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Exhibit-10(h)(iii)
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PURCHASE AND SALE AGREEMENT
Dated as of November 30, 2000
between
VARIOUS ENTITIES LISTED ON SCHEDULE I,
as the Originators
and
WORTHINGTON RECEIVABLES CORPORATION
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THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT"), dated as of
November 30, 2000, is entered into between VARIOUS ENTITIES LISTED ON SCHEDULE I
(each, an "Originator"; and collectively, "ORIGINATORS"), and WORTHINGTON
RECEIVABLES CORPORATION, a Delaware corporation (the "COMPANY").
DEFINITIONS
Unless otherwise indicated herein, capitalized terms used in this
Agreement are defined in Exhibit A to the Receivables Purchase Agreement of even
date herewith (as the same may be amended, supplemented or otherwise modified
from time to time, the "RECEIVABLES PURCHASE AGREEMENT") among the Company, as
the Seller; Worthington Industries, Inc. (individually, "WORTHINGTON"), as the
initial Servicer; Market Street Funding Corporation, and the members of the
various other Purchaser Groups from time to time a party thereto; and PNC Bank,
National Association, as the Administrator. All references herein to months are
to calendar months unless otherwise expressly indicated.
1. The Company is a special purpose corporation, all of the issued and
outstanding shares of which are owned by The Worthington Steel Company, an Ohio
corporation;
2. The Originators generate Receivables in the ordinary course of their
businesses;
3. The Originators, in order to finance their respective businesses,
wish to sell Receivables to the Company, and the Company is willing to purchase
Receivables from the Originators, on the terms and subject to the conditions set
forth herein;
4. The Originators and the Company intend this transaction to be a true
sale of Receivables by each Originator to the Company, providing the Company
with the full benefits of ownership of the Receivables, and the Originators and
the Company do not intend the transactions hereunder to be characterized as a
loan from the Company to any Originator;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 AGREEMENT TO PURCHASE AND SELL. On the terms and subject to
the conditions set forth in this Agreement, each Originator, severally and for
itself, agrees to sell to the Company, and the Company agrees to purchase from
such Originator, from time to time on or after the Closing Date, but before the
Purchase and Sale Termination Date, all of such Originator's right, title and
interest in and to:
(a) each Receivable of such Originator that existed and was owing to
such Originator at the closing of such Originator's business on October 31, 2000
(the "Cut-off Date") other than Receivables contributed pursuant to SECTION 1.6
(the "Contributed Receivables");
(b) each Receivable generated by such Originator from and including the
Cut-off Date to and including the Purchase and Sale Termination Date;
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(c) all rights to, but not the obligations of such Originator under all
Related Security;
(d) all monies due or to become due to such Originator with respect to
any of the foregoing;
(e) all books and records of such Originator related to any of the
foregoing, and all Transaction Documents to which such Originator is a party,
together with all rights (but not obligations) of such Originator thereunder;
and
(f) all collections and other proceeds and products of any of the
foregoing (as defined in the applicable UCC) that are or were received by such
Originator on or after the Cut-off Date, including, without limitation, all
funds which either are received by such Originator, the Company or the Servicer
from or on behalf of the Obligors in payment of any amounts owed (including,
without limitation, invoice price, finance charges, interest and all other
charges) in respect of Receivables, or are applied to such, amounts owed by the
Obligors (including, without limitation, any insurance payments that such
Originator or the Servicer applies in the ordinary course of its business to
amounts owed in respect of any Receivable, and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligors
in respect of Receivables or any other parties directly or indirectly liable for
payment of such Receivables).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to, and in reliance upon, the representations, warranties
and covenants of the Originators set forth in this Agreement and each other
Transaction Document. No obligation or liability to any Obligor on any
Receivable is intended to be assumed by the Company hereunder, and any such
assumption is expressly disclaimed. The Company's foregoing commitment to
purchase Receivables and the proceeds and rights described in CLAUSES (c)
through (f) (collectively, the "RELATED RIGHTS") is herein called the "PURCHASE
FACILITY."
SECTION 1.2 TIMING OF PURCHASES.
(a) CLOSING DATE PURCHASES. Each Originator's entire right, title and
in (i) each Receivable that existed and was owing to such Originator at the
Cut-off Date (other than Contributed Receivables), (ii) all Receivables created
by such Originator from and including the Cut-off Date, to and including the
Closing Date (other than Contributed Receivables), and (iii) all Related Rights
with respect thereto automatically shall be deemed to have been sold by such
Originator to the Company on the Closing Date.
(b) SUBSEQUENT PURCHASES. After the Closing Date, until the Purchase
and Sale Termination Date, each Receivable and the Related Rights generated by
each Originator shall be deemed to have been sold by such Originator to the
Company immediately (and without further action) upon the creation of such
Receivable.
SECTION 1.3 CONSIDERATION FOR PURCHASES. On the terms and subject to
the conditions set forth in this Agreement, the Company agrees to make Purchase
Price payments to the Originators in accordance with Article III and to reflect
all contributions in accordance with SECTION 1.6.
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SECTION 1.4 PURCHASE AND SALE TERMINATION DATE. The "Purchase and Sale
Termination Date" shall be the earliest to occur of (a) the date the Purchase
Facility is terminated pursuant to SECTION 8.2 and (b) the Payment Date
immediately following the day on which Originators shall have given written
notice to the Company at or prior to 10:00 a.m. (New York City time) that the
Originators desire to terminate this Agreement.
SECTION 1.5 INTENTION OF THE PARTIES. It is the express intent of the
parties hereto that the transfers of the Receivables and Related Rights by the
Originators to the Company, as contemplated by this Agreement be, shall be
treated as sales or contributions, as applicable (without recourse except as
provided herein), of all of the Originators' right, title and interest in, to
and under the Receivables or the Contributed Receivables, as applicable, and
Related Rights, and not as loans secured by the Receivables and Related Rights.
If, however, notwithstanding the intent of the parties, such transactions are
deemed to be loans, each Originator hereby grants to the Company a first
priority security interest in all of such Originator's right, title and interest
in and to: (i) the Receivables and the Related Rights now existing and hereafter
created by such Originator, (ii) the related Company Note; (iii) all monies due
or to become due and all amounts received with respect thereto, (iv) all books
and records of such Originator related to any of the foregoing, and all
Transaction Documents to which such Originator is a party, together with all
rights (but not obligations) of such Originator thereunder; and (v) all proceeds
and products of any of the foregoing to secure all of such Originator's
obligations hereunder.
SECTION 1.6 CONTRIBUTION OF RECEIVABLES. On the Closing Date, The
Worthington Steel Company, an Ohio corporation shall, and hereby does,
contribute to the capital of the Company Receivables and Related Rights
consisting of each Receivable of The Worthington Steel Company, an Ohio
corporation that existed and was owing to The Worthington Steel Company, an Ohio
corporation on the Closing Date beginning with the oldest of such Receivables
and continuing chronologically thereafter such that the aggregate Outstanding
Balance of all such Contributed Receivables shall be equal to $10,000,000.
SECTION 1.7 ADDITIONAL ORIGINATORS. Additional Persons may be added as
Originators hereunder, with the consent of the Company and the Administrator,
PROVIDED that following conditions are satisfied on or before the date of such
addition:
(a) The Servicer shall have given the Administrator and the Company
at least thirty days prior written notice of such proposed addition and the
identity of the proposed additional Originator and shall have provided such
other information with respect to such proposed additional Originator as the
Administrator may reasonably request;
(b) such proposed additional Originator has executed and delivered
to the Company and the Administrator an agreement substantially in the form
attached hereto as EXHIBIT C (a "JOINDER AGREEMENT");
(c) such proposed additional Originator has delivered to the Company
and the Administrator each of the documents with respect to such Originator
described in SECTIONS 4.1 and 4.2;
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(d) the receivables intended to be sold by such additional
Originator to the Company hereunder shall be Receivables; and
(e) no Purchase and Sale Termination Date shall have occurred.
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 PURCHASE REPORT. On the Closing Date and on each Settlement
Date, the Servicer shall deliver to the Company and each Originator a report in
substantially the form of EXHIBIT A (each such report being herein called a
"PURCHASE REPORT") setting forth, among other things:
(a) Receivables purchased by the Company from each Originator on the
Closing Date (in the case of the Purchase Report to be delivered on the Closing
Date);
(b) Receivables purchased by the Company from each Originator during
the period commencing on the Settlement Date immediately preceding such
Settlement Date to (but not including) such Settlement Date (in the case of each
subsequent Purchase Report); and
(c) the calculations of reductions of the Purchase Price for any
Receivables as provided in SECTION 3.3 (a) and (b).
SECTION 2.2 CALCULATION OF PURCHASE PRICE. The "PURCHASE PRICE" to be
paid to each Originator for the Receivables that are purchased hereunder from
such Originator shall be determined in accordance with the following formula:
PP = OB x FMVD
where:
PP = Purchase Price for each Receivable as
calculated on the relevant Payment Date.
OB = The Outstanding Balance of such Receivable
on the relevant Payment Date.
FMVD = Fair Market Value Discount, as measured on
such Payment Date, which is equal to the
quotient (expressed as percentage) of (a)
one divided by (b) the sum of (i) one, plus
(ii) the product of (A) the Prime Rate on
such Payment Date plus 0.25% and (B) a
fraction, the numerator of which is the
Turnover Rate (calculated as of the last day
of the Settlement Period next preceding such
Payment Date) and the denominator of which
is 365.
"Payment Date" means (i) the Closing Date and (ii) each Business Day
thereafter that Originators are open for business.
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"Prime Rate" means a PER ANNUM rate equal to the "Prime Rate" as
published in the "Money Rates" section of The Wall Street Journal or if such
information ceases to be published in The Wall Street Journal, such other
publication as determined by the Administrator in its reasonable discretion.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 INITIAL PURCHASE PRICE PAYMENT. On the terms and subject to
the conditions set forth in this Agreement, the Company agrees to pay to each
Originator the Purchase Price for the purchase to be made from such Originator
on the Closing Date partially in cash (in an amount to be agreed between the
Company and such Originator and set forth in the initial Purchase Report) and
partially by issuing a promissory note in the form of Exhibit B to such
Originator with an initial principal balance equal to the remaining Purchase
Price (each such promissory note, as it may be amended, supplemented, endorsed
or otherwise modified from time to time, together with all promissory notes
issued from time to time in substitution therefor or renewal thereof in
accordance with the Transaction Documents, each being herein called a "Company
Note").
SECTION 3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS. On each Payment Date
subsequent to the Closing Date, on the terms and subject to the conditions set
forth in this Agreement, the Company shall pay to each Originator the Purchase
Price for the Receivables generated by such Originator on such Payment Date:
(a) FIRST, in cash to the extent the Company has cash available
therefor; and
(b) SECOND, to the extent any portion of the Purchase Price remains
unpaid, the principal amount outstanding under the applicable Company Note shall
be increased by an amount equal to such remaining Purchase Price.
The Servicer shall make all appropriate record keeping entries with respect to
each of the Company Notes to reflect the foregoing payments and reductions made
pursuant to SECTION 3.3, and the Servicer's books and records shall constitute
rebuttable presumptive evidence of the principal amount of, and accrued interest
on, each of the Company Notes at any time. Furthermore, the Servicer shall hold
the Company Notes for the benefit of the applicable Originator. Each Originator
hereby irrevocably authorizes the Servicer to xxxx the Company Notes "CANCELED"
and to return such Company Notes to the Company upon the final payment thereof
after the occurrence of the Purchase and Sale Termination Date.
SECTION 3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES AND DILUTION.
(a) If, on the day of purchase or contribution of any Receivable from
an Originator hereunder, any of the representations or warranties set forth in
SECTIONS 5.4 and 5.12 are not true with respect to such Receivable or as a
result of any action or inaction of such Originator, on any subsequent day, any
of such representations or warranties set forth in SECTIONS 5.4 and 5.12 is no
longer true with respect to such Receivable, then the Purchase Price (or in the
case of a Contributed Receivable the
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Outstanding Balance of such Receivable (the "Contributed Value")), with respect
to such Receivable shall be reduced by an amount equal to the Outstanding
Balance of such Receivable and shall be accounted to such Originator as provided
in CLAUSE (c) below; PROVIDED, that if the Company thereafter receives payment
on account of Collections due with respect to such Receivable, the Company
promptly shall deliver such funds to such Originator.
(b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed hereunder is
reduced or adjusted as a result of any defective, rejected, returned goods or
services, or any discount or other adjustment made by any Originator, the
Company or the Servicer or any setoff or dispute between any Originator or the
Servicer and an Obligor as indicated on the books of the Company (or, for
periods prior to the Closing Date, the books of Originator), then the Purchase
Price or Contributed Value, as the case may be, with respect to such Receivable
shall be reduced by the amount of such net reduction and shall be accounted to
Originator as provided in clause (c) below.
(c) Any reduction in the Purchase Price or Contributed Value of any
Receivable pursuant to clause (a) or (b) above shall be applied as a credit for
the account of the Company against the Purchase Price of Receivables
subsequently purchased by the Company from such Originator hereunder; provided,
however if there have been no purchases of Receivables from such Originator (or
insufficiently large purchases of Receivables) to create a Purchase Price
sufficient to so apply such credit against, the amount of such credit:
(i) shall be paid in cash to the Company by such Originator in the
manner and for application as described in the following proviso, or
(ii) shall be deemed to be a payment under, and shall be deducted from
the principal amount outstanding under, the Company Note payable to such
Originator;
provided, further, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by such Originator to the Company by deposit in immediately
available funds into the relevant Lock-Box Account for application by the
Servicer to the same extent as if Collections of the applicable Receivable in
such amount had actually been received on such date.
SECTION 3.4 RECONVEYANCE OF RECEIVABLES. In the event that an
Originator has paid to the Company the full Outstanding Balance of any
Receivable pursuant to SECTION 3.3, the Company shall reconvey such Receivable
to such Originator, without representation or warranty, but free and clear of
all liens, security interests, charges, and encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
purchase hereunder is subject to the condition precedent that the Servicer (on
the Company's behalf) shall have received, on or before the Closing Date, the
following, each (unless otherwise indicated) dated the Closing Date, and each in
form and substance satisfactory to the Servicer (acting on the Company's
behalf):
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(a) An Originator Assignment Certificate in the form of Exhibit D
from each Originator, duly completed, executed and delivered by each Originator;
(b) A copy of the resolutions of the Board of Directors of each
Originator approving the Transaction Documents to be delivered by it and the
transactions contemplated hereby and thereby, certified by the Secretary or
Assistant Secretary of such Originator;
(c) Good standing certificates for each Originator issued as of a
recent date acceptable to the Servicer by the Secretary of State of the
jurisdiction of such Originator's organization and each jurisdiction where such
Originator is qualified to transact business;
(d) A certificate of the Secretary or Assistant Secretary of each
Originator certifying the names and true signatures of the officers authorized
on such Person's behalf to sign the Transaction Documents to be delivered by it
(on which certificate the Servicer and the Company may conclusively rely until
such time as the Servicer shall receive from such Person a revised certificate
meeting the requirements of this CLAUSE (d));
(e) The certificate or articles of incorporation or other
organizational document of each Originator duly certified by the Secretary of
State of the jurisdiction of such Originator's organization as of a recent date,
together with a copy of the by-laws of such Originator, each duly certified by
the Secretary or an Assistant Secretary of such Originator;
(f) Originals of the proper financing statements (Form UCC-1) that
have been duly executed and name each Originator as the debtor/seller and the
Company as the secured party/purchaser (and the Administrator, as assignee of
the Company) of the Receivables generated by such Originator as may be necessary
or, in the Servicer's or the Administrator's opinion, desirable under the UCC of
all appropriate jurisdictions to perfect the Company's ownership interest in all
Receivables and such other rights, accounts, instruments and moneys (including,
without limitation, Related Security) in which an ownership or security interest
may be assigned to it hereunder;
(g) A written search report from a Person satisfactory to the
Servicer listing all effective financing statements that name the Originators as
debtors or sellers and that are filed in the jurisdictions in which filings were
made pursuant to the foregoing CLAUSE (f), together with copies of such
financing statements (none of which, except for those described in the foregoing
CLAUSE (F), shall cover any Receivable or any Related Rights which are to be
sold to the Company hereunder), and tax and judgment lien search reports from a
Person satisfactory to the Servicer showing no evidence of such liens filed
against any Originator;
(h) A favorable opinion of Xxxxx, Day, Xxxxxx & Xxxxx, counsel to
the Originators, in form and substance satisfactory to the Servicer and the
Administrator;
(i) A Company Note in favor of each Originator, duly executed by the
Company; and
(j) A certificate from an officer of each Originator to the effect
that the Servicer and such Originator have placed on the most recent, and have
taken all steps reasonably necessary to ensure that there shall be placed on
each subsequent, data processing report that it
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generates which are of the type that a proposed purchaser or lender would use to
evaluate the Receivables, the following legend (or the substantive equivalent
thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD PURSUANT TO A
PURCHASE AND SALE AGREEMENT, DATED AS OF NOVEMBER 30, 2000, AS THE SAME MAY FROM
TO TIME TO TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, BETWEEN CERTAIN
ENTITIES LISTED ON SCHEDULE I THERETO, AS ORIGINATORS, AND WORTHINGTON
RECEIVABLES CORPORATION, AS PURCHASER, AND AN UNDIVIDED, FRACTIONAL OWNERSHIP
INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN SOLD TO THE ADMINISTRATOR
ON BEHALF OF THE PURCHASERS PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED
AS OF NOVEMBER 30, 2000 AS THE SAME MAY FROM TO TIME TO TIME BE AMENDED,
SUPPLEMENTED OR OTHERWISE MODIFIED, AMONG WORTHINGTON RECEIVABLES CORPORATION,
AS SELLER, WORTHINGTON INDUSTRIES, INC., AS SERVICER, MARKET STREET FUNDING
CORPORATION AND THE MEMBERS OF THE VARIOUS OTHER PURCHASER GROUPS FROM TIME TO
TIME A PARTY THERETO, AND PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATOR."
SECTION 4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. Each
Originator, by accepting the Purchase Price related to each purchase of
Receivables generated by such Originator, shall be deemed to have certified that
the representations and warranties contained in Article V are true and correct
on and as of such day, with the same effect as though made on and as of such
day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, each Originator hereby makes, with respect to itself, the
representations and warranties set forth in this ARTICLE V.
SECTION 5.1 ORGANIZATION AND GOOD STANDING. Such Originator has been
duly incorporated or formed and is validly existing as a corporation, limited
liability company or partnership, as applicable, in good standing under the laws
of its jurisdiction of incorporation or formation, with power and authority to
own its properties and to conduct its business as such properties are presently
owned and such business is presently conducted.
SECTION 5.2 DUE QUALIFICATION. Such Originator is located and is
qualified to transact business as a foreign corporation, limited liability
company or partnership, as applicable, in good standing in all jurisdictions in
which (a) the ownership or lease of its property or the conduct of its business
requires such licensing or qualification and (b) the failure to be so licensed
or qualified would be reasonably likely to have a Material Adverse Effect.
SECTION 5.3 POWER AND AUTHORITY; DUE AUTHORIZATION. Such Originator has
(a) all necessary power, authority and legal right (i) to execute and deliver,
and perform its obligations under, each Transaction Document to which it is a
party and (ii) to generate, own, sell, contribute and assign Receivables on the
terms and subject to the conditions herein and therein provided;
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and (b) duly authorized such execution and delivery and such sale, contribution
and assignment and the performance of such obligations by all necessary
corporate action.
SECTION 5.4 VALID SALE; BINDING OBLIGATIONS. Each sale or contribution,
as the case may be, of Receivables made by such Originator pursuant to this
Agreement shall constitute a valid sale or contribution, as the case may be,
transfer, and assignment of Receivables to the Company, enforceable against
creditors of, and purchasers from, such Originator; and this Agreement
constitutes, and each other Transaction Document to be signed by such
Originator, when duly executed and delivered, will constitute, a legal, valid,
and binding obligation of such Originator, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
SECTION 5.5 NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents, and the
fulfillment of the terms hereof or thereof, will not (a) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under (i) such Originator's
certificate or articles of incorporation or bylaws, limited partnership
agreements, articles of organization or limited liability company agreements, as
applicable or (ii) any material indenture, loan agreement, mortgage, deed of
trust, or other material agreement or instrument to which it is a party or by
which it is bound, (b) result in the creation or imposition of any Adverse Claim
upon any of its properties pursuant to the terms of any such material indenture,
loan agreement, mortgage, deed of trust, or other agreement or instrument, other
than the Transaction Documents, or (c) violate any law or any order, rule or
regulation applicable to it of any court or of any state or foreign regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over it or any of its properties.
SECTION 5.6 PROCEEDINGS. Except as set forth in SCHEDULE 5.6, there is
no action, suit, proceeding or investigation pending before any court,
regulatory body, arbitrator, administrative agency, or other tribunal or
governmental instrumentality (a) asserting the invalidity of any Transaction
Document, (b) seeking to prevent such Originator from transferring any
Receivable hereunder (or in the case such transfer does not constitute a sale
under any applicable law, from granting or maintaining the security interest in
any Receivable) to the Purchaser or the consummation of any of the transactions
contemplated by any Transaction Document or (c) seeking any determination or
ruling that is reasonably likely to have a Material Adverse Effect. SECTION 5.7
BULK SALES ACTS. No transaction contemplated hereby requires compliance with, or
will be subject to avoidance under, any bulk sales act or similar law.
SECTION 5.8 GOVERNMENT APPROVALS. Except for the filing of the UCC
financing statements referred to in ARTICLE IV, all of which, at the time
required in ARTICLE IV, shall have been duly made and shall be in full force and
effect, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
Originator's due execution, delivery and performance of any Transaction Document
to which it is a party.
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SECTION 5.9 FINANCIAL CONDITION.
(a) MATERIAL ADVERSE EFFECT. Since May 31, 2000, no event has
occurred that has had, or is reasonably likely to have, a Material Adverse
Effect.
(b) SOLVENT. On the date hereof, and on the date of each purchase
hereunder (both before and after giving effect to such purchase), such
Originator shall be Solvent.
SECTION 5.10 LICENSES, CONTINGENT LIABILITIES, AND LABOR CONTROVERSIES.
(a) Such Originator has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its properties or to the conduct of its business, which violation or failure to
obtain would be reasonably likely to have a Material Adverse Effect.
(b) There are no labor controversies pending against such Originator
that have had (or are reasonably likely to have) a Material Adverse Effect.
SECTION 5.11 MARGIN REGULATIONS. No use of any funds acquired by any
Originator under this Agreement will conflict with or contravene any of
Regulations, T, U and X promulgated by the Federal Reserve Board from time to
time.
SECTION 5.12 QUALITY OF TITLE.
(a) Each Receivable of such Originator (together with the Related
Rights with respect to such Receivable) which is to be sold to the Company
hereunder is or shall be owned by such Originator, free and clear of any Adverse
Claim, except as provided herein and in the Receivables Purchase Agreement.
Whenever the Company makes a purchase or accepts a contribution hereunder, it
shall have acquired and shall continue to have maintained a valid and perfected
ownership interest (free and clear of any Adverse Claim) in all Receivables
generated by such Originator and all Collections related thereto, and in
Originator's entire right, title and interest in and to the Related Rights with
respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by such Originator or any Related
Rights is on file in any recording office except such as may be filed in favor
of the Company or the Originators, as the case may be, in accordance with this
Agreement or in favor of the Administrator, on behalf of the Purchasers in
accordance with the Receivables Purchase Agreement.
(c) Unless otherwise identified to the Company on the date of the
purchase or contribution hereunder, each Receivable purchased hereunder is on
the date of purchase or contribution an Eligible Receivable.
SECTION 5.13 ACCURACY OF INFORMATION. All factual written information
heretofore or contemporaneously furnished (and prepared) by such Originator to
the Company or the Administrator for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is, and
all other such factual written information hereafter furnished (and prepared) by
such Originator to the Company or the Administrator
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pursuant to or in connection with any Transaction Document will be, true and
accurate in all material respects on the date as of which such information is
dated or certified.
SECTION 5.14 [RESERVED].
SECTION 5.15 TRADE NAMES. Such Originator does not use any trade name
other than its actual corporate name and the trade names set forth in SCHEDULE
5.15 (which trade names are the trade names that such Originator sets forth on
such Originator's invoice to Obligors). From and after the date that fell five
(5) years before the date hereof, except as set forth in SCHEDULE 5.15, such
Originator has not been known by any legal name other than its corporate name as
of the date hereof, nor has such Originator been the subject of any merger or
other corporate reorganization.
SECTION 5.16 TAXES. Such Originator has filed all tax returns and
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
SECTION 5.17 COMPLIANCE WITH APPLICABLE LAWS. Such Originator is in
compliance with the requirements of all applicable laws, rules, regulations and
orders of all governmental authorities, a breach of any of which, individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect.
SECTION 5.18 RELIANCE ON SEPARATE LEGAL IDENTITY. Such Originator
acknowledges that the Purchasers, the Purchaser Agents and the Administrator are
entering into the Receivables Purchase Agreement in reliance upon the Company's
identity as a legal entity separate from such Originator.
SECTION 5.19 INVESTMENT COMPANY. Such Originator is not an "investment
company," or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940 as amended. In addition, such
Originator is not a "holding company," a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
ARTICLE VI
COVENANTS OF THE ORIGINATORS
SECTION 6.1 AFFIRMATIVE COVENANTS. From the date hereof until the first
day following the Purchase and Sale Termination Date, each Originator will,
unless the Administrator and the Company shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the
Receivables generated by it and the Contracts and other agreements related
thereto except where the failure to so comply would not materially and adversely
affect the collectibility of such Receivables or the rights of the Company
hereunder.
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(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
existence as a corporation, partnership or limited liability company, as
applicable, and all rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a foreign
corporation, partnership or limited liability company, as applicable, in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would be reasonably likely to have a
Material Adverse Effect.
(c) RECEIVABLES REVIEWS. (i) At any time and from time to time
during regular business hours, and upon reasonable prior notice, permit the
Company or the Administrator, or their respective agents or representatives, (A)
to examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in
possession or under the control of each Originator relating to Receivables,
including, without limitation, the related Contracts and purchase orders and
other agreements related thereto, and (B) to visit the offices and properties of
such Originator for the purpose of examining such materials described in clause
(i)(A) next above and to discuss matters relating to Receivables originated by
it or the performance hereunder with any of the officers or employees of each
Originator having knowledge of such matters, and (ii) without limiting the
foregoing clause (i) above, from time to time on reasonable request of the
Administrator, permit certified public accountants or other auditors acceptable
to the Company and Administrator to conduct, at the Company's expense, a review
of such Originator's books and records with respect to such Receivables.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to re-create records evidencing Receivables it generates 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 such Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS.
Timely perform and comply, in all material respects with all provisions,
covenants and other promises required to be observed by it under the Contracts
and all other agreements related to the Receivables that it generates unless the
failure to so perform or comply does not involve a material portion of such
Receivables, and such Originator of such Receivables shall have complied with
its obligations with respect to such Receivables set forth in SECTION 3.3.
(f) [RESERVED].
(g) CREDIT AND COLLECTION POLICIES. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables that it
generates.
(h) POST OFFICE BOXES. On or prior to the date hereof, deliver to
the Servicer (on behalf of the Company) a certificate from an authorized officer
of such Originator to the effect that (i) the name of the renter of all post
office boxes into which Collections may from time to time be mailed have been
changed to the name of the Company (unless such post office boxes are in the
name of the relevant Lock-Box Banks) and (ii) all relevant postmasters have
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been notified that each of the Servicer and the Administrator are authorized to
collect mail delivered to such post office boxes (unless such post office boxes
are in the name of the relevant Lock-Box Banks).
(i) TRANSACTION DOCUMENTS. Comply in all material respects with the
Transaction Documents to which it is a party.
SECTION 6.2 REPORTING REQUIREMENTS. From the date hereof until the
first day following the Purchase and Sale Termination Date, each Originator
will, unless the Servicer (on behalf of the Company) shall otherwise consent in
writing, furnish to the Company and the Administrator:
(a) PURCHASE AND SALE TERMINATION EVENTS. As soon as possible after
the Originator has knowledge of the occurrence of, and in any event within three
Business Days after the Originator has knowledge of the occurrence of each
Purchase and Sale Termination Event or each Unmatured Purchase and Sale
Termination Event in respect of such Originator, the statement of the chief
financial officer or chief accounting officer of such Originator describing such
Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination
Event and the action that such Originator proposes to take with respect thereto,
in each case in reasonable detail;
(b) PROCEEDINGS. As soon as possible and in any event within three
Business Days after Originator otherwise has knowledge thereof, written notice
of (i) material litigation, investigation or proceeding of the type described in
SECTION 5.6 not previously disclosed to the Company and (ii) all material
adverse developments that have occurred with respect to any previously disclosed
litigation, proceedings and investigations; and
(c) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of such Originator as the Company, the
Purchasers, the Purchaser Agents or the Administrator may from time to time
reasonably request in order to protect the interests of the Company, the
Purchasers, the Purchaser Agents or the Administrator under or as contemplated
by the Transaction Documents.
SECTION 6.3 NEGATIVE COVENANTS. From the date hereof until the date
following the Purchase and Sale Termination Date, each Originator agrees that,
unless the Servicer (on behalf of the Company) and the Administrator shall
otherwise consent in writing, it shall not:
(a) SALES, LIENS, ETC. Except as otherwise provided herein or in any
other Transaction Document, 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 Receivable or related Contract or Related Security, or any
interest therein, or any Collections thereon, or assign any right to receive
income in respect thereof.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in SECTION 4.2(a) of the Receivables Purchase Agreement, extend, amend
or otherwise modify the terms of any Receivable in any material respect
generated by it, or amend, modify or waive, in
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any material respect, any Contract related thereto (which term or condition
relates to payments under, or the enforcement of, such Contract).
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any
change in the character of its business or materially alter its Credit and
Collection Policy, which change or alteration would, in either case, materially
adversely change the credit standing required of particular Obligors or
potential Obligors or impair, in any material respect, the collectibility of the
Receivables generated by it.
(d) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES OR CHATTEL
PAPER. Take any action to cause or permit any Receivable after the generation
thereof to become evidenced by any "instrument" or "chattel paper" (as defined
in the applicable UCC).
(e) MERGERS, ACQUISITIONS, SALES, ETC. (i) Be a party to any merger
or consolidation, except a merger or consolidation where such Originator is the
surviving entity or is merged or consolidated with another Originator, or (ii)
directly or indirectly sell, transfer, assign, convey or lease (other than to
another Originator or wholly-owned Subsidiary thereof) (A) whether in one or a
series of transactions, all or substantially all of its assets or (B) any
Receivables or any interest therein (other than pursuant to this Agreement).
(f) LOCATION OF CHIEF EXECUTIVE OFFICES AND RECORDS. Move its
principal place of business and chief executive office (as such terms are used
in the UCC) and the offices where it keeps its records concerning or related to
the Receivables, to an address other than the addresses set forth on SCHEDULE
6.1(f) or, upon 30 days' prior written notice to the Company and the
Administrator, at such other locations in jurisdictions where all action
required by SECTION 7.3 shall have been taken and completed.
SECTION 6.4 LOCK-BOX BANKS. Make any changes in its instructions to
Obligors regarding Collections or add or terminate any bank as a Lock-Box Bank
unless the requirements of PARAGRAPH 2(g) of EXHIBIT IV to the Receivables
Purchase Agreement have been met.
SECTION 6.5 ACCOUNTING FOR PURCHASES. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as sales of the Receivables and Related Rights by such
Originator to the Company.
SECTION 6.6 TRANSACTION DOCUMENTS. Enter into, execute, deliver or
otherwise become bound by any agreement, instrument, document or other
arrangement that restricts the right of such Originator to amend, supplement,
amend and restate or otherwise modify, or to extend or renew, or to waive any
right under, this Agreement or any other Transaction Document.
SECTION 6.7 SUBSTANTIVE CONSOLIDATION. Each Originator hereby
acknowledges that this Agreement and the other Transaction Documents are being
entered into in reliance upon the Company's identity as a legal entity separate
from such Originator and its Affiliates. Therefore, from and after the date
hereof, each Originator shall take all reasonable steps necessary to make it
apparent to third Persons that the Company is an entity with assets and
liabilities distinct from those of such Originator and any other Person, and is
not a division of such Originator, its Affiliates or any other Person. Without
limiting the generality of the foregoing and in addition to
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and consistent with the other covenants set forth herein, such Originator shall
take such actions as shall be required in order that:
(a) such Originator shall not be involved in the day to day
management of the Company;
(b) such Originator shall maintain separate corporate records and
books of account from the Company and otherwise will observe corporate
formalities and have a separate area from the Company for its business;
(c) the financial statements and books and records of such
Originator shall be prepared after the date of creation of the Company to
reflect and shall reflect the separate existence of the Company; PROVIDED, that
the Company's assets and liabilities may be included in a consolidated financial
statement issued by an affiliate of the Company; PROVIDED, HOWEVER, that any
such consolidated financial statement or the notes thereto shall make clear that
the Company's assets are not available to satisfy the obligations of such
affiliate;
(d) except as permitted by the Receivables Purchase Agreement, (i)
such Originator shall maintain its assets separately from the assets of the
Company, (ii) and the Company's assets, and records relating thereto, have not
been, are not, and shall not be, commingled with those of the Company;
(e) all of the Company's business correspondence and other
communications shall be conducted in the Company's own name and on its own
stationery;
(f) such Originator shall not act as an agent for the Company;
(g) such Originator shall not conduct any of the business of the
Company in its own name;
(h) such Originator shall not pay any liabilities of the Company out
of its own funds or assets;
(i) such Originator shall maintain an arm's-length relationship with
the Company;
(j) such Originator shall not assume or guarantee or become
obligated for the debts of the Company or hold out its credit as being available
to satisfy the obligations of the Company;
(k) such Originator shall not acquire obligations of the Company;
(l) such Originator shall allocate fairly and reasonably overhead or
other expenses that are properly shared with the Company, including, without
limitation, shared office space;
(m) such Originator shall identify and hold itself out as a separate
and distinct entity from the Company;
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(n) such Originator shall correct any known misunderstanding
respecting its separate identity from the Company;
(o) such Originator shall not enter into, or be a party to, any
transaction with the Company, except in the ordinary course of its business and
on terms which are intrinsically fair and not less favorable to it than would be
obtained in a comparable arm's-length transaction with an unrelated third party;
and
(p) such Originator shall not pay the salaries of the Company's
employees, if any.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF RECEIVABLES
SECTION 7.1 RIGHTS OF THE COMPANY. Each Originator hereby authorizes
the Company, the Servicer or their respective designees to take any and all
steps in such Originator's name necessary or desirable, in their respective
determination, to collect all amounts due under any and all Receivables,
including, without limitation, indorsing the name of such Originator on checks
and other instruments representing Collections and enforcing such Receivables
and the provisions of the related Contracts that concern payment and/or
enforcement of rights to payment.
SECTION 7.2 RESPONSIBILITIES OF THE ORIGINATORS. Anything herein to the
contrary notwithstanding:
(a) COLLECTION PROCEDURES. Each Originator agrees to direct its
respective Obligors to make payments of Receivables directly to a post office
box related to the relevant Lock-Box Account at a Lock-Box Bank. Each Originator
further agrees to transfer any Collections that it receives directly to the
Servicer (for the Company's account) within one (1) Business Day of receipt
thereof, and agrees that all such Collections shall be deemed to be received in
trust for the Company and shall be maintained and segregated separate and apart
from all other funds and monies of Originator until transfer of such Collections
to the Servicer.
(b) Each Originator shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve such Originator from such obligations.
(c) None of the Company, the Servicer or the Administrator shall
have any obligation or liability to any Obligor or any other third Person with
respect to any Receivables, Contracts related thereto or any other related
agreements, nor shall the Company, the Servicer, the Purchasers, the Purchaser
Agents or the Administrator be obligated to perform any of the obligations of
such Originator thereunder.
(d) Each Originator hereby grants to the Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of such Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any kind held or
transmitted by such Originator or transmitted or
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received by the Company (whether or not from such Originator) in connection with
any Receivable.
SECTION 7.3 FURTHER ACTION EVIDENCING PURCHASES. Each Originator agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Servicer
may reasonably request in order to perfect, protect or more fully evidence the
Receivables and Related Rights purchased or contributed by the Company
hereunder, or to enable the Company to exercise or enforce any of its rights
hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of the Servicer, such Originator
will:
(a) 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; and
(b) xxxx the master data processing records that evidence or list
(i) such Receivables and (ii) related Contracts with the legend set forth in
SECTION 4.1(j).
Each Originator hereby authorizes the Company or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Receivables and Related
Rights now existing or hereafter generated by Originator. If any Originator
fails to perform any of its agreements or obligations under this Agreement, the
Company or its designee may (but shall not be required to) itself perform, or
cause the performance of, such agreement or obligation, and the expenses of the
Company or its designee incurred in connection therewith shall be payable by
Originator as provided in SECTION 9.1.
SECTION 7.4 APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to any Originator shall, except as
otherwise specified by such Obligor or required by applicable law and unless
otherwise instructed by the Servicer (with the prior written consent of the
Administrator) or the Administrator, be applied as a Collection of any
Receivable or Receivables of such Obligor to the extent of any amounts then due
and payable thereunder before being applied to any other indebtedness of such
Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 PURCHASE AND SALE TERMINATION EVENTS. Each of the following
events or occurrences described in this SECTION 8.1 shall constitute a "PURCHASE
AND SALE TERMINATION EVENT":
(a) A Termination Event (as defined in the Receivables Purchase
Agreement) shall have occurred and, in the case of a Termination Event (other
than one described in PARAGRAPH (F) of EXHIBIT V of the Receivables Purchase
Agreement), the Administrator, shall have declared the Facility Termination Date
to have occurred; or
(b) Any Originator shall fail to make any payment or deposit to be
made by it hereunder when due and such failure shall remain unremedied for one
(1) Business Day; or
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(c) Any representation or warranty made or deemed to be made by any
Originator (or any of its officers) under or in connection with this Agreement,
any other Transaction Documents, or any other information or report delivered
pursuant hereto or thereto shall prove to have been false or incorrect in any
material respect when made or deemed made; or
(d) Any Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed or
observed and such failure shall remain unremedied for 5 Business Days after
written notice thereof shall have been given by the Servicer to such Originator.
SECTION 8.2 REMEDIES.
(a) OPTIONAL TERMINATION. Upon the occurrence of a Purchase and Sale
Termination Event, the Company (and not the Servicer) shall have the option, by
notice to the Originators (with a copy to the Administrator), to declare the
Purchase Facility as terminated.
(b) REMEDIES CUMULATIVE. Upon any termination of the Purchase
Facility pursuant to SECTION 8.2(a), the Company shall have, in addition to all
other rights and remedies under this Agreement, all other rights and remedies
provided under the UCC of each applicable jurisdiction and other applicable
laws, which rights shall be cumulative.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 INDEMNITIES BY THE ORIGINATORS. Without limiting any other
rights which the Company may have hereunder or under applicable law, each
Originator, severally and for itself alone hereby agrees to indemnify the
Company and each of its officers, directors, employees and agents (each of the
foregoing Persons being individually called a "PURCHASE AND SALE INDEMNIFIED
PARTY"), forthwith on demand, from and against any and all damages, losses,
claims, judgments, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively called "PURCHASE AND SALE INDEMNIFIED AMOUNTS") awarded against or
incurred by any of them arising out of or as a result of the failure of such
Originator to perform its obligations under this Agreement or any other
Transaction Document, or arising out of the claims asserted against a Purchase
and Sale Indemnified Party relating to the transactions contemplated herein or
therein or the use of proceeds thereof or therefrom, EXCLUDING, HOWEVER, (i)
Purchase and Sale Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Purchase and Sale
Indemnified Party, (ii) any indemnification which has the effect of recourse for
non-payment of the Receivables to any indemnitor (except as otherwise
specifically provided under this SECTION 9.1) and (iii) any tax based upon or
measured by net income property, or gross receipts. Without limiting the
foregoing, each Originator, severally for itself alone, shall indemnify each
Purchase and Sale Indemnified Party for Purchase and Sale Indemnified Amounts
relating to or resulting from:
(a) the transfer by such Originator of an interest in any Receivable
to any Person other than the Company;
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(b) the breach of any representation or warranty made by such
Originator (or any of its officers) under or in connection with this Agreement
or any other Transaction Document, or any information or report delivered by
Originator pursuant hereto or thereto, which shall have been false or incorrect
in any material respect when made or deemed made;
(c) the failure by such Originator to comply with any applicable
law, rule or regulation with respect to any Receivable generated by such
Originator or the related Contract, or the nonconformity of any Receivable
generated by such Originator or the related Contract with any such applicable
law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables generated by such Originator free and
clear of any Adverse Claim, other than an Adverse Claim arising solely as a
result of an act of the Company, the Purchaser or the Administrator whether
existing at the time of the purchase or contribution of such Receivables or at
any time thereafter;
(e) 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
or purported Receivables generated by such Originator, whether at the time of
any purchase or contribution or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by such Originator (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 services
related to any such Receivable or the furnishing of or failure to furnish such
services;
(g) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by such Originator;
and
(h) any tax or governmental fee or charge (other than any tax
excluded pursuant to CLAUSE (iii) in the proviso to the preceding sentence), 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 the Receivables generated by such Originator or any Related
Security connected with any such Receivables.
If for any reason the indemnification provided above in this SECTION 9.1 is
unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then each of the Originators,
severally and for itself, shall contribute to the amount paid or payable by such
Purchase and Sale Indemnified Party to the maximum extent permitted under
applicable law.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1 AMENDMENTS, ETC.
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and executed by the Company and each Originator (with the prior written
consent of the Administrator).
(b) No failure or delay on the part of the Company, the Servicer,
any Originator or any third party beneficiary in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Company, the Servicer or any Originator in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by the
Company or the Servicer under this Agreement shall, except as may otherwise be
stated in such waiver or approval, be applicable to subsequent transactions. No
waiver or approval under this Agreement shall require any similar or dissimilar
waiver or approval thereafter to be granted hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter thereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter thereof, superseding all prior
oral or written understandings.
SECTION 10.2 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or by facsimile, to the intended party at the
mailing address or facsimile number of such party set forth under its name on
the signature pages hereof or at such other address or facsimile number as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective (i) if personally delivered,
when received, (ii) if sent by certified mail three (3) Business Days after
having been deposited in the mail, postage prepaid, and (iii) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
SECTION 10.3 NO WAIVER; CUMULATIVE REMEDIES. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each Originator hereby authorizes the Company,
at any time and from time to time, to the fullest extent permitted by law, to
set off, against any obligations of such Originator to the Company arising in
connection with the Transaction Documents (including, without limitation,
amounts payable pursuant to SECTION 9.1) that are then due and payable or that
are not then due and payable but are accruing in respect of the then current
Settlement Period, any and all indebtedness at any time owing by the Company to
or for the credit or the account of such Originator.
SECTION 10.4 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be
binding upon and inure to the benefit of the Company and each Originator and
their respective successors and
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permitted assigns. No Originator may assign any of its rights hereunder or any
interest herein without the prior written consent of the Company, except as
otherwise herein specifically provided. 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 as the
parties hereto shall agree. The rights and remedies with respect to any breach
of any representation and warranty made by any Originator pursuant to ARTICLE V
and the indemnification and payment provisions of ARTICLE IX and SECTION 10.6
shall be continuing and shall survive any termination of this Agreement.
SECTION 10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.6 COSTS, EXPENSES AND TAXES. In addition to the obligations
of the Originators under ARTICLE IX, each Originator, severally and for itself
alone, agrees to pay on demand:
(a) to the Company (and any successor and permitted assigns thereof)
all reasonable costs and expenses incurred by such Person in connection with the
enforcement of this Agreement and the other Transaction Documents; 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 or the other Transaction Documents to be delivered hereunder, and
agrees to indemnify each Purchase and Sale Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF STATE OF NEW YORK
OR THE FEDERAL COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION
DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c)
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d)
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS
ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
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SECTION 10.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT,
AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
SECTION 10.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE.
The various captions (including, without limitation, the table of contents) in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to any underscored Section or Exhibit are to such Section or Exhibit
of this Agreement, as the case may be. The Exhibits hereto are hereby
incorporated by reference into and made a part of this Agreement.
SECTION 10.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement.
SECTION 10.11 ACKNOWLEDGMENT AND AGREEMENT. By execution below, each
Originator expressly acknowledges and agrees that all of the Company's rights,
title, and interests in, to, and under this Agreement (but not its obligations),
shall be assigned by the Company pursuant to the Receivables Purchase Agreement,
and each Originator consents to such assignment. Each of the parties hereto
acknowledges and agrees that the Administrator, the Purchaser Agents and the
Purchasers are third party beneficiaries of the rights of the Company arising
hereunder and under the other Transaction Documents to which any Originator is a
party.
SECTION 10.12 NO PROCEEDING. Each Originator hereby agrees that it will
not institute, or join any other Person in instituting, against the Company any
Insolvency Proceeding so long as any of the Company Notes remains outstanding
and for at least one year and one day following the day on which the aggregate
outstanding principal amount of each Company Note is paid in full.
SECTION 10.13 LIMITED RECOURSE. Except as explicitly set forth herein,
the obligations of the Company under this Agreement or any other Transaction
Documents to which it is a party are solely the obligations of the Company. No
recourse under any Transaction Document shall be had against, and no liability
shall attach to, any officer, employee, director, or beneficiary, whether
directly or indirectly, of the Company.
22
24
[SIGNATURE PAGES FOLLOW]
23
25
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.
WORTHINGTON RECEIVABLES CORPORATION
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
------------------------------------
Address: Worthington Receivables Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1
26
ORIGINATORS:
THE WORTHINGTON STEEL COMPANY, a
Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
-------------------------------
Title: Vice President
-----------------------------
Address: Worthington Steel Company,
a Delaware corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE WORTHINGTON STEEL COMPANY, a
North Carolina corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxx
-------------------------------
Title: Vice President
-----------------------------
Address: Worthington Steel Company,
a North Carolina corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-2
27
THE WORTHINGTON STEEL COMPANY, an
Ohio corporation
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------
Title: Vice President
------------------------------
Address: Worthington Steel Company
an Ohio corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WORTHINGTON STEEL COMPANY OF KENTUCKY, LLC
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------
Title: Vice President
------------------------------
Address: Worthington Steel Company of
Kentucky, LLC
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-3
28
WORTHINGTON STEEL COMPANY OF
DECATUR, L.L.C.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
------------------------------------
Address: Worthington Steel Company
of Decatur, LLC
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WORTHINGTON STEEL OF MICHIGAN, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
------------------------------------
Address: Worthington Steel of Michigan, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-4
29
SCHEDULE I
LIST OF ORIGINATORS
-------------------
The Worthington Steel Company, a Delaware corporation
The Worthington Steel Company, a North Carolina corporation
The Worthington Steel Company, an Ohio corporation
Worthington Steel Company of Kentucky, LLC, a Kentucky limited liability company
Worthington Steel Company of Decatur, L.L.C., an Alabama limited liability
company
Worthington Steel of Michigan, Inc., a Michigan corporation
Schedule I-1
30
SCHEDULE 5.6
PROCEEDINGS
-----------
NONE.
31
SCHEDULE 5.15
TRADE NAMES
-----------
Legal Name Trade Names
---------- -----------
The Worthington Steel Company, a Delaware corporation Worthington Steel - Malvern
Worthington Steel Company
The Worthington Steel Company, a North Carolina corporation Worthington Steel - Rock Hill
Worthington Steel Company
The Worthington Steel Company, an Ohio corporation Worthington Steel - Baltimore
Worthington Steel - Columbus
Worthington Steel - Delta
Worthington Steel - Xxxxxx
Xxxxxxxxxxx Steel - Xxxxxx
Xxxxxxxxxxx Steel Company
Worthington Steel Company of Kentucky, LLC Worthington Steel - Louisville
Worthington Steel Company
The Worthington Steel Company
Worthington Steel Company of Decatur, L.L.C. Worthington Steel - Decatur
Worthington Steel Company
The Worthington Steel Company
Worthington Steel of Michigan, Inc. Worthington Steel - Xxxxxxx
Worthington Steel Company
The Worthington Steel Company
THE WORTHINGTON STEEL COMPANY, a Delaware corporation, was originally
incorporated as Worthington Ventures, Inc., a Delaware corporation, in March
1992. The Worthington Steel Company, a Pennsylvania corporation, which held the
Malvern, PA facility, merged with an into Worthington Ventures, Inc. on November
26, 1996 as part of a corporate reorganization. Worthington Ventures, Inc., a
Delaware corporation, was the surviving entity and changed its name to The
Worthington Steel Company.
THE WORTHINGTON STEEL COMPANY, an Ohio corporation, was originally incorporated
on February 10, 1998 as The Worthington Steel Company of Ohio, Inc. On May 22,
1998, as part of a corporate reorganization, its name was changed to the current
name, The Worthington Steel Company.
32
SCHEDULE 6.1(f)
FINANCING STATEMENT FILING OFFICES OF EACH ORIGINATOR
-----------------------------------------------------
Originator Location
---------- --------
The Worthington Steel Company, a Delaware corporation 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
X.X. Xxx 0000
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx
The Worthington Steel Company, a North Carolina corporation 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxx Xxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
The Worthington Steel Company, an Ohio corporation 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxxxx Xxxx 00
Xxxxx, Xxxx 00000
000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Worthington Steel Company of Kentucky, LLC 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Worthington Steel Company of Decatur, L.L.C. 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxx Xxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
33
Worthington Steel of Michigan, Inc. 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 X. Xxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
LOCATION OF BOOKS AND RECORDS OF ORIGINATORS
--------------------------------------------
Originator Location
---------- --------
The Worthington Steel Company, a Delaware corporation 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
X.X. Xxx 0000
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx
The Worthington Steel Company, a North Carolina corporation 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxx Xxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
The Worthington Steel Company, an Ohio corporation 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxxxx Xxxx 00
Xxxxx, Xxxx 00000
000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Worthington Steel Company of Kentucky, LLC 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Worthington Steel Company of Decatur, L.L.C. 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 Xxx Xxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
34
Worthington Steel of Michigan, Inc. 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
0000 X. Xxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
35
EXHIBIT A
FORM OF PURCHASE REPORT
-----------------------
Originator:
Purchaser: Worthington Receivables Corporation
Payment Date:
1. Outstanding Balance of Receivables Purchased:
2. Fair Market Value Discount:
1/{1 + [(Prime Rate + 0.25%) x Turnover Rate]}
365
Where:
Prime Rate = _______
Days' Sales Outstanding = _______
3. Purchase Price (1 x 2) = $_______
36
EXHIBIT B
FORM OF COMPANY NOTE
--------------------
------------
______, 2000
FOR VALUE RECEIVED, the undersigned, Worthington Receivables
Corporation, a Delaware limited liability company ("COMPANY"), promises to pay
to [NAME OF THE ORIGINATOR], a [CORPORATION] [LIMITED LIABILITY COMPANY]
[LIMITED PARTNERSHIP] (the "Originator"), on the terms and subject to the
conditions set forth herein and in the Purchase and Sale Agreement referred to
below, the aggregate unpaid Purchase Price of all Receivables purchased by the
Company from the Originator pursuant to such Purchase and Sale Agreement, as
such unpaid Purchase Price is shown in the records of the Servicer.
1. PURCHASE AND SALE AGREEMENT. This Company Note is one of the Company
Notes described in, and is subject to the terms and conditions set forth in,
that certain Purchase and Sale Agreement of even date herewith (as the same may
be amended, supplemented, amended and restated or otherwise modified in
accordance with its terms, the "PURCHASE AND SALE AGREEMENT"), between the
Company and the various entities listed on Schedule I thereto, including the
Originator. Reference is hereby made to the Purchase and Sale Agreement for a
statement of certain other rights and obligations of the Company and the
Originator.
2. DEFINITIONS. Capitalized terms used (but not defined) herein have
the meanings assigned thereto in Exhibit I to the Receivables Purchase Agreement
(as defined in the Purchase and Sale Agreement). In addition, as used herein,
the following terms have the following meanings:
"BANKRUPTCY PROCEEDINGS" has the meaning set forth in CLAUSE (b) of
PARAGRAPH 9 hereof.
FINAL MATURITY DATE" means the Payment Date immediately following the
date that falls one hundred twenty one (121) days after the Purchase and Sale
Termination Date.
"INTEREST PERIOD" means the period from and including a Settlement Date
(or, in the case of the first Interest Period, the date hereof) to but excluding
the next Settlement Date.
"PRIME RATE" has the meaning assigned thereto in the Purchase and Sale
Agreement.
"RECEIVABLES PURCHASE AGREEMENT" means the Receivables Purchase
Agreement, dated as of November 30, 2000, entered into among the Worthington
Receivables Corporation, Worthington Industries, Inc., Market Street Funding
Corporation, the members of the various other Purchaser Groups from time to time
a party thereto and PNC Bank, National Association.
"SENIOR INTERESTS" means, collectively, (i) all accrued and unpaid
Discount, (ii) all fees payable by the Company to the Senior Interest Holders
pursuant to the Receivables Purchase Agreement, (iii) all amounts payable
pursuant to SECTION 1.7 and 1.8 of the Receivables Purchase Agreement, (iv) the
Aggregate Investment and (v) all other obligations owed by the Company to
37
the Senior Interest Holders under the Receivables Purchase Agreement and other
Transaction Documents that are due and payable, together with any and all
interest and Discount accruing on any such amount after the commencement of any
Bankruptcy Proceedings, notwithstanding any provision or rule of law that might
restrict the rights of any Senior Interest Holder, as against the Company or
anyone else, to collect such interest.
"SENIOR INTEREST HOLDERS" means, collectively, the Purchasers, the
Administrator and the Indemnified Parties.
"Subordination Provisions" means, collectively, clauses (a) through (l)
of paragraph 9 hereof.
"TELERATE SCREEN RATE" means, for any Interest Period, the rate for
thirty day commercial paper denominated in dollars which appears on Page 1250 of
the Dow Xxxxx Telerate Service (or such other page as may replace that page on
that service for the purpose of displaying dollar commercial paper rates) at
approximately 9:00 a.m., New York City time, on the first day of such Interest
Period.
3. INTEREST. Subject to the Subordination Provisions set forth below,
the Company promises to pay interest on this Company Note as follows:
(a) Prior to the Final Maturity Date, the aggregate unpaid Purchase
Price from time to time outstanding during any Interest Period shall bear
interest at a rate per annum equal to the Telerate Screen Rate for such Interest
Period as determined by the Servicer; and
(b) From (and including) the Final Maturity Date to (but excluding)
the date on which the entire aggregate unpaid Purchase Price payable to the
Originator is fully paid, such aggregate unpaid Purchase Price from time to time
outstanding shall bear interest at a rate per annum equal to the Prime Rate.
4. INTEREST PAYMENT DATES. Subject to the Subordination Provisions set
forth below, the Company shall pay accrued interest on this Company Note on each
Settlement Date, and shall pay accrued interest on the amount of each principal
payment made in cash on a date other than a Settlement Date at the time of such
principal payment.
5. BASIS OF COMPUTATION. Interest accrued hereunder that is computed by
reference to the Telerate Screen Rate shall be computed for the actual number of
days elapsed on the basis of a 360-day year, and interest accrued hereunder that
is computed by reference to the rate described in PARAGRAPH 3(B) of this Company
Note shall be computed for the actual number of days elapsed on the basis of a
365- or 366-day year.
6. PRINCIPAL PAYMENT DATES. Subject to the Subordination Provisions set
forth below, payments of the principal amount of this Company Note shall be made
as follows:
(a) The principal amount of this Company Note shall be reduced by an
amount equal to each payment deemed made pursuant to SECTION 3.3 of the Purchase
and Sale Agreement; and
38
(b) The entire remaining unpaid Purchase Price of all Receivables
purchased by the Company from the Originator pursuant to the Purchase and Sale
Agreement shall be due and payable on the Final Maturity Date.
Subject to the Subordination Provisions set forth below, the principal amount of
and accrued interest on this Company Note may be prepaid on any Business Day
without premium or penalty.
7. PAYMENT MECHANICS. All payments of principal and interest hereunder
are to be made in lawful money of the United States of America.
8. ENFORCEMENT EXPENSES. In addition to and not in limitation of the
foregoing, but subject to the Subordination Provisions set forth below and to
any limitation imposed by applicable law, the Company agrees to pay all
expenses, including reasonable attorneys' fees and legal expenses, incurred by
the Originator in seeking to collect any amounts payable hereunder which are not
paid when due.
9. SUBORDINATION PROVISIONS. The Company covenants and agrees, and the
Originator and any other holder of this Company Note (collectively, the
Originator and any such other holder are called the "HOLDER"), by its acceptance
of this Company Note, likewise covenants and agrees on behalf of itself and any
holder of this Company Note, that the payment of the principal amount of and
interest on this Company Note is hereby expressly subordinated in right of
payment to the payment and performance of the Senior Interests to the extent and
in the manner set forth in the following clauses of this PARAGRAPH 9:
(a) No payment or other distribution of the Company's assets of any
kind or character, whether in cash, securities, or other rights or property,
shall be made on account of this Company Note except to the extent such payment
or other distribution is (i) permitted under PARAGRAPH 1(M) of EXHIBIT IV of the
Receivables Purchase Agreement or (ii) made pursuant to CLAUSE (A) or (B) of
PARAGRAPH 6 of this Company Note;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company or any sale of all or substantially all of the assets of the
Company other than as permitted by the Purchase and Sale Agreement (such
proceedings being herein collectively called "BANKRUPTCY PROCEEDINGS"), the
Senior Interests shall first be paid and performed in full and in cash before
the Originator shall be entitled to receive and to retain any payment or
distribution in respect of this Company Note. In order to implement the
foregoing during any Bankruptcy Proceeding: (i) all payments and distributions
of any kind or character in respect of this Company Note to which Holder would
be entitled except for this clause (b) shall be made directly to the
Administrator (for the benefit of the Senior Interest Holders); (ii) Holder
shall promptly file a claim or claims, in the form required in any Bankruptcy
Proceedings, for the full outstanding amount of this Company Note, and shall use
commercially reasonable efforts to cause said claim or claims to be approved and
all payments and other distributions in respect thereof to be made directly to
the Administrator (for the benefit of the Senior Interest Holders) until the
Senior Interests shall have been paid and performed in full and in cash; and
(iii) Holder
39
hereby irrevocably agrees that the Purchasers (or the Administrator acting on
the Purchasers' behalf), in the name of Holder or otherwise, may demand, xxx
for, collect, receive and receipt for any and all such payments or
distributions, and file, prove and vote or consent in any such Bankruptcy
Proceedings with respect to any and all claims of Holder relating to this
Company Note, in each case until the Senior Interests shall have been paid and
performed in full and in cash;
(c) In the event that Holder receives any payment or other
distribution of any kind or character from the Company or from any other source
whatsoever, in respect of this Company Note, other than as expressly permitted
by the terms of this Company Note, such payment or other distribution shall be
received in trust for the Senior Interest Holders and shall be turned over by
Holder to the Administrator (for the benefit of the Senior Interest Holders)
forthwith. Holder will xxxx its books and records so as clearly to indicate that
this Company Note is subordinated in accordance with the terms hereof. All
payments and distributions received by the Administrator in respect of this
Company Note, to the extent received in or converted into cash, may be applied
by the Administrator (for the benefit of the Senior Interest Holders) first to
the payment of any and all expenses (including reasonable attorneys' fees and
legal expenses) paid or incurred by the Senior Interest Holders in enforcing
these Subordination Provisions, or in endeavoring to collect or realize upon
this Company Note, and any balance thereof shall, solely as between the
Originator and the Senior Interest Holders, be applied by the Administrator (in
the order of application set forth in SECTION 1.4(D)(II) of the Receivables
Purchase Agreement) toward the payment of the Senior Interests; but as between
the Company and its creditors, no such payments or distributions of any kind or
character shall be deemed to be payments or distributions in respect of the
Senior Interests;
(d) Notwithstanding any payments or distributions received by the
Senior Interest Holders in respect of this Company Note, while any Bankruptcy
Proceedings are pending Holder shall not be subrogated to the then existing
rights of the Senior Interest Holders in respect of the Senior Interests until
the Senior Interests have been paid and performed in full and in cash. If no
Bankruptcy Proceedings are pending, Holder shall only be entitled to exercise
any subrogation rights that it may acquire (by reason of a payment or
distribution to the Senior Interest Holders in respect of this Company Note) to
the extent that any payment arising out of the exercise of such rights would be
permitted under PARAGRAPH 1(m) of EXHIBIT IV of the Receivables Purchase
Agreement;
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of Holder, on the one hand, and the
Senior Interest Holders on the other hand. Nothing contained in these
Subordination Provisions or elsewhere in this Company Note is intended to or
shall impair, as between the Company, its creditors (other than the Senior
Interest Holders) and Holder, the Company's obligation, which is unconditional
and absolute, to pay Holder the principal of and interest on this Company Note
as and when the same shall become due and payable in accordance with the terms
hereof or to affect the relative rights of Holder and creditors of the Company
(other than the Senior Interest Holders);
(f) Holder shall not, until the Senior Interests have been paid and
performed in full and in cash, (i) cancel, waive, forgive, transfer or assign,
or commence legal proceedings to enforce or collect, or subordinate to any
obligation of the Company, howsoever created, arising
40
or evidenced, whether direct or indirect, absolute or contingent, or now or
hereafter existing, or due or to become due, other than the Senior Interests,
this Company Note or any rights in respect hereof or (ii) convert this Company
Note into an equity interest in the Company, unless Holder shall have received
the prior written consent of the Administrator and the Purchasers in each case;
(g) Holder shall not, without the advance written consent of the
Administrator and the Purchasers, commence, or join with any other Person in
commencing, any Bankruptcy Proceedings with respect to the Company until at
least one year and one day shall have passed since the Senior Interests shall
have been paid and performed in full and in cash;
(h) If, at any time, any payment (in whole or in part) of any Senior
Interest is rescinded or must be restored or returned by a Senior Interest
Holder (whether in connection with Bankruptcy Proceedings or otherwise), these
Subordination Provisions shall continue to be effective or shall be reinstated,
as the case may be, as though such payment had not been made;
(i) Each of the Senior Interest Holders may, from time to time, at
its sole discretion, without notice to Holder, and without waiving any of its
rights under these Subordination Provisions, take any or all of the following
actions: (i) retain or obtain an interest in any property to secure any of the
Senior Interests; (ii) retain or obtain the primary or secondary obligations of
any other obligor or obligors with respect to any of the Senior Interests; (iii)
extend or renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Interests, or release or compromise
any obligation of any nature with respect to any of the Senior Interests; (iv)
amend, supplement, amend and restate, or otherwise modify any Transaction
Document; and (v) release its security interest in, or surrender, release or
permit any substitution or exchange for all or any part of any rights or
property securing any of the Senior Interests, or extend or renew for one or
more periods (whether or not longer than the original period), or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such rights or property;
(j) Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Senior Interest Holders; (ii) notice of
the existence, creation, non-payment or non-performance of all or any of the
Senior Interests; and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Interests, or any thereof, or any
security therefor;
(k) Each of the Senior Interest Holders may, from time to time, on
the terms and subject to the conditions set forth in the Transaction Documents
to which such Persons are party, but without notice to Holder, assign or
transfer any or all of the Senior Interests, or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Interests shall be and remain Senior Interests for
the purposes of these Subordination Provisions, and every immediate and
successive assignee or transferee of any of the Senior Interests or of any
interest of such assignee or transferee in the Senior Interests shall be
entitled to the benefits of these Subordination Provisions to the same extent as
if such assignee or transferee were the assignor or transferor; and
41
(l) These Subordination Provisions constitute a continuing offer
from the holder of this Company Note to all Persons who become the holders of,
or who continue to hold, Senior Interests; and these Subordination Provisions
are made for the benefit of the Senior Interest Holders, and the Administrator
may proceed to enforce such provisions on behalf of each of such Persons.
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 Company Note shall in any event be effective unless (i) the
same shall be in writing and signed and delivered by the Company and Holder and
(ii) all consents required for such actions under the Transaction Documents
shall have been received by the appropriate Persons.
11. MAXIMUM INTEREST. Notwithstanding anything in this Company Note to
the contrary, the Company shall never be required to pay unearned interest on
any amount outstanding hereunder and shall never be required to pay interest on
the principal amount outstanding hereunder at a rate in excess of the maximum
interest rate that may be contracted for, charged or received under applicable
federal or state law (such maximum rate being herein called the "HIGHEST LAWFUL
RATE"). If the effective rate of interest which would otherwise by payable under
this Company Note would exceed the Highest Lawful Rate, or if the holder of this
Company Note shall receive any unearned interest or shall receive monies that
are deemed to constitute interest which would increase the effective rate of
interest payable by the Company under this Company Note to a rate in excess of
the Highest Lawful Rate, then (i) the amount of interest which would otherwise
by payable by the Company under this Company Note shall be reduced to the amount
allowed by applicable law, and (ii) any unearned interest paid by the Company or
any interest paid by the Company in excess of the Highest Lawful Rate shall be
refunded to the Company. Without limitation of the foregoing, all calculations
of the rate of interest contracted for, charged or received by the Originator
under this Company Note that are made for the purpose of determining whether
such rate exceeds the Highest Lawful Rate applicable to the Originator (such
Highest Lawful Rate being herein called the "ORIGINATOR'S MAXIMUM PERMISSIBLE
RATE") shall be made, to the extent permitted by usury laws applicable to the
Originator (now or hereafter enacted), by amortizing, prorating and spreading in
equal parts during the actual period during which any amount has been
outstanding hereunder all interest at any time contracted for, charged or
received by the Originator in connection herewith. If at any time and from time
to time (i) the amount of interest payable to the Originator on any date shall
be computed at the Originator's Maximum Permissible Rate pursuant to the
provisions of the foregoing sentence and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to the
Originator would be less than the amount of interest payable to the Originator
computed at the Originator's Maximum Permissible Rate, then the amount of
interest payable to the Originator in respect of such subsequent interest
computation period shall continue to be computed at the Originator's Maximum
Permissible Rate until the total amount of interest payable to the Originator
shall equal the total amount of interest which would have been payable to the
Originator if the total amount of interest had been computed without giving
effect to the provisions of the foregoing sentence.
42
12. NO NEGOTIATION. This Company Note is not negotiable except that is
may be assigned to any Affiliate of the Originator.
13. GOVERNING LAW. THIS COMPANY NOTE HAS BEEN DELIVERED IN THE STATE OF
____________, AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF ____________.
14. CAPTIONS. Paragraph captions used in this Company Note are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Company Note.
WORTHINGTON RECEIVABLES
CORPORATION
By:_______________________________
Name:__________________________
Title:_________________________
43
EXHIBIT C
FORM OF JOINDER AGREEMENT
-------------------------
THIS JOINDER AGREEMENT, dated as of , 20 (this "Agreement") is executed
by , a corporation organized under the laws of (the "Additional Seller"), with
its principal place of business located at .
BACKGROUND:
X. Xxxxxxxxxxx Receivables Corporation (the "Buyer") and each entity
listed on Schedule I thereto (collectively, the "Sellers"), have entered into
that certain Purchase and Sale Agreement, dated as of November 30, 2000 (as
amended through the date hereof, and as it may be further amended from time to
time, the "PURCHASE AND SALE AGREEMENT").
B. The Additional Seller desires to become a Seller pursuant to SECTION
1.7 of the Purchase and Sale Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Additional Seller hereby agrees as follows:
SECTION 11. DEFINITIONS. Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings assigned thereto in the
Purchase and Sale Agreement or in the Receivables Purchase Agreement (as defined
in the Purchase and Sale Agreement).
SECTION 12. TRANSACTION DOCUMENTS. The Additional Seller hereby agrees
that it shall be bound by all of the terms, conditions and provisions of, and
shall be deemed to be a party to (as if it were an original signatory to), the
Purchase and Sale Agreement and each of the other relevant Specified Documents.
From and after the later of the date hereof and the date that the Additional
Seller has complied with all of the requirements of SECTION 1.7 of the Purchase
and Sale Agreement, the Additional Seller shall be a Seller for all purposes of
the Purchase and Sale Agreement and all other Transaction Documents. The
Additional Seller hereby acknowledges that it has received copies of the
Purchase and Sale Agreement and the other Transaction Documents.
SECTION 13. REPRESENTATIONS AND WARRANTIES. The Additional Seller
hereby makes all of the representations and warranties set forth in ARTICLE V
(to the extent applicable) of the Purchase and Sale Agreement as of the date
hereof (unless such representations or warranties relate to an earlier date, in
which as of such earlier date), as if such representations and warranties were
fully set forth herein. The Additional Seller hereby represents and warrants
that the chief place of business and chief executive office of the Additional
Seller, and the offices where the Additional Seller keeps all of its Records and
Related Security is as follows:
-------------------------------
-------------------------------
-------------------------------
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SECTION 14. MISCELLANEOUS. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York. This
Agreement is executed by the Additional Seller for the benefit of the Buyer, and
its assigns, and each of the foregoing parties may rely hereon. This Agreement
shall be binding upon, and shall inure to the benefit of, the Additional Seller
and its successors and permitted assigns.
[SIGNATURE PAGES FOLLOW]
C-2
45
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed by its duly authorized officer as of the date and year first above
written.
[NAME OF ADDITIONAL SELLER]
By: _______________________________
Name:_________________________
Title:________________________
Consented to:
WORTHINGTON RECEIVABLES CORPORATION
By: _______________________________
Name:_________________________
Title:________________________
Acknowledged by:
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: _______________________________
Name:_________________________
Title:________________________
C-3
46
EXHIBIT D
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
-----------------------------------------
ORIGINATOR ASSIGNMENT CERTIFICATE
Reference is made to the Purchase and Sale Agreement of even date
herewith (as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time, the "PURCHASE AND SALE AGREEMENT") between
the undersigned, the various entities listed on Schedule I, as Originators, and
Worthington Receivables Corporation (the "COMPANY"). Unless otherwise defined
herein, capitalized terms used herein have the meanings provided in the Purchase
and Sale Agreement or in EXHIBIT I to the Receivables Purchase Agreement (as
defined in the Purchase and Sale Agreement), as applicable.
The undersigned hereby sells, assigns and transfers unto the Company
and its successors and assigns all right, title and interest of the undersigned
in and to:
(a) each Receivable of the undersigned that existed and was
owing to the undersigned as of the Cut-off Date other than Receivables
contributed pursuant to SECTION 1.6 of the Purchase and Sale Agreement;
(b) each Receivable generated by the undersigned from and
including the Cut-off Date to and including the Purchase and Sale
Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of the
foregoing;
(e) all books and records of the undersigned related to any of
the foregoing, and all Transaction Documents to which the undersigned
is a party, together with all rights (but not obligations) of the
undersigned; and
(f) all collections and other proceeds and products of any of
the foregoing (as defined in the applicable UCC) that are or were
received by the undersigned on or after the Cut-off Date, including,
without limitation, all funds which either are received by the
undersigned, the Company or the Servicer from or on behalf of the
Obligors in payment of any amounts owed (including, without limitation,
invoice price, finance charges, interest and all other charges) in
respect of Receivables, or are applied to such amounts owed by the
Obligors (including, without limitation, insurance payments that the
undersigned or the Servicer applies in the ordinary course of its
business to amounts owed in respect of any Receivable and net proceeds
of sale or other disposition of repossessed goods or other collateral
or property of the Obligors in respect of Receivables or any other
parties directly or indirectly liable for payment of such Receivables).
This Originator Assignment Certificate is made without recourse but on
the terms and subject to the conditions set forth in the Transaction Documents
to which the undersigned is a
D-1
47
party. The undersigned acknowledges and agrees that the Company and its
successors and assigns are accepting this Originator Assignment Certificate in
reliance on the representations, warranties and covenants of the undersigned
contained in the Transaction Documents to which the undersigned is a party.
THIS ORIGINATOR ASSIGNMENT CERTIFICATE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE PURCHASE AND SALE AGREEMENT AND THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
D-2
48
IN WITNESS WHEREOF, the undersigned has caused this Originator
Assignment Certificate to be duly executed and delivered by its duly authorized
officer this day of , 2000.
[ORIGINATOR]
By:___________________________________________
Name:_________________________________________
Title:________________________________________
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TABLE OF CONTENTS
PAGE
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell.............................................................1
SECTION 1.2 Timing of Purchases........................................................................2
SECTION 1.3 Consideration for Purchases................................................................3
SECTION 1.4 Purchase and Sale Termination Date.........................................................3
SECTION 1.5 Intention of the Parties...................................................................3
SECTION 1.6 Contribution of Receivables................................................................3
SECTION 1.7 Additional Originators.....................................................................3
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report............................................................................4
SECTION 2.2 Calculation of Purchase Price..............................................................4
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Initial Purchase Price Payment.............................................................5
SECTION 3.2 Subsequent Purchase Price Payments.........................................................5
SECTION 3.3 Settlement as to Specific Receivables and Dilution.........................................6
SECTION 3.4 Reconveyance of Receivables................................................................7
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase...................................................7
SECTION 4.2 Certification as to Representations and Warranties.........................................9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
SECTION 5.1 Organization and Good Standing.............................................................9
SECTION 5.2 Due Qualification..........................................................................9
SECTION 5.3 Power and Authority; Due Authorization.....................................................9
SECTION 5.4 Valid Sale; Binding Obligations...........................................................10
SECTION 5.5 No Violation..............................................................................10
SECTION 5.6 Proceedings...............................................................................10
SECTION 5.7 Bulk Sales Acts...........................................................................10
SECTION 5.8 Government Approvals......................................................................10
SECTION 5.9 Financial Condition.......................................................................11
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies.................................11
SECTION 5.11 Margin Regulations........................................................................11
SECTION 5.12 Quality of Title..........................................................................11
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.13 Accuracy of Information...................................................................12
SECTION 5.14 [RESERVED]................................................................................12
SECTION 5.15 Trade Names...............................................................................12
SECTION 5.16 Taxes.....................................................................................12
SECTION 5.17 Compliance with Applicable Laws...........................................................12
SECTION 5.18 Reliance on Separate Legal Identity.......................................................12
SECTION 5.19 Investment Company........................................................................12
ARTICLE VI
COVENANTS OF THE ORIGINATORS
SECTION 6.1 Affirmative Covenants.....................................................................13
SECTION 6.2 Reporting Requirements....................................................................14
SECTION 6.3 Negative Covenants........................................................................15
SECTION 6.4 Lock-Box Banks............................................................................16
SECTION 6.5 Accounting for Purchases..................................................................16
SECTION 6.6 Transaction Documents.....................................................................16
SECTION 6.7 Substantive Consolidation.................................................................16
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES
SECTION 7.1 Rights of the Company.....................................................................18
SECTION 7.2 Responsibilities of the Originators.......................................................18
SECTION 7.3 Further Action Evidencing Purchases.......................................................18
SECTION 7.4 Application of Collections................................................................19
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 Purchase and Sale Termination Events......................................................19
SECTION 8.2 Remedies..................................................................................20
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Originators............................................................20
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments, etc...........................................................................22
SECTION 10.2 Notices, etc..............................................................................22
SECTION 10.3 No Waiver; Cumulative Remedies............................................................22
SECTION 10.4 Binding Effect; Assignability.............................................................23
SECTION 10.5 GOVERNING LAW.............................................................................23
SECTION 10.6 Costs, Expenses and Taxes.................................................................23
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 10.7 SUBMISSION TO JURISDICTION................................................................23
SECTION 10.8 WAIVER OF JURY TRIAL......................................................................24
SECTION 10.9 Captions and Cross References; Incorporation by Reference.................................24
SECTION 10.10 Execution in Counterparts.................................................................24
SECTION 10.11 Acknowledgment and Agreement..............................................................24
SECTION 10.12 No Proceeding.............................................................................25
SECTION 10.13 Limited Recourse..........................................................................25
SCHEDULES
Schedule I List of Originators
Schedule 5.6 Proceedings
Schedule 5.15 Trade Names
Schedule 6.1(f) Filing Office Locations and Records Locations
EXHIBITS
Exhibit A Form of Purchase Report
Exhibit B Form of Company Note
Exhibit C Form of Joinder Agreement
Exhibit D Form of Originator Assignment Certificate
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