1
EXECUTION COPY
PURCHASE AND SALE AGREEMENT
Dated as of September 22, 1995
among
THE STANDARD PRODUCTS COMPANY,
as Originator and
Master Servicer,
5 RUBBER CORPORATION,
XXXXXX RUBBER COMPANY,
and
XXXX INDUSTRIES, INC.,
as Originators and Servicers,
and
THE STANDARD PRODUCTS FUNDING CORPORATION,
as the Initial Purchaser
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TABLE OF CONTENTS
PAGE
ARTICLE I AGREEMENT TO SELL 3
1.1. Agreement to Sell 3
1.2. Timing of Purchases 4
1.3. Consideration for Purchases 4
ARTICLE II CALCULATION OF PURCHASE PRICE 5
2.1. Calculation of Purchase Price 5
ARTICLE III PAYMENT OF PURCHASE PRICE 7
3.1. Initial Purchase Price Payment 7
3.2. Subsequent Purchase Price Payments 8
3.3. Settlement as to Specific Receivables 9
3.4. Settlement as to Dilution 10
3.5. Reconveyance of Receivables 11
3.6. [Reserved] 11
3.7. True Sales 11
3.8. Payments and Computations, Etc 12
ARTICLE IV CONDITIONS OF PURCHASES 12
4.1. Conditions Precedent to Initial Purchase 12
4.2. Certification as to Representations and Warranties 15
4.3. Effect of Payment of Purchase Price 15
ARTICLE V REPRESENTATIONS AND WARRANTIES OF EACH ORIGINATOR
AND SERVICER 15
5.1. Organization and Good Standing 15
5.2. Due Qualification 15
5.3. Power and Authority; Due Authorization 15
5.4. Valid Sale; Binding Obligations 16
5.5. No Violation 16
5.6. Proceedings 16
5.7. Bulk Sales Act 17
5.8. Government Approvals 17
5.9. Financial Condition 17
5.10. Margin Regulations 17
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5.11. Quality of Title 17
5.12. Accuracy of Information 18
5.13. Offices 18
5.14. Trade Names 18
5.15. Taxes 18
5.16. Compliance with Applicable Laws 18
5.17. Lock-Box Accounts 19
5.18. Servicing Programs 19
5.19. Accounts 19
5.20. Reliance on Separate Legal Identity 19
ARTICLE VI COVENANTS OF EACH ORIGINATOR AND SERVICER 19
6.1. Affirmative Covenants 19
6.2. Reporting Requirements 22
6.3. Negative Covenants 22
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF
THE RECEIVABLES 23
7.1. Rights of the Initial Purchaser 23
7.2. Responsibilities of each Originator and
Servicer 24
7.3. Further Action Evidencing Purchases 24
7.4. Application of Collections 25
ARTICLE VIII INDEMNIFICATION 25
8.1. Indemnities by each Originator 25
ARTICLE IX SALE TERMINATION EVENTS 27
9.1. Sale Termination Events 27
9.2. Purchase and Sale Termination Events 28
ARTICLE X MISCELLANEOUS 29
10.1. Amendments, Etc. 29
10.2. Notices, Etc. 30
10.3. No Waiver; Cumulative Remedies 30
10.4. Binding Effect; Assignability 30
10.5. Governing Law 30
10.6. Costs, Expenses and Taxes 31
10.7. Submission to Jurisdiction 31
10.8. Waiver of Jury Trial 31
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10.9. Captions and Cross References; Incorporation
by Reference 32
10.10. Execution in Counterparts 32
10.11. Acknowledgment and Agreement 32
ARTICLE XI ADMINISTRATION AND SERVICING OF RECEIVABLES 32
11.1. Acceptance of Appointment and Other Matters
Relating to the Servicers 32
11.2. Servicing Compensation 33
ARTICLE XII GUARANTEE 33
12.1. Guarantee 33
12.2. Representation and Warranty 36
12.3. Waiver of Subrogation 36
EXHIBIT A - Form of Subscription Agreement
EXHIBIT B - Form of Purchase Report
EXHIBIT C - Form of the Initial Purchaser Note
EXHIBIT D - Form of Opinion of Standard's Counsel
EXHIBIT E - Office Locations
Schedule 5.14 Trade Names
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (as amended, supplemented or modified
from time to time, this "AGREEMENT"), dated as of September 22, 1995, is among
THE STANDARD PRODUCTS COMPANY, an Ohio corporation ("STANDARD") as originator
(an "ORIGINATOR") and as master servicer (the "MASTER SERVICER"), and 5 RUBBER
CORPORATION, a Pennsylvania corporation ("RUBBER"), XXXXXX RUBBER COMPANY, a
California corporation ("XXXXXX"), XXXX INDUSTRIES, INC., an Indiana
corporation, each as an originator and as servicer ("XXXX"; Standard, Rubber,
Xxxxxx and Xxxx are sometimes collectively referred to as the "ORIGINATORS",
and individually as an "ORIGINATOR" and Rubber, Xxxxxx and Xxxx are sometimes
collectively referred to as the "SERVICERS" and individually as a "SERVICER"),
and THE STANDARD PRODUCTS FUNDING CORPORATION, a Delaware corporation, as
Initial Purchaser (the "INITIAL PURCHASER").
PRELIMINARY STATEMENTS
A. Unless otherwise indicated, certain terms that are capitalized
and used throughout this Agreement are defined in APPENDIX A to the Receivables
Purchase Agreement of even-date herewith (as, amended supplemented or otherwise
modified from time to time, the "RECEIVABLES PURCHASE AGREEMENT"), among the
Initial Purchaser, Standard, as initial Master Servicer, Clipper Receivables
Corporation, as purchaser ("PURCHASER"), State Street Boston Capital
Corporation, as administrator for Purchaser under the Program Administration
Agreement (the "ADMINISTRATOR") and National City Bank, as referral agent for
Purchaser under the Relationship Bank Agreement (in such capacity, together
with any successors thereto in such capacity, the "RELATIONSHIP BANK").
B. The Originators wish to sell Receivables that each now owns
and from time to time hereafter will own to the Initial Purchaser, and the
Initial Purchaser is willing, on the terms and subject to the conditions
contained in this Agreement, to purchase such Receivables from each of the
Originators at such time.
C. The Initial Purchaser has entered into the Receivables
Purchase Agreement, pursuant to which, among other things, the Initial
Purchaser may sell to the Purchaser undivided ownership interests in the
Receivables and certain related assets.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
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DEFINITIONS
The following terms used in this Agreement shall have the respective
meanings indicated hereinbelow:
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or similar right or claim of any Person.
"DEEMED COLLECTION" means amounts payable by an Originator pursuant to
SECTION 3.3 or 3.4.
"INITIAL CLOSING DATE" shall have the meaning assigned to such term in
SECTION 1.2 hereof.
"INITIAL CUT-OFF DATE" means the last Cut-Off Date to occur before the
Initial Closing Date.
"INITIAL PURCHASER NOTE" shall have the meaning assigned to such term
in SECTION 3.1 hereof.
"INITIAL REPORTING PERIOD" shall have the meaning assigned to such
term in SECTION 2.1 hereof.
"LOCK-BOX ACCOUNTS" means one or more lock-box accounts held in
Lock-Box Banks for receiving Collections from Pool Receivables.
"ORIGINATOR MATERIAL ADVERSE EFFECT" means, with respect to any event
or circumstance, a material adverse effect on:
(i) the business, assets, financial condition, or operations
of any Originator;
(ii) the ability of any Originator to perform its obligations
under this Agreement or any other Transaction Document to which it is
a party;
(iii) the validity or enforceability as against any Originator
of this Agreement or any other Transaction Document to which it is a
party;
(iv) the status, existence, perfection, priority or
enforceability of the Initial Purchaser's interest in the Receivables
and the Related Rights described in SECTION 1.1; or
(v) the enforceability or collectability of the Receivables or
the related Contracts.
"PURCHASE PRICE" shall have the meaning assigned to such term
in SECTION 2.1 hereof.
"PURCHASE REPORT" shall have the meaning assigned to such term
in SECTION 2.1 hereof.
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"RELATED RIGHTS" shall have the meaning assigned to such term in
SECTION 1.1 hereof.
"SALE INDEMNIFIED AMOUNTS" shall have the meaning assigned to such
term in SECTION 8.1 hereof.
"SALE INDEMNIFIED PARTY" shall have the meaning assigned to such term
in SECTION 8.1 hereof.
"SALE TERMINATION DATE" shall have the meaning assigned to such term
in SECTION 9.2 hereof.
"SERVICER" shall have the meaning assigned to such term in the
introduction.
"SUBSCRIPTION AGREEMENT" means the Subscription Agreement, dated as of
September 22, 1995, between the Initial Purchaser and Standard, in the form of
EXHIBIT A, as it may be amended, supplemented or modified from time to time.
ARTICLE I
AGREEMENT TO SELL
1.1. AGREEMENT TO 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, assign and transfer, and does
hereby sell, assign and transfer to the Initial Purchaser; and the Initial
Purchaser agrees to purchase, and does hereby purchase, from each Originator,
all of such Originator's right, title and interest in and to:
(a) each Receivable of each Originator that existed and was
owing to such Originator as of the close of such Originator's business
on the Initial Cut-Off Date;
(b) each Receivable created or originated by each Originator
from the close of such Originator's business on the Initial Cut-Off
Date, to and including the Sale Termination Date;
(c) all rights to, but not the obligations under, the
Contracts and all Related Security;
(d) all monies due or to become due with respect thereto;
(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 any Originator, the Initial Purchaser or
the Master Servicer from or on behalf of the Obligors in payment of
any amounts owed (including, without limitation, finance charges,
interest
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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 any Originator or the Master Servicer
(if other than Standard) 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 or any other party directly or
indirectly liable for payment of such Receivable and available to be
applied thereon).
All purchases hereunder shall be made without recourse, but shall be made
pursuant to and in reliance upon the representations, warranties and covenants
of each Originator, in its capacity as such, set forth in each Transaction
Document. The proceeds and rights described in SUBSECTIONS (c), (d), (e) and
(f) of this SECTION 1.1 are herein collectively called the "RELATED RIGHTS".
1.2. TIMING OF PURCHASES.
(a) INITIAL CLOSING DATE PURCHASES. On September 22, 1995
(the "INITIAL CLOSING DATE") each Originator shall sell to the Initial
Purchaser in part, as provided in SECTION 3.1, and contribute to the
Initial Purchaser, in part, and the Initial Purchaser shall purchase
and acquire, pursuant to SECTION 1.1, such Originator's entire right,
title and interest in (i) each Receivable that existed and was owing
to such Originator as of the close of such Originator's business on
the Initial Cut-Off Date, and (ii) all Related Rights with respect
thereto.
(b) REGULAR PURCHASES. After the Initial Closing Date,
each Receivable described in SECTION 1.1(b) hereof, and all the
Related Rights with respect thereto, created or originated by each
Originator shall be deemed to have been sold to the Initial Purchaser
pursuant hereto immediately (and without any formal or other
instrument of assignment and without any further action by any Person)
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 Initial
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Purchaser agrees to make all Purchase Price payments to each Originator in
accordance with ARTICLE III.
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. CALCULATION OF PURCHASE PRICE. On each Reporting Date
(commencing with the first Reporting Date following the Initial Closing Date),
the Master Servicer shall deliver to the Initial Purchaser, the Administrator,
the Relationship Bank, and Standard (if the Master Servicer is other than
Standard) a report in substantially the form of EXHIBIT B (each such report
being herein called a "PURCHASE REPORT") with respect to the Initial
Purchaser's purchases of Receivables and Related Rights from each Originator
(a) that arose on or prior to the Initial Cut-Off Date (in
the case of the first Purchase Report to be delivered hereunder) and
(b) that arose during the Settlement Period immediately
preceding such Reporting Date (in the case of each Purchase Report).
The "PURCHASE PRICE" (to be paid to the applicable Originator in accordance
with the terms of ARTICLE III) for the Receivables and the Related Rights sold
by such Originator shall be determined in accordance with the following
formula:
PP = AUB - (AUB X FMVD)
WHERE:
PP =
Purchase Price (to be paid to the applicable
Originator in accordance with the terms of ARTICLE
III) as calculated on the relevant Reporting Date;
AUB = (i) for purposes of calculating the Purchase Price on
the initial Reporting Date, the aggregate Unpaid
Balance of all Receivables that existed and were owing
to the applicable Originator as measured as at the
Initial Cut-Off Date, LESS, in the case of Standard, an
amount equal to the sum of the aggregate Unpaid Balance
of all Receivables that comprised the capital
contribution made by Standard to the Initial Purchaser
on the Initial Closing Date;
(ii) for purposes of calculating the Purchase Price
for Receivables on each Reporting Date thereafter, the
aggregate Unpaid Balance of the Receivables described
in SECTION 1.1(b) hereof that were generated by the
applicable Originator during the immediately preceding
Settlement Period; and
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FMVD = Fair Market Value Discount Factor on the determination
date, which is the sum of the Loss Discount and the
Cost Discount, in each case as calculated on the
most recent Reporting Date.
"LOSS DISCOUNT" as measured on any Reporting Date means the ratio,
expressed as a percentage, of (i) the losses (I.E. write-offs to the bad debt
reserve or other write-offs consistent with the Credit and Collection Policy,
in each case, net of recoveries) recognized for all Receivables during the
three (3) successive Settlement Periods ending on the immediately preceding
Cut-Off Date DIVIDED BY (ii) the Collections on all Receivables received during
such three (3) Settlement Periods.
"COST DISCOUNT" as measured on any Reporting Date means a percentage
determined in accordance with the following formula:
CD = (AD/360) x CR
where:
CD = the Cost Discount as measured on such Reporting Date;
AD = the three-month rolling average of Average Days' Sales
Outstanding set forth in the most recent Report; and
CR = the Cost Rate as measured on such Reporting Date.
"COST RATE" as measured on any Settlement Date means a per annum
percentage rate determined in accordance with the following formula:
CR = 0.02% + EDRP + SFP + PFP + EXP
where:
CR = the Cost Rate as measured on such Settlement Date;
EDRP = the "EARNED DISCOUNT RATE PERCENTAGE", which shall be
equal to the Earned Discount Rate (or if more than one,
the weighted average of the Earned Discount Rates) as
of the first day of the Settlement Period
relating to such Settlement Date;
SFP = the "SERVICER'S FEE PERCENTAGE", which shall be equal
to the per annum percentage rate contemplated by the
definition of Master Servicer's Fee;
PFP = the Program Fee Percentage (as defined in the Fee
Letter); and
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EXP = initially, and until December 31, 1995, 0.01% and, for each
semiannual fiscal period thereafter, the estimated
amount, expressed as a percentage of the Unpaid Balance
of Receivables originated during the preceding
semiannual fiscal period, of any fees, costs and
expenses incurred by the Initial Purchaser and not
accounted for in the Earned Discount Rate, including
without limitation reserve costs, tax payments and
indemnity obligations of the Initial Purchaser for
which the Initial Purchaser is not indemnified pursuant
to this Agreement.
ARTICLE III
PAYMENT OF PURCHASE PRICE
3.1. INITIAL PURCHASE PRICE PAYMENT. On the Initial Closing Date,
Standard shall, and hereby does contribute to the capital of the Initial
Purchaser, Receivables and Related Rights with respect thereto consisting of
each Receivable described in SECTION 1.1(a) hereof beginning with the oldest of
such Receivables and continuing chronologically to the next oldest thereafter,
until all or an undivided interest in the most recent of such contributed
Receivables, such that the aggregate Unpaid Balance of all such contributed
Receivables shall be at least equal to $7,500,000. On the terms and subject to
the conditions set forth in this Agreement, the Initial Purchaser agrees to pay
to each Originator on the Initial Closing Date a portion of the Purchase Price
for the purchase to be made from such Originator with respect to Receivables
existing on or prior to the Initial Cut-Off Date (a) in cash in an aggregate
amount for all the Originators equal to the amount received by the Initial
Purchaser in connection with the first Purchase made pursuant to the
Receivables Purchase Agreement and (b) by the issuance of a subordinated
promissory note in the form of EXHIBIT C to each Originator (each such
promissory note, as it may be amended, supplemented, indorsed or otherwise
modified from time to time in substitution therefor or renewal thereof in
accordance with the Transaction Documents, being herein called an "INITIAL
PURCHASER NOTE") in an initial principal amount equal to the remainder of the
Purchase Price owing on the Initial Closing Date after subtracting the amount
paid to such Originator in cash. The portion of the Purchase Price paid to
each Originator pursuant to the immediately preceding sentence shall be
adjusted on the initial Reporting Date by the amount of the difference, if any,
between (x) the Purchase Price calculated on the initial Reporting Date for
Receivables existing on or prior to the Initial Cut-Off Date pursuant to
SECTION 2.1 hereof and (y) the amount paid to such Originator pursuant to the
immediately preceding sentence. If the amount for any applicable Originator
described in CLAUSE (x) is greater than the amount described in CLAUSE (y), the
Initial Purchaser shall pay to such applicable Originator the difference by
increasing the principal amount outstanding under the Initial Purchaser Note
payable to such Originator, effective as of the last day of the related
Settlement Period. If the amount for any applicable Originator described in
CLAUSE (x) is less than the amount described in CLAUSE (y), such applicable
Originator shall pay to the Initial Purchaser the difference by a reduction in
the principal amount of the Initial Purchaser Note payable to such Originator,
effective as of the last day of the related Settlement Period; PROVIDED,
HOWEVER, that if at any time the unpaid principal amount of such Initial
Purchaser Note has been reduced to zero,
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the applicable Originator shall pay the Initial Purchaser the remainder owed
with respect thereto in immediately available funds to an account designated by
the Initial Purchaser.
3.2. SUBSEQUENT PURCHASE PRICE PAYMENTS. On each Business Day after
the Initial Closing Date until the termination of this Agreement pursuant to
SECTION 10.4 hereof, the Initial Purchaser shall pay to each Originator a
portion of the Purchase Price due pursuant to SECTION 2.1 by depositing into
such account as such Originator shall specify in immediately available funds
from monies then held by or on behalf of the Initial Purchaser, solely to the
extent that such monies do not constitute Collections that are required to be
segregated and held by the Master Servicer pursuant to the Receivables Purchase
Agreement or to be distributed to the Administrator pursuant to the Receivables
Purchase Agreement on the next Settlement Date or required to be paid to the
Master Servicer as the Servicer's Fee on the next Settlement Date, or paid to
the Concentration Banks or the Liquidity Banks pursuant to the Receivables
Purchase Agreement on the next Settlement Date, or otherwise necessary to pay
current expenses of the Initial Purchaser (in its discretion) and provided that
such Originator has paid all amounts then owing by it hereunder. The portion
of the Purchase Price paid to each Originator shall be adjusted on each
Settlement Date by the amount of the difference, if any, between (x) the amount
due pursuant to SECTION 2.1 with respect to all Receivables created or
originated by such Originator that arose during the corresponding Settlement
Period and (y) the amount paid to such Originator during such Settlement Period
pursuant to the foregoing sentence for such Receivables. If the amount for any
applicable Originator described in CLAUSE (x) is greater than the amount
described in CLAUSE (y), the Initial Purchaser shall pay to such applicable
Originator the difference by increasing the principal amount outstanding under
the Initial Purchaser Note payable to such Originator, effective as of the last
day of the related Settlement Period. If the amount for any applicable
Originator described in CLAUSE (x) is less than the amount described in CLAUSE
(y), such applicable Originator shall pay to the Initial Purchaser the
difference by a reduction in the principal amount of the Initial Purchaser Note
payable to such Originator, effective as of the last day of the related
Settlement Period; PROVIDED, HOWEVER, that if at any time the unpaid principal
amount of such Initial Purchaser Note has been reduced to zero, the applicable
Originator shall pay the Initial Purchaser the remainder owed with respect
thereto in immediately available funds to an account designated by the Initial
Purchaser. On each Settlement Date, if no Liquidation Event under the
Receivables Purchase Agreement has occurred and is continuing and payment of
the Initial Purchaser Notes will not result in a Liquidation Event under the
Receivables Purchase Agreement, the Master Servicer will, upon the direction of
the Initial Purchaser, make a payment on one or all of the Initial Purchaser
Notes to the applicable Originator in an aggregate amount equal to the amounts
that are available to the Initial Purchaser.
Master Servicer shall make all appropriate record keeping entries with
respect to the Initial Purchaser Notes to reflect payments by the Initial
Purchaser thereon and Master Servicer's books and records shall constitute
rebuttable presumptive evidence of the principal amount of and accrued interest
on each Initial Purchaser Note. Each Originator hereby irrevocably authorizes
Master Servicer to return its Initial Purchaser Note to the Initial Purchaser
upon the final payment thereof after the termination of this Agreement pursuant
to SECTION 10.4 hereof.
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3.3. SETTLEMENT AS TO SPECIFIC RECEIVABLES. Subject to SECTION
7.2(a) hereof, if an officer of any Originator obtains knowledge or receives
notice from the Initial Purchaser or the Administrator that (a) on the day that
any Receivable purchased hereunder was created or originated by such Originator
any of the representations or warranties set forth in SECTION 5.11 was not true
with respect to such Receivable, or such Receivable was not an Eligible
Receivable or, (b) as a result of any action or inaction of such Originator, on
any day any of the representations or warranties set forth in SECTION 5.11 is
no longer true with respect to a Receivable, then such Originator forthwith
shall reduce the Purchase Price with respect to Receivables that arose during
the same Settlement Period in which such knowledge is obtained or notification
is received by an amount equal to the Unpaid Balance of such Receivable;
PROVIDED, HOWEVER, that if there have been no purchases of Receivables (or
insufficiently large purchases of Receivables to create a Purchase Price large
enough to so reduce by the amount of such net reduction) from such Originator
during such Settlement Period, any amount owed by which the Purchase Price
payable to such Originator would have been reduced pursuant to the immediately
preceding clause of this sentence shall be paid by either (at the option of
such Originator, unless the Initial Purchaser will, absent such payment in
cash, be unable to meet its obligations under the Receivables Purchase
Agreement on the next occurring Settlement Date, in which case such Originator
shall make a cash payment) a reduction in the principal amount of the Initial
Purchaser Note of such Originator (but not below zero) or by payment within two
Business Days after the related Reporting Date in cash by such Originator to
the Initial Purchaser by deposit of immediately available funds in an account
designated by the Initial Purchaser; PROVIDED, FURTHER, that if the Initial
Purchaser thereafter receives payment on account of Collections due with
respect to such Receivable, the Initial Purchaser promptly shall deliver such
funds to such Originator.
3.4. SETTLEMENT AS TO DILUTION. Each Purchase Report shall include,
in respect of the Receivables previously generated by each Originator
(including those Receivables that were contributed by Standard to the capital
of the Initial Purchaser on the Initial Closing Date), a calculation of the
aggregate net reduction in the aggregate Unpaid Balance of such Receivables
owed by particular Obligors on account of any defective, rejected or returned
merchandise or services, any cash discount or any other adjustments, or setoffs
in respect of any claims by the Obligor(s) thereof against such Originator or
any of its Affiliates (other than the Initial Purchaser) (whether such claims
arise out of the same or a related or unrelated transaction), or any rebate or
refund during the most recent Settlement Period. Subject to SECTION 7.2(a)
hereof, the Purchase Price to be paid to the applicable Originator for the
Receivables generated by it during the Settlement Period for which the Purchase
Report referred to in the preceding sentence attributable to Receivables
originated by such Originator is delivered shall be decreased by the amount of
the net reduction referred to in the preceding sentence attributable to
Receivables originated by such Originator; PROVIDED, HOWEVER, that if there
have been no purchases of Receivables (or insufficiently large purchases of
Receivables to create a Purchase Price large enough to so reduce by the amount
of such net reduction) from such Originator during such Settlement Period, any
amount owed by which the Purchase Price payable to such Originator would have
been reduced pursuant to the immediately preceding clause of this sentence
shall be paid by either (at the option of such Originator, unless the Initial
Purchaser will, absent such payment in cash, be unable to meet its obligations
under the Receivables Purchase Agreement on the next occurring Settlement Date,
in which case such Originator shall make a cash payment) a reduction in the
principal
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amount of the Initial Purchaser Note of such Originator (but not below zero) or
by payment within two Business Days after the related Reporting Date in cash by
such Originator to the Initial Purchaser by deposit of immediately available
funds in an account designated by the Initial Purchaser.
3.5. RECONVEYANCE OF RECEIVABLES. In the event that any Originator
has paid to the Initial Purchaser the full Unpaid Balance (or portion thereof)
of any Receivable pursuant to SECTION 3.3 or 3.4, the Initial Purchaser shall
reconvey such Receivable to such Originator, without representation or
warranty, but free and clear of all liens created by the Initial Purchaser.
3.6. [RESERVED].
3.7. TRUE SALES.
(a) Each of the Originators and the Initial Purchaser intend
the transactions hereunder to constitute true sales (or where the
Subscription Agreement applies, conveyances in the form of capital
contributions) of Receivables and Related Assets by each of the
Originators to the Initial Purchaser, providing the Initial Purchaser
with the full benefits of ownership thereof, and no party hereto
intends the transactions contemplated hereunder to be, or for any
purpose to be characterized as, a loan from the Initial Purchaser to
any Originator.
(b) In the event (but only to the extent) that the conveyance
of Receivables and Related Assets hereunder is characterized by a
court or other governmental authority as a loan rather than a sale,
each Originator shall be deemed hereunder to have granted to the
Initial Purchaser, and each Originator hereby severally grants to the
Initial Purchaser, a security interest in all of such Originator's
right, title and interest in, to and under all of the following,
whether now or hereafter owned, existing or arising: (A) all
Receivables of such Originator, and (B) all Related Assets of such
Originator. Such security interest shall secure all of such
Originator's obligations (monetary or otherwise) under this Agreement
and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent. The Initial Purchaser shall have,
with respect to the property described in this SECTION 3.7(b), and in
addition to all the other rights and remedies available to the Initial
Purchaser under this Agreement and applicable law, all the rights and
remedies of a secured party under any applicable UCC, and this
Agreement shall constitute a security agreement under applicable law.
3.8. PAYMENTS AND COMPUTATIONS, ETC.
(a) All amounts to be paid or deposited by an Originator or
the Master Servicer hereunder shall be paid or deposited no later than
10:00 a.m. (New York City time) on the day when due in same day funds.
All amounts received after 10:00 a.m. (New York City time) will be
deemed to have been received on the immediately succeeding Business
Day.
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(b) Each Originator shall, to the extent permitted by law, pay
interest on any amount not paid or deposited by such Originator when
due hereunder, at an interest rate per annum equal to 1.0% per annum
above the Alternate Base Rate, payable on demand.
(c) All computations of interest under SECTION 3.8(b) and all
computations of the Purchase Price, fees, and other amounts hereunder
shall be made on the basis of a 360-day year and actual days elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made
on the next succeeding Business Day and such extension of time shall
be included in the computation of such payment or deposit.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial purchase
hereunder is subject to the condition precedent that the Initial Purchaser
shall have received, on or before the Initial Closing Date, the following, each
(unless otherwise indicated) dated the Initial Closing Date, and each in form,
substance and date satisfactory to the Initial Purchaser, the Administrator and
the Relationship Bank:
(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 such Originator;
(b) Good standing certificates for each Originator issued as
of a recent date by the Secretaries of State of the state of
incorporation of such Originator and the state where such Originator's
principal place of business 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
Initial Purchaser, the Administrator, the Relationship Bank and Master
Servicer (if other than Standard) may conclusively rely until such
time as they shall have received from such Originator a revised
certificate meeting the requirements of this SUBSECTION (c));
(d) The articles or certificate of incorporation of each
Originator, duly certified by the Secretary of State of the state of
its incorporation as of a recent date, in each case together with a
copy of the by-laws of such Originator, each duly certified by the
Secretary or an Assistant Secretary of such Originator;
(e) Copies of the proper financing statements (Form UCC-1)
that have been duly executed and name each Originator as the seller
and the Initial Purchaser as the purchaser
16
(and Purchaser as assignee of the Initial Purchaser) of the
Receivables generated by such Originator and the Related Rights or
other, similar instruments or documents, as may be necessary or, in
Master Servicer's or the Administrators's opinion, desirable under the
UCC of all appropriate jurisdictions or any comparable law of all
appropriate jurisdictions to perfect the Initial Purchaser'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
Master Servicer and the Administrator listing all effective financing
statements that name any Originator as debtor or seller 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
related to any Receivable that is of the type described in SECTION
1.1) which is to be sold to the Initial Purchaser hereunder, and tax
and judgment lien search reports from a Person satisfactory to Master
Servicer and the Administrator showing no evidence of such liens filed
against any Originator;
(g) A favorable opinion of Xxxxx & Xxxxxxxxx, outside counsel
to the Originators, in the form of EXHIBIT D;
(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 Initial
Purchaser's satisfaction;
(i) An Initial Purchaser Note in favor of each Originator,
duly executed by the Initial Purchaser;
(j) A certificate from an officer of Standard to the effect
that Master 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 TO THE
STANDARD PRODUCTS FUNDING CORPORATION PURSUANT TO A PURCHASE AND SALE
AGREEMENT, DATED AS OF SEPTEMBER 22, 1995, AS AMENDED, AMONG THE
STANDARD PRODUCTS CO., 5 RUBBER CORPORATION, XXXXXX RUBBER COMPANY,
XXXX INDUSTRIES, INC. AND THE STANDARD PRODUCTS FUNDING CORPORATION;
AND AN INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN GRANTED
AND ASSIGNED TO CLIPPER RECEIVABLES CORPORATION, PURSUANT TO A
RECEIVABLES PURCHASE AGREEMENT, DATED AS OF SEPTEMBER 22, 1995, AMONG
THE STANDARD PRODUCTS FUNDING CORPORATION, THE STANDARD PRODUCTS CO.,
CLIPPER RECEIVABLES CORPORATION, STATE STREET BOSTON CAPITAL
CORPORATION, AS THE ADMINISTRATOR, AND NATIONAL CITY BANK, AS THE
RELATIONSHIP BANK.
17
(k) A duly executed counterpart of the Subscription Agreement
from each party thereto, together with evidence that a capital
contribution of Receivables and Related Assets in an aggregate amount
of not less than $7,500,000 shall have been made to the Initial
Purchaser thereunder by Standard in exchange for common stock of the
Initial Purchaser;
(l) [intentionally omitted]; and
(m) Such other agreements, instruments, UCC financing
statements, certificates, opinions and other documents as the Initial
Purchaser, the Relationship Bank or the Administrator may reasonably
request.
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 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.
4.3. EFFECT OF PAYMENT OF PURCHASE PRICE. Upon the payment of the
Purchase Price (whether in cash or by an increase in the principal amount
outstanding under the Initial Purchaser Note) for any purchase of Receivables
and Related Assets, title to such Receivables and Related Assets shall vest in
the Initial Purchaser, whether or not the conditions precedent to such purchase
were in fact satisfied; PROVIDED that the Initial Purchaser shall not be deemed
to have waived any claim it may have under this Agreement for the failure by
any applicable Originator in fact to satisfy any such condition precedent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF EACH ORIGINATOR AND SERVICER
In order to induce the Initial Purchaser to enter into this Agreement
and to make purchases hereunder, each Originator and Servicer, as to matters
relating to it or its Receivables or other property, hereby makes the
representations and warranties set forth in this ARTICLE V.
5.1. ORGANIZATION AND GOOD STANDING. It has been duly organized and
is validly existing as a corporation in good standing under the laws of the
state of its incorporation, with corporate power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted.
5.2. DUE QUALIFICATION. It is duly licensed or qualified to do
business as a foreign corporation in good standing in all jurisdictions in
which (a) the ownership or lease of its property
18
or the conduct of its business requires such licensing or qualification and (b)
the failure to be so licensed or qualified has not had and will not have an
Originator Material Adverse Effect.
5.3. POWER AND AUTHORITY; DUE AUTHORIZATION. It 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 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 and
assignment and the performance of such obligations by all necessary corporate
action.
5.4. VALID SALE; BINDING OBLIGATIONS. Each sale of Receivables and
Related Rights made by it pursuant to this Agreement shall constitute a valid
sale, transfer, and assignment thereof to the Initial Purchaser, enforceable
against creditors of, and purchasers from, such Originator and Servicer; and
this Agreement constitutes, and each other Transaction Document to be signed by
it, when duly executed and delivered, will constitute, a legal, valid, and
binding obligation of such Originator and Servicer, enforceable in accordance
with its terms; except as enforceability of any of the foregoing 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.
5.5. NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the other Transaction Documents to which it is a party,
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) its articles or
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, except where such conflict, breach or default
has not had and will not have an Originator Material Adverse Effect, (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, except where such violation has not had and will not
have an Originator Material Adverse Effect.
5.6. PROCEEDINGS. 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 to which it is a party,
(b) seeking to prevent the sale of Receivables and Related Rights to the
Initial Purchaser or the consummation of any of the other transactions
contemplated by any Transaction Document to which it is a party, or (c) seeking
any determination or ruling that would reasonably be expected to have an
Originator Material Adverse Effect.
5.7. BULK SALES ACT. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
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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 and for authorizations, approvals, actions and filings the failure
of which to obtain, notify or file could not reasonably be expected to have an
Originator Material Adverse 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 its due execution, delivery and performance of
any Transaction Document to which it is a party.
5.9. FINANCIAL CONDITION. On the date hereof it is, and on the date
of each transfer of a new Receivable hereunder (both before and after giving
effect to such transfer), it shall be solvent.
5.10. MARGIN REGULATIONS. No use of any funds acquired by it under
this Agreement will conflict with or contravene any of Regulations G, T, U and
X promulgated by the Board of Governors of the Federal Reserve System from time
to time.
5.11. QUALITY OF TITLE.
(a) Each Receivable (together with the Related Rights with
respect to such Receivable) which is to be sold to the Initial
Purchaser 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 Initial Purchaser makes
a purchase hereunder, it shall have acquired and shall continue to
have maintained a valid and perfected ownership interest (free and
clear of any Adverse Claim, other than an Adverse Claim created by the
Initial Purchaser) 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 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 Right is on file in any recording office except such as
may be filed in favor of the Initial Purchaser or such Originator, as
the case may be, in accordance with this Agreement or in favor of the
Purchaser in accordance with the Receivables Purchase Agreement.
5.12. ACCURACY OF INFORMATION. No information heretofore or
contemporaneously furnished in writing (and prepared) by it to the Initial
Purchaser, the Purchaser, the Relationship Bank or the Administrator (excluding
forecasts and projections) for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is, and
no other such written information hereafter furnished (and prepared) by it to
the Initial Purchaser, the Purchaser, the Relationship Bank or the
Administrator pursuant to or in connection with any Transaction Document was
inaccurate in any material respect as of the date it was furnished or as of the
date as of which such information is dated or certified, or contained any
material misstatement of fact or omitted to state any material fact necessary
to make such information not materially misleading. All forecasts and
projections furnished by it to the Initial Purchaser, the Purchaser, the
Relationship Bank or the Administrator, have been prepared in good faith and
are based upon reasonable assumptions.
20
5.13. OFFICES. Its principal place of business and chief executive
office is located at the address set forth under its signature hereto, and the
offices where it 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 in EXHIBIT E (or at such
other locations, notified to Master Servicer (if other than Standard) and the
Administrator 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 and except
as permitted by SECTION 6.1(e), it does not use any trade name other than its
actual corporate name. From and after the date that fell five (5) years before
the date hereof, it has not been known by any legal name other than its
corporate name as of the date hereof, nor has it been the subject of any merger
or other corporate reorganization except as disclosed on SCHEDULE 5.14 and
except as permitted by SECTION 6.1(e).
5.15. TAXES. It 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 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 or the failure of which to be
paid will not have an Originator Material Adverse Effect.
5.16. COMPLIANCE WITH APPLICABLE LAWS. It is in compliance, in all
material respects, with the requirements of 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), a breach of any of
which, individually or in the aggregate, would be reasonably likely to have an
Originator Material Adverse Effect.
5.17. LOCK-BOX ACCOUNTS. The names and addresses of all the Lock-Box
Banks, together with the account numbers of its lock-box accounts at such
Lock-Box Banks, are specified in SCHEDULE 6.01(o) to the Receivables Purchase
Agreement (or have been notified to and approved by the Administrator and the
Relationship Bank in accordance with SECTION 7.03(d) of the Receivables
Purchase Agreement).
5.18. SERVICING PROGRAMS. No license or approval is required for the
Initial Purchaser's use of any software or program used by Master Servicer in
the servicing of the Receivables, other than those which have been obtained and
are in full force and effect.
5.19. ACCOUNTS. Except to the extent permitted by SECTION 6.3(c),
each of the Receivables constitutes an "Account" as such term is defined in the
UCC.
21
5.20. RELIANCE ON SEPARATE LEGAL IDENTITY. It is aware that
Purchaser, the Relationship Bank and the Administrator are entering into the
Transaction Documents to which they are parties in reliance upon the Initial
Purchaser's identity as a legal entity separate from such Originator and
Servicer and any of its other Affiliates.
ARTICLE VI
COVENANTS OF EACH ORIGINATOR AND SERVICER
6.1. AFFIRMATIVE COVENANTS. From the date hereof until the first day
following the Sale Termination Date on which all of the obligations of each
Originator hereunder are paid in full, each Originator and Servicer severally
agrees that it will, unless the Initial Purchaser, the Administrator and the
Relationship Bank 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 such noncompliance has not
had and will not have an Originator Material Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and
maintain its corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification would have
an Originator Material Adverse Effect.
(c) RECEIVABLES REVIEW. (i) At any time and from time to time
during regular business hours, upon reasonable written notice permit
the Initial Purchaser, the Administrator and the Relationship Bank 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 its
possession or under its control relating to the Receivables generated
by it, including, without limitation, the Contracts and other
agreements related thereto, and (B) to visit its offices and
properties for the purpose of examining such materials described in
the foregoing CLAUSE (A) and discussing matters relating to the
Receivables generated by it or its performance hereunder with any of
the Responsible Managers of such Originator and Servicer having
knowledge of such matters; (ii) at any time and from time to time
during regular business hours, upon reasonable notice, permit the
Initial Purchaser, the Administrator, and the Relationship Bank or
their respective agents or representatives, to meet with the
independent auditors of such Originator and Servicer, to the extent
permitted by such auditors, to review such auditors' work papers and
otherwise to review with such auditors the books and records of such
Originator and Servicer; and (iii) without limiting the provisions of
CLAUSE (i) next above, from time to time, at such Originator and
Servicer's expense, (A) upon reasonable notice during business hours,
not more than once in any calendar quarter or (B) on request of
Administrator or the Relationship Bank at any time
22
when a Liquidation Event or Unmatured Liquidation Event shall have
occurred and be continuing, permit certified public accountants or
other auditors acceptable to the Administrator to conduct a review of
its books and records.
(d) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS.
Timely and fully 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.
(e) LOCATION OF OFFICES, RECORDS AND BOOKS OF ACCOUNT; CHANGE
OF NAME, MERGERS, ETC.; MAINTENANCE OF RECORDS, ETC. (i) Keep its
principal place of business and chief executive office (as such terms
are used in the UCC) and the office where it keeps its records
concerning the Receivables at the address set forth on EXHIBIT E or,
upon at least 60 days' prior written notice of a proposed change to
the Administrator and the Initial Purchaser, at any other locations in
jurisdictions where all actions reasonably requested by the Initial
Purchaser or the Administrator to protect and perfect the ownership
interest of the Initial Purchaser and the interests of the Purchaser
in the Receivables and Related Assets have been taken and completed,
(ii) provide the Administrator and the Initial Purchaser with at least
60 days' written notice prior to making any change in its name or
making any other change in its identity or corporate structure
(including, without limitation, a merger) which could render any UCC
financing statement filed in connection with this Purchase and Sale
Agreement "seriously misleading" as such term is used in the UCC; each
notice to the Administrator and the Initial Purchaser pursuant to this
sentence shall set forth the applicable change and the effective date
thereto, (iii) maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables and related Contracts in the event of
the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of
all Receivables (including, without limitation, records adequate to
permit the daily identification of each Receivable and all Collections
of and adjustments to each existing Receivable) and (iv) not have or
maintain, or be a partner in any partnership which has or maintains,
its jurisdiction of organization, principal place of business in the
United States of America of principal assets in the United States of
America in any of the states of Colorado, Kansas, New Mexico,
Oklahoma, Utah and Wyoming.
(f) OWNERSHIP INTEREST, ETC. Take all action necessary or
desirable to establish and maintain a valid and enforceable perfected
ownership interest in the Receivables and the Related Assets, free and
clear of any Adverse Claim (other than any Adverse Claim in favor of
the Purchaser), in favor of the Initial Purchaser, including, without
limitation, taking such action to perfect, protect or more fully
evidence the ownership interest of the Initial Purchaser under this
Purchase and Sale Agreement as the Initial Purchaser or Administrator
may request.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material
respects with its Credit and Collection Policy in connection with the
Receivables that it generates and all Contracts related thereto.
23
(h) SEPARATE CORPORATE EXISTENCE OF THE INITIAL PURCHASER.
Take such actions as shall be required in order to maintain the
separate identity of the Initial Purchaser separate and apart from
such Originator and Servicer and its other affiliates, including those
set forth in Section 7.04 of the Receivables Purchase Agreement.
6.2. REPORTING REQUIREMENTS. From the date hereof until the first
day following the Sale Termination Date upon which all of each Originator's
obligations hereunder have been paid in full, each Originator and Servicer
severally agrees that it will, unless the Initial Purchaser, the Administrator
and the Relationship Bank shall otherwise consent in writing, furnish to the
Initial Purchaser, the Administrator and the Relationship Bank:
(a) PROCEEDINGS. As soon as possible and in any event within
three Business Days after such it has knowledge thereof, written
notice to the Initial Purchaser, the Administrator and the
Relationship Bank of (i) all pending proceedings and investigations of
the type described in SECTION 5.6 not previously disclosed to the
Initial Purchaser and/or the Administrator and (ii) all material
adverse developments that have occurred with respect to any previously
disclosed proceedings and investigations; and
(b) OTHER. Promptly, from time to time, such other
information, documents, records or reports respecting the Receivables
or its performance hereunder that the Initial Purchaser, the
Administrator or the Relationship Bank may from time to time
reasonably request in order to protect the ownership interests of the
Initial Purchaser, the Purchaser, the Administrator, the Relationship
Bank, 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 Sale Termination Date upon which all of each Originator's
obligations hereunder have been paid in full, each Originator and Servicer
severally agrees that, unless the Initial Purchaser, the Administrator and the
Relationship Bank shall otherwise consent in writing, it shall not:
(a) SALES, ADVERSE CLAIMS, 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 other Related Right, or any interest
therein, or any Collections thereon, or assign any right to receive
income in respect thereof.
(b) CHANGE IN CREDIT AND COLLECTION POLICY. Make any material
change in the Credit and Collection Policy that would not be permitted
under Section 7.03(c) of the Receivables Purchase Agreement.
(c) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Take
any action to cause or permit any Receivable (other than Defaulted
Receivables originated by Xxxxxx with an aggregate Unpaid Balance of
less than $2,500,000 at any time) generated by it to become evidenced
by any "instrument" (as defined in the applicable UCC).
24
(d) EXTENSION OR AMENDMENT OF RECEIVABLES. Extend the
maturity or adjust the Unpaid Balance or otherwise modify the terms of
any Receivable, or amend, modify or waive any term or condition of any
related Contract; PROVIDED that this CLAUSE (d) shall not limit the
ability of the Master Servicer to take such actions as permitted by
the Receivables Purchase Agreement; provided further that this CLAUSE
(d) shall not apply to Receivables reconveyed pursuant to SECTION 3.5.
(e) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND PAYMENT
INSTRUCTIONS TO OBLIGORS. Add or terminate any bank as a Lock-Box
Bank or any account as a Lock-Box Account from those listed in
SCHEDULE 6.01(o) to the Receivables Purchase Agreement, or make any
change in its instructions to Obligors regarding payments to be made
to it or payments to be made to any Lock-Box Account (or related post
office box), unless the Relationship Bank and the Administrator shall
have received prior written notice of such addition, termination or
change and the Relationship Bank and the Administrator shall have
received duly executed copies of Lock-Box Agreements with each new
Lock-Box Bank.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1. RIGHTS OF THE INITIAL PURCHASER. Each Originator and Servicer
hereby authorizes the Initial Purchaser and the Master Servicer (if other than
Standard) 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, 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 EACH ORIGINATOR AND SERVICER. Anything
herein to the contrary notwithstanding:
(a) Each Originator and Servicer agrees to direct its
respective Obligors in the billing statements to make payments of
Receivables directly to a Lock-Box Account at a Lock-Box Bank. Each
Originator and Servicer further agrees to transfer any Collections
that it receives directly to Master Servicer (for deposit to a Lockbox
Account) within two Business Days of receipt thereof, and agrees that
all such Collections shall be deemed to be received in trust for the
Initial Purchaser. Each Originator agrees to pay all Deemed
Collections payable pursuant to SECTION 3.3 or 3.4 to the Master
Servicer for deposit to a Lockbox Account on the second Business Day
following the day on which they arise.
25
(b) Each Originator and Servicer shall perform its obligations
hereunder and under the Contracts in all material respects, and the
exercise by the Initial Purchaser or its designee of its rights
hereunder shall not relieve such Originator and Servicer from such
obligations.
(c) Each Originator and Servicer hereby grants to Master
Servicer an irrevocable power of attorney, with full power of
substitution, coupled with an interest, to take in the name of such
Originator and Servicer 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 and Servicer or
transmitted or received by the Initial Purchaser (whether or not from
such Originator and Servicer) in connection with any Receivable.
7.3. FURTHER ACTION EVIDENCING PURCHASES. Each Originator and
Servicer 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 Initial Purchaser may reasonably request in order to perfect,
protect or more fully evidence the Initial Purchaser's ownership of the
Receivables (and the Related Rights) purchased by the Initial Purchaser
hereunder, or to enable the Initial Purchaser 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 Initial Purchaser, each
Originator and Servicer 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 its summary master control data processing records
with the legend set forth in SECTION 4.1(j).
Each Originator and Servicer hereby authorizes the Initial Purchaser 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 and Servicer fails to perform any of its
agreements or obligations under this Agreement, the Initial Purchaser 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 Initial
Purchaser or its designee incurred in connection therewith shall be payable by
such Originator as provided in SECTION 10.6.
7.4. APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to any Originator in respect of any
Contract shall, except as otherwise specified by such Obligor or otherwise
required by contract or law,
(a) at any time before the commencement of the Liquidation
Period, be recorded as a credit in a contra-account established for
Collection of the Receivables of such Obligor; and
26
(b) upon and after the commencement of the Liquidation Period,
be applied first, as a Collection of the Pool Receivables of such
Obligor in the order of the age of such Pool Receivables starting with
the oldest of such Pool Receivables and, second, to any other
indebtedness of such Obligor.
ARTICLE VIII
INDEMNIFICATION
8.1. INDEMNITIES BY EACH ORIGINATOR. Without limiting any other
rights which the Initial Purchaser may have hereunder or under applicable law,
each Originator hereby severally agrees to indemnify the Initial Purchaser and
each of its assigns, officers, directors, employees and agents (each of the
foregoing Persons being individually called a "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 "SALE INDEMNIFIED AMOUNTS") awarded against or incurred by any of them
arising out of or as a result of the following:
(a) the transfer by such Originator of an interest in any
Receivable or Related Right to any Person other than the Initial
Purchaser;
(b) without duplication of amounts paid as Deemed Collections,
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 such 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 Initial
Purchaser an ownership interest in the Receivables and the Related
Rights 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 Initial Purchaser, whether existing at the time of the
purchase of such Receivables or at any time thereafter;
(e) the failure of such Originator to file with respect to
itself, 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 at any subsequent time;
27
(f) without duplication of amounts paid as Deemed Collections,
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 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 services or merchandise related to any
such Receivable or the furnishing of or failure to furnish such
services or merchandise;
(g) any product liability claim arising out of or in
connection with services or merchandise 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 this 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 of the Receivables generated by such Originator
or any Related Right connected with any such Receivables;
EXCLUDING, HOWEVER, (i) Sale Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Sale Indemnified
Party, (ii) any indemnification which has the effect of recourse to any
Originator for non-payment of Receivables originated by such Originator due to
credit problems of the Obligors on such Receivables and (iii) any tax based
upon or measured by net income. For purposes of determining the liability of
any Originator and Servicer under this SECTION 8.1, for any breach of
representation, warranty or covenant, any limitation in such representation,
warranty or covenant based on the existence of an Originator Material Adverse
Effect or other materiality concept shall be disregarded.
If for any reason the indemnification provided above in this SECTION
8.1 is unavailable to a Sale Indemnified Party or is insufficient to hold such
Sale Indemnified Party harmless, then each Originator shall contribute to the
amount paid or payable by such Sale Indemnified Party to the maximum extent
permitted under applicable law.
ARTICLE IX
SALE TERMINATION EVENTS
9.1. SALE TERMINATION EVENTS. Each of the following events or
occurrences described in this SECTION 9.1 shall constitute a "SALE TERMINATION
EVENT":
(a) (i) The Master Servicer (if Standard or any of its
Affiliates) shall fail to perform or observe any term, covenant or
agreement under this Agreement and such failure shall remain
unremedied for five (5) Business Days (except in the case of any
failure to deliver the Information Package, in which case, such
failure shall remain unremedied for
28
three (3) Business Days) or (ii) any Person which is the Master
Servicer shall fail to make when due any payment or deposit to be made
by it under this Agreement; or
(b) Any Originator and Servicer shall fail to make any payment
required under this Agreement; or
(c) Any representation or warranty made or deemed to be made
by any Originator and Servicer (or any of its officers) pursuant to
this Agreement or any other information or report delivered by such
Originator and Servicer or the Master Servicer pursuant to this
Agreement shall prove to have been incorrect or untrue in any material
respect when made or deemed made or delivered and which continues to
be incorrect or untrue in any material respect for a period of 15 days
after the date on which notice of such inaccuracy, requiring the same
to be remedied, shall have been given to such Originator or Servicer
by the Administrator, or after the date a Responsible Manager of such
Originator or Servicer has actual knowledge thereof; or
(d) Any Originator and Servicer 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 fifteen (15) Business Days after the
earlier of (i) written notice thereof shall have been given by the
Initial Purchaser, the Administrator or the Relationship Bank to the
applicable Originator and Servicer and (ii) a Responsible Manager of
such Originator and Servicer has actual knowledge thereof; or
(e) This Agreement shall for any reason (other than pursuant
to the terms thereof) cease to create in favor of the Initial
Purchaser a valid and enforceable perfected ownership interest in each
Receivable, and the Related Assets, free and clear of any Adverse
Claim (other than an Adverse Claim in favor of the Purchaser); or
(f) An Event of Bankruptcy shall occur with respect to any
Originator; or
(g) A Liquidation Event shall have occurred.
9.2. PURCHASE AND SALE TERMINATION EVENTS. If any of the Sale
Termination Events set forth in SECTION 9.1 shall occur and be continuing, the
Initial Purchaser may, with the prior written consent of the Administrator and
the Relationship Bank, by notice to each of the Originators (with a copy to the
Administrator and the Relationship Bank), declare the Sale Termination Date to
have occurred; provided that automatically upon the occurrence of an event
(without any requirement for the passage of time or the giving of notice)
described in CLAUSE (f) of SECTION 9.1, the Sale Termination Date shall occur.
The agreement of the Originators to sell Receivables and Related
Assets hereunder, and the agreement of the Initial Purchaser to purchase
Receivables and Related Assets from the Originators hereunder, shall terminate
automatically on the earlier to occur of (i) the Sale Termination Date and (ii)
the Termination Date. Notwithstanding the occurrence of the Sale Termination
Date, all obligations of each Originator under the Transaction Documents that
shall
29
have arisen prior to the Sale Termination Date shall survive until each such
obligation has been finally and fully paid and performed by such Originator.
Upon the occurrence and during the continuance of a Sale Termination
Event, the Initial Purchaser 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 a Sale Termination Event hereunder shall not deny to the Initial
Purchaser any remedy to which the Initial Purchaser may be otherwise
appropriately entitled, whether by statute or applicable law, at law or in
equity.
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 each Originator, the Initial
Purchaser, the Administrator, the Relationship Bank and the Master
Servicer (if other than Standard).
(b) No failure or delay on the part of the Initial Purchaser,
Master 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 Initial
Purchaser, Master 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 Initial Purchaser or Master 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.
30
10.3. NO WAIVER; CUMULATIVE REMEDIES. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
10.4. BINDING EFFECT; ASSIGNABILITY. This Agreement shall be binding
upon and inure to the benefit of the Initial Purchaser, each Originator and its
respective successors and permitted assigns. No Originator may assign its
rights hereunder or any interest herein without the prior written consent of
the Initial Purchaser, the Administrator and the Relationship Bank. 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 Sale Termination Date on which each Originator has
received payment in full for all Receivables and Related Rights conveyed
pursuant to SECTION 1.1 hereof and has paid and performed all of its
obligations hereunder in full. 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 VIII 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 NEW YORK.
10.6. COSTS, EXPENSES AND TAXES. In addition to the obligations of
each Originator under ARTICLE VIII and subject to any limitations agreed to in
writing by any Affected Party prior to the date hereof, 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
executed by such Originator; 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 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 NEW YORK STATE
OR UNITED STATES FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, STATE 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 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 FINAL JUDGMENT IN ANY SUCH
31
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 INITIAL PURCHASER'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.
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 Initial
Purchaser's rights, title, and interests in, to, and under this Agreement shall
be assigned by the Initial Purchaser 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
Administrator, the Purchaser and the Relationship Bank are third party
beneficiaries of the rights of the Initial Purchaser arising hereunder and
under the other Transaction Documents to which each Originator is a party.
ARTICLE XI
ADMINISTRATION AND SERVICING
OF RECEIVABLES
11.1. ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO THE
SERVICERS. (a) Each Originator severally agrees to act, and is hereby
appointed by the Master Servicer to act, as a
32
Servicer under this Agreement, and the Initial Purchaser hereby consents to
each Seller acting as a Servicer. Each Servicer shall service and administer
the Receivables of which its customers are the Obligors and shall collect
payments due under such Receivables in accordance with its customary and usual
billing and collection procedures for servicing its portfolio of accounts
receivable and in all material respects in accordance with the Credit and
Collection Policy and shall have full power and authority, acting alone or
through any Person designated by it, to do any and all things in connection
with such servicing and administration which it may deem necessary or desirable
(subject to the provisions hereof). Servicing activities performed by the
Servicers with respect to the Receivables shall include collecting and
recording payments, communicating with Obligors, investigating payment
delinquencies, providing billing records to Obligors and maintaining internal
records. Other services performed by the Servicers shall include providing
assistance in any inspections of the documents and records relating to the
Receivables by the Administrator and Relationship Bank to the extent provided
in the Transaction Documents, maintaining the Contracts, documents and files
relating to the Receivables, and assisting the Master Servicer in the
preparation of the Information Package and Purchase Report. Without limiting
the generality of the foregoing, each Servicer agrees that it shall cooperate
with the Master Servicer to permit the Master Servicer to fulfill its
obligations under and in connection with the Transaction Documents.
(b) No Servicer shall extend, amend or otherwise modify the terms
of any Receivable, or amend, modify or otherwise waive any term or condition of
any contract relating thereto except in accordance with the Transaction
Documents.
(c) The Master Servicer in its discretion may terminate the
appointment of any Originator as Servicer at any time; notwithstanding such
termination of an Originator as Servicer, such Originator shall continue to
sell Receivables to the Initial Purchaser pursuant to this Agreement for so
long as such Originator is a party hereto.
(d) Notwithstanding the appointment of and agreement by each
Originator to act as Servicer under the Agreement, the Master Servicer shall
remain primarily liable for all payments to be made by it and the performance
of its duties as Master Servicer under the Transaction Documents to which it is
a party.
11.2. SERVICING COMPENSATION. As full compensation for its servicing
activities hereunder, each Servicer shall be entitled to receive such fees from
the Master Servicer as may be agreed upon from time to time between such
Servicer and the Master Servicer.
33
ARTICLE XII
GUARANTEE
12.1. GUARANTEE. (a) Standard hereby unconditionally and
irrevocably covenants and agrees that it will cause each Originator and
Servicer duly and punctually to perform and observe all of the terms,
conditions, covenants, agreements (including, without limitation, agreements to
make payments of Collections or deemed Collections) and indemnities of such
Originator and Servicer under this Agreement and the other Transaction
Documents strictly in accordance with the terms hereof and thereof and that if
for any reason whatsoever any Originator and Servicer shall fail to so perform
and observe such terms, conditions, covenants, agreements and indemnities,
Standard will duly and punctually perform and observe the same, IT BEING
UNDERSTOOD that Standard shall have no liability under this SECTION 12.1 for
any losses the payment of which would have the effect of recourse to Standard
or any other Originator for non-payment of Receivables originated by Standard
or such other Originator due to credit problems with the Obligors on such
Receivables.
(a) The liabilities and obligations of Standard under this
SECTION 12.1 shall be absolute and unconditional under all
circumstances and shall be performed by Standard regardless of (i)
whether Initial Purchaser, Purchaser, the Relationship Bank or the
Administrator shall have taken any steps to collect from any
Originator, any of the amounts payable by such Originator, to under
this Agreement or shall otherwise have exercised any of their rights
or remedies under this Agreement or the other Transaction Documents
against such Originator and Servicer or against any Obligor under any
of the Pool Receivables, (ii) the validity, legality or enforceability
of this Agreement or any other Transaction Document, or the
disaffirmance of any thereof in any Event of Bankruptcy relating to
any Originator and Servicer, (iii) any law, regulation or decree now
or hereafter in effect which might in any manner affect any of the
terms or provisions of this Agreement or any other Transaction
Document or any of the rights of Initial Purchaser, Purchaser, the
Relationship Bank or the Administrator as against any Originator and
Servicer or as against any Obligor under any of such Pool Receivables
or which might cause or permit to be invoked any alteration in time,
amount, manner of payment or performance of any amount payable by any
Originator and Servicer to Initial Purchaser, Purchaser, the
Relationship Bank or the Administrator under this Agreement, (iv) the
merger or consolidation of any Originator and Servicer into or with
any corporation or any sale or transfer by any Originator and Servicer
of all or any part of its property, (v) the existence or assertion of
any Adverse Claim with respect to any Pool Receivable, or (vi) any
other circumstance whatsoever (with or without notice to or knowledge
of Standard) which may or might in any manner or to any extent vary
the risk of Standard, or might otherwise constitute a legal or
equitable discharge of a surety or guarantor, it being the purpose and
intent of Standard that the liabilities and obligations of Standard
under this SECTION 12.1 shall be absolute and unconditional under any
and all circumstances, and shall not be discharged except by payment
and performance as in this Agreement provided. The guaranty set forth
in this SECTION 12.1 is a guaranty of payment and performance and not
just of collection.
34
(b) Without in any way affecting or impairing the liabilities
and obligations of Standard under this SECTION 12.1, Initial
Purchaser, Purchaser, the Relationship Bank or the Administrator may
at any time and from time to time in its discretion, without the
consent of, or notice to, Standard, and without releasing or affecting
Standard's liability hereunder (i) extend or change the time, manner,
place or terms of this Agreement or any other Transaction Document,
(ii) settle or compromise any of the amounts payable by any Originator
and Servicer under this Agreement or subordinate the same to the
claims of others, (iii) retain or obtain from any Person a lien upon
or security interest in any property to secure any of the obligations
hereunder, (iv) retain or obtain the primary or secondary obligation
of any obligor or obligors, in addition to Standard, with respect to
any of the obligations due hereunder, or (v) release or fail to
perfect any Adverse Claim upon or security interest in, or impair,
surrender, release or permit any substitution in exchange for, all or
any part of any property securing any of the obligations under this
Agreement.
(c) The provisions of this SECTION 12.1 shall continue to be
effective or be reinstated, as the case may be, if any time payment of
any of the amounts payable by any Originator and Servicer under this
Agreement is rescinded or must otherwise be restored or returned by
Initial Purchaser, Purchaser, the Relationship Bank or the
Administrator, as the case may be, upon any Event of Bankruptcy
involving any Originator and Servicer, or otherwise, all as though
such payment had not been made. Standard hereby waives (i) notice of
the occurrence of any default hereunder, (ii) any requirement of
diligence or promptness on the part of Initial Purchaser, Purchaser,
the Relationship Bank or the Administrator in making demand,
commencing suit or exercising any other right or remedy under this
Agreement or otherwise, and (iii) any right to require Initial
Purchaser, Purchaser, the Relationship Bank or the Administrator to
exercise any right or remedy against an Originator and Servicer or the
Pool Receivables prior to enforcing any of their rights against
Standard under this SECTION 12.1. Standard agrees that, in the event
of an Event of Bankruptcy with respect to any Originator and Servicer
or Standard or both, and if such event shall occur at a time when all
of the Sale Indemnified Amounts and other amounts due under this
Agreement may not then be due and payable, Standard will pay forthwith
the full amount which would be payable hereunder by Standard if all
such Sale Indemnified Amounts and other obligations were then due and
payable.
12.2. REPRESENTATION AND WARRANTY. Standard represents and warrants
that it now has, and will continue to have, independent means of obtaining
information concerning each Originator and Servicer's affairs, financial
condition and business. None of the Initial Purchaser, Purchaser, the
Relationship Bank nor the Administrator, shall have any duty or responsibility
to provide Standard with any credit or other information concerning any
Originator and Servicer's affairs, financial condition or business which may
come into Initial Purchaser's, Purchaser's, the Relationship Bank's or the
Administrator's possession.
35
12.3. WAIVER OF SUBROGATION. Standard hereby agrees that no payment
made by it or for its account pursuant to this Agreement shall entitle Standard
by subrogation, indemnification, contribution, reimbursement or otherwise to
any payment by such Originator and Servicer or from or out of any property of
such Originator and Servicer, and Standard hereby expressly waives, to the
fullest extent possible, and shall not exercise, any rights or remedies it has
or may in the future have with respect to any of the foregoing until the date
after the Sale Termination Date on which all amounts payable by any Originator
and Servicer hereunder have been paid in full.
[SIGNATURE PAGES FOLLOW]
36
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.
THE STANDARD PRODUCTS FUNDING
CORPORATION, as Initial Purchaser
By:___________________________________
Name Printed: Xxxxxxx X. Xxxx
Title: Treasurer
Address:
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
THE STANDARD PRODUCTS COMPANY, as
Originator and Master Servicer
By:___________________________________
Name Printed: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President - Finance
Address:
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
37
5 RUBBER CORPORATION, as Originator and Servicer
By:____________________________________
Name Printed:_______________________
Title:______________________________
Address:
000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile:_____________________________
XXXXXX RUBBER CORPORATION, as Originator and
Servicer
By:____________________________________
Name Printed:_______________________
Title:______________________________
Address:
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Facsimile:_____________________________
XXXX INDUSTRIES, INC., as Originator and Servicer
By:_____________________________________
Name Printed:________________________
Title:_______________________________
Address:
000 Xxxxx Xxxxxxx Xxxxxx
00
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile:______________________________
