<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 15, 1994
Commission File No. 1-4087
Ply Gem Industries, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-4087 11-1727150
--------------- --------------------- -------------------
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
777 Third Avenue, New York, New York 10017
------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number: (212) 832-1550
<PAGE>
Items 1 - 4. Not Applicable.
--------------
Item 5. Other Events.
------------
On December 15, 1994, the Registrant and certain of its wholly-owned
Subsidiaries entered into a Receivables Purchase Agreement with Receivables
Capital Corporation, as Purchaser, and Bank of America National Trust and
Savings Association, as Agent.
Item 6. Not Applicable.
--------------
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(c) Exhibits.
10.1 Receivables Purchase Agreement dated as of December 15,
1994 among PGI Investments, Inc., as Seller, Ply Gem Industries, Inc.
and certain of its subsidiaries, as Originators, and Receivables
Capital Corporation, as Purchaser, and Bank of America National Trust
and Savings Association, as Agent.
Item 8. Not Applicable.
--------------
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: January 6, 1994
PLY GEM INDUSTRIES, INC.
By: /s/ Herbert P. Dooskin
--------------------------
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NO.
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<C> <S> <C>
10.1 Receivables Purchase Agreement dated as of December 15, 1994
among PGI Investments, Inc., as Seller, Ply Gem Industries,
Inc. and certain of its subsidiaries, as Originators, and
Receivables Capital Corporation, as Purchaser, and Bank of
America National Trust and Savings Association, as Agent.
</TABLE>
<PAGE>
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 15, 1994
Among
PGI INVESTMENTS, INC.
as Seller
PLY GEM INDUSTRIES, INC., ALLIED PLYWOOD CORPORATION,
CONTINENTAL WOOD PRESERVERS, INC., HOOVER TREATED
WOOD PRODUCTS, INC., SAGEBRUSH SALES, INC.,
STUDLEY PRODUCTS, INC., SNE ENTERPRISES, INC.,
SNE ENTERPRISES - TEXAS, INC., CENTRAL NEW YORK
WINDOW CO. AND VARIFORM, INC.
as Originators
and
RECEIVABLES CAPITAL CORPORATION
as Purchaser
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I THE COMMITMENT
1.01. Commitment. . . . . . . . . . . . . . . . . . . . . . . . 2
1.02. Purchase and Reinvestment Limits. . . . . . . . . . . . . 3
1.03. Making Purchases from Seller. . . . . . . . . . . . . . . 3
1.04. Number of Undivided Interests . . . . . . . . . . . . . . 4
1.05. Commitment Termination Date . . . . . . . . . . . . . . . 4
1.06. Purchase Termination Date . . . . . . . . . . . . . . . . 4
1.07. Voluntary Termination of Commitment or
Reduction of Maximum Purchase Limit . . . . . . . . . . 5
1.08. Limitation of Ownership Interest. . . . . . . . . . . . . 5
ARTICLE II UNDIVIDED INTEREST AND PURCHASER'S SHARE
2.01. Undivided Interest. . . . . . . . . . . . . . . . . . . . 5
2.02. Required Allocation . . . . . . . . . . . . . . . . . . . 6
2.03. Purchaser's Investment. . . . . . . . . . . . . . . . . . 7
2.04. Net Pool Balance. . . . . . . . . . . . . . . . . . . . . 8
2.05. Purchaser's Share . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III SETTLEMENTS
3.01. Non-Run Off Settlement Procedures for
Collections . . . . . . . . . . . . . . . . . . . . . . 10
3.02. Run Off Settlement Procedures for
Collections . . . . . . . . . . . . . . . . . . . . . . 11
3.03. Special Settlement Procedures; Reduction of
Purchaser's Investment, Etc . . . . . . . . . . . . . . 12
3.04. Reporting . . . . . . . . . . . . . . . . . . . . . . . . 14
3.05. Payments and Computations, Etc. . . . . . . . . . . . . . 15
3.06. Dividing or Combining Undivided Interests . . . . . . . . 15
3.07. Treatment of Collections and Deemed
Collections . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV FEES AND YIELD PROTECTION
4.01. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.02. Yield Protection. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V CONDITIONS OF PURCHASES
5.01. Conditions Precedent to Initial Purchase. . . . . . . . . 19
5.02. Conditions Precedent to All Purchases and
Reinvestments . . . . . . . . . . . . . . . . . . . . . 22
5.03. Additional Condition Precedent to Purchases . . . . . . . 23
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties. . . . . . . . . . . . . . 23
ARTICLE VII GENERAL COVENANTS
7.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . 28
7.02. Reporting Requirements. . . . . . . . . . . . . . . . . . 34
7.03. Negative Covenants of Seller and each
Originator. . . . . . . . . . . . . . . . . . . . . . . 36
7.04. Negative Covenants of Seller. . . . . . . . . . . . . . . 37
ARTICLE VIII ADMINISTRATION AND COLLECTION
8.01. Designation of Servicer . . . . . . . . . . . . . . . . . 38
8.02. Duties of Servicer. . . . . . . . . . . . . . . . . . . . 39
8.03. Rights of the Agent . . . . . . . . . . . . . . . . . . . 40
8.04. Responsibilities of Seller. . . . . . . . . . . . . . . . 42
8.05. Further Action Evidencing Purchases . . . . . . . . . . . 42
8.06. Application of Collections. . . . . . . . . . . . . . . . 43
ARTICLE IX SECURITY INTEREST
9.01. Grant of Security Interest. . . . . . . . . . . . . . . . 44
9.02. Further Assurances. . . . . . . . . . . . . . . . . . . . 44
9.03. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE X TERMINATION EVENTS
10.01. Termination Events. . . . . . . . . . . . . . . . . . . . 44
10.02. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE XI THE AGENT
11.01. Authorization and Action. . . . . . . . . . . . . . . . . 48
11.02. Agent's Reliance, Etc . . . . . . . . . . . . . . . . . . 48
11.03. Agent and Affiliates. . . . . . . . . . . . . . . . . . . 49
ARTICLE XII ASSIGNMENT OF PURCHASER'S INTEREST
12.01. Restrictions on Assignments . . . . . . . . . . . . . . . 49
12.02. Rights of Assignee. . . . . . . . . . . . . . . . . . . . 50
12.03. Allocation of Payments. . . . . . . . . . . . . . . . . . 50
12.04. Notice of Assignment. . . . . . . . . . . . . . . . . . . 50
12.05. Evidence of Assignment; Endorsement on
Certificate . . . . . . . . . . . . . . . . . . . . . . 51
12.06. Rights of Program Support Provider and
Collateral Trustee. . . . . . . . . . . . . . . . . . . 51
ARTICLE XIII INDEMNIFICATION
13.01. Indemnities by Seller and each Originator . . . . . . . . 51
ARTICLE XIV MISCELLANEOUS
14.01. Amendments, Etc . . . . . . . . . . . . . . . . . . . . . 54
14.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . 55
14.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . 55
14.04. Binding Effect; Survival. . . . . . . . . . . . . . . . . 55
14.05. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . 56
14.06. No Proceedings. . . . . . . . . . . . . . . . . . . . . . 57
14.07. Confidentiality of Seller Information . . . . . . . . . . 57
14.08. Confidentiality of BofA Information . . . . . . . . . . . 60
14.09. Captions and Cross References . . . . . . . . . . . . . . 62
14.10. Integration . . . . . . . . . . . . . . . . . . . . . . . 63
14.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . 63
14.12. Waiver Of Jury Trial. . . . . . . . . . . . . . . . . . . 63
14.13. Consent To Jurisdiction; Waiver Of Immunities . . . . . . 63
14.14. Execution in Counterparts . . . . . . . . . . . . . . . . 64
14.15. Certain Matters relating to the Originators . . . . . . . 64
APPENDIX A
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
APPENDIX B
CALCULATION OF DISCOUNT AND RESERVE . . . . . . . . . . . . . . . .B-1
<PAGE>
APPENDICES
APPENDIX A - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . .A-1
APPENDIX B - CALCULATION OF DISCOUNT AND RESERVE . . . . . . . . . . .B-1
SCHEDULES
SCHEDULE 6.01(g) Litigation
SCHEDULE 6.01(k) List of Offices of Seller and each Originator
where Records Are Kept
SCHEDULE 6.01(l) List of Lock-Box Banks
SCHEDULE 6.01(m)-1 Forms of Contracts
SCHEDULE 6.01(m)-2 Description of Credit and Collection Policy
SCHEDULE 7.04(a) Schedule of Indebtedness
EXHIBITS
EXHIBIT A Form of Originator Purchase Agreement
EXHIBIT 3.04(a) Form of Periodic Report
EXHIBIT 5.01(a) Form of Certificate of Assignments
EXHIBIT 5.01(i) Form of Lock-Box Agreement
EXHIBIT 5.01(j) Form of Opinion of Counsel for Seller
EXHIBIT 5.01(k) Form of Opinion of Counsel for Agent
EXHIBIT 12.05 Form of Assignment (for assignment to third
party)
<PAGE>
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 15, 1994
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among PGI
INVESTMENTS, INC. a Delaware corporation having its principal
office at 777 Third Avenue, New York, New York 10017 ("Seller"),
PLY GEM INDUSTRIES, INC., a Delaware corporation ("PLY GEM"),
ALLIED PLYWOOD CORPORATION, a Delaware corporation ("APC"),
CONTINENTAL WOOD PRESERVERS, INC., a Michigan corporation
("CWP"), HOOVER TREATED WOOD PRODUCTS, INC., a Delaware
corporation ("HTWP"), SAGEBRUSH SALES, INC., a New Mexico
corporation ("SBS"), STUDLEY PRODUCTS, INC., a New York
corporation ("Studley"), SNE ENTERPRISES, INC., a Delaware
corporation ("SNE"), SNE ENTERPRISES - TEXAS, INC., a Delaware
corporation ("SNE Texas"), CENTRAL NEW YORK WINDOW CO., a
Delaware corporation ("Window Co.") and VARIFORM, INC., a
Missouri corporation ("Variform"; and collectively with PLY GEM,
APC, CWP, HTWP, SBS, Studley, SNE, SNE Texas, and Window Co. the
"Originators"; individually, as "Originator"; each Originator
having its principal office at the location set forth in Schedule
<PAGE>
6.01(k)), RECEIVABLES CAPITAL CORPORATION, a Delaware corporation
having its principal office at World Financial Center, South
Tower, 225 Liberty Street, 8th Floor, New York, New York 10080
(together with its successors and assigns, "Purchaser"), and BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association having its principal office at 555 California
Street, 41st Floor, San Francisco, California 94104 ("BofA"), as
Agent for the Purchaser (together with its successors and
assigns, in such capacity, the "Agent"). Unless otherwise
indicated, capitalized terms used in this Agreement are defined
in Appendix A.
Background
1. The Seller and the Originators have entered into an
Originator Purchase Agreement dated the date hereof, under which
the Seller has agreed to purchase Receivables from the
Originators.
2. PLY GEM has, pursuant to a Support Agreement dated the
date hereof, agreed to cause the Seller and Originators to
perform their respective obligations under this Agreement and the
Originator Purchase Agreement.
3. Seller has, and expects to have, Pool Receivables in
which Seller intends to sell one or more undivided interests.
Seller has requested Purchaser, and Purchaser has agreed, subject
to the terms and conditions contained in this Agreement, to
purchase such undivided interests, referred to herein as
Undivided Interests, from Seller from time to time during the
term of this Agreement.
4. Seller and Purchaser also desire that, subject to the
terms and conditions of this Agreement, certain of the daily
Collections in respect of such Undivided Interests be reinvested
in Pool Receivables through the sale by Seller to Purchaser of
additional undivided interests in the Pool Receivables, such
daily reinvestment of Collections to be effected by an automatic
daily adjustment to Purchaser's Undivided Interests, and to be
intended to permit Purchaser to maintain its Purchaser's
Investments fully invested in uncollected Pool Receivables.
5. Purchaser expects generally to fund its Purchases and
Reinvestments through the issuance of Commercial Paper Notes.
Purchaser has entered into Program Support Agreements providing
for the purchase by a Program Support Provider of, or the making
by a Program Support Provider of loans secured by, Undivided
Interests in the event Purchaser hereunder is unable to fund its
Purchases or Reinvestments pursuant to this Agreement by the
issuance of Commercial Paper Notes or otherwise prefers to fund
such Purchases or Reinvestments under the Program Support
Agreements rather than by the issuance of Commercial Paper Notes,
or is unable to pay such Commercial Paper Notes at maturity from
the proceeds of collections from Pool Receivables in which it
holds an Undivided Interest hereunder. Purchaser has also
entered into a Program Support Agreement with a Program Support
Provider providing for the issuance of a letter of credit to the
trustee for the holders of Commercial Paper Notes, and for the
making of loans to the Purchaser, to provide funds for the
<PAGE>
payment of Commercial Paper Notes and for the making of Purchases
and Reinvestments in the circumstances described above when
funding is not available under certain other Program Agreements.
6. BofA has been requested, and is willing, to act as the
Agent.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
THE COMMITMENT
SECTION 1.01. Commitment. On the terms and subject to the
conditions set forth in this Agreement (including Article V):
(a) Purchases. Purchaser shall purchase from Seller
Undivided Interests (as defined in Section 2.01) from time to
time during the period from the date hereof to the Purchase
Termination Date. Each such purchase and, as the context may
require, the purchase price paid by Purchaser to Seller in
respect thereof (determined pursuant to Section 1.03(b)), is
herein called a "Purchase".
(b) Reinvestments. Pursuant to Section 3.01, during
the period from the date hereof to the Commitment Termination
Date, Purchaser shall permit Servicer to cause certain of the
Collections in respect of the Undivided Interests to be applied
to the purchase of additional undivided interests in the Pool
Receivables, thereby resulting in an appropriate readjustment of
such Undivided Interests. Each such purchase of an additional
undivided interest pursuant to Section 3.01 is herein called a
"Reinvestment".
Purchaser's obligation to make such Purchases and Reinvestments
is herein called the "Commitment".
SECTION 1.02. Purchase and Reinvestment Limits. Under no
circumstances shall Purchaser make any Purchase or Reinvestment
to the extent that, after giving effect to such Purchase or
Reinvestment, as the case may be:
(a) Purchase Limit. The Aggregate Purchaser's
Investments (as defined in Section 2.03) would exceed an
amount (the "Purchase Limit") equal to $50,000,000, as such
amount may be reduced pursuant to Section 1.07; or
(b) Required Allocations Limit. The Aggregate
Required Allocations (as defined in Section 2.02) would
exceed an amount (the "Required Allocations Limit") equal to
98% of the Net Pool Balance (as defined in Section 2.04).
SECTION 1.03. Making Purchases from Seller. (a) Notice of
Purchase. Each Purchase from Seller by Purchaser shall be made
on notice from Seller to the Agent received by the Agent not
later than 11:00 a.m. (New York time) on the Business Day next
preceding the date of such proposed Purchase. Each such notice
<PAGE>
of a proposed Purchase shall specify the desired amount and date
of such Purchase and the desired duration of the initial Yield
Period for the resulting Undivided Interest. The Agent shall
select the duration of such initial, and each subsequent, Yield
Period in its discretion; provided that it shall use reasonable
efforts, taking into account market conditions, to accommodate
Seller's preferences.
(b) Amount of Purchase. The amount of each Purchase shall
be equal to the lesser of (x) the amount proposed by Seller
pursuant to Section 1.03(a) and (y) the maximum amount permitted
under Section 1.02.
(c) Funding of Purchase. On the date of each Purchase,
Purchaser shall, upon satisfaction of the applicable conditions
set forth in Article V, make available to the Agent at its office
at 231 South LaSalle Street in Chicago, Illinois not later than
11:00 a.m. New York time the amount of its Purchase (determined
pursuant to Section 1.03(b)) in same day funds, and after receipt
by the Agent of such funds, the Agent will make such funds
immediately available to Seller at such office.
SECTION 1.04. Number of Undivided Interests. The number of
Undivided Interests hereunder at any one time, after giving
effect to any Purchase, Reinvestment, division or combination,
shall not exceed 10.
SECTION 1.05. Commitment Termination Date. (a) The
"Commitment Termination Date" shall be the earlier to occur of
(i) January 15, 1998 (herein, as the same may be extended, called
the "Scheduled Commitment Termination Date"), and (ii) the date
of termination of the Commitment pursuant to Section 1.07 or
10.02.
(b) The then Scheduled Commitment Termination Date may be
extended from time to time on each January 15 from a January 15
to a January 15, by written notice of request given by Seller to
the Agent at least 60 days before such January 15, and written
notice of acceptance given by the Agent to Seller not later than
30 days prior to such January 15.
SECTION 1.06. Purchase Termination Date. (a) The
"Purchase Termination Date" shall be the earlier to occur of
(i) the Commitment Termination Date and (ii) the date of
termination of the Commitment with respect to Purchases pursuant
to subsection (b).
(b) (i) The Commitment shall terminate with respect to
Purchases, and Purchaser shall have no obligation to make any
further Purchases hereunder, on the scheduled date of termination
of any Program Support Agreement, it being understood that no
such termination shall affect Purchaser's obligation, subject to
the terms and conditions of this Agreement, to make Reinvestments
until the Commitment Termination Date with respect to Undivided
Interests purchased by Purchaser hereunder prior to such
termination.
(ii) At the election of the Purchaser, the Commitment shall
terminate with respect to Purchases, and Purchaser shall have no
obligation to make any further Purchases hereunder, on or after
<PAGE>
any date on which the Agent receives notice pursuant to Section
7.02(h), it being understood that no such termination shall
affect Purchaser's obligation, subject to the terms and
conditions of this Agreement, to make Reinvestments until the
Commitment Termination Date, and it being further understood
that, subject to the terms and conditions of this Agreement, no
such termination shall affect the Purchaser's obligation to make
Purchases after it makes such election if, after giving effect to
such Purchases, the Aggregate Purchaser's Investment would not
exceed that in effect immediately prior to such election.
Purchaser agrees to give Seller at least 30 days' prior
written notice of the termination of the Commitment with respect
to Purchases pursuant to clause (i) of the foregoing clause (b),
but no failure to give or delay in giving such notice shall
prevent or delay such termination.
SECTION 1.07. Voluntary Termination of Commitment or
Reduction of Maximum Purchase Limit. Seller may, upon at least
14 days' notice to the Agent, terminate the Commitment in whole
or reduce in part the unused portion of the Purchase Limit;
provided, however, that (a) each partial reduction shall be in an
amount equal to $5,000,000 or an integral multiple thereof and
(b) after giving effect to such reduction, the remaining Purchase
Limit will not be less than $15,000,000.
SECTION 1.08. Limitation of Ownership Interest. Nothing in
this Agreement shall be interpreted as providing Purchaser with
an ownership interest in any Receivables that are not Pool
Receivables.
ARTICLE II
UNDIVIDED INTEREST AND PURCHASER'S SHARE
SECTION 2.01. Undivided Interest. (a) Definition and
Computation of Undivided Interest. For purposes of this
Agreement, "Undivided Interest" means, as the context may require
(i) an undivided ownership interest, in a percentage determined
from time to time as provided in clause (ii) below, in (A) all
then outstanding Pool Receivables, (B) all Related Security with
respect to such Pool Receivables, and (C) all Collections with
respect to, and other proceeds of, such Pool Receivables and
Related Security; and (ii) at any time, the quotient, expressed
as a percentage, obtained by dividing the Required Allocation for
such Undivided Interest by the Net Pool Balance. Each Undivided
Interest shall be computed as follows:
UI = RA = PI + DF + CR + SFR + DR
--- -----------------------
NPB NPB
where:
UI = the Undivided Interest at any time;
RA = the Required Allocations of such Undivided
Interest at such time, as determined pursuant to
Section 2.02; and
<PAGE>
NPB = the Net Pool Balance at such time, as determined
pursuant to Section 2.04.
(b) Frequency of Computation of Purchaser's Interest. Each
Undivided Interest shall initially be computed by Servicer as of
the opening of business of Servicer on the date of Purchase of
such Undivided Interest from Seller, and such Undivided Interest
shall be recomputed upon receipt of each Periodic Report. In
addition, until such Undivided Interest shall be reduced to zero,
such Undivided Interest shall be deemed to be automatically
recomputed as of the close of business of Servicer on each day
(other than a day on which an actual recomputation is done), and,
as so recomputed, shall constitute the percentage ownership
interest in Pool Receivables held by Purchaser on such day. Such
Undivided Interest shall become zero at such time as Purchaser
shall have received the accrued Earned Discount for such
Undivided Interest, shall have recovered the Purchaser's
Investment of such Undivided Interest and shall have received all
other amounts payable to Purchaser pursuant to this Agreement in
respect of such Undivided Interest and Servicer shall have
received the accrued Servicer's Fee for such Undivided Interest.
Such Undivided Interest shall remain constant from the time as of
which any such computation or recomputation is made until the
time as of which the next such recomputation, if any, shall be
made.
SECTION 2.02. Required Allocation. The "Required
Allocation" of an Undivided Interest at any time means an amount
determined as follows:
RA = PI + DF + CR + SFR + DR
where:
RA = the Required Allocation of an Undivided Interest
at any time;
PI = the Purchaser's Investment of such Undivided
Interest at such time, as determined pursuant to
Section 2.03;
DF = the Discount Factor of such Undivided Interest at
such time, as determined pursuant to Part I of Appendix B;
CR = the Credit Reserve of such Undivided Interest at
such time, as determined pursuant to Part II of Appendix B;
SFR = the Servicer's Fee Reserve of such Undivided
Interest at such time, as determined pursuant to
Part III of Appendix B;
DR = the Dilution Reserve of such Undivided Interest at
such time as determined pursuant to Part IV of Appendix B.
The "related" Undivided Interest with respect to any of the
foregoing items shall mean the Undivided Interest as to which
such item is calculated.
SECTION 2.03. Purchaser's Investment. (a) Subject to
<PAGE>
subsections (b) and (c), "Purchaser's Investment" of an Undivided
Interest at any time means an amount equal to
(i) the aggregate of the amounts theretofore paid to
Seller for the acquisition of such Undivided Interest (A) by
Purchase pursuant to Sections 1.01(a) and 1.03 and (B) by
Reinvestments pursuant to Sections 1.01(b) and 3.01, less
(ii) the aggregate amount of Collections (including
Deemed Collections) theretofore received and distributed on
account of such Purchaser's Investment pursuant to Sections 3.01
and 3.02.
(b) Solely for purposes of calculating the Earned Discount
(and each component thereof) with respect to a portion of an
Undivided Interest pursuant to the proviso to the definition of
"Earned Discount" in Appendix B:
(i) "Purchaser's Investment" of any portion of an
Undivided Interest owned by a Program Support Provider (or any
assignee thereof) or otherwise funded by a Funding shall be
deemed to be the amount paid to Purchaser by such Program Support
Provider as the purchase price of, or the original principal
amount loaned with respect to, such portion (less any portion of
such purchase price or principal amount allocable to Earned
Discount accrued and unpaid at the time of assignment or
Funding), as reduced from time to time by Collections received
and distributed to such Support Provider (or such assignee) on
account of such Funding (other than any portion allocable to
Earned Discount) pursuant to Sections 3.01 and 3.02 or by
payments by Purchaser to the Program Support Provider in
reimbursement of any Funding (less any amount allocable to such
accrued and unpaid Earned Discount); and
(ii) "Purchaser's Investment" of any other portion of
an Undivided Interest shall mean Purchaser's Investment of such
Undivided Interest less the sum of Purchaser's Investments of all
portions of such Undivided Interest described in clause (i)
above, calculated in accordance with such clause (i), as
applicable.
(c) Purchaser's Investment shall not be considered reduced
by any distribution of any portion of Collections if at any time
such distribution is rescinded or must otherwise be returned for
any reason.
(d) The "related" Purchaser's Investment with regard to a
Yield Period or Undivided Interest (or portion thereof) means the
Purchaser's Investment calculated with regard to such Yield
Period or Undivided Interest (or such portion), as the case may
be.
SECTION 2.04. Net Pool Balance. (a) The "Net Pool
Balance" at any time means an amount equal to
(i) the aggregate Unpaid Balance of the Eligible
Receivables in the Receivables Pool at such time, minus
(ii) the aggregate (for all Obligors) of the amounts
by which (x) the Unpaid Balance of all Pool Receivables of each
<PAGE>
Obligor exceeds (y) the Concentration Limit for such Obligor at
such time.
(b) "Concentration Limit" for any Obligor at any time
means, as applicable, (x) 3.0% of the aggregate Unpaid Balance of
Eligible Receivables at such time or (y) the Special
Concentration Limit for such Obligor.
(c) "Special Concentration Limit" for any Obligor
identified in writing by the Agent to the Seller as an Obligor
for which Special Concentration Limits shall apply, means at any
time, 100% of the Unpaid Balance of Eligible Receivables at such
time originated by sales to such Obligor (and its Affiliates) or
such lesser amount equal to the percentage (but not less than 2%)
designated by the Agent in written notice delivered to Seller of
the aggregate Unpaid Balance of all Eligible Receivables at such
time; provided that any such notice reducing the Special
Concentration Limit for any Obligor shall not be effective with
respect to any Eligible Receivables originated by sales to such
Obligor that are Pool Receivables on such date; provided further
that any such Eligible Receivables that are Pool Receivables on
such date shall be counted against the applicable Special
Concentration Limit as so reduced before any Eligible Receivables
originated by sales to such Obligor (and its Affiliates) after
the date of such notice; it being understood and agreed that the
Agent, in so reducing any Special Concentration Limit for any
Obligor, shall be entitled to consider, among other things, the
credit exposure of Purchaser and any Program Support Provider to
such Obligor (and its Affiliates) arising in connection with this
Agreement and other agreements to which Purchaser is a party. If
the Agent shall determine that it is necessary or appropriate to
reduce the Special Concentration Limit for any Obligor (and its
Affiliates) on account of such credit exposure, the Agent may, in
determining the amount of any such reduction, use any reasonable
method that, in its reasonable discretion, it shall deem
appropriate to equitably allocate the amount of such reduction
among the Special Concentration Limit applicable to such Obligor
(and its Affiliates) and any similar concentration limits that
are applicable with respect to such Obligor (and its Affiliates)
under any other agreements to which Purchaser is a party.
(d) In the case of any Obligor which is an Affiliate of any
other Obligor, the Concentration Limit, the Special Concentration
Limit, if any, and the aggregate Unpaid Balance of Pool
Receivables of such Obligors shall be calculated as if such
Obligors were one Obligor.
SECTION 2.05. Purchaser's Share. With respect to each
Undivided Interest, "Purchaser's Share" of Collections of Pool
Receivables received (or deemed received) by Seller or Servicer
on any day means an amount equal to the product of
(a) the amount of all Collections of Pool Receivables
received (or deemed received) by Seller or Servicer on such
day, times:
(b) (i) if such day is not a Run Off Day, such
Undivided Interest on such day, expressed as a decimal, and
(ii) if such day is a Run Off Day, 100%;
<PAGE>
provided that after such time as an Undivided Interest shall
equal zero the Purchaser's Share of Collections therefor shall
also equal zero.
ARTICLE III
SETTLEMENTS
SECTION 3.01. Non-Run Off Settlement Procedures for
Collections. (a) Daily Procedure. On each day (other than a
Run Off Day) in any Yield Period for any Undivided Interest,
Servicer shall deem an amount equal to Purchaser's Share (as
determined in Section 2.05) of Collections of Pool Receivables
received or deemed received on such day to be received in respect
of such Undivided Interest; and
(i) out of Purchaser's Share of such Collections,
hold in trust for the benefit of Purchaser an amount equal to the
related Earned Discount and related Servicer's Fee accrued
through such day and not previously so held for the benefit of
Purchaser,
(ii) apply an amount equal to the remainder of
Purchaser's Share of such Collections (the "Remaining
Collections") to reduce the Purchaser's Investment of such
Undivided Interest (it being understood that such amount need not
be physically paid to Purchaser under this clause (ii)),
(iii) Subject to Section 3.03, after such reduction,
(A) apply such Remaining Collections to the Reinvestment, for the
benefit of Purchaser, of additional undivided interests in Pool
Receivables by recomputation of such Undivided Interest pursuant
to Section 2.01 as of the end of such day, thereby increasing the
related Purchaser's Investment, and (B) pay to Seller such
Remaining Collections.
The recomputed Undivided Interest shall constitute the percentage
ownership interest in Pool Receivables on such day held by
Purchaser with regard to such Undivided Interest.
(b) Settlement Date Procedure. On the Settlement Date for
each Undivided Interest, for each day in the related Yield Period
of such Settlement Period that is not a Run Off Day for such
Undivided Interest, Servicer shall deposit to the Agent's
account, as described in Section 3.05, the amounts set aside as
described in Section 3.01(a)(i) and the amounts, if any, set
aside pursuant to Section 3.03(b) or (c) for payment to the Agent
on such Settlement Date; provided, however, that if the Agent
gives its consent (which consent may be revoked at any time),
Servicer may retain amounts which would otherwise be deposited in
respect of Servicer's Fee, in which case no distribution shall be
made in respect of Servicer's Fee under clause (c) below; and
provided, further that, if any Yield Period as to a related
Undivided Interest shall exceed three months, Servicer shall pay
to the Agent within 2 days of the last day of each three month
period in such Yield Period all related Earned Discount and
related Servicer's Fee that shall have accrued through such last
day to the same extent as if such Yield Period had ended on such
<PAGE>
last day.
(c) Order of Application. Upon receipt by the Agent of
funds distributed pursuant to subsection (b), the Agent shall
distribute them (i) to Purchaser in payment of the accrued and
unpaid Earned Discount for such Undivided Interest, (ii) to
Servicer in payment of the accrued and unpaid Servicer's Fee
payable with respect to such Undivided Interest and (iii) in the
case of any amounts set aside pursuant to Section 3.03(b) or (c),
to Purchaser in reduction of the related Purchaser's Investment.
If there shall be insufficient funds on deposit for the Agent to
distribute funds in payment in full of the amounts referred to in
clauses (i) and (ii), the Agent shall distribute funds, first, in
payment of such Earned Discount, and second, in payment of such
Servicer's Fee.
SECTION 3.02. Run Off Settlement Procedures for Collec-
tions. (a) Daily Procedure. On each Run Off Day occurring in
any Yield Period for an Undivided Interest, Servicer shall set
aside and hold in trust for Purchaser Purchaser's Share of the
Collections of Pool Receivables in respect of such Undivided
Interest for such Run Off Day by depositing such Collections
within one Business Day of Servicer's receipt thereof into a bank
account acceptable to the Agent in which no other funds shall be
deposited.
(b) Settlement Date Procedure. On each Settlement Date for
each Undivided Interest, if one or more Run Off Days for such
Undivided Interest occurred during the related Yield Period for
the Settlement Period ending on such Settlement Date for such
Undivided Interest, Servicer shall deposit to the Agent's
account, as described in Section 3.05, the amounts set aside
pursuant to Section 3.02(a) during such Settlement Period, but
not to exceed the sum of (i) the accrued and unpaid related
Earned Discount, (ii) the Purchaser's Investment of such
Undivided Interest, (iii) the aggregate of other amounts owed
hereunder by Seller to Purchaser or the Agent in respect of such
Undivided Interest, and (iv) the accrued Servicer's Fee payable
with respect to such Undivided Interest. If no Termination Event
or Unmatured Termination Event shall have occurred and be
continuing, any amounts set aside pursuant to clause (a) of this
Section 3.02 and not required to be deposited to the Agent's
account pursuant to the next preceding sentence shall be paid to
Seller by Servicer.
(c) Order of Application. Upon receipt of funds deposited
to the Agent's account pursuant to Section 3.02(b), the Agent
shall distribute them (i) to Purchaser or the Agent (as the case
may be) (A) in payment of the accrued and unpaid Earned Discount
for such Undivided Interest, (B) in reduction of the Purchaser's
Investment of such Undivided Interest and (C) in payment of any
other amounts owed by Seller hereunder to Purchaser or the Agent,
in each case until reduced to zero, and (ii) to Servicer in
payment of the accrued Servicer's Fee payable with respect to
such Undivided Interest, also until reduced to zero. If there
shall be insufficient funds on deposit for the Agent to
distribute funds in payment in full of the aforementioned
amounts, the Agent shall distribute funds on deposit, first, in
payment of the Earned Discount for such Undivided Interest,
second, in payment of the Servicer's Fee payable with respect to
<PAGE>
such Undivided Interest, if any, (if Servicer is not Seller or an
Affiliate of Seller), third, in reduction of Purchaser's
Investment of such Undivided Interest, fourth, in payment of
other amounts payable to Purchaser or the Agent hereunder, and
fifth, in payment of the Servicer's Fee payable with respect to
such Undivided Interest (if Servicer is Seller or an Affiliate of
Seller).
SECTION 3.03. Special Settlement Procedures; Reduction of
Purchaser's Investment, Etc. (a) Deemed Collections. If on any
day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective,
rejected or returned merchandise or services, any cash
discount, or any adjustment by Seller or any Originator (other
than any adjustment permitted by Section 8.02(c)(i)),
(B) reduced or cancelled as a result of a
setoff in respect of any claim by the Obligor thereof
against Seller or any Originator (whether such claim arises out
of the same or a related or an unrelated transaction), or
(C) reduced on account of the obligation of
Seller or any Originator to pay to the related Obligor any rebate
or refund; or
(ii) any of the representations or warranties of
Seller set forth in Section 6.01(i) or (m) is no longer true
with respect to a Pool Receivable,
then, on such day, Seller shall be deemed to have received a
Collection of such Pool Receivable
(I) in the case of clause (i) above, in the
amount of such reduction or cancellation; and
(II) in the case of clause (ii) above, in the
amount of the Unpaid Balance of such Pool Receivable.
(b) Unreinvested Collections. Collections that may not be
reinvested by means of Reinvestments in an Undivided Interest on
account of the application of the Required Allocations Limit or
the Purchase Limit pursuant to Section 2.01 shall be so
reinvested as soon as it is possible to do so without violating
such Required Allocations Limit or Purchase Limit, as the case
may be. To the extent and so long as such Collections may not be
so reinvested, Servicer shall hold such Collections in trust for
the benefit of Purchaser in a separate deposit account containing
only such Collections and no other funds, for payment to the
Agent on the next following Settlement Date for the Yield Period
in which such Collections are accumulated, and the Purchaser's
Investment of such Undivided Interest shall be deemed reduced in
the amount to be paid to the Agent only when in fact finally so
paid. During any Run Off Period, upon 2 days' written notice
given by the Agent to Seller, Servicer shall pay in immediately
available funds such Collections to the Agent within one Business
Day of receipt thereof by Servicer.
<PAGE>
(c) Seller's Reduction of Purchaser's Investment. If at
any time Seller shall wish to cause the reduction of the
Purchaser's Investment of a related Undivided Interest (but not
to commence the liquidation, or reduction to zero, of all
Undivided Interests), Seller may do so as follows:
(i) Seller shall give the Agent at least 2 days'
prior written notice thereof (including the amount of such
proposed reduction and the proposed date on which such reduction
will commence),
(ii) on the proposed date of commencement of such
reduction and on each day thereafter, Servicer shall refrain
from reinvesting Remaining Collections until the amount thereof
not so reinvested shall equal the desired amount of reduction,
and
(iii) Servicer shall hold such Collections for the
benefit of Purchaser, for payment to the Agent on the next
following Settlement Date for the Yield Period in which such
Collections are accumulated, and the Purchaser's Investment
of such Undivided Interest shall be deemed reduced in the amount
to be paid to the Agent only when in fact finally so paid;
provided that,
(A) the amount of any such reduction shall be not less
than $1,000,000 and shall be an integral multiple of $100,000,
and the Purchaser's Investment of such Undivided Interest after
giving effect to such reduction shall be not less than $5,000,000
(unless Purchaser's Investment of such Undivided Interest shall
thereby be reduced to zero) and shall be in an integral multiple
of $1,000,000,
(B) if Seller shall commence any voluntary reduction
in a Yield Period containing all or a portion of any Run Off
Period, Collections not so reinvested shall be treated as if
collected on the next following Run Off Day,
(C) Seller shall use reasonable efforts to attempt to
choose a reduction amount, and the date of commencement thereof,
so that such reduction shall commence and conclude in the same
Yield Period, and
(D) if two or more Undivided Interests shall be
outstanding at the time of any proposed reduction, such
proposed reduction shall be applied, unless the Agent shall
consent otherwise, to the Undivided Interest with the shortest
remaining Yield Period.
(d) Allocations of Obligor's Payments. Except as provided
in Section 3.03(a) or as otherwise required by law or the
underlying Contract, all Collections received from an Obligor of
any Receivable shall be applied to Receivables then outstanding
of such Obligor in the order of the age of such Receivables,
starting with the oldest such Receivable; provided, however,
that, if payment is designated by such Obligor for application to
specific Receivables, it shall be applied to such specified
Receivables.
<PAGE>
SECTION 3.04. Reporting. (a) On or prior to the fifteenth
Business Day of each month, Servicer shall prepare and forward to
the Agent
(i) a Periodic Report relating to all Undivided
Interests owned by Purchaser as of the close of business of
Servicer on the next preceding Month End Date,
(ii) an aggregate listing of aged Pool Receivables by
Originator, and
(iii) if requested by the Agent, a listing of the
Unpaid Balance of Eligible Receivables for each Obligor with
Eligible Receivables equal to or greater than 2.0% of the
aggregate Unpaid Balance of Eligible Receivables at such time.
(b) On or prior to the Settlement Date of any Settlement
Period containing a Run Off Day, Servicer shall prepare and
forward to the Agent a Periodic Report as of the close of
business of Servicer on the next preceding Month End Date.
(c) On or prior to each Settlement Date, Seller will advise
the Agent and, if Seller is not Servicer, Servicer of each Run
Off Day occurring during the Settlement Period ending on such
Settlement Date.
SECTION 3.05. Payments and Computations, Etc. (a) All
amounts to be paid or deposited by Seller hereunder shall be paid
or deposited in accordance with the terms hereof no later than
11:00 a.m. (Chicago time) on the day when due in lawful money of
the United States of America in same day funds to the Agent at
BofA's office at 231 South LaSalle Street, Chicago, Illinois.
(b) Seller or Servicer, as applicable, shall, to the extent
permitted by law, pay to the Agent interest on all amounts not
paid or deposited when due hereunder at 2% per annum above the
Alternate Reference Rate, payable on demand, provided, however,
that such interest rate shall not at any time exceed the maximum
rate permitted by applicable law. Such interest shall be
retained by the Agent except to the extent that such failure to
make a timely payment or deposit has continued beyond the date
for distribution by the Agent of such overdue amount to Purchaser
or any other Person having an interest in such overdue amount, in
which case such interest accruing after such date shall be for
the account of, and distributed by the Agent, to such Persons
ratably in accordance with their respective interests in such
overdue amount.
(c) All computations of interest, Earned Discount, Negative
Spread Fee and any other 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) elapsed.
SECTION 3.06. Dividing or Combining Undivided Interests.
(a) Division of Undivided Interests. The Agent may at any
time, as of the last day of any Yield Period for any then
existing Undivided Interest, divide such existing Undivided
Interest on such last day into two or more new Undivided
Interests, each such new Undivided Interest having a Purchaser's
<PAGE>
Investment as designated in such notice and all such new
Undivided Interests collectively having aggregate Purchaser's
Investments equal to the Purchaser's Investment of such existing
Undivided Interest.
(b) Combination of Undivided Interests. The Agent may at
any time, as of the last day of any Yield Period for two or more
existing Undivided Interests, on or before the date of any
proposed Purchase of an Undivided Interest pursuant to
Sections 1.01 and 1.04 by Purchaser, on such last day or such
date of Purchase, as the case may be, combine into one new
Undivided Interest such existing and/or proposed Undivided
Interests or any combination thereof, such new Undivided Interest
having a Purchaser's Investment equal to the aggregate
Purchaser's Investments of such Undivided Interests so combined.
(c) Effect of Division or Combination. On and after any
division or combination of Undivided Interests as described
above, each of the new Undivided Interests resulting from such
division, or the new Undivided Interest resulting from such
combination, as the case may be, shall be a separate Undivided
Interest having a Purchaser's Investment as set forth above, and
shall take the place of such existing Undivided Interest or
Undivided Interests or proposed Undivided Interest, as the case
may be, in each case under and for all purposes of this
Agreement.
SECTION 3.07. Treatment of Collections and Deemed
Collections. Each Originator shall pay to Servicer all
Collections attributable to Receivables originated by such
Originator deemed received by Seller pursuant to Section 3.03(a),
and Servicer shall hold or distribute such Collections as Earned
Discount, accrued Servicer's Fee, repayment of Purchaser's
Investment, etc. to the same extent as if such Collections had
actually been received on the date of such delivery to Servicer.
If Collections are then being paid to the Agent, or lock boxes or
accounts directly or indirectly owned or controlled by the Agent,
Servicer shall forthwith cause such deemed Collections to be paid
to the Agent or to such lock boxes or accounts, as applicable.
So long as Seller shall hold any Collections or deemed
Collections required to be paid to Servicer or the Agent, it
shall hold such Collections in trust and separate and apart from
its own funds and shall clearly mark its records to reflect such
trust.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees. (a) Arrangement Fee. Seller shall
pay to the Agent for its own account an arrangement fee
("Arrangement Fee") payable on such dates and in such amounts as
set forth in the letter dated November 2, 1994 from the Agent to
Seller.
(b) Program Fee. From the date hereof until the date,
following the Commitment Termination Date, on which Aggregate
Purchaser's Investments shall be reduced to zero, Seller shall
pay to Purchaser a program fee ("Program Fee") for each day in
<PAGE>
such period equal to the product of (x) Aggregate Purchaser's
Investments on such day, times (y) the Program Fee Rate, times
(z) 1/360. Such Program Fee shall be paid in arrears, on the
last Business Day of each calendar quarter and on the date,
following the Commitment Termination Date, when Aggregate
Purchaser's Investments shall be reduced to zero, in the amount
of such Program Fee that shall have accrued during the period
then ending and which shall not have been previously paid.
(c) Non-Use Fee. From the date hereof until the Commitment
Termination Date, the Seller shall pay to the Agent for the
account of the Purchaser a non-use fee ("Non-Use Fee") for each
day in such period in an amount equal to the product of (x) the
Unused Commitment times (y) the Non-Use Fee Rate times (z) 1/360,
payable in arrears on the last Business Day of each calendar
quarter.
(d) Note Fee. From the date hereof until the date, after
the Commitment Termination Date, on which the Aggregate
Purchaser's Investments shall be reduced to zero, Seller shall
pay to the Agent for the account of Purchaser a note issuance fee
("Note Fee") in an amount equal to the sum of (x) the product of
$15.00 and the number of Commercial Paper Notes issued by the
Purchaser in certificated form to fund the Undivided Interests
arising hereunder during the period for which such Note Fee is
payable, as notified by the Agent to the Seller and Servicer,
plus (y) in the case of Commercial Paper Notes which are recorded
in the book-entry system maintained by the Depository Trust
Company, the amount of all charges, fees and other expenses which
are paid or payable by the Purchaser to the issuing agent and
depositary or to the Depository Trust Company for such Commercial
Paper Notes issued by the Purchaser to fund the Undivided
Interests arising hereunder during the period for which such Note
Fee is payable, as notified by the Agent to the Seller and
Servicer. Such Note Fee shall be paid in arrears on the last
Business Day of each calendar quarter and on the date, following
the Commitment Termination Date, when the Aggregate Purchaser's
Investments shall have been reduced to zero, for the number of
Commercial Paper Notes issued to fund the Undivided Interests
hereunder during the calendar quarter or other period then ending
for which no Note Fee shall have theretofore been paid. The
Agent shall notify Seller and Servicer at least two Business Days
prior to the end of each calendar quarter of the number of
Commercial Paper Notes theretofore issued, and on the last
Business Day of such calendar quarter of the number of any
additional Commercial Paper Notes issued, to fund the Undivided
Interests hereunder during such calendar quarter.
SECTION 4.02. Yield Protection. (a) If (i) Regulation D
or (ii) any Regulatory Change occurring after the date hereof
(A) shall subject an Affected Party to any tax, duty
or other charge with respect to any Undivided Interest owned by
or funded by it, or any obligations or right to make Purchases or
Reinvestments or to provide funding therefor, or shall change the
basis of taxation of payments to the Affected Party of any
Purchaser's Investments or Earned Discount owned by, owed to or
funded by it or any other amounts due under this Agreement in
respect of any Undivided Interest owned by or funded by it or its
obligations or rights, if any, to make Purchases or Reinvestments
<PAGE>
or to provide funding therefor (except for changes in the rate of
tax on the overall net income of such Affected Party imposed
by the United States of America, by the jurisdiction in which
such Affected Party's principal executive office is located and,
if such Affected Party's principal executive office is not in the
United States of America, by the jurisdiction where such Affected
Party's principal office in the United States is located); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed
by the Federal Reserve Board, but excluding any reserve included
in the determination of Earned Discount), special deposit or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any Affected
Party or with or for the account of any affiliate (or entity
deemed by the Federal Reserve Board to be an affiliate) of any
Affected Party, or credit extended by any Affected Party; or
(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party; or
(D) shall impose any other condition affecting any
Undivided Interest owned or funded by any Affected Party, or
its obligations or rights, if any, to make Purchases or
Reinvestments or to provide funding therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost to (or in the case of
Regulation D referred to above, to impose a cost on) (I) an
Affected Party funding or making or maintaining any Purchases or
Reinvestments, any purchases, reinvestments, or loans or other
extensions of credit under any Program Support Agreement, or any
Funding, or any commitment of such Affected Party with respect to
any of the foregoing, or (II) the Agent for continuing its, or
Seller's, relationship with Purchaser,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or the
Certificate of Assignments, or under any Program Support
Agreement with respect thereto, or
(z) in the reasonable determination of such Affected
Party, to materially reduce the rate of return on the capital of
an Affected Party as a consequence of its obligations hereunder
or arising in connection herewith to a level below that which
such Affected Party could otherwise have achieved,
then within thirty days after demand by such Affected Party
(which demand shall be accompanied by a statement setting forth
in reasonable detail the basis of such demand), Seller shall pay
directly to such Affected Party such additional amount or amounts
as will compensate such Affected Party for such additional or
increased cost or such reduction.
(b) Each Affected Party will promptly notify Seller and the
Agent of any event of which it has knowledge which will entitle
such Affected Party to compensation pursuant to this
Section 4.02.
<PAGE>
(c) In determining any amount provided for or referred to
in this Section 4.02, an Affected Party may use any reasonable
averaging and attribution methods that it (in its reasonable
discretion) shall deem applicable. Any Affected Party when
making a claim under this Section 4.02 shall submit to Seller a
statement as to such increased cost or reduced return (including
calculation thereof in reasonable detail), which statement shall
constitute prima facie evidence of the accuracy of such claim.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase.
The initial Purchase hereunder is subject to the condition
precedent that the Agent shall have received, on or before the
date of such Purchase, the following, each (unless otherwise
indicated) dated such date and in form and substance satisfactory
to the Agent:
(a) A Certificate of Assignments;
(b) A copy of the resolutions of the Board of
Directors of Seller and each Originator approving this
Agreement, the Originator Purchase Agreement, the Support
Agreement (in the case of PLY GEM), the Certificate of
Assignments and the other Agreement Documents to be delivered by
it hereunder and the transactions contemplated hereby, certified
by its Secretary or Assistant Secretary;
(c) Good standing certificates for Seller and each
Originator issued by the Secretaries of State or similar office
of each State under the laws of which the Seller or such
Originator was organized;
(d) A certificate of the Secretary or Assistant
Secretary of Seller and each Originator certifying the names
and true signatures of the officers authorized on its behalf
to sign this Agreement, the Originator Purchase Agreement, the
Support Agreement (in the case of PLY GEM), the Certificate of
Assignments and the other Agreement Documents to be delivered by
it hereunder (on which certificate the Agent and Purchaser may
conclusively rely until such time as the Agent shall receive a
revised certificate meeting the requirements of this
subsection (d));
(e) The Articles of Incorporation of Seller and each
Originator, duly certified by the Secretary of State or similar
office of each State under the laws of which the Seller or such
Originator was organized, as of a recent date acceptable to
Agent, together with a copy of the By-laws of Seller and each
Originator, duly certified by the Secretary or an Assistant
Secretary of Seller or each Originator, as applicable;
(f) Acknowledgment copies of proper Financing
Statements (Form UCC-1), filed on or prior to the date of
the initial Purchase, naming (i) each Originator as debtor and
Seller as secured party, and the Purchaser as assignee and (ii)
<PAGE>
Seller as the debtor and seller of Receivables or an undivided
interest therein and Purchaser as the secured party and
purchaser, or other, similar instruments or documents, as may be
necessary or, in the opinion of the Agent, desirable under the
UCC or any comparable law of all appropriate jurisdictions to
perfect Purchaser's interests in all Undivided Interests assigned
to it or otherwise created or arising hereunder;
(g) A search report provided in writing to the Agent
listing all effective Financing Statements filed in the
jurisdictions in which filings were made pursuant to
subsection (f) above and in such other jurisdictions that Agent
shall reasonably request, together with copies of such financing
statements (none of which shall cover any Receivables or
Contracts or interests therein or Collections or proceeds of any
thereof);
(h) executed copies of all releases, if any, necessary
to release all security interests and other rights or interests
of any Person in the Receivables and the Contracts and Related
Security related thereto previously granted by any Person,
together with copies of the relevant financing statements (Form
UCC-3);
(i) Duly executed copies of Lock-Box Agreements with
each of the Lock-Box Banks;
(j) A favorable opinion of Modlin & Modlin, counsel
for Seller, in substantially the form of Exhibit 5.01(j);
(k) A favorable opinion of Mayer, Brown & Platt,
counsel for the Agent, substantially in the form of
Exhibit 5.01(k);
(l) Such licenses and sublicenses as the Agent shall
have requested in writing with regard to all computer programs
owned or leased by the Seller or any Originator and used in the
servicing of the Receivables Pool;
(m) Such powers of attorney as the Agent shall
reasonably request to enable the Agent to collect all
amounts due under any and all Pool Receivables;
(n) A Periodic Report as of the most recent Month End
Date;
(o) A report from Price Waterhouse or other
independent certified public accountants or other auditors
acceptable to the Agent (with respect to the fees and expenses
for which Seller's obligation to reimburse Agent shall not exceed
$60,000), with respect to the application of certain procedures
to Seller's and each Originator's books and records relating to
the Pool Receivables;
(p) a certificate from an officer of Seller (in form
and substance reasonably satisfactory to the Agent) to the effect
that, on the date of the proposed initial Purchase, Seller has a
Tangible Net Worth of at least $4,900,000;
(q) The Agreement to Reconvey, duly executed and
<PAGE>
delivered by 2001 Investments, Inc., and certain of the
Originators;
(r) The Originator Purchase Agreement, duly executed
and delivered by the parties thereto; and
(s) The Support Agreement, duly executed and delivered
by PLY GEM.
SECTION 5.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase (including the initial Purchase)
and each Reinvestment hereunder shall be subject to the further
conditions precedent ("Conditions Precedent") that on the date of
such Purchase or Reinvestment the following statements shall be
true (and Seller by accepting the amount of such Purchase or by
receiving the proceeds of such Reinvestment and PLY GEM, by
accepting the benefit of such Purchase or Reinvestment shall be
deemed to have certified that):
(a) The representations and warranties contained in
Section 6.01 are correct on and as of such day as though made on
and as of such day and shall be deemed to have been made on such
day, except, as to Reinvestments, the representation and warranty
set forth at Section 6.01(i) shall apply only as to Receivables
being added to the Receivables Pool on or as of the day of such
Reinvestment,
(b) No event has occurred and is continuing, or would
result from such Purchase or Reinvestment, that constitutes
a Termination Event or Unmatured Termination Event,
(c) After giving effect to each proposed Purchase or
Reinvestment, Aggregate Purchaser's Investments will not exceed
the Purchase Limit and Aggregate Required Allocations will not
exceed the Required Allocations Limit, and
(d) The Commitment Termination Date shall not have
occurred;
provided, however, the absence of the occurrence and continuance
of an Unmatured Termination Event shall not be a Condition
Precedent to
(i) any Reinvestment being made with the
proceeds of Collections that were, on the same day,
applied in reduction of the Aggregate Purchaser's Investments, or
(ii) any other Reinvestment or any Purchase on
any day which does not cause the Aggregate Purchaser's
Investments, after giving effect to such Reinvestment or Purchase
(and to any Reinvestment referred to in clause (i) next above) to
exceed the Aggregate Purchaser's Investments as of the opening of
business on such day.
SECTION 5.03. Additional Condition Precedent to Purchases.
Each Purchase (including the initial Purchase) shall be subject
to the further condition precedent that the Purchase Termination
Date shall not have occurred.
<PAGE>
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties. Seller and,
as to matters relating to it or its business or Pool Receivables
originated by it or its other property, each Originator
represents and warrants as follows:
(a) Organization, Good Standing and Qualification. It
is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction under the laws
of which it is organized and existing and is duly qualified to do
business, and is in good standing, in every jurisdiction where
the nature of its business requires it to be so qualified except
where the failure to so qualify would not have a material adverse
effect on its business.
(b) Power and Authority; Due Authorization. The
execution, delivery and performance by it of this Agreement,
the Originator Purchase Agreement, the Support Agreement (in
the case of PLY GEM), the Certificate of Assignments and any
other Agreement Documents to be delivered by it hereunder and
thereunder, and the assignment of Undivided Interests and the
other transactions contemplated hereby and thereby, are within
its corporate powers, have been duly authorized by all necessary
corporate action, do not (i) contravene (a) its charter or by-
laws, or (b) any law, rule or regulation or any contractual
restriction binding on or affecting it and do not result in or
require the creation of any Adverse Claim, lien, security
interest or other charge or encumbrance upon or with respect to
any of its properties other than as specifically contemplated by
this Agreement and the Originator Purchase Agreement; or
(ii) violate any law or any order, rule, or regulation applicable
to Seller of any court or of any federal or state regulatory
body, administrative agency, or other governmental
instrumentality having jurisdiction over Seller or any Originator
or any of its properties; and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(c) Valid Sale; Binding Obligations. The Originator
Purchase Agreement constitutes a valid sale, transfer and
assignment of the Receivables of each Originator to the Seller
and this Agreement constitutes a valid sale, transfer, and
assignment of the Undivided Interests to Purchaser, and each such
agreement is enforceable against creditors of, and purchasers
from, each Originator and Seller, respectively. The Originator
Purchase Agreement and this Agreement, the Support Agreement (in
the case of PLY GEM), the Certificate of Assignments and each
other Agreement Document constitute its legal, valid and binding
obligations enforceable against it in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally
or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(d) No Proceedings. There are no proceedings or, to
its knowledge, investigations pending or threatened, before
<PAGE>
any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement, the Originator Purchase Agreement,
the Support Agreement, the Certificate of Assignments or any
other Agreement Document, (ii) seeking to prevent the sale and
assignment of any Receivable, Undivided Interest, the issuance of
the Certificate of Assignments or the consummation of any of the
other transactions contemplated by this Agreement, the Originator
Purchase Agreement, the Support Agreement, or any other Agreement
Document, (iii) seeking any determination or ruling that could
reasonably be expected to materially and adversely affect (A) the
performance by Seller, any Originator, or Servicer of its
obligations under this Agreement, the Originator Purchase
Agreement, the Support Agreement (in the case of PLY GEM) or any
other Agreement Document or (B) the validity or enforceability of
this Agreement, the Originator Purchase Agreement, the Support
Agreement (in the case of PLY GEM), the Certificate of
Assignments, any other Agreement Document, the Receivables or the
Contracts or (iv) seeking to adversely affect the federal income
tax attributes of the Purchases hereunder or the Certificate of
Assignments.
(e) Government Approvals. No authorization or
approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by it of this
Agreement, the Originator Purchase Agreement, the Support
Agreement, the Certificate of Assignments or any other document
or instrument to be delivered hereunder except for the filing of
the Financing Statements referred to in Article V, all of which,
at the time required in Article V, shall have been duly made and
shall be in full force and effect.
(f) Financial Condition. The consolidated balance
sheet of PLY GEM and its consolidated Subsidiaries as at December
31, 1993, and the related statements of earnings, stockholders'
equity and statement of cash flows of PLY GEM and its
consolidated Subsidiaries for the fiscal year then ended
certified by Grant Thornton, independent public accountants,
copies of which have been furnished to the Agent, fairly present
the consolidated financial condition of PLY GEM and its
consolidated Subsidiaries as at such date and the consolidated
results of the operations of PLY GEM and its consolidated
Subsidiaries for the period ended on such date, all in accordance
with GAAP consistently applied and since December 31, 1993,
except as disclosed in PLY GEM's Form 10-K for the year ended
December 31, 1993 and Form 10-Q for the quarters ended April 1,
1994, July 2, 1994 or October 1, 1994, filed pursuant to the
Securities and Exchange Act of 1934, as amended, there has been
no material adverse change in any such condition or operations.
(g) Litigation. No injunction, decree or other
decision has been issued or made by any court, governmental
agency or instrumentality thereof that prevents, and, to its
knowledge, no threat by any person has been made to attempt
to obtain any such decision that would prevent, Seller or any
Originator from conducting a significant part of its business
operations, except as described in Schedule 6.01(g) and except as
disclosed in PLY GEM's Form 10-K for the year ended December 31,
1993, Form 10-Q for the quarter ended April 2, 1994, Form 10-Q
<PAGE>
for the quarter ended July 2, 1994, or Form 10-Q for the quarter
ended October 1, 1994 filed pursuant to the Securities Exchange
Act of 1934, as amended, there are no actions, suits or
proceedings pending or, to its knowledge, threatened against it
or affecting any of its Subsidiaries, or its property or the
property of any of its Subsidiaries, in any court, or before any
arbitrator of any kind, or before or by any governmental body
which have a reasonable possibility of being adversely
determined, and, if so determined (A) would have a material
adverse effect on (1) the financial condition of PLY GEM and its
Subsidiaries taken as a whole, (2) the Seller's or any
Originator's ability to collect the Pool Receivables or (B) could
have an adverse effect on its ability to perform its obligations
under this Agreement, the Originator Purchase Agreement, the
Support Agreement (in the case of PLY GEM), any Certificate
of Assignments or any other Agreement Document.
(h) Margin Regulations. No proceeds of any Purchase
will be used to acquire any security in any transaction which is
subject to Sections 13 and 14 of the Securities Exchange Act of
1934, as amended; and the use of all funds obtained by Seller or
any Originator under this Agreement and the Originator Purchase
Agreement, respectively, will not conflict with or contravene any
of Regulations G, T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time;
provided, that up to 5% of the proceeds of any Purchase may be
used to purchase or carry margin stock (as such term is used in
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 establishing margin requirements).
(i) Quality of Title. Each Pool Receivable, together
with the related Contract and all purchase orders and other
agreements related to such Pool Receivable, is owned by Seller
free and clear of any Adverse Claim (other than any Adverse Claim
arising solely as the result of any action taken by Purchaser (or
any assignee thereof) or by the Agent) except as provided herein;
when Purchaser makes a Purchase, it shall have acquired and
shall continue to have maintained a valid and perfected first
priority undivided percentage ownership interest to the extent of
its Undivided Interest in each Pool Receivable and in the Related
Security and Collections with respect thereto, free and clear of
any Adverse Claim (other than any Adverse Claim arising solely
as the result of any action taken by Purchaser (or any assignee
thereof) or by the Agent) except as provided hereunder; and no
effective financing statement or other instrument similar in
effect covering any Pool Receivable, any interest therein, the
Related Security or Collections with respect thereto is on file
in any recording office except such as may be filed (i) in favor
of Seller in accordance with the Contracts, (ii) in favor of
Purchaser or the Agent in accordance with this Agreement or in
connection with any Adverse Claim arising solely as the result of
any action taken by Purchaser (or any assignee thereof) or by
the Agent, or (iii) in favor of BofA, as Collateral Trustee,
or any successor in such capacity, as described in Section 11.01.
(j) Accurate Reports. Each Periodic Report (if
prepared by the Seller, the Servicer (if an Affiliate of the
Seller) or any Originator, or to the extent that information
contained therein is supplied by the Seller, the Servicer (if an
<PAGE>
Affiliate of the Seller) or any Originator), information,
exhibit, financial statement, document, book, record or report
furnished at any time by the Seller, the Servicer (if any
Affiliate of the Seller) or any Originator to the Agent,
Purchaser or any Owner in connection with this Agreement is
accurate in all material respects as of its date or as of the
date so furnished, and no such document contains any material
misstatement of fact or omits to state a material fact or any
fact necessary to make the statements contained therein not
materially misleading.
(k) Offices. The chief place of business and chief
executive office of Seller and each Originator are located at the
address of Seller or such Originator referred to in
Section 13.02, and the offices where Seller and each Originator
keeps all its books, records and documents evidencing Pool
Receivables, the related Contracts and all purchase orders and
other agreements related to such Pool Receivables are located at
the addresses specified in Schedule 6.01(k) (or, in each case, at
such other locations, notified to the Agent in accordance with
Section 7.01(f), in jurisdictions where all action required by
Section 8.05 has been taken and completed).
(l) Lock-Box Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the
lock-box accounts of Seller and each Originator at such Lock-Box
Banks, are specified in Schedule 6.01(l) (or have been notified
to the Agent in accordance with Section 7.03(d)).
(m) Eligible Receivables. Each Receivable included in
the Net Pool Balance as an Eligible Receivable on the date of any
Purchase or Reinvestment and each additional Receivable included
in the Net Pool Balance as an Eligible Receivable on the date of
any Reinvestment shall be an Eligible Receivable on such date.
(n) Compliance With Certain Statutes. Each Purchase
of an Undivided Interest from the Seller hereunder, and each
Reinvestment of Collections in Pool Receivables made hereunder,
will constitute (a) a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended, and
(b) a purchase or other acquisition of notes, drafts,
acceptances, open accounts receivable or other obligations
representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of
the Investment Company Act of 1940, as amended.
(o) No Defaults. Neither the Seller nor any
Originator is in default under or with respect to any
contractual obligation or any law or court order in any
respect which would have a reasonable possibility of causing
a material adverse effect on the business, operations, property
or financial or other condition of PLY GEM and its Subsidiaries
taken as a whole, or which could reasonably be expected to cause
a material adverse effect on the ability of the Seller or any
Originator to collect the Pool Receivables or to perform its
obligations under this Agreement, the Originator Purchase
Agreement, the Support Agreement (in the case of PLY GEM), any
Certificate of Assignments or any other Agreement Document.
(p) No Material Adverse Change in Financial Condition.
<PAGE>
Except as disclosed in PLY GEM's Form 10-K for the year ended
December 31, 1993 and Forms 10-Q for the quarters ended April 1,
1994, July 2, 1994 and October 1, 1994, filed pursuant to the
Securities Exchange Act of 1934, as amended, no material adverse
change in the financial condition or operations of the Seller or
any Originator has occurred since December 31, 1993, nor has any
event occurred which materially adversely affects the
collectibility of the Pool Receivables or which could reasonably
be expected to cause a material adverse effect on the ability of
the Seller or any Originator to collect Pool Receivables or the
ability of the Seller or any Originator to perform hereunder.
(q) Servicing Programs. Any and all computer programs
used by any Originator in the servicing of the Receivables Pool
are licensed or sublicensed by the Seller or each Originator, as
applicable.
ARTICLE VII
GENERAL COVENANTS
SECTION 7.01. Affirmative Covenants. From the date hereof
until the date, following the Commitment Termination Date, on
which all Undivided Interests shall be reduced to zero, Seller
and, as to matters relating to it or its business or Pool
Receivables originated by it or its other property, each
Originator will, unless the Agent shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Comply in all respects
with all applicable laws, rules, regulations, orders and
contractual obligations with respect to it, its business and
properties and all Pool Receivables and related Contracts,
noncompliance with which, in the aggregate, could reasonably
be expected to have a material adverse effect on (i) the
financial condition or operations of the Seller or such
Originator, (ii) the Seller's or any Originator's ability to
perform its obligations under this Agreement, the Originator
Purchase Agreement, the Support Agreement (in the case of PLY
GEM), the Certificate of Assignments, or any other Agreement
Documents or (iii) the collectibility of the Receivables.
(b) Conduct of Business and Preservation of Corporate
Existence. Continue to engage in business of the same general
type as now conducted by it, and other businesses related to, or
growing out of, such business, and preserve, renew and keep in
full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business, and comply with all its contractual obligations and all
Requirements of Law; except where such failure would not
materially adversely affect the interests of the Purchaser, the
Owners or the Agent hereunder or in the Pool Receivables or the
ability of the Seller or any Originator to perform their
respective obligations hereunder.
(c) Audits. At any time and from time to time during
regular business hours upon at least one Business Day's notice,
permit the Agent, or its agents or representatives, reasonably,
<PAGE>
(i) to examine and make copies of and abstracts from all books,
records and documents (including, without limitation, computer
tapes and disks) in the possession or under the control of Seller
or any Originator relating to Pool Receivables, including,
without limitation, the related Contracts and purchase orders and
other agreements, and (ii) to visit the offices and properties of
Seller or any Originator for the purpose of examining such
materials described in clause (i) next above, and to discuss
matters relating to Pool Receivables or Seller's or any
Originator's performance hereunder with any of the officers or
employees of Seller or such Originator having knowledge of such
matters.
(d) Keeping of Records and Books of Account. Maintain
and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing
Pool Receivables in the event of the destruction of the originals
thereof), and keep and maintain, all documents, books, records
and other information reasonably necessary or advisable for the
collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification
of each new Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable). As of the date
hereof the Agent confirms that it is not aware of any
inconsistency between the past practices of the Seller and each
Originator with respect to the subject matter of this paragraph
(d) and the required practices and procedures set forth herein.
(e) Performance and Compliance with Receivables and
Contracts. At its expense timely and fully perform and comply
with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the
Pool Receivables and all purchase orders and other agreements
related to such Pool Receivables.
(f) Location of Records. Keep its chief place of
business and chief executive office, and the offices where it
keeps its records concerning the Pool Receivables, all related
Contracts and all purchase orders and other agreements related to
such Pool Receivables (and all original documents relating
thereto), at the address(es) of Seller or any Originator, as the
case may be, referred to in Section 6.01(k) or, upon 30 days'
prior written notice to the Agent, at such other locations in
jurisdictions where all action required by Section 8.05 shall
have been taken and completed.
(g) Credit and Collection Policies. Comply in all
material respects with its Credit and Collection Policy in regard
to each Pool Receivable and the related Contract and otherwise
comply with past business practices in regard to Collections.
(h) Collections. Instruct all Obligors to cause all
Collections of Pool Receivables to be deposited directly with a
Lock-Box Bank; provided, however, that if any Obligor ignores
such instructions and pays amounts in respect of Collections
directly to an Originator, such Originator shall likewise deposit
such Collections with a Lock-Box Bank within 24 hours of receipt
thereof.
(i) Marking of Records. At its expense, mark its
<PAGE>
master data processing records evidencing Pool Receivables and
related Contracts with a legend evidencing that a Certificate of
Assignments related to such Pool Receivables and related
Contracts have been sold in accordance with this Agreement or the
Originator Purchase Agreement, as the case may be.
(j) Nonconsolidation Covenants. Each Originator and
Seller hereby acknowledge that Purchaser and the Agent are
entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity separate from
each Originator. Therefore, from and after the date hereof,
Seller and each Originator shall take all reasonable steps to
continue Seller's identity as a separate legal entity and to make
it apparent to third Persons that Seller is an entity with assets
and liabilities distinct from those of each Originator and any
other Person, and is not a division of PLY GEM, any other
Originator or any other Person. Without limiting the generality
of the foregoing, Seller and each Originator shall take such
actions and PLY GEM shall cause the Seller to take such actions,
as shall be required in order that:
(i) Seller will be a limited purpose corporation
whose primary activities are restricted in its certificate of
incorporation to purchasing Receivables from each Originator,
entering into agreements for the servicing of such Receivables,
selling Undivided Interests in Receivables hereunder and
conducting such other activities as it deems necessary or
appropriate to carry out its primary activities;
(ii) Not less than one member of Seller's Board
of Directors (the "Independent Directors") shall be individuals
who are not directly or indirectly material beneficial
stockholders or officers, directors, employees, affiliates,
associates, customers or suppliers of any Originator or any of
their Affiliates (it being understood that the Independent
Directors may receive reasonable directors' fees from the
Seller). Seller's Board of Directors shall not approve, or take
any other action to cause the commencement of a voluntary case or
other proceeding with respect to Seller under any applicable
bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law, or the appointment of or taking
possession by, a receiver, liquidator, assignee, trustee,
custodian, or other similar official for Seller unless in each
case the Independent Directors shall approve the taking of such
action in writing prior to the taking of such action. To the
extent permitted by applicable law, the Independent Directors'
fiduciary duty shall be to Seller and not to Seller's
shareholders in respect of any decision of the type described in
the preceding sentence. In the event all Independent Directors
resign or otherwise cease to be directors of Seller, there shall
be selected a replacement Independent Director who shall not be
an individual within the proscriptions of the first sentence of
this clause (ii). Seller's certificate of incorporation shall
reflect the requirements of this Section 7.1(j);
(iii) No Independent Director shall at any time
serve as a trustee in bankruptcy for any Originator or any of
their Affiliates (other than Seller);
(iv) All employees, consultants and agents of
<PAGE>
Seller will be compensated from Seller's own bank accounts for
services provided to Seller except as provided herein in respect
of fees payable to the Servicer. Except for incidental purposes
and for consideration that is not material, Seller will engage
no agents other than a Servicer for the Receivables, which
Servicer will be fully compensated for its services to Seller by
payment of the fees payable to the Servicer hereunder;
(v) Servicer will receive a fee as provided in
this Agreement based on the level of Receivables being managed by
Servicer. Seller will not incur any material indirect or
overhead expenses for items shared between Seller and any
Originator or any of their Affiliates (other than Seller) which
are not reflected in the fees payable to the Servicer hereunder.
To the extent, if any, that Seller and any Originator or any
of their Affiliates (other than Seller) share items of expenses
not reflected in the fees payable to the Servicer hereunder, such
as legal, auditing and other professional services, such expenses
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 each Originator shall pay an
equal portion of all expenses relating to the preparation,
negotiation, execution and delivery of this Agreement, the
Originator Purchase Agreement, the Support Agreement and each
other Agreement Document, including, without limitation, legal,
commitment, agency and other fees;
(vi) Seller's operating expenses will be paid by
Seller from its own assets and not by any Originator or any of
their Affiliates (other than Seller);
(vii) Seller's books and records will be
maintained separately from those of each Originator and
each of their Affiliates (other than Seller);
(viii) Seller will have its own financial
statements prepared and any financial statements of PLY
GEM or any of its Affiliates (other than Seller) which are
consolidated to include Seller will contain detailed notes
clearly stating that (A) all of Seller's assets are owned by
Seller, and (B) Seller is a separate corporate entity with
creditors who have received ownership and security interests in
Seller's assets;
(ix) Seller's assets and liabilities will be
maintained in a manner that facilitates their identification and
segregation from those of each Originator or any of their
Affiliates (other than Seller);
(x) Seller will strictly observe corporate
formalities in its dealings with each Originator and
each of their Affiliates, and funds or other assets of Seller
will not be commingled with those of any Originator or any of
their Affiliates (other than Seller). Seller shall not maintain
joint bank accounts or other depository accounts to which any
Originator or any of their Affiliates (other than Seller) has
independent access (other than PLY GEM in its capacity as
Servicer or any Originator in its capacity as subservicer). None
of Seller's funds will at any time be pooled with any funds of
<PAGE>
any Originator or any of their Affiliates (other than Seller);
(xi) Seller shall pay to each Originator the
marginal increase (or, in the absence of such increase, the
market amount of its portion) of the premium payable with respect
to any insurance policy that covers Seller and such Originator or
any of their Affiliates (other than Seller), but Seller shall
not, directly or indirectly, be named or enter into an agreement
to be named, as a direct or contingent beneficiary or loss payee,
under any such insurance policy, with respect to any amounts
payable due to occurrences or events related to such Originator
or any of their Affiliates (other than Seller);
(xii) Seller will maintain arm's length
relationships with each Originator and each of their
Affiliates (other than Seller). If any Originator or any of
their Affiliates (other than Seller) renders or otherwise
furnishes services to Seller, such Person will be compensated by
Seller at market rates for such services. Neither Seller, on the
one hand, nor such Originator or any of their Affiliates (other
than Seller), on the other hand will be or will hold itself
out to be responsible for the debts of the other or the decisions
or actions respecting the daily business and affairs of the
other;
(xiii) Seller and each Originator will each hold
themselves out to the public as separate entities and conduct
business solely in its own name; and
(xiv) At least one officer of Seller will be
independent and not an officer or director of any Originator.
SECTION 7.02. Reporting Requirements. From the date hereof
until the date, following the Commitment Termination Date, on
which all Undivided Interests shall be reduced to zero, PLY GEM
will, unless the Agent shall otherwise consent in writing,
furnish to the Agent:
(a) Quarterly Financial Statements. As soon as
available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of PLY
GEM, copies of PLY GEM's quarterly financial reports, on
Form 10-Q, as filed with the Securities and Exchange Commission
(or if PLY GEM is no longer required to file such Form 10-Q, such
financial reports of PLY GEM containing the information typically
found on Form 10-Q), certified by the chief financial officer,
treasurer or chief accounting officer of PLY GEM; together with a
certificate from such officer containing a computation of, and
showing compliance with, the financial restrictions contained in
Section 7.04 and copies of all information delivered to each bank
pursuant to Section 5.2 of the Bank Credit Agreement.
(b) Annual Financial Statements. As soon as available
and in any event within 120 days after the end of each fiscal
year of PLY GEM, a copy of PLY GEM's Annual Report, on Form 10-K,
as filed with the Securities and Exchange Commission (or if
PLY GEM is no longer required to file such Form 10-K, such
financial reports of PLY GEM containing information typically
found on Form 10-K) and as reported on by nationally recognized
independent certified public accountants; together with (i) a
<PAGE>
certificate from such accountants containing, as applicable, a
computation of the financial restrictions contained in Section
7.04 and a statement that to the best knowledge of such
accountants the restrictions in Section 7.04 have not been
violated and (ii) copies of all information delivered to each
bank pursuant to Section 5.2 of the Bank Credit Agreement.
(c) Reports to Holders and Exchanges. In addition to
the reports required by subsections (a) and (b) next above,
promptly upon the Agent's request, copies of any reports
specified in such request which PLY GEM sends its security
holders generally, and any reports or registration statements
that PLY GEM files with the Securities and Exchange Commission or
any national securities exchange other than registration
statements relating to employee benefit plans and to
registrations of securities for selling security holders.
(d) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event defined in Article IV of ERISA which PLY GEM or
any of its Affiliates files under ERISA with the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which PLY GEM or any of its Affiliates
receives from the Pension Benefit Guaranty Corporation.
(e) Termination Events. As soon as possible and in
any event within five days after the occurrence of each
Termination Event and each Unmatured Termination Event, a written
statement of the chief financial officer, treasurer or chief
accounting officer of Seller setting forth details of such event
and the action that Seller proposes to take with respect thereto.
(f) Litigation. As soon as possible and in any event
within five Business Days of Seller's or any Originator's
knowledge thereof, notice of (i) the commencement of or any
development in any litigation, investigation or proceeding which
may exist at any time which PLY GEM believes could reasonably be
expected to have a material adverse effect on the business,
operations, property or financial condition of Seller or any
Originator or impair the ability of Seller or any Originator to
perform its obligations under this Agreement, the Originator
Purchase Agreement, the Support Agreement (in the case of PLY
GEM) or any other Agreement Document and (ii) any material
adverse development in previously disclosed litigation.
(g) Agreed Upon Procedures and Other. As soon as
available and in any event within 120 days after the end of
each fiscal year of PLY GEM, a report from Price Waterhouse
or other independent certified public accountants or other
auditors acceptable to the Agent (with respect to the fees and
expenses for which Seller's obligation to reimburse Agent shall
not exceed $40,000 per annum), with respect to the application of
certain procedures to Seller's and each Originator's books and
records relating to the Pool Receivables.
(h) Amendment, Waiver, Default, etc. under Bank Credit
Agreement. As soon as available and in any event within five
Business Days of the execution and delivery thereof, a true and
complete copy of each amendment, modification, waiver or consent
under the Bank Credit Agreement to which the requisite financial
<PAGE>
institutions thereunder and PLY GEM, as applicable, have agreed
and, as soon as possible, notice describing with reasonable
specificity (i) any Event of Default under the Bank Credit
Agreement of which the chief financial officer, treasurer or
controller of Ply Gem has knowledge and (ii) any default with
respect to any Indebtedness, described in Section 10.01(d)(ii) or
any Contingent Obligation, instrument or agreement securing or
related thereto, as described in Section 10.01(d)(ii), with
respect to which the chief financial officer, treasurer or
controller of PLY GEM has received notice from any creditor.
(i) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the
Receivables or the condition or operations, financial or
otherwise, of Seller or any Originator as the Agent may from
time to time reasonably request in order to protect the interests
of the Agent or Purchaser under or as contemplated by this
Agreement.
SECTION 7.03. Negative Covenants of Seller and each
Originator. From the date hereof until the date, following the
Commitment Termination Date, on which all Undivided Interests
shall be reduced to zero, neither Seller nor, as to matters
relating to it or its business or Pool Receivables originated by
it or its other property, any Originator will, without the prior
written consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided
herein, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, any Pool Receivable or related
Contract or Related Security, or any interest therein, or any
lock-box account to which any Collections of any Pool Receivable
are sent, or any right to receive income from or in respect of
any of the foregoing.
(b) Extension or Amendment of Receivables. Except as
otherwise permitted in Section 8.02, extend, amend or otherwise
modify the terms of any Pool Receivable, or amend, modify or
waive any term or condition of any Contract related thereto.
(c) Change in Business or Credit and Collection
Policy. Cease to engage in business of the same general
type now conducted by it, and other businesses related to, or
growing out of such business, or make any material change in the
Credit and Collection Policy. Without limiting the foregoing,
the Seller or any Originator shall notify the Agent of any change
made to the Credit and Collection Policy within 20 calendar days
of such change being implemented. The Agent will have been
deemed to have provided the required written consent to any
material change to the Credit and Collection Policy if notified
within the aforementioned 20 calendar day period and not objected
to within 30 calendar days by the Agent.
(d) Change in Payment Instructions to Obligors. Add
or terminate any bank as a Lock-Box Bank from those listed in
Schedule 6.01(l) or make any change in its instructions to
Obligors regarding payments to be made to any Originator, Seller
or Servicer or payments to be made to any Lock-Box Bank, unless
arrangements reasonably satisfactory to the Agent shall have been
<PAGE>
made to ensure continuity of the deposit of Collections with the
applicable Lock-Box Bank, the Agent shall have received notice of
such addition, termination or change and duly executed copies of
Lock-Box Agreements with each new Lock-Box Bank.
(e) Deposits to Special Accounts. Deposit or
otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other
than Collections of Pool Receivables.
(f) Amendments and Modifications. Amend, supplement,
amend and restate, or otherwise modify the Originator Purchase
Agreement, the Support Agreement (in the case of PLY GEM), any
Lock-Box Agreement, the Seller Notes, the Ply Gem Note or
Seller's certificate of incorporation or by-laws, or waive any of
the provisions thereof unless such modification or waiver is made
both (i) in accordance with the terms of such document,
instrument or agreement and (ii) with the written consent of
Purchaser and Agent.
SECTION 7.04. Negative Covenants of Seller. From the date
hereof until the date, following the Commitment Termination Date,
on which all Undivided Interests shall be reduced to zero, Seller
will not, without the prior written consent of the Agent:
(a) Incurrence of Indebtedness and Investments. Incur
or permit to exist (i) any indebtedness or liability of the
Seller (except for the Seller Notes) or (ii) any investment
or equity contribution by the Seller on account of deposits
or advances or for borrowed money or for the deferred purchase
price of any property or services, except (x) indebtedness for
current accounts payable arising in the ordinary course of
business, and (y) other indebtedness and investments outstanding
on the date hereof and listed in Schedule 7.04(a).
(b) Mergers, Acquisitions, Sales, etc. Be a party to
any merger or consolidation, or 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 in, any other
Person, or, sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without
recourse any Receivables or any interest therein (other than
pursuant hereto).
(c) Restricted Payments. Purchase or redeem, or
permit any of its Affiliates to purchase or redeem, any
shares of the capital stock of Seller, declare or pay any
dividends thereon (other than stock dividends), make any
distribution to stockholders or set aside any funds for any
such purpose, or prepay, purchase or redeem, or permit any of its
Affiliates to purchase, any subordinated indebtedness of Seller
(except for the Seller Notes).
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer. (a) PLY GEM as
Initial Servicer. The servicing, administering and collection of
<PAGE>
the Pool Receivables shall be conducted by the Person designated
as Servicer hereunder ("Servicer") from time to time in
accordance with this Section 8.01. Until the Agent gives to
Seller a Successor Notice (as defined in Section 8.01(b)), PLY
GEM is hereby designated as, and hereby agrees to perform the
duties and obligations of, Servicer pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon PLY
GEM's receipt of a notice from the Agent of the Agent's
designation of a new Servicer (a "Successor Notice"), PLY GEM
agrees that it will terminate its activities as Servicer
hereunder in a manner that the Agent believes will facilitate the
transition of the performance of such activities to the new
Servicer, and the Agent (or, its designee) shall assume each and
all of PLY GEM's said obligations to service and administer such
Receivables, on the terms and subject to the conditions herein
set forth, and PLY GEM shall use its best efforts to assist the
Agent (or its designee) in assuming such obligations. The Agent
agrees not to give PLY GEM a Successor Notice until after the
occurrence and during the continuance of any Termination Event
listed in any of clauses (a), (e), (f), (g), (h), (i), (j), (k),
(l) or (n) of Section 10.01 or until the occurrence of the
Commitment Termination Date or any event which, in the reasonable
opinion of the Agent, could have a material adverse effect on PLY
GEM's ability to perform its obligations as Servicer hereunder
(any such Termination Event or other event being herein called a
"Servicer Transfer Event"), in which case such Successor Notice
may be given at any time in the Agent's discretion. If PLY GEM
disputes the occurrence of a Servicer Transfer Event, PLY GEM may
take appropriate action to resolve such dispute; provided that
PLY GEM must terminate its activities hereunder as Servicer and
allow the newly designated Servicer to perform such activities on
the date provided by the Agent as described above,
notwithstanding the commencement or continuation of any
proceeding to resolve the aforementioned dispute.
(c) Subcontracts. Servicer may, with the prior consent of
the Agent, subcontract with any other Person (including any
Originator, to which the Agent hereby consents) for servicing,
administering or collecting the Pool Receivables, provided that
such Person agrees to conduct such duties in accordance with the
terms of this Agreement and provided, further, that Servicer
shall remain liable for the performance of the duties and
obligations of Servicer pursuant to the terms hereof.
SECTION 8.02. Duties of Servicer. (a) Appointment; Duties
in General. Each of Seller, Purchaser and the Agent hereby
appoints as its agent Servicer, as from time to time designated
pursuant to Section 8.01, to enforce its rights and interests in
and under the Pool Receivables, the Related Security and the
Contracts. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool
Receivable from time to time, all in accordance with applicable
laws, rules and regulations, with reasonable care and diligence,
and in accordance with the Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall
set aside for the account of Seller and Purchaser their
respective allocable shares of the Collections of Pool
Receivables in accordance with Sections 3.01 and 3.02 but shall
<PAGE>
not be required (unless otherwise requested by the Agent, and
subject to Section 3.07) to segregate the funds constituting such
portions of such Collections, or to segregate the respective
allocable shares of Purchaser and any Program Support Party, if
applicable, prior to the remittance thereof in accordance with
such Sections. If instructed by the Agent at any time following
the occurrence and during the continuance of a Termination Event
or following the occurrence of the Commitment Termination Date,
Servicer shall segregate and deposit with a bank (which may be
BofA) designated by the Agent such allocable shares of
Collections of Pool Receivables, set aside for Purchaser, any
Program Support Party and any other assignee from Purchaser of
any Undivided Interest, on the first Business Day following
receipt by Servicer of such Collections in immediately available
funds.
(c) Modification of Receivables. So long as no Termination
Event or Unmatured Termination Event shall have occurred and be
continuing, PLY GEM, while it is Servicer, may, in accordance
with the Credit and Collection Policy, (i) extend the maturity or
adjust the Unpaid Balance of any Defaulted Receivable as PLY GEM
may determine to be appropriate to maximize Collections thereof;
provided that, no such extension shall be for more than a total
of 30 days or cause any Defaulted Receivable to be an Eligible
Receivable and, after giving effect to such extension of
maturity, the Aggregate Required Allocations will not exceed the
Required Allocations Limit, and (ii) adjust the Unpaid Balance of
any Receivable to reflect the reductions or cancellations
described in the first sentence of Section 3.03(a).
(d) Documents and Records. Seller and each Originator
shall deliver to Servicer, and Servicer shall hold in trust for
Seller and Purchaser in accordance with their respective
interests, all documents, instruments and records (including,
without limitation, computer tapes or disks) that evidence or
relate to Pool Receivables.
(e) Certain Duties to Seller. Servicer shall, as soon as
practicable following receipt, turn over to Seller (i) that
portion of Collections of Pool Receivables representing its
undivided interest therein, less, in the event Seller or an
Affiliate of the Seller is not the Servicer, all reasonable and
appropriate out-of-pocket costs and expenses of Servicer of
servicing, collecting and administering the Pool Receivables to
the extent not covered by the Servicer's Fee received by it, and
(ii) the Collections of any Receivable which is not a Pool
Receivable. Servicer, if other than Seller or an Affiliate of
the Seller, shall, as soon as practicable upon demand, deliver to
Seller all documents, instruments and records in its possession
that evidence or relate to Receivables of Seller other than Pool
Receivables, and copies of documents, instruments and records in
its possession that evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this
Agreement shall terminate upon receipt by the Agent, after the
Commitment Termination Date, of an amount equal to the Aggregate
Purchaser's Investment plus accrued Earned Discount for each
Undivided Interest plus all other amounts owed to the Agent and
Purchaser and (unless otherwise agreed to by the Agent and
Servicer) Servicer under this Agreement.
<PAGE>
SECTION 8.03. Rights of the Agent. (a) Notice to
Obligors. At any time following the occurrence and during the
continuance of a Termination Event or following the occurrence of
the Commitment Termination Date, the Agent may notify the
Obligors of Pool Receivables, or any of them, of the ownership of
Undivided Interests by Purchaser.
(b) Notice to Lock-Box Banks. At any time following the
earliest to occur of (i) the occurrence of a Termination Event,
(ii) any of the Conditions Precedent shall not be satisfied and
the Agent shall have requested implementation of the Settlement
procedures set forth in Section 3.02, and (iii) the date five
days after the Agent shall have provided notice to Seller that
the warranty in Section 6.01(p) shall no longer be true, the
Agent is hereby authorized to give notice to the Lock-Box Banks,
as provided in the Lock-Box Agreements, of the transfer to the
Agent of dominion and control over the lock-box accounts to which
the Obligors of Pool Receivables make payments. Seller hereby
transfers to the Agent, effective when the Agent shall give
notice to the Lock-Box Banks as provided in the Lock-Box
Agreements, the exclusive dominion and control over such lock-box
accounts, and shall take any further action that the Agent may
reasonably request to effect such transfer.
(c) Rights on Servicer Transfer Event. At any time
following the designation of a Servicer other than PLY GEM or
Seller pursuant to Section 8.01:
(i) The Agent may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable
under any Pool Receivable directly to the Agent or its designee.
(ii) Seller and each Originator shall, at the Agent's
request and at Seller's expense, give notice of such ownership to
each said Obligor and direct that payments be made directly to
the Agent or its designee.
(iii) Seller and each Originator shall, at the Agent's
request, (A) assemble all of the documents, instruments and
other records (including, without limitation, computer programs,
tapes and disks) which evidence the Pool Receivables, and the
related Contracts and Related Security, or which are otherwise
necessary or desirable to collect such Pool Receivables, and
shall make the same available to the Agent at a place selected by
the Agent or its designee, and (B) segregate all cash, checks and
other instruments received by it from time to time constituting
Collections of Pool Receivables in a manner acceptable to the
Agent and shall, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(iv) Each of Seller, each Originator and Purchaser
hereby authorizes the Agent to take any and all steps in Seller's
or any Originator's name and on behalf of Seller, each Originator
and Purchaser which are necessary or desirable, in the reasonable
determination of the Agent, to collect all amounts due under any
and all Pool Receivables, including, without limitation,
endorsing Seller's or any Originator's name on checks and other
instruments representing Collections and enforcing such Pool
<PAGE>
Receivables and the related Contracts.
SECTION 8.04. Responsibilities of Seller. Anything herein
to the contrary notwithstanding:
(a) Seller and each Originator shall perform all of
its obligations under the Contracts related to the Pool
Receivables and under the related purchase orders and other
agreements to the same extent as if Undivided Interests had
not been sold hereunder and the exercise by the Agent of its
rights hereunder shall not relieve Seller or such Originator
from such obligations.
(b) Neither the Agent nor Purchaser shall have any
obligation or liability with respect to any Pool Receivables,
Contracts related thereto or any other related purchase orders or
other agreements, nor shall any of them be obligated to perform
any of the obligations of Seller or any Originator thereunder.
(c) Seller and each Originator hereby grant to
Servicer an irrevocable power of attorney, with full power
of substitution, coupled with an interest, to take in the name of
Seller or any Originator all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by Seller
or any Originator or transmitted or received by Purchaser
(whether or not from Seller) in connection with any Receivable.
SECTION 8.05. Further Action Evidencing Purchases.
(a) Seller agrees that from time to time, at Seller's expense,
it will promptly execute and deliver all further instruments and
documents, and take all further action that the Agent may
reasonably request in order to perfect, protect or more fully
evidence the Purchases hereunder and the resulting Undivided
Interests, or to enable Purchaser or the Agent to exercise or
enforce any of their respective rights hereunder or under the
Certificate of Assignments. Without limiting the generality of
the foregoing, Seller will upon the request of the Agent:
(i) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and
such other instruments or notices, as may be necessary or
appropriate;
(ii) mark conspicuously each Contract evidencing each
Pool Receivable with a legend, acceptable to the Agent,
evidencing that such Undivided Interests have been sold in
accordance with this Agreement; and
(iii) mark its master data processing records
evidencing such Pool Receivables and related Contracts with
such legend.
(b) Seller hereby authorize the Agent to file one or more
financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool
Receivables and the Related Security now existing or hereafter
arising in the name of Seller. If Seller fails to perform any of
its agreements or obligations under this Agreement, the Agent may
(but shall not be required to) itself perform, or cause
<PAGE>
performance of, such agreement or obligation, and the expenses of
the Agent incurred in connection therewith shall be payable by
Seller as provided in Section 13.01.
(c) Without limiting the generality of subsection (a),
Seller will, not earlier than six (6) months and not later than
three (3) months from the fifth anniversary of the date of filing
of the financing statement referred to in Section 5.01(f) or any
other financing statement filed pursuant to this Agreement or in
connection with any Purchase hereunder, unless the Commitment
Termination Date shall have occurred and all Undivided Interests
shall have been reduced to zero
(i) execute and deliver and file or cause to be filed
an appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to the Agent an
opinion of the counsel for Seller referred to in Section 5.01(j)
(or other counsel for Seller reasonably satisfactory to the
Agent), in form and substance reasonably satisfactory to the
Agent, confirming and updating the opinion delivered pursuant to
Section 5.01(j) with respect to the matters set forth in
paragraph no. 7 of Exhibit 5.01(j) and otherwise to the effect
that all of the Undivided Interests hereunder continue to be
first and prior perfected security interests.
SECTION 8.06. Application of Collections. Any payment by
an Obligor in respect of any indebtedness owed by it to Seller or
any Originator shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless the
Agent instructs otherwise, be applied as a Collection of any Pool
Receivable or Receivables of such Obligor to the extent of any
amounts then due and payable thereunder before such payment is
applied to any other indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all
obligations of Seller arising in connection with this Agreement
and each other Agreement Document to which it is a party, whether
now or hereafter existing, due or to become due, direct or
indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received, fees and Earned
Discount, in each case pro rata according to the respective
amounts thereof, Seller hereby assigns and grants to Purchaser a
security interest in all of Seller's right, title and interest
(including specifically any undivided interest retained by Seller
hereunder) now or hereafter existing in, to and under the
Originator Purchase Agreement (including, without limitation, the
security interest granted thereunder by each Originator in its
Receivables and certain related assets to Seller), the Ply Gem
Note, all the Pool Receivables, the Related Security and all
Collections with regard thereto.
SECTION 9.02. Further Assurances. The provisions of
<PAGE>
Section 8.05 shall apply to the security interest granted under
Section 9.01 as well as to the Purchases and all Undivided
Interests hereunder.
SECTION 9.03. Remedies. Upon the occurrence of a
Termination Event, Purchaser shall have, with respect to the
collateral granted pursuant to Section 9.01, and in addition to
all other rights and remedies available to Purchaser or the Agent
under this Agreement or other applicable law, all the rights and
remedies of a secured party upon default under the UCC.
ARTICLE X
TERMINATION EVENTS
SECTION 10.01. Termination Events. If any of the following
events ("Termination Events") shall occur:
(a) (i) Servicer (if Seller or an Affiliate of Seller)
shall fail to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clause (ii) next
following) and such failure shall remain unremedied for five
Business Days after the Servicer shall have been notified by
Purchaser or the Agent or its chief financial officer, treasurer
or controller have acquired knowledge thereof or (ii) Servicer
(if Seller or an Affiliate of Seller) or Seller (if not Servicer)
shall fail to make any payment or deposit to be made by it
hereunder when due and such amount shall remain unpaid for two
Business Days; or
(b) Any representation or warranty made or deemed to
be made by Seller (or any of its officers) or any Originator
(or any of its officers) under or in connection with this
Agreement, the Originator Purchase Agreement, the Support
Agreement (in the case of PLY GEM), any other Agreement Document
or any Periodic Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in
any material respect when made; or
(c) Seller or any Originator shall fail to perform or
observe any other term, covenant or agreement contained in this
Agreement, the Originator Purchase Agreement, the Support
Agreement (in the case of PLY GEM), any other Agreement Document
on its part to be performed or observed and any such failure
shall remain unremedied for ten Business Days after written
notice thereof shall have been given by the Agent to Seller; or
(d) (i) An Event of Default shall have occurred and be
continuing under the Bank Credit Agreement; or (ii) with respect
to any Indebtedness (other than the notes issued under the Bank
Credit Agreement) which Indebtedness is in an aggregate principal
amount equal to or greater than $10,000,000 or in the payment of
any Contingent Obligation (other than any guaranty in favor of
the financial institutions party to the Bank Credit Agreement)
relating to any primary obligation the aggregate principal amount
of which is equal to or greater than $10,000,000 PLY GEM or any
of its Subsidiaries shall (A) default in the payment of principal
of or interest on any such Indebtedness or Contingent Obligation
beyond the period of grace, if any, provided in the instrument or
<PAGE>
agreement under which such Indebtedness or Contingent Obligation
was created, or (B) default in the observance or performance of
any other agreement or condition relating to any such
Indebtedness (other than the notes issued under the Bank Credit
Agreement) or Contingent Obligations (other than the guaranty in
favor of the financial institutions party to the Bank Credit
Agreement) 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 described in either clause (i) or (ii)
of this paragraph is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, such
Indebtedness to become due prior to its stated maturity or such
Contingent Obligation to become payable; unless, in any such
case, under this clause (d), such Event of Default or default or
other event or condition is waived by the holder of such
Indebtedness or the beneficiary of such Contingent Obligation; or
(e) A Change of Control shall occur; or
(f) An Event of Bankruptcy shall have occurred and
remained continuing with respect to Seller or any Originator; or
(g) (i) Any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental
proceedings not disclosed in writing by Seller to the Agent
and Purchaser prior to the date of execution and delivery of
this Agreement is pending against Seller or any Originator,
or (ii) any material development not so disclosed has occurred in
any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the
reasonable opinion of the Agent, is likely to materially
adversely affect the financial position or business of Seller or
any Originator or impair the ability of Seller or any Originator
to perform its obligations under this Agreement, the Originator
Purchase Agreement, the Support Agreement (in the case of PLY
GEM) or any other Agreement Document; or
(h) At any time, the Aggregate Required Allocations
shall exceed the Required Allocations Limit and such default
shall remain uncured (by payments of Collections or other funds
of the Seller) for a period of 3 Business Days; or
(i) The Default Ratio exceeds 10% for any period of 60
consecutive days; or
(j) The Losses to Liquidations Ratio exceeds 3.0%; or
(k) The Dilution Ratio exceeds 7.5%; or
(l) There shall have occurred any event which
materially adversely affects the collectibility of the Pool
Receivables or there shall have occurred any other event which
materially adversely affects the ability of Seller, any
Originator or Servicer to collect Pool Receivables or the ability
of Seller, any Originator or Servicer to perform hereunder or the
warranty in Section 6.01(p) shall not be true at any time; or
<PAGE>
(m) The Internal Revenue Service shall file notice of
a lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any of the assets of Seller and such lien shall
not have been released within 30 days, or the Pension Benefit
Guaranty Corporation shall, or shall indicate its intention to,
file notice of a lien pursuant to Section 4068 of the Employee
Retirement Income Security Act of 1974 with regard to any of the
assets of Seller or any Originator; or
(n) The Seller's Tangible Net Worth shall be less than
$4,900,000 for more than five Business Days after the earlier of
(x) notice to the Seller or (y) the Seller becomes aware of same.
SECTION 10.02. Remedies. (a) Optional Termination. Upon
the occurrence of a Termination Event (other than a Termination
Event described in subsection (f) of Section 10.01), the Agent
shall, at the request, or may with the consent, of Purchaser, by
notice to Seller declare the Commitment Termination Date to have
occurred.
(b) Automatic Termination. Upon the occurrence of a
Termination Event described in subsection (f) of Section 10.01,
the Commitment Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event; provided
however, that with respect to any proceeding instituted against
Seller pursuant to 11 U.S.C. Section 303 (an "Involuntary Federal
Proceeding"), the settlement procedures described in Section 3.02
shall become applicable upon the commencement of such Proceeding
and no further Purchases or Reinvestments of Collections shall be
made; and provided, further, that if such Involuntary Federal
Proceeding is dismissed within 60 days after its commencement,
and if no other Termination Event has occurred, then following
such dismissal, the Commitment shall be reinstated as if the
Commitment Termination Date had not occurred upon the
commencement of such Involuntary Federal Proceeding.
(c) Additional Remedies. Upon any termination of the
facility pursuant to this Section 10.02, the Agent and Purchaser
shall have, in addition to all other rights and remedies under
this Agreement, the Originator Purchase Agreement, the Support
Agreement and any other Agreement Document or otherwise, all
other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights
shall be cumulative. Without limiting the foregoing or the
general applicability of Article XII hereof, (i) the occurrence
of a Termination Event shall not deny to Purchaser any remedy in
addition to termination of the Commitment to which Purchaser may
be otherwise appropriately entitled, whether at law or in equity,
and (ii) following the occurrence of any Termination Event
Purchaser may elect to assign to any Person any Undivided
Interest owned by Purchaser.
ARTICLE XI
THE AGENT
SECTION 11.01. Authorization and Action. Purchaser hereby
appoints and authorizes the Agent to take such action as agent on
<PAGE>
its behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto.
SECTION 11.02. Agent's Reliance, Etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or the
Agent under or in connection with this Agreement (including,
without limitation, the servicing, administering or collecting
Pool Receivables as Servicer pursuant to Section 8.01), except
for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent:
(a) may consult with legal counsel (including counsel for
Seller), independent certified public accountants and other
experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts;
(b) makes no warranty or representation to Purchaser or any other
holder of any interest in Pool Receivables and shall not be
responsible to Purchaser or any such other holder for any
statements, warranties or representations made in or in
connection with this Agreement, the Originator Purchase
Agreement, the Support Agreement or any other Agreement Document;
(c) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of Seller or any
Originator or to inspect the property (including the books and
records) of Seller or any Originator; (d) shall not be
responsible to Purchaser or any other holder of any interest in
Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement, the Originator Purchase Agreement, the Support
Agreement, the Certificate of Assignments or any other Agreement
Document; and (e) shall incur no liability under or in respect of
this Agreement, the Originator Purchase Agreement, the Support
Agreement or any other Agreement Document by acting upon any
notice (including notice by telephone), consent, certificate or
other instrument or writing (which may be by facsimile or telex)
believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 11.03. Agent and Affiliates. BofA and its
Affiliates may generally engage in any kind of business with
Seller, any Originator or any Obligor, any of their respective
Affiliates and any Person who may do business with or own
securities of Seller, any Originator or any Obligor or any of
their respective Affiliates, all as if BofA were not the Agent
and without any duty to account therefor to Purchaser or any
other holder of an interest in Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments. (a) Neither
Seller nor Purchaser may assign its rights hereunder or any
interest herein without the prior written consent of the Agent,
and Purchaser may not assign any Undivided Interest (or portion
thereof) to any Person without the prior written consent of
<PAGE>
Seller; provided, however, that
(i) Purchaser may assign, or grant a security
interest in, any Undivided Interest (or portion thereof) to
BofA, any Program Support Provider (or any successor of any
thereof by merger, consolidation or otherwise), any Affiliate of
BofA or any Program Support Provider (which may then assign any
Undivided Interest (or portion thereof) so assigned or any
interest therein to such party or parties as it may choose;
provided that Seller shall not be required to pay any amount
under Section 4.02 with respect to such party or parties in
excess of the amount for which Seller would be responsible if
such assignment to such party or parties had not been made); and
(ii) Purchaser may assign and grant a security
interest in any interest in, to and under any Undivided
Interest, this Agreement and the other Agreement Documents to
BofA, as Collateral Trustee, and any successor in such capacity,
to secure Purchaser's obligations under or in connection with the
Commercial Paper Notes, any Program Support Agreement, and
certain other obligations of Purchaser incurred in connection
with the funding of the Purchases and Reinvestments hereunder,
which assignment and grant of a security interest shall not be
considered an "assignment" for purposes of Section 12.01(b),
Section 12.03 or 12.04 or, prior to the enforcement of such
security interest, for purposes of any other provision of this
Agreement.
(b) Seller agrees to advise the Agent within five Business
Days after notice to Seller of any proposed assignment by
Purchaser of any Undivided Interest (or portion thereof), not
otherwise permitted under subsection (a), of Seller's consent or
non-consent to such assignment. If Seller does not consent to
such assignment, Purchaser may immediately assign such Undivided
Interest (or portion thereof) to BofA, any Program Support
Provider or any Affiliate of BofA or any Program Support
Provider. All of the aforementioned assignments shall be upon
such terms and conditions as Purchaser and the assignee may
mutually agree.
SECTION 12.02. Rights of Assignee. Upon the assignment by
Purchaser of any Undivided Interest (or portion thereof) in
accordance with this Article XII, (a) the assignee receiving such
assignment shall have all of the rights of Purchaser hereunder
with respect to such Undivided Interest (or such parties thereof)
and (b) all references to Purchaser in Section 4.02 shall be
deemed to apply to such assignee to the extent of its interest in
the related Purchaser's Investment and the related Collections.
SECTION 12.03. Allocation of Payments. If on any date
there are sufficient funds in the Agent's account to distribute a
portion, but not all, of the amounts payable pursuant to
subsection (c)(i) of either Section 3.01 or Section 3.02 and, due
to any assignment of any Undivided Interest (or portion thereof),
such amounts are payable to more than one Person, then (unless
otherwise agreed between such Persons) (a) if any of such Persons
is a Program Support Provider, as assignee of or holder of a
security interest in such Undivided Interest pursuant to a
Program Support Agreement, then the Agent shall distribute such
funds (i) first to such Program Support Provider, to the extent
<PAGE>
of its interest in such Undivided Interest (or shall hold such
funds in trust for Liquidity Bank pending distribution in
accordance with the applicable Program Support Agreement) and
(ii) second to any Program Support Provider, to the extent of its
accrued and unpaid interest in any other Undivided Interest (or
shall hold such funds in trust for such Program Support Provider
pending distribution in accordance with the applicable Program
Support Agreement), before distributing any such funds to any
other Person, and (b) in all other cases, the Agent shall
distribute funds to such Persons pro rata based upon the amounts
so payable to such Persons.
SECTION 12.04. Notice of Assignment. Purchaser shall
provide notice to Seller of any assignment of any Undivided
Interest (or portion thereof) by Purchaser to any assignee, other
than an assignment to a Program Support Provider pursuant to an
applicable Program Support Agreement or to the Collateral
Trustee.
SECTION 12.05. Evidence of Assignment; Endorsement on
Certificate. Any assignment of any Undivided Interest (or
portion thereof) to any Person may be evidenced by an instrument
of assignment in the form of Exhibit 12.05 or by such other
instrument(s) or document(s) as may be satisfactory to Purchaser,
the Agent and the assignee. Purchaser authorizes the Agent to,
and the Agent agrees that it shall, endorse the Certificate of
Assignments to reflect any assignments made pursuant to this
Article XII or otherwise.
SECTION 12.06. Rights of Program Support Provider and
Collateral Trustee. Seller hereby agrees that, upon notice to
Seller, a Program Support Provider and the Collateral Trustee
referred to in Section 12.01, or either of them, may exercise all
the rights of the Agent hereunder, in the case of a Program
Support Provider, with respect to Undivided Interests, and
Collections with respect thereto, which have been assigned (or in
which a security interest has been granted) to such Program
Support Provider, and in the case of such Collateral Trustee,
with respect to all Undivided Interests (or portions thereof),
and Collections with respect thereto, which are owned by
Purchaser (and not subject to an assignment or security interest
in favor of such Program Support Provider under a Program Support
Agreement), and all other rights and interests of Purchaser in,
to or under this Agreement, the Originator Purchase Agreement,
the Support Agreement or any other Agreement Document. Without
limiting the foregoing, upon such notice such Program Support
Provider and such Collateral Trustee, or either of them, may
request Servicer to segregate Purchaser's and Program Support
Provider's allocable shares of Collections from Seller's
allocable share, and from each other's allocable share, in
accordance with Section 8.02(a), may give a Successor Notice
pursuant to Section 8.01(a), may give or require the Agent to
give notice to the Lock-Box Banks as referred to in
Section 8.03(a), and may direct the Obligors of Pool Receivables
to make payments in respect thereof directly to an account
designated by them (provided that such Program Support Provider
and such Collateral Trustee together shall designate a single
account for the making of such payments with respect to any Pool
Receivable), in each case, to the same extent as the Agent might
have done.
<PAGE>
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller and each Originator.
(a) General Indemnity. Without limiting any other rights which
any such Person may have hereunder or under applicable law, each
Originator, as to matters relating to it or its business or Pool
Receivables originated by it or its other property, hereby
severally agrees, and the Seller hereby agrees, to indemnify each
of the Agent, Purchaser, each Program Support Provider, BofA,
each of BofA's Affiliates, their respective successors,
transferees, participants and assigns and all officers,
directors, shareholders, controlling persons, employees and
agents of any of the foregoing (each an "Indemnified Party"),
forthwith on demand, from and against any and all damages,
losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of
the foregoing being collectively referred to as "Indemnified
Amounts") awarded against or incurred by any of them arising out
of or relating to this Agreement, the Originator Purchase
Agreement, the Support Agreement, any other Agreement Documents
or the ownership or funding of any Undivided Interest or in
respect of any Receivable or any Contract, excluding, however,
(a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of the Agent,
Purchaser or such Indemnified Party and (b) recourse (except as
otherwise specifically provided in this Agreement) for Defaulted
Receivables. The Agent and the Purchaser each hereby
acknowledges that commercially reasonable efforts shall be made
by it to promptly notify the Seller after it requires any
knowledge of any event or condition which could reasonably be
expected to result in an Indemnified Amount being payable;
provided, that the failure to so notify the Seller shall not
impair or otherwise affect the rights of any Indemnified Party to
be indemnified for all Indemnified Amounts under this Section
13.01, it being understood that the immediately preceding proviso
shall not prejudice any claim by Seller for damages if such
failure materially and adversely affects the rights and
obligations of Seller or any Originator. Without limiting the
foregoing, each Originator, as to matters relating to it or its
business or Pool Receivables originated by it or its other
property, hereby severally agrees, and the Seller hereby agrees,
to indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:
(i) the transfer by Seller of any interest in any
Receivable other than the transfer of an Undivided Interest
to Purchaser pursuant to this Agreement and the grant of a
security interest to Purchaser pursuant to Section 9.01;
(ii) the breach of any representation or warranty made
by Seller or any Originator (or any of their respective officers)
under or in connection with this Agreement, the Originator
Purchase Agreement, the Support Agreement, any other Agreement
Documents, any Periodic Report or any other information or report
delivered by Seller or any Originator pursuant hereto, which
shall have been false or incorrect in any material respect when
<PAGE>
made or deemed made;
(iii) the failure by Seller or any Originator to comply
with any applicable law, rule or regulation with respect to
any Pool Receivable or the related Contract, or the nonconformity
of any Pool Receivable or the related Contract with any such
applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in
Purchaser an undivided percentage ownership interest, to the
extent of each Undivided Interest owned by it hereunder, in
the Receivables in, or purporting to be in, the Receivables
Pool, free and clear of any Adverse Claim, other than an Adverse
Claim arising solely as a result of an act of Purchaser, any
assignee from Purchaser or the Agent (when used in this
clause (iv), an Adverse Claim shall include any lien for taxes
whether accrued and payable or not), whether existing at the time
of any Purchase or Reinvestment of such Undivided Interest or at
any time thereafter;
(v) 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 receivables in, or purporting to be in,
the Receivables Pool, whether at the time of any Purchase or
Reinvestment or at any time thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such
Receivable's or the related Contract's not being a legal, valid
and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the
sale of the merchandise or services related to such Receivable or
the furnishing or failure to furnish such merchandise or
services;
(vii) any failure of Seller, any Originator or the
Servicer to perform its duties or obligations in accordance
with the provisions of Article VIII;
(viii) any breach of warranty or products liability
claim arising out of or in connection with merchandise or
services that are the subject of any Pool Receivable; or
(ix) any tax or governmental fee or charge (but not
including taxes upon or measured by net income), all interest and
penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of
counsel in defending against the same, which may arise by reason
of the purchase or ownership of any Undivided Interest, or any
other interest in the Pool Receivables or in any goods which
secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any
Indemnified Party shall have notice of any attempt to impose or
collect any tax or governmental fee or charge for which
indemnification will be sought from Seller or any Originator
under Section 13.01(a)(ix), such Indemnified Party shall give
<PAGE>
prompt and timely notice of such attempt to Seller and Seller or
such Originator shall have the right, at its expense, to conduct
or participate in any proceedings resisting or objecting to the
imposition or collection of any such tax, governmental fee or
charge. Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into
account any tax consequences to the Indemnified Party of the
payment of any of the aforesaid taxes and the receipt of the
indemnity provided hereunder or of any refund of any such tax
previously indemnified hereunder, including the effect of such
tax or refund on the amount of tax measured by net income or
profits which is or was payable by the Indemnified Party.
(c) Contribution. If for any reason the indemnification
provided above in this Section 13.01 is unavailable to an
Indemnified Party or is insufficient to hold an Indemnified Party
harmless, then each of Seller and each Originator severally
agrees to contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on
the one hand and Seller and each Originator on the other hand but
also the relative fault of such Indemnified Party as well as any
other relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement nor consent to any departure by
Seller or any Originator therefrom shall in any event be
effective unless the same shall be in writing and signed by
(a) Seller, the Agent and Purchaser (with respect to an
amendment) or (b) the Agent and Purchaser (with respect to a
waiver or consent by any of them) or Seller (with respect to a
waiver or consent by Seller or any Originator), as the case may
be, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given.
SECTION 14.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including Telex and facsimile
communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or by Telex, or by facsimile, to
the intended party at the address or Telex or facsimile number of
such party set forth under its name on the signature pages hereof
or at such other address or Telex or facsimile number as shall be
designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective,
(a) if personally delivered, when received, (b) if sent by
certified mail, three Business Days after having been deposited
in the mail, postage prepaid, (c) if sent by overnight courier,
one Business Day after having been given to such courier, (d) if
transmitted by Telex, when sent, answerback confirmed, and (e) if
transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means, except that notices and
communications pursuant to Article I shall not be effective until
<PAGE>
received.
SECTION 14.03. No Waiver; Remedies. No failure on the
part of the Agent, any Affected Party, any Indemnified Party,
Purchaser or any other holder of any Undivided Interest to
exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Without limiting the foregoing, each
of BofA and each Program Support Provider is hereby authorized by
Seller and each Originator at any time and from time to time, on
any day (i) which is a Run Off Day or (ii) on which an event has
occurred and is continuing that constitutes an Event of
Termination, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
indebtedness at any time owing by BofA and any Program Support
Provider to or for the credit or the account of Seller or any
Originator, now or hereafter existing under this Agreement, the
Originator Purchase Agreement, the Support Agreement or any other
Agreement Documents, to the Agent, any Affected Party, any
Indemnified Party or Purchaser, or their respective successors
and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement
shall be binding upon and inure to the benefit of Seller, each
Originator, the Agent, Purchaser and their respective successors
and assigns, and the provisions of Section 4.02 and Article XIII
shall inure to the benefit of the Affected Parties and the
Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in the
foregoing shall be deemed to authorize any assignment not
permitted by Section 12.01. 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 such time, after the Commitment Termination Date, as
all Undivided Interests shall have been reduced to zero. The
rights and remedies with respect to any breach of any
representation and warranty made by Seller and each Originator
pursuant to Article VI and the indemnification and payment
provisions of Article XIII and Sections 4.02, 14.05, 14.06
and 14.07 shall be continuing and shall survive any termination
of this Agreement. After (i) the Commitment Termination Date
shall have occurred, (ii) all Undivided Interests shall have been
reduced to zero, (iii) the Earned Discount and Servicing Fee for
all Undivided Interests shall have been received by the parties
entitled thereto and (iv) all other amounts payable under this
Agreement and the other Agreement Documents shall have been paid
in full, the Agent shall, at the request and expense of the
Seller, execute and deliver to the Seller such documents as the
Seller shall reasonably request to evidence the termination of
such Undivided Interests, including, without limitation, UCC
termination statements.
SECTION 14.05. Costs, Expenses and Taxes. In addition to
its obligations under Article XIII, Seller and each Originator
severally agree to pay on demand its respective allocable portion
of:
<PAGE>
(a) all reasonable costs and expenses incurred by the
Agent, Purchaser, BofA, each Program Support Provider and their
respective Affiliates in connection with the negotiation,
preparation, execution and delivery, the administration
(including periodic auditing) or the enforcement of, or any
actual or claimed breach of, this Agreement, the Originator
Purchase Agreement, the Support Agreement, the Certificate of
Assignments and the other Agreement Documents, including, without
limitation (i) the reasonable fees and expenses of counsel to any
of such Persons incurred in connection with any of the foregoing
or in advising such Persons as to their respective rights and
remedies under any of the Agreement Documents, and (ii) all
reasonable out-of-pocket expenses (including reasonable fees
and expenses of independent accountants) incurred in connection
with any review of Seller's or any Originator's books and records
either prior to the execution and delivery hereof or pursuant to
Section 7.01(c); and
(b) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, the Originator
Purchase Agreement, the Support Agreement, the Certificate of
Assignments or the other Agreement Documents, and agrees to
indemnify each Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 14.06. No Proceedings. Seller, each Originator
and BofA, individually and as Agent, each hereby agrees that it
will not institute against Purchaser, or join any other Person in
instituting against Purchaser, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Event
of Bankruptcy) so long as any Commercial Paper Notes issued by
Purchaser shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any such
Commercial Paper Notes shall have been outstanding. The
foregoing shall not limit Seller's right to file any claim in or
otherwise take any action with respect to any insolvency
proceeding that was instituted by any Person other than Seller.
SECTION 14.07. Confidentiality of Seller Information. (a)
Each party hereto (other than Seller and each Originator)
acknowledges that certain of the information provided to such
party by or on behalf of Seller or such Originator in connection
with this Agreement and the transactions contemplated hereby is
or may be confidential, and each such party severally agrees
that, unless Seller or such Originator shall otherwise agree in
writing, and except as provided in subsection (b), such party
will not disclose to any other person or entity:
(i) any information regarding, or copies of, any
Periodic Reports, and any non-public financial statements,
reports and other information, furnished by Seller or any
Originator to Purchaser or the Agent pursuant to or in connection
with this Agreement, or
(ii) any other information regarding Seller or any
Originator which is designated by Seller to such party in writing
or otherwise as confidential
<PAGE>
(the information referred to in clauses (i) and (ii) above,
whether furnished by Seller or any Originator or any attorney for
or other representative of Seller or any Originator (each a
"Seller Information Provider"), is collectively referred to as
the "Seller Information"; provided, however, "Seller Information"
shall not include
(A) any information which is or becomes generally
available to the general public or to such party on a
nonconfidential basis from a source other than Seller or any
Originator or any other Seller Information Provider that such
party reasonably believes has the right to disclose such
information, or which was known to such party on a
nonconfidential basis prior to its disclosure by Seller or any
Originator or any other Seller Information Provider), or
(B) general information regarding the nature of
this Agreement, the Originator Purchase Agreement, the Support
Agreement or any other Agreement Document, the basic terms hereof
or thereof (including without limitation the amount and nature of
Purchaser's commitment and Purchaser's Investments hereunder and
of the recourse or other credit enhancement provided by Seller
hereunder), the nature, amount and status of the Pool
Receivables, and the current and/or historical ratios of losses
to liquidations and/or outstandings with respect to the
Receivables Pool, the identity of Seller and each Originator.
(b) Notwithstanding subsection (a), each party may disclose
any Seller Information:
(i) to any of such party's independent attorneys,
consultants and auditors, and to such of the Program Support
Providers, any dealer or placement agent for Purchaser's
commercial paper, and any actual or potential assignees of,
or participants in, any of the rights or obligations of
Purchaser, any Program Support Provider or BofA under or in
connection with this Agreement, who (A) in the good faith belief
of such party, have a need to know such Seller Information, (B)
are informed by such party of the confidential nature of the
Seller Information and the terms of this Section 14.07, and (C)
are subject to confidentiality restrictions generally consistent
with this Section 14.07,
(ii) to any rating agency that maintains a rating for
Purchaser's commercial paper or is considering the issuance
of such a rating, for the purposes of reviewing the credit of
Purchaser in connection with such rating,
(iii) to any other party to this Agreement, for the
purposes contemplated hereby,
(iv) in the case of the identity of the Seller and/or
each Originator, to any Person whom any dealer or placement
agent for Purchaser shall have identified as an actual or
potential investor in Commercial Paper Notes, and who shall
have agreed with BofA in writing to keep such information
confidential and use it only in connection with considering
or monitoring such investments, subject to applicable legal
requirements (it being understood that such Person may also
<PAGE>
receive the information excluded from the definition of "Seller
Information" pursuant to clause (B) of subsection (a)),
(v) as may be required in the reasonable judgment of
such party, by any municipal, state, federal or other regulatory
body having or claiming to have jurisdiction over such party, in
order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party, or
(vi) subject to subsection (c), in the event such
party is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand
or similar process) to disclose such Seller Information.
(c) In the event that any party hereto (other than Seller
and/or any Originator) or any of its representatives is requested
or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Seller Information, such
party will (or will cause its representatives to)
(i) provide Seller with prompt written notice so that
(A) Seller or any other Seller Information Provider may seek
a protective order or other appropriate remedy, or (B) Seller
may, if it so chooses, agree that such party (or its
representatives) may disclose such Seller Information pursuant to
such request or legal compulsion;
(ii) unless Seller agrees that such Seller Information
may be disclosed, make a timely objection to the request or
compulsion to provide such Seller Information on the basis that
such Seller Information is confidential and subject to the
agreements contained in this Section 14.07;
(iii) take any action as Seller or any other Seller
Information Provider may reasonably request to seek a protective
order or other appropriate remedy, provided that, in connection
therewith, such party shall have first received such assurances
as it may reasonably request that Seller or such other Seller
Information Provider shall reimburse such party's or its
representatives' reasonable costs and expenses or provide such
other assistance as such party or its representatives may
reasonably require; and
(iv) in the event that such protective order or other
remedy is not obtained, or Seller agrees that such Seller
Information may be disclosed, furnish only that portion of the
Seller Information which is legally required to be furnished,
and, provided such party (or its representative) is reimbursed or
assisted as referred to in clause (iii) above, exercise best
efforts to obtain reliable assurance that confidential treatment
will be accorded the Seller Information.
(d) This Section 14.07 shall survive termination of this
Agreement.
SECTION 14.08. Confidentiality of BofA Information. (a)
Each party hereto (other than BofA) acknowledges that BofA
regards the structure of the transactions contemplated by this
Agreement, the other Agreement Documents, and by any Program
<PAGE>
Support Agreement and the other Program Documents referred to
therein, to be proprietary, and each such party severally agrees
that:
(i) unless BofA shall otherwise agree in writing, and
except as provided in subsection (b), such party will not
disclose to any other person or entity:
(A) any information regarding, or copies of, this
Agreement, the other Agreement Documents or any transaction
contemplated hereby,
(B) any information regarding, or copies of, any
Program Support Agreement, any of the other Program Documents
referred to therein, or any transaction contemplated thereby,
(C) any information regarding the organization or
business of Purchaser generally, or
(D) any information regarding BofA which is
designated by BofA to such party in writing or
otherwise as confidential or not otherwise available to
the general public
(the information referred to in clauses (A), (B), (C) and
(D) above, whether furnished by Purchaser, BofA (including any
branch or agency thereof), any Program Support Provider, any
assignee of or participant in any rights or obligations of
Purchaser or any Program Support Provider, or any attorney for or
other representative of any of the foregoing (each a "BofA
Information Provider"), is collectively referred to as the "BofA
Information"; provided, however, "BofA Information" shall not
include any information which is or becomes generally available
to the general public or to such party on a nonconfidential basis
from a source other than BofA or any other BofA Information
Provider, or which was known to such party on a nonconfidential
basis prior to its disclosure by BofA or any other BofA
Information Provider);
(ii) such party will make the BofA Information
available to only such of its officers, directors, employees
and agents who (A) in the good faith belief of such party, have a
need to know such BofA Information, (B) are informed by such
party of the confidential nature of the BofA Information and the
terms of this Section 14.08, and (C) are subject to
confidentiality restrictions consistent with this Section 14.08;
(iii) such party will use the BofA Information solely
for the purposes of evaluating, administering and enforcing
the transactions contemplated by this Agreement and the other
Agreement Documents and making any necessary business judgments
with respect thereto; and
(iv) such party will, upon demand, return (and cause
each of its officers, directors, employees, agents, attorneys,
consultants or auditors (collectively, "representatives") to
return) to BofA, or to such other BofA Information Provider as
shall have furnished it with any BofA Information, all documents
or other written material received from BofA or such other BofA
Information Provider which constitute or contain any BofA
<PAGE>
Information described in subclause (B), (C), or (D) of clause (i)
above and all copies of such documents or other material in its
possession or in the possession of any of its representatives,
and will not retain any copy, summary or extract thereof on any
storage medium whatsoever.
(b) Notwithstanding clause (i) of subsection (a), each
party may disclose any BofA Information:
(i) to its independent attorneys, consultants and
auditors who (A) in the good faith belief of such party, have a
need to know such BofA Information, (B) are informed by such
party of the confidential nature of the BofA Information and the
terms of this Section 14.08, and (C) are subject to
confidentiality restrictions consistent with this Section 14.08,
(ii) to any other party to this Agreement, for the
purposes contemplated hereby,
(iii) as may be required in Seller's reasonable
judgment, by any municipal, state, federal or other
regulatory body (including, without limitation, the
Securities Exchange Commission) having or claiming to have
jurisdiction over such party, in order to comply with any law,
order, regulation, regulatory request or ruling applicable to
such party, or
(iv) subject to subsection (c), in the event such
party is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand
or similar process) to disclose such BofA Information.
(c) In the event that any party hereto (other than BofA) or
any one to whom such party or its representatives transmits the
BofA Information is requested or becomes legally compelled (by
interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any of
the BofA Information, such party will (or will cause its
representatives to)
(i) provide BofA with prompt written notice so that
(A) Purchaser, BofA, or any other BofA Information Provider
may seek a protective order or other appropriate remedy, or
(B) BofA may, if it so chooses, agree that such party (or its
representatives) may disclose such BofA Information pursuant to
such request or legal compulsion;
(ii) unless BofA agrees that such BofA Information may
be disclosed, make a timely objection to the request or
compulsion to provide such BofA Information on the basis that
such BofA Information is confidential and subject to the
agreements contained in this Section 14.08;
(iii) take any action as BofA or any other BofA
Information Provider may reasonably request to seek a
protective order or other appropriate remedy, provided that,
in connection therewith, such party shall have first received
such assurances as it may reasonably request that BofA or such
other BofA Information Provider shall reimburse such party's or
its representatives' reasonable costs and expenses or provide
<PAGE>
such other assistance as such party or its representatives may
reasonably require; and
(iv) in the event that such protective order or other
remedy is not obtained, or BofA agrees that such BofA Information
may be disclosed, furnish only that portion of the BofA
Information which is legally required to be furnished, and,
provided such party (or its representative) is reimbursed or
assisted as referred to in clause (iii) above, exercise best
efforts to obtain reliable assurance that confidential treatment
will be accorded the BofA Information.
(d) This Section 14.08 shall survive termination of this
Agreement.
SECTION 14.09. Captions and Cross References. The various
captions (including, without limitation, the table of contents)
in this Agreement are provided solely for convenience of
reference and shall not affect the meaning or interpretation of
any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule
or Exhibit are to such Section of or Appendix, Schedule or
Exhibit to this Agreement, as the case may be, and references in
any Section, subsection, or clause to any subsection, clause or
subclause are to such subsection, clause or subclause of such
Section, subsection or clause.
SECTION 14.10. Integration. This Agreement contains a
final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and
shall constitute the entire Agreement among the parties hereto
with respect to the subject matter hereof, superseding all prior
oral or written understandings.
SECTION 14.11. Governing Law. THIS AGREEMENT, INCLUDING
THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION OF
THE INTERESTS OF THE PURCHASER IN THE RECEIVABLES IS GOVERNED BY
THE LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.12. Waiver Of Jury Trial. SELLER AND EACH
ORIGINATOR HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT, THE ORIGINATOR PURCHASE AGREEMENT, THE SUPPORT
AGREEMENT, THE CERTIFICATE OF ASSIGNMENTS, ANY OTHER AGREEMENT
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED
OR WHICH MAY BE IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, THE ORIGINATOR
PURCHASE AGREEMENT, THE SUPPORT AGREEMENT, THE CERTIFICATE OF
ASSIGNMENTS OR ANY OTHER AGREEMENT DOCUMENT AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A
JURY TRIAL.
SECTION 14.13. Consent To Jurisdiction; Waiver Of
Immunities. EACH OF SELLER, PURCHASER AND EACH ORIGINATOR HEREBY
ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION,
<PAGE>
FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL
JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN
EITHER CASE SITTING IN THE BOROUGH OF MANHATTAN IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
(ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK
STATE OR FEDERAL COURT AND NOT IN ANY OTHER COURT, AND
(iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. Execution in 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 when taken together shall constitute one and the same
Agreement.
SECTION 14.15. Certain Matters relating to the Originators.
Each Originator and Seller agree that each Originator has entered
into this Agreement and made the representations and warranties
and covenants, and undertaken the other obligations that apply to
it hereunder, for and in consideration of the execution, delivery
and performance of the Originator Purchase Agreement by the
Seller. Each Originator and Seller intend that the sales of
Receivables under the Originator Purchase Agreement be "true
sales" and not a borrowing secured by such Receivables and each
Originator hereby acknowledges and agrees that it is a party
hereto and makes its respective representations and warranties
and covenants, and has undertaken its other obligations herein
(as opposed to the Originator Purchase Agreement) solely as a
measure to avoid repetition in the Originator Purchase Agreement
of certain representations and warranties and covenants and other
obligations herein that are made by the Seller and each
Originator. The representations, warranties, covenants and other
obligations of each Originator hereunder are limited to the
respective representations, warranties, covenants and other
obligations expressly made or undertaken by such Originator
herein.
[SIGNATURES FOLLOW]
<PAGE>
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.
RECEIVABLES CAPITAL CORPORATION,
as Purchaser
By____________________________________
Title_______________________________
c/o Merrill Lynch Money Markets Inc.
World Financial Center - North Tower
250 Vesey - 10th Floor
New York, New York 10081
Attention: Mr. Thomas Dunstan
Telephone Number: (212) 449-2234
Facsimile Number: (212) 449-1606
And with a copy to the Agent (except
in the case of notice from the Agent)
<PAGE>
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as the Agent
By__________________________________
Vice President
231 South LaSalle Street
Chicago, Illinois 60697
Facsimile No.: (312) 828-7855
Attention: Securitized Products
Group
<PAGE>
PGI INVESTMENTS, INC.,
as Seller
By____________________________________
Title_______________________________
777 Third Avenue
30th Floor
New York, New York 10017
Facsimile No.: (212) 888-0472
Attention:____________________________
<PAGE>
PLY GEM INDUSTRIES, INC.
as Originator and initial
Servicer
By_____________________________________
Title________________________________
777 Third Avenue
30th Floor
New York, New York 10017
Facsimile No.: (212) 888-0472
Attention:_____________________________
<PAGE>
ALLIED PLYWOOD CORPORATION,
as Originator
By______________________________________
Title_________________________________
200 Baker Avenue
Suite 210
Concord, Massachusetts 01742
Facsimile No.: (508) 371-2334
Attention:______________________________
<PAGE>
CENTRAL NEW YORK WINDOW CO.,
as Originator
By_______________________________________
Title__________________________________
367 Orchard Street
Rochester, New York 14606
Facsimile No.: (716) 289-8148
Attention:_______________________________
<PAGE>
CONTINENTAL WOOD PRESERVERS, INC.,
as Originator
By________________________________________
Title___________________________________
7500 E. Davison Avenue
Detroit, Michigan 48212
Facsimile No.: (313) 365-5039
Attention:________________________________
<PAGE>
HOOVER TREATED WOOD PRODUCTS, INC.,
as Originator
By________________________________________
Title___________________________________
Main Street, Knox Shopping Center
Knox Building, 2nd Floor
P.O. Box 746
Thompson, Georgia 30824
Facsimile No.: (706) 595-1326
Attention:________________________________
<PAGE>
SAGEBRUSH SALES, INC.,
as Originator
By________________________________________
Title___________________________________
6300 State Road 303
Albuquerque, New Mexico 87125
Facsimile No.: (505) 873-4777
Attention:________________________________
<PAGE>
SNE ENTERPRISES, INC.,
as Originator
By________________________________________
Title___________________________________
One Wausau Center
730 Third Street
P.O. Box 8007
Wausau, Wisconsin 54402-8007
Facsimile No.: (715) 847-6603
Attention:
<PAGE>
SNE ENTERPRISES - TEXAS, INC.,
as Originator
By________________________________________
Title___________________________________
804 4th Street
P.O. Box 293
Commerce, Texas 75428
Facsimile No.: (903) 886-8533
Attention:
<PAGE>
STUDLEY PRODUCTS, INC.,
as Originator
By______________________________________
Title_________________________________
95 Inip Drive
P.O. Box 130
Inwood, New York 11696
Facsimile No.: (516) 371-3540
Attention:_______________________________
<PAGE>
VARIFORM, INC.,
as Originator
By_______________________________________
Title__________________________________
P.O. Box 559
303 West Major
Kearney, Missouri 64060
Facsimile No.: (816) 635-6942
Attention:_______________________________
<PAGE>
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Purchase Agreement dated
as of December 15, 1994 among PGI Investments, Inc., as Seller,
certain of its affiliates, as the Originators, Receivables Capital
Corporation, as Purchaser, and Bank of America National Trust and
Savings Association, as Agent (as amended, supplemented or
otherwise modified from time to time, this "Agreement"). Each
reference in this Appendix A to any Section, Appendix or Exhibit
refers to such Section of or Appendix or Exhibit to this Agreement.
INDEX
Page No.
A. Defined Terms. . . . . . . . . . . . . . . . . . . A-1
B. Other Terms . . . . . . . . . . . . . . . . . . . A-17
C. Computations of Time Periods . . . . . . . . . . . A-18
A. Defined Terms. As used in this Agreement, unless the
context requires a different meaning, the following terms have the
meanings indicated hereinbelow:
"ABACUS" means Abacus Funding Co., a Delaware corporation.
"Adjusted Average Maturity" has the meaning set forth in
Appendix B.
"Adjusted Purchase Limit" means, on any day, the Purchase
Limit as such amount may have been reduced pursuant to Section 1.07
<PAGE>
up to and including such day.
"Adverse Claim" means a lien, security interest, charge, or
encumbrance, or other right or claim of any Person other than (a) a
potential claim or right (that has not yet been asserted) of a
trustee appointed for an Obligor in connection with any Event of
Bankruptcy or (b) an unfiled lien for taxes accrued but not yet
payable.
"Affected Party" means each of Purchaser, each Program Support
Provider, any permitted assignee of Purchaser or a Program Support
Provider, any assignee of any of Purchaser's obligations to a
Program Support Provider in respect of any Funding, or any holder
of a participation interest, in the rights and obligations of any
Program Support Provider under any Program Support Agreement and in
respect of any Funding, the Agent, BankAmerica Corporation and any
holding company of BofA.
"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by, or under common control with,
such Person.
"Agent" has the meaning set forth in the preamble.
"Aggregate Purchaser's Investments" at any time means the sum
of the Dollar amount of all Purchaser's Investments.
"Aggregate Required Allocations" at any time means the sum of
all Required Allocations of all Undivided Interests.
"Agreement Documents" means this Agreement, the Originator
Purchase Agreement, the Support Agreement, the Certificate of
Assignments, the Ply Gem Note, the Seller Notes and the other
documents to be executed and delivered in connection herewith.
"Alternate Reference Rate" has the meaning set forth in
Appendix B.
"Arrangement Fee" has the meaning set forth in
Section 4.01(a).
"Average Maturity" has the meaning set forth in Appendix B .
"BAI" means Bank of America Illinois (formerly known as
Continental Bank), an Illinois state banking corporation.
"Bank Credit Agreement" means the Credit Agreement dated as of
February 24, 1994, among PLY GEM, National Westminster Bank USA, as
Agent and Continental Bank N.A., European American Bank, LTCB Trust
Company and NationsBank of North Carolina, National Association, as
Co-Agents, and certain other banks signatories thereto, as in
effect on the date hereof and as the same may be amended,
supplemented or otherwise modified or waived in accordance with its
terms. If such Credit Agreement expires, terminates or is no
longer binding on PLY GEM for any reason, for purposes of this
Agreement, such Credit Agreement shall be deemed to remain in
effect as in effect at the time immediately prior to the date of
such expiration, termination or other such event; provided, that if
at any time such Credit Agreement is terminated and replaced with a
new committed or term lending facility providing for loans to PLY
<PAGE>
GEM and/or its Subsidiaries in an aggregate principal amount of at
least $50,000,000 and (x) the Agent, in its individual capacity, or
Bank of America Illinois (or their respective successors) is a
lender or a participant thereunder, or (y) as to which the Agent in
its reasonable judgment has notified the Seller that the Agent
consents that such new lending facility shall constitute a Bank
Credit Agreement for all purposes of this Agreement (such consent
not to be unreasonably withheld), such replacement credit agreement
shall be deemed to be the Bank Credit Agreement.
"Bank Rate" has the meaning set forth in Appendix B.
"BofA" has the meaning set forth in the preamble.
"BofA Information" has the meaning set forth in Section 14.08.
"Business Day" means a day on which both (a) the Agent at its
principal office in Chicago, Illinois is open for business and
(b) commercial banks in New York City are not authorized or
required to be closed for business.
"Certificate of Assignments" means a certificate of
assignment, by Seller to the Agent, in the form of Exhibit 5.01(a),
evidencing an Undivided Interest owned by Purchaser or an assignee
thereof.
"Change of Control" means (i) any person or group of related
persons, excluding Permitted Shareholders, gains beneficial
ownership of a majority in voting interest of the outstanding
voting stock of PLY GEM or has caused to be elected a majority of
the Board of Directors of PLY GEM against the wishes of a majority
of the voting interest held by Permitted Shareholders or (ii) all
or substantially all of the assets of PLY GEM are sold or
liquidated. As used herein, "Permitted Shareholders" means (a)
Jeffrey S. Silverman, (b) any of his descendants or legatees, (c)
any executor, personal representative or spouse of Jeffrey S.
Silverman, or any of his descendants, (d) any person who was a
director or employee of PLY GEM or any of its Subsidiary on the
date hereof, (e) any corporation, trust or other entity holding
voting stock of PLY GEM as to which one or more of the persons
identified in the foregoing clauses (a) through (d) have sole
voting or investment power, (f) any trust as to which persons so
identified hold at least 85% of the beneficial interest in the
income and principal of the trust disregarding the interests of
contingent remainderman, and (g) any employee stock ownership plan
for the benefit of employees of PLY GEM or its Subsidiaries.
"Collections" means, with respect to any Receivable, all funds
which either (a) are received by Seller, any Originator, or
Servicer from or on behalf of the related Obligors in payment of
any amounts owed (including, without limitation, purchase prices,
finance charges, interest and all other charges) in respect of such
Receivable, or applied to such amounts owed by such Obligors
(including, without limitation, insurance payments that Seller, any
Originator, or Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net
proceeds of sale or other disposition of repossessed goods or other
collateral or property of the Obligor or any other party directly
or indirectly liable for payment of such Receivable and available
to be applied thereon), or (b) are deemed to have been received, by
<PAGE>
Seller any Originator, or any other Person as a Collection pursuant
to Section 3.03.
"Commercial Paper Notes" means short-term promissory notes
issued or to be issued by Purchaser to fund its investments in
accounts receivable or other financial assets.
"Commercial Paper Rate" has the meaning set forth in
Appendix B.
"Commitment" has the meaning set forth in Section 1.01.
"Commitment Termination Date" has the meaning set forth in
Section 1.05(a).
"Concentration Limit" has the meaning set forth in
Section 2.04(b).
"Conditions Precedent" has the meaning set forth in
Section 5.02.
"Contingent Obligation" as to any Person means any obligation
of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other contractual 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, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) 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 (d) otherwise
to assure or hold harmless the owner of such primary obligation
against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments
for deposit or collection 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 not state or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such
Person in good faith.
"Contract" means a contract between any Originator and any
Person pursuant to or under which such Person shall be obligated to
make payments to such Originator.
"Credit and Collection Policy" means those credit and
collection policies and practices relating to Contracts and
Receivables described in Schedule 6.01(m)-2, as modified without
violating Section 7.03(c).
"Credit Reserve" means, on any day, the greatest of the
following amounts:
(a) two times (ii) the product of (A) the highest
<PAGE>
average Sales Based Default Ratio for any consecutive three
Month End Dates during the twelve month period ending on the
most recent Month End Date times (B) Net Sales for the three month
period ending on the most recent Month End Date;
(b) the greatest of the aggregate Unpaid Balance of
Receivables originated by sales to (i) the Obligor rated A-2 or
less by S&P and/or P-2 or less by Moody's and/or rated less than
any equivalent rating by any nationally recognized ratings service
(as determined by the Agent in its reasonable discretion) owing the
largest aggregate Unpaid Balance on such day, (ii) the two Obligors
rated A-3 or less by S&P and/or P-3 or less by Moody's and/or rated
less than any equivalent rating by any nationally recognized
ratings service (as determined by the Agent in its reasonable
discretion) owing the two largest aggregate Unpaid Balances on such
day, and (iii) the four Obligors without investment grade ratings
by S&P, Moody's and/or any nationally recognized ratings service
(as determined by the Agent in its reasonable discretion) owing the
four largest Unpaid Balances on such day;
(c) the product of (i) the Sales Based Default Ratio for
the most recent Month End Date times (ii) Net Sales for the three
month period ending on the most recent Month End Date; and
(d) $1,500,000.
"Default Ratio" means the ratio (expressed as a percentage)
computed as of each Month End Date by dividing (x) the aggregate
Unpaid Balance of all Pool Receivables that were Defaulted
Receivables on such date by (y) the aggregate Unpaid Balance of all
Pool Receivables on such date.
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains
unpaid for 60 days from the original due date (as such date may be
extended pursuant to Section 8.02(c)) for such payment (except for
any such Receivable with respect to which the Agent has received
written notice briefly describing the nature of a good faith
business dispute between the Originator of such Receivable and the
applicable Obligor),
(b) as to which the Obligor thereof is the Obligor on any
other Defaulted Receivable which, when taken together with any
Receivables described in clause (a) above as being subject to
a good faith business dispute, have an aggregate Unpaid Balance in
excess of 15% or more of the aggregate Unpaid Balance of all Pool
Receivables of such Obligor (unless the aggregate Unpaid Balance of
all Pool Receivables of such Obligor is less than $10,000, in which
case the preceding portion of this clause (b) shall not apply),
(c) originated by sales to an Obligor with respect to
which an Event of Bankruptcy has occurred and remains continuing,
(d) as to which payments have been extended, or the terms
of payment thereof rewritten, without the Agent's consent (except
as permitted herein), or
(e) which, consistent with the Credit and Collection
Policy, would be written off Seller's books as uncollectible.
<PAGE>
"Designated Obligor" means, at any time, all Obligors of any
Originator except any such Obligor as to which the Agent has, at
least three Business Days prior to the date of determination
(exercising its reasonable credit judgment), given notice to Seller
that such Obligor shall not be considered a Designated Obligor;
provided that any Receivable originated by sales to such Obligor
which have been purchased by the Purchaser prior to such date shall
not be excluded from Eligible Receivables solely because the
Obligor is not a Designated Obligor.
"Dilution Factors" means any event or condition described in
clause (a) of Section 3.03(a) that would cause any Pool Receivable
or portion thereof to be deemed a Collection.
"Dilution Ratio" means, as of any day and for any period, the
quotient of (a) the aggregate reduction attributable to Dilution
Factors occurring prior to such day in the Unpaid Balance of
Eligible Receivables originated in such period divided by (b) the
sum of (i) the aggregate Unpaid Balance of such Eligible
Receivables on such day plus (ii) the aggregate amount of such
reduction.
"Dilution Reserve" means, on any day, the highest of (a) the
product of (i) the highest Dilution Ratio for any one month period
ending on a Month End Date within the twelve month period ending on
the most recent Month End Date times (ii) the Aggregate Purchaser's
Investments on such day, (b) the product of (i) two times (ii) the
Dilution Ratio for the twelve month period ended on the most recent
Month End Date times (iii) the Aggregate Purchaser's Investments on
such day and (c) $500,000.
"Discount Factor" has the meaning set forth in Appendix B.
"Dollars" means dollars in lawful money of the United States
of America.
"Domestic CD Rate (Adjusted)" has the meaning set forth in
Appendix B.
"Earned Discount" has the meaning set forth in Appendix B.
"Eligible Contract" means a Contract in one of the forms set
forth in Schedule 6.01(m)-1 or otherwise approved by the Agent.
"Eligible Receivable" means, at any time, a Receivable:
(a) the Obligor of which is not an Affiliate of any of the
parties hereto and is not a Prohibited Governmental Authority;
(b) the Obligor of which is located in (i) Puerto Rico (if
the aggregate Unpaid Balance of Pool Receivables originated by
sales to Obligors located in Puerto Rico is not greater than
$1,000,000 at such time) or (ii) the United States, and, in either
case, is a Designated Obligor at the time of the creation of an
interest in such Receivable hereunder;
(c) which is not a Defaulted Receivable;
(d) (i) which arose in the ordinary course of the related
<PAGE>
Originator's business from the sale of such Originator's
merchandise, insurance or services and (ii) which, according to the
Contract related thereto, is required to be paid in full within 120
days of the original billing date or statement date therefor;
(e) which is an account receivable representing all or part
of the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940,
as amended;
(f) which is denominated and payable only in United States
dollars in the United States;
(g) which arises under an Eligible Contract which has been
duly authorized and which, 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 enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(h) which, at the time of the initial creation of an interest
in such Receivable hereunder, is not subject to any existing
dispute, offset, counter-claim or defense whatsoever;
(i) which, together with the Contract related thereto, does
not contravene any laws, rules or regulations applicable thereto
(including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no party to the Contract
related thereto is in violation of any such law, rule or
regulation;
(j) as to which, at or prior to the time of the initial
creation of an interest in such Receivable through a Purchase, the
Agent has not notified the Seller that the Agent (exercising its
reasonable credit judgment) has determined that such Receivable (or
the class of Receivables into which such Receivable falls) is not
acceptable for purchase by the Purchaser hereunder;
(k) no portion of which includes any amounts payable in
respect of sales taxes;
(l) which, when taken together with all Eligible Receivables
generated by the Obligor of such Receivable, would not exceed the
Concentration Limit with respect to such Obligor;
(m) which, (i) if the perfection of Purchaser's undivided
ownership interest therein is governed by the laws of a
jurisdiction where the Uniform Commercial Code -- Secured
Transactions is in force, constitutes an account as defined in the
Uniform Commercial Code as in effect in such jurisdiction, and
(ii) if the perfection of Purchaser's undivided ownership interest
therein is governed by the law of any jurisdiction where the
Uniform Commercial Code -- Secured Transactions is not in force,
Seller has furnished to the Agent such opinions of counsel as have
<PAGE>
reasonably been requested and/or other evidence as has reasonably
been requested, establishing to the reasonable satisfaction of the
Agent that Purchaser's undivided ownership interest and other
rights with respect thereto are not significantly less protected
and favorable than such rights under the UCC;
(n) with regard to which the warranty of Seller in
Section 6.01(i) is true and correct;
(o) which arises out of a current transaction, or the
proceeds of which have been or are to be used for current
transactions, within the meaning of Section 3(a)(3) of the
Securities Act of 1933, as amended; and
(p) which (i) satisfies all applicable requirements of the
related Credit and Collection Policy and (ii) complies with such
other criteria and requirements as the Agent (exercising its
reasonable credit judgment) may from time to time specify to the
Seller.
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurodollar Rate (Reserve Adjusted)" has the meaning set forth
in Appendix B.
"Event of Bankruptcy" shall be deemed to have occurred with
respect to a Person if either:
(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 all or
substantially all 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 60 consecutive 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 other similar
official) for, such Person or for 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, or,
if a corporation or similar entity, its board of directors
shall vote to implement any of the foregoing.
"Existing Credit Agreement" means and includes the Credit
<PAGE>
Agreement dated as of December 1, 1989 among Purchaser, BofA (as
assignee from BAI) and Credit Lyonnais as amended, supplemented or
otherwise modified from time to time.
"Existing Liquidity Agreement" means and includes the
Secondary Purchase Agreement dated as of December 1, 1989 among
Purchaser, BofA (as assignee of BAI), as Servicing Agent for
Purchaser, BofA (as assignee from BAI) and Credit Lyonnais as
purchasers (and lender), as amended, supplemented or otherwise
modified from time to time.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto or to the
functions thereof.
"Financing Lease(s)" shall mean (a) any lease of property,
real or personal, the then present value of the minimum rental
commitment of which should, in accordance with generally accepted
accounting principles, be capitalized on a balance sheet of the
lessee, and (b) any other such lease the obligations under which
are capitalized on a consolidated balance sheet of PLY GEM and its
Subsidiaries.
"Financing Statement" means any financing statement that lists
the Seller or any Originator (under any present name, any previous
name or any trade name) as debtor and that is filed in any
jurisdiction in which filings would be appropriate under the UCC or
any comparable law to perfect a security interest in any
Receivable, any Collections with respect thereto, any Related
Security or any Contract.
"Funding" means a drawing under a letter of credit, surety
bond or other instrument issued pursuant to a Program Support
Agreement, a drawing on a cash collateral account funded pursuant
to a Program Support Agreement, a purchase, loan or other extension
of credit made by a Program Support Provider to the Purchaser under
a Program Support Agreement, or any other advance or disbursement
of funds from or to the Purchaser or for the Purchaser's account or
for which the Purchaser is obligated to reimburse a Program Support
Provider pursuant to a Program Support Agreement.
"Governmental Authority" means any nation or government
(including, without limitation, the United States government), any
state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative function of or pertaining to government.
"Indebtedness" of a Person, at a particular date, means any of
the following at such date (a) indebtedness of such Person for
borrowed money or evidenced by notes, bonds, debentures or like
instruments, (b) indebtedness of such Person for the deferred
purchase price of property or services, except (i) accounts payable
and accrued expenses arising in the ordinary course of business,
(ii) obligations incurred in connection with additions to property,
plant or equipment which are deferred for no more than 100 days
after the later of the acquisition or completion of installation of
such additions, (iii) other obligations (not including taxes) which
are deferred for no more than 100 days after the date on which they
would first be reflected as liabilities on a balance sheet of such
Person and (iv) obligations to pay for services of officers,
<PAGE>
directors or employees of PLY GEM or any Subsidiary, (c)
obligations of such Person under any Financing Lease and (d)
indebtedness of such Person arising under acceptance facilities.
Without limitation, Indebtedness shall not include undrawn letters
of credit, but shall include unreimbursed draws on letters of
credit.
"Indemnified Amounts" has the meaning set forth in
Section 13.01.
"Indemnified Party" has the meaning set forth in
Section 13.01.
"Involuntary Federal Proceeding" has the meaning set forth in
Section 10.02(b).
"Liquidations" means all funds described in clause (a) of the
definition of Collections.
"Lock-Box Agreement" means a letter agreement, in
substantially the form of Exhibit 5.01(i), between any Originator
or Seller and any Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more
lock-box accounts for receiving Collections from Pool Receivables.
"Losses to Liquidations Ratio" means the percentage that
(x) the losses (net of recoveries) recognized during the three
month period ending on the most recent Month End Date on all
Receivables owned by Seller was of (y) Liquidations of such
Receivables during such period.
"Month End Date" means the last day of each fiscal month.
"Moody's" means Moody's Investors Service, Inc., and any
successor thereto.
"Negative Spread Fee" has the meaning set forth in Appendix B.
"Net Pool Balance" has the meaning set forth in
Section 2.04(a).
"Net Sales" means, for any period, the excess of (a) the
aggregate Unpaid Balances of Receivables originated during such
period minus (b) the aggregate Unpaid Balance of such Receivables
deemed collected pursuant to clause (i) of Section 3.03(a).
"Non-Use Fee" has the meaning set forth in Section 4.01(d).
"Non-Use Fee Rate" means 0.375%.
"Note Fee" has the meaning set forth in Section 4.03(e).
"Obligor" means a Person obligated to make payments with
respect to a Receivable.
"Originator" and "Originators" has the meaning set forth in
the preamble, except that the term "Originator" when used with
respect to Receivables originated by (a) PLY GEM, shall only
include Receivables originated by its Ply Gem Manufacturing
<PAGE>
division and (b) APC, shall not include Receivables originated by
its Goldenberg division in the event APC acquires Goldenberg Group,
Inc. after the date hereof.
"Originator Purchase Agreement" shall mean the Originator
Purchase Agreement, dated as of the date hereof, among PLY GEM,
APC, CWP, HTWP, SBS, Studley, SNE, SNE Texas, Window Co., Variform,
and the Seller, substantially in the form attached as Exhibit A, as
the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.
"Owner" means, for each Undivided Interest upon its purchase,
the Purchaser as the purchaser thereof; provided, however, that,
upon any assignment of the Certificate of Assignments related to
any Undivided Interest pursuant to Article XII, the assignee
thereof shall be the Owner of such Undivided Interest.
"Periodic Report" means a report in substantially the form of
Exhibit 3.04(a).
"Person" means an individual, partnership, 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.
"Ply Gem Note" means a demand note payable by PLY GEM to
Seller in the original principal amount of $5,000,000.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Fee" has the meaning set forth in Section 4.01(b).
"Program Fee Rate" means 0.45%.
"Program Support Agreement" means and includes (a) the
Existing Credit Agreement and any letter of credit issued
thereunder, (b) the Existing Liquidity Agreement and (c) any other
agreement hereafter entered into by any Program Support Provider
providing for the issuance of one or more letters of credit for the
account of the Purchaser, the issuance of one or more surety bonds
for which the Purchaser is obligated to reimburse the applicable
Program Support Provider for any drawings thereunder, the sale by
the Purchaser to any Program Support Provider of Undivided
Interests (or portions thereof) and/or the making of loans and/or
other extensions of credit to the Purchaser in connection with the
Purchaser's securitization program, together with any letter of
credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the
Agent).
"Program Support Provider" means and includes BofA and any
other or additional Person (other than any customer of the
Purchaser) now or hereafter extending credit or having a commitment
to extend credit to or for the account of the Purchaser or issuing
a letter of credit, surety bond or other instrument to support any
obligations arising under or in connection with the Purchaser's
securitization program.
"Prohibited Governmental Authority" means, with respect to any
Receivable the Obligor of which is a Governmental Authority, (i)
<PAGE>
the government of the United States, any political subdivision
thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to the
government of the United States and (ii) each other Governmental
Authority unless the Receivables of such other Governmental
Authority are not prohibited by law or agreement from being sold
and assigned as contemplated by the Originator Purchase Agreement
and hereby; provided, that any notice or other requirement in
connection with any such assignment shall have been satisfied in
order to effectively convey all right, title and interest in such
Receivable and in Undivided Interests therein.
"Purchase" has the meaning set forth in Section 1.01(a).
"Purchase Limit" has the meaning set forth in Section 1.02(a).
"Purchase Termination Date" has the meaning set forth in
Section 1.06.
"Purchaser" has the meaning set forth in the preamble.
"Purchaser Rate" has the meaning set forth in Appendix B.
"Purchaser's Investment" has the meaning set forth in
Section 2.03.
"Purchaser's Share" has the meaning set forth in Section 2.05.
"Rate Variance Factor" has the meaning set forth in
Appendix B.
"Receivable" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general
intangible, arising from the sale by an Originator of merchandise
or services rendered by an Originator, and includes the right to
payment of any interest or finance charges and other obligations of
such Person with respect thereto.
"Receivables Pool" means at any time all then outstanding
Receivables as to which the Obligors thereunder are Designated
Obligors. If a Receivable is a Pool Receivable on the day
immediately preceding the Commitment Termination Date, such
Receivable shall continue to be considered a Pool Receivable at all
times thereafter.
"Regulation D" means Regulation D of the Federal Reserve
Board, or any other regulation of the Federal Reserve Board that
prescribes reserve requirements applicable to nonpersonal time
deposits or "Eurocurrency Liabilities" as presently defined in
Regulation D, as in effect from time to time.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation,
phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign
law applicable to such Affected Party;
(ii) regulation, interpretation, directive,
<PAGE>
requirement or request (whether or not having the force
of law) applicable to such Affected Party of (A) any
court, government authority charged with the
interpretation or administration of any law referred to
in clause (a)(i) or of (B) any fiscal, monetary or other
authority having jurisdiction over such Affected Party;
or
(iii) generally accepted accounting principles or
regulatory accounting principles applicable to such
Affected Party and affecting the application to such
Affected Party of any law, regulation, interpretation,
directive, requirement or request referred to in
clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party
of any existing law, regulation, interpretation, directive,
requirement, request or accounting principles referred to in
clause (a)(i), (a)(ii) or (a)(iii) above.
"Reinvestment" has the meaning set forth in Section 1.01(b).
"Related Security" means, with respect to any Pool Receivable:
(a) all of any Originator's right, title and interest in, under and
to all security agreements or other agreements that relate to such
Pool Receivable; (b) all of any Originator's interest in the
merchandise (including returned merchandise), if any, relating to
the sale which gave rise to such Pool Receivable; (c) all other
security interests or liens and property subject thereto from time
to time purporting to secure payment of such Pool Receivable,
whether pursuant to the Contract related to such Pool Receivable or
otherwise; (d) the assignment to the Agent, for the benefit of
Purchaser and any assignee, of all UCC financing statements
covering any collateral securing payment of such Pool Receivable
(but such assignment is made only to the extent of the interest of
Purchaser in the respective Pool Receivable); and (e) all
guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such
Pool Receivable whether pursuant to the Contract related to such
Pool Receivable or otherwise. The interest of Purchaser in any
Related Security is only to the extent of Purchaser's Undivided
Interest, as more fully described in the definition of an Undivided
Interest.
"Remaining Collections" has the meaning set forth in
Section 3.01(a)(ii).
"Repurchase Agreement" means the Repurchase Agreement, dated
the date hereof, between ABACUS and the Seller, as the same may be
amended, supplemented, or otherwise modified in accordance with the
terms thereof.
"Required Allocations" with respect to any Undivided Interest
at any time means the sum of Purchaser's Investment, Discount
Factor, Servicer's Fee Reserve, Credit Reserve and Dilution Reserve
with respect to such Undivided Interest at such time.
"Required Allocations Limit" has the meaning set forth in
Section 1.02(b).
<PAGE>
"Requirement of Law" for any Person shall mean the Certificate
of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation,
or determination of an arbitrator or a court or other governmental
authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its
property is subject.
"Run Off Day" for any Undivided Interest means any of (a) each
day which occurs on or after the date designated by the Agent to
Seller to be the "Run Off Commencement Date", provided such date is
designated on at least one Business Day's notice during a time when
any of the conditions set forth in Section 5.02 are not satisfied,
(b) each day which occurs on or after the Termination Date for such
Undivided Interest or (c) each day which occurs on or after the
Seller shall have given written notice to the Agent that it no
longer wishes to sell Undivided Interests in the Receivables Pool
to Purchaser.
"Run Off Discount" has the meaning set forth in Appendix B.
"Run Off Period" means one or more successive Run Off Days.
"Run Off Servicer's Fee" has the meaning set forth in
Appendix B.
"S&P" means Standard and Poor's Ratings Group, a division of
McGraw Hill, Inc., and any successor thereto.
"Sales Based Default Ratio" means, as of any Month End Date,
the quotient of (a) the aggregate Unpaid Balance of Defaulted
Receivables not more than 90 days past due plus the aggregate
Unpaid Balance of Receivables that would be Defaulted Receivables
not more than 90 days past due had such Receivables not previously
been written off divided by (b) Net Sales for the calendar month
period ending 90 days prior to such Month End Date.
"Scheduled Commitment Termination Date" has the meaning set
forth in Section 1.02(a).
"Seller" has the meaning set forth in the preamble.
"Seller Information" has the meaning set forth in
Section 14.07.
"Seller Notes" has the meaning set forth in the Originator
Purchase Agreement.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Transfer Event" has the meaning set forth in
Section 8.01(b).
"Servicer's Fee" has the meaning set forth in Appendix B.
"Servicer's Fee Reserve" has the meaning set forth in
Appendix B.
"Settlement Date" means the last day of each Settlement
Period.
<PAGE>
"Settlement Period" for any Undivided Interest means
(a) each period commencing on the first day of each
Yield Period for such Undivided Interest and ending on the
last day of such Yield Period; and
(b) on and after the Termination Date for such Undivided
Interest, such period (including, without limitation, a daily
period) as shall be selected from time to time by the Agent
or, in absence of any such selection, each period of thirty
days from the next preceding Settlement Date;
provided, however, that
(i) with respect to any Yield Period of one day (as
described in clause (ii) of the proviso of the definition of
"Yield Period"), the related Settlement Period shall be the
first day following such Yield Period;
(ii) any Settlement Period which would otherwise end on
a day which is not a Business Day shall be extended to the
next succeeding Business Day; and
(iii) the last Settlement Period shall end on the date
on which all Undivided Interests have been reduced to zero.
"Special Concentration Limit" has the meaning set forth in
Section 2.04(c).
"Subsidiary" of any Person shall mean a corporation or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such
entity, are owned, directly or indirectly, by such Person.
"Successor Notice" has the meaning set forth in
Section 8.01(b).
"Support Agreement" means the Support Agreement dated as of
the date hereof made by PLY GEM in favor of the Purchaser and the
Agent, as amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof.
"Tangible Net Worth" means, with respect to the Seller, the
net worth of the Seller (computed in accordance with generally
accepted accounting principles, except to the extent that the Ply
Gem Note would not be included in the net worth of Seller under
such principles) after subtracting therefrom the aggregate amount
of Seller's intangible assets (other than Receivables), including,
without limitation, goodwill, franchises, licenses, patents,
trademarks, tradenames, copyrights, service marks and brand names.
"Termination Date" for any Undivided Interest means the
Commitment Termination Date.
"Termination Event" has the meaning set forth in
Section 10.01.
<PAGE>
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction or jurisdictions.
"Undivided Interest" has the meaning set forth in
Section 2.01.
"Unmatured Termination Event" means any event which, with the
giving of notice or lapse of time, or both, would become a
Termination Event.
"Unpaid Balance" of any Receivable means at any time the sum
of (x) the unpaid principal amount thereof, plus (y) the unpaid
amount of all finance charges, interest payments and other amounts
actually accrued thereon at such time, minus (z) any amounts
representing any sales or other similar tax.
"Unused Commitment" means, on any day, the excess of the
Adjusted Purchase Limit for such day over the Aggregate Purchaser's
Investments on such day.
"Yield Period" means with respect to any Undivided Interest
(or portion thereof):
(a) the period commencing on the date of the initial
Purchase of such Undivided Interest (or such portion) and
ending such number of days (not to exceed 90 days) thereafter
as the Agent shall select, after consultation with the Seller,
pursuant to Sections 1.03 or 2.01(b); and
(b) thereafter, each period commencing on the last day
of the immediately preceding Yield Period for such Undivided
Interest (or such portion) and ending such number of days (not
to exceed 90 days) thereafter as the Agent shall select, after
consultation with the Seller;
provided, however, that
(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding
Business Day (unless the related Undivided Interest shall be
accruing Earned Discount at a rate determined by reference to
the Eurodollar Rate (Reserve Adjusted), in which case if such
succeeding Business Day is in a different calendar month, such
Yield Period shall instead be shortened to the next preceding
Business Day);
(ii) in the case of Yield Periods of one day for any
Undivided Interest, (A) the initial Yield Period shall be the
day of the related Purchase; (B) any subsequently occurring
Yield Period which is one day shall, if the immediately
preceding Yield Period is more than one day, be the last day
of such immediately preceding Yield Period, and if the
immediately preceding Yield Period is one day, shall be the
next day following such immediately preceding Yield Period,
and (C) any Yield Period for any Undivided Interest which
commences before the Termination Date for such Undivided
Interest and would otherwise end on a date occurring after
such Termination Date, such Yield Period shall end on such
<PAGE>
Termination Date and the duration of each such Yield Period
which commences on or after the Termination Date for such
Undivided Interest shall be of such duration as shall be
selected by the Agent.
The "related" Yield Period for any Undivided Interest at any time
means the Yield Period pursuant to which Earned Discount is then
accruing for such Undivided Interest.
B. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally
accepted accounting principles as in effect on the date hereof.
All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in
such Article 9.
C. Computation of Time Periods. Unless otherwise stated in
this Agreement, 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".
<PAGE>
APPENDIX B
CALCULATION OF DISCOUNT AND RESERVE
This is Appendix B to the Receivables Purchase Agreement dated
as of December 15, 1994 among PGI Investments, Inc., as Seller,
certain of its affiliates, as the Originators, Receivables Capital
Corporation, as Purchaser, and Bank of America National Trust and
Savings Association, as Agent (as amended, supplemented or
otherwise modified from time to time, the "Agreement").
Capitalized terms used in this Appendix B without definition have
the meanings assigned to such terms in Appendix A to the Agreement.
Each reference in this Appendix B to any Section refers to such
Section of the Agreement. Each reference in this Appendix B to any
Part refers to the part of this Appendix B so designated.
INDEX
PART I
DISCOUNT FACTOR
Sub-
Part Term Page No.
A. Discount Factor . . . . . . . . . . . . B-2
B. Earned Discount . . . . . . . . . . . . B-3
C. Negative Spread Fee . . . . . . . . . . B-3
D. Run Off Discount. . . . . . . . . . . . B-4
E. Rate Definitions . . . . . . . . . . . B-4
Alternate Reference Rate. . . . . . . B-4
Bank Rate . . . . . . . . . . . . . . B-5
Commercial Paper Rate . . . . . . . . B-5
Domestic CD Rate (Adjusted) . . . . . B-6
Eurodollar Rate (Reserve Adjusted). . B-7
Purchaser Rate. . . . . . . . . . . . B-8
F. Rate Variance Factor. . . . . . . . . . B-9
PART II
CREDIT RESERVE
A. Credit Reserve. . . . . . . . . . . . . B-9
PART III
DILUTION RESERVE
A. Dilution Reserve . . . . . . . . . . . .B-9
PART IV
SERVICER'S FEE RESERVE
A. Servicer's Fee Reserve. . . . . . . . . B-9
B. Servicer's Fee. . . . . . . . . . . . . B-10
C. Run Off Servicer's Fee. . . . . . . . . B-10
PART V
ADJUSTED AVERAGE MATURITY
A. Adjusted Average Maturity . . . . . . . B-10
B. Average Maturity. . . . . . . . . . . . B-10
<PAGE>
PART I
DISCOUNT FACTOR
A. Discount Factor. The "Discount Factor" for a related
Undivided Interest at any time in a Yield Period means an amount
determined as follows:
DF = ED + ROD
where:
DF = the Discount Factor of such Undivided Interest at such
time;
ED = Earned Discount of such Undivided Interest accrued and
unpaid at such time, as determined pursuant to
Part I.B;
ROD = Run Off Discount of such Undivided Interest at such
time, as determined pursuant to Part I.D.
B. Earned Discount. The "Earned Discount" for any Undivided
<PAGE>
Interest for each day in a related Yield Period means an amount
determined as follows:
ED = PI x PR x 1/360 + NSF (if any);
provided, however, that if, pursuant to the definition of
"Purchaser Rate" in Part I.E., different Purchaser Rates would
apply to different portions of an Undivided Interest, then Earned
Discount shall be calculated separately with respect to each such
portion, and the Earned Discount shall be the sum of the Earned
Discount so calculated for such portions;
where:
ED = Earned Discount of such Undivided Interest (or such
portion) accrued on such day;
PI = the Purchaser's Investment of such Undivided Interest
(or such portion) on such day, as determined pursuant
to Section 2.03; and
PR = the Purchaser Rate for such Undivided Interest (or
such portion) on such day, as defined in Part I.E.
NSF = the Negative Spread Fee for such Undivided Interest
(or such portion thereof) on such day, as defined in
Part C.
No provision of the Agreement shall require the payment or permit
the collection of Earned Discount in excess of the maximum
permitted by applicable law. Earned Discount for any Undivided
Interest shall not be considered paid by any distribution if at any
time such distribution is rescinded or must otherwise be returned
for any reason.
C. Negative Spread Fee. The "Negative Spread Fee" means, for
each Undivided Interest (or portion thereof) for each day in any
Yield Period during which any Run Off Day or Termination Date for
such Undivided Interest occurs, the amount, if any, by which;
(i) the additional Earned Discount (calculated without
taking into account any Negative Spread Fee) which would have
accrued on the reductions of the related Purchaser's
Investment of such Undivided Interest (or such portion) during
such Yield Period (as so computed) if such reductions had
remained as Purchaser's Investment exceeds,
(ii) the income, if any, received by the owner of such
Undivided Interest (or such portion) from such owner's
investing the proceeds of such reductions of Purchaser's
Investment in investments selected in the reasonable
discretion of such owner to mitigate the Negative Spread Fee
payable hereunder.
D. Run Off Discount. The "Run Off Discount" for the related
Undivided Interest at any time means an amount determined as
follows:
ROD = PI x (BR + RVF) x AAM
---------------------
360
<PAGE>
where:
ROD = the Run Off Discount for such Undivided
Interest at such time;
PI = the Purchaser's Investment of such Undivided
Interest at such time;
BR = the Bank Rate for such Undivided Interest for a
Yield Period deemed to commence at such time
pursuant to Part I.E;
AAM = the Adjusted Average Maturity of the
Receivables Pool related to such Undivided
Interest, as determined pursuant to Part V; and
RVF = the Rate Variance Factor deemed to be in effect
at such time, as determined pursuant to
Part I.F.
E. Rate Definitions. The "Alternate Reference Rate" means,
on any date, a fluctuating rate of interest per annum equal to the
higher of
(a) the rate of interest most recently announced by BofA
at its principal office as its reference rate; and
(b) the Federal Funds Rate (as defined below) most
recently determined by BofA plus 1.0% per annum.
For purposes of this definition, "Federal Funds Rate" means, for
any period, a fluctuating interest rate per annum equal (for each
day during such period) to
the rate set forth in the weekly statistical release
designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for
any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior
to 9:00 a.m. (New York City time) on that day by each of three
leading brokers of Federal funds transactions in New York City
selected by the Agent.
The Alternate Reference Rate is not necessarily intended to be the
lowest rate of interest determined by BofA in connection with
extensions of credit.
"Bank Rate" for any Yield Period for the related Undivided
Interest means an interest rate per annum equal to the sum of
(a) 0.50% per annum, plus (b) the Eurodollar Rate (Reserve
Adjusted) for such Yield Period; provided, however, that if (i) it
shall become unlawful for the Agent or any Program Support Provider
to obtain funds in the offshore dollar interbank market in order to
fund any Purchase or to maintain any Undivided Interest, or if such
<PAGE>
funds shall not be reasonably available to the Agent or any Program
Support Provider, or (ii) there shall not be time prior to the
commencement of an applicable Yield Period to determine a
Eurodollar Rate in accordance with its terms, then the "Bank Rate"
for any Yield Period for such Undivided Interest shall be equal to
a rate of (x) 0.50% per annum, plus (y) the Domestic CD Rate
(Adjusted) for such Yield Period.
"Commercial Paper Rate" for any Yield Period for the related
Undivided Interest means a rate per annum equal to the sum of
(i) the rate or, if more than one rate, the weighted average of the
rates, determined by converting to an interest-bearing equivalent
rate per annum the discount rate (or rates) at which Commercial
Paper Notes having a term equal to such Yield Period and to be
issued to fund the Purchase of or to maintain such Undivided
Interest by Purchaser (including, without limitation, Purchaser's
Investment and accrued and unpaid Earned Discount) may be sold by
any placement agent or commercial paper dealer selected by the
Agent, as agreed between each such agent or dealer and the Agent,
plus (ii) the commissions and charges charged by such placement
agent or commercial paper dealer with respect to such Commercial
Paper Notes expressed as a percentage of such face amount and
converted to an interest-bearing equivalent rate per annum.
"Domestic CD Rate (Adjusted)" means, with respect to any Yield
Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined pursuant to the following formula:
Domestic CD Rate = Domestic CD Rate + Assessment
(Adjusted) ---------------- Rate
1-Reserve
Requirement
where:
"Domestic CD Rate" means, with respect to any Yield Period for
any related Undivided Interest (or portion thereof), a rate of
interest equal to the average of the secondary market morning
offering rates in the United States for time certificates of
deposit of major United States money market banks for a period
approximately equal to such Yield Period in an amount
substantially equal to the Purchaser's Investment of the
related Undivided Interest (or such portion), as such offering
rate is quoted to the Agent by the Federal Reserve Bank of New
York during the morning of the first day of such Yield Period;
provided, however, that if the Agent shall not receive any
such quote by the Federal Reserve Bank of New York by
10:00 a.m., Chicago time, on the morning of the first day of
any Yield Period, then "Domestic CD Rate" shall mean, with
respect to such Yield Period, the rate of interest determined
by the Agent to be the average (rounded upwards, if necessary,
to the nearest 1/100 of 1%) of the bid rates quoted to the
Agent in the secondary market at approximately 10:00 a.m.,
Chicago time (or as soon thereafter as practicable), on the
first day of such Yield Period by two certificate of deposit
dealers in New York or Chicago of recognized standing selected
by the Agent in its sole discretion for the purchase from the
Agent at face value of certificates of deposit issued by the
Agent in an amount approximately equal or comparable to the
amount of the related Purchaser's Investment and having a
<PAGE>
maturity equal to such Yield Period.
"Assessment Rate" for any Yield Period means the annual
assessment rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) applicable to the Agent on its
insured deposits, on the Business Day immediately preceding
the first day of such Yield Period, under the Federal Deposit
Insurance Act, determined by annualizing the most recent
assessment levied on the Agent by the Federal Deposit
Insurance Corporation (together with any successor, the
"FDIC") with respect to such deposits after giving effect to
the most recent rebate granted to the Agent by the FDIC with
respect to deposit insurance as well as the loss to the Agent
(determined in the good faith judgment of the Agent) of the
use of such rebate prior to the date a credit is taken by the
Agent with respect to such rebate. The Assessment Rate as of
the date hereof is zero.
"Reserve Requirement" means, with respect to any Yield Period,
a percentage (expressed as a decimal) equal to the daily
average during such Yield Period of the aggregate reserve
requirement (including all basic, supplemental, marginal and
other reserves and taking into account any transitional
adjustments or other scheduled changes in reserve requirements
during such period) specified under Regulation D, as
applicable to the class of banks of which the Agent is a
member, on deposits of the types used as a reference in
determining the Domestic CD Rate and having a maturity
approximately equal to such Yield Period.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to
any Yield Period for any related Undivided Interest (or portion
thereof), a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ---------------
1-Eurodollar
Reserve Percentage
where:
"Eurodollar Rate" means, with respect to any Yield Period for
any related Undivided Interest (or portion thereof), the rate
per annum at which Dollar deposits in immediately available
funds are offered to the Eurodollar Office of the Agent two
Eurodollar Business Days prior to the beginning of such period
by prime banks in the offshore dollar interbank market at or
about the relevant local time of such Eurodollar Office, for
delivery on the first day of such Yield Period, for the number
of days comprised therein and in an amount equal or comparable
to the amount of the related Purchaser's Investment of such
Undivided Interest (or such portion) for such Yield Period.
"Relevant local time" as to any Eurodollar Office shall mean
11:00 a.m., London time when such Eurodollar Office is located
in Europe or the Middle East, or 10:00 a.m., Chicago time,
when such Eurodollar Office is located in North America or the
Caribbean.
<PAGE>
"Eurodollar Business Day" means a day of the year on which
dealings are carried on in the offshore dollar interbank
market of the Agent's Eurodollar Office and banks are open for
business in the location of the Agent's Eurodollar Office and
are not required or authorized to close in New York City.
"Eurodollar Office" shall mean the office of the Agent located
in the Cayman Islands, Grand Cayman B.W.I. or such other
office or offices through which the Agent determines the
Eurodollar Rate. A Eurodollar Office of the Agent may be, at
the option of the Agent, either a domestic or foreign office.
"Eurodollar Reserve Percentage" means, with respect to any
Yield Period, the reserve percentage (expressed as a decimal
and rounded upward to the nearest 1/100th of 1%) equal to the
maximum aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under
regulations issued from time to time by the Federal Reserve
Board and then applicable to assets or liabilities consisting
of and including "Eurocurrency Liabilities", as currently
defined in Regulation D of the Federal Reserve Board, having a
term approximately equal or comparable to such Yield Period.
"Purchaser Rate" for any Yield Period for any related
Undivided Interest (or portion thereof) means:
(a) in the case of an Undivided Interest (or portion
thereof) other than one referred to in clause (b) or (c) of
this definition, the Commercial Paper Rate for such Undivided
Interest (or such portion) for such Yield Period;
(b) in the case of an Undivided Interest (or portion
thereof) (i) owned by any Program Support Provider or any
other assignee (other than Purchaser), or otherwise funded
pursuant to a Program Support Agreement, or (ii) funded by a
Funding if, at the time of the making of such Funding, the
Aggregate Required Allocations did not exceed the Required
Allocations Limit, the Bank Rate for such Undivided Interest
(or such portion) for such Yield Period; and
(c) in the case of an Undivided Interest (or portion
thereof) funded by a Funding other than a Funding referred to
in clause (b) above, a rate per annum equal for each day
during such Yield Period to the Alternate Reference Rate in
effect on such day plus 2% per annum;
provided, however, that on any day when any Termination Event or
Unmatured Termination Event shall have occurred and be continuing,
the Purchaser Rate shall mean a rate per annum equal to the
Alternate Reference Rate in effect on such day plus 2.0% per annum.
F. Rate Variance Factor. The "Rate Variance Factor" means,
(i) during any Yield Period when no Run Off Day shall occur, zero,
and (ii) during any Yield Period in which one or more Run Off Days
occur, such percentage per annum not exceeding 2% as the Agent may
designate from time to time in its sole discretion.
<PAGE>
PART II
CREDIT RESERVE
A. Credit Reserve. The "Credit Reserve" of any Undivided
Interest on any day means an amount determined in accordance with
the definition of Credit Reserve in Appendix A.
PART III
DILUTION RESERVE
A. Dilution Reserve. The "Dilution Reserve" of any Undivided
Interest on any day means an amount determined in accordance with
the definition of Dilution Reserve in Appendix A.
PART IV
SERVICER'S FEE RESERVE
A. Servicer's Fee Reserve. The "Servicer's Fee Reserve" for
the related Undivided Interest at any time means an amount
determined as follows:
SFR = SF + ROSF
where:
SFR = the Servicer's Fee Reserve for such Undivided
Interest at any time;
SF = the unpaid Servicer's Fee relating to such
Undivided Interest accrued to such time and unpaid
as determined pursuant to Part II.B; and
ROSF = the Run Off Servicer's Fee for such Undivided
Interest at such time, as determined pursuant to
Part II.C.
B. Servicer's Fee. The "Servicer's Fee" relating to any
Undivided Interest accrued for any day means
(i) an amount equal to (x) 1.0% per annum, times (y) the
amount of the related Purchaser's Investment at the close of
business on such day, times (z) 1/360; or
(ii) on and after Servicer's reasonable request made at
any time when Seller or any of its Affiliates shall no longer
be Servicer, an alternative amount specified by Servicer not
exceeding (x) 110% of Servicer's cost and expenses of
performing its obligations under the Agreement during the
Yield Period when such day occurs, divided by (y) the number
of days in such Yield Period.
C. Run Off Servicer's Fee. The "Run Off Servicer's Fee" for
any Undivided Interest at any time means an amount equal to
(x) the related Purchaser's Investment at such time,
<PAGE>
times
(y) (A) the percentage per annum set forth in
clause (i)(x) of the definition of "Servicer's Fee", or (B) if
Servicer's Fee is calculated pursuant to clause (ii) of such
definition, the percentage per annum determined for each day
by dividing the amount of the Servicer's Fee accrued for such
day by the related Purchaser's Investment at the close of
business on such day, multiplying the quotient by 360 and
expressing the product as a percentage, times
(z) a fraction, the numerator of which is the number of
days equal to the then Adjusted Average Maturity, and the
denominator of which is 360 days.
PART V
ADJUSTED AVERAGE MATURITY
"Adjusted Average Maturity" means, on any day, the sum of
(i) 30 days (or such greater number not exceeding 90 days chosen by
the Agent) plus (ii) the Average Maturity for such day.
"Average Maturity" means, on any day, that time period
(expressed in days) equal to the weighted average maturity of the
Pool Receivables as shall be calculated by Servicer, as set forth
in the most recent Periodic Report in accordance with the
provisions thereof. If the Agent shall reasonably disagree with
any such calculation, the Agent may recalculate the Average
Maturity for such day, which calculation shall, absent manifest
error, be binding upon Servicer, Seller and Purchaser.
<PAGE>
EXECUTION COPY
FORM OF
ORIGINATOR PURCHASE AGREEMENT
DATED AS OF
DECEMBER 15, 1994
AMONG
PGI INVESTMENTS, INC.
AND
PLY GEM INDUSTRIES, INC., ALLIED PLYWOOD CORPORATION,
CONTINENTAL WOOD PRESERVERS, INC., HOOVER TREATED
WOOD PRODUCTS, INC., SAGEBRUSH SALES, INC.,
STUDLEY PRODUCTS, INC., SNE ENTERPRISES, INC.,
SNE ENTERPRISES - TEXAS, INC., CENTRAL NEW YORK
WINDOW CO. AND VARIFORM, INC.
<PAGE>
ORIGINATOR PURCHASE AGREEMENT
ORIGINATOR PURCHASE AGREEMENT, dated as of December 15, 1994, among
PGI INVESTMENTS, INC., a Delaware corporation (the "Buyer"), and PLY GEM
INDUSTRIES, INC., a Delaware Corporation ("PGI"), ALLIED PLYWOOD CORPORATION,
a Delaware corporation ("APC"), CONTINENTAL WOOD PRESERVERS, INC., a Michigan
corporation ("CWP"), HOOVER TREATED WOOD PRODUCTS, INC., a Delaware
corporation ("HTWP"), SAGEBRUSH SALES, INC., a New Mexico corporation ("SBS"),
STUDLEY PRODUCTS, INC., a New York corporation ("Studley"), SNE ENTERPRISES,
INC., a Delaware corporation ("SNE"), SNE ENTERPRISES - TEXAS, INC., a
Delaware corporation ("SNE Texas"), CENTRAL NEW YORK WINDOW CO., a Delaware
corporation, ("Window Co.") and VARIFORM, INC., a Missouri corporation
("Variform"; and collectively with PGI, APC, CWP, HTWP, SBS, Studley, SNE, SNE
Texas, Window Co. and Variform the "Originators"; individually, an
"Originator", except that the term Originator when used with respect to
Receivables originated by (a) PGI, shall only include Receivables originated
by its Ply Gem Manufacturing division and (b) APC, shall not include
Receivables originated by its Goldenberg division in the event APC acquires
Goldenberg Group, Inc. after the date hereof). Unless otherwise defined
herein, all capitalized terms used herein and defined in the Receivables
Purchase Agreement, dated as of the date hereof (the "Receivables Purchase
Agreement"), among PGI Investments, Inc., as Seller, the Originators,
Receivables Capital Corporation, as Purchaser ("RCC"), and Bank of America
National Trust and Savings Association, as Agent, are used herein as so
defined.
W I T N E S S E T H:
WHEREAS, in the course of each Originator's business, such
Originator generates accounts receivable representing the right to payment
from the sale of merchandise or services rendered by such Originator;
WHEREAS, each Originator desires to sell to the Buyer all
Receivables payable by the obligors designated as such in a report delivered
to and acceptable to the Buyer and the Agent in their sole discretion (as to
each Originator, its "Obligors") on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Buyer desires to purchase from each Originator all
Receivables payable by its Obligors on the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Purchase.
1.1 Purchase of All Receivables Relating to Obligors. (a)
Subject to and upon the terms and conditions herein set forth, each Originator
does hereby severally agree to sell, transfer, assign, set over and otherwise
convey to the Buyer, without recourse, all of its right, title and interest
in, to and under all Receivables payable to it by its Obligors, now existing
and hereafter created, the lockboxes or post office boxes subject to the Lock-
Box Agreements with any Lock-Box Bank, all monies due or to become due with
respect to any of the foregoing, all amounts received with respect thereto,
all collateral security therefor and all proceeds thereof (as to each
Originator, the "Originator Receivables"), and the Buyer does hereby agree to
purchase, at the purchase price computed in accordance with Section 1.2 of
this Agreement, all such right, title and interest in such Originator
Receivables. The sale and assignment of Originator Receivables by each
Originator to the Buyer shall be made pursuant to a Sale and Assignment in the
form attached hereto as Exhibit 1.1.
(b) The parties hereto intend the transfers of Receivables pursuant to
this Agreement to constitute true sales for all purposes of such Receivables
by each Originator to the Buyer providing the Buyer with the full benefits of
ownership thereof, and no party hereto intends the transactions contemplated
hereunder to be, or for any purpose to be characterized as, a loan from the
Buyer to any Originator or a grant of a security interest in the Receivables
by any Originator to the Buyer to secure a debt or other obligation of such
Originator. To the extent that the conveyance of Receivables hereunder is
characterized by a court or other Governmental Authority of competent
jurisdiction as a financing, it is intended by the parties hereto that the
assignment, conveyance and transfer by each Originator of its right, title and
interest in the Receivables to the Buyer hereunder constitute the grant of a
security interest under the UCC (as defined in the UCC as in effect in the
State of New York). Each Originator hereby severally grants to the Buyer on
the terms and conditions of this Agreement a first priority security interest
in and against all of such Originator's right, title and interest in its
Originator Receivables, whether now or hereafter existing or acquired, for the
purpose of securing the payment and performance of such Originator's
obligations hereunder and, in the case of PGI, its obligations under the Ply
Gem Note. To the extent that the conveyance of Receivables hereunder is
<PAGE>
characterized by a court or other Governmental Authority of competent
jurisdiction as a financing, the parties agree that this Agreement constitutes
a "security agreement" under applicable laws.
1.2 Determination of Purchase Price. (a) The purchase price for the
Originator Receivables to be sold by an Originator hereunder (the "Purchase
Price") shall be a dollar amount determined in accordance with the formula set
forth in Exhibit 1.2 hereto.
(b) On each Business Day following the initial Purchase by the Purchaser
under the Receivables Purchase Agreement on which a Receivable is created
(each, a "Purchase Date"), on the terms and subject to the conditions of this
Agreement, the Buyer shall pay to the applicable Originator the Purchase Price
for such Originator Receivables to be sold on such date by such Originator to
the Buyer by making a payment in immediately available funds to a bank account
designated by such Originator to the extent that the Buyer has funds available
to make such payment and, if the Buyer has insufficient funds available to
make such payment, increasing the principal amount outstanding under the
Seller Note issued to such Originator by the amount of the excess, if any, of
(x) such Purchase Price over (y) the cash portion of the amount of any payment
made on such date pursuant to this sentence.
(c) On each Purchase Date, the Purchase Price payable to each Originator
for the Originator Receivables to be sold on such date by such Originator to
the Buyer shall be reduced by an amount equal to the aggregate reduction
attributable to Dilution Factors occurring in the Unpaid Balance of the
Eligible Receivables originated by such Originator, if any, for the preceding
Business Day ("Dilutive Credits"). If such Dilutive Credits exceed the
Purchase Price payable by the Buyer to such Originator on such Purchase Date,
then the principal amount of the Seller Note made in favor of such Originator
shall be reduced by the amount of such excess. If, on any Business Day, the
Dilutive Credits for the preceding Business Day in respect of the Receivables
originated by any Originator are greater than zero and the principal amount of
the Seller Note made in favor of such Originator has been reduced to zero,
then such Originator shall pay to the Buyer the amount of such Dilutive
Credits in immediately available funds on the next succeeding Business Day.
Such Originator's failure to pay such amount shall not mean that the related
Originator Receivables have not been purchased by the Buyer.
Section 1.3 The Seller Notes. (a) On or prior to the date hereof, the
Buyer shall deliver to each Originator a promissory note in the form of
Exhibit 1.3 payable to the order of such Originator (each such promissory
note, as it may be amended, supplemented, endorsed or otherwise modified from
time to time, together with any promissory notes issued from time to time in
substitution thereof or renewal thereof, being herein called a "Seller Note").
(b) The Servicer shall hold the Seller Notes for the benefit of the
Originators and shall make all appropriate record-keeping entries with respect
to such notes or otherwise to reflect payments on and adjustments of such
notes. The Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued interest on such
notes at any time. The Originators hereby severally authorize the Servicer to
mark the Seller Notes "CANCELLED" and to return the Seller Notes to the Buyer
upon the full and final payment thereof after the termination of this
Agreement.
SECTION 2. Representations, Warranties and Covenants.
2.1 Representations and Warranties of the Originators. Each of
<PAGE>
the representations and warranties of each Originator set forth in Section
6.01 of the Receivables Purchase Agreement is hereby incorporated by reference
herein and is deemed to be herein restated and herein reconfirmed in favor of
the Buyer and each of such representations and warranties is hereby made by
each Originator (as to itself) with respect to this Agreement and the
Originator Receivables to be sold by it hereunder. None of the Originator
Receivables sold hereunder have been selected for sale hereunder by any
Originator based upon any criteria that could result in the prospects for the
collection of such Receivables being materially less favorable than collection
prospects of the Receivables originated by such Originator taken as a whole.
2.2 Covenants. (a) Each Originator covenants and agrees with the
Buyer that (a) it will duly and punctually perform each of its covenants and
agreements set forth in Sections 7.01, 8.04 and 8.05 of the Receivables
Purchase Agreement and (b) it will not breach any of its covenants and
agreements set forth in Section 7.03 of the Receivables Purchase Agreement.
(b) Each Originator and the Buyer agree to treat transfers of
Receivables sold, transferred, assigned, and otherwise conveyed pursuant to
Section 1.1 for all purposes (including tax and financial accounting purposes)
as sales on all of its relevant books, records, financial statements and other
applicable documents.
SECTION 3. Conditions Precedent.
The obligation of the Buyer to purchase the Originator Receivables
hereunder shall be subject to the satisfaction of the condition that the Buyer
shall have received from each Originator acknowledgment copies of proper
financing statements (Form UCC-1), dated a date reasonably near to the date
hereof, naming such Originator as the assignor of its Originator Receivables
and the Buyer, as assignee, (and naming the Agent as the assignee of the
Buyer) and/or other similar instruments or documents, as may be necessary or
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the ownership interests in all Originator Receivables to be
assigned by such Originator to the Buyer hereunder.
SECTION 4. Administration and Collections.
Subject to Section 6.2, each Originator may continue to collect the
Originator Receivables to be sold by it hereunder (as a subcontractor of the
Servicer) in accordance with Article VIII of the Receivables Purchase
Agreement. Each Originator agrees that it will perform its obligations
thereunder with respect to all Originator Receivables to be sold by it
hereunder and shall, in any event, take all actions necessary to permit the
Servicer to perform its obligations under the Receivables Purchase Agreement
with respect to such Originator Receivables.
SECTION 5. Remedies.
In addition to any rights and remedies now or hereafter granted
under applicable law and not by way of limitation of any such rights and
remedies, the Buyer shall have all of the rights and remedies of a purchaser
of accounts (or a secured party, if notwithstanding the intent of the parties
hereto, the conveyance of Receivables hereunder is determined not to be a
"true sale"), in either case, under the UCC as enacted in any applicable
jurisdiction in addition to the rights and remedies provided in this
Agreement.
SECTION 6. Miscellaneous.
<PAGE>
6.1 Agent as Third Party Beneficiary. The provisions of this
Agreement which are for the benefit of the Buyer are also intended to be for
the benefit of the Agent (as agent under the Receivables Purchase Agreement)
and RCC, and the Agent and RCC shall be deemed to be third party beneficiaries
with respect to such provisions, entitled to enforce such provisions directly
and in their own names.
6.2 Notice to Obligors. At any time, the Buyer may notify the
Obligors of Pool Receivables, or any of them, of the Buyer's ownership of such
Pool Receivables.
6.3 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the Buyer and its successors and assigns,
including RCC, and the Agent, and the Originators and their respective
permitted successors and permitted assigns. All agreements, representations
and warranties made herein shall survive the execution and delivery of this
Agreement. Notwithstanding anything to the contrary contained herein, this
Agreement may not be assigned by any Originator without the prior written
consent of the Buyer and the Agent.
6.4 Amendments. This Agreement and the rights and obligations of
the parties hereunder may not be changed orally but only by an instrument in
writing signed by the Buyer and each Originator and the Agent.
6.5 Originator Obligations. (a) It is expressly agreed that,
anything in this Agreement contained to the contrary notwithstanding, each
Originator shall remain liable under the Originator Receivables being sold by
it hereunder to perform all of the obligations assumed by it thereunder and
the Buyer shall have no obligations or liability under such Receivables to any
Obligor thereunder by reason of or arising out of this Agreement nor shall the
Buyer be required or obligated in any manner to perform or fulfill any of the
obligations of any Originator under or pursuant to any such Receivable.
(b) Each Originator hereby agrees to pay its allocable share of all
fees and expenses payable under the Receivables Purchase Agreement.
6.6 Counterparts. This Agreement may be executed in any number of
copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
6.7 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THE
PERFECTION OF THE INTEREST OF THE BUYER IN THE RECEIVABLES IS GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
6.8 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.
6.9 Termination. This Agreement shall terminate upon the
termination of the Receivables Purchase Agreement in accordance with the terms
thereof and the reduction of all Undivided Interests thereunder to zero and
the payment in full of all fees and other amounts payable thereunder.
6.10 No Petition. Each Originator hereby covenants and agrees that,
prior to the date which is one year and one day after the termination of the
Receivables Purchase Agreement in accordance with the terms thereof and the
reduction of all Undivided Interests thereunder to zero and the payment in
<PAGE>
full of all fees and other amounts payable thereunder, it will not institute
against, or join any other Person in instituting against, the Buyer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under any bankruptcy, liquidation,
conservatorship, moratorium, rearrangement, receivership, insolvency,
readjustment of debt or similar law.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
hereof.
PGI INVESTMENTS, INC.
By: _________________________________
Authorized Signatory
PLY GEM INDUSTRIES, INC.
By: _________________________________
Authorized Signatory
ALLIED PLYWOOD CORPORATION
By: _________________________________
Authorized Signatory
CONTINENTAL WOOD PRESERVERS, INC.
By: _________________________________
Authorized Signatory
HOOVER TREATED WOOD PRODUCTS, INC.
By: _________________________________
Authorized Signatory
SAGEBRUSH SALES, INC.
By: _________________________________
Authorized Signatory
STUDLEY PRODUCTS, INC.
By: _________________________________
Authorized Signatory
SNE ENTERPRISES, INC.
By: _________________________________
Authorized Signatory
SNE ENTERPRISES - TEXAS, INC.
By: _________________________________
Authorized Signatory
CENTRAL NEW YORK WINDOW CO.
By: _________________________________
Authorized Signatory
VARIFORM, INC.
By: _________________________________
Authorized Signatory
<PAGE>
EXHIBIT 1.1 TO ORIGINATOR
RECEIVABLES PURCHASE AGREEMENT
SALE AND ASSIGNMENT dated December 15, 1994
Subject to and upon the terms and conditions set forth in that
certain Receivables Purchase Agreement, dated as of December 15, 1994, among
PGI INVESTMENTS, INC. (the "Buyer") and the Originators named therein,
including the undersigned (the "Purchase Agreement"), the undersigned hereby
sells, transfers, assigns, sets over and conveys to the Buyer, without
recourse, all of its right, title and interest in, to and under all Originator
Receivables for a purchase price computed in accordance with Section 1.2 of
the Purchase Agreement. The undersigned represents and warrants unto Buyer
that the Originator Receivables sold hereunder have not been selected for sale
hereunder by the undersigned based upon any criteria that could result in the
prospects for the collection of such Receivables being materially less
favorable than collection prospects of the Receivables originated by the
undersigned taken as a whole.
Capitalized terms used herein shall have the meanings specified or
referred to in the Purchase Agreement.
[NAME OF THE ORIGINATOR]
By _____________________________
Title:
<PAGE>
EXHIBIT 1.2 TO ORIGINATOR
RECEIVABLES PURCHASE AGREEMENT
PURCHASE PRICE FORMULA
Part I. Calculation of Purchase Price. On each day when Originator
Receivables are purchased by the Buyer pursuant to Section 1.2 of this
Agreement, subject to Section 1.2, the Purchase Price to be paid to the
applicable Originator on such day for the Originator Receivables that are to
be sold by such Originator on such day shall be determined in accordance with
the following formula:
PP = AUB - PD
where:
<PAGE>
PP = the aggregate Purchase Price for the Originator Receivables to
be purchased from such Originator on such day;
AUB = the aggregate Unpaid Balance of the Originator Receivables to
be purchased from such Originator on such day; and
PD = the Purchase Discount in effect on such day as determined
pursuant to Part II below.
Part II. Definitions and Calculations Related to Purchase Discount.
"Purchase Discount" for the Originator Receivables to be sold by any
Originator shall mean the amount determined in accordance with the following
formula:
PD = AUB x (LD + YD)
where:
PD = the Purchase Discount in effect on such day;
AUB = the aggregate Unpaid Balance of the Originator Receivables to
be purchased from the Originator on such day;
LD = the Loss Discount in effect on such day as determined pursuant
to paragraph 1 below; and
YD = the Yield Discount in effect on such day as determined pursuant
to paragraph 2 below.
1. "Loss Discount" in effect for any day with respect to any Originator
shall mean the result, expressed as a percentage, calculated as of the date of
the most recent Periodic Report, of the quotient of (a) the aggregate Unpaid
Balance of all Pool Receivables originated by such Originator that are more
than 90 days past due on such date divided by (b) the aggregate Unpaid Balance
of all Pool Receivables originated by such Originator on such date.
2. "Yield Discount" in effect for any day with respect to any
Originator shall mean the result, expressed as a percentage, calculated as of
the date of the most recent Periodic Report, of the product of (a) the
quotient of (i) the Average Maturity of the Pool Receivables of such
Originator outstanding on such date divided by (ii) 360 times (b) the
Commercial Paper Rate in effect on such date.
<PAGE>
EXHIBIT 1.3 TO ORIGINATOR
PURCHASE AGREEMENT
FORM OF SELLER PROMISSORY NOTE
New York, New York
December __, 1994
FOR VALUE RECEIVED, the undersigned, PGI INVESTMENTS, INC., a Delaware
corporation (the "Buyer"), promises to pay to [NAME OF ORIGINATOR], a
__________ corporation (the "Originator"), on the terms and subject to the
conditions set forth herein and in the Originator Purchase Agreement referred
to below, the aggregate unpaid Purchase Price of all Originator Receivables
purchased by the Buyer from the Originator pursuant to such Originator
<PAGE>
Purchase Agreement, as such unpaid Purchase Price is shown in the records of
the Servicer.
SECTION 1. Originator Purchase Agreement. This Note is the Seller Note
described in, and is subject to the terms and conditions set forth in, that
certain Originator Purchase Agreement dated as of December 15, 1994 (as the
same may from time to time be amended or otherwise modified in accordance with
its terms, the "Originator Purchase Agreement"), among certain affiliates of
the Buyer, including the Originator, and the Buyer. Reference is hereby made
to the Originator Purchase Agreement for a statement of certain other rights
and obligations of the Buyer and the Originator.
SECTION 2. Definitions. Capitalized terms used but not defined herein
have the meanings assigned thereto in the Originator Purchase Agreement.
SECTION 3. Interest Rate. Interest on the unpaid principal amount of
this Note shall be paid at a rate per annum equal to the sum of (a) the one-
month London Interbank Offered Rate published in The Wall Street Journal on
the first Business Day of the then current month plus (b) fifty (50) basis
points.
SECTION 4. Interest Payment Dates. The Buyer promises to pay accrued
interest on the unpaid principal amount hereof on each Settlement Date, and on
the date, following the Commitment Termination Date, on which Aggregate
Purchaser's Investments shall be reduced to zero, commencing with the
Settlement Date to occur after the date hereof. The Buyer also shall pay
accrued interest on the principal amount of each prepayment hereof on the date
of each such prepayment.
SECTION 5. Computation of Interest. Interest to be paid hereunder shall
be computed for the actual number of days elapsed on the basis of a year
consisting of 365 or 366 days, as applicable.
SECTION 6. Principal Payment Dates. The unpaid principal amount of this
Note is payable on the demand of the Originator; provided, however, that
subject to the foregoing, the principal amount of and accrued interest on this
Note may be prepaid on any Business Day without premium or penalty.
The principal amount outstanding hereunder shall be reduced from time to
time on account of Dilutive Credits in accordance with the Originator Purchase
Agreement.
SECTION 7. Events of Default. Each of the following shall constitute
an Event of Default (an "Event of Default") under this Note:
(a) Non-Payment. Default and continuance thereof for seven (7)
Business Days, in the payment when due of any interest hereunder or default
when due of payment of principal.
(b) Insolvency, etc. An Event of Bankruptcy shall occur with
respect to the Buyer.
SECTION 8. Effect of Default. If an Event of Default shall occur
pursuant to Section 7(b), all principal and accrued but unpaid interest shall
become immediately due and payable. If any other Event of Default shall occur
and be continuing the Originator may declare the principal and all accrued and
unpaid interest hereunder immediately due and payable.
SECTION 9. Cash Payment Mechanics. All cash payments of principal and
interest hereunder are to be made in lawful money of the United States of
<PAGE>
America.
SECTION 10. General. No failure or delay on the part of the Originator
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 the same
shall be in writing and signed and delivered by the Buyer, the Originator and
the Purchaser.
SECTION 11. Maximum Interest. Notwithstanding anything in this Note to
the contrary, the Buyer shall never be required to pay unearned interest on
any amount outstanding hereunder at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received
under applicable law.
SECTION 12. GOVERNING LAW. THIS NOTE HAS BEEN EXECUTED IN NEW YORK, NEW
YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE BUYER AND THE ORIGINATOR HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13. Captions. Section captions used in this Note are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Note.
SECTION 14. Assignment. This Note shall not be assigned to any Person.
In the event that any Person acquires this Note notwithstanding such
prohibition, such Person shall be bound by the covenant of the initial holder
of this Note set forth in Section 8.9 of the Originator Purchase Agreement.
SECTION 15. Notices, etc. All parties now and hereafter liable with
respect to this Note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive presentment, demand, protest and all other notice of
any kind.
[SIGNATURE FOLLOWS]
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
as of the date first above written.
PGI INVESTMENTS, INC.
By:______________________________
Name Printed:____________________
Title:___________________________
<PAGE>
EXECUTION COPY
- - -----------------------------------------------------------------
SUPPORT AGREEMENT
dated as of
December 15, 1994
made by
PLY GEM INDUSTRIES, INC.
in favor of
RECEIVABLES CAPITAL CORPORATION
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
- - -----------------------------------------------------------------
<PAGE>
SUPPORT AGREEMENT
AGREEMENT, dated as of December 15, 1994 made by PLY GEM
INDUSTRIES, INC., a Delaware corporation (the "Company"), in
favor of RECEIVABLES CAPITAL CORPORATION (the "Purchaser") and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION as Agent
for the Purchaser (in such capacity, the "Agent").
PRELIMINARY STATEMENTS.
(1) Allied Plywood Corporation, Continental Wood
Preservers, Inc., Hoover Treated Wood Products, Inc., Sagebrush
Sales, Inc., Studley Products Inc., SNE Enterprises, Inc., SNE
Enterprises - Texas, Inc., Central New York Window Co. and
Variform, Inc. (each an "Originator" and with the Company,
collectively, the "Originators"; except that the term
"Originator" when used with respect to Receivables originated by
(a) PLY GEM, shall only include Receivables originated by its Ply
Gem Manufacturing division and (b) APC, shall not include
Receivables originated by its Goldenberg division in the event
APC acquires Goldenberg Group, Inc., after the date hereof) and
PGI Investments, Inc. (the "Seller"), each a direct or indirect
subsidiary of the Company (collectively, the "Relevant
Subsidiaries"), the Company, the Purchaser and the Agent have
entered into a Receivables Purchase Agreement dated as of the
date hereof (the "Receivables Agreement"; the terms defined
therein and not otherwise defined herein being used herein as
therein defined), pursuant to which the Seller will sell
Undivided Interests in Eligible Receivables to the Purchaser.
The Agent is acting as agent under the Receivables Purchase
Agreement for the Purchaser.
(2) The Company and the Relevant Subsidiaries have entered
into an Originator Purchase Agreement dated as of the date hereof
(the "Originator Purchase Agreement" and, together with the
Receivables Purchase Agreement, the "Agreements") under which the
Seller has agreed to purchase Eligible Receivables from the
Originators.
(3) It is a condition precedent to the purchase of
Undivided Interests in Receivables under the Receivables Purchase
Agreement that the Company, as the beneficial owner of all of the
outstanding shares of stock of each Relevant Subsidiary, shall
have executed and delivered this Agreement.
NOW THEREFORE, in consideration of the premises and in order
to induce the Purchaser to make any purchase or reinvestment
under the Receivables Purchase Agreement, Company hereby agrees
as follows:
SECTION 1. Unconditional Undertaking; Enforcement. (a)
The Company hereby unconditionally and irrevocably undertakes and
agrees with and for the benefit of the Purchaser, any other Owner
and the Agent to cause the due and punctual performance and
observance by the Seller and its successors and assigns of all of
the terms, covenants, conditions, agreements and undertakings on
the part of the Seller (whether as Seller, Servicer or otherwise)
to be performed or observed under the Receivables Purchase
Agreement or any document delivered in connection with the
<PAGE>
Receivables Purchase Agreement in accordance with the terms
thereof, including, without limitation, any agreement of the
Seller to pay any money under the Receivables Purchase Agreement
or any such other document (all such terms, covenants,
conditions, agreements and undertakings on the part of the Seller
to be performed or observed being collectively called the "Seller
Obligations").
(b) The Company hereby unconditionally and irrevocably
undertakes and agrees with and for the benefit of the Purchaser,
any other Owner and the Agent to cause the due and punctual
performance and observance by the Originators and their
respective successors and assigns of all of the terms, covenants,
conditions, agreements and undertakings on the part of any
Originator to be performed or observed under the Agreements or
any document delivered in connection with the Agreements in
accordance with the terms thereof, including, without limitation,
any agreement of any Originator to pay any money under the
Agreements or any such other document (all such terms, covenants,
conditions, agreements and undertakings on the part of any
Originator to be performed or observed being collectively called
the "Originator Obligations").
(c) In the event that any Relevant Subsidiary shall fail in
any manner whatsoever to perform or observe any of the Seller
Obligations or Originator Obligations, as the case may be (the
"Seller Obligations" and the "Originator Obligations" being
hereafter referred to collectively as the "Subsidiary
Obligations") when the same shall be required to be performed or
observed under any of the Agreements or any such other document
referred to in Section 1(a) or (b) hereof, then the Company will
itself duly and punctually perform or observe, or cause to be
duly and punctually performed or observed, such Subsidiary
Obligation, and it shall not be a condition to the accrual of the
obligation of the Company hereunder to perform or observe any
Subsidiary Obligation (or to cause the same to be performed or
observed) that the Purchaser, any other Owner or the Agent shall
have first made any request of or demand upon or given any notice
to the Company or to such Relevant Subsidiary or their respective
successors or assigns, or have instituted any action or
proceeding against the Company or such Relevant Subsidiary or
their respective successors or assigns in respect thereof.
(d) The Purchaser, any other Owner and the Agent may
proceed to enforce the obligations of the Company under this
Section 1 without first pursuing or exhausting any right or
remedy which the Purchaser, any other Owner or the Agent may have
against any Relevant Subsidiary, any other Person or with respect
to any Eligible Receivables or the Agreements.
(e) To secure all obligations of the Company arising in
connection with this Agreement and each other Agreement Document
to which it is a party, whether now or hereafter existing, due or
to become due, direct or indirect, or absolute or contingent, the
Company hereby assigns and grants to Purchaser a security
interest in all of the Company's right, title and interest now or
hereafter existing in, to and under all Receivables originated by
it, whether now or hereafter existing or acquired.
SECTION 2. Obligation Absolute. The Company will perform
<PAGE>
its obligations under this Agreement regardless of any law, rule,
regulation or order now or hereafter in effect in any
jurisdiction affecting any of the terms of the Agreements or any
document delivered in connection with the Agreements or the
rights of the Purchaser, any other Owner or the Agent with
respect thereto. The obligations of the Company under this
Agreement shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any of
the Agreements or any Certificate of Assignments or any document
or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of
performance of, or in any other term of, all or any of the
Subsidiary Obligations, or any other amendment or waiver of
or any consent to departure from any of the Agreements or any
Certificate of Assignments or any document or any other agreement
or instrument relating thereto;
(iii) any exchange, release or failure to transfer title
to any Eligible Receivable, or the non-perfection of any
Collateral or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the
Subsidiary Obligations;
(iv) any failure
(a) to obtain any authorization or approval from
or other action by, or to notify or file with, any governmental
authority or regulatory body required in connection with the
performance of such obligations by the Company,
(b) of the Agent or the Purchaser to assert any
claim or demand or to enforce any right against any Relevant
Subsidiary or any other Person under the provisions of the
Agreements or any Certificate of Assignments or any document or
any other agreement or instrument relating thereto, or
(c) of the Agent or the Purchaser to exercise any
right or remedy against any other guarantor of, or collateral
securing, any Subsidiary Obligations;
(v) any impossibility or impracticality of
performance, illegality, force majeure, any act of any
government, or any other circumstance which might constitute
a defense available to, or a discharge of, any Relevant
Subsidiary or the Company, or any other circumstance, event
or happening whatsoever, whether foreseen or unforeseen and
whether similar or dissimilar to anything referred to above
in this Section 2;
(vi) any disposition of the stock of any Relevant
Subsidiary; or
(vii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of any Relevant Subsidiary, the Company, any surety or
any guarantor.
This Agreement shall continue to be effective or be reinstated,
<PAGE>
as the case may be, if at any time any payment by any Relevant
Subsidiary under any of the Agreements or any document delivered
in connection with any of the Agreements is rescinded or must
otherwise be returned by the Purchaser, any other Owner or the
Agent upon the insolvency, bankruptcy or reorganization of any
Relevant Subsidiary or otherwise, all as though such payment had
not been made. The obligations of the Company under this
Agreement shall not be subject to reduction, termination or other
impairment by reason of any set-off, recoupment, counterclaim or
defense or for any other reason. The obligations of the Company
under this Agreement shall not be discharged except by
performance as herein provided.
SECTION 3. Waiver. The Company hereby waives promptness,
diligence, notice of acceptance and any other notice with respect
to any of the Subsidiary Obligations and this Agreement, the
Agreements, the Certificate of Assignments and any other document
related thereto and any requirement that the Purchaser, any other
Owner or the Agent exhaust any right or take any action against
any Relevant Subsidiary, any other Person or with respect to any
Receivable which has been purchased.
SECTION 4. Subrogation. The Company will not exercise or
assert any rights which it may acquire by way of subrogation
under this Agreement unless and until all of the Subsidiary
Obligations shall have been paid and performed in full. If any
payment shall be made to the Company on account of any
subrogation rights at any time when all of the Subsidiary
Obligations shall not have been paid and performed in full, each
and every amount so paid will be held in trust for the benefit of
the Purchaser and any other Owner and forthwith be paid to the
Agent to be credited and applied to the Subsidiary Obligations to
the extent then unsatisfied, in accordance with the terms of the
Agreements or any document delivered in connection with the
Agreements, as the case may be. In the event that (i) the
Company shall have satisfied any of the Subsidiary Obligations
and (ii) all of the Subsidiary Obligations shall have been paid
and performed in full, the Agent will, at the Company's request
and expense, execute and deliver to the Company appropriate
documents, without recourse and without representation or
warranty of any kind, necessary to evidence or confirm the
transfer by way of subrogation to the Company of the rights of
the Purchaser, any other Owner or the Agent, as the case may be,
with respect to the Subsidiary Obligations to which the Company
shall have become entitled by way of subrogation, and thereafter
the Purchaser, any other Owner and the Agent shall have no
responsibility to the Company or any other Person with respect
thereto.
SECTION 5. Representations and Warranties of the Company.
The Company hereby represents and warrants as follows:
(i) Each of the Company, the Seller and each
Originator (collectively, the "Corporations" and
individually a "Corporation") (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, (b) has the corporate power and authority
and the legal right to own and operate its property, to lease the
property it operates as lessee and to conduct the business in
which it is currently engaged, (c) is duly qualified as a foreign
<PAGE>
corporation and in good standing under the laws of each
jurisdiction where qualification is required by the nature of
its business or the character and location of its property or
business and in which the failure to so qualify would have a
material adverse effect on the business, operations, property or
financial or other condition or results of operations of the
Company and its Subsidiaries taken as a whole and (d) is in
compliance with all Requirements of Law except to the extent
that the failure to comply therewith would not, in the aggregate,
reasonably be expected to have a material adverse effect on the
business, operations, property or financial or other condition of
the Company and its Subsidiaries taken as a whole or to
materially adversely affect the ability of the Seller, the
Servicer and each Originator to perform its obligations under
this Agreement, the Receivables Purchase Agreement, the
Originator Purchase Agreement, and all other instruments and
documents to be delivered by it hereunder and thereunder;
(ii) The execution, delivery and performance by each
Corporation of this Agreement, the Receivables Purchase
Agreement, the Originator Purchase Agreement and all other
instruments and documents to be delivered by such Corporation
hereunder or thereunder, and the transactions contemplated hereby
and thereby, are within such Corporation's corporate powers, have
been duly authorized by all necessary corporate action, do not
contravene (a) such Corporation's charter or by-laws, (b) any
law, rule or regulation, (c) any term or provision contained in
the Bank Credit Agreement or (d) any term or provision contained
in any other material agreement binding on or affecting such
Corporation and do not result in or require the creation of
any lien, security interest or other charge or encumbrance upon
or with respect to any of such Corporation's properties other
than as specifically contemplated by this Agreement, the
Receivables Purchase Agreement and the Originator Purchase
Agreement; and no transaction contemplated hereby or thereby
requires compliance with any bulk sales act or similar law;
(iii) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery
and performance by any Corporation of this Agreement, the
Receivables Purchase Agreement, the Originator Purchase Agreement
or any other document or instrument to be delivered by such
Corporation hereunder or thereunder, except for the filing of the
Financing Statements referred to in Article V of the Receivables
Purchase Agreement, all of which, at the time required in such
Article V, shall have been duly made and shall be in full force
and effect;
(iv) Each of this Agreement, the Receivables Purchase
Agreement, the Originator Purchase Agreement, the Certificate of
Assignments and each other Agreement Document constitute the
legal, valid and binding obligations of each Corporation party
thereto enforceable against such Corporation in accordance with
their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally
or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
<PAGE>
(v) Except as disclosed in the Company's Form 10-K for
the year ended December 31, 1993, Form 10-Q for the quarter
ended April 2, 1994, Form 10-Q for the quarter ended July 2,
1994, or Form 10-Q for the quarter ended October 1, 1994 filed
pursuant to the Securities Exchange Act of 1934, as amended,
there are no actions, suits or proceedings pending or, to its
knowledge, threatened against it or affecting any Relevant
Subsidiary, or its property or the property of any Relevant
Subsidiary, in any court, or before any arbitrator of any kind,
or before or by any governmental body which have a reasonable
possibility of being adversely determined, and, if so determined,
would have a material adverse effect on its or their financial
condition or its or their ability to collect the Pool Receivables
or could have an adverse effect on its or their ability to
perform its or their obligations under this Agreement, the
Receivables Purchase Agreement, the Originator Purchase
Agreement, the Certificate of Assignment or any other Agreement
Document; neither it nor any Relevant Subsidiary is in default
with respect to any contractual obligation or any order of any
court, arbitrator or governmental body;
(vi) No proceeds of any Purchase will be used to
acquire any security in any transaction which is subject to
Sections 13 and 14 of the Securities Exchange Act of 1934, as
amended; provided, that up to 5% of the proceeds of any Purchase
may be used to purchase or carry margin stock (as such term is
used in 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 establishing margin requirements);
(vii) Each Purchase of an Undivided Interest from the
Seller under the Receivables Purchase Agreement, and each
reinvestment of Collections in Pool Receivables made under the
Receivables Purchase Agreement, will constitute (a) a "current
transaction" within the meaning of Section 3(a)(3) of the
Securities Act of 1933, as amended, and (b) a purchase or other
acquisition of notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the
sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940,
as amended;
(viii) Except as disclosed in the Company's Form 10-K
for the year ended December 31, 1993 or Forms 10-Q for the
quarters ended December 31, 1993, April 2, 1994, July 2, 1994 and
October 1, 1994, filed pursuant to the Security and Exchange Act
of 1934, as amended, the consolidated balance sheet of the
Company and its consolidated Subsidiaries as at December 31,
1993, and the related statements of earnings, stockholders'
equity and statement of cash flows of the Company and its
consolidated Subsidiaries for the fiscal year then ended
certified by Grant Thornton, independent public accountants,
copies of which have been furnished to the Agent, fairly present
the consolidated financial condition of the Company and its
consolidated Subsidiaries as at such date and the consolidated
results of the operations of the Company and its consolidated
Subsidiaries for the period ended on such date, all in accordance
with generally accepted accounting principles consistently
applied and, since December 31, 1993, there has been no material
<PAGE>
adverse change in any such condition or operations; and
(ix) The Company is the registered and beneficial
direct or indirect owner of all of each class of the issued and
outstanding shares of the capital stock of each Relevant
Subsidiary.
SECTION 6. Covenants. Until the date on which all of the
Subsidiary Obligations shall have been fully satisfied, the
Company will, unless the Agent shall have otherwise consented in
writing:
(i) Compliance with Laws, etc. Comply in all material
respects with all applicable laws, rules, regulations and orders
with respect to it, its business and properties, the non-
compliance with which would materially adversely affect it, its
business and properties.
(ii) 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
materially adversely affect the interests of any Purchaser, any
other Owner or the Agent under any of the Agreements or the
ability of the Company to perform its obligations under this
Agreement.
SECTION 7. Indemnities. Without limiting any other rights
which the Agent or the Purchaser or any Affiliate thereof or any
other Owner may have under the Receivables Purchase Agreement or
under applicable law, the Company hereby agrees to indemnify each
of the Agent and the Purchaser and each Affiliate thereof and any
other Owner from and against any and all damages, losses, claims,
liabilities and related reasonable out-of-pocket costs and
expenses, including reasonable attorneys' fees and disbursements
(all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them
arising out of or as a result of the Originator Purchase
Agreement, the Receivables Purchase Agreement or the ownership of
a Certificate of Assignments or Undivided Interest or in respect
of any Receivable or any Contract, excluding, however,
(i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of the Agent or the
Purchaser or any such Affiliate thereof or any other Owner
or (ii) recourse for uncollectible Receivables. The Agent and
the Purchaser each hereby acknowledges by acceptance of this
Agreement that commercially reasonable efforts shall be made by
it to promptly notify the Seller after it acquires knowledge of
any event or condition which could reasonably be expected to
result in an Indemnified Amount payable; provided, that the
failure to so notify the Seller shall not impair or otherwise
affect the rights of any Indemnified Party to be indemnified for
all Indemnified Amounts under this Section 7, it being understood
that the immediately preceding proviso shall not prejudice any
claim by Seller for damages if such failure materially and
adversely affects the rights and obligations of Seller or any
Originator. Without limiting the foregoing, the Company agrees
to pay on demand to the Agent or the Purchaser or any Affiliate
<PAGE>
thereof or any other Owner any and all amounts necessary to
indemnify the Agent or the Purchaser and each Affiliate thereof
and any other Owner for Indemnified Amounts relating to or
resulting from:
(i) the creation of an undivided percentage ownership
interest in any Receivable which is not at the date of the
creation of such interest an Eligible Receivable;
(ii) reliance on any representation or warranty made
by any Corporation (or any of its officers) under or in
connection with this Agreement, the Receivables Purchase
Agreement, the Originator Purchase Agreement, any Periodic
Report, Run Off Statement or any other information or report
delivered by any Corporation pursuant hereto or thereto, which
shall have been false or incorrect in any material respect when
made or deemed made;
(iii) the failure by any Corporation or the Servicer
(if an Affiliate of the Company) to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or
the related Contract, or the nonconformity of any Pool Receivable
or the related Contract with any such applicable law, rule or
regulation;
(iv) the failure to vest in the Owner of a Certificate
of Assignments representing an Undivided Interest an undivided
percentage ownership interest, to the extent of such Undivided
Interest, in the Receivables in, or purporting to be in, the
Receivables Pool, free and clear of any Adverse Claim;
(v) the failure to file, or any delay in filing,
Financing Statements with respect to any Receivables in, or
purporting to be in, the Receivables Pool, whether at the time of
any Purchase or reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based
on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against
it in accordance with its terms), or any other claim resulting
from the sale of the merchandise or services related to such
Receivable or the furnishing or failure to furnish such
merchandise or services;
(vii) any failure of any Relevant Subsidiary or the
Servicer (if an Affiliate of the Company) to perform its duties
or obligations in any capacity in accordance with the provisions
of Article VIII of the Receivables Purchase Agreement;
(viii) any breach of warranty or products liability
claim arising out of or in connection with merchandise, insurance
or services which are the subject of any Contract; or
(ix) any tax or governmental fee or charge (but not
including taxes upon or measured by net income), all interest and
penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of
<PAGE>
counsel in defending against the same, which may arise by reason
of the purchase or ownership of any Undivided Interest, or any
other interest in the Pool Receivables or in any goods which
secure any such Pool Receivables.
SECTION 8. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the
Company therefrom shall in any event be effective unless the same
shall be in writing and signed by the Agent, and then such waiver
or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 9. Expenses. The Company will upon demand pay to
the Agent, the Purchaser and any other Owner, respectively, the
amount of any and all reasonable out-of-pocket expenses,
including attorneys' fees and expenses, which they may incur in
connection with the exercise or enforcement of any of their
respective rights or interests hereunder.
SECTION 10. Address for Notices. All demands, notices and
other communications provided for hereunder shall be made or
given in the manner provided for in, and shall be effective in
accordance with, the terms of the Receivables Purchase Agreement.
SECTION 11. No Waiver; Remedies. No failure on the part of
the Agent, the Purchaser or any other Owner to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, BofA is hereby authorized by the
Company from time to time on any day (i) which is a Run Off Day
or (ii) on which an event has occurred and is continuing which
constitutes a Termination Event, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by BofA to or for the
credit or the account of the Company against any and all of the
obligations of the Company now or hereafter existing under this
Agreement to the Agent in its capacity as such, the Purchaser or
BofA or their respective successors and assigns, irrespective of
whether or not any demand shall have been made under this
Agreement and although such obligations may be unmatured.
SECTION 12. Continuing Agreement. This Agreement is a
continuing agreement and shall (i) remain in full force and
effect until all of the Agreements shall have been terminated and
all of the Subsidiary Obligations shall have been fully
satisfied, (ii) be binding upon the Company, its successors and
assigns and (iii) inure to the benefit of and be enforceable by
the Agent, BofA, the Purchaser, any other Owner, and their
respective successors, transferees and assigns.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed and delivered by its officer thereunto duly
<PAGE>
authorized as of the date first above written.
PLY GEM INDUSTRIES, INC.
By _______________________
Title:
