Exhibit 10.1
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RECEIVABLES SALE AGREEMENT
DATED AS OF APRIL 9, 2002
AMONG
XXXXXXXX CORPORATION,
AS SOLE INITIAL ORIGINATOR
AND
XXXXXXXX FUNDING CORPORATION,
AS BUYER
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TABLE OF CONTENTS
PAGE
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ARTICLE I. AMOUNTS AND TERMS...................................... 2
Section 1.1 Purchase of Receivables........................... 2
Section 1.2 Payment for the Purchases......................... 3
Section 1.3 Purchase Price Credit Adjustments................. 5
Section 1.4 Payments and Computations, Etc.................... 5
Section 1.5 Transfer of Records............................... 5
Section 1.6 Characterization.................................. 6
ARTICLE II. REPRESENTATIONS AND WARRANTIES........................ 7
Section 2.1 Representations and Warranties of Originators..... 7
ARTICLE III. CONDITIONS OF PURCHASE............................... 11
Section 3.1 Conditions Precedent to Initial Purchase.......... 11
Section 3.2 Conditions Precedent to Subsequent Payments....... 11
Section 3.3 Reaffirmation of Representations and Warranties... 12
ARTICLE IV. COVENANTS............................................. 12
Section 4.1 Affirmative Covenants of Originators.............. 12
Section 4.2 Negative Covenants of Originators................. 17
ARTICLE V. TERMINATION EVENTS..................................... 18
Section 5.1 Termination Events................................ 18
Section 5.2 Remedies.......................................... 20
ARTICLE VI. INDEMNIFICATION....................................... 21
Section 6.1 Indemnities by Originators........................ 21
Section 6.2 Other Costs and Expenses.......................... 23
ARTICLE VII. MISCELLANEOUS........................................ 23
Section 7.1 Waivers and Amendments............................ 23
Section 7.2 Notices........................................... 24
Section 7.3 Joinder and Termination of Originators............ 24
Section 7.4 Protection of Ownership Interests of Buyer........ 25
Section 7.5 Confidentiality................................... 25
Section 7.6 Bankruptcy Petition............................... 27
Section 7.7 CHOICE OF LAW..................................... 27
Section 7.8 CONSENT TO JURISDICTION........................... 27
Section 7.9 WAIVER OF JURY TRIAL.............................. 27
Section 7.10 Integration; Binding Effect; Survival of Terms.... 28
Section 7.11 Counterparts; Severability; Section References.... 28
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EXHIBITS AND SCHEDULES
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(Exhibits and Schedules to this loan agreement are not included in this
filing.)
Exhibit I Definitions
Exhibit II Principal Places of Business; Locations of Records; Federal
Employer Identification Numbers; Organizational Identification
Numbers; Other Names
Exhibit III Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV Form of Compliance Certificate
Exhibit V Credit and Collection Policy of each Originator
Exhibit VI Form of Subordinated Note
Exhibit VII Form of Performance Undertaking
Exhibit VIII Form of Joinder Agreement
Exhibit IX Form of Termination Agreement
Schedule A List of Documents to Be Delivered to Buyer Prior to the
Initial Purchase
Schedule B List of Excluded Receivables
RECEIVABLES SALE AGREEMENT
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THIS RECEIVABLES SALE AGREEMENT, dated as of April 9, 2002, is by and among
Xxxxxxxx Corporation, an Iowa corporation ("Meredith"), (the foregoing,
together with each Subsidiary of Meredith that hereafter executes a Joinder
Agreement, an "Originator" and collectively, the "Originators"), and Xxxxxxxx
Funding Corporation, a Delaware corporation ("Buyer"). Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in Exhibit I hereto (or, if not defined in
Exhibit I hereto, the meanings assigned to such terms in Exhibit I to the
Purchase Agreement hereinafter defined).
PRELIMINARY STATEMENTS
Each of the Originators now owns, and from time to time hereafter will own,
Receivables. Each of the Originators wishes to sell and assign to Buyer, and
Buyer wishes to purchase from such Originator, all of such Originator's right,
title and interest in and to its Receivables, together with the Related
Security and Collections with respect thereto.
Each of the Originators and Buyer intends the transactions contemplated hereby
to be true sales of the Receivables from such Originator to Buyer, providing
Buyer with the full benefits of ownership of the Receivables originated by such
Originator, and none of the Originators or Buyer intends these transactions to
be, or for any purpose to be characterized as, loans from Buyer to an
Originator.
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Buyer will sell undivided interests in the Receivables and in the associated
Related Security and Collections pursuant to that certain Receivables Purchase
Agreement dated as of April 9, 2002 (as the same may from time to time
hereafter be amended, supplemented, restated or otherwise modified, the
"Purchase Agreement") among Buyer, Xxxxxxxx, as initial Servicer, Falcon Asset
Securitization Corporation ("Conduit"), the financial institutions from time to
time party thereto as "Financial Institutions" and Bank One, NA (Main Office
Chicago) or any successor agent appointed pursuant to the terms of the Purchase
Agreement, as agent for Conduit and such Financial Institutions (in such
capacity, the "Agent").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
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AMOUNTS AND TERMS
Purchase of Receivables.
(a) In consideration for the Purchase Price and upon the terms and
subject to the conditions set forth herein, (i) effective on its Closing Date,
each Originator does hereby sell, assign, transfer, set-over and otherwise
convey to Buyer, without recourse (except to the extent expressly provided
herein), and Buyer does hereby purchase from each Originator, all of such
Originator's right, title and interest in and to all Receivables originated by
it and existing as of the close of business on the Business Day immediately
prior to its Closing Date, together, in each case, with all Related Security
relating thereto and all Collections thereof and (ii) from and after its
Closing Date, each Originator hereby agrees to sell, assign, transfer, set-over
and otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer hereby agrees to purchase from each Originator, all
of such Originator's right, title and interest in and to all Receivables
originated by it from and after its Closing Date, together, in each case, with
all Related Security relating thereto and all Collections thereof. In
accordance with the preceding sentence, Buyer shall acquire all of each
Originator's right, title and interest in and to all Receivables originated by
it and existing as of the close of business on the Business Day immediately
prior to its Closing Date and thereafter arising through and including its
Termination Date, together with all Related Security relating thereto and all
Collections thereof, and Buyer shall be obligated to pay the Purchase Price for
each Receivable, its Related Security and Collections in accordance with
Section 1.2. In connection with the payment of the Purchase Price for any
Receivables purchased hereunder, Buyer may request that the applicable
Originator deliver, and such Originator shall deliver, such opinions or
documents as Buyer may reasonably request in accordance with Section 3.2.
(b) It is the intention of the parties hereto that each Purchase of
Receivables made hereunder shall constitute a sale of "accounts" or "payment
intangibles" (as each such term is used in Article 9 of the UCC), which sale is
absolute and irrevocable and provides Buyer with the full benefits of ownership
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of the Receivables. Except for the Purchase Price Credits owed pursuant to
Section 1.3, the sales of Receivables hereunder are made without recourse to
the Originators; provided, however, that (i) each Originator shall be liable to
Buyer for all representations, warranties and covenants made by such Originator
pursuant to the terms of the Transaction Documents to which such Originator is
a party, and (ii) such sales do not constitute and are not intended to result
in an assumption by Buyer or any assignee thereof of any obligation of the
applicable Originator or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any other
obligations of such Originator. In view of the intention of the parties hereto
that each Purchase of Receivables made hereunder shall constitute a sale of
such Receivables rather than loans secured thereby, each Originator agrees that
it will, on or prior to its Closing Date and in accordance with Section
4.1(e)(ii), xxxx its master data processing records relating to the Receivables
with a legend acceptable to Buyer and to the Agent (as Buyer's assignee),
evidencing that Buyer has purchased such Receivables as provided in this
Agreement; provided that Xxxxxxxx shall have 30 days from the date hereof to
xxxx the data processing records related to Receivables arising from the sale
of advertising on television stations, and agrees to note in its financial
statements that its Receivables have been sold to Buyer. Upon the request of
Buyer or the Agent (as Buyer's assignee), each Originator will 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 to perfect and maintain the perfection of Buyer's ownership
interest in the Receivables originated by such Originator and the Related
Security and Collections with respect thereto, or as Buyer or the Agent (as
Buyer's assignee) may reasonably request.
Section 1.2 Payment for the Purchases.
(a) The Purchase Price for the Purchase of Receivables originated by each
Originator that are in existence on the close of business on the Business Day
immediately preceding its Closing Date (the "Initial Cutoff Date") shall be
payable in full by Buyer to such Originator on its Closing Date, and shall be
paid to such Originator in the following manner:
(i) by delivery of immediately available funds, to the extent of
funds made available to Buyer in connection with its subsequent sale of an
interest in such Receivables to the Purchasers under the Purchase
Agreement; provided that a portion of such funds shall be offset by
amounts owed by Xxxxxxxx to Buyer on account of the issuance of equity
having a total value of not less than the Required Capital Amount, and
(ii) the balance, by delivery of the proceeds of a subordinated
revolving loan from such Originator to Buyer (a "Subordinated Loan") in an
amount not to exceed the least of (A) the remaining unpaid portion of such
Purchase Price and (B) the maximum Subordinated Loan that could be
borrowed without rendering Buyer's Net Worth less than the Required
Capital Amount.
Each Receivable coming into existence after the Initial Cutoff Date shall be
sold to the Buyer on the Business Day occurring immediately after the day such
Receivable is originated and the Purchase Price for such Receivable shall be
due and owing in full by Buyer to the applicable Originator on such Business
Day (except that Buyer may, with respect to any such Purchase Price, offset
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against such Purchase Price any amounts owed by such Originator to Buyer
hereunder and which have become due but remain unpaid) and shall be paid to
such Originator in the manner provided in the following paragraphs (b), (c) and
(d).
(b) With respect to any Receivables sold hereunder after the Initial
Cutoff Date, on the first Business Day after such Receivable is originated,
such Receivable shall be sold to Buyer, and on such date of purchase, Buyer
shall pay the Purchase Price therefor to the applicable Originator in the
following manner:
- first, by delivery of immediately available funds, to the extent of
funds available to Buyer from its subsequent sale of an interest in the
Receivables to the Agent for the benefit of the Purchasers under the
Purchase Agreement, or other cash on hand; and/or
- second, by delivery of the proceeds of a Subordinated Loan, provided
that the making of any such Subordinated Loan shall be subject to the
provisions set forth in Section 1.2(a)(ii); and/or
- third, solely in the case of Receivables originated by Xxxxxxxx, by
accepting such Receivables as a contribution to Buyer's capital; provided
that no such capital contribution shall be made from and after the date on
which Xxxxxxxx notifies Buyer in writing that it has designated a date as
Meredith's Termination Date.
Subject to the limitations set forth in Section 1.2(a)(ii), each Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to such Originator's Termination Date. The Subordinated Loans shall be
evidenced by, and shall be payable in accordance with the terms and provisions
of such Originator's Subordinated Note and shall be payable solely from funds
which Buyer is not required under the Purchase Agreement to set aside for the
benefit of, or otherwise pay over to, the Agent or the Purchasers. Such
Originator is hereby authorized by Buyer to endorse on the schedule attached to
its Subordinated Note an appropriate notation evidencing the date and amount of
each advance thereunder, as well as the date of each payment with respect
thereto, provided that the failure to make such notation shall not affect any
obligation of the Buyer thereunder.
(c) From and after its Termination Date, each Originator shall not be
obligated to (but may, at its option) sell its Receivables to Buyer unless such
Originator reasonably determines that the Purchase Price therefor will be
satisfied with funds available to Buyer from sales of interests in the
Receivables pursuant to the Purchase Agreement, Collections, proceeds of
Subordinated Loans, other cash on hand or otherwise.
(d) Although the Purchase Price for each Receivable coming into existence
after the Initial Cutoff Date shall be paid in full by Buyer to the applicable
Originator on the date such Receivable is purchased, a precise reconciliation
of the Purchase Price between Buyer and such Originator shall be effected on a
monthly basis on Settlement Dates with respect to all Receivables sold during
the same Calculation Period most recently ended prior to such Settlement Date
and based on the information contained in the Monthly Report delivered by the
Servicer pursuant to Article VIII of the Purchase Agreement for such
Calculation Period. Although such reconciliation shall be effected on
Settlement Dates, increases or decreases in the amount owing under the
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applicable Subordinated Note made pursuant to Section 1.2(b) and any
contribution of capital by Xxxxxxxx to Buyer made pursuant to Section 1.2(b)
shall be deemed to have occurred and shall be effective as of the date that the
Purchase Price is paid. On each Settlement Date, each Originator shall
determine the net increase or the net reduction in the outstanding principal
amount of its Subordinated Note occuring during the immediately preceding
Calculation Period and shall account for such net increase or net reduction in
its books and records. Each Originator hereby agrees that within three (3)
Business Days after the Buyer so requests, such Originator will provide the
Buyer with a current report of daily sales giving rise to Receivables purchased
hereunder and a current daily report of Collections received.
(e) Each contribution of a Receivable by Xxxxxxxx to Buyer shall be
deemed to be a Purchase of such Receivable by the Buyer for all purposes of
this Agreement. Buyer hereby acknowledges that Xxxxxxxx shall have no
obligations to make further capital contributions to Buyer, in respect of
Meredith's equity interest in the Buyer or otherwise, in order to provide funds
to pay the Purchase Price to Xxxxxxxx under this Agreement or for any other
reason.
Section 1.3 Purchase Price Credit Adjustments.
If on any day, an Originator is deemed to have received a Deemed Collection
with respect to any Receivable sold by it to Buyer hereunder, then, in such
event, Buyer shall be entitled to a credit (each, a "Purchase Price Credit")
against the Purchase Price otherwise payable to such Originator hereunder in an
amount equal to such Deemed Collection. If such Purchase Price Credit exceeds
the Purchase Price for the Receivables sold on such day, then the applicable
Originator shall pay the remaining amount of such Purchase Price Credit in cash
within 5 Business Days thereafter; provided that if such Originator's
Termination Date has not occurred, such Originator shall be allowed to deduct
the remaining amount of such Purchase Price Credit from any indebtedness owed
to it under its Subordinated Note to the extent permitted thereunder.
Section 1.4 Payments and Computations, Etc.
All amounts to be paid or deposited by Buyer hereunder shall be paid or
deposited in accordance with the terms hereof on the day when due in
immediately available funds to the account of the applicable Originator
designated from time to time by such Originator or as otherwise directed by
such Originator. In the event that any payment owed by any Person hereunder
becomes due on a day that is not a Business Day, then such payment shall be
made on the next succeeding Business Day. If any Person fails to pay any
amount hereunder when due, such Person agrees to pay, on demand, the Default
Fee in respect thereof until paid in full; provided, however, that such Default
Fee shall not at any time exceed the maximum rate permitted by applicable law.
Section 1.5 Transfer of Records.
(a) In connection with each Purchase of a Receivable from an Originator
hereunder, such Originator hereby sells, transfers, assigns and otherwise
conveys to Buyer all of such Originator's right and title to and interest in
the Records relating to such Receivable without the need for any further
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documentation in connection with such Purchase. In connection with such
transfer, such Originator hereby grants to each of Buyer, the Agent and the
Servicer an irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all software used by such Originator to account for the
Receivables originated or serviced by such Originator, to the extent necessary
to administer such Receivables, whether such software is owned by such
Originator or is owned by others and used by such Originator under license
agreements with respect thereto, provided that should the consent of any
licensor of such software be required for the grant of the license described
herein, to be effective, such Originator hereby agrees that upon the request of
Buyer (or Buyer's assignee), such Originator will use its reasonable efforts to
obtain the consent of such third-party licensor. The license granted hereby
shall be irrevocable until the indefeasible payment in full of the Aggregate
Unpaids, and shall terminate on the date this Agreement terminates in
accordance with its terms.
(b) Each Originator (i) shall take such action requested by Buyer and/or
the Agent (as Buyer's assignee), from time to time hereafter, that may be
necessary or appropriate to ensure that Buyer and its assigns under the
Purchase Agreement have an enforceable ownership interest in the Records
relating to the Receivables purchased from such Originator hereunder, and (ii)
shall, at the request of Buyer and/or the Agent (as Buyer's assignee) use its
reasonable efforts to ensure that Buyer, the Agent and the Servicer each has an
enforceable right (whether by license or sublicense or otherwise) to use all of
the computer software used to account for such Receivables and/or to recreate
such Records.
Section 1.6 Characterization.
If, notwithstanding the intention of the parties expressed in Section 1.1(b),
any sale or contribution by an Originator to Buyer of Receivables hereunder
shall be characterized as a secured loan and not a sale, or such sale shall for
any reason be ineffective or unenforceable, then this Agreement shall be deemed
to constitute a security agreement under the UCC and other applicable law. For
this purpose and without being in derogation of the parties' intention that
each sale of Receivables hereunder shall constitute a true sale thereof, each
Originator hereby grants to Buyer a valid and perfected security interest in
all of such Originator's right, title and interest, now owned or hereafter
acquired, in, to and under all Receivables now existing and hereafter arising,
and in all Collections and Related Security with respect thereto, each Lock-Box
and Collection Account, all other rights and payments relating to the
Receivables and all proceeds of the foregoing to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the Purchase
Price of the Receivables originated by such Originator together with all other
obligations of such Originator hereunder, which security interest shall be
prior to all other Adverse Claims thereto. Buyer and its assigns shall have,
in addition to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other applicable law, which rights and remedies shall be
cumulative. Each Originator hereby authorizes Buyer (or any of its assigns),
within the meaning of Section 9-509 of any applicable enactment of the UCC, as
secured party, to file, without the signature of the debtor, the UCC financing
statements contemplated hereby.
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(b) Each Originator acknowledges that Buyer, pursuant to the Purchase
Agreement, shall assign to the Agent, for the benefit of the Agent and the
Purchasers thereunder, all of its rights, remedies, powers and privileges under
this Agreement and that the Agent may further assign such rights, remedies,
powers and privileges to the extent permitted in the Purchase Agreement. Each
Originator agrees that the Agent, as the assignee of the Seller, shall, subject
to the terms of the Purchase Agreement, have the right to enforce this
Agreement and to exercise directly all of Buyer's rights and remedies under
this Agreement (including, without limitation, the right to give or withhold
any consents or approvals of Buyer to be given or withheld hereunder, and, in
any case, without regard to whether specific reference is made to Buyer's
assigns in the provisions of this Agreement which set forth such rights and
remedies) and each Originator agrees to cooperate fully with the Agent and the
Purchasers in the exercise of such rights and remedies. Each Originator
further agrees to give to the Agent copies of all notices it is required to
give to Buyer hereunder.
ARTICLE II.
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REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originators.
Each Originator hereby represents and warrants to Buyer, as to such Originator
and the Receivables originated by it, that, as of the date of each Purchase:
(a) Corporate Existence and Power. Such Originator is a corporation duly
organized, validly existing and in good standing under the laws of the state
mentioned after its name in the preamble to this Agreement, and is duly
qualified to do business and is in good standing as a foreign corporation, and
has and holds all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in
each jurisdiction in which its business is conducted except where the failure
to so qualify or so hold could not reasonably be expected to have a Material
Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. The
execution and delivery by such Originator of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and such Originator's use of the proceeds
of each Purchase made from it hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary corporate action on
its part. This Agreement and each other Transaction Document to which such
Originator is a party has been duly executed and delivered by such Originator.
(c) No Conflict; No Bulk Sale. The execution and delivery by such
Originator of this Agreement and each other Transaction Document to which it is
a party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws or any shareholder agreements, voting trusts, and similar arrangements
applicable to any of its authorized shares, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
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bound, or (iv) any order, writ, judgment, award, injunction or decree binding
on or affecting it or its property, and do not result in the creation or
imposition of any Adverse Claim on assets of such Originator or its
Subsidiaries (except as created hereunder) except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect. No transaction contemplated hereby with respect to such
Originator requires compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Originator of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. Except as disclosed in Meredith's reports on SEC
Form 10-K or 10-Q, there are no actions, suits or proceedings pending, or to
the best of such Originator's knowledge, threatened, against or affecting such
Originator, or any of its properties, in or before any court, arbitrator or
other body, that could reasonably be expected to have a Material Adverse
Effect. Such Originator is not in default with respect to any order of any
court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction Document
to which such Originator is a party constitute the legal, valid and binding
obligations of such Originator enforceable against such Originator in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by
such Originator or any of its Affiliates to Buyer (or its assigns) for purposes
of or in connection with this Agreement, any of the other Transaction Documents
or any transaction contemplated hereby or thereby is, and all such information
hereafter furnished by such Originator or any of its Affiliates to Buyer (or
its assigns) will be, true and accurate in every material respect on the date
such information is stated or certified and will not, on the date such
information is stated or certified, be otherwise misleading in light of the
circumstances under which such information is so furnished.
(h) Use of Proceeds. No proceeds of any Purchase from such Originator
hereunder will be used (i) for a purpose that violates, or would be
inconsistent with, Regulation T, U or X promulgated by the Board of Governors
of the Federal Reserve System from time to time or (ii) to acquire any security
in any transaction (other than any repurchase by Xxxxxxxx of any class of its
own stock) which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) Good Title. Immediately prior to each Purchase from such Originator
hereunder, such Originator (i) is the legal and beneficial owner of the
Receivables which are to be the subject of such Purchase and (ii) is the legal
and beneficial owner of the Related Security with respect thereto or possesses
a valid and perfected security interest therein, in each case, free and clear
of any Adverse Claim, except as created by the Transaction Documents.
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(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to transfer to Buyer
(and Buyer shall acquire from such Originator) (i) legal and equitable title
to, with the right to sell and encumber each Receivable originated by such
Originator, whether now existing or hereafter arising, together with the
Collections with respect thereto, and (ii) all of such Originator's right,
title and interest in the Related Security associated with each such
Receivable, in each case, free and clear of any Adverse Claim, except as
created by the Transaction Documents. There have been duly filed (or delivered
to the Agent (as Buyer's assignee) in form suitable for filing) all financing
statements or other similar instruments or documents necessary under the UCC
(or any comparable law) of all appropriate jurisdictions to perfect Buyer's
ownership interest in the Receivables originated by such Originator, the
Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal places of
business and chief executive office of such Originator and the offices where it
keeps all of its Records are located at the address(es) listed on Exhibit II or
such other locations of which Buyer has been notified in accordance with
Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) has
been taken and completed. Such Originator's Federal Employer Identification
Number and organizational identification number are correctly set forth on
Exhibit II.
(l) Collections. Within 30 days of the date hereof (or, in the case of
any Collections which are deposited in an account at Bank of America, N.A.,
within 90 days after the date hereof), the conditions and requirements set
forth in Section 4.1(j) have at all times been satisfied and duly performed.
The names and addresses of all Collection Banks, together with the account
numbers of the Collection Accounts of such Originator at each Collection Bank
and the post office box number of each Lock-Box, are listed on Exhibit III.
Such Originator has not granted any Person, other than Buyer (and its assigns)
dominion and control of any Lock-Box or Collection Account, or the right to
take dominion and control of any such Lock-Box or Collection Account at a
future time or upon the occurrence of a future event.
(m) Material Adverse Effect. Since December 31, 2001, no event has
occurred that would have a material adverse effect on (i) the ability of such
Originator to perform its obligations under this Agreement, or (ii) the
collectibility of the Receivables originated by such Originator generally or
any material portion of such Receivables.
(n) Names. In the past five (5) years, such Originator has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement and as listed on Exhibit II.
(o) Ownership of Originators. Xxxxxxxx owns, directly or indirectly,
100% of the issued and outstanding shares of capital stock of such Originator
(other than Xxxxxxxx), free and clear of any Adverse Claim. Such capital stock
is validly issued, fully paid and nonassessable, and there are no options,
warrants or other rights to acquire securities of such Originator (other than
Xxxxxxxx).
(p) Not a Holding Company or an Investment Company. Such Originator is
not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
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as amended, or any successor statute. Such Originator is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Originator has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect. Each Receivable originated by such Originator, together with
the Contract related thereto, does not contravene any laws, rules or
regulations applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy), and no part of such Contract is in violation of any such law, rule or
regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Originator has
complied in all material respects with its Credit and Collection Policy with
regard to each Receivable originated by it and the related Contract, and has
not made any material change to such Credit and Collection Policy, other than
as permitted by Section 4.2(c) and in compliance with the notification
requirements in Section 4.1(a)(vii).
(s) Payments to such Originator. With respect to each Receivable
transferred hereunder by such Originator to Buyer, the Purchase Price received
by such Originator constitutes reasonably equivalent value in consideration
therefor and such transfer was not made for or on account of an antecedent
debt.
(t) Enforceability of Contracts. Each Contract with respect to each
Receivable originated by such Originator is effective to create, and has
created, a legal, valid and binding obligation of the related Obligor to pay
the Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(u) Nature of Receivables. Each Receivable originated by such Originator
is an "account" or a "payment intangible" under and as defined in the UCC of
all applicable jurisdictions.
(v) Accounting. The manner in which such Originator accounts for the
transactions contemplated by this Agreement does not jeopardize the true sale
analysis.
(w) Purpose. Such Originator has determined that, from a business
viewpoint, its sales of Receivables to Buyer and the other transactions
contemplated herein and in the Purchase Agreement are in the best interests of
such Originator.
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ARTICLE III.
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CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Initial Purchase.
The initial Purchase from each Originator under this Agreement is subject to
the conditions precedent that (a) Buyer shall have received on or before the
date of such Purchase those documents listed on Schedule A and (b) all of the
conditions to the initial purchase under the Purchase Agreement shall have been
satisfied or waived in accordance with the terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments.
Buyer's obligation to pay each Originator for Receivables coming into existence
after the Initial Cutoff Date shall be subject to the further conditions
precedent that: (a) the Facility Termination Date shall not have occurred; (b)
Buyer (or its assigns) shall have received such other opinions or documents as
it may reasonably request pursuant to Section 6.2 of the Purchase Agreement,
and (c) on the date such Receivable came into existence, the following
statements shall be true (and acceptance of the proceeds of any payment for
such Receivable shall be deemed a representation and warranty by such
Originator that such statements are then true):
(i) the representations and warranties of such Originator set forth
in Article II are true and correct on and as of the date such Receivable
came into existence as though made on and as of such date;
(ii) no event has occurred and is continuing that will constitute a
Termination Event with respect to such Originator or, from and after the
time the Performance Undertaking has been delivered, Performance
Guarantor; and
(iii) the Performance Undertaking remains in full force and effect
from and after the time, if any, when it is required to be delivered.
Section 3.3 Reaffirmation of Representations and Warranties.
Each Originator, by accepting the Purchase Price related to each Purchase of
such Originator's Receivables and Related Security, shall be deemed to have
certified that the representations and warranties of such Originator contained
in Article II are true and correct as to such Originator on and as of the date
of such Purchase, with the same effect as though made on and as of such day,
and that each of the applicable conditions precedent set forth in this Article
III has been satisfied as of the date of such purchase.
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ARTICLE IV.
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COVENANTS
Section 4.1 Affirmative Covenants of Originators.
Until the date on which this Agreement terminates in accordance with its terms,
each Originator hereby covenants as set forth below:
(a) Financial Reporting. Such Originator will maintain, for itself and
each of its Subsidiaries, a system of accounting established and administered
in accordance with GAAP, and furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 90 days after the close of each of
Meredith's respective fiscal years, audited, unqualified financial
statements (which shall include consolidated balance sheets, statements of
income and retained earnings and a statement of cash flows) for Xxxxxxxx
and its consolidated Subsidiaries for such fiscal year certified in a
manner acceptable to Buyer (or its assigns) by a nationally recognized
independent public accounting firm; provided that Meredith's delivery to
the Buyer of its filing with the SEC of SEC Form 10-K for each fiscal year
shall satisfy the requirements of this Section 4.1(a)(i) for each
Originator.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of each of Meredith's respective fiscal
years, consolidated balance sheets of Xxxxxxxx and its consolidated
Subsidiaries as at the close of each such period and statements of income
and retained earnings and a statement of cash flows for Xxxxxxxx and its
consolidated Subsidiaries for the period from the beginning of such fiscal
year to the end of such quarter, all certified by Meredith's chief
financial officer; provided that Meredith's delivery to the Buyer of its
filing with the SEC of SEC Form 10-Q for the first three quarters of each
fiscal year shall satisfy the requirements of this Section 4.1(a)(ii) for
each Originator.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of Exhibit IV signed by an Authorized Officer of Xxxxxxxx and
dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of Xxxxxxxx, copies of all
financial statements, reports and proxy statements so furnished.
(v) SEC Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports (other than SEC Forms 10-K and 10-Q filed by Xxxxxxxx and
delivered in accordance with Sections 4.1(a)(i) and (ii) and other than
SEC Forms 3, 4 or 5) which Xxxxxxxx or any of its Subsidiaries files with
the SEC.
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(vi) Copies of Notices. Promptly upon its receipt of any notice,
request for consent, financial statements, certification, report or other
communication under or in connection with any Transaction Document from
any Person other than Buyer, the Agent or Conduit, copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty (30)
days prior to the effectiveness of any material change in or material
amendment to such Originator's Credit and Collection Policy, a copy of its
Credit and Collection Policy then in effect and a notice (A) indicating
such change or amendment, and (B) if such proposed change or amendment
would be reasonably likely to adversely affect the collectibility of the
Receivables originated by such Originator or decrease the credit quality
of any newly created Receivables, requesting Buyer's consent thereto.
(viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or
the condition or operations, financial or otherwise, of such Originator as
Buyer (or its assigns) may from time to time reasonably request in order
to protect the interests of Buyer (and its assigns) under or as
contemplated by this Agreement.
(b) Notices. Such Originator will notify the Buyer (or its assigns) in
writing of any of the following promptly upon an Authorized Officer learning of
the occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
(i) Termination Events or Potential Termination Events. The
occurrence of each Termination Event and each Potential Termination Event,
by a statement of an Authorized Officer of such Originator.
(ii) Judgment and Proceedings. (1) The entry of any judgment or
decree against an Originator or any of its Subsidiaries if the aggregate
amount of all judgments and decrees then outstanding against the
Originators and their Subsidiaries exceeds $10,000,000 after deducting
(a) the amount with respect to which the applicable Originator or
Subsidiary is insured and with respect to which the insurer has assumed
responsibility in writing, and (b) the amount for which the applicable
Originator or Subsidiary is otherwise indemnified if the terms of such
indemnification are satisfactory to Buyer (or its assigns), and (2) the
institution of any litigation, arbitration proceeding or governmental
proceeding against an Originator which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a default
or an event of default under any other financing arrangement pursuant to
which such Originator is a debtor or an obligor.
(c) Compliance with Laws and Preservation of Corporate Existence. Such
Originator will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably
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be expected to have a Material Adverse Effect. Such Originator will 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 its business is
conducted, except where the failure to so qualify or remain in good standing
could not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Originator will furnish to Buyer (or its assigns) from
time to time such information with respect to it and the Receivables originated
or serviced by it as Buyer (or its assigns) may reasonably request. Such
Originator will, from time to time during regular business hours as requested
by Buyer (or its assigns), upon reasonable notice and at the sole cost of such
Originator, permit Buyer (or its assigns) or their respective agents or
representatives: (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Originator relating to
such Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of such
Originator for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Originator's financial condition
or such Receivables and the Related Security or such Originator's performance
under any of the Transaction Documents or such Originator's performance under
the Contracts and, in each case, with any of the officers or employees of such
Originator having knowledge of such matters; provided, however, that, prior to
the occurrence and continuance of a Termination Event with respect to a
Material Originator, no Originator shall be required to pay the costs of any
such audit if one audit has been performed at Meredith's office in Des Moines,
Iowa in any one fiscal year.
(e) Keeping and Marking of Records and Books.
(i) Such Originator will maintain and implement administrative and
operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables originated by it in the event of
the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all such Receivables (including, without
limitation, records adequate to permit the immediate identification of
each such new Receivable and all Collections of and adjustments to each
such existing Receivable). Such Originator will give Buyer (or its
assigns) notice of any material change in the administrative and operating
procedures referred to in the previous sentence other than a change in the
type of software used by such Originator.
(ii) Such Originator will: upon the request of Buyer (or its
assigns) following the occurrence of a Termination Event with respect to
such Originator or an "Amortization Event" under and as defined in the
Purchase Agreement: (x) xxxx each Contract with a legend describing
Buyer's ownership interests in such Receivables and further describing the
Purchaser Interests of the Agent (on behalf of the Purchasers) and (y)
deliver to Buyer (or its assigns) all Contracts (including, without
limitation, all multiple originals of any such Contract that constitutes
an instrument, a certificated security or chattel paper under the UCC)
relating to such Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Originator will timely and fully (i) perform and comply with all provisions,
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covenants and other promises required to be observed by it under the Contracts
related to the Receivables originated or serviced by it, and (ii) comply in all
material respects with its Credit and Collection Policy in regard to each such
Receivable and the related Contract.
(g) Ownership. Such Originator will take all necessary action to
establish and maintain, irrevocably in Buyer, (i) legal and equitable title to
the Receivables originated by such Originator and the associated Collections
and (ii) all of such Originator's right, title and interest in the Related
Security associated with such Receivables, in each case, free and clear of any
Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns)
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable
law) of all appropriate jurisdictions to perfect Buyer's interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of Buyer as Buyer (or its assigns)
may reasonably request).
(h) Purchasers' Reliance. Such Originator acknowledges that the Agent
and the Purchasers are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer's identity as a legal entity that is
separate from such Originator and any Affiliates thereof. Therefore, from and
after the date of execution and delivery of this Agreement, such Originator
will take all reasonable steps including, without limitation, all steps that
Buyer or any assignee of Buyer may from time to time reasonably request to
maintain Buyer's identity as a separate legal entity and to make it manifest to
third parties that Buyer is an entity with assets and liabilities distinct from
those of such Originator and any Affiliates thereof and not just a division of
such Originator or any such Affiliate. Without limiting the generality of the
foregoing and in addition to the other covenants set forth herein, such
Originator (i) will not hold itself out to third parties as liable for the
debts of Buyer nor purport to own the Receivables and other assets acquired by
Buyer, (ii) will take all other actions necessary on its part to ensure that
Buyer is at all times in compliance with the covenants set forth in Section
7.1(i) of the Purchase Agreement and (iii) will cause all tax liabilities
arising in connection with the transactions contemplated herein or otherwise to
be allocated between such Originator and Buyer on an arm's-length basis and in
a manner consistent with the procedures set forth in U.S. Treasury Regulations
sections 1.1502-33(d) and 1.1552-1.
(i) Collections. Within 30 days after its Closing Date, such Originator
shall direct all Obligors to make payments of such Originator's Receivables
directly to a Lock-Box or Collection Account that is the subject of a
Collection Account Agreement at a Collection Bank; provided that with respect
to any Obligor which, as of the date hereof, is making payments to a Collection
Account at Bank of America, N.A., such Originator shall direct such Obligor to
make payments of Collections directly to a Lock-Box or Collection Account that
is subject to a Collection Account Agreement within 90 days after the date
hereof. If, notwithstanding the foregoing, any Obligor makes payment to such
Originator, such Originator further agrees to remit any Collections (including
any security deposits applied to the Outstanding Balance of any Receivable)
that it receives on such Receivables directly to a Collection Bank for deposit
into a Collection Account within two (2) Business Days after receipt thereof,
and agrees that all such Collections shall be deemed to be received in trust
for Buyer and its assigns; provided that, to the extent permitted pursuant to
Section 1.2, such Originator may retain such Collections as a portion of the
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Purchase Price then payable to or apply such Collections to the reduction of
the outstanding balance of its Subordinated Note.
(j) Taxes. Except to the extent that such Originator is included in
consolidated tax returns or reports filed by Xxxxxxxx, such Originator will
file all tax returns and reports required by law to be filed by it and will
promptly pay all taxes and governmental charges at any time 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 GAAP shall have been set aside on its books. Such Originator
will also pay when due any taxes payable in connection with the Receivables
originated by it, exclusive of taxes on or measured by income or gross receipts
of Buyer and its assigns.
(k) Insurance. Such Originator will maintain in effect, at such
Originator's expense, such casualty and liability insurance as such Originator
deems appropriate in its good faith business judgment. Such Originator will
pay the premiums therefor. The foregoing requirements shall not be construed
to negate, reduce or modify, and are in addition to, such Originator's
obligations hereunder.
Section 4.2 Negative Covenants of Originators.
Until the date on which this Agreement terminates in accordance with its terms,
each Originator hereby covenants that:
(a) Name Change, Offices and Records. Such Originator will not (i)
change its name (within the meaning of Section 9-507(c) of any applicable
enactment of the UCC), identity, corporate structure or location of books and
records unless, at least fifteen (15) Business Days prior to the effective date
of any such name change, change in corporate structure or change in location of
books and records, such Originator notifies Buyer thereof and delivers to Buyer
(or its assigns) such financing statements (Forms UCC-1 and UCC-3) executed by
such Originator (if required under applicable law) which Buyer (or its assigns)
may reasonably request to reflect such name change, location change or change
in corporate structure, together with such other documents and instruments that
Buyer (or its assigns) may reasonably request in connection therewith and has
taken all other steps to ensure that Buyer continues to have a first priority,
perfected ownership or security interest in the Receivables originated by it,
the Related Security related thereto and any Collections thereon, or (ii)
change its jurisdiction of organization unless Buyer (or its assigns) shall
have received from such Originator, prior to such change, (A) those items
described in clause (i) hereof, and (B) if Buyer (or any of its assigns) shall
so request, an opinion of counsel, in form and substance reasonably
satisfactory to such Person, as to such organization and such Originator's
valid existence and good standing and the perfection and priority of Buyer's
ownership or security interest in the Receivables originated by such Originator
and the Related Security and the Collections related thereto.
(b) Change in Payment Instructions to Obligors. Such Originator will not
add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, , unless Buyer (or its assigns) shall have received, at
least ten (10) days before the proposed effective date therefor, (i) written
notice of such addition, termination or change and (ii) with respect to the
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addition of a Collection Bank or a Collection Account or Lock-Box, an executed
Collection Account Agreement with respect to the new Collection Account or
Lock-Box; provided, however, that such Originator may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account, provided
further that such Originator may terminate Bank of America, N.A. as a
Collection Bank and direct Obligors as contemplated in Section 4.1(i).
(c) Modifications to Contracts and Credit and Collection Policy. Without
the consent of Buyer (or its assigns), such Originator will not make any change
to its Credit and Collection Policy that could materially adversely affect the
collectibility of the Receivables originated or serviced by such Originator or
decrease the credit quality of any such newly created Receivables. Except as
otherwise permitted in its capacity as a permitted sub-Servicer pursuant to
Article VIII of the Purchase Agreement, such Originator will not extend, amend
or otherwise modify the terms of any Receivable originated or serviced by it or
any Contract related thereto other than in accordance with its Credit and
Collection Policy.
(d) Sales, Liens. Except pursuant to the Transaction Documents, such
Originator will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, or create or suffer
to exist any Adverse Claim upon (including, without limitation, the filing of
any financing statement) or with respect to, any Receivable originated by it or
the associated Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other
than, in each case, the creation of the interests therein in favor of Buyer
provided for herein), and such Originator will defend the right, title and
interest of Buyer in, to and under any of the foregoing property, against all
claims of third parties claiming through or under such Originator. Such
Originator shall not create or suffer to exist any mortgage, pledge, security
interest, encumbrance, lien, charge or other similar arrangement on any of its
inventory.
(e) Accounting for Purchase. Such Originator will not, and will not
permit any Affiliate to, account for the transactions contemplated hereby in
any manner other than as sales by such Originator to Buyer of Receivables
originated by such Originator and the associated Collections and Related
Security.
ARTICLE V.
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TERMINATION EVENTS
Section 5.1 Termination Events.
The occurrence of any one or more of the following events shall constitute a
Termination Event with respect to an Originator:
(a) Such Originator or, from and after the time the Performance
Undertaking has been delivered, Performance Guarantor shall fail (i) to make
any payment or deposit required hereunder when due and such failure continues
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for two (2) Business Days, or (ii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clause (i) of this paragraph
(a)) or any other Transaction Document to which it is a party and such failure
shall continue for five (5) consecutive Business Days after the earlier to
occur of (A) the discovery of such failure by such Person or (B) notice of such
failure from Buyer (or its assigns).
(b) Any representation, warranty or certification made by such Originator
or, from and after the time the Performance Undertaking has been delivered,
Performance Guarantor in any Transaction Document or in any other document
delivered pursuant thereto shall prove to have been incorrect in any material
respect when made or deemed made and which is not corrected within 5 Business
Days after the earlier to occur of (i) the discovery of such error by such
Person or (ii) notice of such error from Buyer (or its assigns).
(c) Failure of such Originator or, from and after the time the
Performance Undertaking has been delivered, Performance Guarantor to pay any
Indebtedness when due in excess of $25,000,000; or the default by such
Originator or, from and after the time the Performance Undertaking has been
delivered, Performance Guarantor in the performance of any term, provision or
condition contained in any agreement under which any such Indebtedness was
created or is governed, the effect of which is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness to become
due prior to its stated maturity; or any such Indebtedness of such Originator
or, from and after the time the Performance Undertaking has been delivered,
Performance Guarantor shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the date of
maturity thereof.
(d) (i) Such Originator or, from and after the time the Performance
Undertaking has been delivered, Performance Guarantor shall generally not pay
its debts as such debts become due or shall admit in writing its inability to
pay its debts generally or shall make a general assignment for the benefit of
creditors; or (ii) any proceeding shall be instituted by such Originator or,
from and after the time the Performance Undertaking has been delivered,
Performance Guarantor seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property; or (iii) any
proceeding shall be instituted and remain unstayed and undismissed in a court
of appropriate jurisdiction for a period of 60 days against such Originator or,
from and after the time the Performance Undertaking has been delivered,
Performance Guarantor seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property; or (iv) such
Originator or, from and after the time the Performance Undertaking has been
delivered, Performance Guarantor shall take any corporate action to authorize
any of the actions set forth in the foregoing clauses (i), (ii) or (iii) of
this subsection (d).
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(e) A Change of Control shall occur with respect to such Originator or,
from and after the time the Performance Undertaking has been delivered,
Performance Guarantor.
(f) One or more final judgments for the payment of money in an amount in
excess of $25,000,000, individually or in the aggregate, shall be entered
against such Originator or, from and after the time the Performance Undertaking
has been delivered, Performance Guarantor on claims not covered by insurance or
as to which the insurance carrier has denied its responsibility, and such
judgment shall continue unsatisfied and in effect for thirty (30) consecutive
days without a stay of execution.
(g) Such Originator shall divest itself of a Material Business Unit
without the prior written consent of Buyer and the Agent (as Buyer's assignee).
(h) From and after the time, if any, when it is required to be delivered,
the Performance Undertaking shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Performance Guarantor, or
Performance Guarantor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
(i) The occurrence of the Termination Date with respect to any other
Originator that is a Material Originator.
Section 5.2 Remedies.
Upon the occurrence and during the continuation of a Termination Event with
respect to any Originator, Buyer may take any of the following actions: (i)
declare such Originator's Termination Date to have occurred, whereupon its
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by such
Originator; provided, however, that upon the occurrence of a Termination Event
described in Section 5.1(d) with respect to any Originator, or of an actual or
deemed entry of an order for relief under the Federal Bankruptcy Code, such
Originator's Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
such Originator and (ii) to the fullest extent permitted by applicable law,
declare that the Default Fee shall accrue with respect to any amounts then due
and owing by such Originator to Buyer. The aforementioned rights and remedies
shall be without limitation and shall be in addition to all other rights and
remedies of Buyer and its assigns otherwise available under any other provision
of this Agreement, by operation of law, at equity or otherwise, all of which
are hereby expressly preserved, including, without limitation, all rights and
remedies provided under the UCC, all of which rights shall be cumulative.
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ARTICLE VI.
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INDEMNIFICATION
Section 6.1 Indemnities by Originators.
Without limiting any other rights that Buyer may have hereunder or under
applicable law, each Originator hereby agrees to indemnify (and pay upon demand
to) Buyer and its assigns, officers, directors, agents and employees (each, an
"Indemnified Party") from and against any and all damages, losses, claims,
taxes, liabilities, costs, expenses and for all other amounts payable,
including reasonable attorneys' fees (which attorneys may be employees of Buyer
or any such assign) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of
them arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by Buyer of an interest in the Receivables originated
by such Originator, excluding, however, in all of the foregoing cases:
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
(b) Indemnified Amounts to the extent the same includes losses in respect
of Receivables that are uncollectible on account of the insolvency, bankruptcy
or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the United States, the Indemnified Party's
jurisdiction of organization (or, in the case of an individual, primary
residence) or any other jurisdiction in which such Indemnified Party has
established a taxable nexus other than in connection with the transactions
contemplated hereby and by the Purchase Agreement on or measured by the overall
net income of such Indemnified Party to the extent that the computation of such
taxes is consistent with the Intended Characterization;
provided, however, that nothing contained in this sentence shall limit the
liability of such Originator or limit the recourse of Buyer to such Originator
for amounts otherwise specifically provided to be paid by such Originator under
the terms of this Agreement. Without limiting the generality of the foregoing
indemnification, but subject to the exclusions in clauses (a), (b) and (c)
above, each Originator shall indemnify Buyer for Indemnified Amounts
(including, without limitation, losses in respect of uncollectible Receivables,
regardless of whether reimbursement therefor would constitute recourse to such
Originator) relating to or resulting from:
(i) any representation or warranty made by such Originator (or any
of its officers) under or in connection with this Agreement, any other
Transaction Document to which such Originator is a party or any other
information or report delivered by any such Person pursuant hereto or
thereto, which shall have been false or incorrect when made or deemed
made;
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(ii) the failure by such Originator to comply with any applicable
law, rule or regulation with respect to any Receivable originated by it,
or any Contract related thereto, or the nonconformity of any such
Receivable or Contract with any such applicable law, rule or regulation or
any failure of an Originator to keep or perform any of its obligations,
express or implied, with respect to any such Contract;
(iii) any failure of such Originator to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document to which it is a party;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with goods that are
the subject of any Contract or any Receivable originated by such
Originator;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
originated by such Originator (including, without limitation, a defense
based on such Receivable or the related Contract not being a legal, valid
and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale of
goods or services related to such Receivable or the furnishing or failure
to furnish such goods or services;
(vi) the commingling of Collections of such Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document to which
such Originator is a party, the transactions contemplated hereby, the use
by such Originator of the proceeds of any purchase from it hereunder or
any other investigation, litigation or proceeding relating to such
Originator in which any Indemnified Party becomes involved as a result of
any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any such Receivable as a result of such Obligor being immune
from civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) the occurrence of any event described in Section 5.1(d) with
respect to such Originator or, from and after the time the Performance
Undertaking has been delivered, Performance Guarantor;
(x) any failure to vest and maintain vested in Buyer or its assigns,
or to transfer to Buyer, legal and equitable title to, and a first
priority perfected ownership interest in, the Receivables originated by
such Originator and the associated Related Security and Collections, free
and clear of any Adverse Claim (except as created by the Transaction
Documents); and
(xi) the failure to have filed, 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 such
Receivable, the Related Security and Collections with respect thereto, and
the proceeds of any thereof, whether at the time of sale to Buyer or at
any subsequent time.
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If any Indemnified Amount arises out of a lawsuit or other adversarial
proceeding, unless an Indemnified Party's business reputation is at issue, the
applicable Originator shall be entitled to assume and control the defense
thereof in its sole discretion using counsel approved by the applicable
Indemnified Party (such approval not to be unreasonably withheld or delayed).
If an Originator does assume the defense of a lawsuit or other adversarial
proceeding pursuant to the preceding sentence, the applicable Indemnified Party
may engage additional counsel only at such Indemnified Party's sole expense.
Section 6.2 Other Costs and Expenses.
In addition to the obligations of each Originator under Section 6.1, each
Originator agrees to pay on demand:
(a) all reasonable costs and expenses, including attorneys' fees, in
connection with the enforcement against such Originator of this Agreement and
the other Transaction Documents executed by such Originator; and
(b) all stamp duties and other similar filing or recording 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
executed by such Originator, and agrees to indemnify Indemnified Parties
against any liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.
ARTICLE VII.
------------
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its assigns) in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided
shall be cumulative and nonexclusive of any rights or remedies provided by law.
Any waiver of this Agreement shall be effective only in the specific instance
and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing signed by each Originator and Buyer and, to the
extent required under the Purchase Agreement, the Agent and the Financial
Institutions or the Required Financial Institutions.
Section 7.2 Notices.
All communications and notices provided for hereunder shall be in writing
(including bank wire, telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other parties hereto at their respective
addresses or telecopy numbers set forth on the signature pages hereof or at
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such other address or telecopy number as such Person may hereafter specify for
the purpose of notice to each of the other parties hereto. Each such notice or
other communication shall be effective (a) if given by telecopy, upon the
receipt thereof, (b) if given by mail, three (3) Business Days after the time
such communication is deposited in the mail with first class postage prepaid or
(c) if given by any other means, when received at the address specified in this
Section 7.2.
Section 7.3 Joinder and Termination of Originators; Lien Releases.
(a) Subject to the approval of the Agent (such approval not to be
unreasonably withheld or delayed), any wholly-owned domestic Subsidiary of
Xxxxxxxx xxx become an Originator hereunder by entering into a Joinder
Agreement with Buyer. From and after the effective date of such Joinder
Agreement, subject to the terms and conditions set forth therein, and upon the
Agent's receipt of each other agreement, document, lien search report,
financing statement, opinion and certificate requested by the Agent, such
Subsidiary shall become a party hereto as an Originator, entitled to the rights
and subject to the obligations of an Originator hereunder.
(b) Any Originator may cease to be an Originator hereunder by delivering
notice to Buyer pursuant to clause (v) of the definition of Termination Date
and entering into a Termination Agreement with Buyer; provided however that if
any such Originator is a Material Originator, the Termination Date shall occur
with respect to all Originators; provided further, that only Originators of an
aggregate of not more than 10% of the Receivables originated during the
calendar year most recently ended prior to such termination may enter into
Termination Agreements within any calendar year without the consent of the
Buyer and the Agent (such consent may not be unreasonably withheld or delayed).
From and after the effective date of each Termination Agreement and subject to
the terms and conditions set forth therein, the applicable Originator shall no
longer have the rights and obligations of an Originator hereunder; provided
that from and after such date, the rights and remedies with respect to (i) any
breach of any representation and warranty made by such Originator pursuant to
Article II and (ii) Sections 7.5 and 7.6 and the indemnification and payment
provisions of Article VI shall, in any case, be continuing and shall survive
the termination of such Originator's rights and obligations under this
Agreement.
(c) In the event that either (i) the Termination Date shall occur with
respect to any Originator (other than in connection with the occurrence of a
Termination Event) or (ii) any Originator shall divest, sell, swap or otherwise
dispose of any business unit, division, group, magazine or television station
and such event does not cause a Termination Event, the Buyer agrees to deliver,
at such Originator's sole cost and expense, such releases, termination
statements and other documents or instruments (including a letter giving such
Originator authority to file such releases or termination statements) as such
Originator may reasonably request to evidence the release of all security
interests and liens of the Buyer and its assigns hereunder against such
Originator's assets or the assets of such business unit, division, group,
magazine or television station to the extent such assets are not owned by the
Buyer.
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Section 7.4 Protection of Ownership Interests of Buyer.
(a) Each Originator agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that Buyer (or its assigns) may
reasonably request, to perfect, protect or more fully evidence the interest of
Buyer hereunder and the Purchaser Interests, or to enable Buyer (or its
assigns) to exercise and enforce its (or their) rights and remedies hereunder.
At any time after the occurrence of an "Amortization Event" under and as
defined in the Purchase Agreement, Buyer (or its assigns) may, at the
applicable Originator's sole cost and expense, direct such Originator to notify
the Obligors of Receivables originated or serviced by it of the ownership
interests of Buyer under this Agreement and may also direct that payments of
all amounts due or that become due under any or all Receivables be made
directly to Buyer or its designee.
(b) If an Originator fails to perform any of its obligations hereunder,
Buyer (or its assigns) may (but shall not be required to) perform, or cause
performance of, such obligation, and Buyer's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by such Originator
as provided in Section 6.2. Each Originator irrevocably authorizes Buyer (and
its assigns) at any time and from time to time in the sole discretion of Buyer
(or its assigns), and appoints Buyer (and its assigns) as its
attorney(ies)-in-fact, to act on behalf of such Originator (i) to execute on
behalf of such Originator as debtor and to file financing statements necessary
or desirable in Buyer's (or its assigns') sole discretion to perfect and to
maintain the perfection and priority of the interest of Buyer in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as Buyer (or its assigns) in their sole
discretion deem necessary or desirable to perfect and to maintain the
perfection and priority of Buyer's interests in the Receivables. This
appointment is coupled with an interest and is irrevocable.
Section 7.5 Confidentiality.
(a) Each Originator shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of this Agreement and the other
confidential or proprietary information with respect to the Agent and Conduit
and their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein,
except that such Originator and its officers and employees may disclose such
information to such Originator's external accountants and attorneys and as
required by any applicable law (including, without limitation, applicable
securities laws) or order of any judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Originator
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to Buyer, the Agent, the Financial Institutions or Conduit by each
other, (ii) by Buyer, the Agent or the Purchasers to any prospective or actual
assignee or participant of any of them and (iii) by the Agent to any rating
agency, Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which Bank One
acts as the administrative agent and to any officers, directors, employees,
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outside accountants and attorneys of any of the foregoing, provided each such
Person is advised of the confidential nature of such information and agrees (to
the extent required under Regulation FD promulgated by the Securities and
Exchange Commission from time to time pursuant to the Securities Act of 1933)
to maintain the confidentiality thereof. In addition, the Purchasers and the
Agent may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
(c) Buyer shall maintain and shall cause each of its employees and
officers to maintain the confidentiality of this Agreement and the other
confidential or proprietary information with respect to each Originator, the
Obligors and their respective businesses obtained by it in connection with the
due diligence evaluations, structuring, negotiating and execution of the
Transaction Documents, and the consummation of the transactions contemplated
herein and any other activities of Buyer arising from or related to the
transactions contemplated herein provided, however, that each of Buyer and its
employees and officers shall be permitted to disclose such confidential or
proprietary information: (i) to the Agent, the Purchasers and the other
Originators, (ii) to any prospective or actual assignee or participant of the
Agent or the other Purchasers who execute a confidentiality agreement for the
benefit of the applicable Originator and Buyer on terms comparable to those
required of Buyer hereunder with respect to such disclosed information, (iii)
to any rating agency, provider of a surety, guaranty or credit or liquidity
enhancement to Conduit, (iv) to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, and (v) to the extent
required pursuant to any applicable law (including, without limitation,
applicable securities laws), rule, regulation, direction, request or order of
any judicial, administrative or regulatory authority or proceedings with
competent jurisdiction (whether or not having the force or effect of law) so
long as such required disclosure is made under seal to the extent permitted by
applicable law or by rule of court or other applicable body.
Section 7.6 Bankruptcy Petition.
(a) Each Originator and Buyer each hereby covenants and agrees that,
prior to the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Conduit or any Financial Institution that is
a special purpose bankruptcy remote entity, it will not institute against, or
join any other Person in instituting against, Conduit or any such entity any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
(b) Each Originator covenants and agrees that, prior to the date that is
one year and one day after the payment in full of all Aggregate Unpaids under
the Purchase Agreement, it will not institute against, or join any other Person
in instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.
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Section 7.7 CHOICE OF LAW.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
Section 7.8 CONSENT TO JURISDICTION.
EACH ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH ORIGINATOR PURSUANT TO THIS AGREEMENT, AND EACH
ORIGINATOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST AN ORIGINATOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY AN ORIGINATOR AGAINST BUYER (OR ITS
ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY
DOCUMENT EXECUTED BY SUCH ORIGINATOR PURSUANT TO THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 7.9 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT, ANY DOCUMENT EXECUTED BY AN ORIGINATOR PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final
and complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof superseding
all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the
Originators, Buyer and their respective successors and permitted assigns
(including any trustee in bankruptcy). No Originator may assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of an Originator. 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 terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by an Originator pursuant to
Article II; (ii) the indemnification and payment provisions of Article VI; and
(iii) Section 7.5 shall be continuing and shall survive any termination of this
Agreement.
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Section 7.11 Counterparts; Severability; Section References.
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, taken together, shall constitute
one and the same agreement. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits
to, this Agreement.
- 29 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
XXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Corporate Controller
Address:
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Corporate Controller
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
with a copy to:
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
XXXXXXXX FUNDING CORPORATION
By: /s/ Suku V. Radia
Name: Suku V. Radia
Title: President
Address:
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: President
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
with a copy to:
Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
- 30 -
