PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of June 30, 1999
among
THE ORIGINATORS NAMED HEREIN
IMPERIAL SECURITIZATION CORPORATION
and
IMPERIAL DISTRIBUTING, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I
AGREEMENT TO PURCHASE AND CONTRIBUTE
1.1. Agreement to Purchase and Sell 2
1.2. Timing of Purchases 3
1.3. Consideration for Purchases 3
1.4. Purchase and Sale Termination Date 3
1.5. Intention of the Parties 3
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. Calculation of Purchase Price 4
ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. Contribution of Receivables 5
3.2. Initial Purchase Price Payment 5
3.3. Subsequent Purchase Price Payments 5
3.4. Settlement as to Specific Receivables 6
3.5. Reconveyance of Receivables 7
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. Conditions Precedent to Initial Purchase 7
4.2. Certification as to Representations and
Warranties 9
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
5.1. Organization and Good Standing 9
5.2. Due Qualification 9
5.3. Power and Authority; Due Authorization 9
5.4. Valid Sale or Contribution; Binding
Obligations 10
5.5. No Violation 10
5.6. Proceedings 10
5.7. Bulk Sales Act 11
5.8. Government Approvals 11
5.9. Financial Condition 11
5.10. Margin Regulations 11
5.11. Quality of Title 11
5.12. Accuracy of Information 12
5.13. Offices 12
5.14. Trade Names 12
5.15. Taxes 12
5.16. Licenses and Labor Controversies 13
5.17. Compliance with Applicable Laws 13
5.18. Reliance on Separate Legal Identity 13
5.19. Purchase Price 13
5.20. Certain Definitions 13
ARTICLE VI
COVENANTS OF THE ORIGINATOR
6.1. Affirmative Covenants 15
6.2. Reporting Requirements 17
6.3. Negative Covenants 17
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1. Rights of the Company 19
7.2. Responsibilities of Originator 19
7.3. Further Action Evidencing Purchases 19
7.4. Application of Collections 20
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ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1. Purchase and Sale Termination Events 20
8.2. Remedies 22
ARTICLE IX
INDEMNIFICATION
9.1. Indemnities by the Originator 22
ARTICLE X
MISCELLANEOUS
10.1. Amendments, etc 24
10.2. Notices, etc 24
10.3. No Waiver; Cumulative Remedies 25
10.4. Binding Effect; Assignability 25
10.5. Governing Law 25
10.6. Costs, Expenses and Taxes 25
10.7. Submission to Jurisdiction 25
10.8. Waiver of Jury Trial 26
10.9. Captions and Cross References; Incorporation by
Reference 26
10.10. Execution in Counterparts 26
10.11. Acknowledgment and Agreement 26
SCHEDULES
SCHEDULE 5.13 Office Locations
SCHEDULE 5.14 Trade Names
EXHIBITS
EXHIBIT A Form of Purchase Report
EXHIBIT B Form of Company Note
EXHIBIT C Form of Opinion of Originator's Counsel
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PURCHASE AND CONTRIBUTION AGREEMENT
THIS PURCHASE AND CONTRIBUTION AGREEMENT (this "Agreement"), dated as of
June 30, 1999, is between IMPERIAL DISTRIBUTING, INC. ("IDI"), a Delaware
corporation, as the initial Servicer, DIAMOND CRYSTAL SPECIALTY FOODS, INC.
("Diamond"), a Michigan corporation, as an Originator, DIAMOND CRYSTAL BRANDS,
INC. ("Diamond Crystal"), a Delaware corporation, as an Originator, WHOLESOME
FOODS, LLC ("Wholesome"), a Florida limited liability company, as an Originator,
XXXXX SUGAR CORPORATION ("Xxxxx"), a New York corporation, as an Originator,
MICHIGAN SUGAR COMPANY ("Michigan"), a Michigan corporation, as an Originator,
GREAT LAKES SUGAR COMPANY ("Great Lakes"), an Ohio corporation, as an
Originator, IMPERIAL-SAVANNAH, L.P. ("I-S"), a Delaware limited partnership, as
an Originator, and KING PACKAGING CO., INC., ("King"), a Georgia corporation, as
an Originator, (Diamond, Diamond Crystals, Wholesome, Holly, Michigan, Great
Lakes, I-S and King are herein collectively called the "Originators" and
individually called an "Originator"), and IMPERIAL SECURITIZATION CORPORATION, a
Delaware corporation (the "Company").
Definitions
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I 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 IDI, Imperial Sugar Company ("Imperial"), the Company, Fairway Finance
Corporation, as Purchaser (the "Purchaser"), and Xxxxxxx Xxxxx Securities Inc.,
as agent for the Purchaser (to Seller with its successors and assigns, the
"Agent").
Background
1. The Company is a special purpose corporation, all of the capital
stock of which is wholly-owned by Xxxxx.
2. In order to finance their respective businesses, the Originators
wish to sell certain Receivables and Related Rights from time to time to the
Company, and the Company is willing, on the terms and subject to the conditions
set forth herein, to purchase such Receivables and Related Rights from the
Originators.
3. The Company intends to sell to the Purchaser an undivided variable
percentage interest in its Receivables and Related Rights pursuant to the
Receivables Purchase Agreement in order to finance its purchases of certain
Receivables and Related Rights hereunder.
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 CONTRIBUTE
1.1. Agreement to Purchase and Sell. On the terms and subject to the
conditions set forth in this Agreement (including Article IV), and in
consideration of the Purchase Price, each Originator agrees to sell to the
Company, and does hereby sell to the Company, severally and for itself alone,
and the Company agrees to purchase from each Originator, and does hereby
purchase from each Originator, without recourse and without regard to
collectibility, 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 as of the close of Originator's business on June 30, 1999 Closing
Date") (other than the Receivables and Related Rights contributed by such
Originator to the Company pursuant to Section 3.1 (the "Contributed
Receivables"));
(b) each Receivable created or originated by such Originator from the
close of such Originator's business on the Closing 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 related to any of the foregoing; and
(f) all proceeds thereof (as defined in the UCC) received on or after the
date hereof 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, 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, if any, that such Originator or the Servicer (if other than
such Originator) applies in the ordinary course of its business to amounts owed
in respect of any Receivable).
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 each Originator set forth in this Agreement and each
other Transaction Document. The Company's foregoing commitment to purchase such
Receivables and the proceeds and rights described in subsections (c)
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through (f) of this Section 1.1 (collectively, the "Related Rights") is herein
called the "Purchase Facility."
1.2. Timing of Purchases.
(a) Closing Date Purchases. Each Originator's entire right, title and
interest in (i) each Receivable that existed and was owing to Originator as of
the close of such Originator's business on the Closing Date, (other than
Contributed Receivables), (ii) all Related Rights with respect thereto shall be
deemed to have been sold to the Company on the Closing Date.
(b) Regular Purchases. After the Closing Date, each Receivable created or
originated by an Originator and described in Section 1.1(b) hereof and all
Related Rights shall be purchased and owned by the Company (without any further
action) upon the creation or origination of such Receivable.
1.3. Consideration for Purchases. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make all Purchase
Price payments to the respective Originators, and to reflect all contributions,
in accordance with Article III.
1.4. Purchase and Sale Termination Date. The "Purchase and Sale
Termination Date" shall be the earlier to occur of (a) the date of the
termination of this Agreement pursuant to Section 8.2 and (b) the Payment Date
immediately following the day on which the Originators shall have given notice
to the Company that the Originators desire to terminate this Agreement.
As used herein, "Payment Date" means (i) the Closing Date and (ii) each
Business Day thereafter that an Originator is open for business.
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 each
Originator to the Company, as contemplated by this Agreement be, and be treated
as, sales or contributions, as applicable, and not as secured loans secured by
the Receivables and Related Rights. If, however, notwithstanding the intent of
the parties, such transactions are deemed to be loans, such Originator hereby
grants to the Company a first priority security interest in all of such
Originator's right, title and interest in and to the Receivables and the Related
Rights now existing and hereafter created, all monies due or to become due and
all amounts received with respect thereto, and all proceeds thereof, to secure
all of such Originator's obligations hereunder.
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ARTICLE II
CALCULATION OF PURCHASE PRICE
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2.1. Calculation of Purchase Price. On each Servicer Report Date, the
Servicer shall deliver to the Company, the Agent and each Originator a report in
substantially the form of Exhibit A (each such report being herein called a
"Purchase Report") with respect to the matters set forth therein and the
Company's purchases of Receivables from Originator
(a) that are to be made on the Closing Date (in the case of the Purchase
Report to be delivered on the Closing Date), or
(b) that were made during the period commencing on the Servicer Report
Date immediately preceding such Servicer Report Date to (but not including) such
Servicer Report Date (in the case of each subsequent Purchase Report).
The "Purchase Price" (to be paid to each Originator in accordance with the
terms of Article III) for the Receivables and the Related Rights 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.
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, and (B) a
fraction, the numerator of which is the Average Maturity
(calculated as of the last day of the calendar month next
preceding such Payment Date) and the denominator of which is
365.
"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 such other
publication as determined by the Agent in its sole discretion.
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ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. Contribution of Receivables. On the Closing Date, Xxxxx shall, and
hereby does, contribute to the capital of the Company, Receivables and Related
Rights with respect thereto consisting of each Receivable of Imperial that
existed and was owing to Xxxxx on the Closing Date, beginning with the oldest of
such Receivables and continuing chronologically thereafter, and all or an
undivided interest in the most recent of such contributed Receivables such that
the aggregate Outstanding Balance of all such contributed Receivables shall be
equal to $6,689,000.
3.2. 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 the amount of the proceeds of the
Purchase made by the Purchaser on the Closing Date under the Receivables
Purchase Agreement, 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 (as each such promissory note, as it may be amended,
supplemented, indorsed 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, being herein
called a "Company Note").
3.3. Subsequent Purchase Price Payments. On each Business Day falling
after the Closing Date and on or prior to the Purchase and Sale Termination
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 to the Company on such Business Day, in cash, to
the extent provided under Section 1.2 of the Receivables Purchase Agreement, and
to the extent any of such Purchase Price remains unpaid, such remaining portion
of such Purchase Price shall be paid by means of an automatic increase to the
outstanding principal amount of the Company Note issued to such Originator.
Servicer shall make all appropriate record keeping entries with respect to
the Company Notes or otherwise to reflect the foregoing payments and to reflect
adjustments pursuant to Section 3.4, and Servicer's books and records shall
constitute rebuttable presumptive evidence of the principal amount of and
accrued interest on any Company Note at any time. Furthermore, Servicer shall
hold the Company Notes for the benefit of the Originators, and all payments
under the Company Notes shall be made to the Servicer for the account of the
applicable payee thereof. Each Originator hereby irrevocably authorizes Servicer
to xxxx the Company Notes "CANCELLED" and to return such Company Notes to the
Company upon the final payment thereof after the occurrence of the Purchase and
Sale Termination Date.
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3.4. Settlement as to Specific Receivables and Dilution.
(a) If on the day of purchase or contribution of any Receivable from any
Originator hereunder, any of the representations or warranties set forth in
Section 5.4 or 5.11 of such Originator is not true with respect to such
Receivable or as a result of any action or inaction of such Originator, on any
day any of such representations or warranties set forth in Section 5.4 or 5.11
is no longer true with respect to such a Receivable, then the Purchase Price (or
in the case of a Contributed Receivable, the Outstanding Balance of such
Receivable (the "Contributed Value")) with respect to such Receivables shall be
reduced by an amount equal to the Outstanding Balance of such Receivable and
shall be accounted to such Originator as provided in subsection (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 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 offset, setoff or dispute between such 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 such Originator), then the
Purchase Price or the 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 such Originator as provided in subsection (c) below.
(c) Any reduction in the Purchase Price (or Contributed Value) of any
Receivable pursuant to subsection (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 to the extent permitted under clause (o) of Exhibit IV of
the Receivables Purchase Agreement;
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 Collection Account for application by Servicer to the
same extent as if Collections of the applicable Receivable in such amount had
actually been received on such date.
7
(d) Each Purchase Report (other than the Purchase Report delivered on the
Closing Date) shall include, in respect of the Receivables previously generated
by each Originator (including the Contributed Receivables), a calculation of the
aggregate reductions described in subsection (a) or (b) relating to such
Receivables since the last Purchase Report delivered hereunder, as indicated on
the books of the Company (or, for such period prior to the Closing Date, the
books of Originator).
3.5. Reconveyance of Receivables. In the event that Originator has paid
to the Company the full Outstanding Balance of any Receivable pursuant to
Section 3.4, the Company shall reconvey such Receivable to such Originator,
without representation or warranty, but free and clear of all liens created by
the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. Conditions Precedent to Initial Purchase. The initial purchase
hereunder is subject to the condition precedent that the Company shall have
received, on or before the Closing Date, the following, each (unless otherwise
indicated) dated the Closing Date, and each in form, substance and date
satisfactory to the Company:
(a) 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 each Originator;
(b) Good standing certificates for each Originator issued as of a recent
date acceptable to Servicer by the Secretary of State of the jurisdiction of
such Originator's incorporation and the jurisdiction where such Originator's
chief executive office is located;
(c) A certificate of the Secretary or Assistant Secretary of each
Originator certifying the names and true signatures of the officers authorized
on such Originator's behalf to sign the Transaction Documents to be delivered by
it (on which certificate the Company and Servicer (if other than such
Originator) may conclusively rely until such time as the Company and the
Servicer shall receive from such Originator a revised certificate meeting the
requirements of this subsection (c));
(d) The articles of incorporation of each Originator, duly certified by
the Secretary of State of the jurisdiction of such Originator's incorporation as
of a recent date acceptable to Servicer, together with a copy of the by-laws of
such Originator, each duly certified by the Secretary or an Assistant Secretary
of such Originator;
8
(e) Copies of the proper financing statements (Form UCC-1) that have been
duly executed and name each Originator as the assignor and the Company as the
assignee (and Purchaser as assignee of the Company) of the Receivables generated
by such Originator and Related Rights or other, similar instruments or
documents, as may be necessary or, in Servicer's or the Agent's opinion,
desirable under the UCC of all appropriate jurisdictions or any comparable law
of all appropriate jurisdictions to perfect the Company's ownership interest in
all Receivables and Related Rights in which an ownership interest may be
assigned to it hereunder;
(f) A written search report from a Person satisfactory to Servicer and
the Agent listing all effective financing statements that name each Originator
as debtor or assignor and that are filed in the jurisdictions in which filings
were made pursuant to the foregoing subsection (e), together with copies of such
financing statements (none of which, except for those described in the foregoing
subsection (e), shall cover any Receivable or any Related Right), and tax and
judgment lien search reports from a Person satisfactory to Servicer and the
Agent showing no evidence of such liens filed against such Originator;
(g) Favorable opinion of (i) Xxxxx and Xxxxx, L.L.P., special counsel to
each Originator and (ii) local counsel to each Originator, in the forms of
Exhibit C;
(h) Evidence (i) of the execution and delivery by each of the parties
thereto of each of the other Transaction Documents to be executed and delivered
in connection herewith and (ii) that each of the conditions precedent to the
execution, delivery and effectiveness of such other Transaction Documents has
been satisfied to the Company's satisfaction; and
(i) A certificate from an officer of each Originator to the effect that
Servicer and each Originator have placed on the most recent, and have taken all
steps reasonably necessary to ensure that there shall be placed on subsequent,
summary master control data processing reports the following legend (or the
substantive equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN
SOLD OR CONTRIBUTED TO IMPERIAL SECURITIZATION CORPORATION PURSUANT TO A
PURCHASE AND CONTRIBUTION AGREEMENT, DATED AS OF JUNE 30, 1999, AS AMENDED,
AMONG IMPERIAL DISTRIBUTING, INC., THE ORIGINATORS NAMED THEREIN AND IMPERIAL
SECURITIZATION CORPORATION; AND AN UNDIVIDED, FRACTIONAL OWNERSHIP INTEREST IN
THE RECEIVABLES DESCRIBED HEREIN HAS BEEN SOLD TO FAIRWAY FINANCE CORPORATION
PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF JUNE 30, 1999, AS
AMENDED, AMONG IMPERIAL SECURITIZATION CORPORATION, IMPERIAL DISTRIBUTING, INC.,
AS SERVICER, IMPERIAL SUGAR COMPANY, AS PERFORMANCE GUARANTOR, FAIRWAY FINANCE
CORPORATION AND XXXXXXX XXXXX SECURITIES INC.
4.2. Certification as to Representations and Warranties. Each Originator,
by accepting the Purchase Price related to each purchase of Receivables (and
Related Rights)generated by such Originator, shall be deemed to have certified
that the representations and warranties contained in
9
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 (except to the extent relating to an earlier
date).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, each Originator, hereby makes with
respect to itself the representations and warranties set forth in this
Article V.
5.1. Organization and Good Standing. Such Originator has been duly
organized and is validly existing as a corporation in good standing under the
laws of the state of its incorporation, 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.
5.2. Due Qualification. Such Originator is duly licensed or qualified to
do business as a foreign corporation in good standing in the jurisdiction where
its chief executive office and principal place of business are located and in
all other 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 reasonably be expected to have a
Material Adverse Effect.
5.3. Power and Authority; Due Authorization. Such Originator has (a) all
necessary corporate 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 and
Related Rights on the terms and subject to the conditions herein and therein
provided; 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.
5.4. Valid Sale or Contribution; Binding Obligations. Each sale or
contribution, as the case may be, of Receivables and Related Rights made by such
Originator pursuant to this Agreement shall constitute a valid sale or
contribution, as the case may be, transfer, and assignment thereof to the
Company, enforceable against creditors of, and purchasers from, 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 in each case 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.
10
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 or both) a default under (i) such Originator's certificate of
incorporation or by-laws, or (ii) any indenture, loan agreement, mortgage, deed
of trust, or other 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 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 federal, state or foreign regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over it or any of its properties.
5.6. Proceedings. There is no litigation or, to any Originator's
knowledge, any 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 the sale or contribution of Receivables and Related Rights to
the Company or the consummation of any of the other transactions contemplated by
any Transaction Document, or (c) seeking any determination or ruling that could
reasonably be expected to have a Material Adverse Effect.
5.7. Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
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 any Originator's
due execution, delivery and performance of any Transaction Document to which it
is a party, as seller.
5.9. Financial Condition.
(a) On the date hereof, and on the date of each sale of Receivables by
Originator to the Company (both before and after giving effect to such sale),
each Originator shall be Solvent.
(b) The consolidated balance sheets of Imperial and its consolidated
subsidiaries (including the Originators) as of September 30, 1998, and the
related statements of income and shareholders' equity of Imperial and its
consolidated subsidiaries (including the Originators) for the fiscal year then
ended certified by Imperial's independent accountants, copies of which have been
furnished to the Company, present fairly the consolidated financial position of
Imperial and its consolidated subsidiaries (including the Originators) for the
period ended on such date, all in accordance with generally accepted accounting
principles consistently applied; and since such date no event has occurred that
has had, or is reasonably likely to have, a Material Adverse Effect.
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5.10. 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 Board of Governors of the Federal Reserve System from
time to time.
5.11. Quality of Title.
(a) Each Receivable (together with the Related Rights) which is to be
sold or contributed to the Company hereunder is or shall be owned by each
Originator, free and clear of any Adverse Claim. Whenever the Company makes a
purchase, or accepts a contribution, hereunder, it shall have acquired 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 such Originator's entire right, title and interest in and to the other
Related Rights with respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by any Originator or any right related
to any such Receivable is on file in any recording office except such as may be
filed in favor of the Company or such Originator, as the case may be, (or except
as to the Closing Date only, pursuant to the Credit Agreement, with respect to
which proper financing statements necessary to release all security interests
have been executed by the secured party thereunder and which shall be in a form
satisfactory for filing) in accordance with this Agreement or in favor of the
Purchaser in accordance with the Receivables Purchase Agreement.
(c) Unless otherwise identified to the Company in the related Purchase
Report, each Receivable purchased or contributed hereunder is on the date of
purchase or contribution an Eligible Receivable.
5.12. Accuracy of Information. No factual written information furnished or
to be furnished in writing by each Originator, to the Company, the Purchaser or
the Agent for purposes of or in connection with any Transaction Document or any
transaction contemplated hereby or thereby is, and no other such factual written
information hereafter furnished (and prepared) by such Originator, to the
Company, the Purchaser, or the Agent pursuant to or in connection with any
Transaction Document, taken as a whole, will be inaccurate in any material
respect as of the date it was furnished or (except as otherwise disclosed to the
Company at or prior to such time, or, in the case of estimates, projections and
pro forma financial statements, will be based on assumptions believed by the
Company in good faith to be reasonable, on the date as of which such information
is stated or certified) as of the date as of which such information is dated or
certified, or shall contain any material misstatement of fact or omitted or will
omit to state any material fact necessary to make such information, in the light
of the circumstances under which any statement therein was made, not materially
misleading on the date as of which such information is dated or certified.
12
5.13. Offices. Each Originator's principal place of business and chief
executive office is located at the address set forth under such Originator's
signature hereto, and the offices where such Originator keeps all its books,
records and documents evidencing the Receivables, the related Contracts and all
other agreements related to such Receivables are located at the addresses
specified on Schedule 5.13 (or at such other locations, notified to Servicer and
the Agent in accordance with Section 6.1(f), in jurisdictions where all action
required by Section 7.3 has been taken and completed).
5.14. Trade Names. Except as disclosed on Schedule 5.14, no Originator
uses any trade name other than its actual corporate name. From and after the
date that fell five (5) years before the date hereof, no Originator has been
known by any legal name other than its corporate name as of the date hereof, nor
has any Originator been the subject of any merger or other corporate
reorganization except as disclosed on Schedule 5.14.
5.15. Taxes. Each Originator has filed all material 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 which are
not yet delinquent or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting principles shall have been set aside on its books.
5.16. Licenses and Labor Controversies.
(a) No Originator has 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; and
(b) There are no labor controversies pending against any Originator that
have had (or are reasonably likely to have) a Material Adverse Effect.
5.17. Compliance with Applicable Laws. Each Originator is in compliance,
in all material respects, with the requirements of (i) all applicable laws,
rules, regulations, and orders of all governmental authorities (including,
without limitation, Regulation Z, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy and all other consumer
laws applicable to the Receivables and related Contracts) (excluding with
respect to environmental matters which are covered by clause (ii)), and (ii) to
the best of its knowledge, all applicable environmental laws, rules, regulations
and orders of all governmental authorities.
5.18. Reliance on Separate Legal Identity. Each Originator is aware that
Purchaser and the Agent are entering into the Transaction Documents to which
they are parties in reliance upon the Company's identity as a legal entity
separate from such Originator.
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5.19. Purchase Price. The purchase price payable by the Company to each
Originator hereunder is intended by such Originator and Company to be consistent
with the terms that would be obtained in an arm's length sale. The Servicer's
Fee payable to the Servicer is intended to be consistent with terms that would
be obtained in an arm's length servicing arrangement.
5.20. Certain Definitions. With respect to this Agreement, the terms
"Material Adverse Effect" and "Solvent" are defined as follows:
"Material Adverse Effect" means, with respect to any event or
circumstance, a material adverse effect on:
(i) the business, assets, financial condition of any Originator;
(ii) the ability of any Originator or the Servicer (if it is such
Originator) to perform its obligations under the Receivables Purchase
Agreement or any other Transaction Document to which it is a party or the
performance of any such obligations;
(iii) the validity or enforceability of the Receivables Purchase
Agreement or any other Transaction Document;
(iv) with respect to the Purchase and Contribution Agreement, the
status, existence, perfection, priority or enforceability of Company's
interest in the Receivables or Related Rights; or
(v) the validity or enforceability of the Receivables.
"Solvent" means, with respect to any Person at any time, a condition
under which:
(i) the fair value and present fair saleable value of such Person's
total assets is, on the date of determination, greater than such Person's
total liabilities (including contingent and unliquidated liabilities) at such
time;
(ii) such Person is and shall continue to be able to pay all of its
liabilities as such liabilities mature; and
(iii) such Person does not have unreasonably small capital with which
to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated liabilities
at any time shall be that amount which, in light of all the facts and
circumstances then existing,
14
represents the amount which can reasonably be expected to become an actual
or matured liability;
(B) the "fair value" of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such
asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount
which a capable and diligent business person could obtain for such asset
from an interested buyer who is willing to purchase such asset under
ordinary selling conditions; an d
(D) the "present fair saleable value" of an asset means the amount
which can be obtained if such asset is sold with reasonable promptness in
an arm's length transaction in an existing and not theoretical market.
ARTICLE VI
COVENANTS OF THE ORIGINATORS
6.1. Affirmative Covenants. From the date hereof until the first day
following the Final Payout Date, each Originator will, unless the Company and
the Agent shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables generated by it and the related Contracts and other agreements
related thereto.
(b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification could
reasonably be expected to have a Material Adverse Effect.
(c) Receivables Review. (i) At any time and from time to time (but not
more than twice during the term of this Agreement so long as no Termination
Event has occurred and is continuing) during regular business hours, upon
reasonable prior notice, permit the Company and/or the Agent, or their
respective agents or representatives, (A) to examine, to audit and make copies
of and abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the control of
each Originator relating to the Receivables and Related Rights, including,
without limitation, the Contracts and other agreements related thereto, and (B)
to visit such Originator's offices and properties for the purpose of examining
such materials described in the foregoing clause (A) and discussing matters
relating to
15
the Receivables and Related Rights or such Originator's performance hereunder
with any of the officers or employees of such Originator having knowledge of
such matters; and (ii) without limiting the provisions of clause (i) next above,
from time to time on request of the Agent, permit certified public accountants
or other auditors acceptable to the Agent to conduct a review of its books and
records with respect to the Receivables and Related Rights.
(d) Keeping of Records and Books of Account. Maintain an ability to
recreate records evidencing the Receivables in the event of the destruction of
the originals thereof.
(e) Performance and Compliance with Receivables and Contracts. At its
expense timely and fully perform and comply with all provisions, covenants and
other promises required to be observed by it under the related Contracts and all
other agreements related to the Receivables and Related Rights.
(f) Location of Records. Keep its principal place of business and chief
executive office, and the offices where it keeps its records concerning or
related to Receivables and Related Rights, at the address(es) referred to in
Schedule 5.13 or, upon 30 days' prior written notice to the Company and the
Agent, at such other locations in jurisdictions where all action required by
Section 7.3 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects with
its Credit and Collection Policy in connection with the Receivables and the
related Contracts.
(h) Separate Corporate Existence of the Company. Take such actions as
shall be required in order that:
(i) the Company's operating expenses (other than certain
organization expenses and expenses incurred in connection with the
preparation, negotiation and delivery of the Transaction Documents) will
not be paid by any Originator;
(ii) the Company's books and records will be maintained separately
from those of any Originator;
(iii) all financial statements of any Originator that are
consolidated to include the Company will contain detailed notes clearly
stating that (A) all of the Company's assets are owned by the Company, and
(B) the Company is a separate entity with creditors who have received
interests in the Company's assets;
(iv) Each Originator will strictly observe corporate formalities in
its dealing with the Company;
(v) Each Originator shall not commingle its funds with any funds of
the Company;
16
(vi) Each Originator will maintain arm's length relationships with
the Company, and such Originator will be compensated at market rates for
any services it renders or otherwise furnishes to the Company; and
(vii) Each Originator will not be, and will not hold itself out to
be, responsible for the debts of the Company or the decisions or actions in
respect of the daily business and affairs of the Company.
(i) Post Office Boxes. Within 30 days after the date hereof, deliver to
the Agent (with a copy for Purchaser) a certificate from an authorized officer
of each 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 been
notified that each of Servicer and the Agent 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).
6.2. Reporting Requirements. From the date hereof until the first day
following the Purchase and Sale Termination Date, each Originator shall, unless
the Agent and the Company shall otherwise consent in writing, furnish to the
Company and the Agent:
(a) Proceedings. As soon as possible and in any event within three
Business Days after such Originator has knowledge thereof, written notice to the
Company and the Agent of (i) all pending proceedings and investigations of the
type described in Section 5.6 not previously disclosed to the Company and/or the
Agent and (ii) all material adverse developments that have occurred with respect
to any previously disclosed proceedings and investigations.
(b) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables, the Related Rights or
such Originator's performance hereunder that the Company or the Agent may from
time to time reasonably request in order to protect the interests of the
Company, the Purchaser, the Agent or any other Affected Party under or as
contemplated by the Transaction Documents.
6.3. Negative Covenants. From the date hereof until the date following
the Final Payout Date, each Originator agrees that, unless the Agent and the
Company 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, Collections or Related
Security, or any interest therein, or assign any right to receive income in
respect thereof.
17
(b) Extension or Amendment of Receivables. Except as otherwise permitted
in Section 4.2(a) of the Receivables Purchase Agreement or in accordance with
the Credit and Collection Policy, extend, amend or otherwise modify the terms of
any Receivable in any material respect, or amend, modify or waive, in any
material respect, any term or condition of 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 would, in either case, materially 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 generated by it to become
evidenced by any "instrument" or "chattel paper" (as defined in the applicable
UCC) unless such "instrument" or "chattel paper" shall be delivered to the
Company (which in turn shall deliver the same to the Purchaser (or the Agent on
its behalf)).
(e) Mergers, Acquisitions, Sales, etc. Merge or consolidate with another
Person (except pursuant to a merger or consolidation involving two or more
Originators where an Originator is the surviving corporation), or convey,
transfer, lease or otherwise dispose of (whether in one or in a series of
transactions), all or substantially all of its assets (whether now owned or
hereafter acquired), other than pursuant to this Agreement.
(f) Lock-Box Banks. Make any changes in its instructions to Obligors
regarding Collections or add or terminate any Lock-Box Bank unless the
requirements of clause (i) of Exhibit IV of the Receivables Purchase Agreement
have been met.
(g) 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 Security by any Originator to
the Company.
(h) Transaction Documents. Enter into, execute, deliver or otherwise
become bound by any agreement, instrument, document or other arrangement that
restricts the right of any 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 Documents.
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ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1. Rights of the Company. Each Originator hereby authorizes the Company
and 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 and Related Rights,
including, without limitation, endorsing such Originator's name 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.
7.2. Responsibilities of Originator. Anything herein to the contrary
notwithstanding:
(a) Each Originator agrees, to direct, and hereby grants to each of the
Company and the Agent the authority to direct, all Obligors to make payments of
Receivables directly to a Lock-Box Account at a Lock-Box Bank. Each Originator
further agrees to transfer any Collections that it receives directly, to
Servicer (for deposit to such a Lock-Box Account) within three Business Days of
receipt thereof, and agrees that all such Collections shall be deemed to be
received in trust for the Company.
(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, Servicer, Purchaser or the Agent 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, Servicer, Purchaser or the Agent be obligated to perform any
of the obligations of any Originator thereunder.
(d) Each Originator hereby grants to 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 indorse,
negotiate or otherwise realize on any writing or other right of any kind held or
transmitted by such Originator or transmitted or received by the Company
(whether or not from such Originator) in connection with any Receivable or
Related Right.
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 Company
or Servicer may reasonably request in order to perfect, protect or more fully
evidence the Receivables (and the Related Rights) purchased by, or contributed
to, the Company hereunder, or to enable the Company to exercise or enforce any
of its rights
19
hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of the Company, each 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 summary master control data processing records with the
legend set forth in Section 4.1(i).
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 the Related
Rights) now existing or hereafter generated by such 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 performance of, such agreement or obligation, and the expenses
of the Company or its designee incurred in connection therewith shall be payable
by such nonperforming Originator as provided in Section 9.1.
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 otherwise required by contract or law and unless
otherwise instructed by the Company or the Agent, be applied after a Termination
Day first, as a Collection of any Receivables of such Obligor, in the order of
the age of such Receivables, starting with the oldest of such Receivables, and
second, to any other indebtedness of such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
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) The Facility Termination Date (as defined in the Receivables Purchase
Agreement) shall 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
Business Day after notice; or
(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 Document
20
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 in any material
respect any agreement contained in any of Sections 6.1(h) or 6.3; or
(e) 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 thirty (30) days after written
notice thereof shall have been given by Servicer, the Agent or the Company to
Originator; or
(f) (i) Any Originator or any of its subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Originator or
any of its subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for all or any substantial part of its property and,
in the case of any such proceeding instituted against it (but not instituted by
it), such proceeding shall remain undismissed or unstayed for a period of 30
days; or any Originator or any of its subsidiaries shall take any corporate
action to authorize any of the actions set forth in clause (i) above in this
Section 8.1(f);
(g) A contribution failure shall occur with respect to any benefit plan
sufficient to give rise to a lien under Section 302(f) of ERISA, or the Internal
Revenue Service shall, or shall indicate its intention in writing to any
Originator to, file notice of a lien asserting a claim or claims pursuant to the
Code with regard to any of the assets of such Originator, or the Pension Benefit
Guaranty Corporation shall, or shall indicate its intention in writing to such
Originator or an ERISA Affiliate to, either file notice of a lien asserting a
claim pursuant to ERISA with regard to any assets of such Originator or an ERISA
Affiliate or terminate any benefit plan that has unfunded benefit liabilities;
or
(h) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6373 of the Internal Revenue Code with regard to any of assets of any
Originator and such lien shall not have been released within ten Business Days,
or the Pension Benefit Guaranty Corporation shall, or shall indicate its
intention to, file notice of a lien pursuant to Section 4068 of ERISA with
regard to any of the assets of such Originator.
8.2. Remedies.
(i) Optional Termination. Upon the occurrence of a Purchase and
Sale Termination Event, the Company (and not Servicer) shall have the
option by notice to each
21
Originator (with a copy to the Agent) to declare the Purchase and Sale
Termination Date to have occurred.
(ii) Remedies Cumulative. Upon any termination of the Purchase
Facility pursuant to this Section 8.2, the Company shall have, in addition
to all other rights and remedies under this Agreement or otherwise, all
other rights and remedies provided under the UCC of each applicable
jurisdiction and other applicable laws, which rights shall be cumulative.
Without limiting the foregoing, the occurrence of the Purchase and Sale
Termination Date shall not deny the Company any remedy in addition to
termination of the Purchase Facility to which the Company may be otherwise
appropriately entitled, whether at law or equity.
ARTICLE IX
INDEMNIFICATION
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 assigns, 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 following (provided that in no
event shall amounts indemnified hereunder include amounts payable under any Pool
Receivables and remaining unpaid due to the lack of creditworthiness of any
Obligor under a Receivable):
(a) the transfer by such Originator of an interest in any Receivable or
Related Right to any Person other than the Company;
(b) the breach of any representation or warranty made by such Originator
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 (other than with respect to the creditworthiness of any Obligor
under a Receivable);
(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 and Related Rights free
and clear of any Adverse Claim,
22
other than an Adverse Claim arising solely as a result of an act of the Company,
whether existing at the time of the purchase or contribution of such Receivables
or at any time thereafter;
(e) the failure of such Originator to file with respect to itself, or any
delay by such Originator 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 or Related Rights, 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 an Obligor to the payment of any Receivable or purported
Receivable generated by such Originator (including, without limitation, a
defense based on such Receivables or the related Contracts 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 goods or
services related to any such Receivable or the furnishing of or failure to
furnish such goods or services;
(g) any product liability claim or any other claim involving health or
safety issues, arising out of or in connection with goods or services that are
the subject of any Receivable;
(h) any litigation, proceeding or investigation against Originator;
(i) any tax or governmental fee or charge (other than any tax excluded
pursuant to the proviso below), 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, contribution or ownership of the Receivables or
any Related Right connected with any such Receivables; and
(j) any failure of such Originator to perform its duties or obligations
in accordance with the provisions of this Agreement or any other Transaction
Document;
excluding, however, (i) Purchase and Sale Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of a Purchase
and Sale Indemnified Party, (ii) without limiting provisions of Section 3 any
indemnification which has the effect of recourse for non-payment of the
Receivables due to credit reasons to any indemnitor and (iii) any tax based upon
or measured by net income or gross receipts. IT IS THE INTENTION OF THE PARTIES
HERETO THAT THE PURCHASE AND SALE INDEMNIFIED PARTIES BE INDEMNIFIED IN THE CASE
OF THEIR OWN NEGLIGENCE, REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR
CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL.
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 alone, shall contribute to the
23
amount paid or payable by such Purchase and Sale Indemnified Party as a result
of such loss, claim, damage or liability to the maximum extent permitted under
applicable law; provided that, notwithstanding the foregoing, in no event shall
the Purchased Sale Indemnified Amounts include an obligation (direct or
indirect) (i) of any Originator to maintain or preserve the Company's financial
condition or to cause the Company to achieve any specified levels of operating
results, or (ii) for Xxxxx to subscribe for additional equity interest of the
Company.
ARTICLE X
MISCELLANEOUS
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
consented to by the Company, the Agent and the Originators (with respect to an
amendment) or by the Company (with respect to a waiver or consent by it).
(b) No failure or delay on the part of the Company, 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, 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 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.
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 express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall 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 or sent by express mail or courier or if sent by certified
mail, when received, and (ii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
10.3. No Waiver; Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
24
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 permitted assigns; provided, however, that no Originator may
assign its rights hereunder or any interest herein or delegate its duties
hereunder without the prior consent of the Company and the Agent. This Agreement
shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
date after the Purchase and Sale Termination Date on which each Originator has
received payment in full for all Receivables and Related Rights purchased
pursuant to Section 1.1 hereof. 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.
10.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF).
10.6. Costs, Expenses and Taxes. In addition to the obligations of the each
Originator under Article IX, each Originator agrees to pay on demand:
(a) all reasonable costs and expenses in connection with the enforcement
of this Agreement and the other Transaction Documents; and
(b) all stamp and other similar 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, 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.
10.7. Submission to Jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY (a)
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF ILLINOIS
OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, 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 UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) 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) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A NONAPPEALABLE
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
25
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 RESPECTIVE PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.
10.8. Waiver of Jury Trial. EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR UNDER ANY AMENDMENT,
INSTRUMENT OR DOCUMENT 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 ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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.
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.
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 shall be assigned by the Company to
the Purchaser pursuant to the Receivables Purchase Agreement, and each
Originator consents to such assignment. Each of the parties hereto acknowledges
and agrees that the Agent and the Purchaser are third party beneficiaries of the
rights of the Company arising hereunder and under the other Transaction
Documents to which each Originator is a party.
26
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.
IMPERIAL SECURITIZATION CORPORATION
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: President
-----------------------------
XX Xxx 0
0000 Xxxxxxx 00X
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IMPERIAL DISTRIBUTING, INC.
as initial Servicer
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
XX Xxx 0
0000 Xxxxxxx 00X
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1
Purchase and Contribution Agreement
ORIGINATORS:
DIAMOND CRYSTAL SPECIALITY FOODS, INC.
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
DIAMOND CRYSTAL BRANDS, INC.
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
0000 Xxxxxxx Xxxx, XX Xxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WHOLESOME FOODS, LLC
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Manager
-----------------------------
000 Xxxxxxxx Xxxx., XX Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-2
Purchase and Contribution Agreement
XXXXX SUGAR CORPORATION
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
XX Xxx 0
0000 Xxxxxxx 00X
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
MICHIGAN SUGAR COMPANY
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
0000 Xxxxxxx Xxxxxx Xxxx., #000
000 Xxxxx Xxxxx Xxxxxxxx
XX Xxx 0000 (48605)
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
GREAT LAKES SUGAR COMPANY
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Purchase and Contribution Agreement
S-3
IMPERIAL-SAVANNAH, L.P.
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. V.P. of General Partner
-----------------------------
XX Xxx 0
0000 Xxxxxxx 00X
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
KING PACKAGING CO., INC.
By: /s/ X.X. Xxxxxx
--------------------------------
Name: X.X. Xxxxxx
------------------------------
Title: Sr. Vice President
-----------------------------
000 Xxxxxxxxx Xxxx, XX Xxxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Purchase and Contribution Agreement
S-4
