 4(a), in the event that
on the date an interest payment is due hereunder the amount of funds available
therefor pursuant to Section 3.3 of the Agreement is insufficient to pay any
amount due pursuant to paragraph 4(a), then interest shall be payable only to
the extent that funds are available therefor in accordance with Section 3.3 of
the Agreement. In the event that any interest on this Note is not paid when due,
the principal amount of this Note shall automatically be increased by the amount
of such interest in lieu of such payment.
5. Basis of Computation. Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions,
any unpaid principal of this Note shall only become due and payable on the Final
Maturity Date.
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<PAGE> 296
Subject to the Subordination Provisions, the principal amount of and accrued
interest on this Mote may be prepaid on any Business Day without premium or
penalty; provided, that no prepayment shall be made by Buyer to the extent that
such prepayment would result in a default in the payment of any other amount
required to be paid by Buyer under any Transaction Document.
7. Subordination Provisions. Buyer covenants and agrees, and the
Holder, by its acceptance of this Note, likewise covenants and agrees, that the
payment of all Junior Liabilities is hereby expressly subordinated in right of
payment to the payment and performance of the Senior Interests to the extent and
in the manner set forth in this paragraph:
(a) In the event of any Bankruptcy Proceeding, the Senior
Interests shall first be paid and performed in full and in cash before
the Holder shall be entitled to receive and to retain any payment or
distribution in respect of the Junior Liabilities. In order to
implement the foregoing: (i) all payments and distributions of any kind
or character in respect of the Junior Liabilities to which the Holder
would be entitled except for this clause (a) shall be made directly to
the Trustee (for the benefit of itself, the Investor Certificate
holders and the Purchasers), and (ii) if a Bankruptcy Proceeding has
been commenced, the Holder shall promptly file a claim or claims, in
the form required in any Bankruptcy Proceedings, for the full
outstanding amount of the Junior Liabilities, and shall use
commercially reasonable efforts to cause said claim or claims to be
approved and all payments and other distributions in respect thereof to
be made directly to the Trustee (for the benefit of itself, the
Investor Certificate holders and the Purchasers) until the Senior
Interests shall have been paid and performed in full and in cash.
(b) In the event that the Holder receives any payment or other
distribution of any kind or character from Buyer or from any other
source whatsoever, in payment of the Junior Liabilities, after the
commencement of any Bankruptcy Proceeding, such payment or other
distribution shall be received in trust for the Trustee, the Investor
Certificate holders and the Purchasers and shall be turned over by the
Holder to the Trustee forthwith.
(c) Upon the date which is a year and a day after the final
payment in full and in cash of all Senior Interests, the Holder shall
be subrogated to the rights of the Trustee, the Investor Certificate
holders and the Purchasers to receive payments or distributions from
Buyer that are applicable to the Senior Interests until the Junior
Liabilities are paid in full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Holder, on the one hand,
and the Trustee, the Investor Certificate holders and the Purchasers on
the other hand. Nothing contained
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<PAGE> 297
in these Subordination Provisions or elsewhere in this Note is intended
to or shall impair, as between Buyer, its creditors (other than the
Trustee, the Investor Certificate holders and the Purchasers) and the
Holder, Buyer's obligation, which is unconditional and absolute, to pay
the Junior Liabilities as and when the same shall become due and
payable in accordance with the terms hereof and of the Agreement or to
affect the relative rights of the Holder and creditors of Buyer (other
than the Trustee, the Investor Certificate holders and the Purchasers).
(e) Except as otherwise permitted in Sections 1.8 and 10.4 of
the Agreement, the Holder shall not, until the Senior Interests have
been finally paid and performed in full and in cash, (i) cancel, waive,
forgive, transfer or assign, or commence legal proceedings to enforce
or collect, or subordinate to any obligation of Buyer (other than to
the Senior Interests), howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or now or hereafter
existing, or due or to become due, the Junior Liabilities or any rights
in respect hereof or (ii) convert the Junior Liabilities into an equity
interest in Buyer, unless, in the case of each of clauses (i) and (ii),
the Holder shall have received the prior written consent of the Trustee
in each case.
(f) The Holder shall not, without the advance written consent
of the Trustee, commence, or join with any other Person in commencing,
any Bankruptcy Proceedings with respect to Buyer until at least one
year and one day shall have passed after the Senior Interests shall
have been finally paid and performed in full and in cash; provided,
however, that the Holder shall at all times have the right to file any
claim in or otherwise take any action with respect to any insolvency
proceeding instituted against Buyer by any Person other than the Holder
or any other Howmet Person (provided that no such action may be taken
by the Holder until such proceeding has continued undismissed, unstayed
and in effect for a period of 10 days).
(g) If, at any time, any payment (in whole or in part) made
with respect to any Senior Interest is rescinded or must be restored or
returned by a Certificate holder or Purchaser (whether in connection
with any Bankruptcy Proceedings or otherwise), these Subordination
Provisions shall continue to be effective or shall be reinstated, as
the case may be, as though such payment had not been made.
(h) Each of the Trustee, the Investor Certificate holders and
the Purchasers may, from time to time, in its sole discretion, without
notice to the Holder, 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 Interests, (ii) retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to any of the
Senior Interests, (iii) extend or renew for one or more periods
(whether or not longer than the original period),
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<PAGE> 298
alter, increase or exchange any of the Senior Interests, or release or
compromise any obligation of any nature with respect to any of the
Senior Interests, (iv) amend, supplement, amend and restate, or
otherwise modify any Transaction Document to which it is a party, and
(v) release its 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 Interests, or extend or renew for
one or more periods (whether or not longer than the original period),
or release, compromise, alter or exchange any obligations of any nature
of any obligor with respect to any such rights or property.
(i) The Holder hereby waives: (i) notice of acceptance of
these Subordination Provisions by the Trustee or any of the Investor
Certificate holders or Purchasers, (ii) notice of the existence,
creation, non-payment or non-performance of all or any of the Senior
Interests, and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Interests, or any
thereof. or any security therefor.
(j) These Subordination Provisions constitute a continuing
offer from Buyer to all Persons who become the holders of, or who
continue to hold, Senior Interests, and these Subordination Provisions
are made for the benefit of the Trustee, the Investor Certificate
holders and the Purchasers, and the Trustee may proceed to enforce such
provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Holder in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Note shall in any event be effective unless (a) the same shall be in
writing and signed and delivered by Buyer and the Seller, and (b) all consents
required for such actions under the Transaction Documents shall have been
received by the appropriate Persons.
9. Limitation on Interest. Notwithstanding anything in this Note to the
contrary, Buyer shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the
"Highest Lawful Rate"). If the effective rate of interest that would otherwise
be payable under this Note would exceed the Highest lawful Rate, or the Holder
shall receive any unearned interest or shall receive monies that are deemed to
constitute interest that would increase the effective rate of interest payable
by Buyer under this Note to a rate in excess of the Highest lawful Rate, then
(a) the amount of interest that would otherwise be payable by Buyer under this
Note shall be reduced to the amount allowed by applicable law, and (b) any
unearned interest paid by Buyer or any interest paid by Buyer in excess of the
Highest
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<PAGE> 299
Lawful Rate shall be refunded to Buyer. Without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received by the
Holder under this Note that are made for the purpose of determining whether such
rate exceeds the Highest Lawful Rate shall be made, to the extent permitted by
applicable usury laws (now or hereafter enacted), by amortizing, prorating and
spreading in equal parts during the actual period during which any amount has
been outstanding hereunder all interest at any time contracted for, charged or
received by the Seller in connection herewith. If at any time and from time to
time (i) the amount of interest payable to the Holder on any date shall be
computed at the Highest Lawful Rate pursuant to the provisions of the foregoing
sentence, and (ii) in respect of any subsequent interest computation period the
amount of interest otherwise payable to the Holder would be less than the amount
of interest payable to the Holder computed at the Highest Lawful Rate, then the
amount of interest payable to the Holder in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
until the total amount of interest payable to the Holder shall equal the total
amount of interest that would have been payable to the Holder if the total
amount of interest had been computed without giving effect to the provisions of
the foregoing sentence.
10. No Negotiation. This Note is not negotiable.
11. Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
12. Security Interest. The Seller may grant a security interest in or
otherwise pledge this Note as security, and any Person to whom such security
interest is granted or to whom this Note is pledged shall be bound by, and for
all purposes takes this Note subject to, the restrictions and other provisions
(including the Subordination Provisions) set forth herein.
13. Captions. Paragraph captions used in this Note are provided solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Note.
14. Restatement. This Note amends and restates in its entirety the
Buyer Note dated December 13, 1995 and issued by Buyer to Seller pursuant to the
Existing Purchase Agreement.
BLADE RECEIVABLES CORPORATION
By: ___________________________________
Title: ________________________________
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<PAGE> 300
EXHIBIT B
to Purchase Agreement
FORM OF
SELLER ASSIGNMENT CERTIFICATE
Reference is made to the Amended and Restated Receivables Purchase
Agreement of even date herewith (as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time, the "Agreement")
between ____________________, ____________________ and _________________
("Buyer"). Unless otherwise defined herein, capitalized terms used herein have
the meanings provided in Appendix A to the Agreement.
The undersigned (the "Seller") hereby sells, transfers, assigns, sets
over and conveys unto Buyer and its successors and assigns all right, tide and
interest of the Seller in, to and under:
(a) each Receivable of the Seller (other thin Contributed
Receivables) that existed and was owing to the Seller as at the closing
of the Seller's business on the Initial Cut-Off Date,
(b) each Receivable created by the Seller (other than
Contributed Receivables) that arises during the period from and
including the closing of the Seller's business on the Initial Cut-Off
Date to but excluding the earlier to occur of (i) the Purchase
Termination Date and (ii) the Termination Effective Date (if any) with
respect to such Seller,
(c) all Related Security with respect to all Receivables
(other thin Contributed Receivables) of the Seller,
(d) all proceeds of the foregoing, including all fluids
received by any Person in payment of any amounts owed (including
invoice prices, finance charges, interest and all other charges, if
any) in respect of any Receivable described above (other thin a
Contributed Receivable) or Related Security with respect to any such
Receivable, or otherwise applied to repay or discharge any such
Receivable (including insurance payments that the Seller or the
Servicer applies in the ordinary course of its business to amounts owed
in respect of any such Receivable (it being understood that property
insurance covering inventory is not so applied and is not included in
this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or
other collateral or property of any Obligor or any other party directly
or indirectly liable for payment of such Receivables), and
(e) all Records relating to any of the foregoing.
<PAGE> 301
This Seller Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents to
which the Seller is a party. The Seller acknowledges and agrees that Buyer is
accepting this Seller Assignment Certificate in reliance on the representations,
warranties and covenants of the Seller contained in the Transaction Documents to
which the Seller is a party.
THIS SELLER ASSIGNMENT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the undersigned has caused this Seller Assignment
Certificate to be duly executed and delivered by its duly Authorized Officer
this _____ day of _______________, 1996.
[SELLER FULL NAME]
By: ___________________________________
Title: ________________________________
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<PAGE> 302
EXHIBIT C
to Purchase Agreement
FORM OF CONTRIBUTION AGREEMENT
<PAGE> 303
FORM OF CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT, dated as of ,(the "Agreement"), between
HOWMET CORPORATION, a Delaware corporation ("Howmet"), and BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("BRC").
In consideration of the mutual agreements contained herein, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used and not otherwise
defined herein will have the meanings given to them in the Receivables Purchase
Agreement, dated as of December __, 1995 (the "RPA"), by and among BRC, Howmet
and certain subsidiaries of Howmet listed on the signature pages thereto.
ARTICLE II
CONTRIBUTION TO BRC
Section 2.01. Capital Contribution to BRC. Howmet hereby agrees to
transfer, assign, set over and otherwise convey to BRC all of Howmet's right,
tide and interest in, to and under:
(a) each Receivable of Howmet listed or described on Schedule A
attached hereto, which may include Receivables originated after the date hereof
(collectively, the "Contributed Receivables") ,
(b) all Related Security with respect to the Contributed Receivables,
(c) all proceeds of the foregoing, including all fund's received by any
Person in payment of any amounts owed (including invoice prices, finance
charges, interest and all other charges, if any) in respect of any Contributed
Receivable or Related Security with respect to any Contributed Receivable, or
otherwise applied to repay or discharge any Contributed Receivable (including
insurance payments that Howmet or the Servicer applies in the ordinary course of
its business to amounts owed in respect of any Contributed Receivable (it being
understood that property insurance covering inventory is not so applied and is
not included in this grant) and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any Contributed Receivable) or other
collateral or property of any Obligor or any other party directory or indirectly
liable for payment of Contributed Receivables, and
(d) all Records relating to any of the foregoing.
<PAGE> 304
The property described in clauses (b) through (d) above is collectively
called the "Related Contributed Assets."
Section 2.02. Acceptance by BRC. BRC hereby acknowledges its acceptance
of all right, title and interest in and to the property contributed to BRC by
Howmet pursuant to Section 2.01.
Section 2.03. Absolute Transfer: Assumption of Obligations. Howmet and
BRC hereby agree and acknowledge that the contribution of the Contributed
Receivables and Related Contributed Assets to BRC pursuant to Section 2.01 is an
absolute and irrevocable transfer of such property , and is not intended to be a
transfer for purposes of security. Howmet represents and warranties that all of
its representations and warranties in the RPA with respect to the Contributed
Receivables and Related Contributed Assets are true and correct on the date such
Receivables are contributed to BRC.
ARTICLE III
MISCELLANEOUS
Section 3.01. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall constitute but one and the same instrument.
Section 3.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
2
<PAGE> 305
IN WITNESS WHEREOF, Howmet and BRC have caused this Agreement to be
duly executed as of the date of this Agreement.
HOWMET CORPORATION
By: ___________________________________
Name:__________________________________
Title:_________________________________
BLADE RECEIVABLES CORPORATION
By: ___________________________________
Name:__________________________________
Title:_________________________________
3
<PAGE> 306
Schedule 1
Litigation and Other Proceedings
CERCLA Matters
Howmet Corporation ("Howmet") and its subsidiaries, as the case may be, have
either received requests for information or been notified that they are or may
be potentially responsible parties under
CERCLA
or are otherwise involved in proceedings relating to the following locations:
- - In connection with a long standing investigation by the Michigan
Department of Natural Resources, groundwater monitoring at Howmet's
Whitehall facilities is continuing, an air sparging system has been
installed and is operating, and other remedial steps have been taken.
The cost of future remedial measures, including operating the sparging
system for three years and continued monitoring, will be approximately
$175,000.
- - On May 20, 1991, Howmet entered into an Administrative Consent Order
with the New Jersey Department of Environmental Protection and Energy
(the "NJDEP") providing for the further investigation and remediation
of the environmental condition at Howmet's two Dover, New Jersey
facilities. The areas of particular interest include a former disposal
area, two former holding ponds and a drainage ditch. Howmet's remedial
investigation work plan was approved by the NJDEP several years ago,
and Howmet and its consultants are continuing to proceed under it. A
reasonable estimate of further costs is $540,000.
- - In 1988 AT&T Technologies, Inc. ("AT&T") commenced a lawsuit against
Ceramet, Inc., now an operating unit of Howmet-Cercast (U.S.A.), Inc.
("Cercast"), and others for contribution in connection with remedial
costs incurred by AT&T in responding to requests for remedial action by
the United States Environmental Protection Agency (the "EPA") at the
Heleva Landfill in Pennsylvania. In 1993 the EPA issued orders under
CERCLA Section 106 to require AT&T, Cercast and other parties to remedy
the site and reimburse the government's past costs. Subsequently the
government sued these parties in federal court. Cercast has now entered
into a settlement with AT&T and the EPA under which Cercast will pay
$750,000 to settle its potential liability in this lawsuit. The
settlement is pending final drafting and execution of a settlement
agreement or consent decree.
- - In connection with the EPA's long outstanding proceeding involving the
Conservation Chemical Superfund Site, the EPA is performing an
emergency action to remove stored chemicals and contaminated soils from
the site. A settlement has been proposed by the EPA. Howmet's share of
the response costs will be less than $33,000.
- - On November 13, 1992, Howmet was named as a third party defendant,
along with many others, in connection with a lawsuit brought by the EPA
for environmental claims at the Metcoa environmental site in Pulaski,
Pennsylvania. The material Howmet sent to the site was of a
non-radiation nature. Howmet has joined with other defendants in
seeking de minimis status in this case.
- - Howmet's Winsted Machining Center has been named by the EPA as a
Potentially Responsible Party ("PRP") for contamination at the
Barkhamsted, Connecticut, hazardous waste site, along with
approximately forty other parties. Howmet's estimated maximum liability
is now less than $150,000. Under a bonding authorization approved by
the Connecticut General Assembly in
<PAGE> 307
1995 specifically directed to this site, the State of Connecticut, may
incur a substantial portion of the liability which Howmet would
otherwise be expected to bear.
- - Howmet's Dover, New Jersey, Alloy Division facility has been identified
by the NJDEP as one of twenty PRP's relating to contamination at the
Combe Fill (New Jersey) South sanitary landfill. This case has been
under study for more than six years by the NJDEP and involves the
closing of several drinking water wells in the vicinity. Howmet has now
entered into a potential settlement with the NJDEP and the other named
generators which will allocate to Howmet a 6% portion of the cleanup
costs. This will require payments by Howmet estimated at $2.4 million.
The presently identified generators, including Howmet, are taking steps
to file a lawsuit against a substantial number of other likely
generators to spread the burden of cleanup costs.
- - On August 10, 1994 the NJDEP informed Howmet that it was a PRP in
connection with the remediation of hazardous substances at the PJP
Landfill Superfund Site in Jersey City, New Jersey, on the basis of
waste disposal activities of its Dover, New Jersey facility. On July
24, 1995, the NJDEP commenced a lawsuit against Howmet and
approximately 45 other defendants for the NJDEP's costs of clean-up and
removal of the environmental hazard at the site. No specific amount of
liability on the part of Howmet has yet been demanded. It is difficult
at this stage to predict the amount of an ultimate liability, if any.
- - The EPA has named the New England Aircraft Products Company, a former
subsidiary of Howmet, as one of 1,294 parties the EPA plans to hold
responsible for the environmental cleanup of the polluted Solvents
Recovery Service property situated in Southington, Connecticut. The EPA
now claims that the Howmet subsidiary should be charged with
responsibility for 20,790 gallons. This would take it out of the de
minimis group. The exposure to Howmet could reach a maximum in the
$100,000 range.
- - On August 15, 1995, Howmet received a notice from the Texas Natural
Resource Conservation Commission seeking information whether Howmet may
be a PRP with respect to a site in Ovalo, Texas known as the Wichita
Falls, Texas 76703 Site. Howmet has responded indicating that it has no
information linking it to the site. It believes that it has no
involvement at this site.
- - On September 29, 1995, the EPA notified Howmet that it may be a PRP
with respect to the Spectron Superfund Site, in Elktron, Maryland. No
specific amount has been demanded from Howmet, nor does Howmet believe
it has had any involvement at this site.
- - On August 4, 1995, the EPA informed Howmet that it might be a PRP with
respect to the PCB Treatment Inc. Superfund Sites in Kansas City,
Missouri. On October 2, 1995, Howmet responded indicating that 44.77
gallons of its PCBs may have been involved, but believes that all of
that volume was destroyed.
- - In September 1995 the EPA informed Cercast that its Sigma Casting
Division was a PRP with respect to the discharge of hazardous
substances at the Omega Chemical Corporation in Whittier. California.
The division has so far incurred a cost of $22,000 to cover
investigation and surface water cleanup. If groundwater cleanup is also
required, an estimated additional $80,000 may be incurred.
2
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- - On January 23, 1996 Dermody Properties, Inc. ("Dermody"), the owner of
Silver Lake Business Center near the facility formerly owned by Howmet
in Reno, Nevada, sent Howmet a letter informing it that it might become
involved in an ongoing lawsuit brought in July, 1994 by Dermody.
Dermody claims that Howmet, along with six other property owners, may
be the source of contamination to Dermody's property from chlorinated
solvents and petroleum products. Dermody invited Howmet to participate
in a mediation process under way in connection with the lawsuit.
Howmet, however, did not use chlorinated solvents or petroleum products
in its production processes at its site in Reno, and has so informed
Dermody.
- - Since 1987 under a consent administrative order entered into with the
EPA, a group of approximately 100 PRPs has been conducting a remedial
investigation/feasibility study at the Thermo Chem site in Muskegon
County, Michigan. In 1991, the EPA expanded the site to include not
only the former Thermo Chem facility but also a former bulk storage
facility of Thomas Solvent Company, and the site was divided into two
operable units. A settlement agreement in 1995 fixed Howmet's liability
at approximately $260,000.
3
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Schedule 2
Changes in Financial Condition
NONE
<PAGE> 310
Schedule 3
Offices of Seller Where Records are Maintained
Howmet Corporation
475 Steamboat Road
Greenwich, CT 06836-1960
Howmet Refurbishment, Inc.
475 Steamboat Road
Greenwich, CT 06836-1960
Howmet-Tempcraft, Inc.
475 Steamboat Road
Greenwich, CT 06836-1960
Turbine Components Corporation
475 Steamboat Road
Greenwich, CT 06836-1960
Howmet Cercast (U.S.A.), Inc.
475 Steamboat Road
Greenwich, CT 06836-1960
<PAGE> 311
Schedule 4
Legal Names, Trade Names and Names
Under Which the Companies Do Business
Howmet Corporation
(formerly Howmet Turbine Components Corporation)
Howmet Refurbishment, Inc.
Howmet-Tempcraft, Inc.
(formerly Tempcraft, Inc.)
Turbine Components Corporation
Howmet Cercast (U.S.A.), Inc.
(formerly HTC Factors, Inc.)
<PAGE> 312
PROJECT BLADE - TAKEOUT
CERTIFICATE PURCHASE AGREEMENT
(Series 1996-1, Class A)
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
HOWMET CORPORATION,
THE PURCHASERS DESCRIBED HEREIN,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
<PAGE> 313
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions ..................................... 1
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase ........................................ 2
SECTION 2.2 Closing ......................................... 2
SECTION 2.3 Certificates .................................... 2
ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates ....... 3
SECTION 3.2 Notice to Purchasers ............................ 3
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches ........................................ 3
SECTION 4.2 Fees ............................................ 4
SECTION 4.3 Yield Protection ................................ 4
SECTION 4.4 Illegality; Unavailability ...................... 6
SECTION 4.5 Indemnity ....................................... 7
SECTION 4.6 Taxes ........................................... 8
ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment ...................... 10
SECTION 5.2 Pro Rata Treatment; Percentages ................. 10
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor ...................................... 11
SECTION 6.2 Howmet .......................................... 11
SECTION 6.3 Purchasers ...................................... 12
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase .......................... 13
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ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants ........................... 16
SECTION 8.2 Negative Covenants .............................. 17
SECTION 8.3 Transfers ....................................... 17
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment ..................................... 17
SECTION 9.2 Nature of Duties ................................ 17
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors 18
SECTION 9.4 Certain Rights of Agent ......................... 18
SECTION 9.5 Reliance ........................................ 18
SECTION 9.6 Indemnification ................................. 19
SECTION 9.7 Agent in Its Individual Capacity ................ 19
SECTION 9.8 Resignation by Agent ............................ 19
SECTION 9.9 Required Purchasers ............................. 20
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments ...................................... 20
SECTION 10.2 No Waiver; Remedies ............................. 21
SECTION 10.3 Successors and Assigns; Assignments ............. 21
SECTION 10.4 Survival of Agreement ........................... 26
SECTION 10.5 Expenses; Indemnification ....................... 26
SECTION 10.6 Entire Agreement ................................ 28
SECTION 10.7 Notices ......................................... 28
SECTION 10.8 No Third-Party Beneficiaries .................... 28
SECTION 10.9 Severability of Provisions ...................... 28
SECTION 10.10 Counterparts .................................... 28
SECTION 10.11 Governing Law ................................... 28
SECTION 10.12 Tax Characterization ............................ 29
SECTION 10.13 No Proceedings .................................. 29
SECTION 10.14 Reference Bank .................................. 29
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SCHEDULE
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBITS
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX
APPENDIX X Index of Additional Defined Terms
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This CERTIFICATE PURCHASE AGREEMENT, dated as of April 18, 1996 (this
"Agreement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada corporation
("Transferor"), HOWMET CORPORATION, a Delaware corporation ("Servicer" or
"Howmet"), the purchasers named on the signatures pages of this Agreement
(together with their respective permitted assigns, the "Purchasers"), and THE
FIRST NATIONAL BANK OF CHICAGO, as administrative and syndication and
documentation agent for the Purchasers (in that capacity, together with any
successors in that capacity, "Agent").
BACKGROUND
1. Transferor (a) is a party to a Pooling and Servicing Agreement dated
as of December 13, 1995, as amended and restated in its entirety by an Amended
and Restated Pooling and Servicing Agreement dated as of April 18, 1996 (the
"Pooling Agreement"), with Howmet, as initial Servicer, and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (in that
capacity, together with any successors in that capacity, the "Trustee"), (b) is
a party to a Receivables Purchase Agreement dated as of December 13, 1995, as
amended and restated in its entirety by an Amended and Restated Receivables
Purchase Agreement dated as of April 18, 1996, and (c) will enter into a Series
1996-1 Supplement to the Pooling Agreement substantially in the form of Exhibit
A (the "Supplement"). Pursuant to the Pooling Agreement and the Supplement,
Transferor will obtain the Series 1996-1, Class A Certificates (the
"Certificates"), which will represent fractional undivided beneficial interests
in the assets of the Blade Receivables Master Trust (the "Trust"), a trust
organized pursuant to the Pooling Agreement.
2. Transferor wishes to obtain the commitment of each Purchaser to
purchase fractional undivided beneficial interests in the assets of the Trust
(each a "Trust Interest") that will be evidenced by its Certificate. Subject to
the terms and conditions of this Agreement, each Purchaser is willing to
purchase a Certificate. Howmet has joined in this Agreement to confirm certain
representations, warranties and covenants for the benefit of the Purchasers and
the Agent.
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used and not otherwise
defined herein have the meanings assigned to them in the Supplement or, if not
<PAGE> 317
defined in the Supplement, in Appendix A to the Pooling Agreement. An index of
terms defined directly in this Agreement is attached as Appendix X.
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase. The Transferor will sell to each Purchaser and,
subject to the terms and conditions of this Agreement, the Pooling Agreement and
the Supplement, each Purchaser will purchase (each such purchase being a
"Purchase") from the Transferor, at the time and place provided for in Section
2.2, a Certificate for a purchase price equal to 100 % of the Stated Amount of
such Certificate. The Stated Amount of each initial Purchaser's Certificate is
set forth opposite its name in Schedule I.
SECTION 2.2 Closing. The sale of each Certificate shall take place at
the offices of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois
60603 at noon, Chicago time, on April 18, 1996 (the "Effective Date"). On the
Effective Date, the Transferor will deliver to each Purchaser a Certificate,
dated as of the Effective Date and registered in the name of each such
Purchaser, against delivery by each such Purchaser to the Transferor or its
order of immediately available funds in the amount of the purchase price
therefor to Manufacturers & Traders Trust Company, Corporate Trust Department,
One M&T Plaza, 7th floor, Buffalo, New York 14203-2399, Attention: Russell
Whitley.
SECTION 2.3 Certificates. The outstanding amounts of the Purchase made
by each Purchaser shall be evidenced by its Certificate, and to be issued on the
Effective Date substantially in the form of Exhibit A (Part 1) to the
Supplement. Each Purchaser shall and is hereby authorized to record on the grid
attached to its Certificate (or at its option, in its internal books and
records) the date and amount of the Purchase made by it, the amount of each
repayment of the principal amount represented by its Certificate and the
portions of its Purchase that are from time to time allocated to the ABR Tranche
and a Eurodollar Tranche (which shall be conclusive absent demonstrable error);
provided, that failure to make any recordation on the grid or records or any
error in the grid or records shall not adversely affect the Purchaser's rights
with respect to its interest in the assets of the Trust and its right to receive
interest in respect of the outstanding principal amount of the Purchase made by
the Purchaser.
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ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates. Transferor may,
in accordance with Section 4.9 of the Supplement, prepay the Certificates in
full or in part upon at least three Business Days' prior notice by Transferor to
Trustee. In the event of any such prepayment of the Certificates occurring at
any time during the one-year period commencing on the Effective Date, the
Holders of such Certificates shall be entitled to receive a Prepayment Premium.
The Certificates may not be partially prepaid and the Certificates, once
prepaid, may not be reinstated.
SECTION 3.2 Notice to Purchasers. Trustee shall promptly advise the
Purchasers of any notice received by Trustee pursuant to Section 3.1.
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches (a) Subject to the terms and conditions set forth
in this section and Section 4.4, Transferor shall have the option: (x) on any
Business Day, to convert all or part of the ABR Tranche to a Eurodollar Tranche
and (y) on the last day of any Interest Period of a Eurodollar Tranche, to
convert all or any part of that Eurodollar Tranche to form a part of the ABR
Tranche and/or to continue all or any part of that Eurodollar Tranche as a new
Eurodollar Tranche, the Interest Period for which shall commence on the first
day after the prior Interest Period; provided, that:
(i) subject to Section 4.4, each conversion or continuation
shall be made ratably among the Purchasers in accordance with their
respective amounts of the Purchases comprising the converted or
continued Tranche;
(ii) if less than all of the outstanding amount of any Tranche
shall be converted or continued, the aggregate amount of the Tranche
converted or continued shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $2,000,000;
(iii)any Interest Period for a Eurodollar Tranche that
commences after the commencement of the Amortization Period must begin
on a Distribution Date and end on the next Distribution Date; and
(iv) there shall not be more than four separate Eurodollar
Tranches outstanding at any one time.
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(b) If Transferor wishes to convert and/or continue a Tranche under
this section, Transferor shall notify the Agent in writing (i) in the case of a
conversion to or continuation of a Eurodollar Tranche, not later than 2:00 p.m.,
New York City time, three Business Days prior to the date of the proposed
conversion or continuation date and (ii) otherwise, not later than noon, New
York City time, one Business Day prior to the date of the proposed conversion or
continuation. Each notice shall be irrevocable and shall refer to this Agreement
and specify (x) the identity and amount of the Tranche that Transferor wishes to
convert or continue, (y) whether all or part of the Tranche is to be converted
into or continued as a Eurodollar Tranche and (z) the date of the proposed
conversion or continuation (which shall be a Business Day). If Transferor shall
not have delivered a timely notice in accordance with this section with respect
to any Tranche, the Tranche shall, at the end of the Interest Period applicable
to it (unless repaid pursuant to the terms hereof), automatically be converted
into or continued as an ABR Tranche. The Agent shall promptly advise the
Purchasers of any notice given pursuant to this section and of each Purchaser's
portion of any converted or continued Tranche.
(c) In accordance with Section 4.1 of the Supplement, each Purchaser
and the Agent will be entitled to receive additional interest (at the rate
specified therein) on amounts that are not paid when due under this Agreement or
under its Certificate.
SECTION 4.2 Fees. On the Effective Date, Howmet shall pay to the Agent
the fees specified in the fee letter, dated October 20, 1995, delivered by
Servicer to the Agent, for the account of the Persons specified in such letter.
SECTION 4.3 Yield Protection. (a) Notwithstanding any other
provision herein, if, after the date hereof, either:
(i) the adoption of any law, rule or regulation (including any
imposition or increase of reserve requirements) or any change after the
date hereof in the interpretation or administration of any law, rule or
regulation by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
(ii) the compliance by a Purchaser with any new or revised
guideline or request from any central bank or other Governmental
Authority or quasi-governmental authority exercising control over banks
or financial institutions generally (whether or not having the force of
law),
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shall subject a Purchaser to the imposition or modification of any reserve
(including any imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar requirement that
takes the form of a tax) against assets of, deposits with or for the account of,
or credit extended by, the Purchaser or the office from time to time that it
designates to the Agent as the office through which it makes and maintains its
Purchases comprising part of a Eurodollar Tranche (as to each Purchaser, its
"LIBOR Office") or impose any other condition on a Purchaser affecting its
Eurodollar Tranche or its obligations hereunder, and as a result of either of
the foregoing there shall be any increase in the cost to the Purchaser of
agreeing to make or making, funding or maintaining Purchases as Eurodollar
Tranches (except to the extent already included in the determination of the
Reserve Adjusted Eurodollar Rate), or there shall be a reduction in the amount
received or receivable by the Purchaser or its LIBOR Office, then, upon written
notice from the Purchaser to Transferor and Servicer (with a copy to the Agent),
signed by an officer of the Purchaser with knowledge of and responsibility for
such matters, and setting forth in reasonable detail the calculation used to
arrive at the amounts, additional amounts sufficient to indemnity that Purchaser
against the increased cost or reduction in amounts received or receivable shall
constitute "Additional Amounts" for purposes of the Supplement, and the
Purchaser shall be entitled to receive these additional amounts, solely from
amounts allocated thereto and paid pursuant to the Supplement.
(b) If a Purchaser shall reasonably determine that the adoption after
the date hereof of any law, rule or regulation regarding capital adequacy or
capital maintenance, or any change after the date hereof in any of the foregoing
or in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Purchaser, any of its lending
offices or its holding company with any new or revised request or directive
regarding capital adequacy or capital maintenance (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Purchaser's capital or the capital of its holding company as a consequence of
this Agreement, the Purchase made by the Purchaser pursuant hereto to a level
below what the Purchaser or its holding company could have achieved but for the
adoption, change or compliance (taking into consideration the Purchaser's
policies, and the policies of its holding company, with respect to capital
adequacy), then, upon written notice from the Purchaser to Transferor and
Servicer (with a copy to the Agent), signed by an officer of the Purchaser with
knowledge of and responsibility for such matters, and setting forth in
reasonable detail the calculation used to arrive at the amounts, any additional
amounts as will compensate the Purchaser or its holding company for the
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reduction shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) A Purchaser will act reasonably and in good faith (and use
reasonable attribution methods) in determining any additional amounts due
pursuant to subsection (a) or (b), as the case may be, and shall promptly notify
Transferor, Servicer and the Agent in writing of any event of which it has
knowledge occurring alter the date hereof that will entitle it to compensation
pursuant to this section. A certificate of the Purchaser, signed by an officer
of the Purchaser with knowledge of and responsibility for such matters, and
setting forth in reasonable detail the calculation used to arrive at the amounts
necessary to compensate the Purchaser or its holding company as specified in
subsection (a) or (b), as the case may be, shall be delivered to Transferor and
Servicer and shall be conclusive absent demonstrable error.
(d) Failure on the part of a Purchaser to demand compensation for any
amounts as specified in subsection (a) or (b) with respect to any period shall
not constitute a waiver of its right to demand compensation with respect to that
period or any other period. The protection of this section shall be available to
the Purchasers regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed.
(e) Promptly alter giving any notice to Transferor pursuant to this
section, a Purchaser will seek to designate one of its offices located at an
address other than that previously designated pursuant to this Agreement as the
office from which its Purchase will be maintained alter the designation if it
will avoid the need for, or materially reduce the amount of, any payment to
which the Purchaser would otherwise be entitled pursuant to this section and
will not, in the reasonable discretion of the Purchaser, be otherwise
disadvantageous to the Purchaser.
SECTION 4.4 Illegality; Unavailability. (a) In the event that on any
date any Purchaser shall have reasonably determined (which determination shall
be final and conclusive and binding upon all parties) that the continuation of
its Purchase as Eurodollar Tranches has become unlawful by compliance by the
Purchaser in good faith with any law, governmental rule, regulation or order or
has become impossible as a result of a contingency occurring alter the date
hereof that materially and adversely affects its interbank eurodollar market,
then, and in any such event, that Purchaser shall promptly give notice (by
telephone confirmed in writing) to Transferor, Servicer and the Agent (which
notice the Agent shall promptly transmit to each Purchaser) of that
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determination. The obligation of the affected Purchaser to maintain its Purchase
as Eurodollar Tranches during any such period shall be terminated at the earlier
of the termination of the Interest Period then in effect for such Eurodollar
Tranches or when required by law, and Transferor shall, no later than the time
specified for the termination, convert the portion of the Purchase of the
affected Purchaser that constitutes part of any Eurodollar Tranche into a part
of the ABR Tranche.
(b) If, prior to the beginning of any Interest Period, the Agent shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that: (i) Dollar deposits in the relevant amount
and for the Interest Period are not available in the relevant interbank
eurodollar market or (ii) by reason of circumstances affecting the interbank
eurodollar market, that adequate and fair means do not exist for ascertaining
the Reserve Adjusted Eurodollar Rate applicable to a Eurodollar Tranche, then
the Agent shall promptly give notice of this determination to Transferor and to
each Purchaser. Thereafter, and continuing until the Agent shall notify
Transferor that the circumstances giving rise to this determination no longer
exist, (x) each Eurodollar Tranche will, on the last day of the applicable
Interest Period, convert into a part of the ABR Tranche and (y) the right of
Transferor to request Eurodollar Tranches shall be suspended.
SECTION 4.5 Indemnity. If a Purchaser shall incur any losses, expenses
or liabilities (including any interest paid to lenders of funds borrowed by it
to fund its Purchase of its Certificate as a Eurodollar Tranche and any loss
sustained in connection with the re-deployment of such funds) as a result of (a)
the failure of such Purchase to be made on the Effective Date (other than any
such failure resulting from the Purchaser's default in the performance of its
obligations hereunder) or (b) any repayment, including under Section 3.1, of any
part of the Invested Amount allocated to a Eurodollar Tranche on a date that is
not the last day of the Interest Period applicable to that part of the Invested
Amount or that is any date other than the date specified in a notice of
repayment given by Trustee, then, upon written notice (which notice shall be
signed by an officer of the Purchaser with knowledge of and responsibility for
such matters and shall set forth in reasonable detail the basis for requesting
the amounts) from the Purchaser to Transferor and Servicer, additional amounts
sufficient to indemnity the Purchaser against the losses, expenses and
liabilities, but not for any lost profits associated therewith, shall constitute
"Additional Amounts" for purposes of the Supplement, and the Purchaser shall be
entitled to receive these additional amounts, solely from amounts allocated
thereto and paid pursuant to the Supplement.
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SECTION 4.6 Taxes. (a) Any and all payments made to each Purchaser
under its Certificate shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or assessed,
excluding taxes imposed by the jurisdiction in which that Purchaser's principal
office (and/or the office where it books its investment in its Certificate) is
located on all or part of the net income, profits or gains of that Purchaser
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise)
(all the nonexcluded taxes, levies, imposts, charges, deductions, withholdings
and liabilities being hereinafter referred to as "Taxes"), except to the extent
required by law. if Trustee or the Agent is required by law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder or under any
Certificate to a Purchaser, then the sum payable shall be increased by the
amount necessary to yield to such Purchaser (after payment of all Taxes) an
amount equal to the sum it would have received had no such deductions or
withholdings been made, and the additional amount shall constitute "Additional
Amounts" for purposes of the Supplement, and the Purchaser shall be entitled to
receive these additional amounts, solely from amounts allocated thereto and paid
pursuant to the Supplement.
(b) Whenever any Taxes are paid by Trustee pursuant to subsection (a),
as promptly as possible thereafter Servicer shall send to the relevant Purchaser
the original or a certified copy of an original official receipt showing payment
thereof (if any) or any other evidence of the payment as may be available to
Servicer through the exercise of its reasonable efforts. If Trustee falls to pay
any Taxes when due to the appropriate taxing authority or falls to remit to the
Purchaser the required receipts or other required documentary evidence, the
Purchaser shall be entitled to receive, solely from amounts allocated with
respect thereto and paid pursuant to the Supplement, additional amounts
necessary to indemnity it for any incremental taxes, interest or penalties that
may become payable by the Purchaser as a result of any such failure, and the
amounts shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) On or before the date it becomes a party to this Agreement (or, in
the case of an Affected Party, on or before the date it becomes a Support Bank)
and, so long as it may properly do so, periodically thereafter, to keep forms up
to date, each Purchaser (including any Assignee) and Affected Party that is not
a United States person (as defined in section 7701(a)(30) of the Internal
Revenue Code), shall deliver to Trustee any certificates, documents or
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other evidence that shall be required by the Internal Revenue Code or Treasury
Regulations issued pursuant thereto to establish that, assuming the Certificates
are properly characterized as indebtedness for Federal income tax purposes, it
is exempt from existing United States Federal withholding (including backup
withholding) requirements, including (i) two original copies of Internal Revenue
Service Form 4224 or successor applicable form, properly completed and duly
executed by the Purchaser or Affected Party certifying that it is entitled to
receive payments under this Agreement or any Certificate without deduction or
withholding of any United States Federal income taxes, and (ii) an original copy
of Internal Revenue Service Form W-8 or W-9 or applicable successor form,
properly completed and duly executed, establishing that it is entitled to an
exemption from a backup withholding; provided, that if any Purchaser or Affected
Party fails to comply with this subsection 4.6(c) (it being understood that a
Purchaser's or Affected Party's inability to properly provide the documents
described herein after the date it becomes a party hereto, in the case of a
Purchaser, or the date it becomes a Support Bank, in the case of an Affected
Party, shall not constitute failure to comply with this subsection 4.6(c)),
amounts payable to such Purchaser or Affected Party (as the case may be) under
this Section 4.6 shall be limited to amounts that would have been payable under
this section if such Purchaser had so complied. Each Purchaser, including any
Assignee, shall notify Trustee of any change in circumstances or lapse in time
which renders any form provided by such Purchaser pursuant to this subsection
4.6(c) obsolete to the extent that such Purchaser is no longer exempt from
existing United States Federal withholding (including backup withholding)
requirements.
(d) On or before the date it becomes a party to this Agreement (and, so
long as it may properly do so, periodically thereafter, to keep forms up to
date), each Purchaser, including any Assignee, (other than any such Purchaser or
Assignee organized as a corporation under the laws of any state of the United
States) that is a United States person (as defined in Section 7701(a)(30) of the
Internal Revenue Code), shall deliver to Trustee an original copy of Internal
Revenue Service Form W-9 or applicable successor form, properly completed and
duly executed, certifying its exemption from backup withholding.
(e) If any Additional Amount under this Section 4.6 is paid to a
Purchaser and such Purchaser determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its tax liabilities in or with respect to the
taxable year in which the Additional Amount is paid, such Purchaser shall pay to
the Transferor an amount that such Purchaser shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by such
Purchaser in such year as a consequence of such refund, reduction or credit.
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ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment. (a) All amounts payable to any
Purchaser hereunder or with respect to its Certificate shall be made to the
Agent for the account of the Purchaser by wire transfer of immediately available
funds in Dollars not later than 2:00 p.m., New York City time, on the date due.
Any funds received after that time will be deemed to have been received on the
next Business Day. The Agent shall distribute all payments to the Purchasers, in
accordance with their respective interests, prior to the close of business on
the Business Day on which any payment is deemed received.
(b) On any date on which a payment to one or more Purchasers hereunder
or under the Certificates is due and payable, the Agent may (but in no event
shall be required to) assume that the payment has been made available to the
Agent on the date of the payment in accordance with this section, and the Agent
may (but in no event shall be required to), in reliance upon this assumption,
make payment of a corresponding amount to the Purchasers. If and to the extent
any amounts shall not have so been made available to the Agent, each Purchaser
irrevocably and unconditionally agrees to repay to the Agent forthwith on demand
the amount of payment it received together with interest thereon, for each day
from the date payment is made by the Agent until the date the amount is repaid
to the Agent, (i) for the first three days following the date the payment is
made, at a rate per annum equal to the Federal Funds Rate and (ii) thereafter,
at a rate per annum equal to the Federal Funds Rate plus 1%.
SECTION 5.2 Pro Rata Treatment; Percentages. (a) Each repayment of the
principal of the Certificates, each payment of interest thereon and each
conversion or continuation of any Tranche (except as otherwise required by
Section 4.4(a) with respect to conversions) shall be allocated pro rata among
the Purchasers on the date of payment or reduction, in accordance with their
respective Class Percentages.
(b) For purposes of this Agreement, (i) "Class Percentage" means, with
respect to each Purchaser, the percentage equivalent (carried out to twelve
decimal places) of a fraction, the numerator of which is the Stated Amount of
such Purchaser's Certificate and the denominator of which is the sum of the
Stated Amounts of all of the Purchasers' Certificates, and (ii) "Series
Percentage" means, with respect to each Purchaser, the percentage equivalent
(carried out to twelve decimal places) of a fraction, the numerator of which is
the Stated Amount of such Purchaser's Certificate and the denominator of which
is the sum of the Stated Amounts for all of the Series 1996-1 Certificates. The
initial Class Percentages and Series Percentages of the initial Purchasers are
set forth opposite their names in Schedule 1
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ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor. As of the Effective Date, Transferor represents
and warrants to the Purchasers that each of its representations and warranties
in the Pooling Agreement and Purchase Agreement is true and correct, as if made
on the Effective Date, and further represents and warrants that:
(a) no Early Amortization Event or Unmatured Early
Amortization Event exists;
(b) assuming the accuracy of the Purchaser's representations
set out in Section 6.3 and that no Purchaser (and no Person acting on
any Purchaser's behalf) has made a general solicitation or general
advertising within the meaning of the Securities Act, the offer and
sale of the Certificates in the manner contemplated by this Agreement
is a transaction exempt from the registration requirements of the
Securities Act, and the Pooling Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended;
(c) except for First Chicago Capital Markets, Inc. and BT
Securities Corporation (collectively, the "Financial Advisors"),
Transferor has not dealt with any financial advisor, or other Person
who may be entitled to any commission or compensation in connection
with the sale of the Certificates; and the fees of the Financial
Advisors shall not be an obligation of the Purchasers; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.2 Howmet. As of the Effective Date, Howmet represents and
warrants to the Purchasers that:
(a) each of its representations and warranties in the Pooling
Agreement (in its capacity as Servicer) and the Purchase Agreement (in
its capacity as a Seller) is true and correct, as if made on the
Effective Date with the same effect as if made on that date (unless
specifically stated to relate to an earlier date);
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(b) the Pro Forma Financial Data present fairly in all
material respects the pro forma financial position, results of
operations and cash flows of Howmet and its consolidated Subsidiaries
at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein
(except, in the case of quarterly financial statements, for the
omission of footnotes and ordinary year-end adjustments, none of which,
individually or in the aggregate, would be material);
(c) since September 30, 1995 through to the Effective Date
(and except as contemplated in the Pro Forma Financial Data), (i) there
has been no material adverse change in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
Transferor or Howmet, whether or not arising in the ordinary course of
business, and (ii) there have been no transactions (except the
execution and delivery of Transaction Documents, the Howmet Credit
Agreement and the Note Indenture, and the consummation of the
transactions and refinancings contemplated thereby) entered into by
Transferor or Howmet that are material with respect to the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of Transferor or Howmet; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.3 Purchasers. As of the Effective Date (or such later date on
which it acquires its Certificate in accordance with Section 10.3), each
Purchaser represents and warrants (and each Assignee shall be deemed to
represent and warrant as of the date that its assignment becomes effective)
that:
(a) it is a "qualified institutional buyer" as that term is
defined under Rule 144A of the Securities Act and it is not purchasing
its Certificate with a view to making a distribution thereof (within
the meaning of the Securities Act);
(b) it has all necessary corporate power and authority, and
has taken all action necessary, to execute and deliver this Agreement
and the other Transaction Documents to which it is a party, to fulfill
its
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obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby;
(c) it is not a pension, profit sharing or other employee
benefit plan subject to ERISA, and the assets being used to purchase
its Certificate do not constitute the assets of any "benefit plan
investor" (as defined under ERISA);
(d) such Purchaser's making and performance of this Agreement
and the other Transaction Documents to which it is a party do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other law or regulation applicable to it;
(e) this Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by it and
constitute its legal, valid and binding obligation, enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law; and
(f) all approvals, authorizations or other actions by, or
filing with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement and the other
Transaction Documents to which it is a party have been obtained.
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase. The obligation of each Purchaser to
Purchase its Certificate shall be subject to the satisfaction of the conditions
precedent that (x) the Agent shall have received, for the account of such
Purchaser, a duly executed and authenticated Certificate registered in its name
and in a Stated Amount equal to the amount set out opposite its name on the
signature pages of this Agreement, (y) the Agent shall have received certain
fees and reimbursement of any expenses referred to in Section 10.5 for which
invoices have been presented and (z) the Agent shall have received, for the
account of such Purchaser, an original (except as indicated below) counterpart
of the following (each of which, if not in a form attached to this Agreement,
shall be in form and substance satisfactory to the Agent):
(a) certified copies of the Pooling Agreement, the Purchase
Agreement and the Guaranty, each of which shall be in full force and
effect, and evidence that all actions required to be taken under those
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documents in connection with the issuance of the Certificates shall
have been taken;
(b) photocopies of each Account Agreement:
(c) a certificate of the Secretary, or an Assistant Secretary,
of each of Transferor, Servicer, Guarantor and each Seller with respect
to:
(i) attached copies of resolutions of its Board of
Directors then in full force and effect authorizing the
execution, delivery and performance of the Transaction
Documents;
(ii) the incumbency and signatures of those of its
officers authorized to act with respect to the Transaction
Documents; and
(iii) attached copies of its certificate of
incorporation and by-laws;
(d) a certificate of an Authorized Officer of each of
Transferor, Servicer, Guarantor and each Seller stating that, as of the
Effective Date, before and after giving effect to the Purchases and to
the application of any proceeds therefrom, the following statements
shall be true:
(i) the representations and warranties of Transferor,
Servicer, Guarantor and each Seller set out in this Agreement
and the other Transaction Documents are true and accurate as
of the Effective Date (unless specifically stated to relate to
an earlier date); and
(ii) no Early Amortization Event or Unmatured Early
Amortization Event has occurred and is continuing;
(e) a certificate of an appropriate officer of Trustee stating
that the Pooling Agreement has been duly authorized, executed and
delivered by Trustee and the Certificates have been duly authenticated
by Trustee in accordance with the Pooling Agreement, and an opinion of
counsel to Trustee as to related matters;
(f) results of recent searches of the UCC filing records and
tax and ERISA and judgment lien records, updating each of the searches
performed in connection with the issuance by Transferor of the Series
1995-1 Certificates, showing no filings of record that cover any of the
Receivables or the Related Transferred Assets, other than the financing
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statements filed in connection with the issuance of the Series 1995-1
Certificates;
(g) the following opinions addressed to the Agent, the
Purchasers and Trustee, and in each case as to the matters and in such
form and substance as shall be satisfactory to the Agent, the
Purchasers and Trustee:
(i) opinions of Latham & Watkins as to certain
corporate and securities matters, Federal and state tax and
UCC matters, true sale and non-consolidation;
(ii) opinions of (A) Paul, Hastings, Janofsky &
Walker, (B) Kummer Kaempfer Bonner & Renshaw and (C) Vorys,
Sater, Seymour and Pease as to certain corporate, state tax
and UCC matters; and
(iii) the opinion of Roland Paul, General Counsel to
Servicer, as to certain corporate matters;
(h) the Daily Report for the Effective Date;
(i) evidence, reasonably satisfactory to the Agent
and the Purchasers, of the payment of all taxes, fees and
other governmental charges, if any, incidental to the issuance
of the Certificates and to the consummation of the
transactions contemplated hereunder and under the Pooling
Agreement;
(j) a certificate of the Secretary of Howmet to the
effect that there is not, nor has there at any time been, any
matured or unmatured "Event of Default" or "Potential Event of
Default" under (and as defined in) the Howmet Credit Agreement
other than as a result of Howmet's failure to deliver 1995
audited financial statements;
(k) copies of any management or other agreements with
regard to the administration of Transferor's business,
certified by an Authorized Officer of Transferor;
(l) a pro-forma balance sheet of Transferor as of the
Effective Date, after giving effect to the transactions
contemplated by the Supplement, certified by an appropriate
officer of Transferor; and
(m) any other information, certificates, opinions and
documents as the Agent or Credit Suisse may have reasonably
requested.
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ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants. Transferor and Howmet each severally
covenant and agree that, until the Certificates have been paid in full, it will:
(a) duly and timely perform all of its covenants and
obligations under each Transaction Document to which it is a party;
(b) with reasonable promptness deliver to each Purchaser such
information, documents, records or reports respecting the Program or
the Receivables as the Purchaser may from time to time reasonably
request; and
(c) at the same time any report (including any Daily Report,
Monthly Report or annual auditors' report), notice or other document is
provided, or caused to be provided, by Transferor or Servicer to
Trustee under the Pooling Agreement, provide the Agent and each Holder
of a Class B Certificate with a copy of the report.
In addition, it is understood and agreed that so long as the
Certificates remain outstanding, Servicer and Transferor shall (and Servicer
shall cause each Seller to) during regular business hours and (so long as no
Early Amortization Event has occurred and is continuing) upon two Business Days
prior written notice, permit Trustee, the Agent or the Majority Class B
Purchasers (or such other Person as Trustee, the Agent or the Majority Class B
Purchasers may designate from time to time), or their respective agents or
representatives (including certified public accountants or other auditors), as
an expense of Servicer paid out of the Servicing Fee, (i) to examine and make
copies of and abstracts from, and to conduct accounting reviews of, all Records
in the possession or under the control of Servicer, Transferor or any Seller,
including the related Contracts and purchase orders, invoices and other
agreements related thereto, and (ii) to visit the offices and properties of
Servicer, Transferor or any Seller for the purpose of examining such materials
described in clause (i), and to discuss matters relating to the Receivables or
the Related Transferred Assets or the performance by Servicer, Transferor or any
Seller of their respective obligations under any Transaction Document with any
officer, employee or representative of Servicer, Transferor or any Seller.
Trustee, the Agent or the Majority Class B Purchasers may (but shall not be
obligated to) conduct, or cause their respective agents or representatives to
conduct, reviews of the types described in this paragraph (each such review, a
"Receivables Review") whenever Trustee, the Agent or the Majority Class B
Purchasers, in its or their reasonable judgment, deem any such review
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appropriate; provided that, unless an Early Amortization Event or an Unmatured
Early Amortization Event shall exist, (x) no more than two Receivables Reviews
shall be conducted by or at the request of the Agent in any calendar year, and
(y) no more than two Receivables Reviews shall be conducted by or at the request
of the Majority Class B Purchasers in any calendar year; and provided further,
this Section 8.1 shall limit the powers of Trustee under Section 3.5(b) of the
Pooling Agreement.
SECTION 8.2 Negative Covenants. Notwithstanding Section 1.7 of the
Purchase Agreement, Howmet shall not cause or permit any of its Subsidiaries to
become a new Seller without satisfying the Approval Condition unless the
Required Purchasers have consented in writing to that addition.
SECTION 8.3 Transfers. Each Purchaser agrees that it will not transfer
its Certificate (or any portion thereof) to any Person unless such Person shall
have provided the Trustee and Transferor with a certificate to the effect that
such Person: (a) is a "qualified institutional buyer," as that term is defined
under Rule 144A of the Securities Act and is not purchasing its Certificate with
a view to making a distribution thereof (within the meaning of the Securities
Act), and (b) is not a pension, profit sharing or other employee benefit plan
subject to ERISA.
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment. The Purchasers hereby designate The First
National Bank of Chicago as Agent. Each Purchaser hereby irrevocably authorizes
the Agent to take action on its behalf under the provisions of the Transaction
Documents and any other instruments and agreements referred to therein and to
exercise the powers and perform the duties hereunder and thereunder that are
specifically delegated to or required of the Agent by the terms hereof and
thereof, and any other powers as are reasonably incidental thereto. The Agent
may perform any of its duties by or through its respective officers, directors,
agents or employees.
SECTION 9.2 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement. Neither the
Agent nor any of its officers, directors, agents or employees shall be liable
for any action taken or omitted by it or them under any Transaction Document or
in connection herewith or therewith, unless caused by their gross negligence or
willful misconduct. The duties of the Agent shall be mechanical and
administrative in nature, the Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Purchaser, and nothing in any
Transaction Document, expressed or implied, is intended to or shall be
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construed as to impose upon the Agent any obligations in respect of any
Transaction Document except as expressly set forth herein.
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors.
Independently and without reliance upon the Agent or the Financial Advisors,
each Purchaser, to the extent it deems appropriate, has made and shall continue
to make (a) its own independent investigation of the financial condition and
affairs of Transferor, the Seller, Servicer and the Trust in connection with the
making and the continuation of each Purchase and the taking or not taking of any
action in connection herewith and (b) its own appraisal of the creditworthiness
of Transferor, the Seller and Servicer and the merits and risks of an investment
in the Certificates, and, except as expressly provided in this Agreement, the
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Purchaser with any credit or other information
with respect thereto, whether coming into its possession before the making of a
Purchase or at any time or times thereafter. The Agent shall not be responsible
to any Purchaser for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Transaction Documents or the financial condition of Transferor, the Sellers,
Servicer or the Trust or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of any
Transaction Document, or the financial condition of Transferor, the Sellers,
Servicer or the Trust or the existence or possible existence of any Early
Amortization Event or Unmatured Early Amortization Event.
SECTION 9.4 Certain Rights of Agent. If the Agent shall request
instructions from the Required Purchasers with respect to any act or action
(including failure to act) in connection with any Transaction Document, the
Agent shall be entitled to refrain from acting or taking the action unless and
until the Agent shall have received instructions from the Required Purchasers,
and the Agent shall not incur liability to any person by reason of so
refraining. Without limiting the foregoing, no Purchaser shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under any Transaction Document in accordance with the
instructions of the Required Purchasers as for refraining to act in the absence
of instruction.
SECTION 9.5 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or
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made by any person that the Agent believed to be the proper person. The Agent
may consult with legal counsel (including counsel for any Howmet Person),
independent public accountants and other experts selected by the Agent and shall
not be liable for any action taken or omitted to be taken in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.6 Indemnification. To the extent the Agent is not reimbursed
and indemnified by Transferor or Servicer, the Purchasers will reimburse and
indemnify the Agent (or cause the Agent to be reimbursed and indemnified)
ratably in accordance with their respective Series Percentages from and against
any and all liabilities, obligations, losses, damages, penalties. claims,
actions, judgments, suits, costs, expenses or disbursements of whatsoever kind
or nature that may be imposed on, asserted against or incurred or suffered by
the Agent (including fees and expenses of legal counsel, accountants and
experts) in performing its duties or as a result of any action taken or omitted
to be taken by the Agent under any Transaction Document or in any way relating
to or arising out of any Transaction Document; provided that no Purchaser shall
be liable for any portion of these liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable order).
SECTION 9.7 Agent in Its Individual Capacity. The Agent and its
respective Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with Transferor or
Servicer or any Howmet Person as if the Agent was not performing the duties
specified herein, and may accept fees and other consideration from Transferor or
Servicer for services in connection with this Agreement and otherwise without
having to account for the same to the Purchasers. Each of the parties hereto
acknowledges that the Agent will be acting both as agent and as a lender under
the Howmet Credit Agreement.
SECTION 9.8 Resignation by Agent. (a) The Agent may resign at any time
by giving notice to Transferor, the Purchasers and any other Agent, if any. Such
resignation shall be effective immediately unless the resigning Agent is the
only Agent, in which event the resignation of such Agent shall take effect upon
the appointment of a successor Agent pursuant to subsections (b) and (c) below
or as otherwise provided below.
(b) In the event that there is only one Agent, upon any notice of
resignation of such Agent, the Required Purchasers shall appoint a successor
Agent hereunder who shall be a commercial bank or trust company reasonably
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acceptable to Transferor (it being understood and agreed that any Purchaser is
deemed to be acceptable to Transferor).
(c) If a successor Agent is not appointed pursuant to subsection (b)
within 30 days after the delivery of the notice referred to in subsection (a),
the resigning Agent, with the consent of Transferor, shall then appoint a
successor Agent who shall serve as Agent hereunder until the time, if any, that
the Required Purchasers appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to subsection (b)
or (c) above by the 6Oth day after the date notice of resignation was given by
the resigning Agent, such Agent's resignation shall become effective and the
Purchasers shall thereafter perform all the duties of the Agent under the
Transaction Documents until the time, if any, that the Purchasers appoint a
successor Agent as provided above.
SECTION 9.9 Required Purchasers. "Required Purchasers" means:
(i) for purposes of instructing the Trustee to declare that
the Early Amortization Period has commenced pursuant to Section 6.2 of
the Supplement, either (x) Holders of Certificates whose aggregate
Class Percentages exceed 50% or (y) Holders of Class B Certificates
whose aggregate Class Percentages (as defined in the Class B
Certificate Purchase Agreement) exceed 50%; and
(ii) for all other purposes, both (x) Holders of Certificates
whose aggregate Class Percentages exceed 50% and (y) Holders of Class B
Certificates whose aggregate Class Percentages (as defined in the Class
B Certificate Purchase Agreement) exceed 50%.
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments. Except as provided in Section 13.1(a) or (b)
of the Pooling Agreement, neither Transferor nor Howmet shall amend, waive or
otherwise modify any provision of any Transaction Document to which it is a
party, consent to any departure therefrom, or grant any consent thereunder,
unless the same shall have been consented to in writing by the Required
Purchasers prior to the effectiveness of the same; provided, however, that no
amendment shall (a) decrease in any manner the amount of, or delay the timing
of, any allocation, payment or distribution in respect of any Certificate
without the prior written consent of each Purchaser affected thereby, (b) amend,
modify or waive any provision of this Agreement that requires the approval or
consent of a specified percentage of Purchasers
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without the prior written consent of that percentage of Purchasers, (c) amend,
modify or waive the provisions of this section with respect to the rights of any
Purchaser without the consent of that Purchaser, (d) waive any Early
Amortization Event arising from a Bankruptcy Event with respect to Transferor or
any Seller without the consent of each Purchaser, (e) amend or modify the Series
Percentage or Class Percentage of any Purchaser without its prior written
consent, (f) waive any of the requirements hereunder that the interests of
Trustee in the Receivables and the other Transferred Assets be perfected by
appropriate UCC filings without the prior written consent of each Purchaser or
(g) amend, modify or otherwise affect the rights or duties of the Agent
hereunder without the prior written consent of the Agent; provided further that
neither the execution and delivery of a Supplement relating to a refinancing of
the Certificates as contemplated by Section 4.9 of the Supplement relating to
the Certificates, nor any other amendment to the Transaction Documents in
connection with such a refinancing, shall require any consent from any
Purchaser, so long as the prior or contemporaneous repayment in full of the
Certificates in accordance with Section 5.2 of the Supplement relating to the
Certificates is a condition to the issuance of the refinancing certificates, and
of the effectiveness of such related amendment. Each Purchaser shall be bound by
any modification, waiver or consent authorized by this section, whether or not
its Certificate shall have been marked to indicate the modification, waiver or
consent.
SECTION 10.2 No Waiver; Remedies. Any waiver, consent or approval given
by any party hereto shall be effective only in the specific instance and for the
specific purpose for which given, and no waiver by a party of any breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. No failure on the part of any party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce the right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other right. No notice
to or demand on any party hereto in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.3 Successors and Assigns; Assignments. (a) This Agreement
shall be binding upon, and inure to the benefit of, Transferor, Servicer, the
Agent, the Purchasers and their respective successors and assigns; provided that
neither Transferor nor Servicer may assign its rights or obligations hereunder
or in connection herewith or any interest herein (voluntarily, by operation of
law or otherwise) without the prior written
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consent of all the Purchasers, except that the Servicer may be terminated in
accordance with Sections 10.1 and 10.2 of the Pooling Agreement; and provided
further, that no Purchaser or Participant may transfer, pledge, assign, sell
participations in or otherwise encumber its rights or obligations hereunder or
any interest herein except as permitted under this Section 10.3.
(b) Subject to the terms of Section 10.3(f), each Purchaser may at any
time sell to one or more banks or other entities ("Participants") participating
interests in all or any portion of its Certificate and its obligations hereunder
(its "Credit Exposure"); provided that such Participant shall have certified to
the selling Purchaser that such Participant is a "qualified institutional buyer"
(as defined under Rule 144A of the Securities Act) or that such sale is not
required to be registered under the Securities Act or any other applicable
securities laws. In the event of any sale by a Purchaser of participating
interests to a Participant, the Purchaser shall notify Transferor of the
identity of the Participant upon a request by Transferor, the Purchaser's
obligations under this Agreement shall remain unchanged, the Purchaser shall
remain solely responsible for the performance thereof, and the Purchaser shall
remain the holder of its rights under its Certificate and this Agreement for all
purposes under this Agreement, and the other parties to the Transaction
Documents shall continue to deal solely and directly with the Purchaser in
connection with such rights and obligations under this Agreement. Other than in
the case of a sale, transfer, assignment or conveyance of a participating
interest by Falcon Asset Securitization Corporation to a Permitted Transferee,
prior to any rights of a proposed Participant being recognized hereunder or
under any other Transaction Document or Certificates, the Purchaser shall
provide, or shall cause such Participant to provide, to Transferor such
information as Transferor reasonably requests to make the determination required
by Section 10.3(f). Transferor agrees that each Participant shall be entitled to
the benefits of Sections 4.3, 4.5, 4.6 and 10.5 with respect to its
participation in the Certificate. The Purchasers agree that any agreement
between them and any Participant in respect of a participating interest shall
require the Participant to comply with the terms of Section 10.13 and shall not
restrict the Purchasers' right to agree to any amendment, supplement or
modification of the Transaction Documents except to (i) extend the final
maturity of any obligation, (ii) reduce the rate or extend the time of payment
of interest thereon or any fees owed to the Purchasers under the Transaction
Documents, (iii) reduce the principal amount of any obligation, (iv) release or
direct the release of all or substantially all of the Transferred Assets or
Trustee's claim to the Transferred Assets, (v) reduce substantially the amount
of any reserve included in the calculation of the Base Amount, (vi) increase the
amount of the participation from the amount thereof then in effect, or (vii)
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permit assignment or transfer by Transferor or any Seller of its rights or
obligations under the Transaction Documents.
(c) Subject to the terms of Section 10.3(f), any Purchaser may at any
time assign to any Permitted Transferee or to one or more banks or other
financial institutions (each, an "Assignee") all or any part of its Credit
Exposure; provided that (i) unless assigned to an Affiliate of the Purchaser or
to a Permitted Transferee, it assigns all of its Credit Exposure or a portion of
its Credit Exposure in an amount not less than $5,000,000, (ii) such Assignee,
other than an existing Purchaser, an Affiliate of the Purchaser or a Permitted
Transferee, must be reasonably acceptable to the Agent and Transferor, which
acceptance shall not be delayed or withheld unreasonably (it being understood
that acceptance may be withheld due to failure to satisfy Section 10.3(f)),
(iii) if such Assignee is not a United States person (as defined in section
7701(a)(30) of the Internal Revenue Code), such Assignee shall satisfy the
requirements of Section 4.6(c), provided, that if such Assignee thereafter fails
to comply with the requirements of Section 4.6(c), amounts payable to it under
Section 4.6 shall be limited to amounts that would be payable if such Assignee
had complied with Section 4.6(c), (iv) such Assignee shall have certified to the
assigning Purchaser that such Assignee is a "qualified institutional buyer" (as
defined under Rule 144A of the Securities Act) or that such sale is not required
to be registered under the Securities Act or any other applicable securities
laws, and (v) such Assignee makes the representations and warranties set forth
in Section 6.3 to the Transferor as of the effective date of the assignment. For
purposes of this Section 10.3, a "Permitted Transferee" means The First National
Bank of Chicago or any other Person that is at all relevant times a C
corporation within the meaning of section 1361(a)(2) of the Internal Revenue
Code listed on the letter from The First National Bank of Chicago to Transferor
and the Agent dated the Effective Date, as such list may be augmented from time
to time with the consent of Transferor and the Agent; provided, however, that
the aggregate number of actual assignments to Permitted Transferees outstanding
at any time shall not exceed four. In the event of any assignment, the Purchaser
(x) shall comply with Article VI of the Pooling Agreement, provided that no
Opinion of Counsel shall be required to be delivered pursuant to subsection
6.3(e) of the Pooling Agreement with respect to any transfer to a Permitted
Transferee, and (y) shall give notice to Transferor and the Agent and shall
deliver to the Agent, for acceptance and recording in its records, an assignment
agreement substantially in the form of Exhibit B together with a processing and
recordation fee of, in the case of assignments to a Purchaser or an Affiliate of
a Purchaser, $1,500 and, in cases of any other assignment, $3,500; provided that
no processing and recordation fee shall be payable in connection with any
assignment by Falcon Asset Securitization Corporation to a Permitted Transferee.
Within five Business
page 23
<PAGE> 339
Days of receipt thereof, the Agent shall, if the assignment agreement has been
fully executed by the Assignee, the assignor Purchaser and Transferor, is
completed and is in substantially the form of Exhibit B, execute the assignment
agreement and record the information contained therein in its records. Upon the
earlier of the expiration of the five Business Day period or the date of the
recording, the assignment will become effective; provided that any assignment by
Falcon Asset Securitization Corporation to a Permitted Transferee shall not
require acceptance or recording by the Agent or Transferor prior to
effectiveness and shall become effective immediately upon receipt by the Agent
of an assignment agreement appropriately completed in substantially the form of
Exhibit B and executed by Falcon Asset Securitization Corporation and the
applicable Permitted Transferee. Transferor, the Agent and the Purchasers agree
to extend the rights and benefits with respect to Transferor under this
Agreement to the Assignee to the extent the Assignee would have had if it were a
Purchaser that was an original signatory to this Agreement; provided, that
Transferor shall be entitled to continue to deal solely and directly with the
assignor Purchaser in connection with the interests so assigned to the Assignee
until the assignment agreement and any required fee, as described above, shall
have been delivered to Transferor and the Agent by the Purchaser and the
Assignee and the assignment shall have become effective; provided, further, that
notwithstanding anything herein or in the assignment agreement, the Transaction
Documents or any Certificate to the contrary, an assignment (other than an
assignment by Falcon Asset Securitization Corporation to a Permitted Transferee)
shall not become effective, an Assignee (other than a Permitted Transferee)
shall not be recognized as a Purchaser and no other rights of an Assignee
hereunder or under any other Transaction Document or Certificate shall be
recognized unless and until the assigning Purchaser shall have provided, or
caused the Assignee to provide, to Transferor such information as Transferor
reasonably requests to make the determinations required by Section 10.3(f). If
the Transferor has accepted an assignment pursuant to clause (ii) of the first
sentence of Section 10.3(c), the assigning Purchaser shall be deemed to have
provided or caused to be provided such information. Upon the effective
assignment of its Credit Exposure, the Purchaser shall be relieved of its
obligations hereunder to the extent of the assignment.
(d) The sale or assignment of any Credit Exposure to any Assignee or
Participant (each, a "Transferee") shall not be effective until it has agreed to
be bound by the provisions of Section 10.13. Transferor and Howmet each
authorize the Purchasers to disclose to any Transferee and any prospective
Transferee any and all information in their possession concerning Transferor,
Howmet or any other Seller that has been delivered to them by Transferor,
Howmet, any other Seller or Trustee in connection with their credit evaluation
of the Program prior to entering into this Agreement; provided, however, that
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<PAGE> 340
each such Transferee and/or prospective Transferee shall agree to treat all such
information that is non-public as confidential information in accordance with
customary banking practices, except that each such Transferee and/or prospective
Transferee may share any such non-public information with any of its Affiliates
if such Affiliates agree to treat such information as confidential information
in accordance with customary banking practices.
(e) Notwithstanding any other provisions set forth in this Agreement,
the Purchasers may at any time create a security interest in all or any portion
of their rights under this Agreement and the Certificates in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
(f) No transfer, assignment or other conveyance of, or sale of a
participation interest in, a Certificate (other than in the case of a transfer,
assignment, conveyance or sale by Falcon Asset Securitization Corporation to a
Permitted Transferee) shall be made unless (i) the aggregate outstanding
principal amount of all Certificates transferred, or in which a participation
interest is sold, pursuant to such transfer or sale is equal to a principal
amount of Certificates that would represent at least 2.1% of the total interests
in partnership capital or profits, within the meaning of Treasury Regulation
Section 1.7704-1 assuming the Trust were classified as a partnership for Federal
income tax purposes, and (ii) after giving effect thereto, there shall be no
more than eight Private Holders in respect of the Certificates, as reasonably
determined by Transferor. No Certificate may be subdivided into an aggregate
principal amount that would represent less than 2.1% of the total interests in
partnership capital or profits as determined pursuant to the preceding sentence.
Any attempted transfer, assignment, conveyance, participation or subdivision in
contravention of the preceding restrictions, as reasonably determined by the
Transferor, shall be void ab initio and the purported transferor, seller or
subdivider of such Certificate shall continue to be treated as the
Certificateholder of any such Certificate for all purposes of this Agreement.
(g) Each Affected Party with respect to each Purchaser shall be
entitled to receive additional payments pursuant to Sections 4.3, 4.5, 4.6 and
10.5 as though it were a Purchaser under such Sections applied to its interest
in a Certificate; provided that such Affected Party shall not be entitled to
additional payments pursuant to Section 4.6 attributable to its failure or
inability, as of the date it becomes a Support Bank (and, so long as it may
properly do so, periodically thereafter, to keep forms up to date), to satisfy
the requirements of subsection 4.6(c) or 4.6(d) as if it were an Assignee.
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<PAGE> 341
(h) Each Affected Party claiming increased amounts described in
Sections 4.3, 4.5, 4.6 or 10.5 shall furnish, through its related Purchaser, to
the Trustee, the Agent, Servicer and Transferor a certificate setting forth in
reasonable detail the basis and amount of each request by such Affected Party
for any such amounts referred to in such Section, which certificate shall be
prepared in accordance with the requirements of such Section (if any). Each
Affected Party shall promptly notify, through its related Purchaser, the
Trustee, the Agent, Servicer and Transferor of the occurrence of any event of
which such Affected Party is aware that would be likely to result in a demand
for compensation pursuant to Sections 4.3, 4.5, 4.6 or 10.5.
(i) In connection with any proposal that a bank or other financial
institution become a Support Bank for a Purchaser which is a Structured Lender,
such Purchaser, at its sole discretion, shall be entitled to distribute to any
proposed Support Bank on a confidential basis any information furnished to such
Purchaser by the Agent pursuant to the Transaction Documents. Each Purchaser
which is a Structured Lender shall promptly notify the Agent (who shall promptly
notify Transferor) in writing of the identity and interest of each Support Bank
for such Purchaser promptly upon the obtaining of such Support Bank. Such
Purchaser shall provide to the Agent (who shall, upon request, provide copies of
the same to Transferor, Servicer and the Trustee), with respect to each Support
Bank, such forms as would be required to be furnished by such Support Bank
pursuant to subsections 4.6(c) or 4.6(d) if such Support Bank were an Assignee.
SECTION 10.4 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the Certificates delivered
pursuant hereto shall survive the making and the repayment of the Purchases and
the execution and delivery of this Agreement and the Certificates and shall
continue in full force and effect until all obligations have been paid in full.
In addition, the obligations of Transferor under Sections 4.3, 4.4, 4.5, 4.6 and
10.5 and the obligations of the Purchasers under Section 9.6 shall survive the
termination of this Agreement.
SECTION 10.5 Expenses; Indemnification. Transferor and Howmet jointly
and severally shall pay on demand (a) all reasonable out-of-pocket fees and
expenses (including reasonable attorneys' fees and expenses) of the Agent
incurred in connection with the preparation, execution, delivery,
administration, amendment, modification and waiver of the Transaction Documents
and the making and repayment of the Purchases, including any Servicer or
collection agent fees paid to any third party for services rendered to the
Purchasers and the Agent in collecting the Receivables and (b) all reasonable
out-of-pocket fees and expenses of the Purchasers and the Agent
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<PAGE> 342
(including reasonable attorneys' fees and expenses of their counsel) incurred in
connection with the enforcement of the Transaction Documents against Transferor,
Servicer and the Sellers and in connection with any workout or restructuring of
the Transaction Documents. In addition, Transferor will pay any and all stamp
and other taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing, recording or enforcement of this Agreement or
any payment made under the Transaction Documents, and hereby indemnifies and
saves the Agent and the Purchasers harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay the taxes and fees. Transferor and Howmet jointly and severally agree to
reimburse and indemnify the Agent and each Purchaser and their respective
officers, directors, shareholders, controlling Persons, employees and agents
(collectively, the "Indemnitees") from and against any and all actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred or suffered by the Agent or the
Purchasers (including fees and expenses of legal counsel, accountants and
experts) in any way relating to or arising out of any Transaction Document.
Notwithstanding the foregoing (and with respect to clause (y) below,
without prejudice to the rights that an Indemnitee may have pursuant to the
other provisions of the Transaction Documents), in no event shall any Indemnitee
be indemnified against any amounts (v) resulting from gross negligence or
willful misconduct by it or on the part of any of its officers, directors,
employees or agents, (w) to the extent they include amounts in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Servicer for the amount of any Receivable or Related Transferred Asset not paid
by the related Obligor, (x) to the extent they are or result from lost profits,
(y) resulting from any breach by such Indemnitee of its representations,
warranties or covenants in the Transaction Documents or (z) to the extent they
would constitute consequential, special or punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnitee or is insufficient to hold it harmless, then
Transferor and Howmet jointly and severally shall contribute to the amount paid
by the Indemnitee as a result of any loss, claim, damage or liabIlity in a
proportion that is appropriate to reflect not only the relative benefits
received by the Indemnitee on the one hand and Transferor and Howmet on the
other hand, but also the relative fault of the Indemnitee (if any), Transferor
and Howmet and any other relevant equitable considerations; provided that
Transferor's obligations under this section shall be paid by Transferor only to
the extent that funds are available to make the payments alter all amounts to be
paid to Holders pursuant to Section 4.1 shall have been paid, and there shall
page 27
<PAGE> 343
be no recourse to Transferor for all or any part of any amounts payable pursuant
to this section if the funds are at any time insufficient to make all or part of
any such payments.
SECTION 10.6 Entire Agreement. This Agreement, together with the
documents delivered pursuant to Section 7.1 and the other Transaction Documents,
including the exhibits and schedules thereto, contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all
previous oral statements and other writings with respect thereto.
SECTION 10.7 Notices. All communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by
overnight courier or mailed by registered mall, postage prepaid and return
receipt requested, or transmitted by facsimile transmission and confirmed by a
similar mailed writing to any party at the address for that party set forth (a)
on the signature page to this Agreement or (b) to another address as that party
may designate in writing to the Agent and Transferor.
SECTION 10.8 No Third-Party Beneficiaries. Nothing expressed herein is
intended or shall be construed to give any Person (other than the parties hereto
and the Participants and Assignees described in Section 10.3 and, solely to the
extent provided in Section 10.3, the other Affected Parties) any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.9 Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
SECTION 10.10 Counterparts. This Agreement may be executed in any
number of counterparts (which may include facsimile) and by the different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original, and all of which together shall constitute one and the
same instrument.
SECTION 10.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
page 28
<PAGE> 344
SECTION 10.12 Tax Characterization. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
purposes of Federal, applicable state and local income and franchise and other
taxes measured by or imposed on income, the Certificates will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust will
not be characterized as an association (or publicly traded partnership) taxable
as a corporation, (b) agrees that the provisions of the Transaction Documents be
construed to further that intent, and (c) agrees to treat the Certificates, for
purposes of Federal, state and local income and franchise and other taxes
measured by or imposed on income, as indebtedness.
SECTION 10.13 No Proceedings. (a) Each of Servicer, the Agent (solely
in its capacity as such) and each Purchaser (solely in its capacity as such)
hereby agrees that it will not institute against Transferor, or join any other
Person in instituting against Transferor, any insolvency proceeding (namely, any
proceeding of the type refereed to in the definition of "Bankruptcy Event") so
long as any Certificates shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any Certificates shall have
been outstanding. The foregoing shall not limit the right of Servicer, the Agent
or any Purchaser to file any claim in or otherwise take any action with respect
to any insolvency proceeding that was instituted against Transferor by any other
Person.
(b) Each of Servicer, Howmet, Transferor, the Agent (solely in its
capacity as such) and each Purchaser (solely in its capacity as such) hereby
agrees that it will not institute against any Structured Lender, or join any
other Person in instituting against any Structured Lender, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition of
"Bankruptcy Event") for one year plus one day alter the latest maturing
commercial paper note, medium term note or other debt security issued by such
Structured Lender is paid. The foregoing shall not limit the right of Servicer,
the Agent or any Purchaser to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted against such
Structured Lender by any other Person.
(c) Obligations arising under this Section 10.13 shall survive any
termination of this Agreement.
SECTION 10.14 Reference Bank. By its execution of this Agreement, the
Agent, identified as a "Reference Bank" in the Supplement, agrees to act as a
Reference Bank for purposes of the Supplement. The Agent shall notify Servicer
of the Reserve-Adjusted Eurodollar Rate applicable to each Interest Period and
of each change in the Alternate Base Rate.
page 29
<PAGE> 345
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
-------------------------------------------
Name: Roland Paul
-----------------------------------------
Title: Vice President
----------------------------------------
Address: c/o Nevada Corporate Management,
Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION
By: /s/ Roland Paul
-------------------------------------------
Name: Roland Paul
-----------------------------------------
Title: Vice President
----------------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
<PAGE> 346
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: W.E. Covington
--------------------------------------
Title: Authorized Signer
----------------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attention: W. Edward Covington
Telephone: (312) 732-5768
Facsimile: (312) 732-4487
FALCON ASSET SECURITIZATION
CORPORATION,
as a Purchaser
By: W.E. Covington
--------------------------------------
Title: Authorized Signer
----------------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attention: W. Edward Covington
Telephone: (312) 732-5768
Facsimile: (312) 732-4487
<PAGE> 347
SCHEDULE I
to Certificate Purchase
Agreement Series 1996-1, Class A
AMOUNT OF EACH INITIAL PURCHASER'S CERTIFICATE
<TABLE>
<S> <C>
Stated Amount of Certificate
Falcon Asset Securitization $ 47,500,000.00
Corporation
Class Percentage
Falcon Asset Securitization 100%
Corporation
Series Percentage
Falcon Asset Securitization 86%
Corporation
</TABLE>
<PAGE> 348
EXHIBIT A
to Certificate Purchase
Agreement Series 1996-1, Class A
FORM OF SERIES 1996-1 SUPPLEMENT
<PAGE> 349
PROJECT BLADE - TAKE OUT
SERIES 1996-1 SUPPLEMENT
to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
<PAGE> 350
TABLE OF CONTENTS
Page
ARTICLE I DEFINITlONS; INCORPORATION OF TERMS .............................. 1
SECTION 1.1 Definitions ..................................... 1
SECTION 1.2 Modification Condition .......................... 22
SECTION 1.3 Incorporation of Terms .......................... 22
ARTICLE II DESIGNATION ..................................................... 23
SECTION 2.1 Designation ..................................... 23
SECTION 2.2 Group I ......................................... 23
SECTION 2.3 Investor Ownership Percentage ................... 23
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS ........................ 24
SECTION 3.1 Conditions to Issuance .......................... 24
SECTION 3.2 Use of Proceeds ................................. 24
ARTICLE IV PAYMENTS AND ALLOCATIONS ........................................ 24
SECTION 4.1 Interest; Additional Amounts .................... 24
SECTION 4.2 Daily Calculations and Group Allocations ........ 25
SECTION 4.3 Allocations of Daily Group Collections
(Other Than in a Group Amortization Period) ... 25
SECTION 4.4 Allocations of Daily Group Collections
During a Group Amortization Period ............ 27
SECTION 4.5 Withdrawals from the Equalization Account
and Principal Funding Account ................. 29
SECTION 4.6 Available Subordinated Amount ................... 29
SECTION 4.7 Write-Offs and Recoveries ....................... 30
SECTION 4.8 Certain Dilution in a Group Amortization Period . 31
SECTION 4.9 Optional Early Pay Out .......................... 32
SECTION 4.10 Foreign Obligors; Calculation of Excess
Concentrations ................................ 33
SECTION 4.11 Tax Opinion ..................................... 36
SECTION 4.12 Reset of Benchmark Percentages and
Special Concentration Limits .................. 37
ARTICLE V DISTRIBUTIONS AND REPORTS ........................................ 37
SECTION 5.1 Distributions ................................... 37
SECTION 5.2 Special Distributions on the Refinancing
Date .......................................... 38
SECTION 5.3 Payments in Respect of Transferor
Certificate ................................... 39
SECTION 5.4 Daily Reports and Monthly Reports ............... 39
SECTION 5.5 Annual Tax Information .......................... 39
<PAGE> 351
Page
SECTION 5.6 Periodic Perfection Certificate ................. 40
ARTICLE VI EARLY AMORTIZATION EVENTS ....................................... 40
SECTION 6.1 Early Amortization Events ....................... 40
SECTION 6.2 Early Amortization Period ....................... 43
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES .................. 43
SECTION 7.1 Optional Redemption of Investor Interests ....... 43
SECTION 7.2 Termination ..................................... 44
SECTION 7.3 Indemnification by Transferor ................... 44
SECTION 7.4 Indemnification by Servicer ..................... 45
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law ................................... 45
SECTION 8.2 Counterparts .................................... 45
SECTION 8.3 Severability of Provisions ...................... 46
SECTION 8.4 Amendment, Waiver, Etc. ......................... 46
SECTION 8.5 Trustee ......................................... 46
SECTION 8.6 Instructions in Writing ......................... 46
EXHIBITS
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
ii
<PAGE> 352
This SERIES 1996-1 SUPPLEMENT, dated as of April 18, 1996 (this
"Supplement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada
corporation, as Transferor, HOWMET CORPORATION, a Delaware corporation
("Howmet"), as Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of December
13, 1995, as amended and restated in its entirety by the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18, 1996 (as the same may be
further amended, supplemented or otherwise modified from time to time, and as
supplemented hereby, the "Pooling Agreement"), among Transferor, Servicer and
Trustee, Transferor may from time to time direct Trustee to issue and
authenticate, on behalf of the Trust, one or more Series of Certificates in one
or more Groups of Series representing undivided interests in the Transferred
Assets. Certain terms applicable to a Series are to be set forth in a
Supplement. This Supplement is a "Supplement" as that term is defined in the
Pooling Agreement.
Pursuant to this Supplement, Transferor and Trustee shall create a
Series of Certificates and specify certain of their terms.
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS
SECTION 1.1 Definitions. (a) Capitalized terms used and not otherwise
defined herein are used as defined in Appendix A to the Pooling Agreement. This
Supplement shall be interpreted in accordance with the conventions set forth in
Part B of that Appendix A.
(b) Each reference in this Supplement to funds on deposit in the
Carrying Cost Account, the Equalization Account or the Principal Funding Account
(or similar phrase) refers only to funds in the administrative sub-accounts of
those Accounts that are allocated to the Series in Group I. Unless the context
otherwise requires, in this Supplement: (i) each reference to a "Daily Report"
or "Monthly Report" refers to a Daily Report or Monthly Report for Group I; (ii)
each reference to the "Servicing Fee" refers to the Servicing Fee allocable to
Group I; (iii) each reference to the "Series Collection Allocation Percentage"
or the "Series Loss Allocation Percentage" refers to Group I's Series Collection
Allocation Percentage or Series Loss Allocation Percentage, and (iv) each
reference to the Transaction Documents shall include a reference to the
Certificate Purchase Agreements.
(c) Each capitalized term defined below relates only to the Series
1996-1 Certificates and to no other Series of Certificates (except to the extent
that certain of such terms are explicitly used as defined herein in any
Supplement relating to another Series in Group F). Whenever used in this
Supplement, the following words and phrases shall have the following meanings:
<PAGE> 353
"ABR Tranche" means, at any time, the portion of the Series 1996-1
Invested Amount that is designated by Transferor in accordance with a
Certificate Purchase Agreement to accrue interest based on the Alternate Base
Rate.
"Acquisition Amount" is defined in Section 2.3.
"Additional Amounts" means (a) as to the Series 1996-1 Certificates,
the Prepayment Premium and other amounts payable pursuant to Sections 4.3, 4.5,
4.6 and 10.5 of the Class A Certificate Purchase Agreement and amounts payable
pursuant to Sections 4.3, 4.5, 4.6 and 10.5 of the Class B Certificate Purchase
Agreement, and (b) as to any other Series in Group I, any amounts identified as
"Additional Amounts" in the related Supplement.
"Adjusted Eligible Receivables" means, on any Business Day, the result
of (a) the aggregate Unpaid Balance of Eligible Receivables held by the Trust on
that day, minus (b) the Unapplied Cash held by the Trust on that day, plus (c)
the Aggregate Retained Balances, in each case as shown in the Daily Report for
such day.
"Affected Party" shall mean, with respect to any Structured Lender, any
Support Bank: of such Structured Lender.
"Aged Receivables Ratio" means, as calculated in each Monthly Report as
of the Cut-Off Date for the related Calculation Period, a fraction (expressed as
a percentage) having (a) a numerator that is the sum of (i) the aggregate Unpaid
Balance of Receivables that remained outstanding 121 to 150 days after their
respective due dates, as determined as of the Cut-Off Date for such Calculation
Period, plus (ii) the aggregate Unpaid Balance of Receivables that were written
off as uncollectible during the most recently ended Calculation Period and that,
if not so written off, would have been outstanding not more than 120 days after
their respective due dates, as determined as of that Cut-Off Date, and (b) a
denominator that is the aggregate amount payable pursuant to invoices giving
rise to Receivables that were generated during the Calculation Period that
occurred five Calculation Periods prior to the most recently ended Calculation
Period, as determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means The First National Bank: of Chicago, in its capacity as
Agent under (and as defined in) the Certificate Purchase Agreements, together
with its respective successors in such capacity. The Agent is an "Agent" for
purposes of the Pooling Agreement.
"Aggregate Retained Balances" means, on any Business Day, the aggregate
of the balances retained in Lockbox Accounts or Concentration Accounts for items
in the process of collection but for which funds have not been made available by
the related Lockbox Bank: or Concentration Account Bank:, provided that (i) no
notice of insufficient funds or similar
2
<PAGE> 354
situation shall exist with respect thereto and (ii) the Unpaid Balance of
Receivables shall have been reduced by an amount equal to such balances.
"Alternate Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest announced, from time to time, by
Agent as its prime commercial rate for United States dollar loans made
in the United States for any day, and
(b) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime commercial
rate announced by the Agent shall become effective without prior notice to
Transferor or the Servicer as of 12:01 a.m., New York City time, on the Business
Day on which each change in the prime commercial rate is announced by the Agent.
The prime commercial rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged by the Agent to any customer. The Agent
may make commercial loans or other loans at rates of interest at, above or below
the prime commercial rate.
"Amortization Period" means the period (x) beginning on the earlier of
(i) the date on which a termination notice is given by the Sellers pursuant to
Section & 1 of the Purchase Agreement and (ii) the first day of the Calculation
Period that begins on June 1, 2000, and (y) ending on the earlier of (i) the
Expected Final Payment Date and (ii) the date, if any, on which an Early
Amortization Period begins; provided that there will be no Amortization Period
if an Early Amortization Period commences on or prior to the date specified
above for the beginning of the Amortization Period.
"Applicable Ratings Factor" means the Class A Ratings Factor or the
Class B Ratings Factor, as specified in each calculation where the Applicable
Ratings Factor is used.
"Approval Condition" means, with respect to any event or change in the
terms applicable to this Supplement or the Series 1996-1 Certificates, such
event or change shall have been approved in writing, prior to becoming
effective, by the Agent and the Majority Class B Purchasers.
"ASA Measuring Period" means, for any Cut-Off Date falling in a Group
Amortization Period, the Calculation Period ending on that Cut-Off Date (or the
portion thereof falling alter the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization Period).
"Available Subordinated Amount" means, at any time during a Group
Amortization Period, the amount calculated pursuant to Section 4.6.
3
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"Base Amount" means, on any Business Day, the result of the following
formula:
[NER x SCAP x (100%-CBRR)]-CASD-CCRR
where:
NER = the Net Eligible Receivables as reported in the Daily Report
for that Business Day;
SCAP = the Series Collection Allocation Percentage for that Business
Day;
CBRR = the Class B Reserve Ratio in effect for that Business Day;
CASD = the Class A Subordination Deficit for that Business Day; and
CCRR = the Carrying Cost Receivables Reserve as reported in the Daily
Report for such day.
"Basic Concentration Limit" means, with respect to a Concentration Unit
on any day, (i) if such Concentration Unit includes a Special Obligor, the
Special Concentration Limit for such Special Obligor, and (ii) otherwise, the
Concentration Limit applicable to the Parent for such Concentration Unit.
"Carrying Cost Receivables Reserve" means, on any Business Day, the
result of:
(a) the Current Carrying Costs; plus
(b) the product of (i) the Class A Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on Class A
Certificates, multiplied by (iii) a fraction the numerator of which is
the product of two and the number of Turnover Days and the denominator
of which is 360; plus
(c) the product of (i) the Class B Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on the
Class B Certificates, multiplied by (iii) a fraction the numerator of
which is the product of two and the number of Turnover Days and the
denominator of which is 360; plus
(d) the product of (i) the Series Collection Allocation
Percentage on the next preceding Distribution Date, multiplied by (ii)
the aggregate Unpaid Balance of Receivables on the next preceding
Distribution Date, multiplied by (iii) 2%, multiplied by (iv) a
fraction the numerator of which is the product of two and the number of
Turnover Days and the denominator of which is 360; plus
(e) if there is any Series in Group I in addition to the
Series 1996-1 Certificates, the Carrying Cost Receivables Reserve
Increments for each such other Series in Group I (as defined, and
calculated as provided, in the related Supplement); minus
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(f) the balance on deposit in the Carrying Cost Account at the
beginning of that Business Day.
"Category One Balance" is defined in Section 4.10.
"Category One Eligibles" is defined in Section 4.10.
"Category One Obligors" means the following persons: Alfa Romeo Avio
S.p.A., ABB Power Generation Ltd., Boeing Canada Technology Ltd., Fiat Avio
S.p.A., General Electric Canada Inc., Hitachi Ltd., KLM Royal Dutch Airlines,
Mitsubishi Heavy Industries America, Inc., Mitsui & Co. USA, Inc., Motoren-Und
Turbinen-Union Munchen GmbH, Pratt & Whitney Canada Inc., Rolls-Royce PLC,
Siemens A.G. KWU, and Walbar of Canada Inc.
"Category Three Balance" is defined in Section 4.10.
"Category Three Eligibles" is defined in Section 4.10.
"Category Three Excess Concentration" is defined in Section 4.10.
"Category Three Obligors" means Foreign Obligors that are not Category
One Obligors or Category Two Obligors.
"Category Two Balance" is defined in Section 4.10.
"Category Two Eligibles" is defined in Section 4.10.
"Category Two Excess Concentration" is defined in Section 4.10.
"Category Two Obligors" means Foreign Obligors (other than Category One
Obligors) with principal places of business in Canada, Germany, Italy,
Netherlands, Switzerland, England or Sweden.
"Certificate Purchase Agreements" means the Class A Certificate
Purchase Agreement and the Class B Certificate Purchase Agreement.
"Certificate Rate" means, at any time, the weighted average of the
interest rates on all outstanding Series 1996-1 Certificates at that time.
"Certificate Spread" means:
(a) with respect to the Class A Certificates, (i) .50% per
annum in the case of Eurodollar Tranches, and (ii) 0% per annum in the
case of the ABR Tranche; and
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(b) with respect to the Class B Certificates, (i) .80% per
annum in the case of the Eurodollar Tranche, and (ii) 0% per annum in
the case of the ABR Tranche.
"Class A Certificate" is defined in Section 2.1. Each Class A
Certificate shall be substantially in the form of Part 1 of Exhibit A.
"Class A Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class A) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class A Certificates and the Agent.
"Class A Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) 1.333 times the "Benchmark Percentage" for purposes of
clause (c) of the definition of "Concentration Limit,"
(ii) two times the "Benchmark Percentage" for purposes of
clause (d) of that definition, and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (13) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times (y) the
excess of four over the number of Special Obligors.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made pursuant to the Class A Certificate
Purchase Agreement at or prior to that time, reduced (but not below zero) by (a)
the aggregate amount of all distributions that have been made to the Holders of
the Class A Certificates on account of principal, and (13) the amount of all
Investor Write-Offs that have been applied to reduce the Class A Invested Amount
(net of Investor Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the Class A Invested Amount).
"Class A Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class A Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date.
"Class A Purchases" means Purchases made in respect of Class A
Certificates.
"Class A Ratings Factor" means 2.0.
"Class A Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class A Ratings Factor.
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"Class A Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class A Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class A Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class A Minimum Reserve Ratio and (b) the Class A Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period;
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class A Reserve Ratio shall be 26.01%.
"Class A Subordination Deficit" means, on any Business Day, the
positive result (if any) of (a) the Class A Required Reserves, minus (b) the sum
of (i) the Class B Required Reserves plus (ii) the outstanding principal amount
of all Subordinated Classes (all calculated as of the beginning of that Business
Day); provided that at any time when no Senior Class is outstanding the Class A
Subordination Deficit shall equal zero.
"Class B Certificate" is defined in Section 2.1. Each Class B
Certificate shall be substantially in the form of Part 2 of Exhibit A.
"Class B Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class B) dated as of April 18, 1996 among Transferor,
Servicer, the Purchasers of Class B Certificates and the Agent.
"Class B Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) the "Benchmark Percentage" for purposes of clause (c) of
the definition of "Concentration Limit,"
(ii) 1.5 times the "Benchmark Percentage" for purposes of
clause (d) of the definition of "Concentration Limit," and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (B) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times the excess
(if any) of 2.75 over the number of Special Obligors.
"Class B Invested Amount" means, at any time, the sum of the purchase
prices paid for Class B Purchases made pursuant to (and as defined in) the Class
B Certificate Purchase Agreement at or prior to that time, reduced (but not
below zero) by (a) the aggregate amount of all distributions that have been made
to the Holders of the Class B Certificates on account of principal, and (b) the
amount of all Investor Write-Offs that have been applied to reduce
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the Class B Invested Amount (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to reinstate the Class B
Invested Amount).
"Class B Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class B Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date; provided that in no event shall the
Class B Minimum Reserve Ratio be less than 15%.
"Class B Purchases" means Purchases made in respect of Class B
Certificates.
"Class B Ratings Factor" means 1.5.
"Class B Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class B Ratings Factor.
"Class B Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class B Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class B Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class B Minimum Reserve Ratio and (b) the Class B Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period,
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class B Reserve Ratio shall be 21.01%.
"Class Invested Amount" means (a) with respect to Class A, the Class A
Invested Amount, (b) with respect to Class B, the Class B Invested Amount and
(c) with respect to any other Senior Class or Subordinated Class of
Certificates, the amount identified as its "Class Invested Amount" in the
Supplement for such Senior Class or Subordinated Class of Certificates.
"Concentration Limit" means:
(a) 100% for any Tier-1 Obligor;
(b) 100% for any Tier-2 Obligor;
(c) 15% for any Tier-3 Obligor;
(d) 10% for any Tier-4 Obligor; and
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(e) 4% for any Tier-5 Obligor.
Each of the percentages above is called a "Benchmark Percentage".
"Concentration Unit Excess Concentration" is defined in Section 4.10.
"Concentration Unit" means, on any day, each Obligor and its
Affiliates, if any, that are Obligors; it being understood that each Obligor
shall belong to only one Concentration Unit, and that a single Obligor can be a
Concentration Unit.
"Current Carrying Costs" means, during any Distribution Period, the sum
of (i) the amount of interest on the Series 1996-1 Certificates that will be
payable on the next Interest Payment Date and any other Interest Payment Date
falling not later than one week after such Interest Payment Date, (ii) the
amount of the Servicing Fee that will be payable on or before the next
Distribution Date plus (iii) the Current Carrying Costs Increments for each
other Series in Group I (as defined, and calculated as provided in, the
Supplement for each such Series.)
"Daily Group Collections" is defined in Section 4.2.
"Deferred Portion" means, on any day with respect to Group I, the
portion of the Acquisition Amount for the Series of Certificates in Group I as
to which payment has been deferred, which portion shall equal the product of (a)
the Series Collection Allocation Percentage times (b) the sum of the following
amounts (as shown in the Dally Report for such day): (i) the Excess
Concentration Balances, plus (ii) the aggregate unpaid balance of Receivables
that are not Eligible Receivables (including any such Receivables that are
ineligible due to the attachment of Adverse Claims), plus (iii) the Carrying
Cost Receivables Reserve, plus (iv) the Class B Reserve Ratio times the Net
Eligible Receivables, plus (v) the Class A Subordination Deficit (it being
understood that the Deferred Portion may vary from day to day); provided that
the Deferred Portion shall be fixed as of the Group Amortization Calculation
Date.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
giving rise to Receivables and generated during the two Calculation Periods
ending on the most recent Cut-Off Date (as of that Cut-Off Date) and (b) a
denominator equal to the Adjusted Eligible Receivables as of the most recent
Cut-Off Date.
"Dilution Ratio" means, as calculated in each Monthly Report as of the
most recent Cut-Off Date, a fraction (expressed as a percentage) having (a) a
numerator equal to the aggregate amount of Dilution on the Receivables occurring
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated during the second preceding Calculation
Period (so that, for example, if the Calculation Period
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specified in clause (a) corresponded to the March fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the January fiscal
month).
"Dilution Reserve Ratio" means as calculated in each Monthly Report,
the result (expressed as a percentage) calculated in accordance with the
following formula:
{(ARF x ADR) + [(HDR-ADR) x (HDR/ADR)]} x DHV
where:
ADR = the average of the Dilution Ratios during the period of 12
consecutive Calculation Periods ending on the related Cut-Off
Date;
ARF = the Applicable Ratings Factor;
DHV = the Dilution Horizon Variable; and
HDR = the highest average of the Dilution Ratios for any two
consecutive Calculation Periods within the 12 consecutive
Calculation Periods ending on the related Cut-Off Date.
"Distribution Period" means a period from and including a Distribution
Date to but excluding the next Distribution Date.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 6.2 and ending on the day on which the Series Invested
Amount has been reduced to zero. The term "Early Amortization Period" means each
of the Early Amortization Period and any period identified as an "Early
Amortization Period" in the Supplement for any other Series in Group I.
"Eurodollar Tranche" means, during any Interest Period, any portion of
the Series 1996-1 Invested Amount that is designated by Transferor in accordance
with a Certificate Purchase Agreement to accrue interest based on the
Reserve-Adjusted Eurodollar Rate.
"Excess Concentration Balances" means, on any day, the sum of (i) the
sum of the Concentration Unit Excess Concentrations for all Groups, plus (ii)
the Category Two Excess Concentration, plus (iii) the Category Three Excess
Concentration, plus (iv) the Total Foreign Concentration Excess.
"Excess Foreign Obligor Balances" is defined in Section 4.10.
"Expected Final Payment Date" means December 15, 2000.
"Federal Funds Rate" means (a) the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the day (or, if the day is
not a Business Day, the immediately
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preceding Business Day) by the Federal Reserve Bank of New York; provided that
if the rate is not so published for any Business Day, the rate for purposes of
this clause will be the average of the quotations for the day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it, plus (b) 100 basis points.
"Final Scheduled Payment Date" means December 15, 2001.
"First Step Excess" is defined in Section 4.10.
"First Step Residual" is defined in Section 4.10.
"Foreign Obligor" is defined in Section 4.10.
"Fourth Step Excess" is defined in Section 4.10.
"Fully Funded Date" means the first date falling in a Group
Amortization Period or when all Series in Group I are in a Series Amortization
Period and on which there are funds on deposit in the Carrying Cost Account and
the Principal Funding Account that, in the aggregate, equal or exceed the
Investor Repayment Amount and any Servicing Fee payable to anyone other than a
Howmet Person on the first Distribution Date falling after that date.
"Group Amortization Calculation Date" means the day before a Group
Amortization Period begins.
"Group Amortization Period" means the period (if any) commencing on the
first day on which all outstanding Series in Group I are in Early Amortization
Periods.
"Group Initial Invested Amount" means, at any time, the sum of the
Series Initial Invested Amounts of each Series in Group I at that time.
"Group Invested Amount" means, at any time, the sum of the Series
Invested Amounts of each Series in Group I at that time.
"Group I" means a group of Series, including Series 1996-1 and each
other Series that is identified in its Supplement as belonging to Group I.
"Guarantor" means How met, in its capacity as the guarantor under the
Seller Guaranty.
"Holdback Account Termination Date" is defined in Section 4.4.
"Holder" means a Holder (as defined in the Pooling Agreement) of a
Certificate in any Series in Group I.
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"Howmet" is defined in the preamble.
"Howmet Credit Agreement" means the Credit Agreement dated as of
December 13, 1995 among Blade Acquisition Corp., Howmet Holdings Acquisition
Corp., Howmet Acquisition Corp., the financial institutions named therein and
The First National Bank of Chicago, as Administrative Agent and a Managing
Agent, Bankers Trust Company, as Syndication Agent and a Managing Agent, and
Citicorp USA, Inc., as Documentation Agent and a Managing Agent, as the same may
from time to time be amended or supplemented.
"Intercreditor Provisions" means the following provisions of the Howmet
Credit Agreement (as such Agreement was in effect on the Closing Date): Section
9.12 and the definitions of Intercreditor Agreement, Investor Certificates,
Purchased Interest, Receivables Amendment Conditions, Receivables Bridge
Facility, Receivables Documents, Receivables Facility, Receivables Facility
Assets, Receivables Maximum Funded Amount, Receivables Pooling Agreement,
Receivables Purchasers, Receivables Stated Amount and Receivables Subsidiary.
"Interest Payment Date" means (a) as to the Series 199&l Certificates,
any date upon which interest is payable with respect to the ABR Tranche or any
Eurodollar Tranche, as specified in Section 4.1, and (b) as to any interest
payable on any other Series in Group I, the date specified as the "Interest
Payment Date" in the related Supplement.
"Interest Period" means
(a) for Class A Certificates, (i) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to each Eurodollar Tranche
(if any) from time to time, each period from the date upon which that
Eurodollar Tranche was first designated as such pursuant to the Class A
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for the Eurodollar Tranche, if there has been one) to
the date that is one month, two months or three months, at the option
of Transferor, thereafter; and if any Interest Period for a Eurodollar
Tranche would otherwise end on a day that is not a Business Day, the
Eurodollar Tranche shall instead end on the next Business Day (or, if
the next Business Day falls in the next calendar month, then on the
next preceding Business Day); and
(b) for Class B Certificates, (i) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to the Eurodollar Tranche
(if any) from time to time, each period from the date upon which the
Eurodollar Tranche was first designated as such pursuant to the Class B
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for
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the Eurodollar Tranche, if there has been one) to the date that is one
month, two months or three months, at the option of Transferor,
thereafter; and if any Interest Period for the Eurodollar Tranche would
otherwise end on a day that is not a Business Day, the Eurodollar
Tranche shall instead end on the next Business Day (or, if the next
Business Day falls in the next calendar month. then on the next
preceding Business Day).
"Invested Amount" means, at any time:
(a) for purposes of calculating the Series Loss Allocation
Percentage for Group I, the Group Invested Amount; and
(b) for purposes of the application of Sections 6.13 and 12.4
of the Pooling Agreement to the Series 1996-1 Certificates, the Series
1996-1 Invested Amount.
"Investor Allocable Dilution" means, for any ASA Measuring Period, the
product of the aggregate amount of Dilution for that ASA Measuring Period as to
which neither the applicable Seller nor the Guarantor has made any payment
required by Section 3.1 of the Purchase Agreement or the Seller Guaranty on
account of Seller Dilution Adjustments, multiplied by the Series Loss Allocation
Percentage as of the beginning of that ASA Measuring Period, multiplied by the
Investor Allocation Percentage as of the first Business Day of that ASA
Measuring Period.
"Investor Allocable Dilution Adjustments" is defined in Section 4.8.
"Investor Allocable Loss Amount" means, for any ASA Measuring Period,
the product of the Loss Amount for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the beginning of
that ASA Measuring Period.
"Investor Allocable Recoveries" means, for any ASA Measuring Period,
the product of the Net Recoveries for that ASA Measuring Period, multiplied by
the Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the first
Business Day of that ASA Measuring Period.
"Investor Allocation Percentage" means:
(x) on any Business Day that does not fall in a Series
Amortization Period, a fraction (expressed as a percentage, which in
any event may not exceed 100%) (a) the numerator of which is the Net
Invested Amount as of that Business Day, and (1)) the denominator of
which is the Base Amount as of that Business Day;
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(y) on any Business Day falling in any Series Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the beginning of the Series Amortization Period, and (1)) the
denominator of which is the Base Amount as of that Business Day; and
(z) on any Business Day falling in the Group Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the Group Amortization Calculation Date, and (b) the denominator
of which is the Base Amount as of the Group Amortization Calculation
Date.
"Investor Ownership Percentage" means, on any day with respect to Group
I, a fraction (expressed as a percentage, which in any event may not exceed
100%), (x) the numerator of which is the Acquisition Amount on such day and (y)
the denominator of which is the product of (a) the Series Collection Allocation
Percentage times (b) the excess of (i) the Unpaid Balance of Receivables on such
day over (ii) the Unapplied Cash on such day; provided that the Investor
Ownership Percentage shall be fixed as of the Group Amortization Calculation
Date; and provided further that if the Investor Ownership Percentage is being
calculated on any day when a Series in Group I is in an accumulation,
amortization or early amortization period, the Investor Ownership Percentage
shall not be less than the Investor Ownership Percentage immediately prior to
the commencement of such period.
"Investor Repayment Amount" means, on any Business Day, the sum of (a)
the principal amount of the Series 1996-1 Certificates and all other Series in
Group I then outstanding, plus (b) the interest and any Additional Amounts known
to be payable on the Series 1996-1 Certificates and all other Series in Group I
on or before the first Distribution Date falling after that date.
"Investor Write-Offs" means, as calculated in any Monthly Report
relating to a Calculation Period falling completely or partially in a Group
Amortization Period:
(a) if the Available Subordinated Amount is greater than zero
at the end of the related ASA Measuring Period, zero; and
(b) if the Available Subordinated Amount is zero at the end of
the related ASA Measuring Period (taking into account any reduction in
the Available Subordinated Amount shown in such Monthly Report), the
excess (if any) of (x) the sum of the Investor Allocable Loss Amount
and the Investor Allocable Dilution minus Investor Allocable Recoveries
for the related ASA Measuring Period, over (y) the Available
Subordinated Amount as of the beginning of that ASA Measuring Period.
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"Loss Amount" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of
Receivables held by Trust that became Write-Offs during that ASA Measuring
Period, minus (b) the amount of Recoveries received during that ASA Measuring
Period.
"Loss Reserve Ratio" means, as calculated in each Monthly Report, the
result (expressed as a percentage) of (a) the Applicable Ratings Factor
multiplied by (b) the highest average of the Aged Receivables Ratio for any
three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
multiplied by (c) a fraction having (i) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise to Receivables
generated during the four Calculation Periods preceding or ending on the most
recent Cut-Off Date, and (ii) a denominator equal to the Adjusted Eligible
Receivables, as of the most recent Cut-Off Date, multiplied by (d) the Payment
Term Multiplier.
"Majority Class B Purchasers" is defined in Section 8.1 of the Class B
Certificate Purchase Agreement.
"Net Eligible Receivables" means, at any time, (a) the Adjusted
Eligible Receivables, minus (b) the Excess Concentration Balances; it being
understood that the amount of Eligible Receivables will be reduced by Adverse
Claims that attach to Receivables otherwise satisfying the requirements of the
definition of Eligible Receivable.
"Net Invested Amount" means, on any Business Day, the Group Invested
Amount, minus the balance on deposit in the Equalization Account and the
Principal Funding Account with respect to Series in Group I.
"Net Recoveries" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of Recoveries
received in that ASA Measuring Period minus (b) the amount of Receivables that
became Write-Offs in that ASA Measuring Period.
"Note Indenture" means the Indenture dated as of December 13, 1995 by
and between How met, as successor to the obligations thereunder of How met
Acquisition Corp., and Marine Midland Bank, as Trustee, under and pursuant to
which certain senior subordinated notes have been issued, as the same may at any
time be amended or supplemented.
"Parent" means, with respect to any Concentration Unit, the Domestic
Person in such Concentration Unit that owns or controls (directly or indirectly)
the largest number of other Obligors in such Concentration Unit; provided that
if there is no Domestic Person in such Concentration Unit, "Parent" shall mean
the Obligor in such Concentration Unit that owns or controls (directly or
indirectly) the largest number of other Obligors in such Concentration Unit.
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"Past Due Receivables Ratio" means, as calculated in each Monthly
Report as of the Cut-Off Date, a faction (expressed as a percentage) having (a)
a numerator that is the aggregate Unpaid Balance of Receivables that remain
outstanding 61 to 91 days after their respective due dates, as determined as of
such Cut-Off Date, and (b) a denominator that is the aggregate Unpaid Balance of
Receivables as of such Cut-Off Date.
"Payment Term" shall mean, with respect to any Receivable, the number
of days between its invoice date and its due date.
"Payment Term Multiplier" shall mean (a) 1.0, if the Payment Term
Variable is less than 41, (b) 1.17, if the Payment Term Variable is equal to or
more than 41 but less than 51, (c) 1.25, if the Payment Term Variable is equal
to or more than 51 but less than 61, and (d) 1.5, if the Payment Term Variable
is equal to or more than 61 but less than 91; provided, however, that if the
Payment Term Variable equals or exceeds 91, the Payment Term Multiplier for such
Receivable shall be determined by calculating the sum of (x) 1.5, and (y) 0.05,
for each 5-day increment by which the Payment Term Variable exceeds 91, it being
understood that the same number shall apply for all Payment Term Variables that
fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each Monthly
Report as of the most recently ended Cut-Off Date, the quotient of:
(x) the sum of (1) the product of the Outstanding Balance of
each Receivable as of such Cut-Off Date times (2) the Payment Term with
respect to such Receivable; divided by
(y) the aggregate Outstanding Balance of all Receivables as of
such Cut-Off Date.
"Prepayment Accumulation Period" means a period beginning on the day
that Transferor gives a Prepayment Notice to Trustee of a prepayment of the
Series 1996-1 Certificates pursuant to Section 4.9 (and does not notify Trustee
that it intends to cause the Series Interest to be conveyed as described in
subsection 4.9(b)) and ending on the earlier to occur of (a) the day when
amounts sufficient for that prepayment have been accumulated pursuant to Section
4.3 and (b) the end of the Revolving Period for the Series 1996-1 Certificates.
"Prepayment Notice" is defined in Section 4.9.
"Prepayment Premium" means, with respect to any prepayment pursuant to
Section 4.9 or 7.1 or as a result of an Early Amortization Event, the net
present value (as of the date of such prepayment) of the amount of interest that
would have accrued on the amount of principal prepaid from the date of
prepayment through the one year anniversary of the date
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hereof at an interest rate equal to the applicable Certificate Spread in respect
of the Eurodollar Tranche(s), discounted to such prepayment date at a rate per
annum, compounded monthly, equal to the Reserve Adjusted Eurodollar Rate in
effect on the date on which notice of prepayment is given to the Holders of the
Series 1996-1 Certificates being prepaid.
"Principal Deposit Amount" means, with respect to any Series in any
Calculation Period falling in a Series Amortization Period, the amount
determined in accordance with the Supplement for that Series. The Principal
Deposit Amounts for the Series Amortization Periods that may apply to the Series
1996-1 Certificates are:
(a) for any Calculation Period falling in the Amortization
Period or the Early Amortization Period for the Series 1996-1
Certificates, the Series 1996-1 Invested Amount; and
(b) for any Calculation Period falling in a Prepayment
Accumulation Period for the Series 1996-1 Certificates, the amount of
principal to be prepaid.
"Principal Payment Date" means (a) for the Series 1996-1 Certificates,
(i) any date on which any prepayment is to be made pursuant to Section 4.9, (ii)
the end of each Interest Period in respect of the next maturing Eurodollar
Tranche and/or ABR Tranche, in such order as the Agent shall select so as to
minimize "breakage costs," (iii) each Distribution Date falling in an Early
Amortization Period (beginning with the Distribution Date falling in the
Calculation Period after the Calculation Period in which the Early Amortization
Period begins) and (iv) any Distribution Date falling after the commencement of
the Amortization Period, and (b) for any other Series in Group I, each date
specified as a "Principal Payment Date" in the related Supplement. The
Refinancing Date is not a Principal Payment Date.
"Purchase" means any Purchase as defined in either of the Certificate
Purchase Agreements.
"Reference Bank" means The First National Bank of Chicago.
"Refinancing Date" is defined in subsection 4.9(b).
"Required Purchasers" is defined in Section 9.9 of the Certificate
Purchase Agreements.
"Required Receivables" means, on any Business Day, collectively for all
Series in Group I:
(a) So long as a Group Amortization Period has not commenced,
the result of the following formula:
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GIIA + CCRR R
------------ -----
(1 - CARR) x NER
where:
CARR = the Class A Reserve Ratio in effect for that
Business Day;
CCRR = the Carrying Cost Receivables Reserve as reported in
the Daily Report for that Business Day;
GIIA = the Group Initial Invested Amount;
NER = the Net Eligible Receivables as reported in the
Daily Report for that Business Day; and
R = the aggregate Unpaid Balance of Receivables held by
Trustee as reported in the Daily Report for that
Business Day.
(b) If a Group Amortization Period has commenced, the result
of the following formula:
AGIIA + ASA + UCCRR
where:
AGIIA = the adjusted Group Initial Invested Amount on that
Business Day (which shall equal the Group Initial
Invested Amount, reduced (but not below zero) by the
amount of all Investor Write-Offs (net of Investor
Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the
Group Invested
Amount));
UCCRR = the Unfunded Carrying Cost Receivables Reserve on
that Business Day; and
ASA = the Available Subordinated Amount on that
Business Day.
"Required Series Holders" means the Required Purchasers.
"Reserve-Adjusted Eurodollar Rate" means for any Interest Period, the
rate per annum obtained by dividing (i) the arithmetic average (rounded upward
to the nearest 1/100 of one percent) of the offered quotation, if any, to first
class banks in the interbank Eurodollar market by the Reference Bank for U.S.
dollar deposits of amounts in same day funds comparable to the principal amount
of the Investor Certificate of the Reference Bank with maturities comparable to
such Interest Period as of approximately 10:00 a.m. (New York time) on the
second Business Day prior to the first day of that Interest Period by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on
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such second preceding Business Day to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D of
the Federal Reserve Board (or any successor category of liabilities under
Regulation D).
"Revolving Period" means, with respect to any Series in Group I, the
period beginning on the Closing Date and ending on the day before the first day
of an accumulation period, an amortization period or an early amortization
period (other than a prepayment accumulation period with respect to a partial
prepayment of such Series) for such Series; provided that the Revolving Period
for such Series shall be suspended during a prepayment accumulation period with
respect to a partial prepayment of such Series.
"Second Step Excess" is defined in Section 4.10.
"Second Step Residual" is defined in Section 4.10.
"Senior Class" means each of Class A and each class of any other Series
in Group I that is identified in its Supplement as a Senior Class.
"Series Allocable Dilution Adjustments" means, for any ASA Measuring
Period, the product of the aggregate amount of payments pursuant to Section 3.1
of the Purchase Agreement or pursuant to the Seller Guaranty on account of
Seller Dilution Adjustments received during that ASA Measuring Period relating
to Dilution that occurred prior to that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period.
"Series Amortization Period" means (a) as to Series 1996-1, the
Amortization Period, any Prepayment Accumulation Period and any Early
Amortization Period and (b) as to any other Series in Group I any period
identified in the related Supplement as a "Series Amortization Period."
"Series Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Invested Amount, and (b) as to any other Series
in Group I, the amount determined as such in accordance with the Supplement for
that Series.
"Series Initial Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Initial Invested Amount, and (b) as to any other
Series in Group I, the amount determined as such in accordance with the
Supplement for that Series; provided that from and after the date on which the
Series Invested Amount for any Series is reduced to zero, the Series Initial
Invested Amount for that Series will also equal zero.
"Series 1996-1 Certificates" means the Class A Certificates and the
Class B Certificates.
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"Series 1996-1 Holder" means a Holder of a Series 1996-1 Certificate.
"Series 1996-1 Initial Invested Amount" means (i) during the Revolving
Period for the Series 1996-1 Certificates, the Series 1996-1 Invested Amount,
and (ii) thereafter, the Series 1996-1 Invested Amount as of the last day of the
Revolving Period; provided that after the principal amount of the Series 1996-1
Certificates and interest and any Additional Amounts known to be payable in
respect of such Series are reduced to zero, the Series 1996-1 Initial Invested
Amount will equal zero.
"Series 1996-1 Invested Amount" means, at any time, the sum of the
Class A Invested Amount plus the Class B Invested Amount.
"Special Concentration Limit" means:
(i) with respect to the Tier-5 Obligor that owes the highest
aggregate Unpaid Balance of Eligible Receivables, 7%; and
(ii) with respect to the Tier-5 Obligor that owes the second
highest aggregate Unpaid Balance of Eligible Receivables, 5%.
"Special Obligor" means, at any time, the two Tier-5 Obligors that owe
the highest aggregate Unpaid Balances of Receivables and are designated in the
most recent Monthly Report as "Special Obligors"; provided that in the case of
any Obligor (other than Westinghouse Electric Corp.), the Approval Condition
shall have been satisfied with request to such designation.
"Specified Rating Agency" means S&P.
"Stated Amount" means as to any Certificate, the maximum principal
amount that may be required to be funded by the Holder of such Certificate.
"Structured Lender" shall mean Falcon Asset Securitization Corporation,
Alpine Securitization Corp. and any other Holder of a Certificate (x) whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and (y) which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement similar to that set forth in Section 13.9 of the
Pooling Agreement in order to maintain such rating.
"Subordinated Class" means each of Class B and each class of any other
Series in Group I that is identified in its Supplement as a Subordinated Class.
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"Support Bank" shall mean any bank or other financial institution
extending or having a commitment to extend funds to or for the account of any
Structured lender (including by agreement to purchase an assignment of, or
participation in, the Certificate held by such Person) under a liquidity or
credit support agreement which relates to the Certificate purchased by such
Structured lender.
"Third Step Excess" is defined in Section 4.10.
"Third Step Residual" is defined in Section 4.10.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper
rating from the Specified Rating Agency of at least "A-1+" (or its equivalent)
or (b) a senior actual or implied debt rating from the Specified Rating Agency
of at least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-1 Obligor) that
has (a) a commercial paper rating from the Specified Rating Agency of at least
"A-1" (or its equivalent) or (b) a senior actual or implied debt rating from the
Specified Rating Agency of at least "A+"(or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a
Tier-2 Obligor) that has (a) a commercial paper rating from the Specified Rating
Agency of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Specified Rating Agency of at least "BBB+" (or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a
Tier-2 Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from
the Specified Rating Agency of at least "A-3" (or its equivalent) or (b) a
senior actual or implied debt rating from the Specified Rating Agency of at
least "BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a
Tier-2 Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Total Dollar Limit" is defined in Section 4.10.
"Total Foreign Concentration Excess" is defined in Section 4.10.
"Tranche" means each of the ABR Tranche and each Eurodollar Tranche.
"Transferor Indemnified Losses" is defined in Section 7.3.
"Transferor Indemnified Party" is defined in Section 7.3.
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"Transferor Payment Percentage" means, on any Business Day, the
difference of 100% minus the Investor Allocation Percentage on that Business
Day.
"Unapplied Cash" means, on any Business Day, available funds received
in the Master Collection Account and reflected in the Daily Report for that
Business Day that have not been applied as Collections on a particular
Receivable on or prior to the time as of which that Daily Report is prepared.
"Unfunded Carrying Cost Receivables Reserve" means, on any Business Day
falling in a Group Amortization Period, the difference (but not less than zero)
of (a) the Carrying Cost Receivables Reserve as of the Group Amortization
Calculation Date, minus (b) the aggregate Collections deposited into the
Carrying Cost Account during the portion of the Group Amortization Period up to
and including that Business Day.
"Unmatured Early Amortization Event" means an event that, with the
giving of notice or lapse of time (or both) will constitute an Early
Amortization Event.
SECTION 1.2 Modification Condition. (a) For so long as the Series
1996-1 Certificates remain outstanding, for purposes of the Transaction
Documents the definition of the term "Modification Condition" shall be as
follows:
"Modification Condition" means, with respect to any action,
that (i) each Rating Agency has confirmed in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Purchased Interest that was rated by such Rating
Agency, and (ii) if any Series or Purchased Interest has not been
rated, the Required Series Holders for that Series or the Agent for
such Purchased Interest (as the case may be) shall have consented in
writing to such action.
(b) For so long as the Series 1996-1 Certificates remain outstanding,
for purposes of the Transaction Documents the term "Required Investors" shall be
as follows:
"Required Investors" means the Required Series Holders for
each Series and the Agent for each Purchased Interest."
SECTION 1.3 Incorporation of Terms. The terms of the Pooling Agreement
are incorporated in this Supplement as if set forth in full herein. As
supplemented by this Supplement, the Pooling Agreement is in all respects
ratified and confirmed and both together shall be read, taken and construed as
one and the same agreement. If the terms of this Supplement and the terms of the
Pooling Agreement conflict, the terms of this Supplement shall control with
respect to the Series 1996-1 Certificates.
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ARTICLE II DESIGNATION
SECTION 2.1 Designation. There is hereby created a Series to be known
as the "Series 1996-1 Certificates," consisting of two classes: the $47,500,000
Variable Rate Class A, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class A Certificates), which shall be a Senior Class; and the $7,500,000
Variable Rate Class B, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class B Certificates"), which shall be a Subordinated Class. Subject to the
conditions set forth in Article III, Trustee shall authenticate and deliver the
Class A Certificates and the Class B Certificates, to or upon the order of
Transferor in the aggregate principal amount indicated for each above.
Notwithstanding the terms of Section 6.1 of the Pooling Agreement, the Class A
Certificates will be issued in minimum denominations of $5,000,000 and in
integral multiples of $1,000,000 and the Class B Certificates will be issued in
minimum denominations of $2,500,000 and in integral multiples of $500,000.
SECTION 2.2 Group I. The Series 1996-1 Certificates are included in
Group I. Consequently, the Series 1996-1 Certificates will share a single Series
Collection Allocation Percentage (determined using the Required Receivables as
defined herein), a single Series Loss Allocation Percentage (determined using
the Invested Amount as defined herein), and if a Group Amortization Period
occurs, a single Available Subordinated Amount (determined as provided herein)
with the other Series in Group I. Collections, Investor Allocable Dilution,
Investor Allocable Loss Amounts and Investor Write-Offs will be allocated
collectively to Group I in accordance with such shared Series Collection
Allocation Percentage and Series Loss Allocation Percentage, as applicable, and
will be further allocated among Series included in Group I (and the various
Senior Classes and Subordinated Classes) in accordance with this Supplement. The
Servicing Fee with respect to all Series in Group I shall be paid in accordance
with this Supplement and shall be determined in accordance with Section 3.4 of
the Pooling Agreement using the collective Series Collection Allocation
Percentage for Group I. The Series in Group I share a collective Series
Interest, the amount of which equals the shared Series Collection Allocation
Percentage for Group I.
Subsection 12.1 (b) of the Pooling Agreement shall not apply to any
Series in Group I and shall be superseded for all such Series by Section 7.2 of
this Supplement. All terms of this Supplement applying generally to Group I
shall survive the repayment in full or other termination of the Series 1996-1
Certificates until such time as all Series in Group I have been repaid in full
and any revolving purchase commitments made by the Holders relating to
Certificates in any such Series have been terminated (or, if earlier, on the
Final Scheduled Payment Date for the last Series in Group I). Such terms of
general applicability include all of Article IV (excluding Sections 4.1 and
4.9), Article V, Section 7.2 and Article VIII and all related definitions.
SECTION 2.3 Investor Ownership Percentage. The Investor Certificates in
Group I represent an undivided interest in the portion of the Transferred Assets
allocable to Group I,
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<PAGE> 375
which undivided interest (expressed as a percentage) shall equal the Investor
Ownership Percentage. The amount payable on any day by the Holders of such
Investor Certificates for the acquisition of such undivided interest (the
"Acquisition Amount") shall equal the Group Invested Amount plus the Deferred
Portion (it being understood that the Acquisition Amount may vary from day to
day); provided that Acquisition Amount shall be fixed as of the Group
Amortization Calculation Date.
The Deferred Portion of the Acquisition Amount shall be subject to a
holdback and shall be paid to the extent (and only to the extent) Daily Group
Collections are not required to pay amounts described in clauses first through
fourth of Section 4.3 or Section 4.4 (as applicable), it being understood that
the Holders of Series 1996-1 Certificates shall not be liable to pay any portion
of the Deferred Portion not paid out of Daily Series Collections.
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS
SECTION 3.1 Conditions to Issuance. Trustee will not authenticate the
Series 1996-1 Certificates unless all conditions to the issuance of the Series
1996-1 Certificates under Section 6.10 of the Pooling Agreement shall have been
satisfied or waived by the Purchasers.
SECTION 3.2 Use of Proceeds. The proceeds from the issuance of the
Series 1996-1 Certificates shall be used first to repay the Series 1995-1
Certificates in full and second for general corporate purposes of Transferor
(including, but not limited to, purchasing Receivables, repaying indebtedness
and/or making distributions to Howmet).
ARTICLE IV PAYMENTS AND ALLOCATIONS
SECTION 4.1 Interest; Additional Amounts.
(a) Subject to Section 4.1 of the Class A Certificate Purchase
Agreement, Transferor may from time to time allocate the outstanding
principal amount under the Class A Certificates to an ABR Tranche and
up to four Eurodollar Tranches. Subject to Section 4.1 of the Class B
Certificate Purchase Agreement, Transferor may from time to time
allocate the outstanding principal amount under the Class B
Certificates to an ABR Tranche and a Eurodollar Tranche. Interest on an
ABR Tranche shall be payable on each Distribution Date, and interest on
a Eurodollar Tranche shall be payable at the end of the applicable
Interest Period, except that interest on the amount of any principal
repaid on any other date shall be payable on the date of the repayment.
If any such day is not a Business Day, interest shall instead be due on
the next Business Day (or, if the next Business Day falls in the next
calendar month, then on the next preceding Business Day).
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(b) Interest on a Eurodollar Tranche shall accrue during any
Interest Period at a rate per annum equal to the Reserve Adjusted
Eurodollar Rate plus the applicable Certificate Spread and shall be
calculated on the basis of actual days over a year of 360 days.
(c) Interest on an ABR Tranche shall accrue at the Alternate
Base Rate in effect from time to time plus the applicable Certificate
Spread and shall be calculated on the basis of actual days over a year
of 365 or 366 days, as the case may be.
(d) Interest with respect to the Series 1996-1 Certificates
due but not paid on any Distribution Date or the last day of an
Interest Period, as the case may be, will bear additional interest on
the amount at 2% per annum above the Alternate Base Rate to the extent
permitted by law, which additional interest shall be due on demand.
(e) Additional Amounts shall also be payable with respect to
the Series 1996-1 Certificates as specified in the Certificate Purchase
Agreements and to the extent (but only to the extent) that funds become
available for payment of such Additional Amounts in accordance with
Sections 4.2, 4.3 and 4.4.
SECTION 4.2 Daily Calculations and Group Allocations. On each Business
Day, Servicer shall calculate the Series Collection Allocation Percentage for
Group I (and, if necessary for that calculation, the Required Receivables), the
Current Carrying Costs and, prior to the Group Amortization Period, the Base
Amount. On each Business Day prior to the Group Amortization Period, Servicer
shall also determine whether the Net Invested Amount is greater than, equal to
or less than the Base Amount.
Pursuant to Section 4.3 of the Pooling Agreement, Servicer shall
allocate the Series Collection Allocation Percentage of available funds received
in the Master Collection Account (other than any Shared Investor Collections)
since the preceding Business Day's allocation to the shared Series Interest of
Group I. The portion of funds so allocated, together with any funds released
from the Equalization Account or any Principal Funding Account in accordance
with Section 4.5 on that Business Day, are called the "Daily Group Collections."
SECTION 4.3 Allocations of Daily Group Collections (Other Than in a
Group Amortization Period). On each Business Day (other than an Exempt Holiday
or a Business Day falling in a Group Amortization Period or after the Fully
Funded Date), Servicer shall allocate the Daily Group Collections (or, if less,
the aggregate amount of Daily Group Collections required to fund the items
described in priorities first through fourth below) to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account until the amount allocated
to the Carrying Cost Account equals the Current Carrying Costs;
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<PAGE> 377
second, if the Net Invested Amount is greater than the Base
Amount, to the Equalization Account in an amount sufficient to reduce
the Net Invested Amount to an amount equal to the Base Amount; provided
that during a Series Amortization Period in respect of any Series,
funds that would otherwise be required to be deposited in the
Equalization Account pursuant to this priority second shall instead be
deposited in the sub-account of the Principal Funding Account for such
Series (and, if there is more than one such Series, shall be divided
ratably between such sub-accounts, on the basis of the respective
Principal Deposit Amounts of each such Series), but the amount
deposited in any such sub-account shall in no event cause the balance
therein to exceed the applicable Principal Deposit Amount (and any
remaining amount not deposited in any sub-account of the Principal
Funding Account because of this limitation shall be shared among the
other sub-accounts for such Series in Group I (ratably as described
above), in each case to the extent that it will not cause the balance
therein to exceed the applicable Principal Deposit Amount, and any
remaining amount shall be deposited in the Equalization Account); and
provided further that no deposit shall be made to a sub-account of the
Principal Funding Account pursuant to the immediately preceding proviso
(and such proviso shall not apply notwithstanding the existence of a
Series Amortization Period) unless, after giving effect thereto, the
Net Invested Amount would equal the Base Amount;
third, during any Series Amortization Period, to the
applicable sub-account of the Principal Funding Account until the
amount on deposit in that sub-account equals the applicable Principal
Deposit Amount; provided that
(i) the amount allocated to all Investor Certificates
in the aggregate pursuant to this priority third on any
Business Day shall not exceed the product of (x) the Investor
Ownership Percentage, multiplied by (y) the excess of the
Dally Group Collections over the amounts allocated on that
Business Day pursuant to priorities first and second, and
(ii) if more than one Series in Group I is in a
Series Amortization Period, the amount so allocated shall be
divided ratably between such subaccounts, on the basis of the
respective Principal Deposit Amounts of each such Series, but
the amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the applicable Principal
Deposit Amount for any such Series (and any remaining amount
not deposited in any sub-account of the Principal Funding
Account because of this limitation shall be shared among the
other sub-accounts for Series in Group I (ratably as described
above), in each case to the extent that it will not cause the
balance therein to exceed the Principal Deposit Amount for any
such other Series); and
fourth, to hold in the Master Collection Account the amount,
if any, necessary to pay on the next Distribution Date all Additional
Amounts payable to the Holders.
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On such Business Day, Servicer shall allocate and pay the remainder of
Daily Group Collections to make current and/or deferred transfer payments to
Transferor in respect of the Transferor Certificate, provided that Transferor
may, from time to time, direct Servicer to direct Trustee to hold all or part of
the funds to be paid pursuant to this sentence in the Master Collection Account
to be applied as Daily Group Collections on the following Business Day.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in priorities second through fourth, and in the
preceding paragraph, in the order of priority set forth therein.
In addition, if, on any day, funds on deposit in the Master Collection
Account and available (as described in the first paragraph of this Section) for
allocation under priority fourth are less than the amount of the obligations
described therein, then the available Collections shall be allocated by Servicer
to the holders of such obligations pro rata according to the respective amounts
of such obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor as deferred transfer payments.
SECTION 4.4 Allocations of Daily Group Collections During a Group
Amortization Period. On each Business Day (other than an Exempt Holiday) falling
in a Group Amortization Period and prior to or on the Fully Funded Date,
Servicer shall allocate the Daily Group Collections to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account to the extent that the
balance therein is less than the amount of Current Carrying Costs
(other than any Servicing Fee payable to any Howmet Person) payable on
the Distribution Date relating to the Calculation Period during which
such Business Day falls;
second, to the Principal Funding Account and to Transferor
(or, prior to the Holdback Account Termination Date, to the Holdback
Account) in the following amounts:
(a) the amount to be transferred to the Principal
Funding Account shall equal the product of (i) the Investor
Allocation Percentage, multiplied by (ii) the excess of the
Daily Group Collections over the amount allocated on that
Business Day pursuant to priority first, provided that the
aggregate amount so deposited shall in no event exceed the
lesser of (x) the Group Invested Amount
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<PAGE> 379
and (y) the Investor Ownership Percentage times the aggregate
Unpaid Balance of Receivables as of the Group Amortization
Calculation Date; and
(b) the amount to be transferred to Transferor (or,
prior to the Holdback Account Termination Date, to the
Holdback Account) shall equal the product of (i) the
Transferor Payment Percentage, multiplied by (ii) the excess
of the Daily Group Collections over the amount allocated on
that Business Day pursuant to priority first;
the amount allocated to the Principal Funding Account pursuant to
clause (a) of this priority second shall be divided among the
sub-accounts for each Series in Group I as follows:
(1) first such amount shall be divided among the
sub-accounts for each Series that has an outstanding Senior
Class, on the basis of the respective Principal Deposit
Amounts of each such Senior Class, but the amount deposited in
any such sub-account shall in no event cause the balance
therein to exceed the Principal Deposit Amount of any such
Senior Class; and
(2) any remaining amount shall be divided among the
sub-accounts for each Series that has an outstanding
Subordinated Class, on the basis of the respective Principal
Deposit Amounts of each such Subordinated Class, but the
amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the Principal Deposit
Amount of any such Subordinated Class;
third, to hold in the Master Collection Account the amount
necessary to pay on the next Distribution Date all Additional Amounts
payable to the Holders;
fourth, to pay any Servicing Fee payable to any Howmet Person
on the Distribution Date relating to the Calculation Period during
which such Business Day falls; and
fifth, the balance to Transferor, provided that prior to the
Holdback Account Termination Date, amounts payable to Transferor
pursuant to this priority fifth shall be deposited into the Holdback
Account and held as provided below.
The "Holdback Account Termination Date" shall be the earlier to occur
of (i) the date that falls twelve months alter the beginning of the Group
Amortization Period and (ii) the Fully Funded Date. If at any time prior to the
Holdback Account Termination Date, the amount of funds on deposit in the
Holdback Account exceeds the difference of (1) the Investor Repayment Amount
minus (2) the amount of funds then held in the Carrying Cost Account and the
Principal Funding Account that are available to pay the Investor Repayment
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Amount, then the amount of such excess funds shall be released from the Holdback
Account and paid to Transferor as deferred transfer payments. On each Business
Day in a Group Amortization Period prior to the Holdback Account Termination
Date, Servicer shall calculate the aggregate Investor Allocable Dilution for the
Group Amortization Period as to which no Series Allocable Dilution Adjustments
have been received. Such amount (or, if less, the aggregate amount of funds in
the Holdback Account) shall be transferred to the Master Collection Account and
applied to the items listed in the first paragraph of this Section as priorities
first through fifth, in that order (except that no such funds shall be allocated
to Transferor or the Holdback Account pursuant to priority second and the amount
allocable to the Principal Funding Account shall not be limited by application
of the Investor Allocation Percentage). On the Holdback Account Termination
Date, all remaining funds in the Holdback Account shall be paid to Transferor.
If, on any day, funds on deposit in the Master Collection Account and
available (as described in the first paragraph of this Section, for allocation
under priority third are less than the amount of the obligations described
therein, then the available Collections shall be allocated by Servicer to the
holders of such obligations pro rata according to the respective amounts of such
obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor in respect of the Transferor
Certificate as deferred transfer payments.
SECTION 4.5 Withdrawals from the Equalization Account and Principal
Funding Account. On any Business Day (other than an Exempt Holiday) prior to the
Group Amortization Period on which no Early Amortization Event or Unmatured
Early Amortization Event has occurred with respect to any Series in Group I,
Servicer may instruct Trustee in writing to withdraw funds from the Equalization
Account and apply such funds as Daily Group Collections, so long as the Net
Invested Amount would not exceed the Base Amount after giving effect to such
transfer and application. On the first day of any Series Amortization Period or
Group Amortization Period, Servicer shall instruct Trustee to withdraw the
entire balance in the Equalization Account and apply the same as Daily Group
Collections on that day. On the first day of the Group Amortization Period,
Servicer shall instruct Trustee likewise to withdraw the entire balance in the
Principal Funding Account and apply the same as Daily Group Collections on that
day.
SECTION 4.6 Available Subordinated Amount. (a) If a Group Amortization
Period begins, Servicer shall promptly calculate the Available Subordinated
Amount as of the Group Amortization Calculation Date and report such amount in
the Daily Report for the first day in the Group Amortization Period. Servicer
shall also calculate the Available Subordinated Amount as of each Cut-Off Date
falling in the Group Amortization Period, such calculation to be reflected in
the related Monthly Report.
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(b) The Available Subordinated Amount as of the Group Amortization
Calculation Date shall equal the product of (x) the Investor Allocation
Percentage, multiplied by (y) the result of:
(i) the product of the Unpaid Balance of Receivables held by
Trustee at the opening of business on the Group Amortization
Calculation Date, multiplied by the Series Collection Allocation
Percentage on that date; minus
(ii) the sum of (A) the lesser of the Base Amount and the Net
Invested Amount and (B) the Carrying Cost Receivables Reserve at the
opening of business on the Group Amortization Calculation Date.
(c) The Available Subordinated Amount, as of any Cut-Off Date in the
Group Amortization Period, shall equal the result of:
(i) the Available Subordinated Amount as of the preceding
Cut-Off Date (or as of the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization
Period); minus
(ii) the Investor Allocable Loss Amount with respect to the
ASA Measuring Period ending on that Cut-Off Date; minus
(iii) any Investor Allocable Dilution with respect to the ASA
Measuring Period ending on that Cut-Off Date; plus
(iv) subject to Sections 4.7 and 4.8, the Investor Allocable
Recoveries and Investor Allocable Dilution Adjustments with respect to
the ASA Measuring Period ending on that Cut-Off Date.
(d) Notwithstanding the foregoing, in no event shall the Available
Subordinated Amount at any time be less than zero or greater than the initial
Available Subordinated Amount calculated pursuant to subsection (b).
SECTION 4.7 Write-Offs and Recoveries. (a) In each Monthly Report
required to be delivered during the Group Amortization Period, Servicer shall
calculate the Investor WriteOffs and the Investor Allocable Recoveries for the
most recently ended ASA Measuring Period.
(b) If the Investor Write-Offs calculated in any Monthly Report exceed
zero, the Group Invested Amount shall be reduced by the amount of the Investor
Write-Offs with effect on the related Distribution Date. Any such reduction
shall be allocated to the Class Invested Amounts of all outstanding Subordinated
Classes (ratably in accordance with such Class Invested Amounts) until all such
Class Invested Amounts have been reduced to zero.
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Any remaining reduction shall be allocated to the Class Invested Amounts of all
outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts).
(c) If the Group Invested Amount has been reduced on account of any
Investor Write-Offs, then any Investor Allocable Recoveries with respect to any
Calculation Period ending after the reduction takes place shall be applied to
reinstate the Group Invested Amount, to the extent of such prior reductions that
have not previously been reinstated, with effect on the related Distribution
Date. Any such reinstatement shall be allocated to the Class Invested Amounts of
all outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts) until all prior reductions to such Class Invested Amounts on account of
Investor Write-Offs have been reinstated. Any remaining reinstatement shall be
allocated to the Class Invested Amounts of all outstanding Subordinated Classes
(ratably in accordance with such Class Invested Amounts).
(d) If Investor Allocable Recoveries are applied pursuant to subsection
(c) to reinstate the Group Invested Amount on any Distribution Date, then
Investor Allocable Recoveries shall be applied to increase the Available
Subordinated Amount on the same Distribution Date only to the extent of the
excess, if any, of the Investor Allocable Recoveries, minus the amount of
Investor Allocable Recoveries so applied.
(e) The outstanding principal amount of any Senior Class or
Subordinated Class shall be reduced by any reduction, and increased by any
reinstatement, of its Class Invested Amount pursuant to this Section 4.7 or
Section 4.8, in the amount of such reduction or reinstatement.
SECTION 4.8 Certain Dilution in a Group Amortization Period. (a) In
each Monthly Report required to be delivered during the Group Amortization
Period, Servicer shall calculate the Investor Allocable Dilution and the Series
Allocable Dilution Adjustments for the most recently ended ASA Measuring Period.
(b) If the Investor Allocable Dilution calculated in any Monthly Report
is greater than zero, and there are funds in the Holdback Account, then those
funds (up to an amount equal to the amount of the Investor Allocable Dilution)
shall be allocated (i) first, in accordance with priority first of the first
paragraph of Section 4.4, (ii) second, to the Principal Funding Account (in
accordance with clauses (1) and (2) of priority second of the first paragraph of
Section 4.4) until the Net Invested Amount is reduced to zero and (iii) third,
in accordance with priorities third through fifth of the first paragraph of
Section 4.4, in that priority.
(c) If the Available Subordinated Amount or the Group Invested Amount
has been reduced on account of any Investor Allocable Dilution, then (i) any
Series Allocable Dilution Adjustments with respect to any Calculation Period
ending after the reduction takes place and (ii) any additional funds deposited
in the Holdback Account (the "Investor Allocable Dilution
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Adjustments") shall be allocated (x) first, to reinstate the Group Invested
Amount (with the same allocation among Senior Classes and Subordinated Classes
as is described in subsection 4.7(c)), and (y) second, to reinstate the
Available Subordinated Amount, m each case to the extent not previously
reinstated pursuant to Section 4.7 or this Section 4.8. Any funds so allocated
on any day shall be allocated (i) first, in accordance with priority first of
the first paragraph of Section 4.4, (ii) second, to the Principal Funding
Account (in accordance with clauses (1) and (2) of priority second of the first
paragraph of Section 4.4) until the Net Invested Amount is reduced to zero and
(iii) third, in accordance with priorities third through fifth of the first
paragraph of Section 4.4, in that priority.
SECTION 4.9 Optional Early Pay Out. (a) On any Business Day falling in
the Revolving Period, Transferor may provide notice to Trustee of its intention
to accumulate funds to cause the Series 1996-1 Certificates to be prepaid in
full or (as provided in the next sentence) in part. There may be a single
partial prepayment of Class A Certificates, provided that (i) such prepayment
(in the aggregate for all Class A Certificates) shall not exceed $10,000,000,
(ii) such prepayment shall be made after the first anniversary of the date
hereof, and (iii) the amount prepaid shall reflect a reduction in the Unpaid
Balance of Receivables due to the sale of a Seller (or all or substantially all
of its assets) or the 1055 of a major customer by the Sellers. When amounts
sufficient for such prepayment have been accumulated, Transferor may provide
notice to Trustee (the "Prepayment Notice") of the date, at least three business
days after the date of such Prepayment Notice, when the prepayment shall occur.
Trustee shall notify the affected Holders promptly upon receiving such
Prepayment Notice. In the event of any such prepayment of the Series 1996-1
Certificates occurring at any time during the one-year period commencing on the
date hereof, the Holders of such Series 1996-1 Certificates shall be entitled to
receive a Prepayment Premium. Except as expressly provided in this subsection
4.9(a), the Series 1996-1 Certificates may not be partially prepaid. The Series
1996-1 Certificates, once prepaid, may not be reinstated.
(b) Commencing upon the date specified in the notice to the Trustee
referred to in subsection (a) (until an amount equal to the amount to be
prepaid, plus the related Prepayment Premium, if any, and other applicable
Additional Amounts have been accumulated), amounts shall be set aside for
purposes of that prepayment in accordance with Section 4.3, except that no such
amounts shall be set aside if Transferor notifies Trustee that Transferor
intends to cause the Series 1996-1 Certificates to be prepaid by causing the
portion of the Series Interest for Group I attributable to the Series 1996-1
Certificates to be conveyed to one or more Persons (who may be the Holders of a
new Series issued substantially contemporaneously with such prepayment) for a
cash purchase price in an amount equal to the sum of (i) the outstanding
principal amount of the Series 1996-1 Certificates, plus (ii) to the extent not
available in the Carrying Cost Account, accrued and unpaid interest on the
Series 1996-1 Certificates through the day of such prepayment (the "Refinancing
Date"), plus (iii) to the extent not available from funds set aside pursuant to
priority fourth of Section 4.3, the Additional Amounts, if any, owed with
respect to the
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Series 1996-1 Certificates. No such conveyance shall, however, be permitted if
as a result thereof, Transferor, Howmet or any of their Affiliates would acquire
such portion of the Series Interest or the underlying Receivables. In the case
of any such conveyance, the purchase price shall be deposited in the Principal
Funding Account and shall be distributed to the Agent, for further distribution
to the Holders, on the Refinancing Date in accordance with the terms of Section
5.2. Upon deposit of the purchase price in the Principal Funding Account, the
Series 1996-1 Holders shall have no further rights with respect to the
Transferred Assets.
(c) Any prepayment pursuant to this Section 4.9 shall be made on the
later to occur of (i) the date specified in the notice of prepayment and (ii)
the date on which sufficient funds (including funds to cover any related
Additional Amounts) have been accumulated pursuant to Section 4.3 or 4.4 or
obtained by a conveyance described in subsection 4.9(b).
(d) The Class B Certificates may not be prepaid until the Class A
Certificates have been repaid in full. In addition no Class B Certificates (or
Certificates in any other Subordinated Class) may be prepaid if any Senior Class
is outstanding and, alter giving effect to that payment, the Net Invested Amount
would exceed the Base Amount.
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations.
(a) Notwithstanding clause (a) of the definition of Eligible Obligor, Persons
that are not Domestic Persons (such Persons being "Foreign Obligors") may be
Eligible Obligors.
(b) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) whether the members of the Concentration Unit are Domestic
Persons, Category One Obligors, Category Two Obligors or Category Three
Obligors.
(ii) such Concentration Unit's Basic Concentration Limit times
the Adjusted Eligible Receivables for such day (such product being such
Concentration Unit's "Total Dollar Limit").
(iii) the aggregate Unpaid Balance of Eligible Receivables
owed by Domestic Persons in such Concentration Unit.
(iv) an amount (whether positive or negative) equal to (A) the
Total Dollar Limit for such Concentration Unit minus (B) the amount
determined pursuant to clause (iii). Any such positive sum is the
"First Step Residual." The absolute value of any such negative sum is
the "First Step Excess."
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(v) an amount (the "Category One Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category One
Obligors in such Concentration Unit.
(vi) an amount equal to 4% of the Adjusted Eligible
Receivables on such day.
(vii) the lesser of (A) the First Step Residual (or, if there
is no First Step Residual, zero) and (B) the amount determined pursuant
to clause (vi).
(viii) an amount (the "Second Step Excess") equal to (A) the
Category One Balance minus (B) the amount determined pursuant to clause
(vii); provided that if such sum is a negative number, the Second Step
Excess will be zero.
(ix) an amount (the "Second Step Residual") equal to (A) the
First Step Residual minus (B) the Category One Balance plus (C) the
Second Step Excess; provided that if such sum is a negative number, the
Second Step Residual will be zero.
(x) an amount (the "Category Two Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Two
Obligors in such Concentration Unit.
(xi) an amount equal to 2% of Adjusted Eligible Receivables on
such day.
(xii) the lesser of (A) the Second Step Residual and (B) the
amount determined pursuant to clause (xi).
(xiii) an amount (the "Third Step Excess") equal to (A) the
Category Two Balance minus (B) the amount determined pursuant to clause
(xii); provided that if such sum is a negative number, the Third Step
Excess will be zero.
(xiv) an amount (the "Third Step Residual") equal to (A) the
Second Step Residual minus (B) the Category Two Balance plus (C) the
Third Step Excess; provided that if such sum is a negative number, the
ThIrd Step Residual will be zero.
(xv) an amount (the "Category Three Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Three
Obligors in such Concentration Unit.
(xvi) the lesser of (A) the Third Step Residual and (B) the
amount determined pursuant to clause (xi).
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(xvii) an amount (the "Fourth Step Excess") equal to (A) the
Category Three Balance minus (B) the amount determined pursuant to
clause (xvi); provided that if such sum is a negative number, the
Fourth Step Excess will be zero.
(xviii) the sum of the First Step Excess, the Second Step
Excess, the Third Step Excess and the Fourth Step Excess, such sum
being the "Concentration Unit Excess Concentration" for such
Concentration Unit.
(c) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) an amount (the "Category One Eligibles") equal to (A) the
Category One Balance for such Concentration Unit minus (B) the Second
Step Excess (if any) for such Concentration Unit; provided that if such
sum is a negative number, the Category One Eligibles will be zero.
(ii) an amount (the "Category Two Eligibles") equal to (A) the
Category Two Balance minus (B) the Third Step Excess (if any) for such
Concentration Unit; provided that if such sum is a negative number, the
Category Two Eligibles will be zero.
(iii) an amount (the "Category Three Eligibles") equal to (A)
the Category Three Balance minus (B) the Fourth Step Excess for such
Concentration Unit; provided that if such sum is a negative number, the
Category Three Eligibles will be zero.
(d) On each Business Day, Servicer shall determine:
(i) the sum of the Category One Eligibles for all
Concentration Units.
(ii) the sum of the Category Two Eligibles for all
Concentration Units.
(iii) the sum of the Category Three Eligibles for all
Concentration Units.
(iv) an amount (the "Category Two Excess Concentration") equal
to (A) the amount determined pursuant to clause (ii) minus (B) 10% of
the Adjusted Eligible Receivables on such day; provided that if such
sum is a negative number, the Category Two Excess Concentration shall
be zero.
(v) an amount (the "Category Three Excess Concentration")
equal to (A) the amount determined pursuant to clause (iii) minus (B)
5% of the Adjusted Eligible Receivables on such day; provided that if
such sum is a negative number the Category Three Excess Concentrations
shall be zero.
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(vi) the sum of the amounts in clauses (i), (ii) and (iii).
(vii) the sum of the Category Two Excess Concentration and the
Category Three Excess Concentration.
(viii) the sum of (A) the amount determined pursuant to clause
(vi) minus the amount determined pursuant to clause (vii).
(ix) an amount (the "Total Foreign Concentration Excess")
equal to (A) the amount determined pursuant to clause (viii), minus (B)
35% of the Adjusted Eligible Receivables; provided that if such sum is
a negative number, the Total Foreign Concentration Excess shall be
zero.
(e) With respect to (i) all Category One Obligors or Category Two
Obligors, and (ii) each Category Three Obligor that owes Eligible Receivables in
excess of $1,000,000 or that is located in a jurisdiction where Obligors owe an
aggregate amount of Eligible Receivables in excess of $2,000,000, Servicer and
Transferor shall, and shall cause the Sellers to, take all actions reasonably
necessary to perfect and/or protect Transferor's and/or the Trustee's interests
in such Receivables under the laws of the jurisdiction in which such Obligors
are located.
(f) Within the four weeks following each anniversary of the Closing
Date, Servicer shall (i) cause counsel satisfactory to the Required Purchasers,
at the expense of Howmet, to contact local counsel in each jurisdiction in which
Obligors referred to in clause (e) are located, for purposes of determining
whether there has been a change in the laws of such jurisdiction regarding the
assignment of Receivables and (ii) take such actions as are required under
Section 4.10(e) with respect to any such change. Nothing in this Section 4.10(f)
shall limit the obligations of Servicer and Transferor under Section 4.10(e) at
any other time.
(g) Contemporaneously with the delivery of each Monthly Report,
Servicer shall provide Trustee with a certificate, signed by an appropriate
officer, showing (i) any Obligor that is not a Domestic Person and either owes
Receivables in an aggregate amount exceeding $1,000,000 as of the most recent
Cut-Off Date or is a party to a contract with a Seller expiring more than one
year after such Cut-Off Date, and (ii) any jurisdiction outside the United
States in which Obligors owe an aggregate amount of Receivables exceeding
$2,000,000, determined as of such Cut-Off Date.
(h) All documents executed and delivered to, or for the benefit of,
Trustee pursuant to this Section shall be Transaction Documents for all purposes
(including for purposes of Section 6.1).
SECTION 4.11 Tax Opinion. If any Tax Opinion is required to be
delivered in connection with the Series 1996-1 Certificates, the term "Tax
Opinion" shall have the meaning specified below:
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"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax and applicable state income and
franchise tax purposes, (a) such action will not cause the Investor Certificates
of Series 1996-1 debt or partnership interests, (b) such action will not cause
the Trust to be treated as other than an association (or publicly traded
partnership) taxable as a corporation, (c) such action should not be treated as
a taxable event to any Series 1996-1 Investor Certificateholder or Certificate
Owner.
SECTION 4.12 Reset of Benchmark Percentages and Special Concentration
Limits. Transferor may from time to time (i) increase or decrease any Benchmark
Percentage used in the definition of Concentration Limit, (ii) change the
percentages specified in the definition of Special Concentration Limit with
respect to the two Tier-5 Obligors that owe the highest aggregate Unpaid
Balances of Eligible Receivables, or (iii) designate an additional Obligor as a
"Special Obligor," in each case (other than the designation of Westinghouse
Electric Corp. as a Special Obligor) if the Approval Condition is satisfied. It
is understood and agreed that any such changes in the Benchmark Percentages or
the Special Concentration Limits or the addition of a Special Obligor may change
the calculation of the Class A Concentration Factor, the Class B Concentration
Factor, the Class A Minimum Reserve Ratio and the Class B Minimum Reserve Ratio.
ARTICLE V DISTRIBUTIONS AND REPORTS
SECTION 5.1 Distributions. On each Distribution Date and, with respect
to clause (b), on each Principal Payment Date, other than a Distribution Date
that is also a Refinancing Date, Trustee shall, in accordance with instructions
set out in the applicable Daily Report, distribute to the Holders, the following
amounts:
(a) accrued and unpaid interest on the ABR Tranches and any
additional interest payable to the Series 1996-1 Holders pursuant to
Section 4.1 or to the Holders of any other Series in Group I, to the
extent funds are available for such payment in the Carrying Cost
Account (and in the event of any shortfall, such interest shall be paid
first to each Senior Class, ratably in accordance with the total amount
of interest owed to each Senior Class, and second to each Subordinated
Class, ratably in accordance with the total amount of interest owed to
each Subordinated Class);
(b) on each Principal Payment Date, all funds deposited in
each sub-account of the Principal Funding Account on or prior to the
most recent Cut-Off Date shall be distributed in reduction of the
related Series Invested Amounts; all such amounts on deposit in the
Series 1996-1 sub-account of the Principal Funding Account shall be
paid to the Holders of Class A Certificates until they have been paid
or provided for in full before any such amounts are paid to the Holders
of Class B Certificates, and no such amounts shall be paid to the
Holders of any Subordinated Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Invested
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Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day);
(c) if, on the Expected Final Payment Date or any Distribution
Date falling in a Group Amortization Period, the funds on deposit in
the Carrying Cost Account (less any Servicing Fee payable on that day
to anyone other than a Howmet Person) will be equal to or greater than
the Invested Amount (after giving effect to all distributions required
by subsections (a) and (b)), then an amount equal to such remaining
Invested Amount shall be withdrawn from the Carrying Cost Account and
distributed in reduction of the Invested Amount: and
(d) any Additional Amounts payable with respect to
Certificates in any Series in Group I to the extent that funds have
been allocated for those Additional Amounts pursuant to priority fourth
of Section 4.3 or priority third of Section 4.4 (and in the event of
any shortfall, Additional Amounts shall be paid first to each Senior
Class, ratably in accordance with the total Additional Amounts owed to
each Senior Class, and second to each Subordinated Class, ratably in
accordance with the total Additional Amounts owed to each Subordinated
Class).
On each Distribution Date, Trustee shall also, in accordance with
instructions set out in the applicable Daily Report, distribute the Servicing
Fee to the Servicer to the extent that funds are available for that purpose in
the Carrying Cost Account.
On each Interest Payment Date (other than any Distribution Date, which
shall be governed by subsection (a) above), Trustee shall, in accordance with
instructions set out in the applicable Daily Report, distribute interest payable
on that date to the Holders of any Series in Group I, to the extent funds are
available for such payment in the Carrying Cost Account (and in the event of any
shortfall, any such interest shall be paid first to each Senior Class, ratably
in accordance with the total amount of interest owed to each Senior Class, and
second to each Subordinated Class, ratably in accordance with the total amount
of interest owed to each Subordinated Class).
Any amounts payable to the Holders of Class A Certificates pursuant to
this Section shall be paid to the Agent, and the Agent shall distribute such
amounts to such Holders. Amounts payable to a Holder of Class B Certificates
pursuant to this Section shall be paid to such Holder.
SECTION 5.2 Special Distributions on the Refinancing Date. On the
Refinancing Date, Trustee shall, in accordance with instructions set out in the
applicable Daily Report, distribute to the Holders the following amounts:
(a) all interest accrued on the Certificates in any Series in
Group I through the Refinancing Date, to the extent funds are available
for such payment in the Carrying
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Cost Account or have been deposited in the Principal Funding Account
pursuant to Section 4.9;
(b) all funds deposited in the Principal Funding Account
pursuant to Section 4.9, provided that no such amounts shall be paid to
the Holders of the Class B Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Net Invested
Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day); and
(c) any Additional Amounts to the extent that funds for those
Additional Amounts have been allocated pursuant to priority fourth of
Section 4.3 or priority third of Section 4.4 or deposited in the
Principal Funding Account pursuant to Section 4.9.
Amounts payable to Holders of Class A Certificates pursuant to this
Section shall be paid to the Agent, and the Agent shall distribute such amounts
to such Holders. Amounts payable to a Holder of Class B Certificates pursuant to
this Section shall be paid to such Holder. Promptly following receipt of the
amounts payable to the Holders of Certificates pursuant to this Section, such
Holders shall tender such Certificates to the Trustee.
SECTION 5.3 Payments in Respect of Transferor Certificate. On each day
on which funds are allocated for this purpose pursuant to Sections 4.3 and 4.4
(and subject to the terms of Section 4.4 relating to the Holdback Account),
Trustee shall, in accordance with instructions set out in the applicable Dally
Report, distribute to Transferor, in respect of the Transferor Certificate, all
funds allocated for that purpose in accordance with those Sections. In addition,
after the Group Invested Amount has been repaid in full and all interest and
Additional Amounts owed to the Holders have been paid, any additional funds on
deposit in the Carrying Cost Account, the Equalization Account or the Principal
Funding Account shall similarly be paid to Transferor in respect of the
Transferor Certificate.
SECTION 5.4 Daily Reports and Monthly Reports. Each Dally Report and
Monthly Report shall be substantially in the applicable form set out in Exhibit
B or C or in such other form as may be required by any other Supplement relating
to a Series in Group I or otherwise satisfactory to Servicer and Trustee and
consistent with the terms of this Supplement, each such other Supplement and the
Pooling Agreement. Copies of each Monthly Report shall be provided free of
charge by the Trustee to purchasers of Series 1996-1 Certificates in connection
with the initial distribution thereof and may be obtained free of charge upon
request from the Trustee (and presentation of a confirmation evidencing the
purchase of such beneficial interest) by subsequent purchasers.
SECTION 5.5 Annual Tax Information. On or before February 15 of each
calendar year, beginning with calendar year 1997, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to each Person who at any time
during the preceding calendar year was
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a Holder the information for the preceding calendar year, or the applicable
portion thereof during which the Person was a Holder, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable such Holders to prepare their Federal income tax returns.
Servicer's obligations under the preceding sentence shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent to the specified Persons pursuant to the Pooling
Agreement or any requirements of the Internal Revenue Code as from time to time
in effect. Notwithstanding anything to the contrary contained in this Agreement,
Trustee shall, to the extent required by applicable law, from time to time
furnish to the appropriate Persons a Form 1099-INT within the period required by
applicable law.
SECTION 5.6 Periodic Perfection Certificate. On or before December 1 of
each calendar year, beginning with calendar year 1996, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to Trustee and the Agent an
Officer's Certificate setting forth a list of all changes in (a) the name,
identity or corporate structure of Transferor or any Seller and (b) the chief
executive office of Transferor or any Seller (or in the place of business of
Transferor or any Seller that has only one place of business) that have taken
place since the date of the Officer's Certificate most recently delivered
pursuant to this Section 5.6 (or since the Closing Date, in the case of the
first such Officer's Certificate to be delivered), or indicating that no such
events have taken place, and stating in each case what filings of UCC financing
statements, or amendments thereto, relating to the Transaction Documents have
been made in connection with each such event (identifying the date and filing
index numbers for each). Any financing statement identified in such an Officer's
Certificate delivered to Trustee shall be deemed to have been identified to
Trustee in writing for purposes of subsection 11.1(c)(v) of the Pooling
Agreement. If any such new UCC financing statements are filed, Servicer shall
cause Trustee to be named as secured party (in the case of any filing against
Transferor) or assignee of the secured party (in the case of any filing against
a Seller). Notwithstanding the foregoing, if any "Event of Default" or
"Potential Event of Default" under (and as defined in) the Howmet Credit
Agreement occurs, Servicer shall deliver an Officer's Certificate covering the
matters described above to Trustee and Agent not later than 10 days after the
occurrence of such event, and for so long as any such event remains outstanding,
Servicer shall deliver such an Officer's Certificate on the last Business Day
falling in each of March, June, September and December.
ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.1 Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event":
(a)(i) failure on the part of Transferor or Servicer to make
any payment of the principal amount of the Series 1996-1 Certificates
when due, or to make any payment of any interest on the Series 1996-1
Certificates or to make any deposit required by
40
<PAGE> 392
the terms of any Transaction Document on or before two Business Days
after the date such payment or deposit is required to be made, or to
make any other payment, except any payment of the Servicing Fee to a
Howmet Person, required by the terms of any Transaction Document on or
before three Business Days after the date such payment is required to
be made; or (ii) failure on the part of any Seller to duly observe or
perform subsection 6.1(f), 6.1(h), 6.1(j), 6.3(a), 6.3(b), 6.3(c) or
6.3(e) of the Purchase Agreement or Transferor to duly observe or
perform subsection 72(c), 7.2(e), 7.2(f), 7.2(h), 72(i), 72(j) or
7.2(k) of the Pooling Agreement or clause (i) or (ii) of subsection
7.2(d) of the Pooling Agreement, which failure has a substantial
likelihood of having a Material Adverse Effect and continues unremedied
for a period of five Business Days; or (iii) failure on the part of
Transferor, Servicer or any Seller duly to observe or perform any other
covenant or agreement set forth in any Transaction Document, which
failure has a substantial likelihood of having a Material Adverse
Effect and continues unremedied for a period of 30 days; or (iv)
Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in
subsection 5.1(d), 5.1(k), 5.1(o) or 5.1(r) of the Purchase Agreement
or by Transferor in subsection 2.3(a)(i), 2.3(a) (ii) or 7.1(i) of the
Pooling Agreement shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material
respect for a period of five Business Days, or any other representation
or warranty made by Transferor, Servicer or any Seller in any
Transaction Document shall prove to have been incorrect in any material
respect when made, and continues to be incorrect m any material respect
for a period of 30 days; provided that a mistake in the representation
of a Receivable as an Eligible Receivable or the breach of a
representation and warranty with respect to a Receivable shall not
constitute an Early Amortization Event unless and until the applicable
Seller has failed to make the cash payments (if any) owed under
Sections 3.1 and 3.5 of the Purchase Agreement in respect of such
mistake or breach (it being understood that certain of such mistakes or
breaches may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Transferor,
Servicer, Guarantor or any Seller, or Transferor shall become unable,
for any reason, to transfer Receivables or other Transferred Assets to
the Trust in accordance with the provisions of this Agreement and the
Pooling Agreement; provided that if, at the time any event that would,
with the passage of time, become a Bankruptcy Event occurs as a result
of a bankruptcy proceeding being filed against Transferor or any
Seller, then, on and after the day on which the bankruptcy proceeding
is filed until the earlier to occur of the dismissal of the proceeding
and the commencement of an Early Amortization Period, Transferor shall
not purchase Receivables and Related Assets from the affected Seller
or, if Transferor is the subject of the proceeding, transfer
Receivables and Related Transferred Assets to the Trust;
41
<PAGE> 393
(d) the Trust or Transferor shall be required to be registered
as an "investment company" under and within the meaning of the
Investment Company Act of 1940, as amended;
(e) the Net Invested Amount exceeds the Base Amount for a
period of two or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have
been remedied;
(g) Howmet shall cease to own, directly or indirectly, 100% of
the issued and outstanding capital stock of Transferor;
(h) the Internal Revenue Service or the PBGC shall have filed
one or more Tax or ERISA Liens against the assets of Transferor or any
Seller (including Receivables) in an aggregate amount exceeding
$250,000 unless such amounts (i) are bonded in a manner that satisfies
the Approval Condition or (ii) relate to taxes in an aggregate amount
not exceeding $1,000,000 which are contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained under GAAP;
(i) the cessation of, or the failure to create, a valid
first-priority perfected ownership or security interest in favor of
Trustee in the Receivables or the rights of Transferor under the
Purchase Agreement, which cessation or failure has a substantial
likelihood of having a Material Adverse Effect;
(j) the Series 1996-1 Invested Amount is not paid in full on
the Expected Final Payment Date;
(k) Transferor's net worth (as calculated in accordance with
GAAP) shall at any time be less than 17% of the aggregate Unpaid
Balance of the Receivables at such time and such condition continues
for five consecutive Business Days; provided that for purposes of
calculating Transferor's net worth, any and all amounts owed to
Transferor by any Howmet Person shall be excluded from such
calculation;
(l) any foreclosure or similar proceeding in respect of any
adverse claim on any Buyer Note or the Transferor's common stock shall
have been commenced; or tide to any Buyer Note or Transferor's common
stock shall pass to the holders of such adverse claim, it being
understood that the grant of a security interest in the stock of
Transferor or any Buyer Note to a creditor of a Seller that is party to
an Intercreditor Agreement shall not be an Early Amortization Event;
(m) the average of the Aged Receivables Ratio for any three
consecutive Calculation Periods shall be greater than 2.50%;
42
<PAGE> 394
(n) the average of the Past Due Receivables Ratio for any
three consecutive Calculation Periods shall exceed 5.75%;
(o) the average of the Dilution Ratio for any three
consecutive Calculation Periods shall be greater than 6.75%; or
(p) the Intercreditor Provisions shall be amended without
written notice thereof having been provided to the Agent no later than
five Business Days prior to the effective date of such amendment.
SECTION 6.2 Early Amortization Period. Upon the occurrence and
continuance of any Early Amortization Event described in subsection 6.1(c), an
Early Amortization Period shall commence without any notice or other action on
the part of Trustee or the Series 1996-1 Holders, immediately upon the
occurrence of such Early Amortization Event, except that if an Early
Amortization Event described in subsection 6.1(c) occurs as the result of the
occurrence of a Bankruptcy Event with respect to one or more Sellers, the
Receivables originated by which made up less than 10% of the aggregate Unpaid
Balance of Receivables held by the Trust as of the date of the commencement of
the proceeding that gave rise to the first such Bankruptcy Event, then an Early
Amortization Period shall not commence unless Required Series Holders declare it
to have commenced. Upon the occurrence and continuance of any other Early
Amortization Event, after the applicable grace period, if any, and if the action
or event that gave rise to such Early Amortization Event has not been waived by
the Required Series Holders, Trustee may (and, at the direction of the Required
Series Holders, shall) by notice then given in writing to Transferor and
Servicer, declare that an Early Amortization Period has commenced as of the date
of Transferor's receipt of the notice. In the event of any prepayment of the
Series 1996-1 Certificates prior to the first anniversary of the date hereof as
a result of the occurrence of an Early Amortization Event, the Holders thereof
shall be entitled to receive a Prepayment Premium.
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES
SECTION 7.1 Optional Redemption of Investor Interests. On any
Distribution Date occurring during an Early Amortization Period with respect to
the Series 1996-1 Certificates on or after the date that the Series 1996-1
Invested Amount is reduced to 10% or less of the sum of the Stated Amounts for
the Series 1996-1 Certificates, Transferor shall have the option to redeem the
Series 1996-1 Series Interest. The purchase price will be an amount equal to the
Invested Amount plus accrued and unpaid interest (and accrued and unpaid
interest with respect to interest that was due but not paid on any prior
Distribution Date) through the day preceding the Distribution Date at the
applicable interest rate (as specified in Section 4.1) plus the aggregate amount
by which the Invested Amount has been reduced on account of Investor Write-Offs
(and not subsequently reinstated) plus (if such redemption occurs prior to the
first anniversary of the date hereof) the applicable Prepayment Premium. Upon
the tender of the outstanding Certificates of the Series by the Holders to
Trustee,
43
<PAGE> 395
Trustee shall distribute the amounts, together with all funds on deposit in the
Principal Funding Account that are allocable to the Series 1996-1 Certificates,
to the Holders of the Series on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Holders. Following
any redemption, the Holders of the Series shall have no further rights with
respect to the Transferred Assets. In the event that Transferor falls for any
reason to deposit in the Principal Funding Account the aggregate purchase price
for the Series 1996-1 Certificates, payments shall continue to be made to the
Holders of the Series in accordance with the terms of the Pooling Agreement and
this Supplement.
SECTION 7.2 Termination. Notwithstanding Section 12.1 of the Pooling
Agreement, the last payment of the principal of and interest on the Certificates
of any Series in Group I shall be due and payable no later than the Final
Scheduled Payment Date for that Series. If, on the Distribution Date immediately
prior to the Final Scheduled Payment Date for any such Series, Servicer
determines that the Series Invested Amount for the Series on the applicable
Final Scheduled Payment Date (after giving effect to all changes therein on such
date) will exceed zero, Servicer shall, as soon as practicable, solicit bids for
the sale of interests in the Receivables in an amount equal to the product of
(i) the outstanding balance of Receivables, times (ii) the Series Collection
Allocation Percentage, times (iii) the Investor Allocation Percentage, times
(iv) a fraction the numerator of which is the applicable Series Invested Amount
and the denominator of which is the Group Invested Amount. Transferor shall be
entitled to participate in and to receive notice of each bid submitted in
connection with the bidding process. Upon the expiration of the period, Servicer
shall determine (x) the highest bid for such Receivables and (y) the Available
Final Distribution Amount for the Series. Servicer shall sell the interests in
the Transferred Assets on the Final Scheduled Payment Date for the applicable
Series to the bidder with the Highest Bid and shall deposit the proceeds of such
sale in the Master Collection Account for allocation to the Holders. The
priorities specified in Section 5.1 shall apply to any such distribution.
SECTION 7.3 Indemnification by Transferor. Transferor hereby agrees to
indemnify the Trust, Trustee, each Holder of a Series 1996-1 Certificate and
each of the successors, permitted transferees and assigns of any such Person and
all officers, directors, shareholders, controlling Persons, employees,
affiliates and agents of any of the foregoing (each of the foregoing Persons
individually being called a "Transferor Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims (whether on account
of settlements or otherwise, and whether or not the relevant Transferor
Indemnified Party is a party to any action or proceeding that gives rise to any
Transferor Indemnified Losses (as defined below)), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing collectively being called "Transferor
Indemnified Losses") awarded against or incurred by any of them that arise out
of or relate to this Agreement, any other Transaction Document or any of the
transactions contemplated herein or therein or the use of proceeds herefrom or
therefrom (including any Transferor Indemnified Losses (i) relating to any
Adverse Claim, without regard to whether
44
<PAGE> 396
such Adverse Claim was a Permitted Adverse Claim, or (ii) arising from any
failure to make any filing or obtain any consent as required by the Federal
Assignment of Claims Act with respect to any Receivables).
Notwithstanding the foregoing, in no event shall any Transferor
Indemnified Party be indemnified for any Transferor Indemnified Losses (a)
resulting from gross negligence or willful misconduct on the part of such
Transferor Indemnified Party (or the gross negligence or willful misconduct on
the part of any of its officers, directors, employees, affiliates or agents),
(b) to the extent they include Transferor Indemnified Losses in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Transferor for the amount of any Receivable or Related Transferred Asset not
paid by the related Obligor, (c) to the extent they are or result from lost
profits, (d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) distributions on the Series
1996-1 Certificates, (ii) franchise or withholding taxes imposed on any
Transferor Indemnified Party other than the Trust or the Trustee in its capacity
as Trustee or (iii) federal or other income taxes on or measured by the net
income of such Transferor Indemnified Party and costs and expenses m defending
against the same, (e) resulting from any breach by such Transferor Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to a Transferor Indemnified Party or is insufficient to hold a
Transferor Indemnified Party harmless, then Transferor shall contribute to the
amount paid by the Transferor Indemnified Party as a result of any loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Transferor Indemnified Party on the one hand
and Transferor on the other hand, but also the relative fault of such Transferor
Indemnified Party (if any) and Transferor and any other relevant equitable
considerations.
SECTION 7.4 Indemnification by Servicer. Servicer agrees that the Agent
and each Holder of a Series 1996-1 Certificate shall be an "Indemnified Party"
for purposes of Section 8.4 of the Pooling Agreement.
ARTICLE VI[l MISCELLANEOUS
SECTION 8.1 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 8.2 Counterparts. This Supplement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
45
<PAGE> 397
SECTION 8.3 Severability of Provisions. If any one or more of the
provisions or terms of this Supplement shall for any reason whatsoever be held
invalid, then the unenforceable provision(s) or term(s) shall be deemed
severable from the remaining provisions or terms of this Supplement and shall in
no way affect the validity or enforceability of the other provisions or terms of
this Supplement.
SECTION 8.4 Amendment, Waiver, Etc. This Supplement may be amended,
subject to Section 13.1 of the Pooling Agreement and Section 10.1 of each
Certificate Purchase Agreement, from time to time by Servicer, Transferor and
Trustee by a written instrument signed by each of them.
SECTION 8.5 Trustee. Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplement
or for or in respect of the recitals contained herein, all of which recitals are
made solely by Transferor and Servicer.
SECTION 8.6 Instructions in Writing. All instructions given by Servicer
to Trustee pursuant to this Supplement shall be in writing, and may be included
in a Dally Report or Monthly Report.
46
<PAGE> 398
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By:________________________________
Name:______________________________
Title:_____________________________
Address: c/o Nevada Corporate
Management, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION, as Servicer
By:________________________________
Name:______________________________
Title:_____________________________
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________
Name:______________________________
Title:_____________________________
Address: One M&T Plaza, 7th Floor
Buffalo, New York 14203
Attention: Russell Whitley
Facsimile: (716) 842-4474
<PAGE> 399
EXHIBIT A - Part 1
to the Series 1996-1 Supplement
FORM OF CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND
<PAGE> 400
WILL NOT BECOME A PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES.
[If this representation cannot be made, Transferor, Servicer or the Trustee may
require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
<PAGE> 401
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: Maximum Principal Amounts
$___________________
THIS CERTIFIES THAT _________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Transferor"), HOWMET
CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation, as trustee (together with its
successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class A, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
3
<PAGE> 402
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
A, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:________________________
Title: ____________________
4
<PAGE> 403
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: _______________________________
Title: __________________________
Dated: ____________, 1996
5
<PAGE> 404
PURCHASES AND REPAYMENTS
<TABLE>
<CAPTION>
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ------ ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 405
EXHIBIT A - Part 2
to the Series 1996-1 Supplement
FORM OF CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIRE'S OF RULE 144A,
(B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
<PAGE> 406
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot be made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
<PAGE> 407
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B, SERIES 1996-1 CERTIFICATE
Date: $________________
THIS CERTIFIES THAT ______________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and
are therefore subordinated to the Class A, Series 1996-1 Certificates, Series
1996-1 Certificates and Certificates in any other Senior Class that may be
issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income
3
<PAGE> 408
and franchise and other taxes measured by or imposed on income, the Class B,
Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:____________________________
Title: ________________________
4
<PAGE> 409
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:____________________________________
Title: ________________________________
Dated: ____________, 1996
5
<PAGE> 410
PURCHASES AND REPAYMENTS
<TABLE>
<CAPTION>
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- ------ ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 411
EXHIBIT B
to Certificate Purchase
Agreement Series 1996-1, Class A
FORM OF ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of________ (this "Agreement"), is
made between ______________________ ("Assignor"), and ______________________
("Assignee"). Except as otherwise defined herein, capitalized terms have the
meanings assigned to them in the Certificate Purchase Agreement (as defined
below).
BACKGROUND
1. Assignor is a party to the Certificate Purchase Agreement, dated as
of April 18, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Certificate Purchase Agreement"), among BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Transferor"), HOWMET CORPORATION, a Delaware
corporation, the Purchasers party thereto (including Assignor), and The First
National Bank of Chicago, as Agent.
2. Assignor wishes to assign, and Assignee wishes to be so assigned,
Assignor's rights and obligations arising on and after the Effective Date (as
defined below) under the Certificate Purchase Agreement and its Certificate,
including its outstanding Purchase (the "Purchase").
3. Assignor and Assignee also wish (a) Assignee to assume the
obligations of Assignor under the Certificate Purchase Agreement with respect to
Assignee's Share (as defined below) to the extent of the rights assigned and
(b)Assignor to be released from the obligations assumed by Assignee.
4. Transferor, by its execution hereof, is providing its written
consent to the assignment accomplished by this Agreement.
SECTION 1. Assignment. Effective on the Effective Date (as defined
below) and upon payment of the amount specified in Section 3(a), Assignor hereby
assigns and transfers to Assignee, without recourse, representation or
<PAGE> 412
warranty of any kind, express or implied (except as provided in Sections 6(a)
and (b)), and subject to Section 4(b), Assignee's Share (as specified in Annex I
hereto) (the "Assignee's Share") of all of Assignor's rights, title and interest
arising under (a) the Certificate Purchase Agreement relating to Assignor's
Credit Exposure including all rights and obligations with respect to the
Purchase attributable to Assignee's Share and (b) Assignor's Certificate with
respect to Assignee's Share as will result in Assignee having from and after the
Effective Date the Class Percentage and the Series Percentage specified in Annex
I.
SECTION 2. Assumption. Effective on the Effective Date, Assignee hereby
irrevocably purchases, assumes and takes from Assignor, and Assignor is hereby
expressly and absolutely released from, all of Assignor's obligations arising
under the Certificate Purchase Agreement relating to Assignee's Share and the
Purchase attributable to Assignee's Share.
SECTION 3. Payment. In consideration of the assignment by Assignor to
Assignee as set forth above, Assignee agrees to pay to Assignor, in Dollars and
in immediately available funds, (a) on or prior to the Effective Date, an amount
specified by Assignor in writing on or prior to the Effective Date that
represents Assignee's Share attributable to the principal amount of the Purchase
made pursuant to the Certificate Purchase Agreement and outstanding on the
Effective Date, and (b) from time to time thereafter, other amounts (if any)
that Assignee has agreed in writing to pay to Assignor after the Effective Date.
In consideration of the assumption by Assignee, Assignor agrees to pay to
Assignee within two Business Days of the Effective Date, an assignment fee (if
any) that previously has been agreed to in writing by both parties.
Notwithstanding anything to the contrary in this Agreement, if and when
Assignee receives or collects (x) any payment of principal or interest relating
to the Purchase or (y) any payment of fees that are required to be paid to
Assignor pursuant to this Agreement, then Assignee shall forward the payment to
Assignor.
To the extent payment of funds to Assignee or Assignor are not made
within two Business Days, each, as the case may be, shall be entitled to recover
the due amount, together with interest thereon at the Federal Funds Rate per
annum accruing from the date of payment or the date of receipt of the funds by
the other party.
SECTION 4. Effectiveness. (a)(i) This Agreement shall become effective
on the date (the "Effective Date") on which it shall have been duly executed by
all parties and the Agent shall have recorded the information
page 2
<PAGE> 413
contained herein in its records (or automatically if not so recorded within five
Business Days from the Agent's receipt of this Agreement signed by Assignor,
Assignee and Transferor)[; provided, however, that, notwithstanding anything
herein to the contrary, as a condition to the effectiveness of the Assignment,
and prior to any rights of Assignee being recognized hereunder or under any
Transaction Document or Certificate, in accordance with Section 10.3(c) of the
Certificate Purchase Agreement, the assigning Purchaser shall provide, or shall
cause Assignee to provide, to Transferor such information as Transferor
reasonably requests to make the determinations required by Section 10.3(f) of
Revolving Certificate Purchase Agreement. If the Transferor has acknowledged in
writing the terms and conditions of this agreement, the assigning Purchaser
shall be deemed to have provided or caused to be provided such information.] 1/
Assignor hereby notifies the Agent of the assignment, effective as of the
Effective Date, of Assignee's Share and the Purchase attributable to the
Assignee's Share, and directs the Agent to pay Assignee any payment of principal
of, or interest on, the Purchase attributable to the Assignee's Share. No (x)
failure of either Assignee or Assignor to settle any amount owed to the other
(except with respect to the payment of the processing and recordation fee to the
Agent and the payment due under Section 3(a)), (y) dispute respecting any other
settlement, including in respect of Transferor, or (z) bankruptcy, insolvency or
other condition whatsoever respecting any Person, shall in any way impair,
reduce or otherwise affect the effectiveness of this Agreement.
(ii) Assignor, Assignee and the Agent each acknowledges and agrees that
from and after the Effective Date, the Agent shall make all payments under the
Certificate Purchase Agreement in respect of Assignee's Share (including all
payments of principal and interest with respect thereto, whether or not the
payments shall have accrued prior to or after the Effective Date) to Assignee
only. Assignor and Assignee hereby agree further to make all appropriate
adjustments in payments to either of them under the Certificate Purchase
Agreement for periods prior to the Effective Date directly between themselves.
(b) With respect to the Purchase attributable to Assignee's Share, if
and when Assignor receives or collects any payment of principal, interest, or
Additional Amounts with respect to Assignee's Share for any period commencing on
or after the Effective Date, Assignor shall distribute to Assignee the portion
attributable to Assignee's Share, but only to the extent it accrued on or after
the Effective Date and was not theretofore paid to Assignee by Transferor or
otherwise. Any principal, interest and Additional
- ----------
1/ Bracketed language should be deleted in the case of a Permitted
Transferee.
page 3
<PAGE> 414
Amounts paid prior to the Effective Date shall be retained by Assignor. Any
principal, interest, and Additional Amounts received by Assignee that accrued
prior to the Effective Date shall be forwarded promptly, in the form received,
to Assignor. Assignee recognizes and agrees that (i) it shall receive no payment
on account of any Agent's fees or other amounts or expenses (including counsel
fees) payable to the Agent (in such capacity and for its own account), (ii) this
Agreement shall not operate to assign any rights or delegate any obligations of
the Agent (in such capacity), and (iii) notwithstanding anything to the contrary
m this Agreement, Assignor shall retain all of its rights to indemnification
under the Certificate Purchase Agreement for any events, acts or omissions
occurring prior to the Effective Date.
(c) The Agent, by its execution hereof, acknowledges the assignment and
agrees to make payments in respect of principal, interest, fees and Additional
Amounts as described in clause (a).
SECTION 5. Rights as Purchaser under Certificate Purchase Agreement. In
accordance with Section 10.3 of the Certificate Purchase Agreement, (a) as of
the Effective Date, Assignee will be a Purchaser under, and party to, the
Certificate Purchase Agreement and shall have (i) all of the rights and
obligations of a Purchaser (to the extent of the assignment and assumption of
Assignee's Share effected by this Agreement) and (ii) the addresses for (A)
notice purposes and (B) LIBOR Office as set forth in items 2 and 3,
respectively, of Annex I hereto and (b)promptly on or after the Effective Date,
Transferor will execute and deliver any documents and instruments that Assignor
or Assignee reasonably may require.
SECTION 6. Representations and Warranties. (a) Each of Assignor and
Assignee represents and warrants to the other as follows:
(i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, to fulfill the
obligations hereunder and to consummate the transactions contemplated
hereby;
(ii) the making and performance of this Agreement and all
documents required to be executed and delivered hereunder do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other applicable law or regulation;
(iii) this Agreement has been duly executed and delivered and
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
page 4
<PAGE> 415
(iv) all approvals, authorizations or other actions by, or filing
with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained.
(b) Assignor represents and warrants to Assignee that Assignee's Share
and the Purchase attributable to Assignee's Share is not subject to any liens or
security interests created by Assignor.
(c) Except as set forth in subsections (a) and (b), Assignor makes no
representations or warranties, express or implied, to Assignee and shall not be
responsible to Assignee for (i) the execution, effectiveness, genuineness,
legality, validity, enforceability, collectibility, regulatory status or
sufficiency of the Certificate Purchase Agreement or any of the other
Transaction Documents, (ii) the perfection, priority, value or adequacy of any
collateral security or guaranty, (iii) the taking of any action, or the failure
to take any action, with respect to any of the Transaction Documents, (iv) any
representations, warranties, recitals or statements made in any of the
Transaction Documents or in any written or oral financial or other statements,
instruments, reports, certificates or documents made or furnished by Assignor to
Assignee or by or on behalf of Transferor or any of its Affiliates to Assignor
or Assignee in connection with the Transaction Documents and the transactions
contemplated thereby, (v) the financial or other condition of Transferor or any
other Person or (vi) any other matter having any relation to any of the
foregoing. Assignor shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Transaction Documents or the existence or
possible existence of any Unmatured Early Amortization Event, Early Amortization
Event or Servicer Default. Additionally, Assignor shall not have any duty or
responsibility either initially or on a continuing basis to make any
investigation or any appraisal on Assignee's behalf or to provide Assignee with
any credit or other information with respect thereto, whether coming into
Assignor's possession before the execution of the Certificate Purchase Agreement
or at any time thereafter. Assignor shall have no responsibility with respect to
the accuracy of, or the completeness of, any information provided to Assignee,
whether by Assignor or by or on behalf of Transferor or any other Person
obligated under the Certificate Purchase Agreement or any related instrument or
document.
(d) Assignee represents and warrants that it has made its own
independent investigation of each of the foregoing matters, including the
financial condition and affairs of Transferor and its Affiliates, in connection
with the making of the Purchase and the execution of this Agreement
page 5
<PAGE> 416
(including the solvency of Transferor and its Affiliates, their ability to pay
their respective debts as they mature and the capital of Transferor and its
Affiliates remaining after the closing under the Transaction Documents and the
consummation of the transactions contemplated thereby) and has made and shall
continue to make its own appraisal of the creditworthiness of Transferor and its
Affiliates. Assignee (i) confirms that it has received copies of the Transaction
Documents together with copies of certain other closing documents delivered in
connection with the Certificate Purchase Agreement, financial statements and any
other documents and information that it has requested or deemed appropriate to
make its own credit analysis and decision to enter into this Agreement and (ii)
agrees that it will, independently and without reliance upon the Agent, Assignor
or any other Purchaser and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Transaction Documents.
(e) Assignee represents and warrants to Transferor that the
representations and warranties in Section 6.3 of the Certificate Purchase
Agreement are true and correct in respect of such Assignee as of the date
hereof.
SECTION 7. No Proceedings. Assignee hereby agrees to be bound by the
provisions of Section 10.13 of the Certificate Purchase Agreement.
SECTION 8. Withholding Taxes. [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee agrees to execute and deliver to the
Agent, for delivery to Transferor, on or before the Effective Date, (a) two
original copies of Internal Revenue Service Form 4224 or successor applicable
form, properly completed and duly executed by the Assignee certifying that it is
entitled to receive payments under the Certificate Purchase Agreement and any
Certificate without deduction or withholding of any United States Federal income
taxes, and (b) an original copy of Internal Revenue Service Form W-8 or W-9 or
applicable successor form, properly completed and duly executed, certifying its
exemption from backup withholding. Assignee represents and warrants to
Transferor and Assignor that, as of the Effective Date, it shall be entitled to
receive payments under its Certificate, the Certificate Purchase Agreement and
hereunder without deduction for or on account of any taxes imposed by the United
States of America or any political subdivision thereof. In the event that, after
delivering the applicable form, Assignee shall cease to be exempt from
withholding and/or deduction of taxes, then the Agent may withhold and/or deduct
the applicable amount from any payments of principal, interest and any fees to
which Assignee otherwise would be entitled, and the Agent shall have no
liability whatsoever to Assignee for any such withholding
page 6
<PAGE> 417
or deduction. Assignee shall indemnify Transferor and the Agent from and
against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs or expenses that result from Assignee's breach of
such representation and warranty.]2/ [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee (unless organized as a corporation
under the laws of any state of the United States) agrees to execute and
deliver to the Agent, for delivery to Transferor, on or before the
Effective Date, an original copy of Internal Revenue Service Form W-9 or
applicable successor form, properly completed and duly executed, certifying
its exemption from backup withholding.]3/
SECTION 9. Miscellaneous. (a) Each of the parties hereto agrees
to take any action and execute and deliver any documents that any
party hereto reasonably may request from time to time in order to
implement more fully the purposes of this Agreement. Without limiting
the generality of the foregoing, Assignor and Assignee will cooperate
in obtaining for Assignee a Certificate (as well as a replacement
Certificate for Assignor representing any retained interest of
Assignor).
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WIThOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
(c) Except as otherwise set forth herein, this Agreement sets
forth the entire agreement between the parties relating to the subject
matter hereof, and no term or provision of this Agreement may be
amended, changed, waived, discharged or terminated orally or
otherwise, except in a writing signed by Assignor and Assignee.
(d) This Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
(e) Each of the parties hereto agrees that each party shall bear
its own expenses in connection with the preparation and execution of
this Agreement
- ----------
2/ If the Assignee is not a U.S. person within the meaning of Section
7701(a)(30) of the Internal Revenue Code.
3/ If the Assignee is a U.S. person within the meaning of Section
7701(a)(30) of the Internal Revenue Code.
page 7
<PAGE> 418
and the consummation of the Assignment described herein. Assignee further agrees
that it shall send a check in the amount of $[1,500] [3,500] to the Agent on or
prior to the Effective Date, as payment of the processing and recordation fee
described in Section 10.3(c) of the Certificate Purchase Agreement. [Select
correct amount in accordance with that Section.]
(f) All representations and warranties made, and indemnities provided
for, herein shall survive the consummation of the transactions contemplated
hereby. Assignor and Assignee acknowledge and agree that Transferor is a
third-party beneficiary of Section 6(e) of this Agreement.
(g) Assignor may at any time or from time to time grant assignments and
participations in its rights and obligations under the Certificate Purchase
Agreement and its Certificate to other Persons, but not in the portions thereof
assigned to Assignee.
(h) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither Assignor
nor Assignee may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party. The preceding
sentence shall not limit the right of Assignee to assign all or part of
Assignee's Share in the manner contemplated by the Certificate Purchase
Agreement.
(i) Assignee acknowledges that all obligations of the Agent are subject
to Article IX of the Certificate Purchase Agreement.
page 8
<PAGE> 419
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
______________________________________
as Assignor
By:___________________________________
Title: _______________________________
as Assignee
By:___________________________________
Title: _______________________________
The undersigned hereby acknowledges the terms and provisions of this
Agreement, and agrees to make payments in respect of principal, interest and
fees as described in Section 4(a).4/
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:___________________________________
Title: _______________________________
BLADE RECEIVABLES CORPORATION
By:___________________________________
Title: _______________________________
4/ Acknowledgement not required for certain Assignees, as provided in
Section 10.3 of the Certificate Purchase Agreement.
page 9
<PAGE> 420
ANNEX I
to Assignment Agreement
Item 1. Assignee's Share:
(a) Assignee's Stated Amount $_____________
(b) Assignee's Class Percentage _____________%
(c) Assignee's Series Percentage _____________%
Item 2. Address of Assignee for notice purposes:
______________________________
______________________________
______________________________
Attention: __________________
Telephone: __________________
Facsimile: __________________
Item 3. LIBOR Office of Assignee:
______________________________
______________________________
______________________________
<PAGE> 421
APPENDIX X
to Certificate Purchase
Agreement Series 1996-1
INDEX OF ADDITIONAL DEFINED TERMS
Agent .................................................................. 1
Agreement .............................................................. 1
Assignee ............................................................... 23
Certificates ........................................................... 1
Class Percentage ....................................................... 10
Credit Exposure ........................................................ 22
Effective Date ......................................................... 2
Financial Advisors ..................................................... 11
Howmet ................................................................. 1
Indemnitees ............................................................ 27
LIBOR Office ........................................................... 5
Participants ........................................................... 22
Pooling Agreement ...................................................... 1
Purchase ............................................................... 2
Purchasers ............................................................. 1
Receivables Review ..................................................... 16
Required Purchasers .................................................... 20
Series Percentage ...................................................... 10
Servicer ............................................................... 1
Supplement ............................................................. 1
Taxes .................................................................. 8
Transferee ............................................................. 24
Transferor ............................................................. 1
Trust .................................................................. 1
Trust Interest ......................................................... 1
Trustee ................................................................ 1
<PAGE> 422
PROJECT BLADE - TAKEOUT
- --------------------------------------------------------------------------------
CERTIFICATE PURCHASE AGREEMENT
(Series 1996-1, Class B)
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
HOWMET CORPORATION,
THE PURCHASERS DESCRIBED HERE[N,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
- --------------------------------------------------------------------------------
<PAGE> 423
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions ........................................... 1
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase .............................................. 2
SECTION 2.2 Closing ............................................... 2
SECTION 2.3 Certificates .......................................... 2
ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates ............. 2
SECTION 3.2 Notice to Purchasers .................................. 3
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches .............................................. 3
SECTION 4.2 Fees .................................................. 4
SECTION 4.3 Yield Protection ...................................... 4
SECTION 4.4 Illegality; Unavailability ............................ 6
SECTION 4.5 Indemnity ............................................. 7
SECTION 4.6 Taxes ................................................. 7
ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment ............................ 9
SECTION 5.2 Pro Rata Treatment; Percentages ....................... 10
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor ............................................ 10
SECTION 6.2 Howmet ................................................ 11
SECTION 6.3 Purchasers ............................................ 12
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase ................................ 13
i
<PAGE> 424
ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants ................................. 16
SECTION 8.2 Negative Covenants .................................... 17
SECTION 8.3 Transfers ............................................. 17
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment ........................................... 17
SECTION 9.2 Nature of Duties ...................................... 17
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors ...... 18
SECTION 9.4 Certain Rights of Agent ............................... 18
SECTION 9.5 Reliance .............................................. 18
SECTION 9.6 Indemnification ....................................... 19
SECTION 9.7 Agent in Its Individual Capacity ...................... 19
SECTION 9.8 Resignation by Agent .................................. 19
SECTION 9.9 Required Purchasers ................................... 20
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments ........................................... 20
SECTION 10.2 No Waiver; Remedies .................................. 21
SECTION 10.3 Successors and Assigns; Assignments .................. 21
SECTION 10.4 Survival of Agreement ................................ 26
SECTION 10.5 Expenses; Indemnification ............................ 26
SECTION 10.6 Entire Agreement ..................................... 28
SECTION 10.7 Notices .............................................. 28
SECTION 10.8 No Third-Party Beneficiaries ......................... 28
SECTION 10.9 Severability of Provisions ........................... 28
SECTION 10.10 Counterparts ........................................ 28
SECTION 10.11 Governing Law ....................................... 28
SECTION 10.12 Tax Characterization ................................ 29
SECTION 10.13 No Proceedings ...................................... 29
SECTION 10.14 Reference Bank ...................................... 29
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SCHEDULE
SCHEDULE I Amount of Each Initial Purchaser's Certificate
EXHIBITS
EXHIBIT A Form of Series 1996-1 Supplement
EXHIBIT B Form of Assignment Agreement
APPENDIX
APPENDIX X Index of Additional Defined Terms
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This CERTIFICATE PURCHASE AGREEMENT, dated as of April 18, 1996 (this
"Agreement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada corporation
("Transferor"), HOWMET CORPORATION, a Delaware corporation ("Servicer" or
"Howmet"), the purchasers named on the signatures pages of this Agreement
(together with their respective permitted assigns, the "Purchasers"), and THE
FIRST NATIONAL BANK OF CHICAGO, as administrative and syndication and
documentation agent for the Purchasers (in that capacity, together with any
successors in that capacity, "Agent").
BACKGROUND
1. Transferor (a) is a party to a Pooling and Servicing Agreement dated
as of December 13, 1995, as amended and restated in its entirety by an ,Amended
and Restated Pooling and Servicing Agreement dated as of April 18, 1996 (the
"Pooling Agreement") , with Howmet, as initial Servicer, and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (in that
capacity, together with any successors in that capacity, the "Trustee"), (b) is
a party to a Receivables Purchase Agreement dated as of December 13, 1995, as
amended and restated in its entirety by an Amended and Restated Receivables
Purchase Agreement dated as of April 18, 1996, and (c) will enter into a Series
1996-1 Supplement to the Pooling Agreement substantially in the form of Exhibit
A (the "Supplement"). Pursuant to the Pooling Agreement and the Supplement,
Transferor will obtain the Series 1996-1, Class B Certificates (the
"Certificates"), which will represent fractional undivided beneficial interests
in the assets of the Blade Receivables Master Trust (the "Trust"), a trust
organized pursuant to the Pooling Agreement.
2. Transferor wishes to obtain the commitment of each Purchaser to
purchase fractional undivided beneficial interests in the assets of the Trust
(each a "Trust Interest") that will be evidenced by its Certificate. Subject to
the terms and conditions of this Agreement, each Purchaser is willing to
purchase a Certificate. Howmet has joined in this Agreement to confirm certain
representations, warranties and covenants for the benefit of the Purchasers and
the Agent.
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used and not otherwise
defined herein have the meanings assigned to them in the Supplement or, if not
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defined in the Supplement, in Appendix A to the Pooling Agreement. An index of
terms defined directly in this Agreement is attached as Appendix X.
ARTICLE II PURCHASE AND SALE OF CERTIFICATES
SECTION 2.1 Purchase. The Transferor will sell to each Purchaser and,
subject to the terms and conditions of this Agreement, the Pooling Agreement and
the Supplement, each Purchaser will purchase (each such purchase being a
"Purchase") from the Transferor, at the time and place provided for in Section
2.2, a Certificate for a purchase price equal to 100% of the Stated Amount of
such Certificate. The Stated Amount of each initial Purchaser's Certificate is
set forth opposite its name in Schedule I.
SECTION 2.2 Closing. The sale of each Certificate shall take place at
the offices of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois
60603 at noon, Chicago time, on April 18, 1996 (the "Effective Date"). On the
Effective Date, the Transferor will deliver to each Purchaser a Certificate,
dated as of the Effective Date and registered in the name of each such
Purchaser, against delivery by each such Purchaser to the Transferor or its
order of immediately available funds in the amount of the purchase price
therefor to Manufacturers & Traders Trust Company, Corporate Trust Department,
One M&T Plaza, 7th Floor, Buffalo, New York 14203-2399, Attention: Russell
Whitley.
SECTION 2.3 Certificates. The outstanding amounts of the Purchase made
by each Purchaser shall be evidenced by its Certificate, and to be issued on the
Effective Date substantially in the form of Exhibit A (Part 2) to the
Supplement. Each Purchaser shall and is hereby authorized to record on the grid
attached to its Certificate (or at its option, in its internal books and
records) the date and amount of the Purchase made by it, the amount of each
repayment of the principal amount represented by its Certificate and the
portions of its Purchase that are from time to time allocated to the ABR Tranche
and the Eurodollar Tranche (which shall be conclusive absent demonstrable
error); provided, that failure to make any recordation on the grid or records or
any error in the grid or records shall not adversely affect the Purchaser's
rights with respect to its interest in the assets of the Trust and its right to
receive interest in respect of the outstanding principal amount of the Purchase
made by the Purchaser.
ARTICLE III PREPAYMENTS
SECTION 3.1 Transferor's Right to Prepay Certificates. Transferor may,
m accordance with Section 4.9 of the Supplement, prepay the Certificates in full
upon at least three Business Days' prior notice by Transferor to
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Trustee. No Certificates may be prepaid until the Class A Certificates have been
prepaid in full. In addition, no Certificates may be prepaid if any Senior Class
is outstanding and, after giving effect to that payment, the Net Invested Amount
would exceed the Base Amount. In the event of any such prepayment of the
Certificates occurring at any time during the one-year period commencing on the
Effective Date, the Holders of such Certificates shall be entitled to receive a
Prepayment Premium. The Certificates may not be partially prepaid and the
Certificates, once prepaid, may not be reinstated.
SECTION 3.2 Notice to Purchasers. Trustee shall promptly advise the
Purchasers of any notice received by Trustee pursuant to Section 3.1.
ARTICLE IV TRANCHES, INTEREST AND FEES
SECTION 4.1 Tranches. (a) Subject to the terms and conditions set forth
in this section and Section 4.4, Transferor shall have the option: (x) on any
Business Day, to convert all or part of the ABR Tranche to the Eurodollar
Tranche and (y) on the last day of any Interest Period of the Eurodollar
Tranche, to convert all or any part of the Eurodollar Tranche to form a part of
the ABR Tranche and/or to continue all or any part of the Eurodollar Tranche as
a new Eurodollar Tranche, the Interest Period for which shall commence on the
first day after the prior Interest Period; provided, that:
(i) subject to Section 4.4, each conversion or continuation
shall be made ratably among the Purchasers in accordance with their
respective amounts of the Purchases comprising the converted or
continued Tranche;
(ii) if less than all of the outstanding amount of any Tranche
shall be converted or continued, the aggregate amount of the Tranche
converted or continued shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $2,000,000;
(iii) any Interest Period for the Eurodollar Tranche that
commences after the commencement of the Amortization Period must begin
on a Distribution Date and end on the next Distribution Date; and
(iv) there shall not be more than one Eurodollar Tranche
outstanding at any one time.
(b) If Transferor wishes to convert and/or continue a Tranche under
this section, Transferor shall notify the Agent in writing (i) in the case of a
conversion to or continuation of the Eurodollar Tranche, not later than
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2:00 p.m., New York City time, three Business Days prior to the date of the
proposed conversion or continuation date and (ii) otherwise, not later than
noon, New York City time, one Business Day prior to the date of the proposed
conversion or continuation. Each notice shall be irrevocable and shall refer to
this Agreement and specify (x) the identity and amount of the Tranche that
Transferor wishes to convert or continue, (y) whether all or part of the Tranche
is to be converted into or continued as a Eurodollar Tranche and (z) the date of
the proposed conversion or continuation (which shall be a Business Day). If
Transferor shall not have delivered a timely notice in accordance with this
section with respect to any Tranche, the Tranche shall, at the end of the
Interest Period applicable to it (unless repaid pursuant to the terms hereof),
automatically be converted into or continued as an ABR Tranche. The Agent shall
promptly advise the Purchasers of any notice given pursuant to this section and
of each Purchaser's portion of any converted or continued Tranche.
(c) In accordance with Section 4.1 of the Supplement, each Purchaser
and the Agent will be entitled to receive additional interest (at the rate
specified therein) on amounts that are not paid when due under this Agreement or
under its Certificate.
SECTION 4.2 Fees. On the Effective Date, Howmet shall pay to the Agent
the fees specified in the fee letter, dated October 20, 1995, delivered by
Servicer to the Agent, for the account of the Persons specified in such letter.
SECTION 4.3 Yield Protection. (a) Notwithstanding any other provision
herein, if, after the date hereof, either:
(i) the adoption of any law, rule or regulation (including any
imposition or increase of reserve requirements) or any change after the
date hereof in the interpretation or administration of any law, rule or
regulation by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
(ii) the compliance by a Purchaser with any new or revised
guideline or request from any central bank or other Governmental
Authority or quasi-governmental authority exercising control over banks
or financial institutions generally (whether or not having the force of
law),
shall subject a Purchaser to the imposition or modification of any reserve
(including any imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar requirement that
takes the form of a tax) against assets of, deposits with or for the account
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of, or credit extended by, the Purchaser or the office from time to time that it
designates to the Agent as the office through which it makes and maintains its
Purchases comprising part of the Eurodollar Tranche (as to each Purchaser, its
"LIBOR Office") or impose any other condition on a Purchaser affecting its
Eurodollar Tranche or its obligations hereunder, and as a result of either of
the foregoing there shall be any increase in the cost to the Purchaser of
agreeing to make or making, funding or maintaining Purchases as a Eurodollar
Tranche (except to the extent already included in the determination of the
Reserve Adjusted Eurodollar Rate), or there shall be a reduction in the amount
received or receivable by the Purchaser or its LIBOR Office, then, upon written
notice from the Purchaser to Transferor and Servicer (with a copy to the Agent)
, signed by an officer of the Purchaser with knowledge of and responsibility for
such matters, and setting forth in reasonable detail the calculation used to
arrive at the amounts, additional amounts sufficient to indemnify that Purchaser
against the increased cost or reduction in amounts received or receivable shall
constitute "Additional Amounts" for purposes of the Supplement, and the
Purchaser shall be entitled to receive these additional amounts, solely from
amounts allocated thereto and paid pursuant to the Supplement.
(b) If a Purchaser shall reasonably determine that the adoption after
the date hereof of any law, rule or regulation regarding capital adequacy or
capital maintenance, or any change after the date hereof in any of the foregoing
or in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Purchaser, any of its lending
offices or its holding company with any new or revised request or directive
regarding capital adequacy or capital maintenance (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Purchaser's capital or the capital of its holding company as a consequence of
this Agreement, the Purchase made by the Purchaser pursuant hereto to a level
below what the Purchaser or its holding company could have achieved but for the
adoption, change or compliance (taking into consideration the Purchaser's
policies, and the policies of its holding company, with respect to capital
adequacy), then, upon written notice from the Purchaser to Transferor and
Servicer (with a copy to the Agent), signed by an officer of the Purchaser with
knowledge of and responsibility for such matters, and setting forth in
reasonable detail the calculation used to arrive at the amounts, any additional
amounts as will compensate the Purchaser or its holding company for the
reduction shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
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(c) A Purchaser will act reasonably and in good faith (and use
reasonable attribution methods) in determining any additional amounts due
pursuant to subsection (a) or (b), as the case may be, and shall promptly notify
Transferor, Servicer and the Agent in writing of any event of which it has
knowledge occurring after the date hereof that will entitle it to compensation
pursuant to this section. A certificate of the Purchaser, signed by an officer
of the Purchaser with knowledge of and responsibility for such matters, and
setting forth in reasonable detail the calculation used to arrive at the amounts
necessary to compensate the Purchaser or its holding company as specified in
subsection (a) or (, as the case may be, shall be delivered to Transferor and
Servicer and shall be conclusive absent demonstrable error.
(d) Failure on the part of a Purchaser to demand compensation for any
amounts as specified in subsection (a) or (b) with respect to any period shall
not constitute a waiver of its right to demand compensation with respect to that
period or any other period. The protection of this section shall be available to
the Purchasers regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition that shall have occurred or been imposed.
(e) Promptly after giving any notice to Transferor pursuant to this
section, a Purchaser will seek to designate one of its offices located at an
address other than that previously designated pursuant to this Agreement as the
office from which its Purchase will be maintained after the designation if it
will avoid the need for, or materially reduce the amount of, any payment to
which the Purchaser would otherwise be entitled pursuant to this section and
will not, in the reasonable discretion of the Purchaser, be otherwise
disadvantageous to the Purchaser.
SECTION 4.4 Illegality; Unavailability. (a) In the event that on any
date any Purchaser shall have reasonably determined (which determination shall
be final and conclusive and binding upon all parties) that the continuation of
its Purchase as a Eurodollar Tranche has become unlawful by compliance by the
Purchaser in good faith with any law, governmental rule, regulation or order or
has become impossible as a result of a contingency occurring after the date
hereof that materially and adversely affects its interbank eurodollar market,
then, and in any such event, that Purchaser shall promptly give notice (by
telephone confirmed in writing) to Transferor, Servicer and the Agent (which
notice the Agent shall promptly transmit to each Purchaser) of that
determination. The obligation of the affected Purchaser to maintain its Purchase
as a Eurodollar Tranche during any such period shall be terminated at the
earlier of the termination of the Interest Period then in effect for such
Eurodollar Tranche or when required by law, and Transferor shall, no later than
the time specified for the termination, convert the portion of the Purchase
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of the affected Purchaser that constitutes part of the Eurodollar Tranche into a
part of the ABR Tranche.
(b) If, prior to the beginning of any Interest Period, the Agent shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that: (i) Dollar deposits in the relevant amount
and for the Interest Period are not available in the relevant interbank
eurodollar market or (ii) by reason of circumstances affecting the interbank
eurodollar market, that adequate and fair means do not exist for ascertaining
the Reserve Adjusted Eurodollar Rate applicable to the Eurodollar Tranche, then
the Agent shall promptly give notice of this determination to Transferor and to
each Purchaser. Thereafter, and continuing until the Agent shall notify
Transferor that the circumstances giving rise to this determination no longer
exist, (x) the Eurodollar Tranche will, on the last day of the applicable
Interest Period, convert into a part of the ABR Tranche and (y) the right of
Transferor to request a Eurodollar Tranche shall be suspended.
SECTION 4.5 Indemnity. If a Purchaser shall incur any losses, expenses
or liabilities (including any interest paid to lenders of funds borrowed by it
to fund its Purchase of its Certificate as a Eurodollar Tranche and any loss
sustained in connection with the re-deployment of such funds) as a result of (a)
the failure of such Purchase to be made on the Effective Date (other than any
such failure resulting from the Purchaser's default in the performance of its
obligations hereunder) or (b) any repayment, including under Section 3.1, of any
part of the Invested Amount allocated to the Eurodollar Tranche on a date that
is not the last day of the Interest Period applicable to that part of the
Invested Amount or that is any date other than the date specified in a notice of
repayment given by Trustee, then, upon written notice (which notice shall be
signed by an officer of the Purchaser with knowledge of and responsibility for
such matters and shall set forth in reasonable detail the basis for requesting
the amounts) from the Purchaser to Transferor and Servicer, additional amounts
sufficient to indemnify the Purchaser against the losses, expenses and
liabilities, but not for any lost profits associated therewith, shall constitute
"Additional Amounts" for purposes of the Supplement, and the Purchaser shall be
entitled to receive these additional amounts, solely from amounts allocated
thereto and paid pursuant to the Supplement.
SECTION 4.6 Taxes. (a) Any and all payments made to each Purchaser
under its Certificate shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or assessed,
excluding taxes imposed by the jurisdiction in which that
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Purchaser's principal office (and/or the office where it books its investment in
its Certificate) is located on all or part of the net income, profits or gains
of that Purchaser (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise) (all the nonexcluded taxes, levies, imposts, charges, deductions,
withholdings and liabilities being hereinafter referred to as "Taxes"), except
to the extent required by law. If Trustee or the Agent is required by law to
deduct or withhold any Taxes from or in respect of any sum payable hereunder or
under any Certificate to a Purchaser, then the sum payable shall be increased by
the amount necessary to yield to such Purchaser (after payment of all Taxes) an
amount equal to the sum it would have received had no such deductions or
withholdings been made, and the additional amount shall constitute "Additional
Amounts" for purposes of the Supplement, and the Purchaser shall be entitled to
receive these additional amounts, solely from amounts allocated thereto and paid
pursuant to the Supplement.
(b) Whenever any Taxes are paid by Trustee pursuant to subsection (a),
as promptly as possible thereafter Servicer shall send to the relevant Purchaser
the original or a certified copy of an original official receipt showing payment
thereof (if any) or any other evidence of the payment as may be available to
Servicer through the exercise of its reasonable efforts. If Trustee falls to pay
any Taxes when due to the appropriate taxing authority or falls to remit to the
Purchaser the required receipts or other required documentary evidence, the
Purchaser shall be entitled to receive, solely from amounts allocated with
respect thereto and paid pursuant to the Supplement, additional amounts
necessary to indemnify it for any incremental taxes, interest or penalties that
may become payable by the Purchaser as a result of any such failure, and the
amounts shall constitute "Additional Amounts" for purposes of the Supplement,
and the Purchaser shall be entitled to receive these additional amounts, solely
from amounts allocated thereto and paid pursuant to the Supplement.
(c) On or before the date it becomes a party to this Agreement (or, in
the case of an Affected Party, on or before the date it becomes a Support Bank)
and, so long as it may properly do so, periodically thereafter, to keep forms up
to date, each Purchaser (including any Assignee) and Affected Party that is not
a United States person (as defined in section 7701(a)(30) of the Internal
Revenue Code), shall deliver to Trustee any certificates, documents or other
evidence that shall be required by the Internal Revenue Code or Treasury
Regulations issued pursuant thereto to establish that, assuming the Certificates
are properly characterized as indebtedness for Federal income tax purposes, it
is exempt from existing United States Federal withholding (including backup
withholding) requirements, including (i) two original copies of Internal Revenue
Service Form 4224 or successor applicable form, properly completed
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and duly executed by the Purchaser or Affected Party certifying that it is
entitled to receive payments under this Agreement or any Certificate without
deduction or withholding of any United States Federal income taxes, and (ii) an
original copy of Internal Revenue Service Form W-8 or W-9 or applicable
successor form, properly completed and duly executed, establishing that it is
entitled to an exemption from a backup withholding; provided, that if any
Purchaser or Affected Party fails to comply with this subsection 4.6(c) (it
being understood that a Purchaser's or Affected Party's inability to properly
provide the documents described herein after the date it becomes a party hereto,
in the case of a Purchaser, or the date it becomes a Support Bank, in the case
of an Affected Party, shall not constitute failure to comply with this
subsection 4.6(c)), amounts payable to such Purchaser or such Affected Party (as
the case may be) under this Section 4.6 shall be limited to amounts that would
have been payable under this section if such Purchaser had so complied. Each
Purchaser, including any Assignee, shall notify Trustee of any change in
circumstances or lapse in time which renders any form provided by such Purchaser
pursuant to this subsection 4.6(c) obsolete to the extent that such Purchaser is
no longer exempt from existing United States Federal withholding (including
backup withholding) requirements.
(d) On or before the date it becomes a party to this Agreement (and, so
long as it may properly do so, periodically thereafter, to keep forms up to
date), each Purchaser, including any Assignee, (other than any such Purchaser or
Assignee organized as a corporation under the laws of any state of the United
States) that is a United States person (as defined in Section 7701(a)(30) of the
Internal Revenue Code), shall deliver to Trustee an original copy of Internal
Revenue Service Form W-9 or applicable successor form, properly completed and
duly executed, certifying its exemption from backup withholding.
(e) If any Additional Amount under this Section 4.6 is paid to a
Purchaser and such Purchaser determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its tax liabilities in or with respect to the
taxable year in which the Additional Amount is paid, such Purchaser shall pay to
the Transferor an amount that such Purchaser shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by such
Purchaser in such year as a consequence of such refund, reduction or credit.
ARTICLE V OTHER PAYMENT TERMS
SECTION 5.1 Time and Method of Payment. (a) All amounts payable to any
Purchaser hereunder or with respect to its Certificate shall be made to the
Agent for the account of the Purchaser by wire transfer of immediately
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available funds in Dollars not later than 2:00 p.m., New York City time, on the
date due. Any funds received after that time will be deemed to have been
received on the next Business Day. The Agent shall distribute all payments to
the Purchasers, in accordance with their respective interests, prior to the
close of business on the Business Day on which any payment is deemed received.
(b) On any date on which a payment to one or more Purchasers hereunder
or under the Certificates is due and payable, the Agent may (but in no event
shall be required to) assume that the payment has been made available to the
Agent on the date of the payment in accordance with this section, and the Agent
may (but in no event shall be required to), in reliance upon this assumption,
make payment of a corresponding amount to the Purchasers. If and to the extent
any amounts shall not have so been made available to the Agent, each Purchaser
irrevocably and unconditionally agrees to repay to the Agent forthwith on demand
the amount of payment it received together with interest thereon, for each day
from the date payment is made by the Agent until the date the amount is repaid
to the Agent, (i) for the first three days following the date the payment is
made, at a rate per annum equal to the Federal Funds Rate and (ii) thereafter,
at a rate per annum equal to the Federal Funds Rate plus 1%.
SECTION 5.2 Pro Rata Treatment; Percentages. (a) Each repayment of the
principal of the Certificates, each payment of interest thereon and each
conversion or continuation of any Tranche (except as otherwise required by
Section 4.4(a) with respect to conversions) shall be allocated pro rata among
the Purchasers on the date of payment or reduction, in accordance with their
respective Class Percentages.
(b) For purposes of this Agreement, (i) "Class Percentage" means, with
respect to each Purchaser, the percentage equivalent (carried out to twelve
decimal places) of a fraction, the numerator of which is the Stated Amount of
such Purchaser's Certificate and the denominator of which is the sum of the
Stated Amounts of all of the Purchasers' Certificates, and (ii) "Series
Percentage" means, with respect to each Purchaser, the percentage equivalent
(carried out to twelve decimal places) of a fraction, the numerator of which is
the Stated Amount of such Purchaser's Certificate and the denominator of which
is the sum of the Stated Amounts for all of the Series 1996-1 Certificates. The
initial Class Percentages and Series Percentages of the initial Purchasers are
set forth opposite their names in Schedule L
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Transferor. As of the Effective Date, Transferor represents
and warrants to the Purchasers that each of its representations and
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warranties in the Pooling Agreement and Purchase Agreement is true and correct,
as if made on the Effective Date, and further represents and warrants that:
(a) no Early Amortization Event or Unmatured Early
Amortization Event exists;
(b) assuming the accuracy of the Purchaser's representations
set out in Section 6.3 and that no Purchaser (and no Person acting on
any Purchaser's behalf) has made a general solicitation or general
advertising within the meaning of the Securities Act, the offer and
sale of the Certificates in the manner contemplated by this Agreement
is a transaction exempt from the registration requirements of the
Securities Act, and the Pooling Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended;
(c) except for First Chicago Capital Markets, Inc. and BT
Securities Corporation (collectively, the "Financial Advisors"),
Transferor has not dealt with any financial advisor, or other Person
who may be entitled to any commission or compensation in connection
with the sale of the Certificates; and the fees of the Financial
Advisors shall not be an obligation of the Purchasers; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.2 Howmet. As of the Effective Date, Howmet represents and
warrants to the Purchasers that:
(a) each of its representations and warranties in the Pooling
Agreement (in its capacity as Servicer) and the Purchase Agreement (in
its capacity as a Seller) is true and correct, as if made on the
Effective Date with the same effect as if made on that date (unless
specifically stated to relate to an earlier date);
(b) the Pro Forma Financial Data present fairly in all
material respects the pro forma financial position, results of
operations and cash flows of Howmet and its consolidated Subsidiaries
at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent
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basis, except as otherwise stated therein (except, in the case of quarterly
financial statements, for the omission of footnotes and ordinary year-end
adjustments, none of which, individually or in the aggregate, would be
material);
(c) since September 30, 1995 through to the Effective Date
(and except as contemplated in the Pro Forma Financial Data), (i) there
has been no material adverse change in the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
Transferor or Howmet, whether or not arising in the ordinary course of
business, and (ii) there have been no transactions (except the
execution and delivery of Transaction Documents, the Howmet Credit
Agreement and the Note Indenture, and the consummation of the
transactions and refinancings contemplated thereby) entered into by
Transferor or Howmet that are material with respect to the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of Transferor or Howmet; and
(d) no information supplied by or on behalf of Transferor or
Howmet to the Agent or the Purchasers in connection with the
Transaction Documents contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made.
SECTION 6.3 Purchasers. As of the Effective Date (or such later date on
which it acquires its Certificate in accordance with Section 10.3), each
Purchaser represents and warrants (and each Assignee shall be deemed to
represent and warrant as of the date that its assignment becomes effective)
that:
(a) it is a "qualified institutional buyer" as that term is
defined under Rule 144A of the Securities Act and it is not purchasing
its Certificate with a view to making a distribution thereof (within
the meaning of the Securities Act);
(b) it has all necessary corporate power and authority, and
has taken all action necessary, to execute and deliver this Agreement
and the other Transaction Documents to which it is a party, to fulfill
its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby;
(c) it is not a pension, profit sharing or other employee
benefit plan subject to ERISA, and the assets being used to purchase
its
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Certificate do not constitute the assets of any "benefit plan investor" (as
defined under ERISA);
(d) such Purchaser's making and performance of this Agreement
and the other Transaction Documents to which it is a party do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other law or regulation applicable to it;
(e) this Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by it and
constitute its legal, valid and binding obligation, enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law; and
(f) all approvals, authorizations or other actions by, or
filing with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement and the other
Transaction Documents to which it is a party have been obtained.
ARTICLE VII CONDITIONS
SECTION 7.1 Conditions to Purchase. The obligation of each Purchaser to
Purchase its Certificate shall be subject to the satisfaction of the conditions
precedent that (x) the Agent shall have received, for the account of such
Purchaser, a duly executed and authenticated Certificate registered in its name
and in a Stated Amount equal to the amount set out opposite its name on the
signature pages of this Agreement, (y) the Agent shall have received certain
fees and reimbursement of any expenses referred to in Section 10.5 for which
invoices have been presented and (z) the Agent shall have received, for the
account of such Purchaser, an original (except as indicated below) counterpart
of the following (each of which, if not in a form attached to this Agreement,
shall be in form and substance satisfactory to the Agent):
(a) certified copies of the Pooling Agreement, the Purchase
Agreement and the Guaranty, each of which shall be in full force and
effect, and evidence that all actions required to be taken under those
documents in connection with the issuance of the Certificates shall
have been taken;
(b) photocopies of each Account Agreement;
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(c) a certificate of the Secretary, or an Assistant Secretary,
of each of Transferor, Servicer, Guarantor and each Seller with respect
to:
(i) attached copies of resolutions of its Board of
Directors then in full force and effect authorizing the
execution, delivery and performance of the Transaction
Documents;
(ii) the incumbency and signatures of those of its
officers authorized to act with respect to the Transaction
Documents; and
(iii) attached copies of its certificate of
incorporation and by-laws;
(d) a certificate of an Authorized Officer of each of
Transferor, Servicer, Guarantor and each Seller stating that, as of the
Effective Date, before and after giving effect to the Purchases and to
the application of any proceeds therefrom, the following statements
shall be true:
(i) the representations and warranties of Transferor,
Servicer, Guarantor and each Seller set out in this Agreement
and the other Transaction Documents are true and accurate as
of the Effective Date (unless specifically stated to relate to
an earlier date); and
(ii) no Early Amortization Event or Unmatured Early
Amortization Event has occurred and is continuing;
(e) a certificate of an appropriate officer of Trustee stating
that the Pooling Agreement has been duly authorized, executed and
delivered by Trustee and the Certificates have been duly authenticated
by Trustee in accordance with the Pooling Agreement, and an opinion of
counsel to Trustee as to related matters;
(f) results of recent searches of the UCC filing records and
tax and ERISA and judgment lien records, updating each of the searches
performed in connection with the issuance by Transferor of the Series
1995-1 Certificates, showing no filings of record that cover any of the
Receivables or the Related Transferred Assets, other than the financing
statements filed in connection with the issuance of the Series 1995-1
Certificates;
(g) the following opinions addressed to the Agent, the
Purchasers and Trustee, and in each case as to the matters and in such
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form and substance as shall be satisfactory to the Agent, the Purchasers
and Trustee:
(i) opinions of Latham & Watkins as to certain
corporate and securities matters, Federal and state tax and
UCC matters, true sale and non-consolidation;
(ii) opinions of (A) Paul, Hastings, Janofsky &
Walker, (B) Kummer Kaempfer Bonner & Renshaw and (C) Vorys,
Sater, Seymour and Pease as to certain corporate, state tax
and UCC matters; and
(iii) the opinion of Roland Paul, General Counsel to
Servicer, as to certain corporate matters;
(h) the Daily Report for the Effective Date;
(i) evidence, reasonably satisfactory to the Agent
and the Purchasers, of the payment of all taxes, fees and
other governmental charges, if any, incidental to the issuance
of the Certificates and to the consummation of the
transactions contemplated hereunder and under the Pooling
Agreement;
(j) a certificate of the Secretary of Howmet to the effect
that there is not, nor has there at any time been, any matured or
unmatured "Event of Default" or "Potential Event of Default" under (and
as defined in) the Howmet Credit Agreement, other than as a result of
failure to provide 1995 audited financial statements;
(k) copies of any management or other agreements with regard
to the administration of Transferor's business, certified by an
Authorized Officer of Transferor;
(l) a pro-forma balance sheet of Transferor as of the
Effective Date, after giving effect to the transactions contemplated by
the Supplement, certified by an appropriate officer of Transferor; and
(m) any other information, certificates, opinions and
documents as the Agent or Credit Suisse may have reasonably requested.
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ARTICLE VIII COVENANTS
SECTION 8.1 Affirmative Covenants. Transferor and Howmet each severally
covenant and agree that, until the Certificates have been paid in full, it will:
(a) duly and timely perform all of its covenants and
obligations under each Transaction Document to which it is a party;
(b) with reasonable promptness deliver to each Purchaser such
information, documents, records or reports respecting the Program or
the Receivables as the Purchaser may from time to time reasonably
request; and
(c) at the same time any report (including any Dally Report,
Monthly Report or annual auditors' report), notice or other document is
provided, or caused to be provided, by Transferor or Servicer to
Trustee under the Pooling Agreement, provide the Agent and each
Purchaser with a copy of the report.
In addition, it is understood and agreed that so long as the
Certificates remain outstanding, Servicer and Transferor shall (and Servicer
shall cause each Seller to) during regular business hours and (so long as no
Early Amortization Event has occurred and is continuing) upon two Business Days
prior written notice, permit Trustee, the Agent or the Purchasers whose
aggregate Class Percentages exceed 50% (the "Majority Class B Purchasers") or
such other Person as Trustee, the Agent or the Majority Class B Purchasers may
designate from time to time), or their respective agents or representatives
(including certified public accountants or other auditors), as an expense of
Servicer paid out of the Servicing Fee, (i) to examine and make copies of and
abstracts from, and to conduct accounting reviews of, all Records in the
possession or under the control of Servicer, Transferor or any Seller, including
the related Contracts and purchase orders, invoices and other agreements related
thereto, and (ii) to visit the offices and properties of Servicer, Transferor or
any Seller for the purpose of examining such materials described in clause (i),
and to discuss matters relating to the Receivables or the Related Transferred
Assets or the performance by Servicer, Transferor or any Seller of their
respective obligations under any Transaction Document with any officer, employee
or representative of Servicer, Transferor or any Seller. Trustee, the Agent or
the Majority Class B Purchasers may (but shall not be obligated to) conduct, or
cause their respective agents or representatives to conduct, reviews of the
types described in this paragraph (each such review, a "Receivables Review")
whenever Trustee, the Agent or the Majority Class B Purchasers, in
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its or their reasonable judgment, deem any such review appropriate; provided
that, unless an Early Amortization Event or an Unmatured Early Amortization
Event shall exist, (x) no more than two Receivables Reviews shall be conducted
by or at the request of the Agent in any calendar year, and (y) no more than two
Receivables Reviews shall be conducted by or at the request of the Majority
Class B Purchasers in any calendar year; and provided further, this Section 8.1
shall limit the powers of Trustee under Section 3.5(b) of the Pooling Agreement.
SECTION 8.2 Negative Covenants. Notwithstanding Section 1.7 of the
Purchase Agreement, Howmet shall not cause or permit any of its Subsidiaries to
become a new Seller without satisfying the Approval Condition unless the
Required Purchasers have consented in writing to that addition.
SECTION 8.3 Transfers. Each Purchaser agrees that it will not transfer
its Certificate (or any portion thereof) to any Person unless such Person shall
have provided the Trustee and Transferor with a certificate to the effect that
such Person: (a) is a "qualified institutional buyer," as that term is defined
under Rule 144A of the Securities Act and is not purchasing its Certificate with
a view to making a distribution thereof (within the meaning of the Securities
Act), and (b) is not a pension, profit sharing or other employee benefit plan
subject to ERISA.
ARTICLE IX AGENT; REQUIRED PURCHASERS
SECTION 9.1 Appointment. The Purchasers hereby designate The First
National Bank of Chicago as Agent. Each Purchaser hereby irrevocably authorizes
the Agent to take action on its behalf under the provisions of the Transaction
Documents and any other instruments and agreements referred to therein and to
exercise the powers and perform the duties hereunder and thereunder that are
specifically delegated to or required of the Agent by the terms hereof and
thereof, and any other powers as are reasonably incidental thereto. The Agent
may perform any of its duties by or through its respective officers, directors,
agents or employees.
SECTION 9.2 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement. Neither the
Agent nor any of its officers, directors, agents or employees shall be liable
for any action taken or omitted by it or them under any Transaction Document or
in connection herewith or therewith, unless caused by their gross negligence or
willful misconduct. The duties of the Agent shall be mechanical and
administrative in nature, the Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Purchaser, and nothing in any
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Transaction Document, expressed or implied, is intended to or shall be construed
as to impose upon the Agent any obligations in respect of any Transaction
Document except as expressly set forth herein.
SECTION 9.3 Lack of Reliance on Agent and Financial Advisors.
Independently and without reliance upon the Agent or the Financial Advisors,
each Purchaser, to the extent it deems appropriate, has made and shall continue
to make (a) its own independent investigation of the financial condition and
affairs of Transferor, the Seller, Servicer and the Trust in connection with the
making and the continuation of each Purchase and the taking or not taking of any
action in connection herewith and (b) its own appraisal of the creditworthiness
of Transferor, the Seller and Servicer and the merits and risks of an investment
in the Certificates, and, except as expressly provided in this Agreement, the
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Purchaser with any credit or other information
with respect thereto, whether coming into its possession before the making of a
Purchase or at any time or times thereafter. The Agent shall not be responsible
to any Purchaser for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the
Transaction Documents or the financial condition of Transferor, the Sellers,
Servicer or the Trust or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of any
Transaction Document, or the financial condition of Transferor, the Sellers,
Servicer or the Trust or the existence or possible existence of any Early
Amortization Event or Unmatured Early Amortization Event.
SECTION 9.4 Certain Rights of Agent. If the Agent shall request
instructions from the Required Purchasers with respect to any act or action
(including failure to act) in connection with any Transaction Document, the
Agent shall be entitled to refrain from acting or taking the action unless and
until the Agent shall have received instructions from the Required Purchasers,
and the Agent shall not incur liability to any person by reason of so
refraining. Without limiting the foregoing, no Purchaser shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under any Transaction Document in accordance with the
instructions of the Required Purchasers as for refraining to act in the absence
of instruction.
SECTION 9.5 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
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radiogram, order or other document or telephone message signed, sent or made by
any person that the Agent believed to be the proper person. The Agent may
consult with legal counsel (including counsel for any Howmet Person),
independent public accountants and other experts selected by the Agent and shall
not be liable for any action taken or omitted to be taken in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.6 Indemnification. To the extent the Agent is not reimbursed
and indemnified by Transferor or Servicer, the Purchasers will reimburse and
indemnify the Agent (or cause the Agent to be reimbursed and indemnified)
ratably in accordance with their respective Series Percentages from and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses or disbursements of whatsoever kind
or nature that may be imposed on, asserted against or incurred or suffered by
the Agent (including fees and expenses of legal counsel, accountants and
experts) in performing its duties or as a result of any action taken or omitted
to be taken by the Agent under any Transaction Document or in any way relating
to or arising out of any Transaction Document; provided that no Purchaser shall
be liable for any portion of these liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable order).
SECTION 9.7 Agent in Its Individual Capacity. The Agent and its
respective Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with Transferor or
Servicer or any Howmet Person as if the Agent was not performing the duties
specified herein, and may accept fees and other consideration from Transferor or
Servicer for services in connection with this Agreement and otherwise without
having to account for the same to the Purchasers. Each of the parties hereto
acknowledges that the Agent will be acting both as agent and as a lender under
the Howmet Credit Agreement.
SECTION 9.8 Resignation by Agent. (a) The Agent may resign at any time
by giving notice to Transferor, the Purchasers and any other Agent, if any. Such
resignation shall be effective immediately unless the resigning Agent is the
only Agent, in which event the resignation of such Agent shall take effect upon
the appointment of a successor Agent pursuant to subsections ( and (c) below or
as otherwise provided below.
(b) In the event that there is only one Agent, upon any notice of
resignation of such Agent, the Required Purchasers shall appoint a successor
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Agent hereunder who shall be a commercial bank or trust company reasonably
acceptable to Transferor (it being understood and agreed that any Purchaser is
deemed to be acceptable to Transferor).
(c) If a successor Agent is not appointed pursuant to subsection (
within 30 days after the delivery of the notice referred to in subsection (a),
the resigning Agent, with the consent of Transferor, shall then appoint a
successor Agent who shall serve as Agent hereunder until the time, if any, that
the Required Purchasers appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to subsection (
or (c) above by the 60th day after the date notice of resignation was given by
the resigning Agent, such Agent's resignation shall become effective and the
Purchasers shall thereafter perform all the duties of the Agent under the
Transaction Documents until the time, if any, that the Purchasers appoint a
successor Agent as provided above.
SECTION 9.9 Required Purchasers. "Required Purchasers" means:
(i) for purposes of instructing the Trustee to declare that
the Early Amortization Period has commenced pursuant to Section 6.2 of
the Supplement, either (x) Holders of Certificates whose aggregate
Class Percentages exceed 50% or (y) Holders of Class A Certificates
whose aggregate Class Percentages (as defined in the Class A
Certificate Purchase Agreement) exceed 50%; and
(ii) for all other purposes, both (x) Holders of Certificates
whose aggregate Class Percentages exceed 50% and (y) Holders of Class A
Certificates whose aggregate Class Percentages (as defined in the Class
A Certificate Purchase Agreement) exceed 50%.
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendments. Except as provided in Section 13.1(a) or (b)of
the Pooling Agreement, neither Transferor nor Howmet shall amend, waive or
otherwise modify any provision of any Transaction Document to which it is a
party, consent to any departure therefrom, or grant any consent thereunder,
unless the same shall have been consented to in writing by the Required
Purchasers prior to the effectiveness of the same; provided, however, that no
amendment shall (a) decrease in any manner the amount of, or delay the timing
of, any allocation, payment or distribution in respect of any Certificate
without the prior written consent of each Purchaser affected thereby, (b)amend,
modify or waive any provision of this Agreement that
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requires the approval or consent of a specified percentage of Purchasers without
the prior written consent of that percentage of Purchasers, (c) amend, modify or
waive the provisions of this section with respect to the rights of any Purchaser
without the consent of that Purchaser, (d) waive any Early Amortization Event
arising from a Bankruptcy Event with respect to Transferor or any Seller without
the consent of each Purchaser, (e) amend or modify the Series Percentage or
Class Percentage of any Purchaser without its prior written consent, (f) waive
any of the requirements hereunder that the interests of Trustee in the
Receivables and the other Transferred Assets be perfected by appropriate UCC
filings without the prior written consent of each Purchaser or (g) amend, modify
or otherwise affect the rights or duties of the Agent hereunder without the
prior written consent of the Agent; provided further that neither the execution
and delivery of a Supplement relating to a refinancing of the Certificates as
contemplated by Section 4.9 of the Supplement relating to the Certificates, nor
any other amendment to the Transaction Documents in connection with such a
refinancing, shall require any consent from any Purchaser, so long as the prior
or contemporaneous repayment in full of the Certificates in accordance with
Section 5.2 of the Supplement relating to the Certificates is a condition to the
issuance of the refinancing certificates, and of the effectiveness of such
related amendment. Each Purchaser shall be bound by any modification, waiver or
consent authorized by this section, whether or not its Certificate shall have
been marked to indicate the modification, waiver or consent.
SECTION 10.2 No Waiver; Remedies. Any waiver, consent or approval given
by any party hereto shall be effective only in the specific instance and for the
specific purpose for which given, and no waiver by a party of any breach or
default under this Agreement shall be deemed a waiver of any other breach or
default. No failure on the part of any party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce the right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other right. No notice
to or demand on any party hereto in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 10.3 Successors and Assigns; Assignments. (a) This Agreement
shall be binding upon, and inure to the benefit of, Transferor, Servicer, the
Agent, the Purchasers and their respective successors and assigns; provided that
neither Transferor nor Servicer may assign its rights or obligations hereunder
or in connection herewith or any interest herein
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(voluntarily, by operation of law or otherwise) without the prior written
consent of all the Purchasers, except that the Servicer may be terminated in
accordance with Sections 10.1 and 10.2 of the Pooling Agreement; and provided
further, that no Purchaser or Participant may transfer, pledge, assign, sell
participations in or otherwise encumber its rights or obligations hereunder or
any interest herein except as permitted under this Section 10.3.
(b) Subject to the terms of Section 10.3(f), each Purchaser may at any
time sell to one or more banks or other entities ("Participants") participating
interests in all or any portion of its Certificate and its obligations hereunder
(its "Credit Exposure"); provided that such Participant shall have certified to
the selling Purchaser that such Participant is a "qualified institutional buyer"
(as defined under Rule 144A of the Securities Act) or that such sale is not
required to be registered under the Securities Act or any other applicable
securities laws. In the event of any sale by a Purchaser of participating
interests to a Participant, the Purchaser shall notify Transferor of the
identity of the Participant upon a request by Transferor, the Purchaser's
obligations under this Agreement shall remain unchanged, the Purchaser shall
remain solely responsible for the performance thereof, and the Purchaser shall
remain the holder of its rights under its Certificate and this Agreement for all
purposes under this Agreement, and the other parties to the Transaction
Documents shall continue to deal solely and directly with the Purchaser in
connection with such rights and obligations under this Agreement. Other than in
the case of a sale, transfer, assignment or conveyance of a participating
interest by Alpine Securitization Corp. to a Permitted Transferee prior to any
rights of a proposed Participant being recognized hereunder or under any other
Transaction Document or Certificates, the Purchaser shall provide, or shall
cause such Participant to provide, to Transferor such information as Transferor
reasonably requests to make the determination required by Section 10.3(f).
Transferor agrees that each Participant shall be entitled to the benefits of
Sections 4.3, 4.5, 4.6 and 10.5 with respect to its participation in the
Certificate. The Purchasers agree that any agreement between them and any
Participant in respect of a participating interest shall require the Participant
to comply with the terms of Section 10.13 and shall not restrict the Purchasers'
right to agree to any amendment, supplement or modification of the Transaction
Documents except to (i) extend the final maturity of any obligation, (ii) reduce
the rate or extend the time of payment of interest thereon or any fees owed to
the Purchasers under the Transaction Documents, (iii) reduce the principal
amount of any obligation, (iv) release or direct the release of all or
substantially all of the Transferred Assets or Trustee's claim to the
Transferred Assets, (v) reduce substantially the amount of any reserve included
in the calculation of the Base Amount, (vi) increase the amount of the
participation from the amount thereof then in effect, or (vii) permit assignment
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or transfer by Transferor or any Seller of its rights or obligations under the
Transaction Documents.
(c) Subject to the terms of Section 10.3(f), any Purchaser may at any
time assign to any Permitted Transferee or to one or more banks or other
financial institutions (each, an "Assignee") all or any part of its Credit
Exposure; provided that (i) unless assigned to an Affiliate of the Purchaser or
to a Permitted Transferee, it assigns all of its Credit Exposure or a portion of
its Credit Exposure in an amount not less than $2,500,000, (ii) such Assignee,
other than an existing Purchaser, an Affiliate of the Purchaser or a Permitted
Transferee, must be reasonably acceptable to the Agent and Transferor, which
acceptance shall not be delayed or withheld unreasonably (it being understood
that acceptance may be withheld due to the failure to satisfy Section 10.3(f)),
(iii) if such Assignee is not a United States person (as defined in section
7701(a)(30) of the Internal Revenue Code), such Assignee shall satisfy the
requirements of Section 4.6(c), provided, that if such Assignee thereafter fails
to comply with the requirements of Section 4.6(c), amounts payable to it under
Section 4.6 shall be limited to amounts that would be payable if such Assignee
had complied with Section 4.6(c), (iv) such Assignee shall have certified to the
assigning Purchaser that such Assignee is a "qualified institutional buyer" (as
defined under Rule 144A of the Securities Act) or that such sale is not required
to be registered under the Securities Act or any other applicable securities
laws, and (v) such Assignee makes the representations and warranties set forth
in Section 6.3 to the Transferor as of the effective date of the assignment. For
purposes of this Section 10.3, a "Permitted Transferee" means Credit Suisse or
any other Person that is at all relevant times a C corporation within the
meaning of section 1361(a)(2) of the Internal Revenue Code listed on the letter
from Credit Suisse to Transferor and the Agent dated the Effective Date, as such
list may be augmented from time to time with the consent of Transferor and the
Agent; provided, however, that the aggregate number of actual assignments to
Permitted Transferees at any time outstanding shall not exceed four. In the
event of any assignment, the Purchaser (x) shall comply with Article VI of the
Pooling Agreement, provided that no Opinion of Counsel shall be required to be
delivered pursuant to subsection 6.3(e) of the Pooling Agreement with respect to
any transfer to a Permitted Transferee, and (y) shall give notice to Transferor
and the Agent and shall deliver to the Agent, for acceptance and recording in
its records, an assignment agreement substantially in the form of Exhibit B
together with a processing and recordation fee of, in the case of assignments to
a Purchaser or an Affiliate of a Purchaser, $1,500 and, in cases of any other
assignment, $3,500; provided that no processing and recordation fee shall be
payable in connection with any assignment by Alpine Securitization Corp. to a
Permitted Transferee. Within five Business Days of receipt thereof, the Agent
shall, if the assignment
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agreement has been fully executed by the Assignee, the assignor Purchaser and
Transferor, is completed and is in substantially the form of Exhibit B, execute
the assignment agreement and record the information contained therein in its
records. Upon the earlier of the expiration of the five Business Day period or
the date of the recording, the assignment will become effective; provided that
any assignment by Alpine Securitization Corp. to a Permitted Transferee shall
not require acceptance or recording by the Agent or Transferor prior to
effectiveness and shall become effective immediately upon receipt by the Agent
of an assignment agreement appropriately completed in substantially the form of
Exhibit B and executed by Alpine Securitization Corp. and the applicable
Permitted Transferee. Transferor, the Agent and the Purchasers agree to extend
the rights and benefits with respect to Transferor under this Agreement to the
Assignee to the extent the Assignee would have had if it were a Purchaser that
was an original signatory to this Agreement; provided, that Transferor shall be
entitled to continue to deal solely and directly with the assignor Purchaser in
connection with the interests so assigned to the Assignee until the assignment
agreement and any requIred fee, as described above, shall have been delivered to
Transferor and the Agent by the Purchaser and the Assignee and the assignment
shall have become effective; provided, further, that notwithstanding anything
herein or in the assignment agreement, the Transaction Documents or any
Certificate to the contrary, an assignment (other than an assignment by Alpine
Securitization Corp. to a Permitted Transferee) shall not become effective, an
Assignee (other than a Permitted Transferee) shall not be recognized as a
Purchaser and no other rights of an Assignee hereunder or under any other
Transaction Document or Certificate shall be recognized unless and until the
assigning Purchaser shall have provided, or caused the Assignee to provide, to
Transferor such information as Transferor reasonably requests to make the
determinations required by Section 10.3(f). If the Transferor has accepted an
assignment pursuant to clause (ii) of the first sentence of Section 10.3(c), the
assigning Purchaser shall be deemed to have provided or caused to be provided
such information. Upon the effective assignment of its Credit Exposure, the
Purchaser shall be relieved of its obligations hereunder to the extent of the
assignment.
(d) The sale or assignment of any Credit Exposure to any Assignee or
Participant (each, a "Transferee") shall not be effective until it has agreed to
be bound by the provisions of Section 10.13. Transferor and Howmet each
authorize the Purchasers to disclose to any Transferee and any prospective
Transferee any and all information in their possession concerning Transferor,
Howmet or any other Seller that has been delivered to them by Transferor,
Howmet, any other Seller or Trustee in connection with their credit evaluation
of the Program prior to entering into this Agreement; provided, however, that
each such Transferee and/or prospective Transferee shall agree to treat all such
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information that is non-public as confidential information in accordance with
customary banking practices, except that each such Transferee and/or prospective
Transferee may share any such non-public information with any of its Affiliates
if such Affiliates agree to treat such information as confidential information
in accordance with customary banking practices.
(e) Notwithstanding any other provisions set forth in this Agreement,
the Purchasers may at any time create a security interest in all or any portion
of their rights under this Agreement and the Certificates in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
(f) No transfer, assignment or other conveyance of, or sale of a
participation interest in, a Certificate (other than in the case of a transfer,
assignment, conveyance or sale by Alpine Securitization Corp. to a Permitted
Transferee) shall be made unless (i) the aggregate outstanding principal amount
of all Certificates transferred, or in which a participation interest is sold,
pursuant to such transfer or sale is equal to a principal amount of Certificates
that would represent at least 2.1% of the total interests in partnership capital
or profits, within the meaning of Treasury Regulation Section 1.7704-1 assuming
the Trust were classified as a partnership for Federal income tax purposes, and
(ii) after giving effect thereto, there shall be no more than three Private
Holders in respect of the Certificates, as reasonably determined by Transferor.
No Certificate may be subdivided into an aggregate principal amount that would
represent less than 2.1% of the total interests in partnership capital or
profits as determined pursuant to the preceding sentence. Any attempted
transfer, assignment, conveyance, participation or subdivision in contravention
of the preceding restrictions, as reasonably determined by the Transferor, shall
be void ab initio and the purported transferor, seller or subdivider of such
Certificate shall continue to be treated as the Certificateholder of any such
Certificate for all purposes of this Agreement.
(g) Each Affected Party with respect to each Purchaser shall be
entitled to receive additional payments pursuant to Sections 4.3, 4.5, 4.6 and
10.5 as though it were a Purchaser under such Sections applied to its interest
in a Certificate; provided that such Affected Party shall not be entitled to
additional payments pursuant to Section 4.6 attributable to its failure or
inability, as of the date it becomes a Support Bank (and, so long as it may
properly do so, periodically thereafter, to keep forms up to date), to satisfy
the requirements of subsection 4.6(c) or 4.6(d) as if it were an Assignee.
(h) Each Affected Party claiming increased amounts described in
Sections 4.3, 4.5, 4.6 or 10.5 shall furnish, through its related Purchaser, to
page 25
<PAGE> 451
the Trustee, the Agent, Servicer and Transferor a certificate setting forth in
reasonable detail the basis and amount of each request by such Affected Party
for any such amounts referred to in such Section, which certificate shall be
prepared in accordance with the requirements of such Section (if any). Each
Affected Party shall promptly notify, through its related Purchaser, the
Trustee, the Agent, Servicer and Transferor of the occurrence of any event of
which such Affected Party is aware that would be likely to result in a demand
for compensation pursuant to Sections 4.3, 4.5, 4.6 or 10.5.
(i) In connection with any proposal that a bank or other financial
institution become a Support Bank for a Purchaser which is a Structured lender,
such Purchaser, at its sole discretion, shall be entitled to distribute to any
proposed Support Bank on a confidential basis any information furnished to such
Purchaser by the Agent pursuant to the Transaction Documents. Each Purchaser
which is a Structured lender shall promptly notify the Agent (who shall promptly
notify Transferor) in writing of the identity and interest of each Support Bank
for such Purchaser promptly upon the obtaining of such Support Bank. Such
Purchaser shall provide to the Agent (who shall, upon request, provide copies of
the same to Transferor, Servicer and the Trustee), with respect to each Support
Bank, such forms as would be required to be furnished by such Support Bank
pursuant to subsections 4.6(c) or 4.6(d) if such Support Bank were an Assignee.
SECTION 10.4 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the Certificates delivered
pursuant hereto shall survive the making and the repayment of the Purchases and
the execution and delivery of this Agreement and the Certificates and shall
continue in full force and effect until all obligations have been paid in full.
In addition, the obligations of Transferor under Sections 4.3, 4.4, 4.5, 4.6 and
10.5 and the obligations of the Purchasers under Section 9.6 shall survive the
termination of this Agreement.
SECTION 10.5 Expenses; Indemnification. Transferor and Howmet jointly
and severally shall pay on demand (a) all reasonable out-of-pocket fees and
expenses (including reasonable attorneys' fees and expenses) of the Agent
incurred in connection with the preparation, execution, delivery,
administration, amendment, modification and waiver of the Transaction Documents
and the making and repayment of the Purchases, including any Servicer or
collection agent fees paid to any third party for services rendered to the
Purchasers and the Agent in collecting the Receivables and (b) all reasonable
out-of-pocket fees and expenses of the Purchasers and the Agent (including
reasonable attorneys' fees and expenses of their counsel) incurred in connection
with the enforcement of the Transaction Documents against
page 26
<PAGE> 452
Transferor, Servicer and the Sellers and in connection with any workout or
restructuring of the Transaction Documents. In addition, Transferor will pay any
and all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, recording or enforcement of
this Agreement or any payment made under the Transaction Documents, and hereby
indemnifies and saves the Agent and the Purchasers harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay the taxes and fees. Transferor and Howmet jointly and severally
agree to reimburse and indemnify the Agent and each Purchaser and their
respective officers, directors, shareholders, controlling Persons, employees and
agents (collectively, the "Indemnitees") from and against any and all actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred or suffered by the Agent or the
Purchasers (including fees and expenses of legal counsel, accountants and
experts) in any way relating to or arising out of any Transaction Document.
Notwithstanding the foregoing (and with respect to clause (y) below,
without prejudice to the rights that an Indemmtee may have pursuant to the other
provisions of the Transaction Documents), in no event shall any Indemnitee be
indemnified against any amounts (v) resulting from gross negligence or willful
misconduct by it or on the part of any of its officers, directors, employees or
agents, (w) to the extent they include amounts in respect of Receivables and
reimbursement therefor that would constitute credit recourse to Servicer for the
amount of any Receivable or Related Transferred Asset not paid by the related
Obligor, (x) to the extent they are or result from lost profits, (y) resulting
from any breach by such Indemnitee of its representations, warranties or
covenants in the Transaction Documents or (z) to the extent they would
constitute consequential, special or punitive damages.
If for any reason the indemnification provided in this section is
unavailable to an Indemnitee or is insufficient to hold it harmless, then
Transferor and Howmet jointly and severally shall contribute to the amount paid
by the Indemnitee as a result of any loss, claim, damage or liability in a
proportion that is appropriate to reflect not only the relative benefits
received by the Indemnitee on the one hand and Transferor and Howmet on the
other hand, but also the relative fault of the Indemnitee (if any), Transferor
and Howmet and any other relevant equitable considerations; provided that
Transferor's obligations under this section shall be paid by Transferor only to
the extent that funds are available to make the payments alter all amounts to be
paid to Holders pursuant to Section 4.1 shall have been paid, and there shall be
no recourse to Transferor for all or any part of any amounts payable
page 27
<PAGE> 453
pursuant to this section if the funds are at any time insufficient to make all
or part of any such payments.
SECTION 10.6 Entire Agreement. This Agreement, together with the
documents delivered pursuant to Section 7.1 and the other Transaction Documents,
including the exhibits and schedules thereto, contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all
previous oral statements and other writings with respect thereto.
SECTION 10.7 Notices. All communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered, sent by
overnight courier or mailed by registered mall, postage prepaid and return
receipt requested, or transmitted by facsimile transmission and confirmed by a
similar mailed writing to any party at the address for that party set forth (a)
on the signature page to this Agreement or (b) to another address as that party
may designate in writing to the Agent and Transferor.
SECTION 10.8 No Third-Party Beneficiaries. Nothing expressed herein is
intended or shall be construed to give any Person (other than the parties hereto
and the Participants and Assignees described in Section 10.3 and, solely to the
extent provided in Section 10.3, the other Affected Parties) any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.9 Severability of Provisions. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
SECTION 10.10 Counterparts. This Agreement may be executed in any
number of counterparts (which may include facsimile) and by the different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original, and all of which together shall constitute one and the
same instrument.
SECTION 10.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
page 28
<PAGE> 454
SECTION 10.12 Tax Characterization. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
purposes of Federal, applicable state and local income and franchise and other
taxes measured by or imposed on income, the Certificates will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust will
not be characterized as an association (or publicly traded partnership) taxable
as a corporation, (b) agrees that the provisions of the Transaction Documents be
construed to further that intent, and (c) agrees to treat the Certificates, for
purposes of Federal, state and local income and franchise and other taxes
measured by or imposed on income, as indebtedness.
SECTION 10.13 No Proceedings. (a) Each of Servicer, the Agent (solely
in its capacity as such) and each Purchaser (solely in its capacity as such)
hereby agrees that it will not institute against Transferor, or join any other
Person in instituting against Transferor, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of "Bankruptcy Event") so
long as any Certificates shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any Certificates shall have
been outstanding. The foregoing shall not limit the right of Servicer, the Agent
or any Purchaser to file any claim in or otherwise take any action with respect
to any insolvency proceeding that was instituted against Transferor by any other
Person.
(b) Each of Servicer, Howmet, Transferor, the Agent (solely in its
capacity as such) and each Purchaser (solely in its capacity as such) hereby
agrees that it will not institute against any Structured Lender, or join any
other Person in instituting against any Structured Lender, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition of
"Bankruptcy Event") for one year plus one day alter the latest maturing
commercial paper note, medium term note or other debt security issued by such
Structured Lender is paid. The foregoing shall not limit the right of Servicer,
the Agent or any Purchaser to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted against such
Structured Lender by any other Person.
(c) Obligations arising under this Section 10.13 shall survive any
termination of this Agreement.
SECTION 10.14 Reference Bank. By its execution of this Agreement, the
Agent, identified as a "Reference Bank" in the Supplement, agrees to act as a
Reference Bank for purposes of the Supplement. The Agent shall notify Servicer
of the Reserve-Adjusted Eurodollar Rate applicable to each Interest Period and
of each change in the Alternate Base Rate.
page 29
<PAGE> 455
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------------
Name: Roland Paul
------------------------------
Title: Vice president
-----------------------------
Address: c/o Nevada Corporate Management,
Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION
By: /s/ Roland Paul
--------------------------------
Name: Roland Paul
------------------------------
Title: Vice president
-----------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 861-4746
<PAGE> 456
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: /s/ W. E. Covington
-------------------------------
Title: Authorized Signer
----------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attention: W. Edward Covington
Telephone: (312) 732-5768
Facsimile: (312) 7324487
ALPINE SECURITIZATION CORP.,
as a Purchaser
By: Credit Suisse, New York Branch,
attorney-in-fact
By: /s/ Carl Jackson
--------------------------------
Title: Member of Senior Management
-----------------------------
By: /s/ Roger W. Saylor
--------------------------------
Title: Associate
-----------------------------
Address: 12 E. 49th Street
42nd Floor
New York, New York 10017
Attention: Carl Jackson
Telephone: (212) 238-5370
Facsimile: (212) 238-5332
<PAGE> 457
SCHEDULE I
to Certificate Purchase
Agreement Series 1996-1, Class B
AMOUNT OF EACH INITIAL PURCHASER'S CERTIFICATE
----------------------------------------------
Stated Amount of Certificate
Alpine Securitization Corp. $ 7,500,000.00
Class Percentage
Alpine Securitization Corp. 100%
Series Percentage
Alpine Securitization Corp. 14%
<PAGE> 458
EXHIBIT A
to Certificate Purchase
Agreement Series 1996-I, Class B
FORM OF SERIES 1996-1 SUPPLEMENT
<PAGE> 459
PROJECT BLADE - TAKE OUT
- --------------------------------------------------------------------------------
SERIES 1996-1 SUPPLEMENT
to AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
dated as of April 18, 1996
among
BLADE RECEIVABLES CORPORATION,
as Transferor,
HOWMET CORPORATION,
as Servicer,
and
MANUFACTURERS AND TAADERS TRUST COMPANY,
as Trustee
- --------------------------------------------------------------------------------
<PAGE> 460
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS .............................. 1
SECTION 1.1 Definitions ........................................... 1
SECTION 1.2 Modification Condition ................................ 22
SECTION 1.3 Incorporation of Terms ................................ 22
ARTICLE II DESIGNATION ..................................................... 23
SECTION 2.1 Designation ........................................... 23
SECTION 2.2 Group I ............................................... 23
SECTION 2.3 Investor Ownership Percentage ......................... 23
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS ........................ 24
SECTION 3.1 Conditions to Issuance ................................ 24
SECTION 3.2 Use of Proceeds ....................................... 24
ARTICLE IV PAYMENTS AND ALLOCATIONS ........................................ 24
SECTION 4.1 Interest; Additional Amounts .......................... 24
SECTION 4.2 Daily Calculations and Group Allocations .............. 25
SECTION 4.3 Allocations of Daily Group Collections
(Other Than in a Group Amortization Period) ......... 25
SECTION 4.4 Allocations of Daily Group Collections
During a Group Amortization Period .................. 27
SECTION 4.5 Withdrawals from the Equalization Account
and Principal Funding Account ....................... 29
SECTION 4.6 Available Subordinated Amount ......................... 29
SECTION 4.7 Write-Offs and Recoveries ............................. 30
SECTION 4.8 Certain Dilution in a Group Amortization Period ....... 31
SECTION 4.9 Optional Early Pay Out ................................ 32
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations 33
SECTION 4.11 Tax Opinion .......................................... 36
SECTION 4.12 Reset of Benchmark Percentages and
Special Concentration Limits ....................... 37
ARTICLE V DISTRIBUTIONS AND REPORTS ........................................ 37
SECTION 5.1 Distributions ......................................... 37
SECTION 5.2 Special Distributions on the Refinancing
Date ................................................ 38
SECTION 5.3 Payments in Respect of Transferor
Certificate ......................................... 39
SECTION 5.4 Daily Reports and Monthly Reports ..................... 39
SECTION 5.5 Annual Tax Information ................................ 39
<PAGE> 461
Page
SECTION 5.6 Periodic Perfection Certificate ....................... 40
ARTICLE VI EARLY AMORTIZATION EVENTS ....................................... 40
SECTION 6.1 Early Amortization Events ............................. 40
SECTION 6.2 Early Amortization Period ............................. 43
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES .................. 43
SECTION 7.1 Optional Redemption of Investor Interests ............. 43
SECTION 7.2 Termination ........................................... 44
SECTION 7.3 Indemnification by Transferor ......................... 44
SECTION 7.4 Indemnification by Servicer ........................... 45
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law ......................................... 45
SECTION 8.2 Counterparts .......................................... 45
SECTION 8.3 Severability of Provisions ............................ 46
SECTION 8.4 Amendment, Waiver, Etc ................................ 46
SECTION 8.5 Trustee ............................................... 46
SECTION 8.6 Instructions in Writing ............................... 46
EXHIBITS
EXHIBIT A Part 1. Form of Class A Certificate
Part 2. Form of Class B Certificate
ii
<PAGE> 462
This SERIES 1996-1 SUPPLEMENT, dated as of April 18, 1996 (this
"Supplement"), is made among BLADE RECEIVABLES CORPORATION, a Nevada
corporation, as Transferor, HOWMET CORPORATION, a Delaware corporation
("Howmet"), as Servicer, and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York
banking corporation, as Trustee.
Pursuant to the Pooling and Servicing Agreement, dated as of December
13,1995, as amended and restated in its entirety by the Amended and Restated
Pooling and Servicing Agreement, dated as of April 18,1996 (as the same may be
further amended, supplemented or otherwise modified from time to time, and as
supplemented hereby, the "Pooling Agreement"), among Transferor, Servicer and
Trustee, Transferor may from time to time direct Trustee to issue and
authenticate, on behalf of the Trust, one or more Series of Certificates in one
or more Groups of Series representing undivided interests in the Transferred
Assets. Certain terms applicable to a Series are to be set forth in a
Supplement. This Supplement is a "Supplement" as that term is defined in the
Pooling Agreement.
Pursuant to this Supplement, Transferor and Trustee shall create a
Series of Certificates and specify certain of their terms.
ARTICLE I DEFINITIONS; INCORPORATION OF TERMS
SECTION 1.1 Definitions. (a) Capitalized terms used and not otherwise
defined herein are used as defined in Appendix A to the Pooling Agreement. This
Supplement shall be interpreted in accordance with the conventions set forth in
Part B of that Appendix A.
(b) Each reference in this Supplement to funds on deposit in the
Carrying Cost Account, the Equalization Account or the Principal Funding Account
(or similar phrase) refers only to funds in the administrative sub-accounts of
those Accounts that are allocated to the Series in Group I. Unless the context
otherwise requires, in this Supplement: (i) each reference to a "Daily Report"
or "Monthly Report" refers to a Daily Report or Monthly Report for Group I; (ii)
each reference to the "Servicing Fee" refers to the Servicing Fee allocable to
Group I; (iii) each reference to the "Series Collection Allocation Percentage"
or the "Series Loss Allocation Percentage" refers to Group I's Series Collection
Allocation Percentage or Series loss Allocation Percentage, and (iv) each
reference to the Transaction Documents shall include a reference to the
Certificate Purchase Agreements.
(c) Each capitalized term defined below relates only to the Series
1996-1 Certificates and to no other Series of Certificates (except to the extent
that certain of such terms are explicitly used as defined herein in any
Supplement relating to another Series in Group I). Whenever used in this
Supplement, the following words and phrases shall have the following meanings:
<PAGE> 463
"ABR Tranche" means, at any time, the portion of the Series 1996-1
Invested Amount that is designated by Transferor in accordance with a
Certificate Purchase Agreement to accrue interest based on the Alternate Base
Rate.
"Acquisition Amount" is defined in Section 2.3.
"Additional Amounts" means (a) as to the Series 1996-1 Certificates,
the Prepayment Premium and other amounts payable pursuant to Sections 4.3, 4.5,
4.6 and 10.5 of the Class A Certificate Purchase Agreement and amounts payable
pursuant to Sections 4.3, 4.5, 4.6 and 10.5 of the Class B Certificate Purchase
Agreement, and (b) as to any other Series in Group I, any amounts identified as
"Additional Amounts" in the related Supplement.
"Adjusted Eligible Receivables" means, on any Business Day, the result
of (a) the aggregate Unpaid Balance of Eligible Receivables held by the Trust on
that day, minus (b) the Unapplied Cash held by the Trust on that day, plus (c)
the Aggregate Retained Balances, in each case as shown in the Daily Report for
such day.
"Affected Party" shall mean, with respect to any Structured Lender, any
Support Bank of such Structured Lender.
"Aged Receivables Ratio" means, as calculated in each Monthly Report as
of the Cut-Off Date for the related Calculation Period, a fraction (expressed as
a percentage) having (a) a numerator that is the sum of (i) the aggregate Unpaid
Balance of Receivables that remained outstanding 121 to 150 days after their
respective due dates, as determined as of the Cut-Off Date for such Calculation
Period, plus (ii) the aggregate Unpaid Balance of Receivables that were written
off as uncollectible during the most recently ended Calculation Period and that,
if not so written off, would have been outstanding not more than 120 days after
their respective due dates, as determined as of that Cut-Off Date, and (b) a
denominator that is the aggregate amount payable pursuant to invoices giving
rise to Receivables that were generated during the Calculation Period that
occurred five Calculation Periods prior to the most recently ended Calculation
Period, as determined as of the Cut-Off Date for such prior Calculation Period.
"Agent" means The Firs:t National Bank of Chicago, in its capacity as
Agent under (and as defined in) the Certificate Purchase Agreements, together
with its respective successors in such capacity. The Agent is an "Agent" for
purposes of the Pooling Agreement.
"Aggregate Retained Balances" means, on any Business Day, the aggregate
of the balances retained in Lockbox Accounts or Concentration Accounts for items
in the process of collection but for which funds have not been made available by
the related Lockbox Bank or Concentration Account Bank, provided that (i) no
notice of insufficient funds or similar
2
<PAGE> 464
situation shall exist with respect thereto and (ii) the Unpaid Balance of
Receivables shall have been reduced by an amount equal to such balances.
"Alternate Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest announced, from time to time, by Agent as
its prime commercial rate for United States dollar loans made
in the United States for any day, and
(b) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime commercial
rate announced by the Agent shall become effective without prior notice to
Transferor or the Servicer as of 12:01 a.m., New York City time, on the Business
Day on which each change in the prime commercial rate is announced by the Agent.
The prime commercial rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged by the Agent to any customer. The Agent
may make commercial loans or other loans at rates of interest at, above or below
the prime commercial rate.
"Amortization Period" means the period (x) beginning on the earlier of
(i) the date on which a termination notice is given by the Sellers pursuant to
Section 8.1 of the Purchase Agreement and (ii) the first day of the Calculation
Period that begins on June 1, 2000, and (y) ending on the earlier of (i) the
Expected Final Payment Date and (ii) the date, if any, on which an Early
Amortization Period begins; provided that there will be no Amortization Period
if an Early Amortization Period commences on or prior to the date specified
above for the beginning of the Amortization Period.
"Applicable Ratings Factor" means the Class A Ratings Factor or the
Class B Ratings Factor, as specified in each calculation where the Applicable
Ratings Factor is used.
"Approval Condition" means, with respect to any event or change in the
terms applicable to this Supplement or the Series 1996-1 Certificates, such
event or change shall have been approved in writing, prior to becoming
effective, by the Agent and the Majority Class B Purchasers.
"ASA Measuring Period" means, for any Cut-Off Date falling in a Group
Amortization Period, the Calculation Period ending on that Cut-Off Date (or the
portion thereof falling after the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization Period).
"Available Subordinated Amount" means, at any time during a Group
Amortization Period, the amount calculated pursuant to Section 4.6.
3
<PAGE> 465
"Base Amount" means, on any Business Day, the result of the following
formula:
[NER x SCAP x (100%-CBRR)]-CASD-CCRR
where:
NER = the Net Eligible Receivables as reported in the Daily Report
for that Business Day;
SCAP = the Series Collection Allocation Percentage for that Business
Day;
CBRR = the Class B Reserve Ratio in effect for that Business Day;
CASD = the Class A Subordination Deficit for that Business Day; and
CCRR = the Carrying Cost Receivables Reserve as reported in the
Daily Report for such day.
"Basic Concentration Limit" means, with respect to a Concentration Unit
on any day, (i) if such Concentration Unit includes a Special Obligor, the
Special Concentration Limit for such Special Obligor, and (ii) otherwise, the
Concentration Limit applicable to the Parent for such Concentration Unit.
"Carrying Cost Receivables Reserve" means, on any Business Day, the
result of:
(a) the Current Carrying Costs; plus
(b) the product of (i) the Class A Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on Class A
Certificates, multiplied by (iii) a fraction the numerator of which is
the product of two and the number of Turnover Days and the denominator
of which is 360; plus
(c) the product of (i) the Class B Invested Amount, multiplied
by (ii) 1.5 times the weighted average of the interest rates on the
Class B Certificates, multiplied by (iii) a fraction the numerator of
which is the product of two and the number of Turnover Days and the
denominator of which is 360; plus
(d) the product of (i) the Series Collection Allocation
Percentage on the next preceding Distribution Date, multiplied by (ii)
the aggregate Unpaid Balance of Receivables on the next preceding
Distribution Date, multiplied by (iii) 2%, multiplied by (iv) a
fraction the numerator of which is the product of two and the number of
Turnover Days and the denominator of which is 360; plus
(e) if there is any Series in Group I in addition to the
Series 1996-1 Certificates, the Carrying Cost Receivables Reserve
Increments for each such other Series in Group I (as defined, and
calculated as provided, in the related Supplement); minus
4
<PAGE> 466
(f) the balance on deposit in the Carrying Cost Account at the
beginning of that Business Day.
"Category One Balance" is defined in Section 4.10.
"Category One Eligibles" is defined in Section 4.10.
"Category One Obligors" means the following persons: Alfa Romeo Avio
S.p. A., ABB Power Generation Ltd., Boeing Canada Technology Ltd., Fiat Avio
S.p.A., General Electric Canada Inc., Hitachi Ltd., KLM Royal Dutch Airlines,
Mitsubishi Heavy Industries America, Inc., Mitsui & Co. USA, Inc., Motoren-Und
Turbinen-Union Munchen GmbH, Pratt & Whitney Canada Inc., Rolls-Royce PLC,
Siemens A.G. KWU, and Walbar of Canada Inc.
"Category Three Balance" is defined in Section 4.10.
"Category Three Eligibles" is defined in Section 4.10.
"Category Three Excess Concentration" is defined in Section 4.10.
"Category Three Obligors" means Foreign Obligors that are not Category
One Obligors or Category Two Obligors.
"Category Two Balance" is defined in Section 4.10.
"Category Two Eligibles" is defined in Section 4.10.
"Category Two Excess Concentration" is defined in Section 4.10.
"Category Two Obligors" means Foreign Obligors (other than Category One
Obligors) with principal places of business in Canada, Germany, Italy,
Netherlands, Switzerland, England or Sweden.
"Certificate Purchase Agreements" means the Class A Certificate
Purchase Agreement and the Class B Certificate Purchase Agreement.
"Certificate Rate" means, at any time, the weighted average of the
interest rates on all outstanding Series 1996-1 Certificates at that time.
"Certificate Spread" means:
(a) with respect to the Class A Certificates, (i).50% per
annum in the case of Eurodollar Tranches, and (ii) 0% per annum in the
case of the ABR Tranche; and
5
<PAGE> 467
(b) with respect to the Class B Certificates, (i).80% per
annum in the case of the Eurodollar Tranche, and (ii) 0% per annum in
the case of the ABR Tranche.
"Class A Certificate" is defined in Section 2.1. Each Class A
Certificate shall be substantially in the form of Part 1 of Exhibit A.
"Class A Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class A) dated as of April 18,1996 among Transferor,
Servicer, the Purchasers of Class A Certificates and the Agent.
"Class A Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) 1.333 times the "Benchmark Percentage" for purposes of
clause (c) of the definition of "Concentration Limit,"
(ii) two times the "Benchmark Percentage" for purposes of
clause (d) of that definition, and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (B) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times (y) the
excess of four over the number of Special Obligors.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made pursuant to the Class A Certificate
Purchase Agreement at or prior to that time, reduced (but not below zero) by (a)
the aggregate amount of all distributions that have been made to the Holders of
the Class A Certificates on account of principal, and (b)the amount of all
Investor Write-Offs that have been applied to reduce the Class A Invested Amount
(net of Investor Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the Class A Invested Amount).
"Class A Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class A Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date.
"Class A Purchases" means Purchases made in respect of Class A
Certificates.
"Class A Ratings Factor" means 2.0.
"Class A Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class A Ratings Factor.
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<PAGE> 468
"Class A Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class A Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class A Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class A Minimum Reserve Ratio and (b)the Class A Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period;
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class A Reserve Ratio shall be 26.01%.
"Class A Subordination Deficit" means, on any Business Day, the
positive result (if any) of (a) the Class A Required Reserves, minus (b) the sum
of (i) the Class B Required Reserves plus (ii) the outstanding principal amount
of all Subordinated Classes (all calculated as of the beginning of that Business
Day); provided that at any time when no Senior Class is outstanding the Class A
Subordination Deficit shall equal zero.
"Class B Certificate" is defined in Section 2.1. Each Class B
Certificate shall be substantially in the form of Part 2 of Exhibit A.
"Class B Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1996-1, Class B) dated as of April 18,1996 among Transferor,
Servicer, the Purchasers of Class B Certificates and the Agent.
"Class B Concentration Factor" means, as of any Cut-Off Date, the
greatest of:
(i) the "Benchmark Percentage" for purposes of clause (c) of
the definition of "Concentration Limit,"
(ii) 1.5 times the "Benchmark Percentage" for purposes of
clause (d) of the definition of "Concentration Limit," and
(iii) the sum of (A) all Special Concentration Limits, if any,
plus (B) the product of (x) the "Benchmark Percentage" for purposes of
clause (e) of the definition of Concentration Limit times the excess
(if any) of 2.75 over the number of Special Obligors.
"Class B Invested Amount" means, at any time, the sum of the purchase
prices paid for Class B Purchases made pursuant to (and as defined in) the Class
B Certificate Purchase Agreement at or prior to that time, reduced (but not
below zero) by (a) the aggregate amount of all distributions that have been made
to the Holders of the Class B Certificates on account of principal, and (b) the
amount of all Investor Write-Offs that have been applied to reduce
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<PAGE> 469
the Class B Invested Amount (net of Investor Allocable Recoveries and Investor
Allocable Dilution Adjustments that have been applied to reinstate the Class B
Invested Amount).
"Class B Minimum Reserve Ratio" means the sum, as of any Cut-Off Date,
of (a) the Class B Concentration Factor for that Cut-Off Date plus (b) the
product of the average of the Dilution Ratios for the period of 12 preceding
Calculation Periods ending on that Cut-Off Date, multiplied by the Dilution
Horizon Variable for that Cut-Off Date; provided that in no event shall the
Class B Minimum Reserve Ratio be less than 15%.
"Class B Purchases" means Purchases made in respect of Class B
Certificates.
"Class B Ratings Factor" means 1.5.
"Class B Required Reserve Ratio" means, as calculated in each Monthly
Report, the Loss Reserve Ratio plus the Dilution Reserve Ratio, each calculated
using the Class B Ratings Factor.
"Class B Required Reserves" means, at any time, the product of (a) the
Net Eligible Receivables multiplied by (b) the Class B Reserve Ratio multiplied
by (c) the Series Collection Allocation Percentage.
"Class B Reserve Ratio" means, during any Distribution Period, the
greater of (a) the Class B Minimum Reserve Ratio and (b) the Class B Required
Reserve Ratio, each as calculated in the Monthly Report required to be delivered
on the Report Date immediately prior to the start of that Distribution Period,
provided that during the period from the date hereof to the first Distribution
Date thereafter the Class B Reserve Ratio shall be 21.01%.
"Class Invested Amount" means (a) with respect to Class A, the Class A
Invested Amount, (b)with respect to Class B, the Class B Invested Amount and (c)
with respect to any other Senior Class or Subordinated Class of Certificates,
the amount identified as its "Class Invested Amount" in the Supplement for such
Senior Class or Subordinated Class of Certificates.
"Concentration Limit" means:
(a) 100% for any Tier-1 Obligor;
(b) 100% for any Tier-2 Obligor;
(c) 15% for any Tier-3 Obligor;
(d) 10% for any Tier-4 Obligor; and
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<PAGE> 470
(e) 4% for any Tier-5 Obligor.
Each of the percentages above is called a "Benchmark Percentage".
"Concentration Unit Excess Concentration" is defined in Section 4.10.
"Concentration Unit" means, on any day, each Obligor and its
Affiliates, if any, that are Obligors; it being understood that each Obligor
shall belong to only one Concentration Unit, and that a single Obligor can be a
Concentration Unit.
"Current Carrying Costs" means, during any Distribution Period, the sum
of (i) the amount of interest on the Series 1996-1 Certificates that will be
payable on the next Interest Payment Date and any other Interest Payment Date
falling not later than one week after such Interest Payment Date, (ii) the
amount of the Servicing Fee that will be payable on or before the next
Distribution Date plus (iii) the Current Carrying Costs Increments for each
other Series in Group I (as defined, and calculated as provided in, the
Supplement for each such Series.)
"Daily Group Collections" is defined in Section 4.2.
"Deferred Portion" means, on any day with respect to Group I, the
portion of the Acquisition Amount for the Series of Certificates in Group I as
to which payment has been deferred, which portion shall equal the product of (a)
the Series Collection Allocation Percentage times (b) the sum of the following
amounts (as shown in the Daily Report for such day): (i) the Excess
Concentration Balances, plus (ii) the aggregate unpaid balance of Receivables
that are not Eligible Receivables (including any such Receivables that are
ineligible due to the attachment of Adverse Claims), plus (iii) the Carrying
Cost Receivables Reserve, plus (iv) the Class B Reserve Ratio times the Net
Eligible Receivables, plus (v) the Class A Subordination Deficit (it being
understood that the Deferred Portion may vary from day to day); provided that
the Deferred Portion shall be fixed as of the Group Amortization Calculation
Date.
"Dilution Horizon Variable" means, at any time, a fraction having (a) a
numerator equal to the sum of the aggregate amounts payable pursuant to invoices
giving rise to Receivables and generated during the two Calculation Periods
ending on the most recent Cut-Off Date (as of that Cut-Off Date) and (b) a
denominator equal to the Adjusted Eligible Receivables as of the most recent
Cut-Off Date.
"Dilution Ratio" means, as calculated in each Monthly Report as of the
most recent Cut-Off Date, a fraction (expressed as a percentage) having (a) a
numerator equal to the aggregate amount of Dilution on the Receivables occurring
during the Calculation Period ending on the most recent Cut-Off Date, and (b) a
denominator equal to the aggregate amounts payable pursuant to invoices giving
rise to Receivables that were generated during the second preceding Calculation
Period (so that, for example, if the Calculation Period
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<PAGE> 471
specified in clause (a) corresponded to the March fiscal month, the Calculation
Period in this clause (b) would be the one corresponding to the January fiscal
month).
"Dilution Reserve Ratio" means as calculated in each Monthly Report,
the result (expressed as a percentage) calculated in accordance with the
following formula:
{(ARF x ADR) + [(HDR-ADR) x (HDR/ADR)]} x DHV
where:
ADR = the average of the Dilution Ratios during the period of 12
consecutive Calculation Periods ending on the related Cut-Off
Date;
ARF = the Applicable Ratings Factor;
DHV = the Dilution Horizon Variable; and
HDR = the highest average of the Dilution Ratios for any two
consecutive Calculation Periods within the 12 consecutive
Calculation Periods ending on the related Cut-Off Date.
"Distribution Period" means a period from and including a Distribution
Date to but excluding the next Distribution Date.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 6.2 and ending on the day on which the Series Invested
Amount has been reduced to zero. The term "Early Amortization Period" means each
of the Early Amortization Period and any period identified as an "Early
Amortization Period" in the Supplement for any other Series in Group I.
"Eurodollar Tranche" means, during any Interest Period, any portion of
the Series 1996-1 Invested Amount that is designated by Transferor in accordance
with a Certificate Purchase Agreement to accrue interest based on the
Reserve-Adjusted Eurodollar Rate.
"Excess Concentration Balances" means, on any day, the sum of (i) the
sum of the Concentration Unit Excess Concentrations for all Groups, plus (ii)
the Category Two Excess Concentration, plus (iii) the Category Three Excess
Concentration, plus (iv) the Total Foreign Concentration Excess.
"Excess Foreign Obligor Balances" is defined in Section 4.10.
"Expected Final Payment Date" means December 15, 2000.
"Federal Funds Rate" means (a) the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for the day (or, if the day is
not a Business Day, the immediately
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<PAGE> 472
preceding Business Day) by the Federal Reserve Bank of New York; provided that
if the rate is not so published for any Business Day, the rate for purposes of
this clause will be the average of the quotations for the day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it, plus (b) 100 basis points.
"Final Scheduled Payment Date" means December 15, 2001.
"First Step Excess" is defined in Section 4.10.
"First Step Residual" is defined in Section 4.10.
"Foreign Obligor" is defined in Section 4.10.
"Fourth Step Excess" is defined in Section 4.10.
"Fully Funded Date" means the first date falling in a Group
Amortization Period or when all Series in Group I are in a Series Amortization
Period and on which there are funds on deposit in the Carrying Cost Account and
the Principal Funding Account that, in the aggregate, equal or exceed the
Investor Repayment Amount and any Servicing Fee payable to anyone other than a
Howmet Person on the first Distribution Date falling after that date.
"Group Amortization Calculation Date" means the day before a Group
Amortization Period begins.
"Group Amortization Period" means the period (if any) commencing on the
first day on which all outstanding Series in Group I are in Early Amortization
Periods.
"Group Initial Invested Amount" means, at any time, the sum of the
Series Initial Invested Amounts of each Series in Group I at that time.
"Group Invested Amount" means, at any time, the sum of the Series
Invested Amounts of each Series in Group I at that time.
"Group I" means a group of Series, including Series 1996-1 and each
other Series that is identified in its Supplement as belonging to Group I.
"Guarantor" means Howmet, in its capacity as the guarantor under the
Seller Guaranty.
"Holdback Account Termination Date" is defined in Section 4.4.
"Holder" means a Holder (as defined in the Pooling Agreement) of a
Certificate in any Series in Group I.
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<PAGE> 473
"Howmet" is defined in the preamble.
"Howmet Credit Agreement" means the Credit Agreement dated as of
December 13, 1995 among Blade Acquisition Corp., Howmet Holdings Acquisition
Corp., Howmet Acquisition Corp., the financial institutions named therein and
The First National Bank of Chicago, as Administrative Agent and a Managing
Agent, Bankers Trust Company, as Syndication Agent and a Managing Agent, and
Citicorp USA, Inc., as Documentation Agent and a Managing Agent, as the same may
from time to time be amended or supplemented.
"Intercreditor Provisions" means the following provisions of the Howmet
Credit Agreement (as such Agreement was in effect on the Closing Date): Section
9.12 and the definitions of Intercreditor Agreement, Investor Certificates,
Purchased Interest, Receivables Amendment Conditions, Receivables Bridge
Facility, Receivables Documents, Receivables Facility, Receivables Facility
Assets, Receivables Maximum Funded Amount, Receivables Pooling Agreement.
Receivables Purchasers, Receivables Stated Amount and Receivables Subsidiary.
"Interest Payment Date" means (a) as to the Series 1996-1 Certificates,
any date upon which interest is payable with respect to the ABR Tranche or any
Eurodollar Tranche, as specified in Section 4.1, and (b)as to any interest
payable on any other Series in Group I, the date specified as the "Interest
Payment Date" in the related Supplement.
"Interest Period" means
(a) for Class A Certificates, (1) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to each Eurodollar Tranche
(if any) from time to time, each period from the date upon which that
Eurodollar Tranche was first designated as such pursuant to the Class A
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for the Eurodollar Tranche, if there has been one) to
the date that is one month, two months or three months, at the option
of Transferor, thereafter; and if any Interest Period for a Eurodollar
Tranche would otherwise end on a day that is not a Business Day, the
Eurodollar Tranche shall instead end on the next Business Day (or, if
the next Business Day falls in the next calendar month, then on the
next preceding Business Day); and
(b) for Class B Certificates, (i) as to the ABR Tranche (if
any) from time to time, (x) the period from the date hereof to, but
excluding, the first subsequent Distribution Date and (y) each
Distribution Period thereafter and (ii) as to the Eurodollar Tranche
(if any) from time to time, each period from the date upon which the
Eurodollar Tranche was first designated as such pursuant to the Class B
Certificate Purchase Agreement (or the end of the next preceding
Interest Period for
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<PAGE> 474
the Eurodollar Tranche, if there has been one) to the date that is one
month, two months or three months, at the option of Transferor,
thereafter; and if any Interest Period for the Eurodollar Tranche would
otherwise end on a day that is not a Business Day, the Eurodollar
Tranche shall instead end on the next Business Day (or, if the next
Business Day falls in the next calendar month, then on the next
preceding Business Day).
"Invested Amount" means, at any time:
(a) for purposes of calculating the Series Loss Allocation
Percentage for Group I, the Group Invested Amount; and
(b) for purposes of the application of Sections 6.13 and 12.4
of the Pooling Agreement to the Series 1996-1 Certificates, the Series
1996-1 Invested Amount.
"Investor Allocable Dilution" means, for any ASA Measuring Period, the
product of the aggregate amount of Dilution for that ASA Measuring Period as to
which neither the applicable Seller nor the Guarantor has made any payment
required by Section 3.1 of the Purchase Agreement or the Seller Guaranty on
account of Seller Dilution Adjustments, multiplied by the Series Loss Allocation
Percentage as of the beginning of that ASA Measuring Period, multiplied by the
Investor Allocation Percentage as of the first Business Day of that ASA
Measuring Period.
"Investor Allocable Dilution Adjustments" is defined in Section 4.8.
"Investor Allocable Loss Amount" means, for any ASA Measuring Period,
the product of the Loss Amount for that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the beginning of
that ASA Measuring Period.
"Investor Allocable Recoveries" means, for any ASA Measuring Period,
the product of the Net Recoveries for that ASA Measuring Period, multiplied by
the Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period, multiplied by the Investor Allocation Percentage as of the first
Business Day of that ASA Measuring Period.
"Investor Allocation Percentage" means:
(x) on any Business Day that does not fall in a Series
Amortization Period, a fraction (expressed as a percentage, which in
any event may not exceed 100%) (a) the numerator of which is the Net
Invested Amount as of that Business Day, and (b) the denominator of
which is the Base Amount as of that Business Day;
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<PAGE> 475
(y) on any Business Day falling in any Series Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the beginning of the Series Amortization Period, and (b) the
denominator of which is the Base Amount as of that Business Day; and
(z) on any Business Day falling in the Group Amortization
Period, a fraction (expressed as a percentage, which in any event may
not exceed 100%) (a) the numerator of which is the Net Invested Amount
as of the Group Amortization Calculation Date, and (b) the denominator
of which is the Base Amount as of the Group Amortization Calculation
Date.
"Investor Ownership Percentage" means, on any day with respect to Group
I, a fraction (expressed as a percentage, which in any event may not exceed
100%), (x) the numerator of which is the Acquisition Amount on such day and (y)
the denominator of which is the product of (a) the Series Collection Allocation
Percentage times (b) the excess of (i) the Unpaid Balance of Receivables on such
day over (ii) the Unapplied Cash on such day; provided that the Investor
Ownership Percentage shall be fixed as of the Group Amortization Calculation
Date; and provided further that if the Investor Ownership Percentage is being
calculated on any day when a Series in Group I is in an accumulation,
amortization or early amortization period, the Investor Ownership Percentage
shall not be less than the Investor Ownership Percentage immediately prior to
the commencement of such period.
"Investor Repayment Amount" means, on any Business Day, the sum of (a)
the principal amount of the Series 1996-1 Certificates and all other Series in
Group I then outstanding, plus (b) the interest and any Additional Amounts known
to be payable on the Series 1996-1 Certificates and all other Series in Group I
on or before the first Distribution Date falling after that date.
"Investor Write-Offs" means, as calculated in any Monthly Report
relating to a Calculation Period falling completely or partially in a Group
Amortization Period:
(a) if the Available Subordinated Amount is greater than zero
at the end of the related ASA Measuring Period, zero; and
(b) if the Available Subordinated Amount is zero at the end of
the related ASA Measuring Period (taking into account any reduction in
the Available Subordinated Amount shown in such Monthly Report), the
excess (if any) of (x) the sum of the Investor Allocable Loss Amount
and the Investor Allocable Dilution minus Investor Allocable Recoveries
for the related ASA Measuring Period, over (y) the Available
Subordinated Amount as of the beginning of that ASA Measuring Period.
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<PAGE> 476
"Loss Amount" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of
Receivables held by Trust that became Write-Offs during that ASA Measuring
Period, minus (b) the amount of Recoveries received during that ASA Measuring
Period.
"Loss Reserve Ratio" means, as calculated in each Monthly Report, the
result (expressed as a percentage) of (a) the Applicable Ratings Factor
multiplied by (b) the highest average of the Aged Receivables Ratio for any
three consecutive Calculation Periods that occurred during the preceding 12
consecutive Calculation Periods ending on the most recent Cut-Off Date
multiplied by (c) a fraction having (i) a numerator equal to the sum of the
aggregate amounts payable pursuant to invoices giving rise to Receivables
generated during the four Calculation Periods preceding or ending on the most
recent Cut-Off Date, and (ii) a denominator equal to the Adjusted Eligible
Receivables, as of the most recent Cut-Off Date, multiplied by (d) the Payment
Term Multiplier.
"Majority Class B Purchasers" is defined in Section 8.1 of the Class B
Certificate Purchase Agreement.
"Net Eligible Receivables" means, at any time, (a) the Adjusted
Eligible Receivables, minus (b) the Excess Concentration Balances; it being
understood that the amount of Eligible Receivables will be reduced by Adverse
Claims that attach to Receivables otherwise satisfying the requirements of the
definition of Eligible Receivable.
"Net Invested Amount" means, on any Business Day, the Group Invested
Amount, minus the balance on deposit in the Equalization Account and the
Principal Funding Account with respect to Series in Group I.
"Net Recoveries" means, with respect to any ASA Measuring Period, an
amount equal to the positive difference (if any) of (a) the amount of Recoveries
received in that ASA Measuring Period minus (b) the amount of Receivables that
became Write-Offs in that ASA Measuring Period.
"Note Indenture" means the Indenture dated as of December 13, 1995 by
and between Howmet, as successor to the obligations thereunder of Howmet
Acquisition Corp., and Marine Midland Bank, as Trustee, under and pursuant to
which certain senior subordinated notes have been issued, as the same may at any
time be amended or supplemented.
"Parent" means, with respect to any Concentration Unit, the Domestic
Person in such Concentration Unit that owns or controls (directly or indirectly)
the largest number of other Obligors in such Concentration Unit; provided that
if there is no Domestic Person in such Concentration Unit, "Parent" shall mean
the Obligor in such Concentration Unit that owns or controls (directly or
indirectly) the largest number of other Obligors in such Concentration Unit.
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"Past Due Receivables Ratio" means, as calculated in each Monthly
Report as of the Cut-Off Date, a faction (expressed as a percentage) having (a)
a numerator that is the aggregate Unpaid Balance of Receivables that remain
outstanding 61 to 91 days after their respective due dates, as determined as of
such Cut-Off Date, and (b) a denominator that is the aggregate Unpaid Balance of
Receivables as of such Cut-Off Date.
"Payment Term" shall mean, with respect to any Receivable, the number
of days between its invoice date and its due date.
"Payment Term Multiplier" shall mean (a) 1.0, if the Payment Term
Variable is less than 41, (b) 1.17, if the Payment Term Variable is equal to or
more than 41 but less than 51, (c) 1.25, if the Payment Term Variable is equal
to or more than 51 but less than 61, and (d) 1.5, if the Payment Term Variable
is equal to or more than 61 but less than 91; provided, however, that if the
Payment Term Variable equals or exceeds 91, the Payment Term Multiplier for such
Receivable shall be determined by calculating the sum of (x) 1.5, and (y) 0.05,
for each 5-day increment by which the Payment Term Variable exceeds 91, it being
understood that the same number shall apply for all Payment Term Variables that
fall within a five-day range.
"Payment Term Variable" shall mean, as calculated in each Monthly
Report as of the most recently ended Cut-Off Date, the quotient of:
(x) the sum of (1) the product of the Outstanding Balance of
each Receivable as of such Cut-Off Date times (2) the Payment Term with
respect to such Receivable; divided by
(y) the aggregate Outstanding Balance of all Receivables as of
such Cut-Off Date.
"Prepayment Accumulation Period" means a period beginning on the day
that Transferor gives a Prepayment Notice to Trustee of a prepayment of the
Series 1996-1 Certificates pursuant to Section 4.9 (and does not notify Trustee
that it intends to cause the Series Interest to be conveyed as described in
subsection 4.9(b)) and ending on the earlier to occur of (a) the day when
amounts sufficient for that prepayment have been accumulated pursuant to Section
4.3 and (b) the end of the Revolving Period for the Series 1996-1 Certificates.
"Prepayment Notice" is defined in Section 4.9.
"Prepayment Premium" means, with respect to any prepayment pursuant to
Section 4.9 or 7.1 or as a result of an Early Amortization Event, the net
present value (as of the date of such prepayment) of the amount of interest that
would have accrued on the amount of principal prepaid from the date of
prepayment through the one year anniversary of the date
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<PAGE> 478
hereof at an interest rate equal to the applicable Certificate Spread in respect
of the Eurodollar Tranche(s), discounted to such prepayment date at a rate per
annum, compounded monthly, equal to the Reserve Adjusted Eurodollar Rate in
effect on the date on which notice of prepayment is given to the Holders of the
Series 1996-1 Certificates being prepaid.
"Principal Deposit Amount" means, with respect to any Series in any
Calculation Period falling in a Series Amortization Period, the amount
determined in accordance with the Supplement for that Series. The Principal
Deposit Amounts for the Series Amortization Periods that may apply to the Series
1996-1 Certificates are:
(a) for any Calculation Period falling in the Amortization
Period or the Early Amortization Period for the Series 1996-1
Certificates, the Series 1996-1 Invested Amount; and
(b) for any Calculation Period falling in a Prepayment
Accumulation Period for the Series 1996-1 Certificates, the amount of
principal to be prepaid.
"Principal Payment Date" means (a) for the Series 1996-1 Certificates,
(i) any date on which any prepayment is to be made pursuant to Section 4.9, (ii)
the end of each Interest Period in respect of the next maturing Eurodollar
Tranche and/or ABR Tranche, in such order as the Agent shall select so as to
minimize "breakage costs," (iii) each Distribution Date falling in an Early
Amortization Period (beginning with the Distribution Date falling in the
Calculation Period after the Calculation Period in which the Early Amortization
Period begins) and (iv) any Distribution Date falling after the commencement of
the Amortization Period, and (b) for any other Series in Group I, each date
specified as a "Principal Payment Date" in the related Supplement. The
Refinancing Date is not a Principal Payment Date.
"Purchase" means any Purchase as defined in either of the Certificate
Purchase Agreements.
"Reference Bank" means The First National Bank of Chicago.
"Refinancing Date" is defined in subsection 4.9(b).
"Required Purchasers N is defined in Section 9.9 of the Certificate
Purchase Agreements.
"Required Receivables" means, on any Business Day, collectively for all
Series in Group I:
(a) So long as a Group Amortization Period has not commenced,
the result of the following formula:
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<PAGE> 479
GIIA + CCRR R
----------- -----
(1 - CARR) X NER
where:
CARR = the Class A Reserve Ratio in effect for that Business
Day;
CCRR = the Carrying Cost Receivables Reserve as reported in
the Daily Report for that Business Day;
GIIA = the Group Initial Invested Amount;
NER = the Net Eligible Receivables as reported in the
Daily Report for that Business Day; and
R = the aggregate Unpaid Balance of Receivables held by
Trustee as reported in the Daily Report for that
Business Day.
(b) If a Group Amortization Period has commenced, the result
of the following formula:
AGIIA + ASA + UCCRR
where:
AGIIA = the adjusted Group Initial Invested Amount on that
Business Day (which shall equal the Group Initial
Invested Amount, reduced (but not below zero) by the
amount of all Investor Write-Offs (net of Investor
Allocable Recoveries and Investor Allocable Dilution
Adjustments that have been applied to reinstate the
Group Invested
Amount));
UCCRR = the Unfunded Carrying Cost Receivables Reserve on
that Business Day; and
ASA = the Available Subordinated Amount on that Business
Day.
"Required Series Holders" means the Required Purchasers.
"Reserve-Adjusted Eurodollar Rate" means for any Interest Period, the
rate per annum obtained by dividing (i) the arithmetic average (rounded upward
to the nearest 1/100 of one percent) of the offered quotation, if any, to first
class banks in the interbank Eurodollar market by the Reference Bank for U.S.
dollar deposits of amounts in same day funds comparable to the principal amount
of the Investor Certificate of the Reference Bank with maturities comparable to
such Interest Period as of approximately 10:00 a.m. (New York time) on the
second Business Day prior to the first day of that Interest Period by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on
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such second preceding Business Day to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D of
the Federal Reserve Board (or any successor category of liabilities under
Regulation D).
"Revolving Period" means, with respect to any Series in Group I, the
period beginning on the Closing Date and ending on the day before the first day
of an accumulation period, an amortization period or an early amortization
period (other than a prepayment accumulation period with respect to a partial
prepayment of such Series) for such Series; provided that the Revolving Period
for such Series shall be suspended during a prepayment accumulation period with
respect to a partial prepayment of such Series.
"Second Step Excess" is defined in Section 4.10.
"Second Step Residual" is defined in Section 4.10.
"Senior Class" means each of Class A and each class of any other Series
in Group I that is identified in its Supplement as a Senior Class.
"Series Allocable Dilution Adjustments" means, for any ASA Measuring
Period, the product of the aggregate amount of payments pursuant to Section 3.1
of the Purchase Agreement or pursuant to the Seller Guaranty on account of
Seller Dilution Adjustments received during that ASA Measuring Period relating
to Dilution that occurred prior to that ASA Measuring Period, multiplied by the
Series Loss Allocation Percentage as of the beginning of that ASA Measuring
Period.
"Series Amortization Period" means (a) as to Series 1996-1, the
Amortization Period, any Prepayment Accumulation Period and any Early
Amortization Period and (b)as to any other Series in Group I any period
identified in the related Supplement as a "Series Amortization Period."
"Series Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Invested Amount, and (b) as to any other Series
in Group I, the amount determined as such in accordance with the Supplement for
that Series.
"Series Initial Invested Amount" means (a) as to the Series 1996-1
Certificates, the Series 1996-1 Initial Invested Amount, and (b) as to any other
Series in Group I, the amount determined as such in accordance with the
Supplement for that Series; provided that from and after the date on which the
Series Invested Amount for any Series is reduced to zero, the Series Initial
Invested Amount for that Series will also equal zero.
"Series 1996-1 Certificates" means the Class A Certificates and the
Class B Certificates.
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"Series 1996-1 Holder" means a Holder of a Series 1996-1 Certificate.
"Series 1996-1 Initial Invested Amount" means (i) during the Revolving
Period for the Series 1996-1 Certificates, the Series 1996-1 Invested Amount,
and (ii) thereafter, the Series 1996-1 Invested Amount as of the last day of the
Revolving Period; provided that after the principal amount of the Series 1996-1
Certificates and interest and any Additional Amounts known to be payable in
respect of such Series are reduced to zero, the Series 1996-1 Initial Invested
Amount will equal zero.
"Series 1996-1 Invested Amount" means, at any time, the sum of the
Class A Invested Amount plus the Class B Invested Amount.
"Special Concentration Limit" means:
(i) with respect to the Tier-5 Obligor that owes the highest
aggregate Unpaid Balance of Eligible Receivables, 7%; and
(ii) with respect to the Tier-5 Obligor that owes the second
highest aggregate Unpaid Balance of Eligible Receivables, 5%.
"Special Obligor" means, at any time, the two Tier-5 Obligors that owe
the highest aggregate Unpaid Balances of Receivables and are designated in the
most recent Monthly Report as "Special Obligors"; provided that in the case of
any Obligor (other than Westinghouse Electric Corp.), the Approval Condition
shall have been satisfied with request to such designation.
"Specified Rating Agency" means S&P.
"Stated Amount" means as to any Certificate, the maximum principal
amount that may be required to be funded by the Holder of such Certificate.
"Structured Lender" shall mean Falcon Asset Securitization Corporation,
Alpine Securitization Corp. and any other Holder of a Certificate (x) whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and (y) which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement similar to that set forth in Section 13.9 of the
Pooling Agreement in order to maintain such rating.
"Subordinated Class" means each of Class B and each class of any other
Series in Group I that is identified in its Supplement as a Subordinated Class.
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"Support Bank" shall mean any bank or other financial institution
extending or having a commitment to extend funds to or for the account of any
Structured Lender (including by agreement to purchase an assignment of, or
participation in, the Certificate held by such Person) under a liquidity or
credit support agreement which relates to the Certificate purchased by such
Structured Lender.
"Third Step Excess" is defined in Section 4. 10.
"Third Step Residual" is defined in Section 4.10.
"Tier-1 Obligor" means any Obligor that has (a) a commercial paper
rating from the Specified Rating Agency of at least "A-1+" (or its equivalent)
or (b) a senior actual or implied debt rating from the Specified Rating Agency
of at least "AAA" (or its equivalent).
"Tier-2 Obligor" means any Obligor (other than a Tier-1 Obligor) that
has (a) a commercial paper rating from the Specified Rating Agency of at least
"A-1" (or its equivalent) or (b) a senior actual or implied debt rating from the
Specified Rating Agency of at least "A+" (or its equivalent).
"Tier-3 Obligor" means any Obligor (other than a Tier-1 Obligor or a
Tier-2 Obligor) that has (a) a commercial paper rating from the Specified Rating
Agency of at least "A-2" (or its equivalent) or (b) a senior actual or implied
debt rating from the Specified Rating Agency of at least "BBB+" (or its
equivalent).
"Tier-4 Obligor" means any Obligor (other than a Tier-1 Obligor, a
Tier-2 Obligor or a Tier-3 Obligor) that has (a) a commercial paper rating from
the Specified Rating Agency of at least "A-3" (or its equivalent) or (b) a
senior actual or implied debt rating from the Specified Rating Agency of at
least "BBB-" (or its equivalent).
"Tier-5 Obligor" means any Obligor other than a Tier-1 Obligor, a
Tier-2 Obligor, a Tier-3 Obligor or a Tier-4 Obligor.
"Total Dollar Limit" is defined in Section 4.10.
"Total Foreign Concentration Excess" is defined in Section 4.10.
"Tranche" means each of the ABR Tranche and each Eurodollar Tranche,
"Transferor Indemnified Losses" is defined in Section 7.3.
"Transferor Indemnified Party" is defined in Section 7.3.
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"Transferor Payment Percentage" means, on any Business Day, the
difference of 100% minus the Investor Allocation Percentage on that Business
Day.
"Unapplied Cash" means, on any Business Day, available funds received
in the Master Collection Account and reflected in the Daily Report for that
Business Day that have not been applied as Collections on a particular
Receivable on or prior to the time as of which that Daily Report is prepared.
"Unfunded Carrying Cost Receivables Reserve" means, on any Business Day
falling in a Group Amortization Period, the difference (but not less than zero)
of (a) the Carrying Cost Receivables Reserve as of the Group Amortization
Calculation Date, minus (b) the aggregate Collections deposited into the
Carrying Cost Account during the portion of the Group Amortization Period up to
and including that Business Day.
"Unmatured Early Amortization Event" means an event that, with the
giving of notice or lapse of time (or both) will constitute an Early
Amortization Event.
SECTION 1.2 Modification Condition. (a) For so long as the Series
1996-1 Certificates remain outstanding, for purposes of the Transaction
Documents the definition of the term "Modification Condition" shall be as
follows:
"Modification Condition" means, with respect to any action,
that (i) each Rating Agency has confirmed in writing that such action
will not result in a reduction or withdrawal of the rating of any
outstanding Series or Purchased Interest that was rated by such Rating
Agency, and (ii) if any Series or Purchased Interest has not been
rated, the Required Series Holders for that Series or the Agent for
such Purchased Interest (as the case may be) shall have consented in
writing to such action.
(b) For so long as the Series 1996-1 Certificates remain outstanding,
for purposes of the Transaction Documents the term "Required Investors" shall be
as follows:
"Required Investors" means the Required Series Holders for
each Series and the Agent for each Purchased Interest."
SECTION 1.3 Incorporation of Terms. The terms of the Pooling Agreement
are incorporated in this Supplement as if set forth in full herein. As
supplemented by this Supplement, the Pooling Agreement is in all respects
ratified and confirmed and both together shall be read, taken and construed as
one and the same agreement. If the terms of this Supplement and the terms of the
Pooling Agreement conflict, the terms of this Supplement shall control with
respect to the Series 1996-1 Certificates.
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ARTICLE II DESIGNATION
SECTION 2.1 Designation. There is hereby created a Series to be known
as the "Series 1996-1 Certificates," consisting of two classes: the $47,500,000
Variable Rate Class A, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class A Certificates), which shall be a Senior Class; and the $7,500,000
Variable Rate Class B, Trade Receivables Backed Certificates, Series 1996-1 (the
"Class B Certificates"), which shall be a Subordinated Class. Subject to the
conditions set forth in Article III, Trustee shall authenticate and deliver the
Class A Certificates and the Class B Certificates, to or upon the order of
Transferor in the aggregate principal amount indicated for each above.
Notwithstanding the terms of Section 6.1 of the Pooling Agreement, the Class A
Certificates will be issued in minimum denominations of $5,000,000 and in
integral multiples of $1,000,000 and the Class B Certificates will be issued in
minimum denominations of $2,500,000 and in integral multiples of $500,000.
SECTION 2.2 Group I. The Series 1996-1 Certificates are included in
Group I. Consequently, the Series 1996-1 Certificates will share a single Series
Collection Allocation Percentage (determined using the Required Receivables as
defined herein), a single Series Loss Allocation Percentage (determined using
the Invested Amount as defined herein), and if a Group Amortization Period
occurs, a single Available Subordinated Amount (determined as provided herein)
with the other Series in Group I. Collections, Investor Allocable Dilution,
Investor Allocable Loss Amounts and Investor Write-Offs will be allocated
collectively to Group I in accordance with such shared Series Collection
Allocation Percentage and Series Loss Allocation Percentage, as applicable, and
will be further allocated among Series included in Group I (and the various
Senior Classes and Subordinated Classes) in accordance with this Supplement. The
Servicing Fee with respect to all Series in Group I shall be paid in accordance
with this Supplement and shall be determined in accordance with Section 3.4 of
the Pooling Agreement using the collective Series Collection Allocation
Percentage for Group I. The Series in Group I share a collective Series
Interest, the amount of which equals the shared Series Collection Allocation
Percentage for Group I.
Subsection 12.1(b) of the Pooling Agreement shall not apply to any
Series in Group I and shall be superseded for all such Series by Section 7.2 of
this Supplement. All terms of this Supplement applying generally to Group I
shall survive the repayment in full or other termination of the Series 1996-1
Certificates until such time as all Series in Group I have been repaid in full
and any revolving purchase commitments made by the Holders relating to
Certificates in any such Series have been terminated (or, if earlier, on the
Final Scheduled Payment Date for the last Series in Group I). Such terms of
general applicability include all of Article IV (excluding Sections 4.1 and
4.9), Article V, Section 7.2 and Article VIII and all related definitions.
SECTION 2.3 Investor Ownership Percentage. The Investor Certificates in
Group I represent an undivided interest in the portion of the Transferred Assets
allocable to Group I,
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<PAGE> 485
which undivided interest (expressed as a percentage) shall equal the Investor
Ownership Percentage. The amount payable on any day by the Holders of such
Investor Certificates for the acquisition of such undivided interest (the
"Acquisition Amount") shall equal the Group Invested Amount plus the Deferred
Portion (it being understood that the Acquisition Amount may vary from day to
day); provided that Acquisition Amount shall be fixed as of the Group
Amortization Calculation Date.
The Deferred Portion of the Acquisition Amount shall be subject to a
holdback and shall be paid to the extent (and only to the extent) Daily Group
Collections are not required to pay amounts described in clauses first through
fourth of Section 4.3 or Section 4.4 (as applicable), it being understood that
the Holders of Series 1996-1 Certificates shall not be liable to pay any portion
of the Deferred Portion not paid out of Daily Series Collections.
ARTICLE III CONDITIONS TO ISSUANCE; USE OF PROCEEDS
SECTION 3.1 Conditions to Issuance. Trustee will not authenticate the
Series 1996-1 Certificates unless all conditions to the issuance of the Series
1996-1 Certificates under Section 6.10 of the Pooling Agreement shall have been
satisfied or waived by the Purchasers.
SECTION 3.2 Use of Proceeds. The proceeds from the issuance of the
Series 1996-1 Certificates shall be used first to repay the Series 1995-1
Certificates in full and second for general corporate purposes of Transferor
(including, but not limited to, purchasing Receivables, repaying indebtedness
and/or making distributions to Howmet).
ARTICLE IV PAYMENTS AND ALLOCATIONS
SECTION 4.1 Interest; Additional Amounts.
(a) Subject to Section 4.1 of the Class A Certificate Purchase
Agreement, Transferor may from time to time allocate the outstanding
principal amount under the Class A Certificates to an ABR Tranche and
up to four Eurodollar Tranches. Subject to Section 4.1 of the Class B
Certificate Purchase Agreement, Transferor may from time to time
allocate the outstanding principal amount under the Class B
Certificates to an ABR Tranche and a Eurodollar Tranche. Interest on an
ABR Tranche shall be payable on each Distribution Date, and interest on
a Eurodollar Tranche shall be payable at the end of the applicable
Interest Period, except that interest on the amount of any principal
repaid on any other date shall be payable on the date of the repayment.
If any such day is not a Business Day, interest shall instead be due on
the next Business Day (or, if the next Business Day falls in the next
calendar month, then on the next preceding Business Day).
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<PAGE> 486
(b) Interest on a Eurodollar Tranche shall accrue during any
Interest Period at a rate per annum equal to the Reserve Adjusted
Eurodollar Rate plus the applicable Certificate Spread and shall be
calculated on the basis of actual days over a year of 360 days.
(c) Interest on an ABR Tranche shall accrue at the Alternate
Base Rate in effect from time to time plus the applicable Certificate
Spread and shall be calculated on the basis of actual days over a year
of 365 or 366 days, as the case may be.
(d) Interest with respect to the Series 1996-1 Certificates
due but not paid on any Distribution Date or the last day of an
Interest Period, as the case may be, will bear additional interest on
the amount at 2% per annum above the Alternate Base Rate to the extent
permitted by law, which additional interest shall be due on demand.
(e) Additional Amounts shall also be payable with respect to
the Series 1996-1 Certificates as specified in the Certificate Purchase
Agreements and to the extent (but only to the extent) that funds become
available for payment of such Additional Amounts in accordance with
Sections 4.2, 4.3 and 4.4.
SECTION 4.2 Daily Calculations and Group Allocations. On each Business
Day, Servicer shall calculate the Series Collection Allocation Percentage for
Group I (and, if necessary for that calculation, the Required Receivables), the
Current Carrying Costs and, prior to the Group Amortization Period, the Base
Amount. On each Business Day prior to the Group Amortization Period, Servicer
shall also determine whether the Net Invested Amount is greater than, equal to
or less than the Base Amount.
Pursuant to Section 4.3 of the Pooling Agreement, Servicer shall
allocate the Series Collection Allocation Percentage of available funds received
in the Master Collection Account (other than any Shared Investor Collections)
since the preceding Business Day's allocation to the shared Series Interest of
Group I. The portion of funds so allocated, together with any funds released
from the Equalization Account or any Principal Funding Account in accordance
with Section 4.5 on that Business Day, are called the "Daily Group Collections."
SECTION 4.3 Allocations of Daily Group Collections (Other Than in a
Group Amortization Period). On each Business Day (other than an Exempt Holiday
or a Business Day falling in a Group Amortization Period or after the Fully
Funded Date), Servicer shall allocate the Daily Group Collections (or, if less,
the aggregate amount of Daily Group Collections required to fund the items
described in priorities first through fourth below) to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account until the amount allocated
to the Carrying Cost Account equals the Current Carrying Costs;
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<PAGE> 487
second, if the Net Invested Amount is greater than the Base
Amount, to the Equalization Account in an amount sufficient to reduce
the Net Invested Amount to an amount equal to the Base Amount; provided
that during a Series Amortization Period in respect of any Series,
funds that would otherwise be required to be deposited in the
Equalization Account pursuant to this priority second shall instead be
deposited in the sub-account of the Principal Funding Account for such
Series (and, if there is more than one such Series, shall be divided
ratably between such sub-accounts, on the basis of the respective
Principal Deposit Amounts of each such Series), but the amount
deposited in any such sub-account shall in no event cause the balance
therein to exceed the applicable Principal Deposit Amount (and any
remaining amount not deposited in any sub-account of the Principal
Funding Account because of this limitation shall be shared among the
other sub-accounts for such Series in Group I (ratably as described
above), in each case to the extent that it will not cause the balance
therein to exceed the applicable Principal Deposit Amount, and any
remaining amount shall be deposited in the Equalization Account); and
provided further that no deposit shall be made to a sub-account of the
Principal Funding Account pursuant to the immediately preceding proviso
(and such proviso shall not apply notwithstanding the existence of a
Series Amortization Period) unless, after giving effect thereto, the
Net Invested Amount would equal the Base Amount;
third, during any Series Amortization Period, to the
applicable sub-account of the Principal Funding Account until the
amount on deposit in that sub-account equals the applicable Principal
Deposit Amount; provided that
(i) the amount allocated to all Investor Certificates
in the aggregate pursuant to this priority third on any
Business Day shall not exceed the product of (x) the Investor
Ownership Percentage, multiplied by (y) the excess of the
Daily Group Collections over the amounts allocated on that
Business Day pursuant to priorities first and second, and
(ii) if more than one Series in Group I is in a
Series Amortization Period, the amount so allocated shall be
divided ratably between such subaccounts, on the basis of the
respective Principal Deposit Amounts of each such Series, but
the amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the applicable Principal
Deposit Amount for any such Series (and any remaining amount
not deposited in any sub-account of the Principal Funding
Account because of this limitation shall be shared among the
other sub-accounts for Series in Group I (ratably as described
above), in each case to the extent that it will not cause the
balance therein to exceed the Principal Deposit Amount for any
such other Series); and
fourth, to hold in the Master Collection Account the amount,
if any, necessary to pay on the next Distribution Date all Additional
Amounts payable to the Holders.
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<PAGE> 488
On such Business Day, Servicer shall allocate and pay the remainder of
Daily Group Collections to make current and/or deferred transfer payments to
Transferor in respect of the Transferor Certificate, provided that Transferor
may, from time to time, direct Servicer to direct Trustee to hold all or part of
the funds to be paid pursuant to this sentence m the Master Collection Account
to be applied as Daily Group Collections on the following Business Day.
If, on any day, the amount of Collections that is then allocated to the
Carrying Cost Account exceeds the amount of Collections that is then required to
be allocated to the Carrying Cost Account, the Servicer shall reallocate such
Collections on such day to one or more of the obligations described in the first
paragraph of this Section in priorities second through fourth, and in the
preceding paragraph, in the order of priority set forth therein.
In addition, if, on any day, funds on deposit in the Master Collection
Account and available (as described in the first paragraph of this Section) for
allocation under priority fourth are less than the amount of the obligations
described therein, then the available Collections shall be allocated by Servicer
to the holders of such obligations pro rata according to the respective amounts
of such obligations held by them.
On any Business Day failing after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor as deferred transfer payments.
SECTION 4.4 Allocations of Daily Group Collections During a Group
Amortization Period. On each Business Day (other than an Exempt Holiday) failing
in a Group Amortization Period and prior to or on the Fully Funded Date,
Servicer shall allocate the Daily Group Collections to the following purposes,
in the priority indicated (and to the extent of Daily Group Collections
available):
first, to the Carrying Cost Account to the extent that the
balance therein is less than the amount of Current Carrying Costs
(other than any Servicing Fee payable to any Howmet Person) payable on
the Distribution Date relating to the Calculation Period during which
such Business Day falls;
second, to the Principal Funding Account and to Transferor
(or, prior to the Holdback Account Termination Date, to the Holdback
Account) in the following amounts:
(a) the amount to be transferred to the Principal
Funding Account shall equal the product of (i) the Investor
Allocation Percentage, multiplied by (ii) the excess of the
Daily Group Collections over the amount allocated on that
Business Day pursuant to priority first, provided that the
aggregate amount so deposited shall in no event exceed the
lesser of (x) the Group Invested Amount
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<PAGE> 489
and (y) the Investor Ownership Percentage times the aggregate
Unpaid Balance of Receivables as of the Group Amortization
Calculation Date; and
(b) the amount to be transferred to Transferor (or,
prior to the Holdback Account Termination Date, to the
Holdback Account) shall equal the product of (i) the
Transferor Payment Percentage, multiplied by (ii) the excess
of the Daily Group Collections over the amount allocated on
that Business Day pursuant to priority first;
the amount allocated to the Principal Funding Account pursuant to clause (a) of
this priority second shall be divided among the sub-accounts for each Series in
Group I as follows:
(1) first such amount shall be divided among the
sub-accounts for each Series that has an outstanding Senior
Class, on the basis of the respective Principal Deposit
Amounts of each such Senior Class, but the amount deposited in
any such sub-account shall in no event cause the balance
therein to exceed the Principal Deposit Amount of any such
Senior Class; and
(2) any remaining amount shall be divided among the
sub-accounts for each Series that has an outstanding
Subordinated Class, on the basis of the respective Principal
Deposit Amounts of each such Subordinated Class, but the
amount deposited in any such sub-account shall in no event
cause the balance therein to exceed the Principal Deposit
Amount of any such Subordinated Class;
third, to hold in the Master Collection Account the amount
necessary to pay on the next Distribution Date all Additional Amounts
payable to the Holders;
fourth, to pay any Servicing Fee payable to any Howmet Person
on the Distribution Date relating to the Calculation Period during
which such Business Day falls; and
fifth, the balance to Transferor, provided that prior to the
Holdback Account Termination Date, amounts payable to Transferor
pursuant to this priority fifth shall be deposited into the Holdback
Account and held as provided below.
The "Holdback Account Termination Date" shall be the earlier to occur
of (i) the date that falls twelve months alter the beginning of the Group
Amortization Period and (ii) the Fully Funded Date. If at any time prior to the
Holdback Account Termination Date, the amount of funds on deposit in the
Holdback Account exceeds the difference of (1) the Investor Repayment Amount
minus (2) the amount of funds then held in the Carrying Cost Account and the
Principal Funding Account that are available to pay the Investor Repayment
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<PAGE> 490
Amount, then the amount of such excess funds shall be released from the Holdback
Account and paid to Transferor as deferred transfer payments. On each Business
Day in a Group Amortization Period prior to the Holdback Account Termination
Date, Servicer shall calculate the aggregate Investor Allocable Dilution for the
Group Amortization Period as to which no Series Allocable Dilution Adjustments
have been received. Such amount (or, if less, the aggregate amount of funds in
the Holdback Account) shall be transferred to the Master Collection Account and
applied to the items listed in the first paragraph of this Section as priorities
first through fifth, in that order (except that no such funds shall be allocated
to Transferor or the Holdback Account pursuant to priority second and the amount
allocable to the Principal Funding Account shall not be limited by application
of the Investor Allocation Percentage). On the Holdback Account Termination
Date, all remaining funds in the Holdback Account shall be paid to Transferor.
If, on any day, funds on deposit in the Master Collection Account and
available (as described in the first paragraph of this Section, for allocation
under priority third are less than the amount of the obligations described
therein, then the available Collections shall be allocated by Servicer to the
holders of such obligations pro rata according to the respective amounts of such
obligations held by them.
On any Business Day falling after the Fully Funded Date, all Daily
Group Collections shall be paid to Transferor in respect of the Transferor
Certificate as deferred transfer payments.
SECTION 4.5 Withdrawals from the Equalization Account and Principal
Funding Account. On any Business Day (other than an Exempt Holiday) prior to the
Group Amortization Period on which no Early Amortization Event or Unmatured
Early Amortization Event has occurred with respect to any Series in Group I,
Servicer may instruct Trustee in writing to withdraw funds from the Equalization
Account and apply such funds as Daily Group Collections, so long as the Net
Invested Amount would not exceed the Base Amount after giving effect to such
transfer and application. On the first day of any Series Amortization Period or
Group Amortization Period, Servicer shall instruct Trustee to withdraw the
entire balance in the Equalization Account and apply the same as Daily Group
Collections on that day. On the first day of the Group Amortization Period,
Servicer shall instruct Trustee likewise to withdraw the entire balance in the
Principal Funding Account and apply the same as Daily Group Collections on that
day.
SECTION 4.6 Available Subordinated Amount. (a) If a Group Amortization
Period begins, Servicer shall promptly calculate the Available Subordinated
Amount as of the Group Amortization Calculation Date and report such amount in
the Daily Report for the first day in the Group Amortization Period. Servicer
shall also calculate the Available Subordinated Amount as of each Cut-Off Date
falling in the Group Amortization Period, such calculation to be reflected in
the related Monthly Report.
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<PAGE> 491
(b) The Available Subordinated Amount as of the Group Amortization
Calculation Date shall equal the product of (x) the Investor Allocation
Percentage, multiplied by (y) the result of:
(i) the product of the Unpaid Balance of Receivables held by
Trustee at the opening of business on the Group Amortization
Calculation Date, multiplied by the Series Collection Allocation
Percentage on that date; minus
(ii) the sum of (A) the lesser of the Base Amount and the Net
Invested Amount and (B) the Carrying Cost Receivables Reserve at the
opening of business on the Group Amortization Calculation Date.
(c) The Available Subordinated Amount, as of any Cut-Off Date in the
Group Amortization Period, shall equal the result of:
(i) the Available Subordinated Amount as of the preceding
Cut-Off Date (or as of the Group Amortization Calculation Date, in the
case of the first Cut-Off Date falling in the Group Amortization
Period); minus
(ii) the Investor Allocable loss Amount with respect to the
ASA Measuring Period ending on that Cut-Off Date; minus
(iii) any Investor Allocable Dilution with respect to the ASA
Measuring Period ending on that Cut-Off Date; plus
(iv) subject to Sections 4.7 and 4.8, the Investor Allocable
Recoveries and Investor Allocable Dilution Adjustments with respect to
the ASA Measuring Period ending on that Cut-Off Date.
(d) Notwithstanding the foregoing, in no event shall the Available
Subordinated Amount at any time be less than zero or greater than the initial
Available Subordinated Amount calculated pursuant to subsection (b).
SECTION 4.7 Write-Offs and Recoveries. (a) In each Monthly Report
required to be delivered during the Group Amortization Period, Servicer shall
calculate the Investor WriteOffs and the Investor Allocable Recoveries for the
most recently ended ASA Measuring Period.
(b) If the Investor Write-Offs calculated in any Monthly Report exceed
zero, the Group Invested Amount shall be reduced by the amount of the Investor
Write-Offs with effect on the related Distribution Date. Any such reduction
shall be allocated to the Class Invested Amounts of all outstanding Subordinated
Classes (ratably in accordance with such Class Invested Amounts) until all such
Class Invested Amounts have been reduced to zero.
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<PAGE> 492
Any remaining reduction shall be allocated to the Class Invested Amounts of all
outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts).
(c) If the Group Invested Amount has been reduced on account of any
Investor Write-Offs, then any Investor Allocable Recoveries with respect to any
Calculation Period ending after the reduction takes place shall be applied to
reinstate the Group Invested Amount, to the extent of such prior reductions that
have not previously been reinstated, with effect on the related Distribution
Date. Any such reinstatement shall be allocated to the Class Invested Amounts of
all outstanding Senior Classes (ratably in accordance with such Class Invested
Amounts) until all prior reductions to such Class Invested Amounts on account of
Investor Write-Offs have been reinstated. Any remaining reinstatement shall be
allocated to the Class Invested Amounts of all outstanding Subordinated Classes
(ratably in accordance with such Class Invested Amounts).
(d) If Investor Allocable Recoveries are applied pursuant to subsection
(c) to reinstate the Group Invested Amount on any Distribution Date, then
Investor Allocable Recoveries shall be applied to increase the Available
Subordinated Amount on the same Distribution Date only to the extent of the
excess, if any, of the Investor Allocable Recoveries, minus the amount of
Investor Allocable Recoveries so applied.
(e) The outstanding principal amount of any Senior Class or
Subordinated Class shall be reduced by any reduction, and increased by any
reinstatement, of its Class Invested Amount pursuant to this Section 4.7 or
Section 4.8, in the amount of such reduction or reinstatement.
SECTION 4.8 Certain Dilution in a Group Amortization Period. (a) In
each Monthly Report required to be delivered during the Group Amortization
Period, Servicer shall calculate the Investor Allocable Dilution and the Series
Allocable Dilution Adjustments for the most recently ended ASA Measuring Period.
(b) If the Investor Allocable Dilution calculated in any Monthly Report
is greater than zero, and there are funds in the Holdback Account, then those
funds (up to an amount equal to the amount of the Investor Allocable Dilution)
shall be allocated (i) first, in accordance with priority first of the first
paragraph of Section 4.4, (ii) second, to the Principal Funding Account (in
accordance with clauses (1) and (2) of priority second of the first paragraph of
Section 4.4) until the Net Invested Amount is reduced to zero and (iii) third,
in accordance with priorities third through fifth of the first paragraph of
Section 4.4, in that priority.
(c) If the Available Subordinated Amount or the Group Invested Amount
has been reduced on account of any Investor Allocable Dilution, then (i) any
Series Allocable Dilution Adjustments with respect to any Calculation Period
ending after the reduction takes place and (ii) any additional funds deposited
in the Holdback Account (the "Investor Allocable Dilution
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Adjustments") shall be allocated (x) first, to reinstate the Group Invested
Amount (with the same allocation among Senior Classes and Subordinated Classes
as is described in subsection 4.7(c)), and (y) second, to reinstate the
Available Subordinated Amount, in each case to the extent not previously
reinstated pursuant to Section 4.7 or this Section 4.8. Any funds so allocated
on any day shall be allocated (i) first, in accordance with priority first of
the first paragraph of Section 4.4, (ii) second, to the Principal Funding
Account (in accordance with clauses (1) and (2) of priority second of the first
paragraph of Section 4.4) until the Net Invested Amount is reduced to zero and
(iii) third, in accordance with priorities third through fifth of the first
paragraph of Section 4.4, in that priority.
SECTION 4.9 Optional Early Pay Out. (a) On any Business Day falling in
the Revolving Period, Transferor may provide notice to Trustee of its intention
to accumulate funds to cause the Series 1996-1 Certificates to be prepaid in
full or (as provided in the next sentence) in part. There may be a single
partial prepayment of Class A Certificates, provided that (i) such prepayment
(in the aggregate for all Class A Certificates) shall not exceed $10,000,000,
(ii) such prepayment shall be made after the first anniversary of the date
hereof, and (iii) the amount prepaid shall reflect a reduction in the Unpaid
Balance of Receivables due to the sale of a Seller (or all or substantially all
of its assets) or the loss of a major customer by the Sellers. When amounts
sufficient for such prepayment have been accumulated, Transferor may provide
notice to Trustee (the "Prepayment Notice") of the date, at least three business
days after the date of such Prepayment Notice, when the prepayment shall occur.
Trustee shall notify the affected Holders promptly upon receiving such
Prepayment Notice. In the event of any such prepayment of the Series 1996-1
Certificates occurring at any time during the one-year period commencing on the
date hereof, the Holders of such Series 1996-1 Certificates shall be entitled to
receive a Prepayment Premium. Except as expressly provided in this subsection
4.9(a), the Series 1996-1 Certificates may not be partially prepaid. The Series
1996-1 Certificates, once prepaid, may not be reinstated.
(b) Commencing upon the date specified in the notice to the Trustee
referred to in subsection (a) (until an amount equal to the amount to be
prepaid, plus the related Prepayment Premium, if any, and other applicable
Additional Amounts have been accumulated), amounts shall be set aside for
purposes of that prepayment in accordance with Section 4.3, except that no such
amounts shall be set aside if Transferor notifies Trustee that Transferor
intends to cause the Series 1996-1 Certificates to be prepaid by causing the
portion of the Series Interest for Group I attributable to the Series 1996-1
Certificates to be conveyed to one or more Persons (who may be the Holders of a
new Series issued substantially contemporaneously with such prepayment) for a
cash purchase price in an amount equal to the sum of (i) the outstanding
principal amount of the Series 1996-1 Certificates, plus (ii) to the extent not
available in the Carrying Cost Account, accrued and unpaid interest on the
Series 1996-1 Certificates through the day of such prepayment (the "Refinancing
Date"), plus (iii) to the extent not available from funds set aside pursuant to
priority fourth of Section 4.3, the Additional Amounts, if any, owed with
respect to the
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Series 1996-1 Certificates. No such conveyance shall, however, be permitted if
as a result thereof, Transferor, Howmet or any of their Affiliates would acquire
such portion of the Series Interest or the underlying Receivables. In the case
of any such conveyance, the purchase price shall be deposited in the Principal
Funding Account and shall be distributed to the Agent, for further distribution
to the Holders, on the Refinancing Date in accordance with the terms of Section
5.2. Upon deposit of the purchase price in the Principal Funding Account, the
Series 1996-1 Holders shall have no further rights with respect to the
Transferred Assets.
(c) Any prepayment pursuant to this Section 4.9 shall be made on the
later to occur of (i) the date specified in the notice of prepayment and (ii)
the date on which sufficient funds (including funds to cover any related
Additional Amounts) have been accumulated pursuant to Section 4.3 or 4.4 or
obtained by a conveyance described in subsection 4.9(b).
(d) The Class B Certificates may not be prepaid until the Class A
Certificates have been repaid in full. In addition no Class B Certificates (or
Certificates in any other Subordinated Class) may be prepaid if any Senior Class
is outstanding and, after giving effect to that payment, the Net Invested Amount
would exceed the Base Amount.
SECTION 4.10 Foreign Obligors; Calculation of Excess Concentrations.
(a) Notwithstanding clause (a) of the definition of Eligible Obligor, Persons
that are not Domestic Persons (such Persons being "Foreign Obligors") may be
Eligible Obligors.
(b) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) whether the members of the Concentration Unit are Domestic
Persons, Category One Obligors, Category Two Obligors or Category Three
Obligors.
(ii) such Concentration Unit's Basic Concentration Limit times
the Adjusted Eligible Receivables for such day (such product being such
Concentration Unit's "Total Dollar Limit").
(iii) the aggregate Unpaid Balance of Eligible Receivables
owed by Domestic Persons in such Concentration Unit.
(iv) an amount (whether positive or negative) equal to (A) the
Total Dollar Limit for such Concentration Unit minus (B) the amount
determined pursuant to clause (iii). Any such positive sum is the
"First Step Residual." The absolute value of any such negative sum is
the "First Step Excess."
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(v) an amount (the "Category One Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category One
Obligors in such Concentration Unit.
(vi) an amount equal to 4% of the Adjusted Eligible
Receivables on such day.
(vii) the lesser of (A) the First Step Residual (or, if there
is no First Step Residual, zero) and (B) the amount determined pursuant
to clause (vi).
(viii) an amount (the "Second Step Excess") equal to (A) the
Category One Balance minus (B) the amount determined pursuant to clause
(vii); provided that if such sum is a negative number, the Second Step
Excess will be zero.
(ix) an amount (the "Second Step Residual") equal to (A) the
First Step Residual minus (B) the Category One Balance plus (C) the
Second Step Excess; provided that if such sum is a negative number, the
Second Step Residual will be zero.
(x) an amount (the "Category Two Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Two
Obligors in such Concentration Unit.
(xi) an amount equal to 2 % of Adjusted Eligible Receivables
on such day.
(xii) the lesser of (A) the Second Step Residual and (B) the
amount determined pursuant to clause (xi).
(xiii) an amount (the "Third Step Excess") equal to (A) the
Category Two Balance minus (B) the amount determined pursuant to clause
(xii); provided that if such sum is a negative number, the Third Step
Excess will be zero.
(xiv) an amount (the "Third Step Residual") equal to (A) the
Second Step Residual minus (B) the Category Two Balance plus (C) the
Third Step Excess; provided that if such sum is a negative number, the
Third Step Residual will be zero.
(xv) an amount (the "Category Three Balance") equal to the
aggregate Unpaid Balance of Eligible Receivables owed by Category Three
Obligors in such Concentration Unit.
(xvi) the lesser of (A) the Third Step Residual and (B) the
amount determined pursuant to clause (xi).
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(xvii) an amount (the "Fourth Step Excess") equal to (A) the
Category Three Balance minus (B) the amount determined pursuant to
clause (xvi); provided that if such sum is a negative number, the
Fourth Step Excess will be zero.
(xviii) the sum of the First Step Excess, the Second Step
Excess, the Third Step Excess and the Fourth Step Excess, such sum
being the "Concentration Unit Excess Concentration" for such
Concentration Unit.
(c) On each Business Day and with respect to each Concentration Unit,
Servicer shall determine:
(i) an amount (the "Category One Eligibles") equal to (A) the
Category One Balance for such Concentration Unit minus (B) the Second
Step Excess (if any) for such Concentration Unit; provided that if such
sum is a negative number, the Category One Eligibles will be zero.
(ii) an amount (the "Category Two Eligibles") equal to (A) the
Category Two Balance minus (B) the Third Step Excess (if any) for such
Concentration Unit; provided that if such sum is a negative number, the
Category Two Eligibles will be zero.
(iii) an amount (the "Category Three Eligibles") equal to (A)
the Category Three Balance minus (B) the Fourth Step Excess for such
Concentration Unit; provided that if such sum is a negative number, the
Category Three Eligibles will be zero.
(d) On each Business Day, Servicer shall determine:
(i) the sum of the Category One Eligibles for all
Concentration Units.
(ii) the sum of the Category Two Eligibles for all
Concentration Units.
(iii) the sum of the Category Three Eligibles for all
Concentration Units.
(iv) an amount (the "Category Two Excess Concentration") equal
to (A) the amount determined pursuant to clause (ii) minus (B) 10% of
the Adjusted Eligible Receivables on such day; provided that if such
sum is a negative number, the Category Two Excess Concentration shall
be zero.
(v) an amount (the "Category Three Excess Concentration")
equal to (A) the amount determined pursuant to clause (iii) minus (B)
5% of the Adjusted Eligible Receivables on such day; provided that if
such sum is a negative number the Category Three Excess Concentrations
shall be zero.
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(vi) the sum of the amounts in clauses (i), (ii) and (iii).
(vii) the sum of the Category Two Excess Concentration and the
Category Three Excess Concentration.
(viii) the sum of (A) the amount determined pursuant to clause
(vi) minus the amount determined pursuant to clause (vii).
(ix) an amount (the "Total Foreign Concentration Excess")
equal to (A) the amount determined pursuant to clause (viii), minus (B)
35% of the Adjusted Eligible Receivables; provided that if such sum is
a negative number, the Total Foreign Concentration Excess shall be
zero.
(e) With respect to (i) all Category One Obligors or Category Two
Obligors, and (ii) each Category Three Obligor that owes Eligible Receivables in
excess of $1,000,000 or that is located in a jurisdiction where Obligors owe an
aggregate amount of Eligible Receivables in excess of $2,000,000, Servicer and
Transferor shall, and shall cause the Sellers to, take all actions reasonably
necessary to perfect and/or protect Transferor's and/or the Trustee's interests
in such Receivables under the laws of the jurisdiction in which such Obligors
are located.
(f) Within the four weeks following each anniversary of the Closing
Date, Servicer shall (i) cause counsel satisfactory to the Required Purchasers,
at the expense of Howmet, to contact local counsel in each jurisdiction in which
Obligors referred to in clause (e) are located, for purposes of determining
whether there has been a change in the laws of such jurisdiction regarding the
assignment of Receivables and (ii) take such actions as are required under
Section 4.10(e) with respect to any such change. Nothing in this Section 4.10(f)
shall limit the obligations of Servicer and Transferor under Section 4.10(e) at
any other time.
(g) Contemporaneously with the delivery of each Monthly Report,
Servicer shall provide Trustee with a certificate, signed by an appropriate
officer, showing (i) any Obligor that is not a Domestic Person and either owes
Receivables in an aggregate amount exceeding $1,000,000 as of the most recent
Cut-Off Date or is a party to a contract with a Seller expiring more than one
year after such Cut-Off Date, and (ii) any jurisdiction outside the United
States in which Obligors owe an aggregate amount of Receivables exceeding
$2,000,000, determined as of such Cut-Off Date.
(h) All documents executed and delivered to, or for the benefit of,
Trustee pursuant to this Section shall be Transaction Documents for all purposes
(including for purposes of Section 6.1).
SECTION 4.11 Tax Opinion. if any Tax Opinion is required to be
delivered in connection with the Series 1996-1 Certificates, the term "Tax
Opinion" shall have the meaning specified below:
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<PAGE> 498
"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax and applicable state income and
franchise tax purposes, (a) such action will not cause the Investor Certificates
of Series 1996-1 debt or partnership interests, (b) such action will not cause
the Trust to be treated as other than an association (or publicly traded
partnership) taxable as a corporation, (c) such action should not be treated as
a taxable event to any Series 1996-1 Investor Certificateholder or Certificate
Owner.
SECTION 4.12 Reset of Benchmark Percentages and Special Concentration
Limits. Transferor may from time to time (i) increase or decrease any Benchmark
Percentage used in the definition of Concentration Limit, (ii) change the
percentages specified in the definition of Special Concentration Limit with
respect to the two Tier-5 Obligors that owe the highest aggregate Unpaid
Balances of Eligible Receivables, or (iii) designate an additional Obligor as a
"Special Obligor," in each case (other than the designation of Westinghouse
Electric Corp. as a Special Obligor) if the Approval Condition is satisfied. It
is understood and agreed that any such changes in the Benchmark Percentages or
the Special Concentration Limits or the addition of a Special Obligor may change
the calculation of the Class A Concentration Factor, the Class B Concentration
Factor, the Class A Minimum Reserve Ratio and the Class B Minimum Reserve Ratio.
ARTICLE V DISTRIBUTIONS AND REPORTS
SECTION 5.1 Distributions. On each Distribution Date and, with respect
to clause (b), on each Principal Payment Date, other than a Distribution Date
that is also a Refinancing Date, Trustee shall, in accordance with instructions
set out in the applicable Daily Report, distribute to the Holders, the following
amounts:
(a) accrued and unpaid interest on the ABR Tranches and any
additional interest payable to the Series 1996-1 Holders pursuant to
Section 4.1 or to the Holders of any other Series in Group I, to the
extent funds are available for such payment in the Carrying Cost
Account (and in the event of any shortfall, such interest shall be paid
first to each Senior Class, ratably in accordance with the total amount
of interest owed to each Senior Class, and second to each Subordinated
Class, ratably in accordance with the total amount of interest owed to
each Subordinated Class);
(b) on each Principal Payment Date, all funds deposited in
each sub-account of the Principal Funding Account on or prior to the
most recent Cut-Off Date shall be distributed in reduction of the
related Series Invested Amounts; all such amounts on deposit in the
Series 1996-1 sub-account of the Principal Funding Account shall be
paid to the Holders of Class A Certificates until they have been paid
or provided for in full before any such amounts are paid to the Holders
of Class B Certificates, and no such amounts shall be paid to the
Holders of any Subordinated Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Invested
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<PAGE> 499
Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day);
(c) if, on the Expected Final Payment Date or any Distribution
Date failing in a Group Amortization Period, the funds on deposit in
the Carrying Cost Account (less any Servicing Fee payable on that day
to anyone other than a Howmet Person) will be equal to or greater than
the Invested Amount (after giving effect to all distributions required
by subsections (a) and (b)), then an amount equal to such remaining
Invested Amount shall be withdrawn from the Carrying Cost Account and
distributed in reduction of the Invested Amount; and
(d) any Additional Amounts payable with respect to
Certificates in any Series in Group I to the extent that funds have
been allocated for those Additional Amounts pursuant to priority fourth
of Section 4.3 or priority third of Section 4.4 (and in the event of
any shortfall, Additional Amounts shall be paid first to each Senior
Class, ratably in accordance with the total Additional Amounts owed to
each Senior Class, and second to each Subordinated Class, ratably in
accordance with the total Additional Amounts owed to each Subordinated
Class).
On each Distribution Date, Trustee shall also, in accordance with
instructions set out in the applicable Daily Report, distribute the Servicing
Fee to the Servicer to the extent that funds are available for that purpose in
the Carrying Cost Account.
On each Interest Payment Date (other than any Distribution Date, which
shall be governed by subsection (a) above), Trustee shall, in accordance with
instructions set out in the applicable Daily Report, distribute interest payable
on that date to the Holders of any Series in Group I, to the extent funds are
available for such payment in the Carrying Cost Account (and in the event of any
shortfall, any such interest shall be paid first to each Senior Class, ratably
in accordance with the total amount of interest owed to each Senior Class, and
second to each Subordinated Class, ratably in accordance with the total amount
of interest owed to each Subordinated Class).
Any amounts payable to the Holders of Class A Certificates pursuant to
this Section shall be paid to the Agent, and the Agent shall distribute such
amounts to such Holders. Amounts payable to a Holder of Class B Certificates
pursuant to this Section shall be paid to such Holder.
SECTION 5.2 Special Distributions on the Refinancing Date. On the
Refinancing Date, Trustee shall, in accordance with instructions set out in the
applicable Daily Report, distribute to the Holders the following amounts:
(a) all interest accrued on the Certificates in any Series in
Group I through the Refinancing Date, to the extent funds are available
for such payment in the Carrying
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<PAGE> 500
Cost Account or have been deposited in the Principal Funding Account
pursuant to Section 4.9;
(b) all funds deposited in the Principal Funding Account
pursuant to Section 4.9, provided that no such amounts shall he paid to
the Holders of the Class B Certificates on any day if (i) any Senior
Class will remain outstanding after that date and (ii) the Net Invested
Amount exceeds the Base Amount on that day (after giving effect to all
payments and allocations made pursuant to Section 4.3 on that day); and
(c) any Additional Amounts to the extent that funds for those
Additional Amounts have been allocated pursuant to priority fourth of
Section 4.3 or priority third of Section 4.4 or deposited in the
Principal Funding Account pursuant to Section 4.9.
Amounts payable to Holders of Class A Certificates pursuant to this
Section shall he paid to the Agent, and the Agent shall distribute such amounts
to such Holders. Amounts payable to a Holder of Class B Certificates pursuant to
this Section shall he paid to such Holder. Promptly following receipt of the
amounts payable to the Holders of Certificates pursuant to this Section, such
Holders shall tender such Certificates to the Trustee.
SECTION 5.3 Payments in Respect of Transferor Certificate. On each day
on which funds are allocated for this purpose pursuant to Sections 4.3 and 4.4
(and subject to the terms of Section 4.4 relating to the Holdback Account),
Trustee shall, in accordance with instructions set out in the applicable Dally
Report, distribute to Transferor, in respect of the Transferor Certificate, all
funds allocated for that purpose in accordance with those Sections. In addition,
after the Group Invested Amount has been repaid in full and all interest and
Additional Amounts owed to the Holders have been paid, any additional funds on
deposit in the Carrying Cost Account, the Equalization Account or the Principal
Funding Account shall similarly he paid to Transferor in respect of the
Transferor Certificate.
SECTION 5.4 Daily Reports and Monthly Reports. Each Daily Report and
Monthly Report shall he substantially in the applicable form set out in Exhibit
B or C or in such other form as may he required by any other Supplement relating
to a Series in Group I or otherwise satisfactory to Servicer and Trustee and
consistent with the terms of this Supplement, each such other Supplement and the
Pooling Agreement. Copies of each Monthly Report shall be provided free of
charge by the Trustee to purchasers of Series 1996-1 Certificates in connection
with the initial distribution thereof and may be obtained free of charge upon
request from the Trustee (and presentation of a confirmation evidencing the
purchase of such beneficial interest) by subsequent purchasers.
SECTION 5.5 Annual Tax Information. On or before February 15 of each
calendar year, beginning with calendar year 1997, Servicer, on behalf of
Trustee, shall furnish or cause to he furnished to each Person who at any time
during the preceding calendar year was
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<PAGE> 501
a Holder the information for the preceding calendar year, or the applicable
portion thereof during which the Person was a Holder, as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code to the
holders of the issuer's indebtedness and such other customary information as is
necessary to enable such Holders to prepare their Federal income tax returns.
Servicer's obligations under the preceding sentence shall be deemed to have been
satisfied to the extent that substantially comparable information shall he
provided by the Paying Agent to the specified Persons pursuant to the Pooling
Agreement or any requirements of the Internal Revenue Code as from time to time
in effect. Notwithstanding anything to the contrary contained in this Agreement,
Trustee shall, to the extent required by applicable law, from time to time
furnish to the appropriate Persons a Form 1099-INT within the period required by
applicable law.
SECTION 5.6 Periodic Perfection Certificate. On or before December 1 of
each calendar year, beginning with calendar year 1996, Servicer, on behalf of
Trustee, shall furnish or cause to be furnished to Trustee and the Agent an
Officer's Certificate setting forth a list of all changes in (a) the name,
identity or corporate structure of Transferor or any Seller and (b) the chief
executive office of Transferor or any Seller (or in the place of business of
Transferor or any Seller that has only one place of business) that have taken
place since the date of the Officer's Certificate most recently delivered
pursuant to this Section 5.6 (or since the Closing Date, in the case of the
first such Officer's Certificate to he delivered), or indicating that no such
events have taken place, and stating in each case what filings of UCC financing
statements, or amendments thereto, relating to the Transaction Documents have
been made in connection with each such event (identifying the date and filing
index numbers for each). Any financing statement identified in such an Officer's
Certificate delivered to Trustee shall be deemed to have been identified to
Trustee in writing for purposes of subsection 11.1(c)(v) of the Pooling
Agreement. If any such new UCC financing statements are filed, Servicer shall
cause Trustee to be named as secured party (in the case of any filing against
Transferor) or assignee of the secured party (in the case of any filing against
a Seller). Notwithstanding the foregoing, if any "Event of Default" or
"Potential Event of Default" under (and as defined in) the Howmet Credit
Agreement occurs, Servicer shall deliver an Officer's Certificate covering the
matters described above to Trustee and Agent not later than 10 days after the
occurrence of such event, and for so long as any such event remains outstanding,
Servicer shall deliver such an Officer's Certificate on the last Business Day
falling in each of March, June, September and December.
ARTICLE VI EARLY AMORTIZATION EVENTS
SECTION 6.1 Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event":
(a)(i) failure on the part of Transferor or Servicer to make
any payment of the principal amount of the Series 1996-1 Certificates
when due, or to make any payment of any interest on the Series 1996-1
Certificates or to make any deposit required by
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the terms of any Transaction Document on or before two Business Days
after the date such payment or deposit is required to be made, or to
make any other payment, except any payment of the Servicing Fee to a
Howmet Person, required by the terms of any Transaction Document on or
before three Business Days after the date such payment is required to
be made; or (ii) failure on the part of any Seller to duly observe or
perform subsection 6.1(f), 6.1(h), 6.1(j), 6.3(a), 6.3(b), 6.3(c) or
6.3(e) of the Purchase Agreement or Transferor to duly observe or
perform subsection 7.2(c), 7.2(e), 7.2(f), 7.2(h), 7.2(i), 7.2(j) or
7.2(k) of the Pooling Agreement or clause (i) or (ii) of subsection
7.2(d) of the Pooling Agreement, which failure has a substantial
likelihood of having a Material Adverse Effect and continues unremedied
for a period of five Business Days; or (iii) failure on the part of
Transferor, Servicer or any Seller duly to observe or perform any other
covenant or agreement set forth in any Transaction Document, which
failure has a substantial likelihood of having a Material Adverse
Effect and continues unremedied for a period of 30 days; or (iv)
Guarantor gives notice of termination of the Seller Guaranty;
(b) any representation or warranty made by a Seller in
subsection 5.1(d), 5.1(k), 5.1(o) or 5.1(r) of the Purchase Agreement
or by Transferor in subsection 2.3(a) (i), 2.3(a) (ii) or 7.1(i) of the
Pooling Agreement shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material
respect for a period of five Business Days, or any other representation
or warranty made by Transferor, Servicer or any Seller in any
Transaction Document shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material
respect for a period of 30 days; provided that a mistake in the
representation of a Receivable as an Eligible Receivable or the breach
of a representation and warranty with respect to a Receivable shall not
constitute an Early Amortization Event unless and until the applicable
Seller has failed to make the cash payments (if any) owed under
Sections 3.1 and 3.5 of the Purchase Agreement in respect of such
mistake or breach (it being understood that certain of such mistakes or
breaches may result in a non-cash adjustment under the Purchase
Agreement);
(c) a Bankruptcy Event shall occur with respect to Transferor,
Servicer, Guarantor or any Seller, or Transferor shall become unable,
for any reason, to transfer Receivables or other Transferred Assets to
the Trust in accordance with the provisions of this Agreement and the
Pooling Agreement; provided that if, at the time any event that would,
with the passage of time, become a Bankruptcy Event occurs as a result
of a bankruptcy proceeding being filed against Transferor or any
Seller, then, on and after the day on which the bankruptcy proceeding
is filed until the earlier to occur of the dismissal of the proceeding
and the commencement of an Early Amortization Period, Transferor shall
not purchase Receivables and Related Assets from the affected Seller
or, if Transferor is the subject of the proceeding, transfer
Receivables and Related Transferred Assets to the Trust;
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(d) the Trust or Transferor shall be required to be registered
as an "investment company" under and within the meaning of the
Investment Company Act of 1940, as amended;
(e) the Net Invested Amount exceeds the Base Amount for a
period of two or more consecutive Business Days;
(f) a Servicer Default shall have occurred and shall not have
been remedied;
(g) Howmet shall cease to own, directly or indirectly, 100% of
the issued and outstanding capital stock of Transferor;
(h) the Internal Revenue Service or the PBGC shall have filed
one or more Tax or ERISA Liens against the assets of Transferor or any
Seller (including Receivables) in an aggregate amount exceeding
$250,000 unless such amounts (i) are bonded in a manner that satisfies
the Approval Condition or (ii) relate to taxes in an aggregate amount
not exceeding $1,000,000 which are contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained under GAAP;
(i) the cessation of, or the failure to create, a valid
first-priority perfected ownership or security interest in favor of
Trustee in the Receivables or the rights of Transferor under the
Purchase Agreement, which cessation or failure has a substantial
likelihood of having a Material Adverse Effect;
(j) the Series 1996-1 Invested Amount is not paid in full on
the Expected Final Payment Date;
(k) Transferor's net worth (as calculated in accordance with
GAAP) shall at any time be less than 17% of the aggregate Unpaid
Balance of the Receivables at such time and such condition continues
for five consecutive Business Days; provided that for purposes of
calculating Transferor's net worth, any and all amounts owed to
Transferor by any Howmet Person shall be excluded from such
calculation;
(l) any foreclosure or similar proceeding in respect of any
adverse claim on any Buyer Note or the Transferor's common stock shall
have been commenced; or title to any Buyer Note or Transferor's common
stock shall pass to the holders of such adverse claim, it being
understood that the grant of a security interest in the stock of
Transferor or any Buyer Note to a creditor of a Seller that is party to
an Intercreditor Agreement shall not be an Early Amortization Event;
(m) the average of the Aged Receivables Ratio for any three
consecutive Calculation Periods shall be greater than 2.50%;
42
<PAGE> 504
(n) the average of the Past Due Receivables Ratio for any
three consecutive Calculation Periods shall exceed 5.75%;
(o) the average of the Dilution Ratio for any three
consecutive Calculation Periods shall be greater than 6.75%; or
(p) the Intercreditor Provisions shall be amended without
written notice thereof having been provided to the Agent no later than
five Business Days prior to the effective date of such amendment.
SECTION 6.2 Early Amortization Period. Upon the occurrence and
continuance of any Early Amortization Event described in subsection 6.1(c), an
Early Amortization Period shall commence without any notice or other action on
the part of Trustee or the Series 1996-1 Holders, immediately upon the
occurrence of such Early Amortization Event, except that if an Early
Amortization Event described in subsection 6.1(c) occurs as the result of the
occurrence of a Bankruptcy Event with respect to one or more Sellers, the
Receivables originated by which made up less than 10% of the aggregate Unpaid
Balance of Receivables held by the Trust as of the date of the commencement of
the proceeding that gave rise to the first such Bankruptcy Event, then an Early
Amortization Period shall not commence unless Required Series Holders declare it
to have commenced. Upon the occurrence and continuance of any other Early
Amortization Event, alter the applicable grace period, if any, and if the action
or event that gave rise to such Early Amortization Event has not been waived by
the Required Series Holders, Trustee may (and, at the direction of the Required
Series Holders, shall) by notice then given in writing to Transferor and
Servicer, declare that an Early Amortization Period has commenced as of the date
of Transferor's receipt of the notice. In the event of any prepayment of the
Series 1996-1 Certificates prior to the first anniversary of the date hereof as
a result of the occurrence of an Early Amortization Event, the Holders thereof
shall be entitled to receive a Prepayment Premium.
ARTICLE VII OPTIONAL REDEMPTION; TERMINATION; INDEMNITIES
SECTION 7.1 Optional Redemption of Investor Interests. On any
Distribution Date occurring during an Early Amortization Period with respect to
the Series 1996-1 Certificates on or alter the date that the Series 1996-1
Invested Amount is reduced to 10% or less of the sum of the Stated Amounts for
the Series 1996-1 Certificates, Transferor shall have the option to redeem the
Series 1996-1 Series Interest. The purchase price will be an amount equal to the
Invested Amount plus accrued and unpaid interest (and accrued and unpaid
interest with respect to interest that was due but not paid on any prior
Distribution Date) through the day preceding the Distribution Date at the
applicable interest rate (as specified in Section 4.1) plus the aggregate amount
by which the Invested Amount has been reduced on account of Investor Write-Offs
(and not subsequently reinstated) plus (if such redemption occurs prior to the
first anniversary of the date hereof) the applicable Prepayment Premium. Upon
the tender of the outstanding Certificates of the Series by the Holders to
Trustee,
43
<PAGE> 505
Trustee shall distribute the amounts, together with all funds on deposit in the
Principal Funding Account that are allocable to the Series 1996-1 Certificates,
to the Holders of the Series on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Holders. Following
any redemption, the Holders of the Series shall have no further rights with
respect to the Transferred Assets. In the event that Transferor falls for any
reason to deposit in the Principal Funding Account the aggregate purchase price
for the Series 1996-1 Certificates, payments shall continue to be made to the
Holders of the Series in accordance with the terms of the Pooling Agreement and
this Supplement.
SECTION 7.2 Termination. Notwithstanding Section 12.1 of the Pooling
Agreement, the last payment of the principal of and interest on the Certificates
of any Series in Group I shall be due and payable no later than the Final
Scheduled Payment Date for that Series. If, on the Distribution Date immediately
prior to the Final Scheduled Payment Date for any such Series, Servicer
determines that the Series Invested Amount for the Series on the applicable
Final Scheduled Payment Date (after giving effect to all changes therein on such
date) will exceed zero, Servicer shall, as soon as practicable, solicit bids for
the sale of interests in the Receivables in an amount equal to the product of
(i) the outstanding balance of Receivables, times (ii) the Series Collection
Allocation Percentage, times (iii) the Investor Allocation Percentage, times
(iv) a fraction the numerator of which is the applicable Series Invested Amount
and the denominator of which is the Group Invested Amount. Transferor shall be
entitled to participate in and to receive notice of each bid submitted in
connection with the bidding process. Upon the expiration of the period, Servicer
shall determine (x) the highest bid for such Receivables and (y) the Available
Final Distribution Amount for the Series. Servicer shall sell the interests in
the Transferred Assets on the Final Scheduled Payment Date for the applicable
Series to the bidder with the Highest Bid and shall deposit the proceeds of such
sale in the Master Collection Account for allocation to the Holders. The
priorities specified in Section 5.1 shall apply to any such distribution.
SECTION 7.3 Indemnification by Transferor. Transferor hereby agrees to
indemnify the Trust, Trustee, each Holder of a Series 1996-1 Certificate and
each of the successors, permitted transferees and assigns of any such Person and
all officers, directors, shareholders, controlling Persons, employees,
affiliates and agents of any of the foregoing (each of the foregoing Persons
individually being called a "Transferor Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims (whether on account
of settlements or otherwise, and whether or not the relevant Transferor
Indemnified Party is a party to any action or proceeding that gives rise to any
Transferor Indemnified Losses (as defined below)), judgments, liabilities and
related reasonable costs and expenses (including reasonable attorneys' fees and
disbursements) (all of the foregoing collectively being called "Transferor
Indemnified Losses") awarded against or incurred by any of them that arise out
of or relate to this Agreement, any other Transaction Document or any of the
transactions contemplated herein or therein or the use of proceeds herefrom or
therefrom (including any Transferor Indemnified Losses (i) relating to any
Adverse Claim, without regard to whether
44
<PAGE> 506
such Adverse Claim was a Permitted Adverse Claim, or (ii) arising from any
failure to make any filing or obtain any consent as required by the Federal
Assignment of Claims Act with respect to any Receivables).
Notwithstanding the foregoing, in no event shall any Transferor
Indemnified Party be indemnified for any Transferor Indemnified Losses (a)
resulting from gross negligence or willful misconduct on the part of such
Transferor Indemnified Party (or the gross negligence or willful misconduct on
the part of any of its officers, directors, employees, affiliates or agents),
(b) to the extent they include Transferor Indemnified Losses in respect of
Receivables and reimbursement therefor that would constitute credit recourse to
Transferor for the amount of any Receivable or Related Transferred Asset not
paid by the related Obligor, (c) to the extent they are or result from lost
profits, (d) to the extent they are or result from taxes (including interest and
penalties thereon) asserted with respect to (i) distributions on the Series
1996-1 Certificates, (ii) franchise or withholding taxes imposed on any
Transferor Indemnified Party other than the Trust or the Trustee in its capacity
as Trustee or (iii) federal or other income taxes on or measured by the net
income of such Transferor Indemnified Party and costs and expenses in defending
against the same, (e) resulting from any breach by such Transferor Indemnified
Party of its representations, warranties or covenants in the Transaction
Documents, or (f) to the extent that they constitute consequential, special or
punitive damages.
If for any reason the indemnification provided in this section is
unavailable to a Transferor Indemnified Party or is insufficient to hold a
Transferor Indemnified Party harmless, then Transferor shall contribute to the
amount paid by the Transferor Indemnified Party as a result of any loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Transferor Indemnified Party on the one hand
and Transferor on the other hand, but also the relative fault of such Transferor
Indemnified Party (if any) and Transferor and any other relevant equitable
considerations.
SECTION 7.4 Indemnification by Servicer. Servicer agrees that the Agent
and each Holder of a Series 1996-1 Certificate shall be an "Indemnified Party"
for purposes of Section 8.4 of the Pooling Agreement.
ARTICLE VIII MISCELLANEOUS
SECTION 8.1 Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
SECTION 8.2 Counterparts. This Supplement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
45
<PAGE> 507
SECTION 8.3 Severability of Provisions. If any one or more of the
provisions or terms of this Supplement shall for any reason whatsoever be held
invalid, then the unenforceable provision(s) or term(s) shall be deemed
severable from the remaining provisions or terms of this Supplement and shall in
no way affect the validity or enforceability of the other provisions or terms of
this Supplement.
SECTION 8.4 Amendment, Waiver, Etc. This Supplement may be amended,
subject to Section 13.1 of the Pooling Agreement and Section 10.1 of each
Certificate Purchase Agreement, from time to time by Servicer, Transferor and
Trustee by a written instrument signed by each of them.
SECTION 8.5 Trustee. Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplement
or for or in respect of the recitals contained herein, all of which recitals are
made solely by Transferor and Servicer.
SECTION 8.6 Instructions in Writing. All instructions given by Servicer
to Trustee pursuant to this Supplement shall be in writing, and may be included
in a Daily Report or Monthly Report.
46
<PAGE> 508
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BLADE RECEIVABLES CORPORATION,
as Transferor
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address: c/o Nevada Corporate
Management, Inc.
3753 Howard Hughes Parkway
Suite 200
Las Vegas, Nevada 89109
Attention: James P. Lawler
Facsimile: (702) 892-3906
HOWMET CORPORATION, as Servicer
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Attention: Chief Financial Officer
Facsimile: (203) 8614746
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address: One M&T Plaza, 7th Floor
Buffalo, New York 14203
Attention: Russell Whitley
Facsimile: (716) 842-4474
<PAGE> 509
EXHIBIT A - Part 1
to the Series 1996-1 Supplement
FORM OF CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIvE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND
<PAGE> 510
WILL NOT BECOME A PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. (If this representation cannot be
made, Transferor, Servicer or the Trustee may require the legend to contain
additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
<PAGE> 511
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: Maximum Principal Amounts
$________________
ThiS CERTIFIES THAT _________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Transferor"), HOWMET
CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND TRADERS
TRUST COMPANY, a New York banking corporation, as trustee (together with its
successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class A, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
3
<PAGE> 512
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
A, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b)agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WiTNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:_________________________
Title: _____________________
4
<PAGE> 513
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:________________________________
Title:____________________________
Dated:____________,1996
5
<PAGE> 514
PURCHASES AND REPAYMENTS
<TABLE>
<CAPTION>
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- --------- ----------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 515
EXHIBIT A - Part 2
to the Series 1996-1 Supplement
FORM OF CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTh IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTh IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
<PAGE> 516
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot be made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
2
<PAGE> 517
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B, SERIES 1996-1 CERTIFICATE
Date: $________________
THIS CERTIFIES THAT___________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banning corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b)the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and
are therefore subordinated to the Class A, Series 1996-1 Certificates, Series
1996-1 Certificates and Certificates in any other Senior Class that may be
issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income
3
<PAGE> 518
and franchise and other taxes measured by or imposed on income, the Class B,
Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b) agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By:__________________________
Title:_______________________
4
<PAGE> 519
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By:____________________________
Title:_________________________
Dated:___________, 1996
5
<PAGE> 520
PURCHASES AND REPAYMENTS
<TABLE>
<CAPTION>
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- --------- ----------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 521
EXHIBIT B
to Certificate Purchase
Agreement Series 1996-1, Class B
FORM OF ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of _________ (this "Agreement"), is
made between _____________________ ("Assignor"), and ____________________
("Assignee"). Except as otherwise defined herein, capitalized terms have the
meanings assigned to them in the Certificate Purchase Agreement (as defined
below).
BACKGROUND
1. Assignor is a party to the Certificate Purchase Agreement, dated as
of April 18, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Certificate Purchase Agreement"), among BLADE RECEIVABLES
CORPORATION, a Nevada corporation ("Transferor"), HOWMET CORPORATION, a Delaware
corporation, the Purchasers party thereto (including Assignor), and The First
National Bank of Chicago, as Agent.
2. Assignor wishes to assign, and Assignee wishes to be so assigned,
Assignor's rights and obligations arising on and after the Effective Date (as
defined below) under the Certificate Purchase Agreement and its Certificate,
including its outstanding Purchase (the "Purchase").
3. Assignor and Assignee also wish (a) Assignee to assume the
obligations of Assignor under the Certificate Purchase Agreement with respect to
Assignee's Share (as defined below) to the extent of the rights assigned and (b)
Assignor to be released from the obligations assumed by Assignee.
4. Transferor, by its execution hereof, is providing its written
consent to the assignment accomplished by this Agreement.
SECTION 1. Assignment. Effective on the Effective Date (as defined
below) and upon payment of the amount specified in Section 3(a), Assignor hereby
assigns and transfers to Assignee, without recourse, representation or
<PAGE> 522
warranty of any kind, express or implied (except as provided in Sections 6(a)
and (b)), and subject to Section 4(b), Assignee's Share (as specified in Annex I
hereto) (the "Assignee's Share") of all of Assignor's rights, title and interest
arising under (a) the Certificate Purchase Agreement relating to Assignor's
Credit Exposure including all rights and obligations with respect to the
Purchase attributable to Assignee's Share and (b) Assignor's Certificate with
respect to Assignee's Share as will result in Assignee having from and after the
Effective Date the Class Percentage and the Series Percentage specified in Annex
I.
SECTION 2. Assumption. Effective on the Effective Date, Assignee hereby
irrevocably purchases, assumes and takes from Assignor, and Assignor is hereby
expressly and absolutely released from, all of Assignor's obligations arising
under the Certificate Purchase Agreement relating to Assignee's Share and the
Purchase attributable to Assignee's Share.
SECTION 3. Payment. In consideration of the assignment by Assignor to
Assignee as set forth above, Assignee agrees to pay to Assignor, in Dollars and
in immediately available funds, (a) on or prior to the Effective Date, an amount
specified by Assignor in writing on or prior to the Effective Date that
represents Assignee's Share attributable to the principal amount of the Purchase
made pursuant to the Certificate Purchase Agreement and outstanding on the
Effective Date, and (b) from time to time thereafter, other amounts (if any)
that Assignee has agreed in writing to pay to Assignor after the Effective Date.
In consideration of the assumption by Assignee, Assignor agrees to pay to
Assignee within two Business Days of the Effective Date, an assignment fee (if
any) that previously has been agreed to in writing by both parties.
Notwithstanding anything to the contrary in this Agreement, if and when
Assignee receives or collects (x) any payment of principal or interest relating
to the Purchase or (y) any payment of fees that are required to be paid to
Assignor pursuant to this Agreement, then Assignee shall forward the payment to
Assignor.
To the extent payment of funds to Assignee or Assignor are not made
within two Business Days, each, as the case may be, shall be entitled to recover
the due amount, together with interest thereon at the Federal Funds Rate per
annum accruing from the date of payment or the date of receipt of the funds by
the other party.
SECTION 4. Effectiveness. (a)(i) This Agreement shall become effective
on the date (the "Effective Date") on which it shall have been duly executed by
all parties and the Agent shall have recorded the information
page 2
<PAGE> 523
contained herein in its records (or automatically if not so recorded within five
Business Days from the Agent's receipt of this Agreement signed by Assignor,
Assignee and Transferor)[; provided, however, that, notwithstanding anything
herein to the contrary, as a condition to the effectiveness of the assignment,
and prior to any rights of Assignee being recognized hereunder or under any
Transaction Document or Certificate, in accordance with Section 10.3(c) of the
Certificate Purchase Agreement, the assigning Purchaser shall provide, or shall
cause Assignee to provide, to Transferor such information as Transferor
reasonably requests to make the determinations required by Section 10. 3(f) of
the Certificate Purchase Agreement. If the Transferor has acknowledged in
writing the terms and conditions of this agreement, the assigning Purchaser
shall be deemed to have provided or caused to be provided such information.]1/
Assignor hereby notifies the Agent of the assignment, effective as of the
Effective Date, of Assignee's Share and the Purchase attributable to the
Assignee's Share, and directs the Agent to pay Assignee any payment of principal
of, or interest on, the Purchase attributable to the Assignee's Share. No (x)
failure of either Assignee or Assignor to settle any amount owed to the other
(except with respect to the payment of the processing and recordation fee to the
Agent and the payment due under Section 3(a)), (y) dispute respecting any other
settlement, including in respect of Transferor, or (z) bankruptcy, insolvency or
other condition whatsoever respecting any Person, shall in any way impair,
reduce or otherwise affect the effectiveness of this Agreement.
(ii) Assignor, Assignee and the Agent each acknowledges and agrees that
from and after the Effective Date, the Agent shall make all payments under the
Certificate Purchase Agreement in respect of Assignee's Share (including all
payments of principal and interest with respect thereto, whether or not the
payments shall have accrued prior to or after the Effective Date) to Assignee
only. Assignor and Assignee hereby agree further to make all appropriate
adjustments in payments to either of them under the Certificate Purchase
Agreement for periods prior to the Effective Date directly between themselves.
(b) With respect to the Purchase attributable to Assignee's Share, if
and when Assignor receives or collects any payment of principal, interest, or
Additional Amounts with respect to Assignee's Share for any period commencing on
or after the Effective Date, Assignor shall distribute to Assignee the portion
attributable to Assignee's Share, but only to the extent it accrued on or after
the Effective Date and was not theretofore paid to Assignee by Transferor or
otherwise. Any principal, interest and Additional
- ----------
1/ Bracketed language should be deleted in the case of a Permitted Transferee.
page 3
<PAGE> 524
Amounts paid prior to the Effective Date shall be retained by Assignor. Any
principal, interest, and Additional Amounts received by Assignee that accrued
prior to the Effective Date shall be forwarded promptly, in the form received,
to Assignor. Assignee recognizes and agrees that (i) it shall receive no payment
on account of any Agent's fees or other amounts or expenses (including counsel
fees) payable to the Agent (in such capacity and for its own account), (ii) this
Agreement shall not operate to assign any rights or delegate any obligations of
the Agent (in such capacity), and (iii) notwithstanding anything to the contrary
in this Agreement, Assignor shall retain all of its rights to indemnification
under the Certificate Purchase Agreement for any events, acts or omissions
occurring prior to the Effective Date.
(c) The Agent, by its execution hereof, acknowledges the assignment and
agrees to make payments in respect of principal, interest, fees and Additional
Amounts as described in clause (a).
SECTION 5. Rights as Purchaser under Certificate Purchase Agreement. In
accordance with Section 10.3 of the Certificate Purchase Agreement, (a) as of
the Effective Date, Assignee will be a Purchaser under, and party to, the
Certificate Purchase Agreement and shall have (i) all of the rights and
obligations of a Purchaser (to the extent of the assignment and assumption of
Assignee's Share effected by this Agreement) and (ii) the addresses for (A)
notice purposes and (B) LIBOR Office as set forth in items 2 and 3,
respectively, of Annex I hereto and (b) promptly on or after the Effective Date,
Transferor will execute and deliver any documents and instruments that Assignor
or Assignee reasonably may require.
SECTION 6. Representations and Warranties. (a) Each of Assignor and
Assignee represents and warrants to the other as follows:
(i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, to fulfill the
obligations hereunder and to consummate the transactions contemplated
hereby;
(ii) the making and performance of this Agreement and all
documents required to be executed and delivered hereunder do not and
will not violate any law or regulation of the jurisdiction of its
incorporation or any other applicable law or regulation;
(iii) this Agreement has been duly executed and delivered and
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
page 4
<PAGE> 525
(iv) all approvals, authorizations or other actions by, or
filing with, any Governmental Authority necessary for the validity or
enforceability of its obligations under this Agreement have been
obtained.
(b) Assignor represents and warrants to Assignee that Assignee's Share
and the Purchase attributable to Assignee's Share is not subject to any liens or
security interests created by Assignor.
(c) Except as set forth in subsections (a) and (b), Assignor makes no
representations or warranties, express or implied, to Assignee and shall not be
responsible to Assignee for (i) the execution, effectiveness, genuineness,
legality, validity, enforceability, collectibility, regulatory status or
sufficiency of the Certificate Purchase Agreement or any of the other
Transaction Documents, (ii) the perfection, priority, value or adequacy of any
collateral security or guaranty, (iii) the taking of any action, or the failure
to take any action, with respect to any of the Transaction Documents, (iv) any
representations, warranties, recitals or statements made in any of the
Transaction Documents or in any written or oral financial or other statements,
instruments, reports, certificates or documents made or furnished by Assignor to
Assignee or by or on behalf of Transferor or any of its Affiliates to Assignor
or Assignee in connection with the Transaction Documents and the transactions
contemplated thereby, (v) the financial or other condition of Transferor or any
other Person or (vi) any other matter having any relation to any of the
foregoing. Assignor shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Transaction Documents or the existence or
possible existence of any Unmatured Early Amortization Event, Early Amortization
Event or Servicer Default. Additionally, Assignor shall not have any duty or
responsibility either initially or on a continuing basis to make any
investigation or any appraisal on Assignee's behalf or to provide Assignee with
any credit or other information with respect thereto, whether coming into
Assignor's possession before the execution of the Certificate Purchase Agreement
or at any time thereafter. Assignor shall have no responsibility with respect to
the accuracy of, or the completeness of, any information provided to Assignee,
whether by Assignor or by or on behalf of Transferor or any other Person
obligated under the Certificate Purchase Agreement or any related instrument or
document.
(d) Assignee represents and warrants that it has made its own
independent investigation of each of the foregoing matters, including the
financial condition and affairs of Transferor and its Affiliates, in connection
with the making of the Purchase and the execution of this Agreement
page 5
<PAGE> 526
(including the solvency of Transferor and its Affiliates, their ability to pay
their respective debts as they mature and the capital of Transferor and its
Affiliates remaining after the closing under the Transaction Documents and the
consummation of the transactions contemplated thereby) and has made and shall
continue to make its own appraisal of the creditworthiness of Transferor and its
Affiliates. Assignee (i) confirms that it has received copies of the Transaction
Documents together with copies of certain other closing documents delivered in
connection with the Certificate Purchase Agreement, financial statements and any
other documents and information that it has requested or deemed appropriate to
make its own credit analysis and decision to enter into this Agreement and (ii)
agrees that it will, independently and without reliance upon the Agent, Assignor
or any other Purchaser and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Transaction Documents.
(e) Assignee represents and warrants to Transferor that the
representations and warranties in Section 6.3 of the Certificate Purchase
Agreement are true and correct in respect of such Assignee as of the date
hereof.
SECTION 7. No Proceedings. Assignee hereby agrees to be bound by the
provisions of Section 10.13 of the Certificate Purchase Agreement.
SECTION 8. Withholding Taxes. [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee agrees to execute and deliver to the
Agent, for delivery to Transferor, on or before the Effective Date, (a) two
original copies of Internal Revenue Service Form 4224 or successor applicable
form, properly completed and duly executed by the Assignee certifying that it is
entitled to receive payments under the Certificate Purchase Agreement and any
Certificate without deduction or withholding of any United States Federal income
taxes, and (b) an original copy of Internal Revenue Service Form W-8 or W-9 or
applicable successor form, properly completed and duly executed, certifying its
exemption from backup withholding. Assignee represents and warrants to
Transferor and Assignor that, as of the Effective Date, it shall be entitled to
receive payments under its Certificate, the Certificate Purchase Agreement and
hereunder without deduction for or on account of any taxes imposed by the United
States of America or any political subdivision thereof. In the event that, after
delivering the applicable form, Assignee shall cease to be exempt from
withholding and/or deduction of taxes, then the Agent may withhold and/or deduct
the applicable amount from any payments of principal, interest and any fees to
which Assignee otherwise would be entitled, and the Agent shall have no
liability whatsoever to Assignee for any such withholding
page 6
<PAGE> 527
or deduction. Assignee shall indemnify Transferor and the Agent from and against
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs or expenses that result from Assignee's breach of such
representation and warranty.]2/ [In accordance with Section 4.6 of the
Certificate Purchase Agreement, Assignee (unless organized as a corporation
under the laws of any state of the United States) agrees to execute and deliver
to the Agent, for delivery to Transferor, on or before the Effective Date, an
original copy of Internal Revenue Service Form W-9 or applicable successor form,
properly completed and duly executed, certifying its exemption from backup
withholding.]3/
SECTION 9. Miscellaneous. (a) Each of the parties hereto agrees to take
any action and execute and deliver any documents that any party hereto
reasonably may request from time to time in order to implement more fully the
purposes of this Agreement. Without limiting the generality of the foregoing,
Assignor and Assignee will cooperate in obtaining for Assignee a Certificate (as
well as a replacement Certificate for Assignor representing any retained
interest of Assignor).
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
(c) Except as otherwise set forth herein, this Agreement sets forth the
entire agreement between the parties relating to the subject matter hereof, and
no term or provision of this Agreement may be amended, changed, waived,
discharged or terminated orally or otherwise, except in a writing signed by
Assignor and Assignee.
(d) This Agreement may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
(e) Each of the parties hereto agrees that each party shall bear its
own expenses in connection with the preparation and execution of this Agreement
- ----------
2/ If the Assignee is not a U.S. person within the meaning of Section 7701
(a)(30) of the Internal Revenue Code.
3/ If the Assignee is a U.S. person within the meaning of Section 7701(a)
(30) of the Internal Revenue Code.
page 7
<PAGE> 528
and the consummation of the Assignment described herein. Assignee further agrees
that it shall send a check in the amount of $[1,500] [3,500] to the Agent on or
prior to the Effective Date, as payment of the processing and recordation fee
described in Section 10.3(c) of the Certificate Purchase Agreement. [Select
correct amount in accordance with that Section.]
(f) All representations and warranties made, and indemnities provided
for, herein shall survive the consummation of the transactions contemplated
hereby. Assignor and Assignee acknowledge and agree that Transferor is a
third-party beneficiary of Section 6(e) of this Agreement.
(g) Assignor may at any time or from time to time grant assignments and
participations in its rights and obligations under the Certificate Purchase
Agreement and its Certificate to other Persons, but not in the portions thereof
assigned to Assignee.
(h) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither Assignor
nor Assignee may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party. The preceding
sentence shall not limit the right of Assignee to assign all or part of
Assignee's Share in the manner contemplated by the Certificate Purchase
Agreement.
(i) Assignee acknowledges that all obligations of the Agent are subject
to Article IX of the Certificate Purchase Agreement.
page 8
<PAGE> 529
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.
___________________________________
as Assignor
By:________________________________
Title: ___________________________
___________________________________
as Assignee
By:________________________________
Title: ___________________________
The undersigned hereby acknowledges the terms and provisions of this
Agreement, and agrees to make payments in respect of principal, interest and
fees as described in Section 4(a).4/
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:___________________________
Title: ______________________
BLADE RECEIVABLES CORPORATION
By:___________________________
Title: ______________________
- ----------
4/ Acknowledgement not required for certain Assignees, as provided in
Section 10.3 of the Certificate Purchase Agreement.
page 9
<PAGE> 530
ANNEX I
to Assignment Agreement
Item 1. Assignee's Share:
(a) Assignee's Stated Amount $______________
(b) Assignee's Class Percentage _____________%
(c) Assignee's Series Percentage _____________%
Item 2. Address of Assignee for notice purposes:
____________________________________
____________________________________
____________________________________
Attention:__________________________
Telephone:__________________________
Facsimile:__________________________
Item 3. LIBOR Office of Assignee:
____________________________________
____________________________________
____________________________________
<PAGE> 531
APPENDIX X
to Certificate Purchase
Agreement Series 1996-1
INDEX OF ADDITIONAL DEFINED TERMS
Agent ...................................................................... 1
Agreement .................................................................. 1
Assignee ................................................................... 23
Certificates ............................................................... 1
Class Percentage ........................................................... 10
Credit Exposure ............................................................ 22
Effective Date ............................................................. 2
Financial Advisors ......................................................... 11
Howmet ..................................................................... 1
Indemnitees ................................................................ 27
LIBOR Office ............................................................... 5
Majority Class B Purchasers ................................................ 16
Participants ............................................................... 22
Pooling Agreement .......................................................... 1
Purchase ................................................................... 2
Purchasers ................................................................. 1
Receivables Review ......................................................... 16
Required Purchasers ........................................................ 20
Series Percentage .......................................................... 10
Servicer ................................................................... 1
Supplement ................................................................. 1
Taxes ...................................................................... 8
Transferee ................................................................. 24
Transferor ................................................................. 1
Trust ...................................................................... 1
Trust Interest ............................................................. 1
Trustee .................................................................... 1
<PAGE> 532
CLASS A, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
<PAGE> 533
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot he made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY FALCON ASSET SECURITIZATION
CORPORATION TO A PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES), UNLESS (i) THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED
OR CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) APTER GIVING EFFECT ThERETO, THERE SHALL BE
NO MORE THAN EIGHT PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS A CERTIFICATES) IN RESPECT OF THE
CLASS A, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
page 2
<PAGE> 534
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS A, SERIES 1996-1 CERTIFICATE
Date: April 18, 1996 Maximum Principal Amount:
$47,500,000
THIS CERTIFIES ThAT FALCON ASSET SECURITIZATION CORPORATION is the
registered owner of a nonassessable, fully-paid, fractional undivided interest
in the Blade Receivables Master Trust (the "Trust") that was created pursuant to
(a) the Pooling and Servicing Agreement, dated as of December 13, 1995, as
amended and restated in its entirety by the Amended and Restated Pooling and
Servicing Agreement, dated as of April 18, 1996 (as the same may be further
amended, supplemented or otherwise modified from time to time, the "Pooling
Agreement"), among BLADE RECEIVABLES CORPORATION, a Nevada corporation
("Transferor"), HOWMET CORPORATION, a Delaware corporation ("Servicer"), and
MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as
trustee (together with its successors and assigns in such capacity, "Trustee"),
and (b) the Supplement dated as of April 18, 1996 relating to the Series 1996-1
Certificates (the "Supplement"). This Certificate is one of the duly authorized
Class A, Series 1996-1 Certificates designated and issued under the Pooling
Agreement and the Supplement. Except as otherwise defined herein, capitalized
terms have the meanings that the Supplement and the Pooling Agreement assign to
them. This Certificate is subject to the terms, provisions and conditions of,
and is entitled to the benefits afforded by, the Pooling Agreement and the
Supplement, to which terms, provisions and conditions the Holder of this
Certificate by virtue of the acceptance hereof assents and by which the Holder
is bound.
The Class A, Series 1996-1 Certificates are a Senior Class and are
therefore entitled to share in the benefits of the subordination of the Class B,
Series 1996-1 Certificates and Certificates in any other Subordinated Class that
may be issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
page 3
<PAGE> 535
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
A, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b)agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
[Remainder of Page Intentionally Left Blank]
page 4
<PAGE> 536
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------
Title: Vice President
-----------------------
<PAGE> 537
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ illegible
----------------------------
Title: ASST. VICE PRESIDENT
-------------------------
Dated: April 18, 1996
<PAGE> 538
PURCHASES AND REPAYMENTS
<TABLE>
<CAPTION>
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
- ---------------- --------- ----------- -------------
Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
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<PAGE> 539
CLASS B, SERIES 1996-1 CERTIFICATE
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR
(D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIvE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE.
THIS CERTIFICATE WILL BE NOT ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON
PRESENTATION OF EVIDENCE SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT THAT
THE RESTRICTIONS ON TRANSFER SET FORTH IN THE POOLING AGREEMENT HAVE BEEN
COMPLIED WITH.
<PAGE> 540
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF BLADE RECEIVABLES
CORPORATION THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A PARTNERSHIP,
SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES. [If this representation cannot he made, Transferor, Servicer or the
Trustee may require the legend to contain additional representations.]
THIS CERTIFICATE MAY NOT BE TRANSFERRED, ASSIGNED OR OTHERWISE CONVEYED, AND A
PARTICIPATION INTEREST THEREIN MAY NOT BE SOLD (OTHER THAN IN THE CASE OF A
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE BY ALPINE SECURITIZATION CORP. TO A
PERMITTED TRANSFEREE (AS DEFINED IN THE CERTIFICATE PURCHASE AGREEMENT RELATING
TO THE SERIES 1996-1, CLASS B CERTIFICATES), UNLESS (i) THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF ALL CERTIFICATES TRANSFERRED, ASSIGNED OR
CONVEYED, OR IN WHICH A PARTICIPATION INTEREST IS SOLD, PURSUANT TO SUCH
TRANSFER, ASSIGNMENT, CONVEYANCE OR SALE, IS EQUAL TO A PRINCIPAL AMOUNT OF
CERTIFICATES THAT WOULD REPRESENT AT LEAST 2.1% OF THE TOTAL INTERESTS IN
PARTNERSHIP CAPITAL OR PROFITS, WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.7704-1, ASSUMING THE TRUST WERE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES AND (ii) AFTER GIVING EFFECT THERETO, THERE SHALL BE
NO MORE THAN THREE PRIVATE HOLDERS (AS DEFINED IN THE CERTIFICATE PURCHASE
AGREEMENT RELATING TO THE SERIES 1996-1, CLASS B CERTIFICATES) IN RESPECT OF THE
CLASS B, SERIES 1996-1 CERTIFICATES, IN EACH CASE AS REASONABLY DETERMINED BY
TRANSFEROR.
page 2
<PAGE> 541
BLADE TRADE RECEIVABLES BACKED CERTIFICATES
CLASS B, SERIES 199&1 CERTIFICATE
Date: April 18, 1996 $7,500,000
THIS CERTIFIES ThAT ALPINE SECURITIZATION CORP. is the registered owner
of a nonassessable, fully-paid, fractional undivided interest in the Blade
Receivables Master Trust (the "Trust") that was created pursuant to (a) the
Pooling and Servicing Agreement, dated as of December 13, 1995, as amended and
restated in its entirety by the Amended and Restated Pooling and Servicing
Agreement, dated as of April 18, 1996 (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Pooling Agreement"),
among BLADE RECEIVABLES CORPORATION, a Delaware corporation ("Transferor"),
HOWMET CORPORATION, a Delaware corporation ("Servicer"), and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, as trustee (together with
its successors and assigns in such capacity, "Trustee"), and (b) the Supplement
dated as of April 18, 1996 relating to the Series 1996-1 Certificates (the
"Supplement"). This Certificate is one of the duly authorized Class B, Series
1996-1 Certificates designated and issued under the Pooling Agreement and the
Supplement. Except as otherwise defined herein, capitalized terms have the
meanings that the Supplement and the Pooling Agreement assign to them. This
Certificate is subject to the terms, provisions and conditions of, and is
entitled to the benefits afforded by, the Pooling Agreement and the Supplement,
to which terms, provisions and conditions the Holder of this Certificate by
virtue of the acceptance hereof assents and by which the Holder is bound.
The Class B, Series 1996-1 Certificates are a Subordinated Class and
are therefore subordinated to the Class A, Series 1996-1 Certificates, Series
1996-1 Certificates and Certificates in any other Senior Class that may be
issued from time to time to the extent set forth in the Supplement.
Unless the certificate of authentication hereon shall have been
executed by or on behalf of Trustee by the manual signature of a duly authorized
signatory, this Certificate shall not entitle the Holder hereof to any benefit
under the Transaction Documents or be valid for any purpose.
This Certificate does not represent a recourse obligation of, or an
interest in, Transferor, any Seller, Servicer, Trustee or any Affiliate of any
of them. This Certificate is limited in right of payment to the Transferred
Assets.
page 3
<PAGE> 542
By its acceptance of this Certificate, each Holder hereof (a)
acknowledges that it is the intent of Transferor, and agrees that it is the
intent of the Holder that, for purposes of Federal, applicable state and local
income and franchise and other taxes measured by or imposed on income, the Class
B, Series 1996-1 Certificates (including this Certificate) will be treated as
evidence of indebtedness secured by the Transferred Assets and the Trust not be
characterized as an association taxable as a corporation, (b)agrees that the
provisions of the Transaction Documents be construed to further that intent, and
(c) agrees to treat this Certificate for purposes of Federal, applicable state
and local income and franchise and other taxes measured by or imposed on income
as indebtedness.
This Certificate shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of laws principles, and all
obligations, rights and remedies under or arising in connection with this
Certificate shall be determined in accordance with the laws of the State of New
York.
[Remainder of Page Intentionally Left Blank]
page 4
<PAGE> 543
IN WITNESS WHEREOF, Transferor has caused this Certificate to be
executed by its officer thereunto duly authorized.
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------
Title: Vice President
-----------------------
<PAGE> 544
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B, Series 1996-1 Certificates referred to in
the Pooling Agreement, as supplemented by the Supplement.
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ illegible
----------------------------
Title: ASST. VICE PRESIDENT
------------------------
Dated: April 18, 1996
<PAGE> 545
PURCHASES AND REPAYMENTS
<TABLE>
<CAPTION>
Principal
Amount of Outstanding
Purchase Principal
Amount Purchased Repaid Balance Stated Amount
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Interest
Base Eurodollar Period (if Base Eurodollar Base Eurodollar
Rate Rate applicable) Rate Rate Rate Rate Reduction Net
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<PAGE> 546
GUARANTY
THIS GUARANTY, dated as of December 13, 1995 (this "Guaranty"), is
issued by HOWMET CORPORATION, a Delaware corporation ("Guarantor"), for the
benefit of BLADE RECEIVABLES CORPORATION, a Nevada corporation ("Purchaser"),
and its successors and assigns.
Guarantor agrees as follows:
SECTION 1 . Definitions. Capitalized terms used in this Guaranty,
unless otherwise defined herein, shall have the meaning set forth in Appendix A
to the Pooling and Servicing Agreement, dated as of December 13, 1995 (as it may
be amended, supplemented or otherwise modified from time to time, the "Pooling
Agreement") among Purchaser, Guarantor, as Servicer, and Manufacturers and
Traders Trust Company, as Trustee.
SECTION 2. Guaranty. FOR VALUE RECEIVED, Guarantor hereby
unconditionally guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, and the full and prompt
performance, of each of the Sellers' (each, a "Guaranteed Party") obligations,
howsoever created, arising or evidenced, whether direct or indirect, primary or
secondary, absolute or contingent, joint or several, now or hereafter existing
or due or to become due, which arise out of or in connection with any Seller
Transaction Document (all of such obligations being hereinafter collectively
called the "Liabilities"); provided that nothing contained herein shall be
deemed to constitute recourse liability for the payment of any losses in respect
of Receivables and reimbursement therefor that would constitute credit recourse
to the Guarantor or any Seller for the amount of any Receivable or Related
Transferred Asset not paid by the related Obligor. Guarantor further agrees to
pay all expenses (including reasonable attorneys' fees and legal expenses) paid
or incurred by Purchaser or its assigns in endeavoring to collect the
Liabilities, or any part thereof, and in enforcing this Guaranty.
SECTION 3. Continuing Guaranty. This Guaranty shall in all respects be
a continuing, absolute and unconditional guaranty, and shall remain in full
force and effect (notwithstanding, without limitation, that at any time or from
time to time all Liabilities may have been paid in full), subject to
discontinuance only upon actual receipt by Trustee of written notice from
Guarantor of the discontinuance hereof; provided, however, that no such notice
of discontinuance hereof shall affect or impair any of the agreements and
obligations of Guarantor (i) hereunder with respect to any and all Liabilities
existing prior to the time of
<PAGE> 547
actual receipt of such notice by Trustee, any and all Liabilities created or
acquired thereafter pursuant to any commitments and agreements made by Purchaser
under and with respect to the Purchase Agreement, and any and all extensions or
renewals thereof, and (ii) any and all expenses paid or incurred by Purchaser or
its assigns in endeavoring to collect any of the foregoing and in enforcing this
Guaranty; and all of the agreements and obligations under this Guaranty shall,
notwithstanding any such notice of discontinuance, remain fully in effect until
all such Liabilities (including any extensions or renewals of any thereof) and
all such other obligations and expenses finally shall have been paid in full.
SECTION 4. Rescission. Guarantor further agrees that, if at any time
all or any part of any payment theretofore applied by Purchaser to any of the
Liabilities is or must be rescinded or returned by Purchaser for any reason
whatsoever, such Liabilities shall, for the purposes of this Guaranty, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by Purchaser, and this
Guaranty shall continue to be effective or be reinstated, as the case may be, as
to such Liabilities, all as though such application by Purchaser had not been
made.
SECTION 5. Certain Actions. Purchaser may, from time to time at its
sole discretion and without notice to Guarantor, take any or all of the
following actions without affecting the obligations of Guarantor hereunder: (a)
retain or obtain a lien upon or a security interest in any property to secure
any of the Liabilities or any obligation hereunder; (b) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to
Guarantor, with respect to any of the Liabilities or any obligation hereunder;
(c) extend or renew for one or more periods (regardless of whether longer than
the original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of Guarantor hereunder or any obligation of any nature
of any other obligor (including any Guaranteed Party) with respect to any of the
Liabilities; (d) release or fail to perfect its lien upon or security interest
in, or impair, surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Liabilities or any
obligation hereunder, or extend or renew for one or more periods (regardless of
whether longer than the original period) or release, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any such
property; and (e) resort to Guarantor for payment of any of the Liabilities,
regardless of whether Purchaser shall have resorted to any property securing any
of the Liabilities or any obligation hereunder or shall have proceeded against
any other obligor primarily or secondarily obligated with respect to any of the
Liabilities.
SECTION 6. Subrogation. Any amounts received by Purchaser from
whatsoever source on account of the Liabilities may be applied by it toward the
payment of such of the Liabilities, and in such order of application, as
Purchaser or its assigns may from time to time elect. Until such time as
Purchaser shall have received payment of the full amount of all Liabilities and
performance of all of Guarantor's obligations hereunder, no payment made by or
for the account of Guarantor pursuant to this Guaranty shall entitle Guarantor
by subrogation, indemnity or otherwise to any payment by any Guaranteed Party or
from or out of any property of any Guaranteed Party and Guarantor shall not
exercise any right or
2
<PAGE> 548
remedy against any Guaranteed Party or any property of any Guaranteed Party by
reason of any performance by Guarantor of this Guaranty.
SECTION 7. Waiver. Guarantor hereby expressly waives: (a) notice of
Purchaser's acceptance of this Guaranty; (b) notice of the existence or creation
or non-payment of all or any of the Liabilities; (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever (provided that nothing
contained in this clause (c) shall affect any obligations to give notice or make
demand as set forth in the Purchase Agreement or the Pooling Agreement); and (d)
all diligence in collection or protection of or realization upon the Liabilities
or any thereof, any obligation hereunder, or any security for or guaranty of any
of the foregoing.
SECTION 8. Unconditional Nature of Guaranty. No delay on Purchaser's
part in the exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by Purchaser of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy; nor shall any modification or waiver of any of the provisions of this
Guaranty be binding upon Purchaser except as expressly set forth in a writing
duly signed by Purchaser. No action of Purchaser permitted hereunder shall in
any way affect or impair Purchaser's rights or Guarantor's obligations under
this Guaranty. For the purposes of this Guaranty, Liabilities shall include all
of each Guaranteed Party's obligations under the Seller Transaction Documents,
notwithstanding any right or power of such Guaranteed Party or anyone else to
assert any claim or defense as to the invalidity or unenforceability of any such
obligation, and no such claim or defense shall affect or impair the obligations
of Guarantor hereunder. Guarantor's obligations under this Guaranty shall be
absolute and unconditional irrespective of any circumstance whatsoever which
might constitute a legal or equitable discharge or defense of Guarantor.
Guarantor hereby acknowledges that there are no conditions to the effectiveness
of this Guaranty.
SECTION 9. Information. Guarantor has and will continue to have
independent means of obtaining information concerning each Guaranteed Party's
affairs, financial condition and business. Purchaser shall not have any duty or
responsibility to provide Guarantor with any credit or other information
concerning any Guaranteed Party's affairs, financial condition or business which
may come into Purchaser's possession.
SECTION 10. Representations and Warranties. Guarantor represents and
warrants as follows:
(a) Organization and Good Standing. It has been duly organized
and is validly existing as a corporation in good standing under the
laws of its state of incorporation, with corporate power and authority
to own its properties and to conduct its business as such properties
are presently owned and such business is presently conducted.
3
<PAGE> 549
(b) Due Qualification. It is duly licensed or qualified to do
business as a foreign corporation in good standing in each jurisdiction
in which (i) the ownership or lease of its property or the conduct of
its business requires such licensing or qualification, and (ii) the
failure to be so licensed or qualified would have a substantial
likelihood of having a Material Adverse Effect.
(c) Power and Authority; Due Authorization. It has (i) all
necessary power, authority and legal right to execute, deliver and
perform its obligations under this Guaranty and (ii) duly authorized by
all necessary corporate action such execution, delivery and performance
of this Guaranty.
(d) Binding Obligations. This Guaranty constitutes the legal,
valid and binding obligation of Guarantor, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance of
this Guaranty will not (i) conflict with, or result in any breach of
any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under (A) the certificate of
incorporation or by-laws of Guarantor or (B) any indenture, loan
agreement, receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument to which Guarantor is a party or by which
it or its property is bound, (ii) results in or requires the creation
or imposition of any Adverse Claim (other than a Permitted Adverse
Claim) upon any of its properties pursuant to the terms of any such
indenture, loan agreement, receivables purchase agreement, mortgage,
deed of trust, or other agreement or instrument or (iii) violate any
law or any order, rule, regulation applicable to Guarantor of any court
or of any federal, state or foreign regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
Guarantor or any of its properties, which conflict, violation, breach,
default or Adverse Claim (other than a Permitted Adverse Claim),
individually or in the aggregate, would have a substantial likelihood
of having a Material Adverse Effect.
SECTION 11. Successors and Assigns. (a) This Guaranty shall be binding
upon Guarantor and upon Guarantor's successors and assigns and all references
herein to Guarantor or any Guaranteed Party shall be deemed to include any
successor or successors, whether immediate or remote, to such person or entity.
Guarantor shall not assign any of its obligations hereunder without the prior
written consent of Purchaser.
(b) This Guaranty shall inure to the benefit of Purchaser and its
successors and assigns. Guarantor acknowledges and agrees that Purchaser's
rights to receive payment and pursue remedies under this Guaranty are being
assigned to Trustee, for the benefit of the
4
<PAGE> 550
Certificateholders and the Purchasers, pursuant to the Pooling Agreement, as
supplemented from time to time (including by the Series 1995-1 Supplement to the
Pooling Agreement, of even date with this Guaranty).
SECTION 12. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 13. Consent to Jurisdiction; Waiver of Jury Trial. Purchaser
may enforce any claim arising out of this Guaranty in any state or federal court
having subject matter jurisdiction and located in New York, New York and with
respect to any such claim, Guarantor hereby irrevocably submits to the
jurisdiction of such courts. Guarantor irrevocably consents to the service of
process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to Guarantor, and agrees that such service, to the fullest
extent permitted by law, (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii) shall be
taken and held to be valid personal service upon and personal delivery to it.
Nothing herein contained shall preclude Purchaser from bringing an action or
proceeding in respect hereof in any other country, state or place having
jurisdiction over such action. Guarantor irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court located in New York, New York and any claim that any such suit, action or
proceeding brought in such court has been brought in an inconvenient forum.
GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 14. Notices. All notices hereunder shall be given in the manner
set forth in Section 13.6 of the Pooling Agreement.
5
<PAGE> 551
IN WITNESS WHEREOF, this Guaranty has been executed and delivered by
Guarantor's duly authorized officer as of the date first written above.
HOWMET CORPORATION
By: /s/ Roland Paul
----------------------------------------
Name: Roland Paul
--------------------------------------
Title: Vice President
-------------------------------------
Address: 475 Steamboat Road
Greenwich, Connecticut 06836-1960
Facsimile No.: (203) 8614746
<PAGE> 552
PROJECT BLADE
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of December 13, 1995 (this
"Agreement"), is executed and delivered by THE FIRST NATIONAL BANK OF CHICAGO as
Collateral Agent under the Security Agreement referred to hereinbelow (in such
capacity, together with its successors in such capacity, the "Collateral
Agent"), and MANUFACTURERS AND TRADERS TRUST COMPANY, as trustee under the
Pooling and Servicing Agreement referred to hereinbelow (in such capacity, the
"Trustee").
BACKGROUND
A. Howmet Corporation ("Howmet") and certain of its subsidiaries
(collectively with Howmet, the "Operating Companies") and the Collateral Agent,
are parties to that certain Security Agreement dated as of December 13, 1995 (as
amended, modified or supplemented and in effect from time to time, the "Security
Agreement") for the benefit of certain creditors of Operating Companies
("Operating Company Creditors") party to the credit agreement referred to
therein (the "Credit Agreement").
B. The Operating Companies are entering into that certain Receivables
Purchase Agreement (as amended, modified or supplemented and in effect from time
to time, the "Purchase Agreement"), dated as of December 13, 1995, by and
between the Operating Companies and Blade Receivables Corporation ("Finco"),
pursuant to which each of the Operating Companies will sell to Finco
substantially all Receivables that it now owns and from time to time hereafter
will own, and Howmet may from time to time enter into one or more Contribution
Agreements (each, a "Contribution Agreement") with Finco, pursuant to which
Howmet will contribute to Finco some or all of its Receivables.
C. Contemporaneously with the sale or contribution of Receivables to
Finco pursuant to the Purchase Agreement and any Contribution Agreement, Finco
will transfer the Receivables and the other Specified Assets (as defined below)
to the Trustee pursuant to that certain Pooling and Servicing Agreement (as
amended, supplemented, amended and restated, or otherwise modified and in effect
from time to time, the "Pooling and Servicing Agreement") dated as of December
13, 1995 among Finco, Howmet, as initial Servicer, and the Trustee.
D. Contemporaneously with the execution and delivery of the Purchase
Agreement and the Pooling and Servicing Agreement, and from time to time
thereafter, securities ("Certificates") representing beneficial interests in, or
obligations secured by, such
<PAGE> 553
Specified Assets will he issued. Certain of the Certificates may be sold by
Finco to investors ("Investors") and/or pledged to secure loans or other
extensions of credit made to Finco by lenders (the "Lenders"), all as further
provided by the Transaction Documents (as defined below).
E. To induce Finco and the Trustee to enter into the Transaction
Documents to which it is a party, to induce any Lenders to extend credit
thereunder and to induce any Investors to purchase Certificates, the requisite
parties to the Credit Agreement have authorized the Collateral Agent to execute
and deliver this Agreement.
F. The execution and delivery of this Agreement is a condition
precedent to the effectiveness of the Purchase Agreement, the Pooling and
Servicing Agreement and the other Transaction Documents.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows;
1. Definitions. (a) Capitalized terms not defined herein that are
defined in Appendix A to the Pooling and Servicing Agreement shall for the
purposes of this Agreement (including the recitals hereof) have the meanings
ascribed to such terms in such Appendix A; provided that the term "Transaction
Documents" shall include all supplements to the Pooling and Servicing Agreement
and all credit agreements and all other agreements pursuant to which loans or
other extensions of credit evidenced or secured by Certificates are from time to
time made.
(b) In addition, the following terms shall have the meanings specified
below:
"Bank Collateral" means all property and interests in property
(other than Specified Assets) now or hereafter acquired by any
Operating Company in or upon which a security interest, lien or
mortgage is granted by such Operating Company to the Collateral Agent
under the Security Agreement or any other collateral document executed
in connection with the Credit Agreement.
"Specified Assets" means the Purchased Receivables, the
Contributed Receivables and the Related Assets, as more fully described
in Section 1.1 of the Purchase Agreement.
2. Authorization. The Collateral Agent confirms that the terms of the
Credit Agreement (i) authorize the Collateral Agent to execute, deliver and
perform this Agreement, and (ii) provide for all of the parties to the Credit
Agreement to be bound by this Agreement.
3. Release of Transferred Assets Collateral. The Collateral Agent
hereby releases all liens and security interests of any kind whatsoever which
the Collateral Agent (or any trustee or agent acting on its behalf) holds in
Specified Assets, to the extent that such
<PAGE> 554
Specified Assets would otherwise constitute Bank Collateral. It is understood
and agreed that the Collateral Agent shall have no rights to or in any such
proceeds that are Specified Assets. The Collateral Agent agrees, upon the
reasonable request of the Trustee, to execute and deliver to the Trustee such
UCC partial release statements and other documents and instruments, and do such
other acts and things, as the Trustee may reasonably request in order to
evidence the release provided for in this Section 3; provided, however, that
failure to execute and deliver any such partial release statements, documents or
instruments, or to do such acts and things, shall not affect or impair the
release provided for in this Section 3.
4. Separation of Collateral. (a) The Trustee hereby agrees promptly to
return to Howmet (for the benefit of itself and the other Operating Companies)
funds or other property other than Specified Assets (or proceeds thereof) which
constitute Bank Collateral (or proceeds thereof); provided, that Howmet or the
Collateral Agent shall have identified such Bank Collateral or proceeds in
writing to the Trustee or an Authorized Officer of the Trustee otherwise has
actual knowledge of the identity of such Bank Collateral or proceeds; and
provided further that if the Collateral Agent shall so request in a written
notice to the Trustee, the Trustee shall return such funds and property to the
Collateral Agent instead of to Howmet. For purposes of maintaining the
perfection of the Collateral Agent's lien thereon, the Collateral Agent hereby
appoints the Trustee as its agent in respect of such funds or other property.
(b) The Collateral Agent hereby agrees to promptly return to the
Trustee any funds or other property which constitute Specified Assets (or
proceeds thereof), provided, that the Trustee shall have identified such
Specified Assets or proceeds in writing to the Collateral Agent or an authorized
officer of the Collateral Agent otherwise has actual knowledge of the identity
of such Specified Assets or proceeds. For purposes of maintaining the perfection
of the Trustee's interests therein, the Trustee hereby appoints the Collateral
Agent as its agent with respect to such Specified Assets and proceeds.
(c) All payments made by an Obligor that is obligated to make payment
with respect to both Specified Assets and other Receivables shall be applied
against the specified Receivables, if any, that are designated by such Obligor.
In the absence of such designation, such payment shall be applied against the
oldest outstanding Receivables owed by such Obligor.
(d) Unless the Trustee and Collateral Agent agree otherwise, neither
the Trustee nor the Collateral Agent shall send any notice to an Obligor
directing it to remit payments in respect of any Receivable to any account other
than the Lockbox Accounts or the Concentration Accounts.
(e) In the event that any of the Specified Assets (or proceeds thereof)
become commingled with any Bank Collateral (or proceeds thereof), then the
Collateral Agent and the Trustee shall, in good faith, cooperate with each other
to separate the Specified Assets (and proceeds thereof) from such Bank
Collateral (and proceeds thereof); provided, however,
- 3 -
<PAGE> 555
that in the case of any assets, if such separation is not possible, the parties
hereto agree to share the proceeds of such property proportionately according to
the interests of the Collateral Agent and the Trustee therein; provided,
further, that the out-of-pocket costs and expenses incurred by the parties
hereto to effect such separation and/or sharing (including without limitation
fees and expenses of auditors and attorneys) shall be shared by the parties
hereto proportionately according to the benefit of such separation and/or
sharing to the Collateral Agent and the Trustee (and the parties for which each
of them acts) to the extent that such costs and expenses are not reimbursed or
otherwise borne by the Operating Companies (it being understood that nothing in
this Agreement shall limit the obligation of the Operating Companies to make
such reimbursement or hear such costs and expenses in accordance with the terms
of the Credit Agreement, the Security Agreement and the Transaction Documents);
and provided, further, that this Section 4(e) shall not require any party to
this Agreement to take any action which it believes, in good faith, may
prejudice its ability to realize the value of, or to otherwise protect, its
interests (and the interests of the parties for which it acts).
5. Additional Agreements with Seller Parties. The Collateral Agent
agrees, represents and warrants, on behalf of itself and the other parties to
the Credit Agreement (excluding the Operating Companies; the Collateral Agent
and such parties being herein called the "Seller Parties") as follows:
(a) The Seller Parties shall not (i) challenge the transfers
of Specified Assets from any Operating Company to Finco, whether on the
grounds that such transfers were disguised financings or fraudulent
conveyances or otherwise, so long as such transfers are carried out in
all material respects in accordance with the Transaction Documents, or
(ii) assert that any Operating Company and Finco should be
substantively consolidated.
(b) Notwithstanding any prior termination of this Agreement,
the Seller Parties shall not, with respect to Finco, institute or join
any other Person in instituting a proceeding of the type referred in
the definition of "Event of Bankruptcy", so long as any Security or any
obligation to a Lender shall be outstanding or there shall not have
lapsed one year plus one day since the last day on any such Security or
obligation shall have been outstanding. The foregoing will not limit
the rights of Seller Parties to file any claim or otherwise take any
action with respect to any such insolvency proceedings that may be
instituted against Finco by a Person other than a Seller Party.
(c) No Seller Party shall assign its rights or obligations
under the Credit Agreement to any other Person unless such Person shall
have agreed in writing to be bound by the terms of this Agreement as if
it were a party hereto.
(d) Subject to any applicable restrictions in the Transaction
Documents, the Trustee may (but shall not be required to) enter into
one or more premises of any
- 4 -
<PAGE> 556
Operating Company, whether leased or owned, at any time during
reasonable business hours, without force or process of law and without
obligation to pay rent or compensation to such Operating Company, Finco
or the Seller Parties and may use any equipment located thereon
relating to Records and may have access and use of such Records and any
other property to which such access and use are granted under the
Transaction Documents, in each case provided that such uses are for the
purposes of enforcing the Trustee's rights with respect to the
Specified Assets.
6. Additional Agreements of Trustee. The Trustee agrees, represents and
warrants as follows:
(a) The Trustee shall not (i) challenge the transfers of the
Bank Collateral (other than Specified Assets) from any Operating
Company to the Collateral Agent, whether on the grounds that such
transfers were disguised financings or fraudulent conveyances or
otherwise, so long as such transfers are carried out in all material
respects in accordance with the Credit Agreement, the Security
Agreement and related documents, or (ii) assert that any Operating
Company and Finco should be substantively consolidated.
(b) The Trustee shall not assign its rights or obligations
under the Transaction Documents to any other Person unless such Person
shall have agreed in writing to be bound by the terms of this Agreement
as if it were a party hereto.
(c) The Trustee does not have any security or other interest
in any portion of the Bank Collateral (including, without limitation,
Receivables) that do not constitute Specified Assets.
7. Reliance. Each of Finco, the Trustee, all lenders, all Investors and
all Seller Parties may rely on this Agreement as if such Person were a party
hereto. This Agreement shall remain in effect until the termination of the Trust
in accordance with the terms of the Pooling Agreement.
8. Miscellaneous. (a) No delay upon the part of any party to this
Agreement and the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any such party of
any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No waiver, amendment or other
modification, or consent with respect to, any provision of this Agreement shall
be effective unless the same shall be in writing and shall be signed by the
Collateral Agent and the Trustee.
(b) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of one which so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
- 5 -
<PAGE> 557
(c) This Agreement shall be governed by and construed in accordance
with the internal laws (as opposed to conflicts of law provisions) of the State
of New York.
(d) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors and assigns.
(e) All notices and other communications for hereunder shall, unless
otherwise stated herein, be in writing (including telecommunications and
communications by facsimile copy) and mailed, transmitted or delivered, as to
each party hereto at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective upon receipt or (i) in the case of notice by mall, three
business days after being deposited in the malls, postage prepaid, and (ii) in
the case of notice by facsimile copy, upon the earlier to occur of (A)
completion of transmission and telephone confirmation of receipt or (B) the
recipient's close of business on the date of transmission.
- 6 -
<PAGE> 558
IN WITNESS WHEREOF, the Collateral Agent and the Trustee have caused
this Agreement to be executed and delivered as of the day first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Collateral Agent
By: /s/ David G. Dixon
--------------------------------
Name David G. Dixon
--------------------------------
Title: Authorized Agent
--------------------------------
One First National Plaza
Chicago, Illinois 60670
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ illegible
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
One M&T Plaza
7th Floor
Buffalo, New York 14203
ACKNOWLEDGED AND AGREED:
BLADE RECEIVABLES CORPORATION
By: /s/ Roland Paul
--------------------------------
Name: Roland Paul
--------------------------------
Title: Vice President
--------------------------------
<PAGE> 559
HOWMET CORPORATION
By: /s/ ROLAND PAUL
---------------
Name: Roland A. Paul
---------------
Title: Vice President
HOWMET CERCAST (U.S.A.), INC., as Seller
By: /s/ROLAND PAUL
---------------
Name: Roland A. Paul
---------------
Title: Vice President
HOWMET REFURBISHMENT, INC., as Seller
By: /s/ROLAND PAUL
--------------
Name: Roland A. Paul
--------------
Title: Vice President
HOWMET-TEMPCRAFT, INC., as Seller
By: /s/ ROLAND PAUL
--------------
Name: Roland A. Paul
--------------
Title: Vice President
TURBINE COMPONENTS CORPORATION, as Seller
By: /s/ ROLAND PAUL
--------------
Name: Roland A. Paul
--------------
Title: Vice President
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES
State or Country
of Incorporation
----------------
Howmet Cercast (Canada), Inc. Canada
Howmet Cercast (U.S.A.), Inc. Delaware
Howmet Ltd. United Kingdom
Howmet Refurbishment Inc. Delaware
Howmet S.A. France
Howmet Tempcraft, Inc. Ohio
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEETS
AND THE STATEMENTS OF OPERATIONS AS REPORTED IN THE FORM 10K FOR THE YEAR
ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FORM 10K.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-31-1996 DEC-31-1995
<CASH> 23,398 9,606
<SECURITIES> 0 0
<RECEIVABLES> 128,625 139,481
<ALLOWANCES> 5,623 8,258
<INVENTORY> 149,419 150,288
<CURRENT-ASSETS> 319,758 294,598
<PP&E> 332,047 303,410
<DEPRECIATION> 40,961 1,847
<TOTAL-ASSETS> 1,023,893 1,099,503
<CURRENT-LIABILITIES> 308,915 293,693
<BONDS> 266,870 418,186
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 304,517 276,283
<TOTAL-LIABILITY-AND-EQUITY> 1,023,893 1,099,503
<SALES> 1,106,812 945,498
<TOTAL-REVENUES> 1,106,812 945,498
<CGS> 803,624 719,448
<TOTAL-COSTS> 803,624 719,448
<OTHER-EXPENSES> 59,686 35,434
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 39,301 6,638
<INCOME-PRETAX> 59,851 55,061
<INCOME-TAX> 31,160 24,143
<INCOME-CONTINUING> 27,301 26,444
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 27,301 26,444
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
<PAGE> 1
EXHIBIT 99.1
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
The Company wishes to inform its investors of the following important factors
that in some cases have affected, and in the future could affect, the Company's
results of operations and that could cause such future results of operations to
differ materially from those expressed in any forward looking statements made by
or on behalf of the Company. Disclosure of these factors is intended to permit
the Company to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Many of these factors have been
discussed in prior SEC filings by the Company.
Although the Company has attempted to list comprehensively these important
cautionary factors, the Company wishes to caution investors that other factors
may in the future prove to be important in affecting the Company's results of
operations. The Company undertakes no obligation to publicly update or revise
any forward looking statements, whether as a result of new information, future
events or otherwise.
Limitations and Risks due to Substantial Leverage and Debt Service
The Company incurred significant indebtedness in connection with the
acquisition by Blade Acquisition Corp. ("Blade") of the Company's parent company
and the Cercast group of companies from affiliates of Pechiney S.A. on December
13, 1995 (the "Acquisition") and amended and restated on December 5, 1996. At
December 31, 1996 the Company's consolidated total indebtedness and total
stockholders' equity was $323.0 million and $304.5 million respectively. The
Company's indebtedness (the "Senior Indebtedness") under senior credit
facilities provided by the Credit Agreement dated December 13, 1995 and amended
and restated on December 5, 1996 among Blade, Howmet Holdings Acquisition Corp.
("HHAC"), Howmet Acquisition Corp., The First National Bank of Chicago as
Administrative Agent and one of the Managing Agents, and other banks (the
"Senior Credit Facilities") is secured by guarantees of the Company's domestic
subsidiaries and by Blade and Howmet Holdings Corporation ("Holdings"), and the
stock of Holdings and the Company is pledged to secure the Blade and Holdings
guarantees, respectively. In addition, upon consummation of the Acquisition, the
Company entered into the receivables financing program (the "Receivables
Facility") now covered by the Amended and Restated Receivables Purchase
Agreement dated as of April 18, 1996 between the Company, certain of its
subsidiaries and Blade Receivables Corporation (the "Receivables Subsidiary")
and the related Blade Receivables Master Trust Amended and Restated Pooling and
Services Agreement dated as of April 18, 1996 among the Receivables Subsidiary,
the Company, and Manufacturers and Traders Trust Company, as Trustee, pursuant
to which the Company sold certain accounts receivable to a special purpose trust
for aggregate cash proceeds of $51.4 million. The Company intends to continue
sales of eligible accounts receivable. The Indenture dated as of December 7,
1995 between Howmet Acquisition Corp. and Marine Midland Bank, as Trustee (the
"Indenture") under which the Company's 10% Senior Subordinated Notes due 2003
(the "Notes") were issued, does not contain significant restrictions on the
Company's ability to sell its accounts receivable pursuant to the facility or
with respect to the use of proceeds thereof. The Company's ability to make any
scheduled payments of the principal of, or interest on the Notes, or to
refinance its indebtedness, depends on its future performance, which to some
extent is subject to economic, financial, competitive and other factors beyond
its control, and there can be no assurance that the foregoing payments will be
made. If the Company cannot generate sufficient cash flow from operations in the
future to service its debt and make necessary capital expenditures, the Company
may be required to refinance all or a portion of its existing debt,
33
<PAGE> 2
including the Notes, to sell assets or to obtain additional financing. There can
be no assurance that any such refinancing or refinancing of the Senior Credit
Facilities at maturity would be possible, on reasonable terms if at all, or that
any such sales of assets or additional financing could be achieved.
The Company's high level of debt will have several important effects on its
future operations, including the following: (a) the Company will have
significant cash requirements to service debt, reducing funds available for
operations, for capital expenditures and research and development (which are
important factors in the Company's technological leadership role), and for
acquisitions and future business opportunities, thus possibly increasing the
Company's vulnerability to adverse general economic and industry conditions,
which could be exacerbated by the cyclical nature of a portion of the Company's
business (see "Effects of Aerospace Industry Economic Conditions and
Cyclicality," below) and greater capital resources of its principal competitor
after giving effect to the Acquisition, and (b) the financial covenants and
other restrictions contained in the Senior Credit Facilities and other
agreements relating to the Senior Indebtedness and the Indenture will require
the Company to meet certain financial tests and will restrict its ability to
borrow additional funds, to dispose of assets or to pay cash dividends.
Effects of Aerospace Industry Economic Conditions and Cyclicality
The commercial aerospace industry is a cyclical business, and the demand by
commercial airlines for new aircraft historically has been highly related to the
stability and health of the United States and world economies. Aircraft delivery
trends vary in direct relation to the general economic cycle, with an
approximate two year lag. Aircraft are delivered when completed, regardless of
economic conditions at that time, because substantial deposits are required at
the time of the orders. The United States airline industry as a whole has
reported a return to profitability in 1995 and 1996 and excess capacity has been
reduced after several years of operating losses in the early 1990s. There can be
no assurance that the improved operating performance of the commercial airlines
will continue or that deliveries of engines for large commercial aircraft will
not decline in the future. Any developments in the commercial aerospace market
resulting in a reduction in the rate of aircraft engine deliveries in the
future, including future cancellations and deferrals of scheduled deliveries,
could materially adversely affect the Company's financial condition and results
of operations.
Reduced Government Sales
Military and defense contractor sales in the United States comprised
approximately 14% of the Company's 1996 sales. United States defense spending in
markets served by the Company has been declining since the 1980s, and continued
reductions in defense budgets or military aircraft procurement could adversely
affect the Company's financial condition and results of operations.
Concentrated Customer Base; Competition
A substantial portion of the Company's business is conducted with a small
number of large aerospace and industrial gas turbine customers, including
General Electric Aircraft Engines ("GEAE"), General Electric Power Systems
("GEPS") and Pratt & Whitney Aircraft Division of United Technologies
Corporation ("PWA"). The current three year contract with PWA is scheduled to
expire in 1997 consistent with industry practice regarding contract lifecycles.
The Company's top ten customers accounted in the aggregate for approximately 62%
of 1996 net sales. More than half of Howmet's business is based on multi-year
contracts with its customers, usually for a three-year period, that generally
give the Company the right and obligation to fill a
34
<PAGE> 3
specified percentage of the customer's requirements but generally do not provide
the Company with any minimum order commitments. The Company typically
renegotiates these contracts during the last year of the contract period and,
during the process, customers frequently solicit bids from the Company's
competitors, principally from its strongest competitor, Precision Castparts
Corp. ("PCC"). Most of the contracts require specified price reductions over the
term of the contract based on lower production costs as programs mature, shared
benefits from other cost reductions resulting from joint production decisions,
and negotiated reductions. The Company has made price concessions to customers
in recent years, and management expects customer pressure for such pricing
concessions to continue.
One of Howmet's largest customers, GEPS, in connection with its
corporate-level policy decision to reduce sole sourcing, has exercised its right
to terminate its long-term sole source contract with Howmet effective in
February 1997, and has placed orders for certain components with the Company's
principal competitor, PCC.
The Company's financial condition and results of operations could be
materially adversely affected if one or more of the Company's key customers
shifted a material amount of its work from the Company. In addition, the Company
could also be materially adversely affected by any substantial work stoppage or
interruption of production at any of its major customers or at any of the major
aircraft manufacturers, and could be materially adversely affected if one or
more key customers reduce or cease conducting operations. Furthermore,
competition is based to a significant extent on technological capabilities and
innovations, and there can be no assurance that one or more of the Company's
competitors will not develop products and/or processes that would give them
competitive advantages in the Company's markets.
Concentration of Ownership
The Carlyle Group ("Carlyle") and Thiokol Corporation ("Thiokol") through
affiliates, have beneficial ownership of 51% and 49%, respectively, of the
voting capital stock of Blade. Pursuant to a stockholders agreement (the
"Stockholders Agreement"), Blade has a board of directors consisting of seven
members, and Carlyle and Thiokol each appoint three directors to the board.
Under the Stockholders Agreement, Blade and its subsidiaries, including the
Company, may not take certain actions, including, but not limited to, certain
mergers, sale transactions, transactions with affiliates, issuances of capital
stock, incurrence of debt, and payments of dividends on or repurchases of
capital stock, without the approval of a supermajority of the board of
directors. The Stockholders Agreement provides that Thiokol may purchase all of
Carlyle's interest in Blade, during the period from the third anniversary
through the sixth anniversary after the closing of the Acquisition on December
13, 1995 (the "Closing Date"). Thiokol has publicly indicated that, subject to
favorable financial and operating performance by the Company and favorable
conditions in the financial markets, it expects to exercise its option to
acquire Carlyle's interest in Blade and, thereafter, to cause the Company to
redeem the Notes. As a result of the ownership structure of Blade and the
contractual rights described above, the voting and management control of Blade,
which indirectly controls the Company, is highly concentrated. Carlyle, acting
with the consent of Thiokol, has the ability to direct the actions of Blade with
respect to matters such as the payment of dividends, material acquisitions,
dispositions and certain other corporate transactions. Thiokol and Carlyle are
in a position to exercise control over Blade and ultimately over the Company, to
determine the outcome of all matters required to be submitted to stockholders
for approval, and to otherwise direct and control the operations of Blade and,
indirectly, the Company. Carlyle and Thiokol are also parties to management
agreements with the Company, pursuant to which Carlyle and Thiokol render
certain management and advisory services to the Company and receive fees for
such services. Carlyle and Thiokol also received certain fees in connection with
the consummation of the Acquisition.
35
<PAGE> 4
Environmental Matters
The Company is subject to comprehensive and changing international, federal,
state and local laws, regulations and ordinances that (i) govern activities or
operations that may have adverse environmental effects, such as discharges to
air and water, as well as handling and disposal practices for solid and
hazardous wastes, and (ii) impose liability for the costs of cleaning up, and
certain damages resulting from, sites of past spills, disposals or other
releases of hazardous substances and materials (together, "Environmental Laws").
Management believes that the Company's current operations are in substantial
compliance with such Environmental Laws. However, due to the nature of the
Company's operations, the Company is involved from time to time in legal
proceedings involving remediation of environmental contamination from past or
present operations, as well as compliance with environmental requirements
applicable to ongoing operations. There can be no assurance that material costs,
liabilities, or penalties will not be incurred in connection with any such
proceedings or claims or to meet such compliance requirements or in connection
with currently unknown environmental liabilities.
The Company's facilities have made, and will continue to make, expenditures to
comply with current and future environmental laws. The Company anticipates that
it will incur additional capital and operating costs in the future to comply
with existing environmental laws and new requirements arising from new or
amended statutes and regulations. Because the applicable regulatory agencies
have not yet promulgated final standards for some existing environmental
programs, the Company cannot at this time reasonably estimate the cost for
compliance with these additional requirements. The amount of any such compliance
costs could be material.
The Company is subject to liability under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA") (the federal
"Superfund" statute), and similar state statutes for investigation and
remediation of environmental contamination at properties owned and/or operated
by it and at off-site locations where it has arranged for the disposal of
hazardous substances. Liability under CERCLA is, in most cases, joint and
several, meaning that any responsible party could be held liable for all costs
necessary for investigating and remediating a release or threatened release of
hazardous substances. As a practical matter, liability at most CERCLA (and
similar) sites is shared among all the solvent Potentially Responsible Parties
("PRPs"). The most relevant factors in determining the probable liability of a
PRP at a CERCLA site usually are the cost of the investigation and remediation,
the relative amount of hazardous substances contributed by the PRP to the site,
and the number of solvent PRPs. The Company has been or may be named a PRP under
CERCLA and similar state statutes at fourteen present or former on-site and
off-site locations. The Company also is currently addressing environmental
issues at five European sites, as is discussed in "Management's Discussion and
Analysis of Financial Condition and Results of Operation."
The Company has received recent test results indicating levels of
polychlorinated biphenyls ("PCB's") at its Dover, New Jersey facility which
will require remediation. These levels have been reported to the New Jersey
Department of Environmental Protection ("NJDEP"). The Company is preparing a
work plan to define the risk and to test possible clean-up options. The
statement of work must be approved by the NJDEP pursuant to an Administrative
Consent Order entered into between the Company and NJDEP on May 20, 1991
regarding clean-up of the site. Various remedies are possible and could
involve expenditures ranging from $2 million to $22 million or more. The
Company has recorded a $2 million long-term liability as of December 31, 1996
for this matter. Given the uncertanties, it is possible that the estimated
range of this cost and the amount accrued will change in the near future. The
indemnification discussed below applies to the costs associated with this
matter.
36
<PAGE> 5
In addition, in connection with the Acquisition, Pechiney International and
Pechiney S.A. are required to indemnify Blade for environmental liabilities and
obligations stemming from events occurring or conditions existing prior to the
closing of the Acquisition to the extent such liabilities exceed the Company's
reserves of $6.0 million at June 30, 1995. Blade assigned its rights to the
Company with respect to any such indemnification upon consummation of the
Acquisition. The Company has recorded a long-term receivable of approximately
$2 million related to this indemnification. There can be no assurance, however,
that, Pechiney International and Pechiney S.A. will indemnify the Company for
all such environmental matters set forth above when demanded by the Company. If
Pechiney International and Pechiney S.A. do not honor their indemnification
obligations, the Company likely would be responsible for such matters.
37
