Exhibit 10.62
EXECUTION COPY
RECEIVABLES SALE AGREEMENT
Dated as of January 8, 2002
by and among
THE ENTITIES PARTY HERETO
FROM TIME TO TIME AS ORIGINATORS
and
EAGLE-PICHER FUNDING CORPORATION.
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND INTERPRETATION.........................................................................1
Section 1.01. Definitions...................................................................................1
Section 1.02. Rules of Construction.........................................................................1
ARTICLE II TRANSFERS OF RECEIVABLES..............................................................................1
Section 2.01. Agreement to Transfer.........................................................................1
Section 2.02. Grant of Security Interest....................................................................3
Section 2.03. Joint and Severable Obligations...............................................................3
ARTICLE III CONDITIONS PRECEDENT.................................................................................3
Section 3.01. Conditions to Initial Transfer................................................................3
Section 3.02. Conditions to all Transfers...................................................................4
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS.............................................................5
Section 4.01. Representations and Warranties of the Originators.............................................5
Section 4.02. Affirmative Covenants of the Originators.....................................................12
Section 4.03. Negative Covenants of the Originators........................................................19
Section 4.04. Breach of Representations, Warranties or Covenants...........................................22
ARTICLE V INDEMNIFICATION.......................................................................................22
Section 5.01. Indemnification..............................................................................22
ARTICLE VI INTENTIONALLY-OMITTED................................................................................25
ARTICLE VII COLLATERAL SECURITY.................................................................................25
Section 7.01. Security Interest............................................................................25
Section 7.02. Other Collateral; Rights in Receivables......................................................26
Section 7.03. Delivery of Collateral.......................................................................26
Section 7.04. Originators Remain Liable....................................................................26
ARTICLE VIII MISCELLANEOUS......................................................................................27
Section 8.01. Notices......................................................................................27
Section 8.02. No Waiver; Remedies..........................................................................28
Section 8.03. Successors and Assigns.......................................................................28
Section 8.04. Termination; Survival of Obligations.........................................................29
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Section 8.05. Complete Agreement; Modification of Agreement................................................29
Section 8.06. Amendments and Waivers.......................................................................29
Section 8.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.................................30
Section 8.08. Counterparts.................................................................................31
Section 8.09. Severability.................................................................................31
Section 8.10. Section Titles...............................................................................32
Section 8.11. No Setoff....................................................................................32
Section 8.12. Confidentiality..............................................................................32
Section 8.13. Further Assurances...........................................................................33
Section 8.14. Fees and Expenses............................................................................33
INDEX OF APPENDICES
Exhibit 2.01(a) Form of Receivables Assignment
Schedule 4.01(a) Jurisdictions of Organization
Schedule 4.01(b) Executive Offices; Collateral Locations; Corporate, Legal
or Other Names; Organizational Identification Number/FEIN
Schedule 4.01(d) Litigation
Schedule 4.01(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock, Debt
Schedule 4.01(i) Tax Matters
Schedule 4.01(j) Intellectual Property
Schedule 4.01(m) ERISA
Schedule 4.01(t) Deposit and Disbursement Accounts
Schedule 4.02(g) Corporate or Legal and Trade Names
Schedule 4.03(b) Existing Liens
Annex X Definitions
Annex Y Schedule of Documents
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THIS RECEIVABLES SALE AGREEMENT (as amended, supplemented or
otherwise modified and in effect from time to time, this "AGREEMENT") is entered
into as of January 8, 2002, by and among EAGLE-PICHER FUNDING CORPORATION, a
Delaware corporation (the "BUYER"), as buyer hereunder, and each of the entities
listed on the signature pages hereto as an "Originator" (each, an "ORIGINATOR")
as a seller hereunder.
RECITALS
A. Each Originator intends to sell, and the Buyer intends to
purchase, certain Receivables originated by such Originator, from time to time,
as described herein.
B. The Buyer has been formed for the sole purpose of
purchasing and reselling to the Purchasers all Receivables originated by the
Parent and each other Originator.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter 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
DEFINITIONS AND INTERPRETATION
Section 1.01. DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in ANNEX X. Section 1.02. RULES
OF CONSTRUCTION. For purposes of this Agreement, the rules of construction set
forth in ANNEX X shall govern. All Appendices hereto, or expressly identified to
this Agreement, are incorporated herein by reference and, taken together with
this Agreement, shall constitute but a single agreement.
ARTICLE II
TRANSFERS OF RECEIVABLES
Section 2.01. AGREEMENT TO TRANSFER.
(a) RECEIVABLES TRANSFERS. Subject to the terms and conditions hereof, each
Originator agrees to sell (without recourse except to the extent specifically
provided herein) to Buyer on the Closing Date and on each Business Day
thereafter (each such date, a "TRANSFER DATE") all Receivables owned by it on
each such Transfer Date, and Buyer agrees to purchase all such Receivables on
each such Transfer Date (each such sale and purchase, a "TRANSFER"). All
Transfers by an Originator to the Buyer shall collectively be evidenced by a
certificate of assignment substantially in the form of EXHIBIT 2.01(a) (each, a
"RECEIVABLES ASSIGNMENT," and collectively, the "RECEIVABLES ASSIGNMENTS"), and
each Originator and Buyer shall execute and deliver a Receivables Assignment on
or before the Closing Date.
(b) DETERMINATION OF TRANSFERRED RECEIVABLES. On and as of each Transfer
Date, all Receivables owned by each Originator and not previously acquired by
Buyer shall be identified for sale to Buyer (each such Receivable identified for
sale, individually, a "TRANSFERRED RECEIVABLE" and, collectively, the
"TRANSFERRED RECEIVABLES"). The Transferred Receivables will be identified by
reference to the General Trial Balance of each Originator.
(c) PAYMENT OF PURCHASE PRICE. (i) In consideration for each Sale of
Transferred Receivables hereunder, Buyer shall pay to the Originator thereof the
Sale Price therefor in Dollars in a combination of (A) immediately available
funds on the Transfer Date therefore in an amount equal to the cash available to
Buyer for the payment thereof and (B) payment of the remaining portion of such
Sale Price (the "DEFERRED PURCHASE PRICE") after such Transfer Date in
accordance with the provisions of this SECTION 2.01(c). All such payments by
Buyer under this SECTION 2.01(c) shall be effected by means of a wire or
intrabank transfer on the day when due to such account or accounts as the
Originators may designate.
(ii) Each Originator agrees to accept the portion of the Sale Price
for each Sale of Transferred Receivables hereunder in excess of the Buyer's
then-available cash in accordance with the following provisions, and agrees
that no interest shall accrue on the unpaid portion of any such Deferred
Purchase Price. The Buyer agrees to pay in full, in immediately available
funds, the Deferred Purchase Price with respect to each Sale hereunder
within 90 days after the Transfer Date for such Sale and agrees that such
Deferred Purchase Price shall be paid regardless of whether or not the
Obligor under any applicable Receivable pays such Receivable. Each
Originator and the Buyer agree that payment of the Deferred Purchase Price
shall be made by Buyer only from amounts available to the Buyer pursuant to
Sections 6.03(c), 6.04(a)(iv) and 6.05(g) of the Purchase Agreement. At any
time on and after the ninetieth day following the Closing Date, the
aggregate outstanding Deferred Purchase Price owed by the Buyer may not
exceed the Maximum Deferred Purchase Price for more than five (5)
consecutive Business Days.
(iii) Each of the Originators and Buyer acknowledge and agree that the
arrangements hereunder with respect to the Deferred Purchase Price
component of each Sale hereunder are provided as a convenience to the Buyer
and are not intended to derogate from the expressed intention of the
parties hereto regarding the characterization of Sales hereunder as true
sales occurring on the applicable Transfer Date for each such Sale.
(d) OWNERSHIP OF TRANSFERRED RECEIVABLES. On and after each Transfer Date
and after giving effect to the Transfers to be made on each such date, Buyer
shall own the Transferred Receivables and no Originator shall take any action
inconsistent with such ownership nor shall any Originator claim any ownership
interest in such Transferred Receivables.
(e) RECONSTRUCTION OF GENERAL TRIAL BALANCE. If at any time any Originator
fails to generate its General Trial Balance, Buyer shall have the right to
reconstruct such General Trial Balance
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so that a determination of the Transferred Receivables can be made pursuant to
SECTION 2.01(b). Each Originator agrees to cooperate with such reconstruction,
including by delivery to Buyer, upon Buyer's request, of copies of all Contracts
and Records.
(f) SERVICING OF RECEIVABLES. So long as no Event of Servicer Termination
shall have occurred and be continuing and no Successor Servicer has assumed the
responsibilities and obligations of the Servicer pursuant to Section 9.02 of the
Purchase Agreement, the Servicer and each Sub-Servicer shall (i) conduct the
servicing, administration and collection of the Transferred Receivables and
shall take, or cause to be taken, all such actions as may be necessary or
advisable to service, administer and collect the Transferred Receivables, all in
accordance with (A) the terms of the Purchase Agreement, (B) customary and
prudent servicing procedures for trade receivables of a similar type and (C) all
applicable laws, rules and regulations, and (ii) hold all Invoices and other
documents and incidents (other than Contracts) relating to the Transferred
Receivables in trust for the benefit of Buyer, as the owner thereof, and for the
sole purpose of facilitating the servicing of the Transferred Receivables in
accordance with the terms of the Purchase Agreement.
Section 2.02. GRANT OF SECURITY INTEREST. The parties hereto intend that
each Transfer shall constitute a purchase and sale and not a loan.
Notwithstanding the foregoing, in addition to and not in derogation of any
rights now or hereafter acquired by Buyer under SECTION 2.01 hereof, the parties
hereto intend that this Agreement shall constitute a security agreement under
applicable law and that each Originator shall be deemed to have granted, and
each Originator does hereby grant, to the Buyer a continuing security interest
in all of such Originator's right, title and interest in, to and under the
Transferred Receivables and the Originator Collateral whether now owned or
hereafter acquired by such Originator to secure the obligations of such
Originator to the Buyer hereunder (including, if and to the extent that any
Transfer is recharacterized as a transfer for security, the repayment of a loan
deemed to have been made by the Buyer in the amount of the Sale Price with
respect thereto and which secures the Buyer's right to receive all Collections
of the Transferred Receivables as otherwise contemplated under this Agreement).
Section 2.03. JOINT AND SEVERABLE OBLIGATIONS. Each Originator hereby
agrees that each agreement, representation, warranty, covenant and obligation of
any Originator hereunder shall be the joint and several liability of each
Originator hereunder and each Originator hereby agrees that, promptly upon the
demand of the Buyer or any assignee of Buyer (including the Administrative Agent
or any Purchaser) it will fully perform each agreement, covenant and obligation
of each other Originator party hereto.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. CONDITIONS TO INITIAL TRANSFER. The initial Transfer hereunder
shall be subject to satisfaction of each of the following conditions precedent
(any one or more of which may be waived in writing by each of Buyer and the
Administrative Agent):
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(a) THIS AGREEMENT; INFORMATION; OTHER DOCUMENTS. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to, each
Originator and Buyer, and Buyer shall have received such information, documents,
instruments, and agreements as Buyer shall request in connection with the
transactions contemplated by this Agreement, including all documents,
instruments, agreements and legal opinions identified in the Schedule of
Documents, each in form and substance satisfactory to Buyer.
(b) GOVERNMENTAL APPROVALS. Buyer shall have received (i) satisfactory
evidence that the Originators have obtained all required consents and approvals
of all Persons, including all requisite Governmental Authorities, to the
execution, delivery and performance of this Agreement and the other Related
Documents and the consummation of the transactions contemplated hereby and
thereby or (ii) an Officer's Certificate from each Originator in form and
substance satisfactory to Buyer affirming that no such consents or approvals are
required.
(c) COMPLIANCE WITH LAWS. Each Originator shall be in compliance with all
applicable foreign, federal, state and local laws and regulations,
including, without limitation, those specifically referenced in SECTION 4.02(f)
except to the extent that the failure to so comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(d) PAYMENT OF FEES AND TAXES. Each Originator and each Domestic Subsidiary
of each Originator shall have paid all fees required to be paid by it on the
Closing Date, including all fees, costs and expenses required hereunder or
required to be paid by it in connection with closing the transactions
contemplated hereunder and under the other Related Documents. Each Originator
and each Domestic Subsidiary of each Originator shall have paid all taxes,
including without limitation any stamp duty which may be imposed as a result of
the transactions contemplated by this Agreement and the Related Documents.
(e) PURCHASE AGREEMENT CONDITIONS. Each of those conditions precedent set
forth in SECTIONS 3.01 and 3.02 of the Purchase Agreement shall have been
satisfied or waived in writing as provided therein.
Section 3.02. CONDITIONS TO ALL TRANSFERS. Each Transfer hereunder
(including the initial Transfer) shall be subject to satisfaction of the
following further conditions precedent as of the Transfer Date therefor:
(a) the representations and warranties of each Originator contained herein
or in any other Related Document (including, in the case of the Parent, in its
role as Servicer) shall be true and correct as of such Transfer Date, both
before and after giving effect to such Transfer and to the application of the
Sale Price therefor, except to the extent that any such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted by this Agreement;
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(b) (i) the Administrative Agent shall not have declared the Facility
Termination Date to have occurred after the occurrence of a Termination Event
and (ii) the Facility Termination Date shall not have occurred automatically, in
either event in accordance with Section 9.01 of the Purchase Agreement;
(c) each Originator and each other Domestic Subsidiary of the Parent shall
be in compliance with each of its covenants and other agreements set forth
herein or in any Related Document and applicable to such Person (including, in
the case of the Parent, in its role as Servicer); and
(d) each Originator shall have taken such other action, including delivery
of approvals, consents, opinions, documents and instruments to Buyer as Buyer
may request.
The acceptance by any Originator of the Sale Price for any Transferred
Receivables on any Transfer Date shall be deemed to constitute, as of any such
Transfer Date, a representation and warranty by such Originator that the
conditions in this SECTION 3.02 have been satisfied. Upon any such acceptance,
title to the Transferred Receivables sold on such Transfer Date shall be vested
absolutely in Buyer, whether or not such conditions were in fact so satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.01. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS. To induce
Buyer to purchase the Transferred Receivables, each Originator makes the
following representations and warranties to Buyer as of the Closing Date and,
except to the extent provided otherwise below, as of each Transfer Date, each
and all of which shall survive the execution and delivery of this Agreement.
(a) LEGAL EXISTENCE; COMPLIANCE WITH LAW. Each Originator (i) is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as set forth on
SCHEDULE 4.01(a) hereto (which is such Originator's only state of organization);
(ii) is duly qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified is not reasonably likely to result in a Material Adverse Effect; (iii)
has the requisite corporate or limited liability company power and authority and
the legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease, and to conduct its
business, in each case, as now, heretofore and proposed to be conducted; (iv)
has all licenses, permits, consents or approvals from or by, and has made all
filings with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct,
except where the failure to obtain such licenses, permits, consents or approvals
is not reasonably likely to result in a Material Adverse Effect; (v) is in
compliance with its charter, bylaws, limited liability company agreement and
other organizational documents, as applicable; and (vi) subject to specific
representations set forth herein regarding
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ERISA, Environmental Laws, tax laws and other laws, is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) EXECUTIVE OFFICES; COLLATERAL LOCATIONS; CORPORATE, LEGAL OR OTHER
NAMES; FEIN. As of the Closing Date, the current location of each Originator's
chief executive office, principal place of business, other offices, the
warehouses and premises within which any Originator Collateral is stored or
located, and the locations of its records concerning the Originator Collateral
are set forth in SCHEDULE 4.01(b) and none of such locations have changed within
the past 12 months. During the prior five years, except as set forth in SCHEDULE
4.01(B), no Originator has been known as or used any corporate, legal,
fictitious or trade name. In addition, SCHEDULE 4.01(b) lists the organizational
identification number issued by each Originator's state of organization or
states that no such number has been issued and lists the federal employer
identification number of each Originator.
(c) CORPORATE OR LIMITED LIABILITY COMPANY POWER, AUTHORIZATION,
ENFORCEABLE OBLIGATIONS. The execution, delivery and performance by each
Originator of this Agreement and the other Related Documents to which it is a
party and the creation and perfection of all Transfers and Liens provided for
herein and therein: (i) are within such Person's corporate or limited liability
company power; (ii) have been duly authorized by all necessary or proper
corporate and shareholder or limited liability company action; (iii) do not
contravene any provision of such Person's charter, bylaws, limited liability
company agreement or other organizational documents, as applicable; (iv) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority; (v) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (vi) do not result in the
creation or imposition of any Adverse Claim upon any of the property of such
Person; and (vii) do not require the consent or approval of any Governmental
Authority or any other Person, except those which will have been duly obtained,
made or complied with prior to the Closing Date as provided SECTION 3.01(b) and,
with respect solely to the Transfer of Governmental Receivables, which are not
Eligible Receivables, notices or consents not given or obtained under applicable
Assignment of Government Claims Laws. The exercise by Buyer of any of its rights
and remedies under any Related Document to which it is a party, does not require
the consent or approval of any Governmental Authority or any other Person (other
than consents or approvals solely relating to or required to be obtained by the
Buyer, and subject to the Bankruptcy Code), except those which will have been
duly obtained, made or complied with prior to the Closing Date as provided in
SECTION 3.01(b) and, with respect solely to the Transfer of Governmental
Receivables, which are not Eligible Receivables, notices or consents not given
or obtained under applicable Assignment or Government Claims Laws. On or prior
to the Closing Date, each of the Related Documents shall have been duly executed
and delivered by each Originator that is a party thereto and on the Closing Date
each such Related Document shall then constitute a legal, valid and binding
obligation of such Originator enforceable against it in accordance with its
terms.
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(d) NO LITIGATION. No Litigation is now pending or, to the knowledge of any
Originator, threatened against any Originator (or any Domestic Subsidiary of any
Originator) that (i) challenges any Originator's right or power to enter into or
perform any of its obligations under the Related Documents to which it is a
party, or the validity or enforceability of any Related Document or any action
taken thereunder, (ii) seeks to prevent the Transfer, Purchase, contribution or
pledge of any Receivable or Originator Collateral or the consummation of any of
the transactions contemplated under this Agreement or the other Related
Documents or (iii) has a reasonable risk of being determined adversely to any
Originator (or any Domestic Subsidiary of any Originator) and that, if so
determined, could reasonably be expected to have a Material Adverse Effect.
Except as set forth on SCHEDULE 4.01(d), as of the Closing Date there is no
Litigation pending or threatened that seeks damages in excess of $500,000 or
injunctive relief against, or alleges criminal misconduct by, any Originator (or
any Domestic Subsidiary of any Originator).
(e) SOLVENCY. Both before and after giving effect to (i) the transactions
contemplated by this Agreement and the other Related Documents and (ii) the
payment and accrual of all transaction costs in connection with the foregoing,
each Originator is and will be Solvent. No event of the type described in
SECTION 9.01(c) of the Purchase Agreement has been commenced or threatened
against any Originator.
(f) MATERIAL ADVERSE EFFECT. Between September 30, 2001 and the Closing
Date, (i) no Originator has incurred any obligations, contingent or
non-contingent liabilities, liabilities for charges, long-term leases or unusual
forward or long-term commitments that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (ii) no contract,
lease or other agreement or instrument has been entered into by any Originator
or has become binding upon any Originator's assets and no law or regulation
applicable to any Originator has been adopted that has had or could reasonably
be expected to have a Material Adverse Effect, and (iii) no Originator is in
default and no third party is in default under any material contract, lease or
other agreement or instrument to which any Originator is a party that alone or
in the aggregate could reasonably be expected to have a Material Adverse Effect.
Between September 30, 2001, and the Closing Date no event has occurred that
alone or together with other events could reasonably be expected to have a
Material Adverse Effect.
(g) OWNERSHIP OF RECEIVABLES; LIENS. Each Originator owns each Receivable
originated or acquired by it free and clear of any Adverse Claim (other than
Permitted Seller Encumbrances) and, from and after each Transfer Date, Buyer
will acquire valid and properly perfected title to and the sole record and
beneficial ownership interest in each Transferred Receivable purchased or
otherwise acquired on such date, free and clear of any Adverse Claim or
restrictions on transferability. As of the Closing Date, none of the properties
and assets of any Originator are subject to any Adverse Claims other than
Permitted Originator Encumbrances, and there are no facts, circumstances or
conditions known to any Originator that may result in any Adverse Claims
(including Adverse Claims arising under Environmental Laws) other than Permitted
Originator Encumbrances. Each Originator has received all assignments, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Originator's
right, title and interest in and to the Receivables
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originated by it, the Originator Collateral attributable to it, and its other
properties and assets. Each Originator has rights in and the power to transfer
the Receivables. Each Originator has rights in and the power to transfer each
item of the Originator Collateral upon which it purports to xxxxx x Xxxx
hereunder free and clear of any and all Liens other than Permitted Originator
Encumbrances. The Liens granted to Buyer pursuant to SECTION 7.01 will at all
times be fully perfected first priority Liens in and to the Originator
Collateral, subject only to Permitted Originator Encumbrances.
(h) VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND DEBT.
Except as set forth in SCHEDULE 4.01(h), no Originator has any Subsidiaries, is
engaged in any joint venture or partnership with any other Person, or is an
Affiliate of any other Person. All of the issued and outstanding Stock of each
Originator is owned, directly or indirectly, by the Parent. There are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Originator may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Debt of each
Originator as of the Closing Date is described in SCHEDULE 4.01(h).
(i) TAXES. All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Originator
and each of its Affiliates included in the Parent Group have been filed with the
appropriate Governmental Authority and all charges have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof (or any such fine, penalty, interest, late charge or loss
has been paid), excluding charges or other amounts being contested in accordance
with SECTION 4.02(l). Proper and accurate amounts have been withheld by each
Originator (and each such Affiliate) from its respective employees for all
periods in full and complete compliance with all applicable federal, state,
local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. SCHEDULE 4.01(i) sets forth as of the
Closing Date (i) those taxable years for which any Originator's (or such
Affiliate's) tax returns are currently being audited by the IRS or any other
applicable Governmental Authority and (ii) any assessments or threatened
assessments in connection with such audit or otherwise currently outstanding.
Except as described on SCHEDULE 4.01(i), as of the Closing Date, no Originator
(or such Affiliate) has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any charges. None of the
Originators, such Affiliates and their respective predecessors are liable for
any charges: (A) under any agreement (including any tax sharing agreements) or
(B) to the best of each Originator's (and each such Affiliate's) knowledge, as a
transferee. As of the Closing Date, no Originator (or such Affiliate) has agreed
or been requested to make any adjustment under IRC Section 481(a), by reason of
a change in accounting method or otherwise, that would have a Material Adverse
Effect.
(j) INTELLECTUAL PROPERTY. As of the Closing Date, each Originator owns or
has rights to use all intellectual property necessary to continue to conduct its
business as now or heretofore conducted by it or proposed to be conducted by it.
Each Originator conducts its business and affairs without infringement of or
interference with any intellectual property of any other Person, except to the
extent such infringement or interference could not reasonably be expected to
have a
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Material Adverse Effect. As of the Closing Date, except as set forth in SCHEDULE
4.01(j), no Originator is aware of any infringement or claim of infringement by
others of any intellectual property of any Originator.
(k) FULL DISCLOSURE. As of the dates specified therein (or, if no such
dates are specified, as of the date furnished or delivered), (i) all information
contained in this Agreement, any of the other Related Documents, or any written
statement furnished by or on behalf of any Originator to Buyer, any Purchaser or
the Administrative Agent pursuant to the terms of this Agreement or any of the
other Related Documents is true and accurate in every material respect, and (ii)
none of this Agreement, any of the other Related Documents, or any written
statement furnished by or on behalf of any Originator to Buyer, any Purchaser or
the Administrative Agent pursuant to the terms of this Agreement or any of the
other Related Documents (including any such statement furnished by an Originator
in its capacity as a Servicer or Sub-Servicer), is misleading as a result of the
failure to include therein a material fact.
(l) NOTICES TO OBLIGORS. Each Originator has directed all Obligors of
Transferred Receivables originated by it to remit all payments with respect to
such Transferred Receivables for deposit in a Lockbox or Lockbox Account.
(m) ERISA.
(i) SCHEDULE 4.01(m) lists all Plans as of the Closing Date and
separately identifies all Pension Plans, including all Title IV Plans,
Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare
Plans. Each Qualified Plan has been determined by the IRS to qualify under
Section 401 of the IRC, the trusts created thereunder have been determined
to be exempt from tax under the provisions of Section 501 of the IRC, and
nothing has occurred that would cause the loss of such qualification or
tax-exempt status. Except as otherwise provided in SCHEDULE 4.01(m), (x)
each Plan is in compliance with the applicable provisions of ERISA and the
IRC, including the timely filing of all reports required under the IRC or
ERISA, (y) no Originator or ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section 412 of the
IRC or Section 302 of ERISA or the terms of any such Plan and (z) no
Originator or ERISA Affiliate has engaged in a "prohibited transaction," as
defined in Section 4975 of the IRC, in connection with any Plan that would
subject any Originator to a material tax on prohibited transactions imposed
by Section 4975 of the IRC.
(ii) Except as set forth in SCHEDULE 4.01(m): (A) no Title IV Plan has
any Unfunded Pension Liability; (B) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or
is reasonably expected to occur; (C) there are no pending or, to the
knowledge of any Originator, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any
Plan; (D) no Originator or ERISA Affiliate has incurred or reasonably
expects to incur any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan;
9
(E) within the last five years no Title IV Plan with Unfunded Pension
Liabilities has been transferred outside of the "controlled group" (within
the meaning of Section 4001(a)(14) of ERISA) of any Originator or ERISA
Affiliate; (F) Stock of all Originators and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of the assets of any Plan, measured
on the basis of fair market value as of the last valuation date of any
Plan; and (G) no liability under any Title IV Plan has been satisfied with
the purchase of a contract from an insurance company that is not rated AAA
by S&P or an equivalent rating by another nationally recognized rating
agency.
(n) BROKERS. No broker or finder acting on behalf of any Originator was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and no Originator
has any obligation to any Person in respect of any finder's or brokerage fees in
connection herewith or therewith.
(o) MARGIN REGULATIONS. No Originator is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin security" as
such terms are defined in Regulations T, U or X of the Federal Reserve Board as
now and from time to time hereafter in effect (such securities being referred to
herein as "MARGIN STOCK"). No portion of the proceeds the Sale Price for any
Sale will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any Debt that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any portion of such proceeds to be considered a
"purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Originator will take or permit to be taken any action that
might cause any Related Document to violate any regulation of the Federal
Reserve Board applicable to such Originator.
(p) NONAPPLICABILITY OF BULK SALES LAWS. No transaction contemplated by
this Agreement or any of the other Related Documents requires compliance with
any bulk sales act or similar law.
(q) SECURITIES ACT AND INVESTMENT COMPANY ACT EXEMPTIONS. Each purchase of
Transferred Receivables under this Agreement constitutes (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act and
(ii) a purchase or other acquisition of notes, drafts, acceptances, open
accounts receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act.
(r) GOVERNMENT REGULATION. No Originator is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
No Originator is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, or any other federal or state statute that
restricts or limits its ability to incur Debt or to perform its obligations
hereunder or under any other Related Document. The purchase or acquisition of
the Transferred
10
Receivables by Buyer hereunder, the application of the Sale Price therefor and
the consummation of the transactions contemplated by this Agreement and the
other Related Documents will not violate any provision of any such statute or
any rule, regulation or order issued by the Securities and Exchange Commission.
(s) BOOKS AND RECORDS; MINUTES. Each Originator maintains (i) books and
records of account and (ii) minutes of the meetings and other proceedings of its
Stockholders and board of directors (or analogous governing body).
(t) DEPOSIT AND DISBURSEMENT ACCOUNTS. SCHEDULE 4.01(t) lists all banks and
other financial institutions at which any Originator maintains a deposit account
established for the receipt of collections on accounts receivable as of the
Closing Date, including any Lockbox Accounts and the Concentration Account
(including a notation as to whether any such account receives or has received
collections of Excluded Receivables), and such schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number therefor, in each case as of the Closing Date.
(u) REPRESENTATIONS AND WARRANTIES IN OTHER RELATED DOCUMENTS. Each of the
representations and warranties of each Originator contained in the Related
Documents (other than this Agreement) is true and correct in all material
respects and such Originator hereby makes each such representation and warranty
to, and for the benefit of, the Buyer, the Purchasers and the Administrative
Agent as if the same were set forth in full herein, and each Originator consents
to the assignment of Buyer's rights with respect thereto to the Purchasers and
the Administrative Agent (and their successors and assigns) as contemplated in
SECTION 4.02(e).
(v) RECEIVABLES. With respect to each Transferred Receivable designated as
an Eligible Receivable in any Investment Base Certificate delivered on or after
the Transfer Date of such Transferred Receivable:
(i) such Transferred Receivable satisfies the criteria for an Eligible
Receivable;
(ii) prior to its Sale to Buyer such Transferred Receivable was owned
by the Originator thereof free and clear of any Adverse Claim (other than
Permitted Seller Encumbrances), and such Originator had the full right,
power and authority to sell, assign, transfer and pledge its interest
therein as contemplated under this Agreement and the other Related
Documents and, upon such Sale, Buyer will acquire valid and properly
perfected title to and the sole record and beneficial ownership interest in
such Transferred Receivable, free and clear of any Adverse Claim and,
following such Transfer, such Transferred Receivable will not be subject to
any Adverse Claim as a result of any action or inaction on the part of such
Originator;
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(iii) the Transfer of each such Transferred Receivable pursuant to
this Agreement and the Receivables Assignment executed by the Originator in
respect thereof constitutes, as applicable, a valid sale, transfer,
assignment, setover and conveyance to Buyer of all right, title and
interest of such Originator in and to such Transferred Receivable; and
(iv) the Originator of such Transferred Receivable has no knowledge of
any fact (including any defaults by the Obligor thereunder on any other
Receivable) that would cause it or should have caused it to expect that any
payments on such Transferred Receivable will not be paid in full when due
or to expect any other Material Adverse Effect.
The representations and warranties described in this SECTION 4.01 shall survive
the Transfer of the Transferred Receivables to Buyer, any subsequent assignment
of the Transferred Receivables by Buyer, and the termination of this Agreement
and the other Related Documents and shall continue until the indefeasible
payment in full of all Transferred Receivables.
Section 4.02. AFFIRMATIVE COVENANTS OF THE ORIGINATORS. Each Originator
covenants and agrees that, unless otherwise consented to by Buyer and the
Administrative Agent, from and after the Closing Date and until the Termination
Date:
(a) OFFICES AND RECORDS. Each Originator shall maintain its principal place
of business and chief executive office and the office at which it keeps its
Records at the respective locations specified in SCHEDULE 4.01(b) or, upon 30
days' prior written notice to Buyer and the Administrative Agent, at such other
location in a jurisdiction where all action requested by Buyer, any Purchaser or
the Administrative Agent pursuant to SECTION 8.13 shall have been taken with
respect to the Transferred Receivables. Each Originator shall at its own cost
and expense, for not less than three years from the date on which each
Transferred Receivable was originated, or for such longer period as may be
required by law, maintain adequate Records with respect to such Transferred
Receivable, including records of all payments received, credits granted and
merchandise returned with respect thereto. Each Originator will, (A) at all
times from and after the date hereof, clearly and conspicuously xxxx its
computer and master data processing books and records relating to the
Transferred Receivables with the legend set forth in Section 7.07(a) of the
Purchase Agreement and (B) segregate (from all other receivables then owned or
being serviced by such Originator) all Invoices relating to each Transferred
Receivable.
(b) ACCESS. Each Originator shall, during normal business hours, from time
to time upon one Business Day's prior notice and as frequently as Buyer, the
Servicer or the Administrative Agent determines to be appropriate: (i) subject
to compliance with such Originator's insurance, safety and security
requirements, provide Buyer, the Servicer or the Administrative Agent and any of
their respective officers, employees and agents access to its properties
(including properties of such Originator utilized in connection with the
collection, processing or servicing of the Transferred Receivables), facilities,
advisors and employees (including officers) of each Originator, each
Originator's Domestic Subsidiaries and to the
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Originator Collateral, (ii) permit Buyer, the Servicer or the Administrative
Agent and any of their respective officers, employees and agents, to inspect,
audit and make extracts from such Originator's books and records, including all
Records maintained by such Originator, (iii) permit Buyer, the Servicer or the
Administrative Agent and their respective officers, employees and agents, to
inspect, review and evaluate the Transferred Receivables and other Originator
Collateral of any Originator, and (iv) permit Buyer, the Servicer or the
Administrative Agent and their respective officers, employees and agents to
discuss matters (other than legally privileged information) relating to the
Transferred Receivables or such Originator's performance under this Agreement or
the affairs, finances and accounts of such Originator or its Domestic
Subsidiaries with any of such Person's officers, directors, employees,
representatives or agents (in each case, with those Persons having knowledge of
such matters) and with its independent certified public accountants. If an
Incipient Termination Event or a Termination Event shall have occurred and be
continuing, or the Administrative Agent, in good faith, believes that an
Incipient Termination Event or a Termination Event has occurred or is imminent
or deems any Purchaser's rights or interests in the Transferred Receivables or
the Seller Collateral insecure, each such Originator shall provide such access
at all times and without advance notice and shall provide Buyer, the Servicer
and the Administrative Agent with access to its suppliers and customers. Each
Originator shall make available to Buyer, the Servicer and the Administrative
Agent and their respective counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records, including Records
maintained by such Originator and each Domestic Subsidiary of such Originator,
as the Buyer, the Servicer or the Administrative Agent may request. Each
Originator shall deliver any document or instrument necessary for Buyer, the
Servicer or the Administrative Agent, as they may from time to time request, to
obtain records from any service bureau or other Person that maintains records
for such Originator and each Domestic Subsidiary of such Originator, and shall
maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Originator and each Domestic Subsidiary
of such Originator.
(c) COMMUNICATION WITH ACCOUNTANTS. Each Originator authorizes Buyer, the
Servicer and the Administrative Agent to communicate directly with its
independent certified public accountants, and authorizes and shall instruct
those accountants and advisors to disclose and make available to Buyer, the
Servicer and the Administrative Agent any and all financial statements and other
supporting financial documents, schedules and information (other than legally
privileged information) relating to any Originator (including copies of any
issued management letters required to be submitted to the Administrative Agent
pursuant to the Related Documents) with respect to the business, financial
condition and other affairs of any Originator as they relate to the Transferred
Receivables, the Originator Collateral, and any other matters which relate to
events, circumstances or facts which the Administrative Agent reasonably
believes may result in, constitute or relate to a Material Adverse Effect. Each
Originator agrees to render to Buyer, the Servicer and the Administrative Agent
at such Originator's own cost and expense, such clerical and other assistance as
may be reasonably requested with regard to the foregoing. If any Termination
Event shall have occurred and be continuing, each Originator shall, promptly
upon request therefor, assist Buyer in delivering to the Administrative Agent
Records reflecting activity through the close of business on the Business Day
immediately preceding the date of such request.
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(d) COMPLIANCE WITH CREDIT AND COLLECTION POLICIES, TRANSFERRED RECEIVABLES
AND CONTRACTS. Each Originator shall comply in all material respects with the
Credit and Collection Policies and with the terms of each Transferred Receivable
and any Invoice with respect thereto. Each Originator will comply with the terms
of each Contract (other than an Invoice) except to the extent that the failure
to so comply (i) could not reasonably be expected to have a Material Adverse
Effect or (ii) is not reasonably likely to have a material adverse effect on the
value of a Transferred Receivable or the Originator Collateral or the interests
of Buyer therein (PROVIDED, that a breach of this CLAUSE (ii) shall not
constitute a Termination Event so long as the provisions of SECTION 4.04 hereof
are complied with with respect thereto).
(e) ASSIGNMENT. Each Originator agrees that, to the extent permitted under
the Purchase Agreement, Buyer may assign all of its right, title and interest
in, to and under the Transferred Receivables and this Agreement, including its
right to exercise the remedies set forth in SECTION 4.04. Each Originator agrees
that, upon any such assignment, the assignee thereof may enforce directly,
without joinder of Buyer, all of the obligations of such Originator hereunder,
including any obligations of such Originator set forth in SECTIONS 4.02(O),
4.04, 5.01 and 8.14.
(f) COMPLIANCE WITH AGREEMENTS AND APPLICABLE LAWS. Each Originator shall
(and shall cause each of its Domestic Subsidiaries to) perform each of its
obligations under this Agreement and the other Related Documents and comply with
all federal, state and local laws and regulations applicable to it and the
Receivables, including those relating to truth in lending, retail installment
sales, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices, privacy, licensing, securities laws, margin
regulation, taxation, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to so comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Each Originator shall (and shall cause each of its
Domestic Subsidiaries to) continue to pay all governmental fees and all taxes,
including without limitation any stamp duty, which may be imposed as a result of
the transactions contemplated by this Agreement and the Related Documents.
(g) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each Originator
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate or limited liability company existence and
its rights and franchises; (ii) continue to conduct its business substantially
as now conducted or as otherwise permitted hereunder and in accordance with the
terms of its certificate or articles of incorporation and bylaws, limited
liability company agreement and other organizational documents, as applicable;
(iii) at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, including all
licenses, permits, charters and registrations, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and (iv) transact business only in such
corporate, legal and trade names as are set forth in SCHEDULE 4.02(g) or, upon
30 days' prior written notice to Buyer, the Administrative Agent and each Rating
Agency, in such other corporate, legal or trade names with respect to which all
action requested by Buyer, any
14
Purchaser or the Administrative Agent pursuant to SECTION 8.13 shall have been
taken with respect to the Transferred Receivables. No Originator shall change
the type of entity it is, its jurisdiction of incorporation or organization, or
its organization number, if any, issued by its state of incorporation or
organization, except upon 30 days' prior written notice to Buyer and the
Administrative Agent, and with respect to which jurisdiction all action
requested by Buyer, any Purchaser or the Administrative Agent pursuant to
SECTION 8.13 shall have been taken with respect to the Transferred Receivables.
(h) NOTICE OF MATERIAL EVENT. Each Originator shall (and shall cause each
of its Domestic Subsidiaries to) promptly inform Buyer in writing of the
occurrence of any of the following, in each case setting forth the details
thereof, any notices or other correspondence relating thereto, and what action,
if any, such Originator or such Domestic Subsidiary proposes to take with
respect thereto:
(i) any Litigation commenced or threatened against any Originator or
any such Domestic Subsidiary or with respect to or in connection with all
or any portion of the Transferred Receivables that (A) seeks damages or
penalties in an uninsured amount in excess of $500,000 in any one instance
or $1,000,000 in the aggregate, (B) seeks injunctive relief, (C) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Originator or ERISA Affiliate in connection with any Plan, (D)
alleges criminal misconduct by any Originator or any such Domestic
Subsidiary, (E) alleges the violation of any law regarding, or seeks
remedies in connection with, any Environmental Liability, or (F) could
reasonably be expected to have a Material Adverse Effect;
(ii) the commencement of a case or proceeding by or against any
Originator or any such Domestic Subsidiary seeking a decree or order in
respect of any Originator or any such Domestic Subsidiary (A) under the
Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy, liquidation, insolvency, moratorium, receivership or
reorganization law, (B) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for any Originator
or any such Domestic Subsidiary or for any substantial part of such
Person's assets, or (C) ordering the winding-up or liquidation of the
affairs of any Originator or any such Domestic Subsidiary;
(iii) the receipt of notice that (A) such Originator or any such
Domestic Subsidiary is being placed under regulatory supervision, (B) any
license, permit, charter, registration or approval necessary for the
conduct of such Originator's or any such Domestic Subsidiary's business is
to be, or may be, suspended or revoked, or (C) such Originator or any such
Domestic Subsidiary is to cease and desist any practice, procedure or
policy employed by such Originator or any such Domestic Subsidiary in the
conduct of its business if such cessation may have a Material Adverse
Effect;
(iv) (A) any Adverse Claim made or asserted against any of the
Transferred Receivables or Originator Collateral of which it becomes aware
or (B) any determination
15
that a Transferred Receivable designated as an Eligible Receivable in an
Investment Base Certificate or otherwise was not an Eligible Receivable at
the time of such designation;
(v) (A) each infringement or claim of infringement by any other Person
of any intellectual property of any Originator and (B) each item of
intellectual property necessary to continue its business as then conducted
by such Originator which it does not own or have rights to use;
(vi) the execution or filing with the IRS or any other Governmental
Authority of any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any taxes,
assessments or other charges;
(vii) the establishment of any Plan, Pension Plan, Title IV Plan,
Multiemployer Plan, ESOP, Welfare Plan or Retiree Welfare Plan not listed
on SCHEDULE 4.01(M); or
(viii) any other event, circumstance or condition that has had or
could reasonably be expected to have a Material Adverse Effect.
The requirements of this SECTION 4.02(h) shall be satisfied so long as any
Originator has provided the notice and details required herein.
(i) USE OF PROCEEDS. Each Originator shall utilize the proceeds of the Sale
Price obtained by it for each Sale made by it hereunder solely for general
corporate purposes (including the retirement or repayment of third party debt
and loans from or made to Affiliates) and to pay any related expenses payable by
such Originator under this Agreement and the other Related Documents in
connection with the transactions contemplated hereby and thereby and for no
other purpose.
(j) SEPARATE IDENTITY.
(i) Each Originator shall, and shall cause each of its Affiliates
included in the Parent Group to, maintain corporate records and books of
account separate from those of Buyer.
(ii) The financial statements of each Originator (including the
Parent) and its consolidated Subsidiaries shall disclose that (A) Buyer's
sole business consists of the purchase of the Receivables from the
Originators and the subsequent resale of such Receivables to the
Purchasers, (B) Buyer is a separate corporate entity with its own separate
creditors who will be entitled, upon its liquidation, to be satisfied out
of Buyer's assets prior to any value in Buyer becoming available to Buyer's
equity holders and (C) the assets of Buyer are not available to pay
creditors of the Parent or any other Affiliate of the Parent.
16
(iii) The resolutions, agreements and other instruments underlying the
transactions described in this Agreement shall be continuously maintained
by each Originator as official records.
(iv) Each Originator shall, and shall cause each Affiliate included in
the Parent Group to, maintain an arm's-length relationship with Buyer and
shall not hold itself out as being liable for the Debts of Buyer.
(v) Each Originator shall, and shall cause each Affiliate included in
the Parent Group to, keep its assets and its liabilities wholly separate
from those of Buyer.
(vi) Each Originator shall, and shall cause each Affiliate included in
the Parent Group to, conduct its business solely in its own name through
its duly Authorized Officers or agents and in a manner designed not to
mislead third parties as to the separate identity of the Buyer.
(vii) No Originator shall (and each Originator shall cause each
Affiliate included in the Parent Group not to) mislead third parties by
conducting or appearing to conduct business on behalf of Buyer or expressly
or implicitly representing or suggesting that the Parent or such Affiliate
is liable or responsible for the Debts of Buyer or that the assets of any
Originator or such Affiliate are available to pay the creditors of Buyer.
(viii) The operating expenses and liabilities of Buyer shall be paid
from Buyer's own funds and not from the funds of any Originator.
(ix) Each Originator shall at all times have, and cause each Affiliate
included in the Parent Group at all times to have, stationery and other
business forms and a mailing address and telephone number separate from
those of Buyer.
(x) Each Originator shall, and shall cause each Affiliate included in
the Parent Group to, at all times limit its transactions with Buyer only to
those expressly permitted hereunder or under any other Related Document.
(xi) Each Originator shall, and shall cause each Affiliate included in
the Parent Group to, comply with (and cause to be true and correct) each of
the facts and assumptions contained in the opinion of Squire, Xxxxxxx &
Xxxxxxx L.L.P. delivered pursuant to the Schedule of Documents.
(k) ERISA AND ENVIRONMENTAL NOTICES. Each Originator shall give Buyer and
the Administrative Agent prompt written notice of (i) any event that could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA and (ii) any environmental claims against any Originator or any
other Domestic Subsidiary of the Parent or any other Originator which,
individually could reasonably be expected to exceed $500,000 or in the aggregate
could reasonably be expected to exceed $1,000,000.
17
(l) PAYMENT, PERFORMANCE AND DISCHARGE OF OBLIGATIONS.
(i) Subject to SECTION 4.02(l)(ii), each Originator shall (and shall
cause each of its Domestic Subsidiaries to) pay, perform and discharge or
cause to be paid, performed and discharged all of its obligations and
liabilities, including all taxes, assessments and governmental charges upon
its income and properties and all lawful claims for labor, materials,
supplies and services, promptly when due.
(ii) Each Originator (and each such Domestic Subsidiary) may in good
faith contest, by appropriate proceedings, the validity or amount of any
charges or claims described in SECTION 4.02(l)(i); PROVIDED, that (A)
adequate reserves with respect to such contest are maintained on the books
of such Originator (or such Domestic Subsidiary), in accordance with GAAP,
(B) such contest is maintained and prosecuted continuously and with
diligence, (C) none of the Originator Collateral may become subject to
forfeiture or loss as a result of such contest, (D) no Lien may be imposed
to secure payment of such charges or claims other than inchoate tax liens
and (E) Buyer and such Originator (or Domestic Subsidiary, as applicable)
have fully considered and reasonably believe that nonpayment or
nondischarge thereof could not reasonably be expected to have or result in
a Material Adverse Effect.
(m) DEPOSIT OF COLLECTIONS. Each Originator shall (and shall cause each of
its Domestic Subsidiaries to) instruct all Obligors to remit all payments with
respect to any Transferred Receivables directly into a Lockbox Account and shall
deposit and cause its Subsidiaries to deposit or cause to be deposited promptly
into a Lockbox Account, and in any event no later than the first Business Day
after receipt thereof, all Collections it may receive in respect of Transferred
Receivables, and until so deposited all such items or other proceeds shall be
held in trust, as trustee, for the benefit of the Buyer and its assigns
(including the Administrative Agent and the Purchasers). Neither the Buyer nor
the Servicer shall make any deposits into a Lockbox or any Lockbox Account
except in accordance with the terms of this Agreement or any other Related
Document.
(n) ACCOUNTING CHANGES. If any Accounting Changes occur and such changes
result in a change in the standards or terms used herein, then the parties
hereto agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of such Persons and their
Subsidiaries shall be the same after such Accounting Changes as if such
Accounting Changes had not been made. If the parties hereto agree upon the
required amendments to this Agreement, then after appropriate amendments have
been executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained herein shall, only to the extent of
such Accounting Change, refer to GAAP consistently applied after giving effect
to the implementation of such Accounting Change. If such parties cannot agree
upon the required amendments within 30 days following the date of implementation
of any Accounting Change, then all financial statements delivered and all
18
standards and terms used herein shall be prepared, delivered and used without
regard to the underlying Accounting Change.
(o) ADJUSTMENTS TO SALE PRICE. If on any day the Billed Amount of any
Transferred Receivable is reduced as a result of any Dilution Factors, and the
amount of such reduction exceeds the amount, if any, of Dilution Factors taken
into account in the calculation of the Sale Price for such Transferred
Receivable, the Originator thereof shall make a cash payment to Buyer in the
amount of such excess by remitting such amount to the Collection Account in
accordance with the terms of the Purchase Agreement.
(p) BOOKS AND RECORDS. Each Originator shall cause its books and Records to
be marked as to clearly distinguish Excluded Receivables from Transferred
Receivables.
(q) PARENT FINANCIAL COVENANTS. The Parent shall comply with any of the
financial covenants set forth in ANNEX G to the Purchase Agreement.
(r) COLLECTIONS AND PROCEEDS OF TRANSFERRED RECEIVABLES. Each Originator
shall ensure that no Collections or other proceeds with respect to a Transferred
Receivable reconveyed to it pursuant to SECTION 4.04 hereof are paid or
deposited into any Lockbox Account.
(s) REPORTS AND RECORDS REGARDING TRANSFERRED RECEIVABLES AND RECONVEYED
RECEIVABLES. Each Originator hereby agrees that, from and after the Closing Date
until the Termination Date, it shall prepare and deliver all reports, statements
and records required to be delivered by it hereunder or under any other Related
Document so as to clearly distinguish (i) Excluded Receivables from Transferred
Receivables and (ii) Transferred Receivables that are subsequently reconveyed to
the appropriate Originator pursuant to SECTION 4.04 hereof from Transferred
Receivables that are not so reconveyed.
Section 4.03. NEGATIVE COVENANTS OF THE ORIGINATORS. Each Originator
covenants and agrees that, without the prior written consent of Buyer and the
Administrative Agent, from and after the Closing Date and until the Termination
Date:
(a) SALE OF STOCK AND ASSETS. Except for sales of inventory and equipment
in the ordinary course of business as permitted by the Senior Debt Facility, no
Originator shall sell, transfer, convey, assign (by operation of law or
otherwise) or otherwise dispose of, or assign any right to receive income in
respect of, any of its properties or other assets, including capital Stock, any
Transferred Receivable or Invoice with respect thereto, any of its rights with
respect to any Lockbox or Lockbox Account or any other Originator Collateral.
(b) LIENS. No Originator shall create, incur, assume or permit to exist any
Adverse Claim on or with respect to (i) its Receivables other than Permitted
Seller Encumbrances or (ii) any other Originator Collateral (whether now owned
or hereafter acquired) except for the Liens set forth in SCHEDULE 4.03(b) and
other Permitted Originator Encumbrances.
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(c) MODIFICATIONS OF RECEIVABLES OR CONTRACTS. No Originator shall (i)
extend, amend, forgive, discharge, compromise, cancel or otherwise modify the
terms of any Transferred Receivable, or amend, modify or waive any term or
condition of any Invoice or other Contract therefor; PROVIDED, that as long as
no Incipient Termination Event or Termination Event has occurred and is
continuing, (A) any Originator, in its capacity as Servicer or Sub-Servicer, may
take such actions as are permitted under the terms of the Purchase Agreement,
and (B) any Originator may amend any Contract (other than an Invoice) related to
a Transferred Receivable PROVIDED, that such action would not, (1) cause any
Transferred Receivable which prior to such amendment did not constitute an
Eligible Receivable to be an Eligible Receivable, (2) cause any Transferred
Receivable which prior to such amendment constituted an Eligible Receivable to
cease to be an Eligible Receivable, (3) cause an Incipient Termination Event or
a Termination Event to occur or (4) have a material adverse effect on the value
or collectibility of, the interests of the Purchasers in, or the security for,
any Transferred Receivable, or (ii) amend, modify or waive any term or provision
of the Credit and Collection Policies.
(d) SALE CHARACTERIZATION. No Originator shall (and will not allow any of
its Domestic Subsidiaries to) make statements or disclosures or prepare any
financial statements for any purpose, including for federal income tax,
reporting or accounting purposes, that shall account for the transactions
contemplated by this Agreement in any manner other than as a true sale of its
full right, title and ownership interest in such Transferred Receivable to
Buyer.
(e) CAPITAL STRUCTURE AND BUSINESS. No Originator shall (i) make any
changes in any of its business objectives, purposes or operations that could
have or result in a Material Adverse Effect or (ii) make any change in its
capital structure as described on SCHEDULE 4.01(h), including the issuance of
any shares of Stock, warrants or other securities convertible into Stock or any
revision of the terms of its outstanding Stock or (iii) amend, supplement or
otherwise modify its certificate or articles of incorporation, bylaws, limited
liability company agreement or other organizational documents, as applicable, in
a manner that could have or result in a Material Adverse Effect. No Originator
shall change its jurisdiction of incorporation or organization or reincorporate
or reorganize itself except as permitted by SECTION 4.02(g). No Originator shall
engage in any business other than the businesses currently engaged in by the
Originators.
(f) ACTIONS AFFECTING RIGHTS. No Originator shall (i) take any action, or
fail to take any action, if such action or failure to take action may interfere
with the enforcement of any rights hereunder or under the other Related
Documents, including rights with respect to the Transferred Receivables; (ii)
waive or alter any rights with respect to the Transferred Receivables (or any
agreement or instrument relating thereto) except to the extent permitted under
SECTION 4.03(c); or (iii) fail to pay any tax, assessment, charge, fee or other
obligation of such Originator with respect to the Transferred Receivables, or
fail to defend any action, if such failure to pay or defend may adversely affect
the priority or enforceability of the perfected title of Buyer to and the sole
record and beneficial ownership interest of Buyer in the Transferred Receivables
or, prior to their Sale hereunder, such Originator's right, title or interest
therein.
20
(g) ERISA. No Originator shall (and shall not cause or permit any ERISA
Affiliate or any of its Domestic Subsidiaries to) cause or permit to occur an
event that could result in the imposition of a Lien under Section 412 of the IRC
or Section 302 or 4068 of ERISA or cause or permit to cause an ERISA Event to
the extent such ERISA Event could reasonably be expected to have a Material
Adverse Effect.
(h) CHANGE TO CREDIT AND COLLECTION POLICIES. No Originator shall fail to
comply with, and no amendment or modification shall be made to, the Credit and
Collection Policies without the prior written consent of Buyer and the
Administrative Agent.
(i) ADVERSE TAX CONSEQUENCES. No Originator shall take or permit to be
taken any action (other than with respect to actions taken or to be taken solely
by a Governmental Authority), or fail or neglect to perform, keep or observe any
of its obligations hereunder or under the other Related Documents, that would
have the effect directly or indirectly of subjecting any payment to Buyer, any
Purchaser or holders of the Commercial Paper who are residents of the United
States of America to withholding taxation.
(j) NO PROCEEDINGS. From and after the Closing Date and until the date one
year plus one day following the date on which the Commercial Paper allocable to
Buyer with the latest maturity has been indefeasibly paid in full in cash, no
Originator shall, directly or indirectly, institute or cause to be instituted
against Buyer or Conduit Purchaser any proceeding of the type referred to in
SECTIONS 9.01(c) and 9.01(d) of the Purchase Agreement
(k) COMMINGLING. No Originator shall (and each Originator shall cause each
of its Domestic Subsidiaries not to) deposit or permit the deposit of any funds
that do not constitute Collections of Transferred Receivables into any Lockbox
or Lockbox Account or the Concentration Account. Further, no Originator shall
(and each Originator shall cause each of its Domestic Subsidiaries not to)
deposit or permit the deposit of any funds that constitute Collections of
Excluded Receivables into any Lockbox Account or the Concentration Account. If
such funds are nonetheless deposited into a Lockbox, Lockbox Account or
Concentration Account and the Originator so notifies the Applicable Purchaser,
such Purchaser shall notify the Administrative Agent to promptly remit any such
amounts to the applicable Originator.
(l) PURCHASE OF RECEIVABLES. No Originator or the Parent shall, directly or
indirectly, purchase any accounts receivable from any Person without the express
written consent of the Administrative Agent.
(m) DEBT. No Originator shall (and shall not allow any of its Domestic
Subsidiaries to) create, incur, assume or permit to exist any Debt, except (i)
Debt of such Person to the Buyer, the Servicer, any Affected Person, any
Indemnified Person or any other Person expressly permitted by this Agreement and
the Related Documents, (ii) deferred taxes, (iii) unfunded pension fund and
other employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, (iv) indorser liabilities in
connection with the indorsement of negotiable instruments for deposit or
collection in the ordinary course of
21
business and (v) indebtedness that is not prohibited under the terms of the
Senior Debt Facility as in effect on the Closing Date.
(n) MERGERS, SUBSIDIARIES, ETC. No Originator shall (and shall not allow
any of its Domestic Subsidiaries to) directly or indirectly, by operation of law
or otherwise, (i) form or acquire any Subsidiary or (ii) merge with, consolidate
with, convey, transfer, lease or otherwise dispose of all (or substantially all)
of its assets (whether now owned or hereafter acquired) to, or acquire all (or
substantially all) of the assets or capital Stock or other ownership interests
of, or otherwise combine with or acquire, any Person (whether in one transaction
or in a series of transactions) other than (A) dispositions of accounts
receivable and related assets as contemplated by this Agreement and (B)
transactions with respect to the Parent, a Subsidiary Originator or any other
Domestic Subsidiary of the Parent (excluding in any event the Buyer) which are
not prohibited under the terms of the Senior Debt Facility as in effect on the
Closing Date.
Section 4.04. BREACH OF REPRESENTATIONS, WARRANTIES OR COVENANTS. Upon
discovery by any Originator or Buyer of any breach of any representation,
warranty or covenant described in SECTIONS 4.01, 4.02 or 4.03 (other than a
representation, warranty or covenant relating to the absence of Dilution
Factors), which breach is reasonably likely to have a material adverse effect on
the value of a Transferred Receivable or the Originator Collateral or the
interests of Buyer therein, the party discovering the same shall give prompt
written notice thereof to the other parties hereto. The Originator that breached
such representation, warranty or covenant may, at any time on any Business Day,
or shall, if requested by notice from Buyer, on the first Business Day following
receipt of such notice, either (a) repurchase such Transferred Receivable from
Buyer for cash or (b) transfer ownership of a new Eligible Receivable or new
Eligible Receivables to Buyer on such Business Day, in each case in an amount
equal to the Billed Amount of such Transferred Receivable MINUS the sum of (A)
Collections received in respect thereof and (B) the amount of any Dilution
Factors taken into account in the calculation of the Sale Price therefor.
Notwithstanding the foregoing, if any Transferred Receivable is not paid in full
on account of any Dilution Factors, the Originator's repurchase obligation under
this SECTION 4.04 with respect to such Transferred Receivable shall be reduced
by the amount of any such Dilution Factors taken into account in the calculation
of the Sale Price therefor.
ARTICLE V
INDEMNIFICATION
Section 5.01. INDEMNIFICATION. Without limiting any other rights that Buyer
or any of its Stockholders, officers, directors, employees, attorneys, agents or
representatives (each, an "ORIGINATOR INDEMNIFIED PERSON") may have hereunder or
under applicable law, each Originator hereby agrees to indemnify and hold
harmless each Originator Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Originator Indemnified Person in connection with or arising out of the
transactions contemplated under this Agreement or under any other Related
Document, any actions or failures to act in connection therewith, including any
and all legal costs and expenses arising out of or
22
incurred in connection with disputes between or among any parties to any of the
Related Documents, or in respect of any Transferred Receivable or Originator
Collateral or any Contract therefor or the use by such Originator of the Sale
Price therefor; PROVIDED, that no Originator shall be liable for any
indemnification to an Originator Indemnified Person to the extent that any such
Indemnified Amounts result solely from (a) such Originator Indemnified Person's
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction, (b) recourse for uncollectible or uncollected
Transferred Receivables due to the lack of creditworthiness of the Obligor or
the occurrence of any event of bankruptcy with respect to such Obligor, or (c)
any income tax or franchise tax incurred by any Originator Indemnified Person,
except to the extent that the incurrence of any such tax results from a breach
of or default under this Agreement or any other Related Document. Subject to the
exceptions set forth in clauses (a), (b) and (c) of the immediately preceding
sentence but otherwise without limiting the generality of the foregoing, each
Originator shall pay on demand to each Originator Indemnified Person any and all
Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty made or deemed made by
such Originator (or any of its officers) under or in connection with this
Agreement or any other Related Document or on any other information
delivered by such Originator pursuant hereto or thereto that shall have
been incorrect in any material respect when made or deemed made or
delivered;
(ii) the failure by such Originator to comply with any term, provision
or covenant contained in this Agreement, any other Related Document or any
agreement executed in connection herewith or therewith, any applicable law,
rule or regulation with respect to any Transferred Receivable or Originator
Collateral or Contract therefor, or the nonconformity of any Transferred
Receivable or Originator Collateral or the Contract therefor with any such
applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in Buyer, or to Transfer
to Buyer, valid and properly perfected title to and sole record and
beneficial ownership of the Receivables that constitute Transferred
Receivables, together with all Collections in respect thereof, free and
clear of any Adverse Claim;
(iv) any dispute, claim, offset or defense of any Obligor (other than
its discharge in bankruptcy) to the payment of any Transferred Receivable
(including a defense based on such Transferred Receivable or the Contract
therefor 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 merchandise or services giving rise to such
Transferred Receivable or the furnishing or failure to furnish such
merchandise or services or relating to collection activities with respect
to such Transferred Receivable (if such collection activities were
performed by the Originator or any Affiliate acting as the Servicer or a
Sub-Servicer), except to the extent that such dispute, claim, offset or
defense results solely from any action or inaction on the part of Buyer;
23
(v) any products liability claim or other claim arising out of or in
connection with merchandise, insurance or services that is the subject of
any Contract;
(vi) the commingling of Collections with respect to Transferred
Receivables by such Originator at any time with its other funds or the
funds of any other Person;
(vii) any failure by such Originator to cause the filing of, or any
delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or any other
applicable laws with respect to any Receivable that is the subject of a
Transfer hereunder, whether at the time of any such Transfer or at any
subsequent time, or Originator Collateral;
(viii) any failure by any Originator or the Servicer to perform, keep
or observe any of their respective duties or obligations hereunder, under
any other Related Document or under any Contract related to a Transferred
Receivable, or Originator Collateral;
(ix) any failure of a Lockbox Account Bank or a Concentration Account
Bank to comply with the terms of the applicable Lockbox Account Agreement;
(x) any investigation, Litigation or proceeding related to this
Agreement or the use of the Sale Price obtained in connection with any Sale
or the ownership of Receivables or Collections with respect thereto or in
respect of any Receivable or Contract, or;
(xi) any claim brought by any Person other than an Originator
Indemnified Person arising from any activity by such Originator or any of
its Affiliates in servicing, administering or collecting any Transferred
Receivables or Originator Collateral.
NO ORIGINATOR INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE
OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
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ARTICLE VI
INTENTIONALLY-OMITTED
ARTICLE VII
COLLATERAL SECURITY
Section 7.01. SECURITY INTEREST. To secure the prompt and complete payment,
performance and observance of any and all recourse and indemnity obligations of
each Originator to Buyer, including those set forth in SECTIONS 4.02(o), 4.04,
5.01 and 8.14, and to induce Buyer to enter into this Agreement in accordance
with the terms and conditions hereof, each Originator hereby grants, assigns,
conveys, pledges, hypothecates and transfers to Buyer a Lien upon all of such
Originator's right, title and interest in, to and under the following property,
whether now owned by or owing to, or hereafter acquired by or arising in favor
of, such Originator (including under any trade names, styles or derivations of
such Originator), and whether owned by or consigned by or to, or leased from or
to, such Originator, and regardless of where located (all of which being
hereinafter collectively referred to as the "ORIGINATOR COLLATERAL"):
(a) all Transferred Receivables, Invoices therefor and Collections thereon;
(b) all of the Originator's rights in the merchandise (including returned
goods) relating to the Transferred Receivables;
(c) all of Buyer's credits and balances with the Originator existing at any
time;
(d) all Lockboxes, Lockbox Accounts, the Concentration Account and all
funds on deposit therein and all certificates and instruments, if any, from time
to time representing or evidencing any Lockbox, Lockbox Account or the
Concentration Account;
(e) all notes, certificates of deposit and other instruments from time to
time delivered to or otherwise possessed by the Buyer, the Administrative Agent
or any Purchaser or any assignee or agent on behalf of any such person in
substitution for or in addition to any of the then existing Originator
Collateral;
(f) all interest, dividends, cash, instruments, investment property and
other property from time to time received, receivable or otherwise distributed
with respect to or in exchange for any and all of the then existing Originator
Collateral;
(g) all Related Documents to which the Originator is a party;
(h) all other property that may from time to time hereafter be granted and
pledged by any Originator or by any Person on its behalf under this Agreement;
and
25
(i) to the extent not otherwise included, all proceeds (whether
constituting accounts, general intangibles, documents, chattel paper,
instruments or investment property) of the foregoing and all accessions to, and
substitutions and replacements for, each of the foregoing.
Section 7.02. OTHER COLLATERAL; RIGHTS IN RECEIVABLES. Nothing contained in
this ARTICLE VII shall limit the rights of Buyer in and to any other collateral
that may have been or may hereafter be granted to Buyer by any Originator or any
third party pursuant to any other agreement or the rights of Buyer under any of
the Transferred Receivables.
Section 7.03. DELIVERY OF COLLATERAL. All certificates or instruments
representing or evidencing the Originator Collateral shall be delivered to and
held by or on behalf of the Buyer (and its assigns including the Administrative
Agent) and shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Buyer (and its assigns including the
Administrative Agent). The Buyer (and its assigns including the Administrative
Agent) shall have the right (a) at any time to exchange certificates or
instruments representing or evidencing Originator Collateral for certificates or
instruments of smaller or larger denominations and (b) at any time in its
discretion following the occurrence and during the continuation of a Termination
Event and without notice to any Originator, to transfer to or to register in the
name of the Buyer (and its assigns including the Administrative Agent) or its
nominee any or all of the Originator Collateral. Each Originator will, (A) at
all times from and after the date hereof, clearly and conspicuously xxxx its
computer and master data processing books and records with the legend set forth
in SECTION 7.07 (a) of the Purchase Agreement, and (B) segregate (from all other
receivables then owned or being serviced by such Originator) all Invoices
relating to each Receivable.
Section 7.04. ORIGINATORS REMAIN LIABLE. It is expressly agreed by the
Originators that, anything herein to the contrary notwithstanding, each
Originator shall remain liable under any and all of the Receivables originated
by it, the Contracts therefor and all other Originator Collateral to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder. The Buyer shall not have any obligation or liability under any such
Receivables, Contracts or Originator Collateral by reason of or arising out of
this Agreement or the granting herein of a Lien thereon or the receipt by the
Buyer of any payment relating thereto pursuant hereto. The exercise by the Buyer
of any of its respective rights under this Agreement shall not release any
Originator from any of its respective duties or obligations under any such
Receivables, Contracts or Originator Collateral. The Buyer shall not be required
or obligated in any manner to perform or fulfill any of the obligations of any
Originator under or pursuant to any such Receivable, Contract or Originator
Collateral, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any such Receivable, Contract or Originator
Collateral, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts that may have been
assigned to it or to which it may be entitled at any time or times.
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ARTICLE VIII
MISCELLANEOUS
Section 8.01. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission on a
Business Day prior to 3:00 p.m. (local time) (with such telecopy or facsimile
promptly confirmed by delivery of a copy by personal delivery or United States
Mail as otherwise provided in this SECTION 8.01), (c) one Business Day after
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger on a Business Day prior to 3:00 p.m.
(local time), all of which shall be addressed to the party to be notified and
sent to the address or facsimile number set forth below in this SECTION 8.01 or
to such other address (or facsimile number) as may be substituted by notice
given as herein provided:
BUYER: 000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
PARENT: 000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Treasurer
Facsimile: (000) 000-0000
with a copy to: the attention of the General Counsel
at the same address
EACH ORIGINATOR: c/o Eagle-Picher Industries, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Treasurer
Facsimile: (000) 000-0000
with a copy to: the attention of the General Counsel
at the same address
27
PROVIDED, that each such declaration or other communication shall be deemed to
have been validly delivered to the Administrative Agent under this Agreement
only upon delivery to the Administrative Agent in accordance with the terms of
the Purchase Agreement. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Failure or delay
in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Buyer) designated
in any written communication provided hereunder to receive copies shall in no
way adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Notwithstanding the foregoing,
whenever it is provided herein that a notice is to be given to any other party
hereto by a specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is received after
such time or on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
Section 8.02. NO WAIVER; REMEDIES. Buyer's failure, at any time or times,
to require strict performance by the Originators of any provision of this
Agreement or any Receivables Assignment shall not waive, affect or diminish any
right of Buyer thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of any breach or default hereunder shall
not suspend, waive or affect any other breach or default whether the same is
prior or subsequent thereto and whether the same or of a different type. None of
the undertakings, agreements, warranties, covenants and representations of any
Originator contained in this Agreement or any Receivables Assignment, and no
breach or default by any Originator hereunder or thereunder, shall be deemed to
have been suspended or waived by Buyer unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly authorized signatory
of Buyer and directed to such Originator specifying such suspension or waiver.
Buyer's rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that Buyer may have under any
other agreement, including the other Related Documents, by operation of law or
otherwise. Recourse to the Originator Collateral shall not be required.
Section 8.03. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of each Originator and Buyer and their respective
successors and permitted assigns, except as otherwise provided herein. No
Originator may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder without the prior express written
consent of Buyer, the Purchasers and the Administrative Agent and unless the
Rating Agency Condition shall have been satisfied with respect to any such
assignment. Any such purported assignment, transfer, hypothecation or other
conveyance by any Originator without the prior express written consent of Buyer,
the Purchasers and the Administrative Agent shall be void. Each Originator
acknowledges that Buyer may, to the extent permitted in the Purchase Agreement,
assign its rights granted hereunder, including the benefit of any indemnities
under ARTICLE V and any of its rights in the Originator Collateral granted under
ARTICLE VII . Upon each such assignment, such assignee shall have, to the extent
of such assignment, all rights of Buyer hereunder and, to the extent permitted
under the Purchase Agreement, the Purchaser or any assignee thereof may in turn
assign such rights. Each Originator agrees that, upon any such
28
assignment, such assignee may enforce directly, without joinder of Buyer, the
rights set forth in this Agreement. All such assignees, including parties to the
Purchase Agreement in the case of any assignment to such parties, shall be third
party beneficiaries of, and shall be entitled to enforce Buyer's rights and
remedies under, this Agreement to the same extent as if they were parties
hereto. Without limiting the generality of the foregoing, all notices to be
provided to the Buyer hereunder shall be delivered to the Buyer and the
Administrative Agent under the Purchase Agreement, and shall be effective only
upon such delivery to the Administrative Agent in accordance with the terms of
the Purchase Agreement. The terms and provisions of this Agreement are for the
purpose of defining the relative rights and obligations of each Originator and
Buyer with respect to the transactions contemplated hereby and, except for the
Purchasers and the Administrative Agent, no Person shall be a third party
beneficiary of any of the terms and provisions of this Agreement.
Section 8.04. TERMINATION; SURVIVAL OF OBLIGATIONS.
(a) 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 Termination Date.
(b) Except as otherwise expressly provided herein or in any other Related
Document, no termination or cancellation (regardless of cause or procedure) of
any commitment made by Buyer under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of any Originator or the rights
of Buyer relating to any unpaid portion of any and all recourse and indemnity
obligations of such Originator to Buyer, including those set forth in SECTIONS
4.02(o), 4.04, 5.01 and 8.14, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required after the
Facility Termination Date. Except as otherwise expressly provided herein or in
any other Related Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon each Originator, and all rights of Buyer
hereunder, all as contained in the Related Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; PROVIDED, that the
rights and remedies pursuant to SECTIONS 4.02(o), 4.04, the indemnification and
payment provisions of ARTICLE V, and the provisions of SECTIONS 4.03(j), 8.12
and 8.14 shall be continuing and shall survive any termination of this
Agreement.
Section 8.05. COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. This Agreement
and the other Related Documents constitute the complete agreement between the
parties with respect to the subject matter hereof and thereof, supersede all
prior agreements and understandings relating to the subject matter hereof and
thereof, and may not be modified, altered or amended except as set forth in
SECTION 8.06.
Section 8.06. AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Agreement or any of the other
Related Documents, or any
29
consent to any departure by any Originator therefrom, shall in any event be
effective unless the same shall be in writing and signed by each of the parties
hereto, the Purchasers and the Administrative Agent. No consent or demand in any
case shall, in itself, entitle any party to any other consent or further notice
or demand in similar or other circumstances.
Section 8.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND EACH RELATED DOCUMENT (EXCEPT TO THE EXTENT THAT ANY
RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE OBLIGATIONS ARISING
HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT
OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE BUYER IN THE RECEIVABLES OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER, THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE BUYER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE ORIGINATOR COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OF THE
ORIGINATORS ARISING HEREUNDER, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN
FAVOR OF BUYER. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY
HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS,
30
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH BENEATH ITS
NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON SUCH PARTY'S RECEIPT THEREOF. EACH PARTY HERETO AGREES THAT
"RECEIPT" OF ANY SUCH SUMMONS, COMPLAINT OR OTHER SERVICE OF PROCESS MAY BE
EVIDENCED, WITHOUT LIMITATION, BY ANY OF THE FOLLOWING: 1) CONFIRMATION OF
DELIVERY IN ANY FORM ISSUED BY THE UNITED STATES POSTAL SERVICE, 2) A DELIVERY
CONFIRMATION IN THE FORM PROVIDED BY ANY NATIONALLY RECOGNIZED COURIER SERVICE
OR 3) A RECEIPT SIGNED BY ANY EMPLOYEE, OFFICER, DIRECTOR OR INDEPENDENT
CONTRACTOR OF THE PERSON RECEIVING SUCH NOTICE PHYSICALLY PRESENT AT THE ADDRESS
SET FORTH BENEATH ITS NAME ON THE SIGNATURE PAGES HERETO. NOTHING IN THIS
SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.08. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
Section 8.09. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
31
Section 8.10. SECTION TITLES. The section titles and table of contents
contained in this Agreement are provided for ease of reference only and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto.
Section 8.11. NO SETOFF. Each Originator's obligations under this Agreement
shall not be affected by any right of setoff, counterclaim, recoupment, defense
or other right such Originator might have against Buyer, any Purchaser or the
Administrative Agent, all of which rights are hereby expressly waived by such
Originator.
Section 8.12. CONFIDENTIALITY.
(a) Except to the extent otherwise required by applicable law, as required
to be filed publicly with the Securities and Exchange Commission, or unless each
Affected Party shall otherwise consent in writing, each Originator and Buyer
agree to maintain the confidentiality of this Agreement (and all drafts hereof
and documents ancillary hereto) in its communications with third parties other
than any Affected Party or any Originator Indemnified Person and otherwise and
not to disclose, deliver or otherwise make available to any third party (other
than its directors, officers, employees, accountants or counsel) the original or
any copy of all or any part of this Agreement (or any draft hereof and documents
ancillary hereto) except to an Affected Party or an Originator Indemnified
Person.
(b) Each Originator agrees that it shall not (and shall not permit any of
its Subsidiaries to) issue any news release or make any public announcement
pertaining to the transactions contemplated by this Agreement and the Related
Documents without the prior written consent of Buyer and each of the Committed
Purchaser and the Conduit Purchaser (which consent shall not be unreasonably
withheld) unless such news release or public announcement is required by law, in
which case such Originator shall consult with Buyer and each of the Committed
Purchaser and the Conduit Purchaser prior to the issuance of such news release
or public announcement. Any Originator may, however, disclose the general terms
of the transactions contemplated by this Agreement and the Related Documents to
trade creditors, suppliers and other similarly-situated Persons so long as such
disclosure is not in the form of a news release or public announcement.
(c) Except to the extent otherwise required by applicable law, or in
connection with any judicial or administrative proceedings, as required to be
filed publicly with the Securities Exchange Commission, or unless the
Originators otherwise consent in writing, the Buyer agrees (i) to maintain the
confidentiality of (A) this Agreement (and all drafts hereof and documents
ancillary hereto) and (B) all other confidential proprietary information with
respect to the Originators and their respective Affiliates and each of their
respective businesses obtained by the Buyer in connection with the structuring,
negotiation and execution of the transactions contemplated herein and in the
other documents ancillary hereto, in each case, in its communications with third
parties other than any Affected Party, or Originator Indemnified Person or any
Originator and (ii) not to disclose, deliver, or otherwise make available to any
third party (other than its directors, officers, employees, accountants or
counsel) the original or any
32
copy of all or any part of this Agreement (or any draft hereof and documents
ancillary hereto) except to an Affected Party or any Originator.
Section 8.13. FURTHER ASSURANCES.
(a) Each Originator shall, at its sole cost and expense, upon request of
Buyer, any Purchaser or the Administrative Agent, promptly and duly execute and
deliver any and all further instruments and documents and take such further
actions that may be necessary or desirable or that Buyer, any Purchaser or the
Administrative Agent may request to carry out more effectively the provisions
and purposes of this Agreement or any other Related Document or to obtain the
full benefits of this Agreement and of the rights and powers herein granted,
including (i) using its best efforts to secure all consents and approvals
necessary or appropriate for the assignment to or for the benefit of Buyer of
any Transferred Receivable or Originator Collateral held by such Originator or
in which such Originator has any rights not heretofore assigned, (ii) filing any
financing or continuation statements under the UCC with respect to the ownership
interests or Liens granted hereunder or under any other Related Document, (iii)
transferring Originator Collateral to Buyer's possession if such Originator
Collateral consists of chattel paper or instruments or if a Lien upon such
Originator Collateral can be perfected only by possession, or if otherwise
requested by Buyer; and (iv) entering into "control agreements" (as defined in
the UCC with respect to any Originator Collateral to the extent that a first
priority Lien upon such Originator Collateral can be perfected only by control.
Each Originator hereby authorizes Buyer, each Purchaser and the Administrative
Agent to file any such financing or continuation statements without the
signature of such Originator to the extent permitted by applicable law. A
carbon, photographic or other reproduction of this Agreement or of any notice or
financing statement covering the Transferred Receivables, the Originator
Collateral or any part thereof shall be sufficient as a notice or financing
statement where permitted by law. If any amount payable under or in connection
with any of the Originator Collateral is or shall become evidenced by any
instrument, such instrument, other than checks and notes received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory to
Buyer immediately upon such Originator's receipt thereof and promptly delivered
to Buyer.
(b) If any Originator fails to perform any agreement or obligation under
this SECTION 8.13, Buyer, any Purchaser or the Administrative Agent may (but
shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of Buyer, such Purchaser or
the Administrative Agent incurred in connection therewith shall be payable by
such Originator upon demand of Buyer, such Purchaser or the Administrative
Agent.
Section 8.14. FEES AND EXPENSES. In addition to its indemnification
obligations pursuant to ARTICLE V, each Originator agrees, jointly and
severally, to pay on demand all costs and expenses incurred by Buyer in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Related Documents, including the fees and out-of-pocket
expenses of Buyer's counsel, advisors, consultants and auditors retained in
connection with the transactions contemplated thereby and advice in connection
therewith, and each Originator agrees, jointly and severally, to pay all costs
and expenses, if any (including
33
attorneys' fees and expenses but excluding any costs of enforcement or
collection of the Transferred Receivables), in connection with the enforcement
of this Agreement and the other Related Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Receivables
Sale Agreement to be executed by their respective duly authorized
representatives, as of the date first above written.
EAGLE-PICHER FUNDING CORPORATION, AS BUYER:
By
------------------------------------
Name:
Title:
ORIGINATORS:
EAGLE-PICHER INDUSTRIES, INC.,
AS PARENT AND AS AN ORIGINATOR
By
------------------------------------
Name:
Title:
Eagle-Picher
Receivables Sale Agreement
dated as of January ___, 2002
XXXXXXXXX ENTERPRISES LIMITED,
AS AN ORIGINATOR
By
-----------------------------
Name:
Title:
DAISY PARTS, INC.,
AS AN ORIGINATOR
By
-----------------------------
Name:
Title:
Eagle-Picher
Receivables Sale Agreement
dated as of January ___, 2002
EAGLE-PICHER MINERALS, INC.,
AS AN ORIGINATOR
By
-----------------------------
Name:
Title:
EAGLE-PICHER TECHNOLOGIES, LLC,
AS AN ORIGINATOR
By
-----------------------------
Name:
Title:
Eagle-Picher
Receivables Sale Agreement
dated as of January ___, 2002
HILLSDALE TOOL & MANUFACTURING CO.,
AS AN ORIGINATOR
By
-----------------------------
Name:
Title:
Eagle-Picher
Receivables Sale Agreement
dated as of January ___, 2002
EXHIBIT 2.01(a)
Form of
RECEIVABLES ASSIGNMENT
THIS RECEIVABLES ASSIGNMENT (the "RECEIVABLES ASSIGNMENT") is
entered into as of January [___], 2002, by and between [Name of Originator] (the
"ORIGINATOR") and EAGLE-PICHER FUNDING CORPORATION ("BUYER").
1. We refer to that certain Receivables Sale Agreement (as
amended, restated, supplemented or otherwise modified from time to time, the
"SALE AGREEMENT") of even date herewith among the Buyer and the Originators
party thereto. All of the terms, covenants and conditions of the Sale Agreement
are hereby made a part of this Receivables Assignment and are deemed
incorporated herein in full. Unless otherwise defined herein, capitalized terms
or matters of construction defined or established in the Sale Agreement shall be
applied herein as defined or established therein.
2. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Originator hereby sells
without recourse, except as provided in Sections 4.02(o) and 4.04 of the Sale
Agreement, all of the Originator's right, title and interest in, to and under
all of its Receivables (including all Collections, Invoices and proceeds with
respect thereto) existing as of the Closing Date and thereafter created or
arising at any time until the earliest of (i) the date Administrative Agent has
declared the Facility Termination Date to have occurred after the occurrence of
a Termination Event or (ii) the Facility Termination Date shall have occurred
automatically, in either event in accordance with SECTION 9.01 of the Purchase
Agreement.
3. Subject to the terms and conditions of the Sale Agreement,
the Originator hereby covenants and agrees to sign, sell or contribute, as
applicable, execute and deliver, or cause to be signed, sold, executed and
delivered, and to do or make, or cause to be done or made, upon request of Buyer
and at the Originator's expense, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirmatory or otherwise, as may be
reasonably required by Buyer for the purpose of or in connection with acquiring
or more effectively vesting in Buyer or evidencing the vesting in Buyer of the
property, rights, title and interests of the Originator sold hereunder or
intended to be sold hereunder.
4. Wherever possible, each provision of this Receivables
Assignment shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Receivables Assignment shall
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Receivables Assignment.
Eagle-Picher
Receivables Sale Agreement
1
5. THIS RECEIVABLES ASSIGNMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the parties have caused this Receivables
Assignment to be executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
[NAME OF ORIGINATOR] EAGLE-PICHER FUNDING CORPORATION
By: By:
--------------------------- -----------------------------------
Name: Name:
Title: Title:
2
