PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of December 20, 1996
between
VANSTAR CORPORATION
and
VANSTAR FINANCE CO.
TABLE OF CONTENTS
PAGE
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ARTICLE I
AGREEMENT TO PURCHASE AND CONTRIBUTE
1.1. Agreement to Purchase and Sell . . . . . . . . . . . . . . . . 2
1.2. Timing of Purchases. . . . . . . . . . . . . . . . . . . . . . 3
1.3. Consideration for Purchases. . . . . . . . . . . . . . . . . . 3
1.4. Company Agreement to Make Demand Loans . . . . . . . . . . . . 3
1.5. Purchase and Contribution Termination Date . . . . . . . . . . 3
1.6. Intention of the Parties . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. Calculation of Purchase Price. . . . . . . . . . . . . . . . . 4
2.2. Definitions and Calculations Related to
Purchase Discount . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. Contribution of Receivables. . . . . . . . . . . . . . . . . . 7
3.2. Initial Purchase Price Payment . . . . . . . . . . . . . . . . 8
3.3. Subsequent Purchase Price Payments . . . . . . . . . . . . . . 8
3.4. Settlement as to Specific Receivables. . . . . . . . . . . . . 8
3.5. Reconveyance of Receivables. . . . . . . . . . . . . . . . . . 10
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. Conditions Precedent to Initial Purchase . . . . . . . . . . . 10
4.2. Certification as to Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . 12
TABLE OF CONTENTS
(continued)
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
5.1. Organization, Good Standing and Due
Qualification . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2. Power and Authority; Due Authorization . . . . . . . . . . . . 12
5.3. Valid Sale or Contribution; Binding
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.5. Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6. Bulk Sales Act . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7. Government Approvals . . . . . . . . . . . . . . . . . . . . . 13
5.8. Financial Condition. . . . . . . . . . . . . . . . . . . . . . 13
5.9. Quality of Title . . . . . . . . . . . . . . . . . . . . . . . 14
5.10. Accuracy of Information. . . . . . . . . . . . . . . . . . . . 14
5.11. Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.12. Trade Names. . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.13. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.14. Licenses and Labor Controversies . . . . . . . . . . . . . . . 15
5.15. Compliance with Applicable Laws. . . . . . . . . . . . . . . . 15
5.16. Reliance on Separate Legal Identity. . . . . . . . . . . . . . 16
5.17. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI
COVENANTS OF ORIGINATOR
6.1. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . 16
6.2. Reporting Requirements . . . . . . . . . . . . . . . . . . . . 18
6.3. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
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TABLE OF CONTENTS
(continued)
7.1. Rights of the Company . . . . . . . . . . . . . . . . . . . . 20
7.2. Responsibilities of Originator. . . . . . . . . . . . . . . . 20
7.3. Further Action Evidencing Purchases . . . . . . . . . . . . . 21
7.4. Application of Collections. . . . . . . . . . . . . . . . . . 22
ARTICLE VIII
PURCHASE AND CONTRIBUTION TERMINATION EVENTS
8.1. Purchase and Contribution Termination
Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IX
INDEMNIFICATION
9.1. Indemnities by Originator . . . . . . . . . . . . . . . . . . 24
ARTICLE X
MISCELLANEOUS
10.1. Amendments, etc . . . . . . . . . . . . . . . . . . . . . . . 26
10.2. Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . 26
10.3. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . 26
10.4. Binding Effect; Assignability . . . . . . . . . . . . . . . . 26
10.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 27
10.6. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . 27
10.7. Submission to Jurisdiction. . . . . . . . . . . . . . . . . . 27
10.8. Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 28
10.9. Captions and Cross References;
Incorporation by Reference . . . . . . . . . . . . . . . . . 28
10.10. Execution in Counterparts . . . . . . . . . . . . . . . . . . 28
10.11. Acknowledgment and Agreement. . . . . . . . . . . . . . . . . 28
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TABLE OF CONTENTS
(continued)
PAGE
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SCHEDULES
SCHEDULE 5.13 Office Locations
SCHEDULE 5.14 Trade Names
EXHIBITS
EXHIBIT A Form of Purchase Report
EXHIBIT B Form of Company Note
EXHIBIT C Form of Opinion of Originator's Counsel
EXHIBIT D Form of Originator Note
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PURCHASE AND CONTRIBUTION AGREEMENT
THIS PURCHASE AND CONTRIBUTION AGREEMENT (as amended, supplemented or
modified from time to time, this "AGREEMENT"), dated as of December 20, 1996,
is between VANSTAR CORPORATION, a Delaware corporation ("ORIGINATOR"), as
seller and contributor, and VANSTAR FINANCE CO., a Delaware corporation (the
"COMPANY"), as purchaser and contributee.
DEFINITIONS
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in EXHIBIT I to the Receivables
Purchase Agreement of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "RECEIVABLES PURCHASE AGREEMENT"),
among the Company, Originator, as initial Servicer, POOLED ACCOUNTS
RECEIVABLE CAPITAL CORPORATION, as purchaser (together with its successors
and assigns, the "PURCHASER"), and XXXXXXX XXXXX SECURITIES, INC., as agent
for Purchaser (together with its successors and assigns, the "AGENT").
BACKGROUND
1. The Company is a special purpose corporation, all of the capital
stock of which is wholly-owned by Originator.
2. On the Closing Date, Originator is transferring certain Pool
Receivables and Related Rights to the Company as a contribution to the
Company in return for 100 shares of the common stock of the Company.
3. In order to finance its business, Originator wishes to sell certain
Pool Receivables and Related Rights from time to time to the Company, and the
Company is willing, on the terms and subject
to the conditions set forth herein, to purchase such Pool Receivables and
Related Rights from Originator.
4. The Company intends to sell to Purchaser an undivided variable
percentage interest in its Pool Receivables and Related Rights pursuant to
the Receivables Purchase Agreement in order to finance its purchases of
certain Pool Receivables and Related Rights hereunder.
5. Originator and the Company understand that Pool Receivables sold or
contributed to the Company hereunder shall not include Excluded Receivables.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND CONTRIBUTE
1.1. AGREEMENT TO PURCHASE AND SELL. On the terms and subject to the
conditions set forth in this Agreement (including ARTICLE IV), and in
consideration of the Purchase Price, Originator agrees to sell to the
Company, and does hereby sell to the Company, and the Company agrees to
purchase from Originator, and does hereby purchase from Originator, all of
Originator's right, title and interest in and to:
(a) each Pool Receivable of Originator that existed and was owing to
Originator as of the close of Originator's business on December 20, 1996 (the
"CLOSING DATE") (other than the Pool Receivables and Related Rights
contributed by Originator to the Company pursuant to Section 3.1 (the
"CONTRIBUTED RECEIVABLES"));
(b) each Pool Receivable created or originated by Originator from the
close of Originator's business on the Closing Date to and including the
Purchase and Contribution Termination Date;
(c) all rights to, but not the obligations under, all Related Security;
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(d) all monies due or to become due with respect to any of the foregoing;
(e) all books and records related to any of the foregoing; and
(f) all proceeds thereof (as defined in the UCC) received on or after
the date hereof including, without limitation, all funds which either are
received by Originator, the Company or the Servicer from or on behalf of the
Obligors in payment of any amounts owed (including, without limitation,
finance charges, interest and all other charges) in respect of Pool
Receivables, or are applied to such amounts owed by the Obligors (including,
without limitation, insurance payments, if any, that Originator or the
Servicer (if other than Originator) applies in the ordinary course of its
business to amounts owed in respect of any Pool Receivable).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to and in reliance upon the representations,
warranties and covenants of Originator, in its capacity as seller and
contributor, set forth in each Transaction Document. The Company's foregoing
commitment to purchase such Pool Receivables and the proceeds and rights
described in SUBSECTIONS (C) through (F) of this SECTION 1.1 (collectively,
the "RELATED RIGHTS") is herein called the "PURCHASE FACILITY."
1.2. TIMING OF PURCHASES.
(a) CLOSING DATE PURCHASES. Originator's entire right, title and
interest in (i) each Pool Receivable that existed and was owing to Originator
as of the close of Originator's business on the Closing Date, (other than
Contributed Receivables), (ii) all Related Rights with respect thereto shall
be deemed to have been sold to the Company on the Closing Date.
(b) REGULAR PURCHASES. After the Closing Date, each Pool Receivable
created or originated by Originator and described in SECTION 1.1(B) hereof
and all Related Rights shall be purchased and owned by the Company (without
any further action) upon the creation or origination of such Pool Receivable.
1.3. CONSIDERATION FOR PURCHASES. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to
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make all Purchase Price payments to Originator, and to reflect all
contributions, in accordance with ARTICLE III.
1.4. COMPANY AGREEMENT TO MAKE DEMAND LOANS. On the terms and subject
to the conditions set forth in this Agreement and in the Receivables Purchase
Agreement, the Company agrees to make demand loans (each such loan being
herein called an "ORIGINATOR LOAN") to Vanstar prior to the Purchase and
Contribution Termination Date in such amounts as Vanstar may request from
time to time; PROVIDED, HOWEVER, that:
(a) the Originator Loans made to Vanstar shall be evidenced by a demand
promissory note in the form of EXHIBIT D to this Agreement issued by Vanstar
to the order of the Company (such demand promissory note, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
accordance with the Transaction Documents, together with all promissory notes
issued from time to time in substitution therefor or renewal thereof in
accordance with the Transaction Documents, being called the "ORIGINATOR
NOTE");
(b) no Originator Loan shall be made to Vanstar to the extent that the
making of such Originator Loan would violate CLAUSE (O) of EXHIBIT IV to the
Receivables Purchase Agreement.
1.5. PURCHASE AND CONTRIBUTION TERMINATION DATE. The "PURCHASE AND
CONTRIBUTION TERMINATION DATE" shall be the Final Payout Date; or, if
earlier, the day following the Termination Date when a Termination Event
under CLAUSE (N) of EXHIBIT V of the Receivables Purchase Agreement shall
have occurred and be continuing.
As used herein, "PAYMENT DATE" means (i) the Closing Date and (ii) each
Business Day thereafter that Originator is open for business.
1.6. INTENTION OF THE PARTIES. It is the express intent of the parties
hereto that the transfers of the Pool Receivables (other than Contributed
Receivables) and Related Rights by the Originator to the Company, as
contemplated by this Agreement be, and be treated as, sales and not as
secured loans secured by the Pool Receivables
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and Related Rights. If, however, notwithstanding the intent of the parties,
such transactions are deemed to be loans, Originator hereby grants to the
Company a first priority security interest in all of Originator's right,
title and interest in and to the Pool Receivables and the Related Rights now
existing and hereafter created, all monies due or to become due and all
amounts received with respect thereto, and all proceeds thereof, to secure
all of Originator's obligations hereunder.
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. CALCULATION OF PURCHASE PRICE. On each Servicer Report Date, the
Servicer shall deliver to the Company, the Agent and Originator (if the
Servicer is other than Originator) a report in substantially the form of
EXHIBIT A (each such report being herein called a "PURCHASE REPORT") with
respect to the matters set forth therein and the Company's purchases of Pool
Receivables from Originator
(a) that are to be made on the Closing Date (in the case of the
Purchase Report to be delivered on the Closing Date), or
(b) that were made during the period covered by the Servicer Report
required to be delivered on such Servicer Report Date to (but not including)
such Servicer Report Date (in the case of each subsequent Purchase Report).
The "PURCHASE PRICE" (to be paid to Originator in accordance with the terms
of ARTICLE III) for the Pool Receivables and the Related Rights that are
purchased on any Business Day hereunder shall be determined in accordance
with the following formula:
PP = OB - PD
WHERE:
PP = Purchase Price for each Pool Receivable as calculated on the
relevant Business Day.
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OB = the Outstanding Balance of such Pool Receivable.
PD = The Purchase Discount as measured on such Business Day pursuant
to SECTION 2.2.
2.2. DEFINITIONS AND CALCULATIONS RELATED TO PURCHASE DISCOUNT.
(a) PURCHASE DISCOUNT. "PURCHASE DISCOUNT" for the Pool Receivables
and Related Assets that were purchased from Originator on each Business Day
shall be determined in accordance with the following formula:
PD = OB x (WALD + FD)
WHERE:
PD = the Purchase Discount as measured on such Business Day
OB, in respect of Originator, has the meaning set forth in SECTION 2.1;
WALD = the Weighted Average Loss Discount as measured on such Business
Day, as determined pursuant to PARAGRAPH (b) below; and
FD = the Funding Discount as measured on such Business Day, as
determined pursuant to PARAGRAPH (c) below.
(b) WEIGHTED AVERAGE LOSS DISCOUNT. "WEIGHTED AVERAGE LOSS DISCOUNT" as
measured on any Business Day means the Weighted Average Loss Discount over the
last three calendar months ending on the last day of the calendar month ended
immediately preceding such Business Day calculated as the QUOTIENT of
(i) the SUM of (A) a rate equal to three times the Loss-to-
Liquidation Ratio for the most recent calendar month, PLUS (B) a
rate equal to two times the Loss-to-Liquidation Ratio for the
second most recent calendar month, PLUS, (C) a rate equal to the
actual Loss-to-Liquidation Ratio for the third most recent
calendar month, DIVIDED by
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(ii) six.
"LOSS TO LIQUIDATION RATIO" means the ratio (expressed as a percentage)
computed as of the last day of each month by dividing (i) the aggregate
Outstanding Balance of all Pool Receivables originated by Originator that were
charged-off as uncollectible during the most recent calendar month then ended by
(ii) the aggregate Collections (other than deemed Collections) received by the
Company or Originator during such month.
(c) Funding Discount. "Funding Discount" as measured on any Business Day
means a percentage determined in accordance with the following formula:
FD = (OTD/360) x FR
WHERE:
FD = the Funding Discount as measured on such Business Day;
OTD = the "ORIGINATOR TURNOVER DAYS" for Originator, which shall be
equal to the PRODUCT of (x) the QUOTIENT of (i) the aggregate
Outstanding Balance of Pool Receivables originated by Originator
as of the last day of the calendar month which occurs two months
prior to the month in which such Business Day occurs, DIVIDED by
(ii) the aggregate amount of the Collections received during the
month ending on the last day of the calendar month ended
immediately preceding such Business Day on Pool Receivables
originated by Originator, MULTIPLIED by (y) the number of days in
the month ending on the last day of the most recently ended
calendar month; and
FR = the Funding Rate as measured on such Business Day, as determined
pursuant to PARAGRAPH (d) below, or, in the case of the initial
purchase, a Funding Rate equal to 5.85% per annum
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(d) FUNDING RATE. "FUNDING RATE" as measured on any Business Day means a
per annum percentage rate determined in accordance with the following formula:
FR = 0.02% + DRP + SFP + EXP
WHERE:
FR = the Funding Rate as measured on such Business Day;
DRP = the "DISCOUNT RATE PERCENTAGE", which shall be equal to a
fraction (expressed as a percentage) (x) the NUMERATOR of which
is the SUM of the PRODUCTS obtained by MULTIPLYING (A) each CP
Rate or Bank Rate applicable to each Portion of Investment
outstanding as of such Business Day, TIMES (B) the amount of the
Portion of Investment to which such CP Rate or Bank Rate applied
on such day, and (y) the DENOMINATOR of which is the aggregate
outstanding amount of Investment on such day;
SFP = the "SERVICER'S FEE PERCENTAGE", which shall be equal to the per
annum percentage rate contemplated by the definition of Servicing
Fee; and
EXP = the amount, expressed as a per annum percentage rate, of any
fees, costs and expenses incurred by the Company on such Business
Day (and not accounted for in the Discount Rate Percentage),
including without limitation reserve costs, tax payments and
indemnity obligations of the Company for which the Company is not
indemnified pursuant to this Agreement; PROVIDED, HOWEVER, that,
for purposes of minimizing fluctuations in the rate calculated as
the Funding Rate, the Servicer may allocate and spread any
unscheduled or unaccruable costs and expenses of the Company over
several months at the Servicer's reasonable discretion, subject
to the requirement that such allocation be reasonably calculated
to allow the Company to recover such costs and expenses over a
reasonable period of time.
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ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. CONTRIBUTION OF RECEIVABLES. On the Closing Date, Originator shall,
and hereby does, contribute to the capital of the Company, Pool Receivables and
Related Rights with respect thereto consisting of each Pool Receivable of
Originator that existed and was owing to Originator on the Closing Date,
beginning with the oldest of such Pool Receivables and continuing
chronologically thereafter, and all or an undivided interest in the most recent
of such contributed Pool Receivables such that the aggregate Outstanding Balance
of all such contributed Pool Receivables shall be equal to $30,000,000.
3.2. INITIAL PURCHASE PRICE PAYMENT. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to pay to Originator
the Purchase Price for the purchase of Pool Receivables to be made on the
Closing Date, partially in cash in the amount of the proceeds of the Purchase
made by the Purchaser on the Closing Date under the Receivables Purchase
Agreement, and partially by issuing a promissory note in the form of EXHIBIT B
to Originator with an initial principal balance equal to the remaining Purchase
Price (as such promissory note may be amended, supplemented, indorsed or
otherwise modified from time to time, together with all promissory notes issued
from time to time in substitution therefor or renewal thereof in accordance with
the Transaction Documents, being herein called the "COMPANY NOTE").
3.3. SUBSEQUENT PURCHASE PRICE PAYMENTS. On each Business Day falling
after the Closing Date and on or prior to the Purchase and Contribution
Termination Date, on the terms and subject to the conditions set forth in this
Agreement, the Company shall pay to Originator the Purchase Price for the Pool
Receivables sold by Originator to the Company on such Business Day in cash, to
the extent provided under SECTION 1.2 of the Receivables Purchase Agreement,
SECOND, to the extent any of such Purchase Price remains unpaid, the principal
amount outstanding under the Originator Note shall be reduced and deemed paid in
an amount equal to such remaining Purchase Price, until such outstanding
principal amount is reduced to zero, and THIRD, to the extent any portion of the
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Purchase Price remains unpaid such remaining portion of such Purchase Price
shall be paid by means of an automatic increase to the outstanding principal
amount of the Company Note.
Servicer shall make all appropriate record keeping entries with respect to
the Company Note or otherwise to reflect the foregoing payments and adjustments
pursuant to SECTION 3.4, and Servicer's books and records shall constitute
rebuttable presumptive evidence of the principal amount of and accrued interest
on the Company Note at any time. Furthermore, Servicer shall hold the Company
Note for the benefit of Originator, and all payments under the Company Note
shall be made to Originator. Originator hereby irrevocably authorizes Servicer
to xxxx the Company Note "CANCELLED" and to return the Company Note to the
Company upon the final payment thereof after the occurrence of the Purchase and
Contribution Termination Date.
3.4. SETTLEMENT AS TO SPECIFIC RECEIVABLES AND DILUTION.
(a) If on the day of purchase or contribution of any Pool Receivable from
Originator hereunder, any of the representations or warranties set forth in
SECTION 5.4 or 5.11 is not true with respect to such Pool Receivable or as a
result of any action or inaction of Originator, on any day any of the
representations or warranties set forth in SECTION 5.4 or 5.11 is no longer true
with respect to such a Pool Receivable, then the Purchase Price (or in the case
of a Contributed Receivable, the Outstanding Balance of such Pool Receivable
(the "CONTRIBUTED VALUE")) with respect to such Receivables shall be reduced by
an amount equal to the Outstanding Balance of such Pool Receivable and shall be
accounted to Originator as provided in SUBSECTION (c) below; PROVIDED, that if
the Company thereafter receives payment on account of Collections due with
respect to such Pool Receivable, the Company promptly shall deliver such funds
to Originator.
(b) If, on any day, the Outstanding Balance of any Pool Receivable
(including any Contributed Receivable) purchased (or contributed) hereunder is
reduced or adjusted as a result of any defective, rejected, or returned goods or
services, or any discount or other adjustment made by Originator, Company or
Servicer or any setoff or dispute between the Seller, Originator or the Servicer
and an Obligor as indicated on the books of the Company (or, for periods
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prior to the Closing Date, the books of Originator), then the Purchase Price
or the Contributed Value, as the case may be, with respect to such Pool
Receivable shall be reduced by the amount of such net reduction and shall be
accounted to Originator as provided in SUBSECTION (c) below.
(c) Any reduction in the Purchase Price (or Contributed Value) of any Pool
Receivable pursuant to SUBSECTION (a) or (b) above shall be applied as a credit
for the account of the Company against the Purchase Price of Pool Receivables
subsequently purchased by the Company from Originator hereunder; PROVIDED,
HOWEVER if there have been no purchases of Pool Receivables (or insufficiently
large purchases of Pool Receivables) to create a Purchase Price sufficient to so
apply such credit against, the amount of such credit
(i) shall be paid in cash to the Company by Originator in the manner
and for application as described in the following proviso, or
(ii) shall be deemed to be a payment under, and shall be deducted
from the principal amount outstanding under, the Company Note, to the
extent that such payment is permitted under CLAUSE (o) of EXHIBIT IV of the
Receivables Purchase Agreement;
PROVIDED, FURTHER, that at any time (y) when a Termination Event or Unmatured
Termination Event exists or (z) on or after the Purchase and Contribution
Termination Date, the amount of any such credit shall be paid by Originator to
the Company by deposit in immediately available funds into the Collection
Account for application by Servicer to the same extent as if Collections of the
applicable Pool Receivable in such amount had actually been received on such
date.
(d) Each Purchase Report (other than the Purchase Report delivered on the
Closing Date) shall include, in respect of the Pool Receivables previously
generated by Originator (including the Contributed Receivables), a calculation
of the aggregate reductions described in SUBSECTION (a) or (b) relating to such
Pool Receivables since the last Purchase Report delivered hereunder, as
indicated on the books of the Company (or, for such period prior to the Closing
Date, the books of Originator).
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3.5. RECONVEYANCE OF RECEIVABLES. In the event that Originator has paid
to the Company the full Outstanding Balance of any Pool Receivable pursuant to
SECTION 3.4, the Company shall reconvey such Pool Receivable to Originator,
without representation or warranty, but free and clear of all liens created by
the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial purchase
hereunder is subject to the condition precedent that the Company shall have
received, on or before the Closing Date, the following, each (unless otherwise
indicated) dated the Closing Date, and each in form, substance and date
satisfactory to the Company:
(a) A counterpart of this Agreement and the other Transaction Documents
duly executed by the parties hereto and thereto, together with each of the
closing documents required to be delivered under any Transaction Document;
(b) Certified copies of (i) the resolutions of the Board of Directors of
each of the Company and Originator authorizing the execution, delivery, and
performance by the Company and Originator of this Agreement and the other
Transaction Documents to which it is a party, (ii) all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and such other Transaction Documents and (iii) the
certificate of incorporation and by-laws of the Company and Originator;
(c) A certificate of the Secretary or Assistant Secretary of each of the
Company and Originator certifying the names and true signatures of the officers
of the Company and Originator authorized to sign this Agreement and the other
Transaction Documents to which it is a party. Until the Company and the
Servicer (if not the Originator) receives a subsequent incumbency certificate
from Originator, in form and substance satisfactory to the Company (and the
Servicer), the Company and the Servicer shall be entitled to rely on the last
such certificate delivered to it by Originator;
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(d) Copies of the proper financing statements (Form UCC-1) that have been
duly executed and name Originator as the assignor and the Company as the
assignee (and Purchaser as assignee of the Company) of the Pool Receivables
generated by Originator and Related Rights or other, similar instruments or
documents, as may be necessary or, in Servicer's or the Agent's opinion,
desirable under the UCC of all appropriate jurisdictions or any comparable law
of all appropriate jurisdictions to perfect the Company's ownership interest in
all Pool Receivables and Related Rights in which an ownership interest may be
assigned to it hereunder;
(e) Completed UCC requests for information, dated on or before the date of
such initial purchase, listing the financing statements referred to in
SUBSECTION (d) above and all other effective financing statements filed in the
jurisdictions referred to in SUBSECTION (d) above that name the Company or any
Originator as debtor, together with copies of such other financing statements
(none of which shall cover any Pool Receivables, Contracts or Related Security),
and similar search reports with respect to federal tax liens and liens of the
Pension Benefit Guaranty Corporation in such jurisdictions as the Servicer and
the Agent may request, showing no such liens on any of the Pool Receivables,
Contracts or Related Security;
(f) Favorable opinions of Xxxxx & Xxxxxx, special counsel to Originator,
in the form of EXHIBIT C;
(g) Evidence (i) of the execution and delivery by each of the parties
thereto of each of the other Transaction Documents to be executed and delivered
in connection herewith and (ii) that each of the conditions precedent to the
execution, delivery and effectiveness of such other Transaction Documents has
been satisfied to the Company's satisfaction; and
(h) A certificate from an officer of Originator to the effect that
Servicer and 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 POOL RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO
VANSTAR FINANCE CO. PURSUANT TO A PURCHASE AND CONTRIBUTION AGREEMENT, DATED AS
OF DECEMBER 20, 1996, BETWEEN VANSTAR FINANCE
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CO. AND VANSTAR CORPORATION; AND AN INTEREST IN THE POOL RECEIVABLES
DESCRIBED HEREIN HAS BEEN GRANTED TO POOLED ACCOUNTS RECEIVABLE CAPITAL
CORPORATION, PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF
DECEMBER 20, 1996, AMONG VANSTAR CORPORATION, VANSTAR FINANCE CO., POOLED
ACCOUNTS RECEIVABLE CAPITAL CORPORATION, AND XXXXXXX XXXXX SECURITIES, INC.,
AS AGENT."
4.2. CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. Originator, by
accepting the Purchase Price related to each purchase of Pool Receivables (and
Related Rights) shall be deemed to have certified that the representations and
warranties contained in ARTICLE V are true and correct on and as of such day,
with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, Originator, in its capacity as
seller under this Agreement, hereby makes the representations and warranties set
forth in this ARTICLE V.
5.1. ORGANIZATION, GOOD STANDING AND DUE QUALIFICATION. Originator is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and is duly qualified to do business, and is in
good standing, as a foreign corporation in every jurisdiction where the nature
of its business requires it to be so qualified and where the failure to so
qualify would be reasonably expected to have a Material Adverse Effect.
5.2. POWER AND AUTHORITY; DUE AUTHORIZATION. Originator has (a) all
necessary corporate power, authority and legal right (i) to execute and deliver,
and perform its obligations under, each Transaction Document to which it is a
party, as seller, and (ii) to generate, own, sell, contribute and assign Pool
Receivables and Related Rights on the terms and subject to the conditions herein
and therein provided; and (b) duly authorized such execution and delivery and
such sale, contribution and assignment and the performance of such obligations
by all necessary corporate action.
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5.3. VALID SALE OR CONTRIBUTION; BINDING OBLIGATIONS. Each sale or
contribution, as the case may be, of Pool Receivables and Related Rights made by
Originator pursuant to this Agreement shall constitute a valid sale or
contribution, as the case may be, transfer, and assignment thereof to the
Company, enforceable against creditors of, and purchasers from, Originator; and
this Agreement constitutes, and each other Transaction Document to be signed by
Originator, as seller, when duly executed and delivered, will constitute, a
legal, valid, and binding obligation of Originator, enforceable in accordance
with its terms; except in each case as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
5.4. NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which Originator is a
party as seller, 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)
Originator's certificate of incorporation or by-laws, or (ii) any indenture,
loan agreement, mortgage, deed of trust, or other agreement or instrument to
which it is a party or by which it is bound, (b) result in the creation or
imposition of any Adverse Claim upon any of its properties pursuant to the terms
of any such indenture, loan agreement, mortgage, deed of trust, or other
agreement or instrument, other than the Transaction Documents, or (c) violate
any law or any order, rule, or regulation applicable to it of any court or of
any federal, state or foreign regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over it or any of its
properties.
5.5. PROCEEDINGS. There is no litigation or, to Originator's knowledge,
any proceeding or investigation pending before any Governmental Authority (a)
asserting the invalidity of any Transaction Document to which Originator is a
party as seller, (b) seeking to prevent the sale or contribution of Pool
Receivables and Related Rights to the Company or the consummation of any of the
other transactions contemplated by any Transaction Document to which Originator
is a party as seller, or (c) seeking any determination or
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ruling that could reasonably be expected to have a Material Adverse Effect.
5.6. BULK SALES ACT. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
5.7. GOVERNMENT APPROVALS. Except for (x) 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
(y) in respect of enforceability against (1) a Federal Obligor, any filings
required under the Assignment of Claims Act and (2) a Local Government Obligor,
any filings required by any applicable state or local Governmental Authority no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for Originator's due
execution, delivery and performance of any Transaction Document to which it is a
party, as seller.
5.8. FINANCIAL CONDITION.
(a) On the date hereof, and on the date of each sale of Pool Receivables
by Originator to the Company (both before and after giving effect to such sale),
Originator shall be Solvent.
(b) The consolidated balance sheets of Originator and its consolidated
subsidiaries as at April 30, 1996, a copy of which has been furnished to the
Company, fairly presents the financial condition of Originator and its
subsidiaries, as at such date, the consolidated balance sheets of Originator and
its subsidiaries as at July 31, 1996, a copy of which has been delivered to the
Company, fairly presents the financial condition of Originator and its
subsidiaries as at such date, and since April 30, 1996 there has been no change
in the ability of Originator to perform its obligations under the Agreement or
the other Transaction Documents to which it is a party or the collectibility of
the Pool Receivables, or which affects the legality, validity or enforceability
of the Agreement or the other Transaction Documents which would be reasonably
expected to have a Material Adverse Effect.
5.9. QUALITY OF TITLE.
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(a) Each Pool Receivable (together with the Related Rights) which is to be
sold or contributed to the Company hereunder is or shall be owned by Originator,
free and clear of any Adverse Claim (other than any Permitted IBMCC Claim or any
Permitted Inventory Claim which, in either case, is automatically and
irrevocably released upon any transfer hereunder). Whenever the Company makes a
purchase, or accepts a contribution, hereunder, it shall have acquired a valid
and perfected ownership interest (free and clear of any Adverse Claim) in all
Pool Receivables generated by Originator and all Collections related thereto,
and in Originator's entire right, title and interest in and to the other Related
Rights with respect thereto.
(b) No effective financing statement or other instrument similar in effect
covering any Pool Receivable generated by Originator or any right related to any
such Pool Receivable is on file in any recording office except such as may be
filed in favor of the Company or Originator, as the case may be, in accordance
with this Agreement or in favor of the Purchaser in accordance with the
Receivables Purchase Agreement.
5.10. ACCURACY OF INFORMATION. Each report, information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished at any time by Originator to the Company, the Purchaser or the Agent
in connection with this Agreement or any Transaction Document is or will be
accurate in all material respects as of its date or (except as otherwise
disclosed at such time) as of the date so furnished, and no such item contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
5.11. OFFICES. Originator's principal place of business and chief
executive office is located at the address set forth under Originator's
signature hereto, and the offices where Originator keeps all its books, records
and documents evidencing the Pool Receivables, the related Contracts and all
other agreements related to such Pool Receivables are located at the addresses
specified on SCHEDULE 5.13 (or at such other locations, notified to Servicer (if
other than Originator) and the Agent in accordance with SECTION
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6.1(f), in jurisdictions where all action required by SECTION 7.3 has been
taken and completed).
5.12. TRADE NAMES. Except as disclosed on SCHEDULE 5.14, Originator 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, Originator has not been
known by any legal name other than its corporate name as of the date hereof, nor
has Originator been the subject of any merger or other corporate reorganization
except as disclosed on SCHEDULE 5.14.
5.13. TAXES. Originator has filed all tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes which are not yet delinquent or
are being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with generally accepted accounting
principles shall have been set aside on its books.
5.14. LICENSES AND LABOR CONTROVERSIES.
(a) Originator has not failed to obtain any licenses, permits, franchises
or other governmental authorizations necessary to the ownership of its
properties or to the conduct of its business, which violation or failure to
obtain would be reasonably expected to have a Material Adverse Effect; and
(b) There are no labor controversies pending against Originator that have
had (or are reasonably likely to have) a Material Adverse Effect.
5.15. COMPLIANCE WITH APPLICABLE LAWS. Originator is in compliance, in
all material respects, with the requirements of (i) all applicable laws, rules,
regulations, and orders of all governmental authorities (including, without
limitation, Regulation Z, laws, rules and regulations relating to usury, truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy and all other consumer
laws applicable to the Pool Receivables and related Contracts) (excluding with
respect to environmental matters which are covered by CLAUSE (ii)), and (ii) to
the best of its knowledge,
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all applicable environmental laws, rules, regulations and orders of all
governmental authorities.
5.16. RELIANCE ON SEPARATE LEGAL IDENTITY. Originator is aware that
Purchaser and the Agent are entering into the Transaction Documents to which
they are parties in reliance upon the Company's identity as a legal entity
separate from Originator.
5.17. PURCHASE PRICE. The purchase price payable by the Company to the
Originator hereunder is intended by the Originator and Company to be consistent
with the terms that would be obtained in an arm's length sale. The Servicer's
Fee payable to the Originator is intended to be consistent with terms that would
be obtained in an arm's length servicing arrangement.
ARTICLE VI
COVENANTS OF ORIGINATOR
6.1. AFFIRMATIVE COVENANTS. From the date hereof until the first day
following the Final Payout Date, Originator will, unless the Company and the
Agent shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in with all applicable laws, rules,
regulations and orders, including those with respect to the Pool Receivables
generated by it and the related Contracts and other agreements related thereto
except to the extent that the failure so to comply with such laws, rules,
regulations and orders would not be reasonably expected to have a Material
Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification could
reasonably be expected to have a Material Adverse Effect.
(c) RECEIVABLES REVIEW. (i) At any time and from time to time (but not
more than three audits during any calendar year during the
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term of this Agreement and so long as no Termination Event has occurred and
is continuing shall be paid for by Seller) during regular business hours,
upon reasonable prior notice, permit the Company and/or the Agent, or their
respective agents or representatives, (A) to examine, to audit and make
copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of Originator relating to the Pool Receivables and Related Rights,
including, without limitation, the Contracts and other agreements related
thereto, and (B) to visit Originator's offices and properties for the purpose
of examining such materials described in the foregoing CLAUSE (A) and
discussing matters relating to the Pool Receivables and Related Rights or
Originator's performance hereunder with any of the officers or employees of
Originator having knowledge of such matters; and (ii) without limiting the
provisions of CLAUSE (i) next above, from time to time on request of the
Agent, permit certified public accountants or other auditors acceptable to
the Agent to conduct a review of its books and records with respect to the
Pool Receivables and Related Rights.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain an ability to
recreate records evidencing the Pool Receivables in the event of the destruction
of the originals thereof.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. Originator
shall, at its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables, and timely and fully comply in all
material respects with the Credit and Collection Policy with regard to each Pool
Receivable and the related Contract except to the extent that all such failures
to comply therewith would not be reasonably expected to have a Material Adverse
Effect.
(f) LOCATION OF RECORDS. Keep its principal place of business and chief
executive office, and the offices where it keeps its records concerning or
related to Pool Receivables and Related Rights, at the address(es) referred to
in SCHEDULE 5.13 or, upon 60 days' prior written notice to the Company and the
Agent, at such other locations in jurisdictions where all action required by
SECTION 7.3 shall have been taken and completed.
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(g) SEPARATE CORPORATE EXISTENCE OF THE COMPANY. Take such actions as
shall be required in order that:
(i) the Company's operating expenses (other than certain
organization expenses and fees and expenses incurred in connection with
the preparation, negotiation and delivery of the Transaction Documents)
will not be paid by Originator;
(ii) the Company's books and records will be maintained separately
from those of Originator;
(iii) all financial statements of Originator that are consolidated to
include the Company will contain detailed notes clearly stating that (A)
all of the Company's assets are owned by the Company, and (B) the Company
is a separate entity with creditors who have received interests in the
Company's assets;
(iv) Originator will strictly observe corporate formalities in its
dealing with the Company;
(v) Originator shall not commingle its funds with any funds of the
Company;
(vi) Originator will maintain arm's length relationships with the
Company, and Originator will be compensated at market rates for any
services it renders or otherwise furnishes to the Company; and
(vii) Originator will not be, and will not hold itself out to be,
responsible for the debts of the Company or the decisions or actions in
respect of the daily business and affairs of the Company (other than with
respect to such decisions or actions of the Originator in its capacity as
Servicer).
(h) RECEIPT OF COLLECTIONS. Originator shall promptly remit to the
applicable post office box related to the Lock-Box Accounts (or cause to be
deposited directly to such Lock-Box Accounts) all Collections received by
Originator.
6.2. REPORTING REQUIREMENTS. From the date hereof until the first day
following the Purchase and Contribution Termination Date,
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Originator shall, unless the Agent and the Company shall otherwise consent in
writing, furnish to the Company and the Agent:
(a) PROCEEDINGS. Promptly after Originator has knowledge thereof, written
notice to the Company and the Agent of (a) litigation, investigation or
proceeding which may exist at any time Originator, on the one hand, and any
Governmental Authority which, if not cured or if adversely determined, as the
case may be, would be reasonably expected to have a Material Adverse Effect or,
(b) litigation or proceeding adversely affecting Originator in which the amount
involved is $100,000 or more and not covered by insurance or for which adequate
reserves are not maintained on the financial statements of such Person or the
consolidated balance sheet of Vanstar or in which injunctive or similar relief
is sought or (c) litigation or proceeding relating to any Transaction Document;
(b) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Pool Receivables, the Related
Rights or Originator's performance hereunder that the Company or the Agent may
from time to time reasonably request in order to protect the interests of the
Company, the Purchaser, the Agent or any other Affected Party under or as
contemplated by the Transaction Documents.
6.3. NEGATIVE COVENANTS. From the date hereof until the date following
the Final Payout Date, Originator agrees that, unless the Agent and the Company
shall otherwise consent in writing, it shall not:
(a) SALES, LIENS, ETC. Except as otherwise provided herein or in any
other Transaction Document, (i) 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, the Company Note (other than any Permitted IBMCC Claim), the
Originator Note, any Pool Receivable or related Contract, Collections or Related
Security, or any interest therein, or assign any right to receive income in
respect thereof, or (ii) create or suffer to exist any Adverse Claim (other than
any Permitted IBMCC Claim or Permitted Inventory Claim which, in either case, is
automatically and irrevocably released upon any transfer hereunder) upon or with
respect to any proceeds of its inventory.
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(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise permitted
in SECTION 4.2(a) of the Receivables Purchase Agreement or in accordance with
the Credit and Collection Policy, extend, amend or otherwise modify the terms of
any Pool Receivable in any material respect, or amend, modify or waive, in any
material respect, any term or condition of any Contract related thereto (which
term or condition relates to payments under, or the enforcement of, such
Contract).
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any material
change in the character of its business or in the Credit and Collection Policy
that would (i) adversely affect the collectibility of the Receivables Pool, (ii)
create a material defense to the payment of any Pool Receivable in the
Receivables Pool or (iii) adversely affect the credit criteria used in approving
customers that are potential Obligors of Product Business Receivables.
Originator shall not make any other change in the Credit and Collection Policy
without the prior written consent of the Agent if such change would be
reasonably expected to have a Material Adverse Effect.
(d) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES OR CHATTEL PAPER.
Take any action to cause or permit any Pool Receivable generated by it to become
evidenced by any "instrument" or "chattel paper" (as defined in the applicable
UCC) unless such "instrument" or "chattel paper" shall be delivered to the
Company (which in turn shall deliver the same to the Purchaser (or the Agent on
its behalf)).
(e) MERGERS, ACQUISITIONS, SALES, ETC. Merge or consolidate with another
Person (except pursuant to a merger or consolidation involving Originator where
Originator is the surviving corporation), or convey, transfer, lease or
otherwise dispose of (whether in one or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired), other
than pursuant to this Agreement.
(f) LOCK-BOX BANKS. Make any changes in its instructions to Obligors
regarding Collections or add or terminate any Lock-Box Bank unless the
requirements of CLAUSE (i) of EXHIBIT IV of the Receivables Purchase Agreement
have been met.
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(g) ACCOUNTING FOR PURCHASES. Account for or treat (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than as sales of the Pool Receivables and Related Security by Originator
to the Company.
(h) TRANSACTION DOCUMENTS. Enter into, execute, deliver or otherwise
become bound by any agreement, instrument, document or other arrangement that
restricts the right of Originator to amend, supplement, amend and restate or
otherwise modify, or to extend or renew, or to waive any right under, this
Agreement or any other Transaction Documents.
(i) USE OF PROCEEDS. Use any proceeds of any sale hereunder (x) in
connection with any hostile tender offer or (y) for any purpose that violates
any applicable law, rule or regulation, including, without limitation,
Regulations G or U of the Federal Reserve Board.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1. RIGHTS OF THE COMPANY. Originator hereby authorizes the Company and
the Servicer (if other than Originator) or their respective designees to take
any and all steps in Originator's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all Pool
Receivables and Related Rights, including, without limitation, endorsing
Originator's name on checks and other instruments representing Collections and
enforcing such Pool Receivables and the provisions of the related Contracts that
concern payment and/or enforcement of rights to payment.
7.2. RESPONSIBILITIES OF ORIGINATOR. Anything herein to the contrary
notwithstanding:
(a) Originator agrees to direct, and hereby grants to each of the Company
and the Agent (to the extent permitted in the Receivables Purchase Agreement)
the authority to direct, all Obligors to make payments of Pool Receivables
directly to a Lock-Box Account at a Lock-Box Bank. Originator further agrees to
transfer
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any Collections that it receives directly to Servicer (for deposit to such a
Lock-Box Account) within two Business Days of receipt thereof, and agrees
that all such Collections shall be deemed to be received in trust for the
Company.
(b) Originator shall perform its obligations hereunder, and the exercise
by the Company or its designee of its rights hereunder shall not relieve
Originator from such obligations.
(c) None of the Company, Servicer (if other than the Originator),
Purchaser or the Agent shall have any obligation or liability to any Obligor or
any other third Person with respect to any Pool Receivables, Contracts related
thereto or any other related agreements, nor shall the Company, Servicer (if
other than the Originator), Purchaser or the Agent be obligated to perform any
of the obligations of Originator thereunder.
(d) Originator hereby grants to Servicer (if other than Originator) an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of Originator all steps necessary or advisable to
indorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by Originator or transmitted or received by the Company
(whether or not from Originator) in connection with any Pool Receivable or
Related Right.
7.3. FURTHER ACTION EVIDENCING PURCHASES. Originator agrees that from
time to time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that the Company or
Servicer may reasonably request in order to perfect, protect or more fully
evidence the Pool Receivables (and the Related Rights) purchased by, or
contributed to, the Company hereunder, or to enable the Company to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, upon the request of the
Company, Originator will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
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(b) xxxx the summary master control data processing records with the
legend set forth in SECTION 4.1(i).
Originator hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Pool Receivables (and the Related Rights)
now existing or hereafter generated by Originator. If Originator fails to
perform any of its agreements or obligations under this Agreement, the Company
or its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Company or
its designee incurred in connection therewith shall be payable by 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 Originator shall, except as otherwise specified
by such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Company or the Agent, be applied FIRST, as a Collection of any
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
PURCHASE AND CONTRIBUTION TERMINATION EVENTS
8.1. PURCHASE AND CONTRIBUTION TERMINATION EVENTS. Each of the following
events or occurrences described in this SECTION 8.1 shall constitute a "PURCHASE
AND CONTRIBUTION TERMINATION EVENT":
(a) The Facility Termination Date (as defined in the Receivables Purchase
Agreement) shall have occurred; or
(b) Originator shall fail to make any payment or deposit to be made by it
hereunder when due and such failure shall remain unremedied for two Business
Days; or
(c) Any representation or warranty made or deemed to be made by Originator
(or any of its officers) under or in connection with this Agreement, any other
Transaction Document or any other
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information or report delivered pursuant hereto or thereto shall prove to
have been false or incorrect in any material respect when made or deemed
made; or
(d) Originator shall fail to perform or observe in any material respect
any agreement contained in any of SECTIONS 6.1(g) or 6.3; or
(e) Originator shall fail to perform or observe any other term, covenant
or agreement contained in this Agreement on its part to be performed or observed
and such failure shall remain unremedied for thirty (30) days after the earlier
of (x) the date on which Originator shall have knowledge thereof and (y) notice
thereof shall have been given by Servicer, the Agent or the Company to
Originator; or
(f) The Originator or any of its subsidiaries shall fail to pay any
principal of or premium or interest on any of its Debt which is outstanding in a
principal amount of at least $10,000,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the instrument, mortgage,
indenture or other agreement relating to such Debt; or any other event shall
occur or condition shall exist under any instrument, mortgage, indenture or
other agreement relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such instrument, mortgage,
indenture or other agreement, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid,
redeemed, purchased or defeased, or an offer to repay, redeem, purchase or
defease such Debt shall be required to be made in each case prior to the stated
maturity thereof (other than by a regularly scheduled required payment or in
connection with sales of assets or the issuance of Debt or other securities, if
the instrument, mortgage, indenture or other agreement relative to such Debt
requires the prepayment, redemption, purchase or defeasance of such Debt in
connection with such sale or issuance and the proceeds from such sale or
issuance are used to prepay, redeem, purchase or defease such Debt in accordance
with its terms); or
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(g) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6373 of the Internal Revenue Code with regard to any of assets of
Originator and such lien shall not have been released within ten Business Days,
or the Pension Benefit Guaranty Corporation shall, or shall indicate its
intention to, file notice of a lien pursuant to Section 4068 of ERISA with
regard to any of the assets of the Originator; or
(h) A Termination Event under the Receivables Purchase Agreement shall
have occurred.
8.2. REMEDIES.
(i) OPTIONAL TERMINATION. Upon the occurrence of a Purchase and
Contribution Termination Event, the Company (and not Servicer) shall have
the option by notice to Originator (with a copy to the Agent) to declare
the Purchase and Contribution Termination Date to have occurred.
(ii) REMEDIES CUMULATIVE. Upon any termination of the Facility
pursuant to this SECTION 8.2, the Company shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction
and other applicable laws, which rights shall be cumulative. Without
limiting the foregoing, the occurrence of the Purchase and Contribution
Termination Date shall not deny the Company any remedy in addition to
termination of the Purchase Facility to which the Company may be otherwise
appropriately entitled, whether at law or equity.
ARTICLE IX
INDEMNIFICATION
9.1. INDEMNITIES BY ORIGINATOR. Without limiting any other rights which
the Company may have hereunder or under applicable law, Originator hereby agrees
to indemnify the Company and each of its assigns, officers, directors, employees
and agents (each of the foregoing Persons being individually called a "PCA
INDEMNIFIED PARTY"), forthwith on demand, from and against any and all damages,
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losses, claims, judgments, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively called "PURCHASE AND CONTRIBUTION INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of the
following:
(a) the transfer by Originator of an interest in any Pool Receivable or
Related Right to any Person other than the Company;
(b) the breach of any representation or warranty made by Originator under
or in connection with this Agreement or any other Transaction Document, or any
information or report delivered by Originator pursuant hereto or thereto which
shall have been false or incorrect in any material respect when made or deemed
made;
(c) the failure by Originator to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related Contract, or the
nonconformity of any Pool Receivable or the related Contract with any such
applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an ownership
interest in the Pool Receivables generated by Originator and Related Rights free
and clear of any Adverse Claim, other than an Adverse Claim arising solely as a
result of an act of the Company, whether existing at the time of the purchase or
contribution of such Pool Receivables or at any time thereafter;
(e) the failure of Originator to file with respect to itself, or any delay
by Originator in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other applicable laws
with respect to any Pool Receivables or purported Pool Receivables generated by
Originator or Related Rights, whether at the time of any purchase or
contribution or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Pool Receivable or purported
Pool Receivable generated by Originator (including, without limitation, a
defense based on such Pool 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
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goods or services related to any such Pool Receivable or the furnishing of or
failure to furnish such goods or services;
(g) any product liability claim arising out of or in connection with goods
or services that are the subject of any Pool Receivable;
(h) any litigation, proceeding or investigation against Originator;
(i) any tax or governmental fee or charge (other than any tax excluded
pursuant to the proviso below), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same, which may
arise by reason of the purchase, contribution or ownership of the Pool
Receivables or any Related Right connected with any such Pool Receivables; and
(j) any failure of Originator, individually or as Servicer, to perform its
duties or obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
EXCLUDING, HOWEVER, (i) Purchase and Contribution Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of a
PCA Indemnified Party, (ii) any indemnification which has the effect of recourse
for non-payment of the Pool Receivables due to credit reasons to Originator
(except as otherwise specifically provided under this SECTION 9.1) and (iii) any
tax based upon or measured by net income or gross receipts.
If for any reason the indemnification provided above in this SECTION 9.1 is
unavailable to a PCA Indemnified Party or is insufficient to hold such PCA
Indemnified Party harmless, then Originator shall contribute to the amount paid
or payable by such PCA Indemnified Party as a result of such loss, claim, damage
or liability to the maximum extent permitted under applicable law.
ARTICLE X
MISCELLANEOUS
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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 Originator, the Company, the Servicer (if other than Originator)
and the Agent; PROVIDED, HOWEVER, that no material amendment of this Agreement
shall be effective unless the Purchaser (or the Agent on its behalf) shall have
received written confirmation by the Rating Agencies that such amendment shall
not cause the rating on the then outstanding Notes to be downgraded or
withdrawn.
(b) No failure or delay on the part of the Company, Servicer, Originator
or any third party beneficiary in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on the Company,
Servicer, or Originator in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Company or
Servicer under this Agreement shall, except as may otherwise be stated in such
waiver or approval, be applicable to subsequent transactions. No waiver or
approval under this Agreement shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
10.2. NOTICES, ETC. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, (i) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (ii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
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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 Company, Originator and its respective
successors and permitted assigns. Originator may not assign its rights
hereunder or any interest herein without the prior consent of the Company and
the Agent which consent is hereby given with respect to the assignment by
Vanstar to IBMCC of certain rights to the extent permitted by the Intercreditor
Agreement. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the date after the Purchase and Contribution
Termination Date on which Originator has received payment in full for all Pool
Receivables and Related Rights purchased pursuant to SECTION 1.1 hereof. The
rights and remedies with respect to any breach of any representation and
warranty made by Originator pursuant to ARTICLE V and the indemnification and
payment provisions of ARTICLE IX and SECTION 10.6 shall be continuing and shall
survive any termination of this Agreement.
10.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE INTERESTS OF PURCHASER IN THE POOL
RECEIVABLES, OR REMEDIES HEREUNDER IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
10.6. COSTS, EXPENSES AND TAXES. In addition to the obligations of
Originator under ARTICLE IX, Originator agrees to pay on demand:
(a) all reasonable costs and expenses in connection with the enforcement
of this Agreement and the other Transaction Documents; and
(b) all stamp and other similar taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents, and agrees to indemnify each PCA
Indemnified Party
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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 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 NONAPPEALABLE FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST 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.
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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, Originator
expressly acknowledges and agrees that all of the Company's rights, title, and
interests in, to, and under this Agreement shall be assigned by the Company to
the Purchaser pursuant to the Receivables Purchase Agreement, and Originator
consents to such assignment. Each of the parties hereto acknowledges and agrees
that the Agent and the Purchaser are third party beneficiaries of the rights of
the Company arising hereunder and under the other Transaction Documents to which
Originator is a party.
Section 10.12. NO PROCEEDINGS. Each of the Originator and the Company
hereby covenants and agrees that it will not institute against, or join any
other Person in instituting against, any Note Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the latest maturing Note issued by any such Note Issuer is
paid in full.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
VANSTAR FINANCE CO.
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Treasurer
Address:
Attention:
-------------------------------
Telephone:
Facsimile:
VANSTAR CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Treasurer
Address:
Attention:
-------------------------------
Telephone:
Facsimile:
Acknowledged and consented by:
VANSTAR CORPORATION, as Servicer
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
------------------------------
Title: Treasurer
-----------------------------
Address:
Attention:
-------------------------
Telephone:
Facsimile:
SCHEDULE 5.13
OFFICE LOCATIONS
SCHEDULE 5.14
TRADE NAMES
EXHIBIT A
FORM OF PURCHASE REPORT
EXHIBIT B
FORM OF COMPANY NOTE
EXHIBIT C
FORM OF OPINION OF ORIGINATOR'S COUNSEL
EXHIBIT D
FORM OF ORIGINATOR NOTE
DEMAND NOTE
Chicago, Illinois
___________, 1995
The undersigned, [NAME OF ORIGINATOR], a ____________ corporation (the
"ORIGINATOR"), for value received, promises to pay to the order of Vanstar
Finance Co., a Delaware corporation (the "COMPANY"), ON DEMAND, the aggregate
unpaid principal amount of all loans made by the Company to the Originator (the
"ORIGINATOR LOANS") together with accrued interest on such amounts from time to
time outstanding hereunder at the rate provided below. Such amounts as shown in
the records of the Servicer (as such term is defined in the Purchase and
Contribution Agreement referred to below) will be rebuttable presumptive
evidence of the principal amount owing under this Demand Note.
The unpaid principal amount of each Originator Loan from time to time
outstanding shall bear interest (which also shall be payable ON DEMAND) from
(and including) the date on which such Originator Loan was made to (but
excluding) the date on which such Originator Loan is paid in full (a) prior to
the final payment in full and in cash of the Senior Interests (as such term is
defined in the Company Note), at a variable rate PER ANNUM equal to the Discount
Rate Percentage, determined as of the then most recent Payment Date, and (b)
after such final payment, at a variable rate PER ANNUM equal to the Base Rate,
as determined by the Servicer. Interest hereunder shall be computed for the
actual number of days elapsed on the basis of a year consisting of 365 or, where
appropriate, 366 days.
This Demand Note is an Originator Note described in, and is subject to the
terms and conditions set forth in, that certain Purchase and Contribution
Agreement, dated as of December 20, 1996 (as the same may at any time be
amended, supplemented, or otherwise modified from time to time in accordance
with its terms, the "PURCHASE AND CONTRIBUTION AGREEMENT"), between the
Originator, the Servicer, and the Company. Reference is hereby made to the
Purchase and Contribution Agreement for a statement of certain other rights and
obligations of the Company. All capitalized terms used but not otherwise
defined herein have the meanings assigned thereto in the Purchase and
Contribution Agreement.
All payments of principal and interest hereunder are to be made in lawful
money of the United States of America in same day funds to the account
designated from time to time by the Servicer to the Company.
In addition to and not in limitation of the foregoing, the Originator
further agrees, subject to any limitation imposed by applicable law, to pay all
expenses, including without limitation reasonable Attorney Costs, incurred by
the holder of this Demand Note in seeking to collect any amounts payable
hereunder which are not paid when due.
No failure or delay on the part of the Company or any other holder of this
Demand Note 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 Originator shall entitle it to
any notice or demand in similar or other circumstances. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Demand Note shall in any event be effective unless (i) the same shall be in
writing and signed and delivered by the holder hereof and (ii) all consents
required for such action under the Transaction Documents shall have been given
by the appropriate Persons.
Upon the occurrence of any Insolvency Proceeding with respect to the
Originator, the principal balance hereof and all interest accrued hereon shall
be immediately due and payable, without demand, presentment, protest or notice
of dishonor.
Notwithstanding anything in this Demand Note to the contrary, the
Originator shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law.
THIS DEMAND NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF).
[NAME OF ORIGINATOR]
By:
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Title:
-------------------------------
