1
EXHIBIT 10.5
RECEIVABLES PURCHASE AGREEMENT
BETWEEN
INDIAN INDUSTRIES, INC.
AS THE SELLER,
AND
INDIAN - XXXXXX XX,
AS THE BUYER
DATED AS OF MAY 15, 2000
2
TABLE OF CONTENTS
Page
ARTICLE 1 AMOUNTS AND TERMS OF THE PURCHASES............................................................3
SECTION 1.1 AGREEMENT TO PURCHASE AND SELL................................................................3
SECTION 1.2 NO RECOURSE...................................................................................4
SECTION 1.3 TRUE SALES....................................................................................4
SECTION 1.4 CONSIDERATION FOR PURCHASES...................................................................5
ARTICLE 2 CALCULATION OF PURCHASE PRICE.................................................................5
SECTION 2.1 CALCULATION OF PURCHASE PRICE.................................................................5
ARTICLE 3 PAYMENT OF PURCHASE PRICE.....................................................................6
SECTION 3.1 THE PURCHASE PRICE PAYMENT....................................................................6
SECTION 3.2 INELIGIBLE RECEIVABLES, REPURCHASE, ETC.......................................................6
SECTION 3.3 PAYMENTS AND COMPUTATIONS, ETC................................................................6
ARTICLE 4 CONDITIONS TO PURCHASE........................................................................7
SECTION 4.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT.......................................7
SECTION 4.2 CONDITIONS PRECEDENT TO ALL PURCHASES.........................................................8
SECTION 4.3 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES............................................8
SECTION 4.4 EFFECT OF PAYMENT OF PURCHASE PRICE...........................................................8
ARTICLE 5 REPRESENTATIONS AND WARRANTIES................................................................8
SECTION 5.1 REPRESENTATIONS AND WARRANTIES................................................................8
ARTICLE 6 COVENANTS....................................................................................11
SECTION 6.1 AFFIRMATIVE COVENANTS........................................................................11
SECTION 6.2 NEGATIVE COVENANTS...........................................................................12
ARTICLE 7 INDEMNIFICATION..............................................................................12
SECTION 7.1 INDEMNITIES BY .............................................................12
ARTICLE 8 ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF
THE ASSIGNED RECEIVABLES.....................................................................15
SECTION 8.1 SERVICING OF ASSIGNED RECEIVABLES AND RELATED RIGHTS.........................................15
SECTION 8.2 RIGHTS OF THE BUYER; ENFORCEMENT RIGHTS......................................................15
SECTION 8.3 RESPONSIBILITIES OF .......................................................16
SECTION 8.4 FURTHER ACTION EVIDENCING PURCHASES..........................................................16
SECTION 8.5 PURCHASE TERMINATION EVENT...................................................................17
ARTICLE 9 MISCELLANEOUS................................................................................17
SECTION 9.1 AMENDMENTS, ETC..............................................................................17
SECTION 9.2 NOTICES, ETC.................................................................................17
SECTION 9.3 BINDING EFFECT; ASSIGNABILITY................................................................18
SECTION 9.4 GOVERNING LAW AND JURISDICTION...............................................................18
SECTION 9.5 EXECUTION IN COUNTERPARTS....................................................................19
SECTION 9.6 SURVIVAL OF TERMINATION......................................................................19
SECTION 9.7 WAIVER OF JURY TRIAL.........................................................................19
SECTION 9.8 ENTIRE AGREEMENT.............................................................................19
SECTION 9.9 HEADINGS.....................................................................................19
3
RECEIVABLES PURCHASE AGREEMENT
This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is entered into as of
May 15, 2000 between Indian Industries, Inc., a corporation incorporated under
the laws of Indiana, as seller (sometimes referred to as "Indian Industries" or
the "Seller," as the case may be) and INDIAN-XXXXXX XX, a corporation
incorporated under the laws of Switzerland, as buyer (sometimes referred to as
"AG" or the "Buyer").
PRELIMINARY STATEMENTS
1. Certain terms that are capitalized and used throughout this
Agreement are defined in Exhibit 1 to this Agreement. References in the Exhibits
hereto to the Agreement refer to this Agreement, as amended, modified or
supplemented from time to time and at any time.
2. AG is a corporation all of whose issued and outstanding shares of
capital stock is wholly owned by Escalade, Incorporated, a corporation
incorporated and existing under the laws of Indiana.
3. Indian Industries wishes to sell Receivables that it now owns and
from time to time hereafter will own to AG, and AG is willing, on the terms and
subject to the conditions contained in this Agreement, to purchase such
Receivables from Indian Industries at such times.
4. AG, in the Services Agreement, will appoint Indian Industries as the
Servicer to collect Assigned Receivables as AG may from time to time purchase
from Indian Industries.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:
ARTICLE 1 AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Agreement to Purchase and Sell.
(a) On the terms and conditions hereinafter set forth, and in
consideration of the Purchase Price, Indian Industries hereby sells to the
Buyer, and the Buyer hereby purchases from Indian Industries, all of Indian
Industries' right, title and interest in and to:
(i) all Assigned Receivables, except that in
connection with the Initial Sale Indian Industries will retain
any Receivable that is sixty-one (61) or more days past due
and which is identified on the attached Exhibit 2 and any such
Receivable shall not be sold to Buyer at any time following
the Initial Sale;
(ii) all rights to, but not the obligations under,
all related Contracts and all Related Property with respect
thereto;
(iii) all monies due or to become due with respect to
the foregoing; and
-1-
4
(iv) all Collections in respect of, and other
proceeds of, such Assigned Receivables or any other of the
foregoing including, without limitation, all funds which
either are received by Indian Industries or the Buyer from or
on behalf of or for credit to the Obligors in payment of any
amounts owed (including, without limitation, finance charges,
interest and all other charges) in respect of such Assigned
Receivables, or are applied to such amounts owed by the
Obligors (including, without limitation, insurance payments,
if any, that Indian Industries applies in the ordinary course
of its business to amounts owed in respect of any such
Assigned Receivable and the net proceeds of sale or other
disposition of goods or other collateral or property of the
Obligors or any other Person directly or indirectly liable for
payment of such Assigned Receivable and available to be
applied thereon, excluding, however, proceeds of returned
inventory).
All purchases hereunder shall be made without recourse, but shall be
made pursuant to and in reliance upon the representations, warranties and
covenants of Indian Industries, in its capacity as seller, set forth herein. The
proceeds and rights described in subsections (ii), (iii) and (iv) of this
Section 1.1(a) are herein collectively called the "Related Rights". Sales by the
Seller to the Buyer of Receivables under this Agreement may be made at the close
of each business week of Indian Industries but shall be made no less frequently
than by the end of each four week accounting period of Indian Industries.
Section 1.2 No Recourse. Except as specifically provided in this
Agreement, the purchase and sale of Receivables and Related Rights under this
Agreement shall be without recourse to Indian Industries; provided that Indian
Industries shall be liable to the Buyer for all representations, warranties,
covenants and indemnities made by Indian Industries pursuant to the terms of
this Agreement, it being understood that such obligation of Indian Industries
will not arise on account of the failure of any Obligor for credit reasons to
make any payment in respect of an Assigned Receivable.
Section 1.3 True Sales.
(a) Each of Indian Industries and the Buyer intend the
transactions hereunder to constitute absolute and irrevocable purchases and
sales of Receivables and the Related Rights by Indian Industries to the Buyer
providing the Buyer with the full benefits of ownership of the Assigned
Receivables, and no party hereto intends the transactions contemplated hereunder
to be, or for any purpose to be characterized as, a loan or similar advance from
the Buyer to Indian Industries giving rise to indebtedness secured by such
Assigned Receivables and Related Rights.
(b) In the event (but only to the extent) that the transfer,
assignment and conveyance of Assigned Receivables and Related Rights hereunder
is characterized by a court or other Governmental Authority as a loan rather
than a sale, Indian Industries shall be deemed hereunder to have granted to the
Buyer, and Indian Industries hereby grants to the Buyer, a security interest in
all of Indian Industries' right, title and interest in, to and under all of the
Assigned Receivables and Related Rights, whether now or hereafter owned,
existing or arising. Such security interest shall secure all of Indian
Industries' obligations (monetary or otherwise)
-2-
5
arising under, pursuant to or by virtue of this Agreement (including any loan
deemed to have been made to Indian Industries pursuant hereto), whether now or
hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent. The Buyer shall have, with respect to the property
described in this Section 1.3, and in addition to all the other rights and
remedies available to the Buyer under this Agreement and applicable law, all the
rights and remedies of a secured party under the UCC, and this Agreement shall
constitute a security agreement under applicable law. To the extent permitted by
applicable law, Indian Industries hereby authorizes Buyer to file any financing
statements, amendments, continuation statements, or the like, as Buyer may deem
necessary or appropriate with any filing jurisdiction, signed by Buyer alone.
Section 1.4 Consideration for Purchases. On the terms and subject to
the conditions set forth in this Agreement, the Buyer agrees to make all
Purchase Price payments to Indian Industries in accordance with Article 3.
ARTICLE 2 CALCULATION OF PURCHASE PRICE
Section 2.1 Calculation of Purchase Price. The "Purchase Price" (to be
paid to Indian Industries in accordance with the terms of Article 3) for the
Assigned Receivables and the Related Rights shall be determined in accordance
with the following formula:
PP = AR x FMVD
where:
PP = Purchase Price (to be paid to Indian
Industries in accordance with the terms
of Article 3) as calculated on the relevant
Determination Date;
AR = For purposes of calculating the Purchase
Price for Assigned Receivables on each
Determination Date, the aggregate Unpaid
Balance of the Receivables that will be sold
to the Buyer; and
FMVD = "Fair Market Value Discount Factor" on the
Determination Date, which shall equal the
discount factor as determined pursuant to an
economic transfer pricing study as
calculated by an independent third party
acceptable to both Buyer and Indian
Industries. Buyer and Indian Industries
agree that until otherwise agreed the
initial FMVD shall equal 95% based upon the
economic transfer pricing study that has
been previously agreed to by Buyer and
Indian Industries.
ARTICLE 3 PAYMENT OF PURCHASE PRICE
Section 3.1 The Purchase Price Payment. Buyer shall pay the purchase
price for the Initial Sale of Assigned Receivables sold under this Agreement by
making a demand note in
-3-
6
favor of Indian Industries in the form of Exhibit 3, attached hereto and made a
part hereof. For all sales of Assigned Receivables sold under this Agreement
other than the Initial Sale, Buyer shall pay the Purchase Price of Assigned
Receivables by depositing into such account as Indian Industries shall specify
in immediately available funds, as specified in Section 3.3.
Section 3.2 Ineligible Receivables, Repurchase, Etc.
(a) If any of the representations or warranties in Section 5.1
(i) or (t) hereto is not true with respect to any Receivable (each such
Receivable, an "Ineligible Receivable"), Indian Industries shall deliver and pay
to the Servicer in same day funds an amount equal to the full Unpaid Balance of
such Assigned Receivable for application by the Servicer to the same extent as
if Collections of such Unpaid Balance had actually been received on such date.
(b) In the event that Indian Industries has paid to the Buyer
the full Unpaid Balance of any Assigned Receivable pursuant to this Section 3.2,
the Buyer shall reconvey such Assigned Receivable and all Related Rights with
respect thereto to Indian Industries, without recourse, representation or
warranty, free and clear of all Liens created by the Buyer; such reconveyed
Assigned Receivables and all Related Rights shall no longer be subject to the
terms of this Agreement (including any obligation to turn over Collections with
respect thereto).
Section 3.3 Payments and Computations, Etc.
(a) All amounts to be paid or deposited by Indian Industries
hereunder shall be paid or deposited no later than 2:00 p.m. (Central time) on
the day when due in same day funds. All amounts received after 2:00 p.m.
(Central time) will be deemed to have been received on the immediately
succeeding Business Day.
(b) All amounts to be paid or deposited by the Buyer hereunder
shall be paid or deposited no later than 2:00 p.m. (Zurich time) on the day when
due in same day funds. All amounts received after 2:00 p.m. (Zurich time) will
be deemed to have been received on the immediately succeeding Business Day.
(c) Whenever any payment or deposit to be made hereunder shall
be due on a day other than a Business Day, such payment or deposit shall be made
on the next succeeding Business Day.
ARTICLE 4 CONDITIONS TO PURCHASE
Section 4.1 Conditions Precedent to Effectiveness of this Agreement.
The effectiveness of this Agreement is subject to the conditions precedent that
the Buyer shall have received each of the following, on or before the date of
the first purchase hereunder, each in form and substance (including the date
thereof) satisfactory to the Buyer.
(a) A certificate of the Secretary of Indian Industries
certifying (i) a copy of the resolutions of its Board of Directors approving
this Agreement and the other Transaction Documents to be delivered by it
hereunder and the transactions contemplated hereby; (ii) the names and true
signatures of the officers authorized on its behalf to sign this Agreement and
the
-4-
7
other Transaction Documents to be delivered by it hereunder (on which
certificate the Buyer may conclusively rely until such time as the Buyer shall
receive from Indian Industries, as the case may be, a revised certificate
meeting the requirements of this subsection (a)); (iii) a copy of its by-laws as
then in effect; and (iv) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement and
the other Transaction Documents;
(b) The Articles of Incorporation of Indian Industries, duly
certified by the Secretary of State of Indiana, as of a recent date;
(c) Signed original copies or time stamped receipt copies, of
the proper financing statements (Form UCC-1) that have been duly executed and
name Indian Industries as the debtor and seller and the Buyer as the secured
party and purchaser of the Assigned Receivables and the Related Rights or other,
similar instruments or documents, as may be necessary or, in Buyer's opinion,
desirable under the UCC or any comparable law of all appropriate jurisdictions
to perfect the Buyer's ownership interest in all Assigned Receivables and
Related Rights in which an ownership interest is assigned to it hereunder;
(d) A certificate from an officer of Indian Industries to the
effect that Indian Industries has 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 of Indian Industries the
following legend (or the substantive equivalent thereof):
THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO INDIAN -
XXXXXX XX PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED
AS OF MAY 15, 2000, AS AMENDED FROM TIME TO TIME, BETWEEN
INDIAN INDUSTRIES, INC. AND INDIAN- XXXXXX XX.
(e) Such other agreements, instruments, UCC financing
statements, certificates, opinions and other documents as the Buyer may
reasonably request.
Section 4.2 Conditions Precedent to All Purchases. Each purchase under
this Agreement is subject to the condition precedent that the agreement of
Indian Industries to sell Assigned Receivables and Related Rights, and the
agreement of the Buyer to purchase Assigned Receivables and Related Rights,
shall not have terminated pursuant to Sections 8.5 and 9.3 of this Agreement,
and shall be subject further to the conditions precedent that the
representations and warranties contained in Article 5 are correct on and as of
such day as though made on and as of such day and shall be deemed to have been
made on such day (except that any such representation or warranty that is
expressly stated as being made only as of a specified earlier date shall be true
and correct in all material respects as of such earlier date).
Section 4.3 Certification as to Representations and Warranties. Indian
Industries, by accepting the Purchase Price paid for each purchase of Assigned
Receivables and Related Rights on any day, shall be deemed to have certified
that its representations and warranties contained in Article 5 are true and
correct on and as of such day, with the same effect as though made on and as of
such day.
-5-
8
Section 4.4 Effect of Payment of Purchase Price. Upon the payment of
the Purchase Price for any purchase of Assigned Receivables and Related Rights,
absolute title to such Assigned Receivables and Related Rights shall vest in the
Buyer, whether or not the conditions precedent to such purchase were in fact
satisfied; provided that the Buyer shall not be deemed to have waived any claim
it may have under this Agreement for the failure by Indian Industries in fact to
satisfy any such condition precedent unless the underlying Assigned Receivable
has been repurchased from the Buyer by the Seller.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties. In order to induce the
Buyer to enter into this Agreement and to make purchases thereunder, Indian
Industries hereby represents and warrants as follows:
(a) Organization and Good Standing. Indian Industries has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State ofIndiana, with power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted.
(b) Due Qualification. Indian Industries is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such qualification,
licenses or approvals except where the failure to so qualify or have such
licenses or approvals could not reasonably be expected to have a Seller Material
Adverse Effect.
(c) Power and Authority; Due Authorization. Indian Industries
(i) has all necessary power, authority and legal right to (A) execute and
deliver this Agreement and the other Transaction Documents to which it is a
party, (B) carry out the terms of the Transaction Documents to which it is a
party, and (C) sell and assign the Assigned Receivables and Related Rights on
the terms and conditions herein provided and (ii) has duly authorized by all
necessary corporate action the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, and each
other Transaction Document to be signed by Indian Industries when duly executed
and delivered will constitute, a legal, valid and binding obligation of Indian
Industries enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which
Indian Industries is a party and the
-6-
9
fulfillment of the terms hereof and thereof will not (i) 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 Indian Industries'
articles of incorporation or by-laws or any loan or credit agreement, other
agreement, indenture, lease or instrument of Indian Industries, or by which it
or its properties may be bound, but only to the extent that such conflict,
breach or default is reasonably likely to have a Seller Material Adverse Effect,
(ii) result in the creation or imposition of any Lien upon any of Indian
Industries' properties pursuant to the terms of any such loan or credit
agreement, other agreement, indenture, lease or instrument, other than the
Transaction Documents, or (iii) violate any requirements of law enacted by any
Governmental Authority.
(f) No Proceedings. There is no litigation, proceeding or
investigation pending or, to the best of Indian Industries' knowledge,
threatened, before any Governmental Authority or arbitrator (i) asserting the
invalidity of this Agreement or any other Transaction Document to which Indian
Industries is a party, (ii) seeking to prevent the sale and assignment of the
Receivables and Related Rights, the collectibility of any of the Receivables or
the consummation of any of the other transactions contemplated by this Agreement
or any other Transaction Document, or (iii) seeking any determination or ruling
that could reasonably be expected to have a Seller Material Adverse Effect.
(g) Government Approvals. No action by a Governmental
Authority is required for the due execution, delivery and performance by Indian
Industries of this Agreement or any other Transaction Document to which it is a
party.
(h) Securities Exchange Act. No proceeds of any purchase will
be used to acquire any equity security of a class which is registered pursuant
to Section 12 of the Securities Exchange Act of 1934.
(i) Quality of Title; Valid Sale; Etc. Immediately prior to
any sale or contribution to the Buyer under this Agreement, Indian Industries is
the legal and beneficial owner of each of the Assigned Receivables and the
Related Rights free and clear of any Lien; and upon each purchase or
contribution the Buyer shall acquire a valid and enforceable ownership interest
in each Assigned Receivable and in the Related Rights then existing or
thereafter arising with respect thereto, free and clear of any Lien. Each
Assigned Receivable constitutes an "account" as such term is defined in the UCC.
No effective financing statement or other instrument similar in effect covering
any Assigned Receivable or Related Rights with respect thereto is on file in any
recording office, except those filed in favor of the Buyer pursuant to this
Agreement.
(j) Accuracy of Information. Each report, information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of it to the Buyer in connection with
this Agreement is or will be correct in all material respects as of its date or
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 materially misleading.
-7-
10
(k) Offices. The principal place of business and chief
executive office of Indian Industries are located at the address of Indian
Industries referred to in Section 9.2, and the offices where Indian Industries
keeps all its books, records and documents evidencing or relating to Assigned
Receivables are located at the address of Indian Industries referred to in
Section 9.2 (or in jurisdictions where all action required by Section 8.4 has
been taken and completed).
(l) Bulk Sales Act. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(m) Margin Regulations. The use of all funds obtained by
Indian Industries under this Agreement will not conflict with or contravene any
of Regulation T, U or X promulgated by the Federal Reserve Board from time to
time.
(n) Maintenance of Books and Records. Indian Industries has
accounted for and will account for each sale of Assigned Receivables and Related
Rights in its books and financial statements as sales, consistent with generally
accepted accounting principles.
(o) Credit and Collection Policy. Indian Industries has
complied in all material respects with, and as Servicer will continue to comply
with, the Credit and Collection Policy and practices with regard to each
Assigned Receivable.
(p) Solvency. Indian Industries is solvent; and at the time of
(and immediately after) each sale pursuant to this Agreement it shall be
solvent.
(q) Compliance with Transaction Documents. Indian Industries,
as Servicer and/or Seller, has complied with all of the terms, covenants and
agreements contained in this Agreement and the other Transaction Documents
applicable to it.
(r) Corporate Name. Indian Industries' complete corporate name
is set forth in the preamble to this Agreement, and Indian Industries does not
use and has not during the last six years used any other corporate name, trade
name, doing business name or fictitious name other than the trade name "Indian
Industries".
(s) Investment Company Act. It is not, and is not controlled
by, an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
(t) Eligible Receivables. Each Assigned Receivable sold by
Indian Industries to the Buyer hereunder as of the date of its sale hereunder is
in fact an Eligible Receivable.
ARTICLE 6 COVENANTS
Section 6.1 Affirmative Covenants. From the date hereof until the
earlier of (a) collection by the Buyer of all Assigned Receivables, and (b) six
(6) months after a Purchase Termination Event:
-8-
11
(a) Compliance with Laws, Etc. Indian Industries will comply
in all material respects with all requirements of law enacted by any
Governmental Authority, including those with respect to the Assigned Receivables
and the related Contracts and Related Rights, except where noncompliance could
not reasonably be expected to have a Seller Material Adverse Effect.
(b) Preservation of Corporate Existence. Indian Industries
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its formation, 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 Seller
Material Adverse Effect.
(c) Audits. (i) Indian Industries will at any time and from
time to time during regular business hours, but only upon the delivery of three
(3) Business Day's prior notice thereof to Indian Industries, permit the Buyer
or any of its respective agents, representatives or lenders, (A) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in its possession or under its
control relating to Assigned Receivables, (B) to visit its offices and
properties for the purpose of examining such materials described in clause
(i)(A) above, and to discuss matters relating to Assigned Receivables or its
performance hereunder with any of its officers or employees having knowledge of
such matters, and (C) to verify the existence and amount of the Assigned
Receivables; and (ii) without limiting the provisions of clause (i) above, from
time to time on request of the Buyer, permit certified public accountants or
other auditors acceptable to the Buyer to conduct, at Indian Industries'
expense, a review of Indian Industries' books and records with respect to the
Assigned Receivables.
(e) Location of Records. Indian Industries will keep its
principal place of business and chief executive office, and the offices where it
keeps its records concerning the Assigned Receivables, all related Contracts and
other Related Rights and all other agreements related to such Assigned
Receivables (and all original documents relating thereto), at its address(es)
referred to in Section 9.2 or, upon 30 days' prior written notice to the Buyer,
at such other locations in the State of Indiana where all action required by
Section 8.4 shall have been taken and completed.
(f) Collections. Indian Industries in its capacity as the
Servicer, if instructed by AG, will instruct all Obligors to cause all
Collections to be sent to a Lock Box Account. In the event that Indian
Industries receives Collections directly from any Obligor, Indian Industries
shall deposit such Collections into a Lock Box Account by the end of the then
current four week accounting period of Indian Industries.
Section 6.2 Negative Covenants. From the date hereof until the earlier
of (a) collection by the Buyer of all Assigned Receivables, and (b) six (6)
months after a Purchase Termination Event:
(a) Sales, Liens, Etc. Indian Industries will not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Lien (other than the
-9-
12
Lien and security interest created by Section 1.3, above) upon or with respect
to, any Assigned Receivable or Related Rights or any interest therein.
(b) Extension or Amendment of Receivables. Indian Industries
will not, except as Servicer and as expressly permitted in any other Transaction
Document, extend, amend or otherwise modify the terms of any Assigned
Receivable; or amend, modify or waive any term or condition of any Contract
related to an Assigned Receivable.
(c) Change in Business or Credit and Collection Policy. Indian
Industries will not make any change in the character of its business or in the
credit and collection policy, which change could impair the collectibility of
any Assigned Receivable or otherwise adversely affect the interests or remedies
of the Buyer under this Agreement or any other Transaction Document unless such
change does not result in a Seller Material Adverse Effect.
(d) Change in Payment Instructions to Obligors. Indian
Industries will not make any change, or as the Servicer make any change, in its
instructions to Obligors regarding payments to be made to a post office box or a
wire transfer receipt account.
(e) Deposits to Special Accounts. Indian Industries will not
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lock-Box Account any payments other than Collections of Assigned
Receivables.
ARTICLE 7 INDEMNIFICATION
Section 7.1 Indemnities by Indian Industries. Without limiting any
other rights which the Buyer and each of its permitted assigns, officers,
directors, employees, agents, lenders or secured creditors (each of the
foregoing Persons being individually called a "Sale Indemnified Party") may have
hereunder or under applicable law, Indian Industries hereby agrees to indemnify
and hold harmless the Buyer and each Sale Indemnified Party from and against any
and all damages, losses, claims, judgments, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing collectively being called "Sale Indemnified Amounts") arising out of
or resulting from this Agreement (whether directly or indirectly) or the use of
proceeds of purchases or the purchase ownership of any Assigned Receivable or
Related Rights, excluding, however, (a) Sale Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of the Buyer
or such Sale Indemnified Party, (b) Sale Indemnified Amounts to the extent the
same include losses in respect of Assigned Receivables and reimbursement
therefor that would constitute credit recourse to Indian Industries for the
amount of any Assigned Receivable or Related Rights not paid by the Obligor for
credit reasons, or (c) any net income taxes or franchise taxes imposed on the
Buyer or such Sale Indemnified Party. Without limiting or being limited by the
foregoing, but subject to the exclusions set forth in the immediately preceding
sentence, Indian Industries shall pay on demand to the Buyer and each Sale
Indemnified Party any and all amounts necessary to indemnify and hold harmless
the Buyer and such Sale Indemnified Party from and against any and all Sale
Indemnified Amounts relating to or resulting from any of the following, with the
express understanding that no such claim shall arise solely due to the inability
of a particular Obligor to satisfy its obligations under a particular Assigned
Receivable because it lacks the financial resources to do so:
-10-
13
(i) the transfer or assignment (by operation of law
or otherwise) by Indian Industries of an interest in any
Assigned Receivable or Related Rights to any Person other than
the Buyer or the transfer and sale to the Buyer of any
Receivable other than an Eligible Receivable;
(ii) the failure of any information provided by
Indian Industries to the Buyer with respect to Assigned
Receivables or this Agreement to be true, correct and
complete;
(iii) the failure of any representation or warranty
or statement made or deemed made by Indian Industries (or any
of its officers), under or in connection with this Agreement
to have been true and correct when made or deemed made;
(iv) the failure by Indian Industries to comply with
any requirements of law enacted by any Governmental Authority
with respect to any Receivable or Related Rights or otherwise;
or the failure of any Assigned Receivable or Related Rights to
conform to any such requirement of law;
(v) the failure to vest and maintain vested in the
Buyer a valid and enforceable absolute ownership interest in
each Assigned Receivable at any time existing and the Related
Rights with respect thereto, free and clear of any Lien, other
than a Lien arising solely as a result of an act of the Buyer,
whether existing at the time of purchase of such Assigned
Receivable or at any time thereafter;
(vi) the failure of Indian Industries 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
Assigned Receivables and the Related Rights in respect
thereof, whether at the time of any purchase or at any
subsequent time;
(vii) any dispute, claim, counterclaim, offset or
defense (other than discharge in bankruptcy) of the Obligor to
the payment of any Assigned Receivable (including, without
limitation, a defense based on such Assigned 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 the goods or services related to such Assigned
Receivable or the furnishing or failure to furnish such goods
or services;
(viii) any failure of Indian Industries to perform
its duties or obligations in accordance with the provisions
hereof or to perform its duties or obligations under any of
the Contracts;
(ix) any products liability claim or personal injury
or property damage suit or other claim, investigation,
litigation or proceeding of whatever sort arising
-11-
14
out of or in connection with merchandise, insurance or
services which are the subject of any Receivable or Contract;
(x) the commingling of Collections of Assigned
Receivables at any time with other funds;
(xi) any investigation, litigation or proceeding
related to this Agreement or the use of proceeds of purchases
or the ownership of any Assigned Receivable or Related Rights;
(xii) any tax or governmental fee or charge (but not
including taxes upon or measured by net income or representing
a franchise or doing business tax on such Sale Indemnified
Party), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses, including
the reasonable fees and expenses of counsel in defending
against the same, which may arise by reason of the purchase or
ownership of the Assigned Receivables generated by Indian
Industries or any Related Rights connected with any such
Assigned Receivables; or
(xiii) any failure by Indian Industries to pay any
taxes when due, including, without limitation, sales taxes or
excise taxes, payable in connection with the Assigned
Receivables.
ARTICLE 8 ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE ASSIGNED RECEIVABLES
Section 8.1 Servicing of Assigned Receivables and Related Rights.
Consistent with the Buyer's ownership of the Assigned Receivables and the
Related Rights, the Buyer shall have the sole right to service, administer and
collect the Assigned Receivables, to assign such right and to delegate such
right to others. In consideration of the Buyer's purchase of the Assigned
Receivables and the Related Rights, Indian Industries agrees to cooperate fully
with the Buyer to facilitate the full and proper performance of such duties and
obligations for the benefit of the Buyer.
Section 8.2 Rights of the Buyer; Enforcement Rights.
(a) Unless the underlying Assigned Receivables have been
repurchased by Indian Industries from the Buyer pursuant to Section 3.2, the
Buyer shall have no obligation to account for, to replace, to substitute or to
return any Assigned Receivables and Related Rights to Indian Industries. Unless
the underlying Assigned Receivables have been repurchased by the Buyer from
Indian Industries, the Buyer shall have no obligation to account for, or to
return to Indian Industries, Collections, or any interest, late fees and charges
or other finance charges collected pursuant thereto, without regard to whether
such Collections and charges are in excess of the Purchase Price for such
Assigned Receivables and Related Rights.
(b) The Buyer shall have the unrestricted right to further
assign, transfer,
-12-
15
deliver, hypothecate, grant Liens in, subdivide or otherwise deal with the
Receivables and Related Rights, and all of the Buyer's right, title and interest
in, to and under this Agreement, on whatever terms the Buyer shall determine.
(c) The Buyer shall have the sole right to retain any gains or
profits created by buying, selling or holding the Assigned Receivables and
Related Rights and, except as expressly set forth in the Transaction Documents,
shall have the sole risk of and responsibility for losses or damages created by
such buying, selling or holding.
(d) Indian Industries hereby authorizes the Buyer, and
irrevocably appoints the Buyer as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of Indian
Industries, which appointment is coupled with an interest, to take any and all
steps in the name of Indian Industries and on behalf of Indian Industries
necessary or desirable, in the determination of the Buyer, to collect any and
all amounts or portions thereof due under any and all Assigned Receivables or
Related Rights, including, without limitation, endorsing the name of Indian
Industries on checks and other instruments representing Collections and
enforcing such Assigned Receivables and Related Rights.
Section 8.3 Responsibilities of Indian Industries .
Anything herein to the contrary notwithstanding:
(a) Indian Industries agrees to deliver directly to the
Servicer (for the Buyer's account), by the end of the then current four week
accounting period of Indian Industries, any Collections that it receives, in the
form so received, and agrees that all Collections shall be deemed to be received
in trust for the Buyer and shall be maintained and segregated separate and apart
from all other funds and moneys of Indian Industries until delivery of the
Collections to the Servicer;
(b) Indian Industries in its capacity as the Servicer, if
instructed by AG, agrees to instruct all Obligors to cause all Collections to be
sent to a post office box that is the subject of a Lock-Box Agreement; and
(c) Indian Industries shall (i) perform all of its obligations
hereunder and under the Contracts related to the Assigned Receivables and
Related Rights to the same extent as if the Assigned Receivables and Related
Rights had not been sold hereunder, and the exercise by the Buyer or its
designee or assignee of the Buyer's rights hereunder or in connection herewith
shall not relieve Indian Industries from such obligations and (ii) pay when due
any taxes, including, without limitation, any sales taxes payable in connection
with the Assigned Receivables and their creation and satisfaction.
Notwithstanding anything to the contrary in this Agreement, the Buyer shall not
have any obligation or liability with respect to any Assigned Receivable or
Related Rights nor shall the Buyer be obligated to perform any of the
obligations of Indian Industries under any of the foregoing, other than a duty
to cooperate with Indian Industries in connection with the performance of its
obligations under this Agreement.
-13-
16
Section 8.4 Further Action Evidencing Purchases. Indian Industries
agrees that from time to time, at its expense, it will execute and deliver all
further instruments and documents, and take all further reasonable action, in
order to perfect, protect or more fully evidence the purchase of the Assigned
Receivables and the Related Rights by the Buyer hereunder, or to enable the
Buyer to exercise or enforce any of its rights hereunder or under any other
Transaction Document as soon as reasonably possible. Indian Industries further
agrees from time to time, at its expense, promptly to take all action that the
Buyer may reasonably request in order to perfect, protect or more fully evidence
such purchase of the Assigned Receivables and the Related Rights or to enable
the Buyer to exercise or enforce any of its or their respective rights hereunder
or under any other Transaction Document in respect of the Assigned Receivables
and the Related Rights. Without limiting the generality of the foregoing Indian
Industries will:
(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as the Buyer or its lender(s) may reasonably determine
to be necessary or appropriate; and
(b) xxxx the master data processing records evidencing the
Assigned Receivables and, if requested by the Buyer, to the extent reasonably
practicable, legend the related Contracts, to reflect the sale of the Assigned
Receivables and Related Rights pursuant to this Agreement.
Indian Industries hereby authorizes the Buyer or its designee or
assignee to file, signed only by the Buyer, one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Assigned Receivables and Related Rights of Indian
Industries, in each case whether now existing or hereafter generated. If Indian
Industries fails to perform any of its agreements or obligations under this
Agreement, the Buyer or its designee or assignee may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the reasonable expenses of the Buyer or its designee or assignee incurred in
connection therewith shall be payable by Indian Industries under Section 7.1.
Section 8.5 Purchase Termination Event. Either (i) an election by the
Seller to no longer sell Receivables and Related Rights to the Buyer hereunder
by delivery to the Buyer of a notice to that effect or (ii) an election by the
Buyer to no longer purchase Receivables and Related Rights from the Seller
hereunder by delivery to the Seller of a notice to that effect; such notice to
take effect on the Business Day after the day of receipt by the recipient of
such notice (in either case, a "Purchase Termination Event").
ARTICLE 9 MISCELLANEOUS
Section 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by Indian Industries therefrom shall
be effective unless in a writing signed by the Buyer and any lender of the Buyer
to which the Buyer shall have granted a Lien in, or assigned to, any of the
Assigned Receivables, and any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Buyer to exercise, and no delay in exercising, any right
hereunder shall operate
-14-
17
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right.
Section 9.2 Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise expressly stated herein, be in writing
(which shall include facsimile communication) and shall be personally delivered
or sent 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
below 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, (a) if personally delivered, when received,
(b) if sent by certified mail, three (3) Business Days after having been
deposited in the mail, postage prepaid, (c) if sent by overnight courier, one
(1) Business Day after having been given to such courier, and (d) if transmitted
by facsimile, when sent, receipt confirmed by telephone or electronic means.
The Seller: Indian Industries, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention:
----------------------------
Telephone:
----------------------------
Facsimile:
----------------------------
AG: Indian-Xxxxxx XX
Xxxxxxxxxxxxx 00
0000, Xxx, Xxxxxxxxxxx
Attention: President
Telephone: 0000 00 000 00 00
Facsimile: 0041 41 720 34 46
Section 9.3 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Buyer and Indian Industries and
their respective successors and permitted assigns. Indian Industries may not
assign its rights hereunder or any interest herein without the prior written
consent of the Buyer. The Buyer may not assign its rights hereunder or any
interest herein without the prior written consent of Indian Industries;
provided, that Indian Industries hereby approves of the Buyer's assignment of
its rights hereunder, either absolutely or as collateral, to Bank One, Indiana,
National Association, and its successors and assigns. 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 occurrence of any Purchase Termination Event on which Indian
Industries has received payment in full for all Assigned Receivables and Related
Rights conveyed pursuant to Section 1.1 hereof and has paid and performed all of
its obligations hereunder in full. The rights and remedies with respect to any
breach of any representation and warranty made by Indian Industries pursuant to
Article 5 shall be continuing and shall survive any termination of this
Agreement.
Section 9.4 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
-15-
18
IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF INDIANA WITHOUT
REFERENCE TO THE CHOICE OR CONFLICTS OF LAWS RULES OR PRINCIPLES OF ANY FOREIGN
OR DOMESTIC JURISDICTION, EXCEPT TO THE EXTENT THAT THE PERFECTION (OR THE
EFFECT OF PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF THE BUYER IN THE
RECEIVABLES AND THE RELATED RIGHTS IS GOVERNED BY THE LAWS OF A STATE OR
JURISDICTION OTHER THAN THE STATE OF INDIANA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF INDIANA OR ANY UNITED
STATES FEDERAL COURT, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
TRANSACTION DOCUMENT.
Section 9.5 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
Section 9.6 Survival of Termination. The provisions of Section 1.4,
Article 7, Section 9.4, Section 9.7 and this Section 9.6 shall survive any
termination of this Agreement.
Section 9.7 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH
OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
-16-
19
Section 9.8 Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding of the parties hereto,
and supersede all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof.
The Exhibits to this Agreement shall be deemed incorporated by reference into
this Agreement as if set forth herein.
Section 9.9 Headings. The captions and headings of this Agreement and
in any Exhibit hereto are for convenience of reference only and shall not affect
the interpretation hereof or thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective duly authorized officers, as of the
date first above written.
INDIAN INDUSTRIES, INC., AS SELLER
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx, Secretary
-------------------------------
(Printed Name and Title)
INDIAN - XXXXXX XX, AS BUYER
By: /s/ Xxxx Xxxxxxxxx
-------------------------------
Xxxx Xxxxxxxxx, Director
-------------------------------
(Printed Name and Title)
STATE OF INDIANA )
) ss:
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this 16th day of
May, 2000, by Xxxx X. Xxxxxx, the Secretary of Indian Industries, Inc., an
Indiana corporation, on behalf of the corporation.
/s/ Xxxxx X. Xxxxx
-----------------------------------
Notary Public - Signature
Xxxxx X. Xxxxx
-----------------------------------
(Printed Name)
My Commission Expires: 11/25/00
---------------
My County of Residence: Xxxxxxxx
--------------
-17-
20
STATE OF _____________ )
) ss:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _______ day of
May, 2000, by ___________________________, the ________________ of Indian-Xxxxxx
XX, a Swiss corporation, on behalf of the corporation.
--------------------------------
Notary Public - Signature
--------------------------------
(Printed Name)
My Commission Expires: ____________________
My County of Residence: ____________________
Official Certification
Seen for authentication of the above signature, affixed in our presence by
Xx. Xxxx Xxxxxxxxx Xxxxxxxxx, Swiss citizen of Herrliberg ZH, according to his
Information residing in Zurich, Switzerland,
(who has identified himself by passport),
who, according to the extract shown to us from the Commercial Register dated
April 26, 2000, is entered in the Commercial Register of the canton of Zug as
member of the board of directors with the right to sign individually for the
Indian-Xxxxxx XX (Indian-Xxxxxx Ltd.), having its registered domicile in Zug,
Switzerland.
The Swiss law does not provide for the act of swearing.
Zurich 8, May 16, 2000/ih
NOTARIAT RIESBACH-ZURICH
/s/ Xxx Xxxxxx
-------------------------------
Xxx Xxxxxx, certifying officer
-18-
21
EXHIBIT 1
DEFINITIONS
As used in the Receivables Purchase Agreement, dated as of May 15,
2000, between Indian Industries, Inc. and Indian-Xxxxxx XX (the "Agreement"),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section and Exhibit references in the Agreement
are to Sections of and Exhibits to the Agreement. All accounting terms not
specifically defined herein shall be constructed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of Indiana and not specifically defined herein, are used herein as defined
in Article 9. Unless the context otherwise requires, "or" means "and/or," and
"including" (and with correlative meaning "include" and "includes") means
including without limiting the generality of any description preceding such
term.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person.
"Assigned Receivable" means any Receivable which as of any
Determination Date, Indian Industries sells to the Buyer.
"Adverse Claim" means a lien, security interest, pledge or charge or
encumbrance of any kind other than a lien, pledge, security interest or other
charge or encumbrance, in favor of the Buyer.
"Business Day" means any day on which (i) banks are not authorized or
required to remain closed in Indianapolis, Indiana and (ii) if this definition
of "Business Day" is used in connection with the Buyer, reference shall be to
any day on which banks are not authorized or required to remain closed in
Zurich, Switzerland.
"Buyer" has the meaning assigned in the preamble to this Agreement.
"Collections" means, with respect to any Assigned Receivables, (i) all
funds or other payment media or property that are received by any Person in
payment of any amounts owed in respect of such Assigned Receivable (including,
without limitation, finance charges, interest and all other charges), or applied
to amounts owed in respect of such Assigned Receivable (including, without
limitation, insurance payments and net proceeds of the sale or other disposition
of repossessed goods or other collateral or property of the Obligor or any
Person directly or indirectly liable for the payment of such Assigned Receivable
and available to be applied thereon) and (ii) all other proceeds of such
Assigned Receivable.
"Contract" means, with respect to any Receivable, any all contracts,
understandings, instruments, agreements, invoices, notes or other writings
pursuant to which such Receivable arises or which evidences such Receivable or
under which any Obligor becomes or is obligated to make payment in respect of
such Receivable.
-19-
22
"Credit and Collection Policy" means those receivables credit and
collection policies and practices of Seller in effect on the date of this
Agreement, as modified from time to time.
"Determination Date" shall mean any date on which Assigned Receivables
are sold to the Buyer.
"Eligible Receivables" means, at any date a determination thereof is to
be made, those Receivables of Indian Industries for which Indian Industries
shall have furnished to the Buyer information adequate for purposes of
identification at all times and in form and substance as may be requested by the
Buyer; provided however, that a Receivable shall not constitute an Eligible
Receivable if it: (a) remains unpaid sixty-one (61) or more days after the
original due date for its payment stated on the applicable invoice; (b) is an
account receivable with respect to which the account receivable debtor is the
subject of a bankruptcy or similar insolvency proceeding or has made an
assignment for the benefit of creditors or whose assets have been conveyed to a
receiver or trustee or who is no longer conducting its customary business,
except and to the extent the Bank otherwise agrees in writing; (c) is an account
receivable which is not invoiced (and dated as of the date of such invoice) and
sent to the account receivable debtor in the ordinary course of the business of
Indian Industries and in accordance with customary billing practices after
delivery of the underlying goods to, or performance of the underlying services
for, the accounts receivable debtor; (d) is an account receivable arising with
respect to goods which have not been shipped or arising with respect to services
which have not been fully performed; (e) is an account receivable with respect
to which the account receivable debtor's obligation to pay the account
receivable is conditioned upon the account receivable debtor's approval or is
otherwise subject to any repurchase obligation or return right, as with sales
made on a xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval or
consignment basis; (f) is an account receivable in which the Buyer does not have
an interest; (g) is an account receivable due from any Affiliate of Indian
Industries or which is due solely from an accounts receivable debtor which is a
USA federal governmental entity or agency, except and to the extent the Buyer
otherwise agrees in writing; (h) is an account receivable evidenced by an
instrument (as defined in Article 9 of the UCC) not in the possession of the
Buyer; or (i) is an account receivable which has been charged-off by Indian
Industries. At any time more than ten percent (10%) of the aggregate amount of
accounts receivable due from an accounts receivable debtor remain unpaid
sixty-one (61) or more days after the date(s) due, as stated on the original
invoice(s) evidencing such accounts receivable, then no account receivable due
Indian Industries from that accounts receivable debtor shall constitute an
Eligible Receivable.
"Fair Market Value Discount Factor" shall have the meaning assigned to
such term in Section 2.1 hereof.
"Governmental Authority" means any court or any federal, state,
municipal, local or other department, commission, board, bureau, agency, public
authority, instrumentality or any arbitrator.
"Ineligible Receivable" shall have the meaning assigned to such term in
Section 3.2(a) hereof.
-20-
23
"Initial Sale" means the first and earliest sale of Assigned
Receivables made by Indian Industries to Buyer pursuant to this Agreement. There
can be only one Initial Sale under this Agreement.
"Lien" means any security interest, mortgage, pledge, assignment, or
voluntary or involuntary lien, charge or other encumbrance of any kind,
including interests of vendors or lessors under conditional sale contracts or
capital leases.
"Lock-Box Account" means an account maintained at a bank or other
financial institution for the purpose of receiving collections with respect to
the Assigned Receivables.
"Lock-Box Agreement" means an agreement between the Buyer and each
Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
"Obligor" means, with respect to any Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereor.
"Purchase Price" shall have the meaning assigned to such term in
Section 2.1 hereof.
"Purchase Termination Event" shall have the meaning assigned to such
term in Section 8.5 hereof.
"Receivable" means any indebtedness and any other obligations owed to
the Seller by, or any rights of the Seller to payments from or on behalf of, an
Obligor, which constitutes an account arising in connection with the sale of
goods or services by the Seller, and includes, without limitation, the
obligation to pay any finance charges, fees and other charges with respect
thereto. Indebtedness and other obligations arising from any one transaction,
including, without limitation, indebtedness and other obligation represented by
an individual invoice or Contract, shall constitute a Receivable separate from a
Receivable arising from any other transaction.
"Related Property" means, with respect to any Receivable:
(i) all of the Seller's interest in any goods (including
returned goods), and documentation or title evidencing the shipment or storage
of any goods (including returned goods) relating to any sale giving rise to such
Receivable;
(ii) all other security interests or liens and property
subject thereto from time
-21-
24
to time purporting to secure payment of such Receivable, whether pursuant to the
Contract relating to such Receivable or otherwise, together with all UCC
financing statements or similar filings signed by an Obligor relating thereto;
and
(iii) all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of whatever
character from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise.
"Related Rights" shall have the meaning assigned to such term in
Section 1.1(a) hereof.
"Sale Indemnified Amounts" shall have the meaning assigned to such term
in Section 7.1 hereof.
"Sale Indemnified Party" shall have the meaning assigned to such term
in Section 7.1 hereof.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller Material Adverse Effect" means, with respect to any event or
circumstance
(i) a material adverse effect on the assets, business,
financial condition, prospects or operation of Indian Industries;
(ii) a material adverse effect on the ability of Indian
Industries to perform its obligations under this Agreement or any other
Transaction Document to which Indian Industries as the Seller or the Servicer,
in its capacity as such, is a party;
(iii) a material adverse effect on the validity or
enforceability as against Indian Industries of this Agreement or any other
Transaction Document to which Indian Industries, as the Seller or the Servicer
as such, is a party;
(iv) a material adverse effect on the status, existence,
vesting, validity, perfection, priority or enforceability of the Buyer's
interests in the Assigned Receivables and the Related Rights; or
(v) a material adverse effect on the validity, enforceability
or collectibility of more than _______ percent (___%) of the then outstanding
Assigned Receivables.
"Servicer" means the Person who will collect the Assigned Receivables
on behalf of the Buyer. Indian Industries will be appointed by AG as the
Servicer pursuant to the Services Agreement.
"Services Agreement" means the Services Agreement, dated as of even
date herewith, between AG and Indian Industries, wherein AG appoints Indian
Industries as the Servicer.
-22-
25
"Transaction Documents" means this Agreement, the Services Agreement,
the Lock-Box Agreements (if any), and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with this Agreement, in each case as the same
may be amended, supplemented or otherwise modified or restated from time to time
in accordance with this Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"Unpaid Balance" means the then outstanding principal balance thereof,
excluding therefrom any available reductions or adjustments, the amount of which
the Buyer and Seller have agreed upon, due to defective, rejected, returned,
repossessed or foreclosed goods, defective goods or rejected services or any
cash discount, adjustment or set off.
-23-
26
EXHIBIT 2
PURCHASE STATEMENT
This instrument is delivered to you pursuant to the Receivables
Purchase Agreement dated as of May 15, 2000, by and between Indian Industries,
Inc. and INDIAN-XXXXXX XX (the "Agreement").
1. The undersigned hereby sells, assigns and transfers, absolutely but
without recourse and with the covenants, warranties and indemnifications set
forth in the Agreement, to INDIAN - XXXXXX XX pursuant to Article 1 of the
Agreement, all rights, title and interests of the Seller in, to and under the
Receivables sold herewith and all Related Rights (as such term is defined in the
Agreement) with respect thereto, for an aggregate purchase price of $__________,
payable in accordance with the provisions of Article 3 of the Agreement.
[Include the following Paragraph 2 in the Purchase Statement prepared
with respect to the Initial Sale only:]
2. The undersigned will retain the Receivables that have remained
unpaid for sixty-one (61) or more days after the original due date for payment
and which are identified on Schedule 1, attached hereto.
3. This instrument shall become effective as of the date hereof upon
your acceptance.
INDIAN INDUSTRIES, INC.
By:
-----------------------------
--------------------------------
(Printed Name and Title)
Accepted as of ___________ ____, 2000.
INDIAN - XXXXXX XX
By:
--------------------------------
------------------------------------
(Printed Name and Title)
-24-
27
[Attach the following Schedule to the Purchase Statement prepared with respect
to the Initial Sale only:]
SCHEDULE 1
TO
PURCHASE STATEMENT
DATED AS OF MAY 15, 2000
Indian Industries, Inc. is hereby transferring as of May 15, 2000 to INDIAN
XXXXXX XX certain Assigned Receivables. ________________________ is retaining
the Receivables that have remained unpaid for sixty-one (61) or more days after
the original due date for payment and which are set forth below bearing the
following customer name, invoice number and date:
-25-
28
EXHIBIT 3
SUBORDINATED
PROMISSORY NOTE
$_____________ May 15, 0000
Xxxxxxxxxxxx, Xxxxxxx
1. FOR VALUE RECEIVED, the undersigned, INDIAN XXXXXX XX, a corporation
incorporated under the laws of Switzerland ("Maker"), promises to pay to the
order of Indian Industries, Inc., a corporation incorporated under the laws of
Indiana ("Holder"), upon demand the principal sum of
_________________________________ Dollars ($_____________), for payment of
accounts receivable purchased pursuant to the terms of the Receivables Purchase
Agreement dated as of May 15, 2000 by and between Maker and Holder, as same may
be amended from time to time (the "Purchase Agreement"), together with interest
accrued on the unpaid principal balance from the date hereof at the Note Rate as
defined below, subject to adjustment.
Accrued interest shall be payable annually on the first day of each
calendar year commencing January 1, 2001, and continuing on the first day of
each year thereafter, together with a final payment of all unpaid principal and
interest, together with any other sums due under this Note, upon demand of the
Holder.
2. The Note Rate shall be at the Applicable Federal Rate in effect as
of the date hereof. The Applicable Federal Rate means the rate of interest per
annum determined periodically by the United States federal government pursuant
to Internal Revenue Code Section 1274.
3. Interest shall be calculated on the basis of a 360 day year and
charged for twelve (12) thirty (30) day months.
4. This Note may be prepaid in part or in full at any time without
premium or penalty. To do so, the Maker must give written notice to the Holder
of its intention to prepay this Note in full or in part pursuant to this
paragraph and shall specify therein the principal amount to be prepaid and the
date on which such prepayment shall occur. The amount which shall be paid to the
Holder in the event of such prepayment shall be the principal so prepaid plus
accrued interest thereon to the date of prepayment. Prepayments will be applied
first to accrued interest and then to principal.
5. Maker shall pay all principal, interest, costs and expenses hereon,
including but not limited to attorneys' fees and costs, all without relief from
valuation and appraisement laws.
6. All payments on account of the indebtedness evidenced by this Note
shall be first applied to the interest on the unpaid principal balance and the
remainder to principal.
-26-
29
Payments are to be made at the office of Holder, Indian Industries,
Inc., 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or to such other address as
the Holder may in writing designate to the Maker from time to time. All payments
are to be made in immediately available funds.
7. In addition to the breach ("Event of Default") of any of the terms
and conditions herein, the failure to pay any installment of principal or
interest hereunder when due or demanded and the continuance of such failure for
five days thereafter, time being of the essence, shall also be considered an
Event of Default. Upon the occurrence of an Event of Default (i) the outstanding
principal balance hereunder at the sole option of the Holder and without further
demand or notice of any kind (which are hereby expressly waived), may become
immediately due and payable, and such amounts, together with all arrearages of
interest, shall then bear interest at a rate per annum three percent (3%) in
excess of the then applicable Prime Rate, (ii) the Maker will pay to the Holder
all attorneys' fees, court costs and expenses incurred by the Holder in
connection with the Holder's efforts to collect such indebtedness, and (iii) the
Holder may exercise from time to time any of the rights and remedies available
to the Holder under applicable law and/or the Purchase Agreement.
8. In no event shall the interest rate hereunder exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final determination, deem applicable hereto. In the event that a court
determines that the Holder has received interest hereunder in excess of the
highest rate applicable hereto, such excess interest shall be applied as a
principal payment and/or refunded to the Maker.
9. No delay or omission of the holder of this Note to exercise any
right or power arising from any Event of Default herein shall impair any such
right or power or be considered to be a waiver of any other right or power or of
any such default or any acquiescence therein nor shall the action or nonaction
of the Holder in case of default on the part of the Maker impair any right or
power resulting therefrom. A waiver of a right or remedy or of an Event of
Default on one occasion shall not be construed as a bar or waiver on any other
occasion. No waiver shall be effective unless made in a signed writing. If any
provision of this Note is held invalid, that provision will be ineffective to
the extent of such invalidity, without invalidating the remainder of that
provision or the other provisions of this Note.
10. The Maker and all endorsers, sureties, guarantors and all others
who are or may become liable for all or any part of this obligation hereby waive
presentment, demand for payment, notice of default or dishonor, notice of
protest, and protest, and all other notices or demands in connection with the
delivery, acceptance, performance, default, endorsement or guaranty of this
Note. All such persons hereby consent to any number of renewals or extensions of
the time of payment hereof and to any changes in the interest rate and to any
releases of collateral which the Holder at any time may grant or agree to,
without notice to such persons. Any such renewals or extensions may be made
without notice to any of said parties and without affecting their liability.
-27-
30
-1-
11. This Note will be governed and construed in accordance with the
laws of the State of Indiana. MAKER HEREBY WAIVES THE RIGHT TO TRIAL BY JURY
WITH RESPECT TO ALL MATTERS ARISING OUT OF THIS NOTE.
12. This Note is subject to the terms of a Standby and Subordination
Agreement and an Offset Waiver Agreement, each dated as of May 15, 2000 in favor
of BANK ONE, INDIANA, NATIONAL ASSOCIATION (the "Bank"), to which reference is
hereby made, restricting the rights of the maker, drawer or any guarantor, and
of any holder, with respect to payments on account of the principal and interest
hereof and subordinating the indebtedness evidenced hereby to the interests of
the Bank and waiving offset and certain related rights.
MAKER:
INDIAN-XXXXXX XX
By:
----------------------------------
Title:
-------------------------------
STATE OF _____________ )
) ss:
COUNTY OF ___________ )
The foregoing Subordinated Promissory Note was acknowledged before me
this _______ day of _________, 20___, by ___________________________, the
________________ of Indian-Xxxxxx XX, a Swiss corporation, on behalf of the
corporation.
------------------------------------
Notary Public
-28-
