EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
Dated as of March 31, 1997
Among
ZENITH MICROCIRCUITS CORPORATION
as Seller
and
ZENITH FINANCE CORPORATION
as Purchaser
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Other Definitional Provisions 4
SECTION 1.03. Computation of Time Periods 4
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables 5
SECTION 2.02. Payment of Purchase Price 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Seller 6
SECTION 3.02. Representations and Warranties of the Purchaser 12
SECTION 3.03. Obligations Unaffected 13
ARTICLE IV
COVENANTS
SECTION 4.01. Affirmative Covenants of the Seller 13
SECTION 4.02. Reporting Requirements of the Seller 17
SECTION 4.03. Negative Covenants of the Seller 19
SECTION 4.04. Affirmative Mutual Covenant 21
ARTICLE V
EVENTS OF TERMINATION
SECTION 5.01. Termination 21
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. Indemnification 23
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Further Assurances 26
SECTION 7.02. Payments 27
SECTION 7.03. Costs, Expenses and Taxes 27
SECTION 7.04. Binding Effect; Assignability 27
SECTION 7.05. No Waiver; Cumulative Remedies 28
SECTION 7.06. Amendment 28
SECTION 7.07. Severability 29
SECTION 7.08. Notices 29
SECTION 7.09. Counterparts 30
SECTION 7.10. Construction of Agreement as Security Agreement 30
SECTION 7.11. Third-Party Beneficiaries 30
SECTION 7.12. The Seller's Obligations 31
SECTION 7.13. Governing Law, Jurisdiction, Consent to
Service of Process 31
EXHIBIT
Exhibit A Form of Subordinated Note
RECEIVABLES PURCHASE AGREEMENT, dated as of
March 31, 1997, among ZENITH MICROCIRCUITS CORPORATION
("Zenith"), as seller hereunder (the "Seller" or the "Originator"), and
ZENITH FINANCE CORPORATION, a Delaware corporation, as
purchaser (the "Purchaser").
PRELIMINARY STATEMENTS
1. The Seller desires to sell to the Purchaser, and the
Purchaser desires to buy from the Seller, on the date hereof and from time
to time hereafter, all of the Seller's right, title and interest in, to and
under the Receivables and Seller Related Security existing on the date
hereof or hereafter created.
2. All of the shares of the Purchaser are owned by
Zenith.
3. Pursuant to that certain Pooling and Servicing
Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "Pooling and Servicing
Agreement"), among the Purchaser, Zenith, as servicer (the "Servicer"),
and Bankers Trust Company, a New York banking corporation, as trustee
(the "Trustee"), the Purchaser has agreed to transfer to the Trust created
pursuant to the Pooling and Servicing Agreement, for the benefit of the
Holders referred to therein, all of its right, title and interest in, to and
under the Receivables and Seller Related Security.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used herein
but not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement. In addition, the term "Agreement" shall
mean this Receivables Purchase Agreement, as the same may from time to
time be amended, supplemented or otherwise modified. The following
capitalized terms shall have the following meanings:
"Early Termination" has the meaning specified in
Section 5.01.
"Effective Period" means the period beginning on the
Transfer Date and terminating on (i) the earliest of (a) the close of business
on the Business Day on which a Termination Event occurs, (b) the close of
business on the Business Day immediately following the day on which any
Early Amortization Event occurs and (c) the close of business on the
Business Day immediately preceding the day on which the Amortization
Period for the last outstanding Series begins or (ii) such other date as is
specified in a written notice from either the Seller or the Purchaser to the
other and to the Trustee.
"ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the controlled group of the Seller, or
under common control with the Seller, within the meaning of Section 414
of the Internal Revenue Code and the regulations promulgated thereunder.
"Multiemployer Plan" means a "multiemployer plan", as
defined in Section 4001(a)(3) of ERISA, to which the Seller or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation
to make contributions.
"Multiple Employer Plan" means a "single employer plan",
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Seller or any ERISA Affiliate and at least one Person
other than the Seller and the ERISA Affiliates or (b) was so maintained and
in respect of which the Seller or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.
"Plan" means a Single Employer Plan or Multiple Employer
Plan.
"Plan Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event has
been waived by the PBGC, or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA are met with respect to a contributing sponsor,
as defined in Section 4001(a)(13) or ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan within
the following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of operations at
a facility of the Seller or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the Seller or
any ERISA Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (f) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Purchase Date" has the meaning specified in
Section 2.02(b).
"Purchase Percentage" means (i) for the period from the
Transfer Date until the first Distribution Date on which payment is made by
the Purchaser after the Transfer Date, 98.71% and (ii) for each day on and
after such first Distribution Date an amount (expressed as a percentage)
determined in accordance with the following formula:
100% - (LD + PDRR)
where:
LD = the amount (expressed as a percentage)
equal to the greater of (i) one-fourth of one
percent and (ii) 1.5 times the average of the
Loss to Liquidation Ratios for the three
Collection Periods most recently ended on or
before such date, provided that such amount
shall in no event exceed the sum of (x) one-
half of one percent plus (y) the average of
the Loss to Liquidation Ratios for such three
Collection Periods.
PDRR = the amount (expressed as a percentage) equal to:
TR x 30 x DR
360
where:
TR = the Turnover Rate as of the
most recent Distribution Date
on or before such date.
DR = the amount (expressed as a
percentage) equal to the sum
of the Trustee's publicly
announced "prime" rate as of
the most recent Distribution
Date plus the amount
(expressed as a percentage), if
any, by which the per annum
rate in effect on such
Distribution Date for
computing the Servicing Fee
(as set forth in all applicable
Supplements) exceeds one
percent.
"Purchase Price" has the meaning specified in
Section 2.02(c).
"Seller Related Security" means with respect to any
Receivable owed to the Seller (i) all of the Seller's interest in the
merchandise (including returned merchandise), if any, relating to the sale
which gave rise to such Receivable, (ii) all other Liens and property subject
to such Liens from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements signed by an Obligor
describing any collateral securing such Receivable; and (iii) all guarantees,
letters of credit, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of
such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise.
"Single Employer Plan" means a "single employer plan", as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Seller or any ERISA Affiliate or (b) was so maintained
and in respect of which the Seller or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Termination Event" has the meaning specified in
Section 5.01.
SECTION 1.02. Other Definitional Provisions. (a) All
accounting terms not defined in this Agreement, and accounting terms
partly defined in this Agreement to the extent not completely defined, shall
have the respective meanings given to them under GAAP or regulatory
accounting principles, as applicable and in effect from time to time. To the
extent that the definitions of accounting terms herein are inconsistent with
the meanings of such terms under GAAP or regulatory accounting
principles, the definitions contained herein shall control.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement; Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms and
to the masculine as well as to the feminine and neuter genders of such
terms.
SECTION 1.03. Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a period of time
from a specified date to a later specified date, the word "from" shall mean
"from and including" and the words "to" and "until" shall mean "to but
excluding".
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables. By
execution of this Agreement, the Seller does hereby transfer, assign, set-
over and otherwise convey without recourse, except as expressly provided
herein, to the Purchaser all of the Seller's right, title and interest in, to
and under all Receivables existing at the close of business on the Transfer
Date and thereafter created from time to time, and all monies due or to become
due and all Collections in respect of such Receivables and other amounts
received or receivable from time to time with respect to such Receivables
and all proceeds thereof, and all of the Seller's right, title and interest
in, to and under the Seller Related Security.
SECTION 2.02. Payment of Purchase Price. (a) On the
Transfer Date, the Purchaser shall pay to the Seller, with respect to all of
the Seller's right, title and interest in, to and under all Receivables and all
Seller Related Security existing at the close of business on the Transfer
Date, a payment consisting of $82,650 multiplied by the Purchase
Percentage.
(b) On each Business Day during the Effective Period
(each, a "Purchase Date"), the Seller shall determine the Receivables and
the Seller Related Security with respect thereto arising since the close of
business on the preceding Business Day, which Receivables and Seller
Related Security shall be deemed available for purchase by the Purchaser
on such Purchase Date. To the extent that any sale of Receivables is not
reflected in the Daily Report, such Receivables and the Seller Related
Security with respect thereto will nevertheless be deemed sold to such
Purchaser in every respect and all of the Seller's rights, title and interest
in, to and under such Receivables and Seller Related Security will be deemed
to have been sold to the Purchaser.
(c) The purchase price payable to the Seller for the
Receivables and Seller Related Security to be purchased on any Purchase
Date shall be an amount equal to the product of (i) the aggregate
Outstanding Balance of all Receivables deemed available for purchase
pursuant to paragraph (b) above and (ii) the Purchase Percentage for such
Purchase Date (such amount, the "Purchase Price"), provided, however,
that such Purchase Price shall not be less than the reasonably equivalent
value of the Receivables to which such Purchase Price relates, and in the
event that, in the reasonable judgment of either the Seller or the Purchaser,
such Purchase Price is less than such reasonably equivalent value or does
not reflect the fair market value of such Receivables, within five Business
Days after such Purchase Date, each of the Seller and the Purchaser (after
notice to the other party) shall appoint a Person (other than an Affiliate of
the Purchaser or Seller) in the business of purchasing trade receivables, and
such Persons shall appoint a third Person (other than an Affiliate of the
Purchaser or Seller) in such business, and such Persons shall make an
independent appraisal of the value of such Receivables and shall determine
a Purchase Price which reasonably reflects the fair market value of such
Receivables. The Purchase Percentage with respect to each Determination
Date shall be calculated in the Determination Date Certificate with respect
to such Determination Date and such calculation shall be used in the
calculation of the Purchase Price owed under this Agreement for all
Purchases occurring from and including such Determination Date to but
excluding the next Determination Date.
(d) The Purchase Price shall be paid to the Seller on the
applicable Purchase Date in immediately available funds to the extent of
funds available to the Purchaser. The excess, if any, of the Purchase Price
over the payment therefor set forth in clauses (a) and (c) above shall be
deemed to be a loan by the Seller to the Purchaser (a "Subordinated Loan")
evidenced by the Subordinated Note of the Purchaser substantially in the
form attached hereto as Exhibit A.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the
Seller. The Seller represents and warrants to the Purchaser as of the
Transfer Date and each Purchase Date that:
(a) Due Organization, Qualification and Authorization.
The Seller (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed, except where the failure to do so could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, and (iii) has all requisite corporate power
and authority (including all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted, except where the failure to do so could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(b) Corporate Powers and No Conflicts. The execution,
delivery and performance by the Seller of the Transaction
Documents to which it is or is to be a party, the making of each
purchase and sale of Receivables hereunder and the consummation
of the transactions contemplated hereby are within the Seller's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Seller's charter or
bylaws, (ii) violate any Requirement of Law, (iii) conflict with or
result in the breach of, or constitute a default under, any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Seller or any of its properties
or (iv) except for the Liens created under the Transaction
Documents, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of the Seller.
The Seller is not in violation of any Requirement of Law or in
breach of any such contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument, the violation or breach of
which could have a Material Adverse Effect.
(c) Government Authorization and Approval. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required with respect to the Seller for (i) the due
execution, delivery or performance by the Seller of any of the
Transaction Documents to which it is or is to be a party, the making
of each purchase and sale of Receivables hereunder or the
consummation of the other transactions contemplated hereby or
thereby, (ii) the grant by the Seller of the transfers made or Liens
granted by it pursuant to this Agreement, (iii) the perfection or
maintenance of the transfers made or Liens created by this
Agreement (including the first priority nature thereof) or (iv) the
exercise by the Purchaser and its assigns of its rights under this
Agreement or its remedies granted under the Transaction
Documents, except for (A) the financing statements and other
documents required to have been filed on or prior to the Transfer
Date pursuant to Article IV of the applicable Certificate Purchase
Agreement, all of which have already been duly filed and are in full
force and effect, (B) the filing from time to time of any
amendments, assignments, continuation statements or other
documents which may become required or applicable pursuant to
Section 7.01 hereof or Sections 2.05(i) or 3.04(i) of the Pooling
and Servicing Agreement and (C) any properly completed and
executed UCC-3 termination statements which shall have been
delivered to the Program Agent on or before the Transfer Date.
(d) Enforceability. Each Transaction Document to
which the Seller is or is to be a party constitutes a legal, valid and
binding obligation of the Seller enforceable against the Seller in
accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and except as such enforceability may be limited by
general principles of equity, whether considered in a suit at law or
in equity). Each Transaction Document is in full force and effect,
and is not subject, as to the Seller, to any specific dispute, offset,
counterclaim or defense of the Seller.
(e) No Litigation. There is no action, suit,
investigation, litigation or proceeding affecting the Seller, pending
or threatened before any Governmental Authority or arbitrator that
(i) could have a Material Adverse Effect, (ii) purports to affect the
legality, validity or enforceability of any Transaction Document or
the consummation of the transactions contemplated hereby,
including the prevention of the issuance of the Certificates or (iii)
could have an adverse effect on the income or franchise tax
classifications or liabilities of the Trust under the United States
federal or States of Illinois or New York income or franchise tax
systems.
(f) Liens on Properties. Except for Permitted Liens
and except for Liens that will be terminated prior to the Transfer
Date, there are no Liens of any nature whatsoever on any
Receivable or Seller Related Security or Collections. The Seller is
not a party to any contract, agreement, lease or instrument (other
than this Agreement or as contemplated by this Agreement) the
performance of which, either unconditionally or upon the happening
of an event, will result in or require the creation of any Lien on any
Receivable or Seller Related Security or Collections, or otherwise
result in a violation of any Transaction Document.
(g) Contractual Obligations. (i) The Seller is not a
party to any indenture, loan or credit agreement or any lease or
other agreement or instrument, or subject to any Requirement of
Law, that would have a material adverse effect on the ability of the
Seller to carry out its obligations under this Agreement or any
Transaction Document to which it is a party, and (ii) neither the
Seller nor, to the best Knowledge of the Seller, any other party is in
default in any respect under or with respect to any Transaction
Document or any other material contract, agreement, lease or
instrument to which the Seller is a party.
(h) Investment Company Act, Etc. The Seller is not an
"investment company", or an "affiliated person" of, or "promoter"
or "principal underwriter" for, or a company controlled by, an
"investment company" within the meaning of and as such terms are
defined in the Investment Company Act. Each purchase and sale of
Receivables to the Purchaser hereunder constitutes 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. The acquisition
by the Purchaser of each Receivable constitutes a "current
transaction" within the meaning of Section 3(a)(3) of the Act.
(i) Locations. The chief place of business and chief
executive office of the Seller, and the office where the Seller keeps
the originals of its books, records and documents regarding the
Receivables and the Seller Related Security are located at the
address of the Seller specified in Section 7.08. During the four
months prior to the Transfer Date and prior to any Purchase Date,
the chief place of business and chief executive office of the Seller,
and the offices where the Seller kept the originals of its books,
records and documents regarding the Receivables and Seller
Related Security were located at the address of the Seller specified
in Section 7.08.
(j) Tradenames. The legal name of the Seller is as set
forth on the signature page of this Agreement and the Seller has no
tradenames, fictitious names, assumed names or "doing business as"
names, except for "Zenith".
(k) Accuracy of Information. Each certificate,
information, exhibit, financial statement, document, book, record or
report furnished by a Responsible Official of the Seller to the
Purchaser in connection with this Agreement and in connection
with each Receivable and the Seller Related Security is accurate in
all material respects as of its date and no such document contains
any misstatement of material fact.
(l) Solvency. The Seller is Solvent and will be Solvent
after giving effect to the transactions contemplated by the
Transaction Documents.
(m) Collection Accounts. Schedule 3.03(f) to the
Pooling and Servicing Agreement (as such Schedule may be
amended from time to time pursuant thereto) is a complete and
accurate list of each Lock Box and Collection Account as of each
Purchase Date. The Collection Account Banks are the only
institutions holding Collection Accounts for the receipt of payments
from Lock Boxes in respect of Receivables (subject to such changes
as may be made from time to time in accordance with Section
4.02(b) of the Pooling and Servicing Agreement), and all Obligors,
and only such Obligors, have been instructed or, upon the creation
of Receivables, will be instructed to make payments only to Lock
Boxes or Collection Accounts and such instructions have not been
modified or revoked by the Seller (except as permitted under
Section 4.02 of the Pooling and Servicing Agreement) and such
instructions that have been given are in full force and effect.
(n) Compliance. The Seller has complied, and will
comply on each Purchase Date, with each Requirement of Law with
respect to all Receivables and Seller Related Security sold
hereunder and the Contracts related thereto and with respect to its
business or properties, in each case except where the failure to do
so could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. The Seller has
maintained all applicable permits, certifications and licenses
necessary with respect to all Receivables and Seller Related
Security sold hereunder and the Contracts related thereto, except
where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
The Seller has performed and complied with its obligations under
the Contracts and invoices giving rise to the Receivables, except
where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(o) Taxes. The Seller has filed all tax returns (federal,
state and local) which it reasonably believes are required to be filed
and has paid or made adequate provision for the payment of all
taxes, assessments and other governmental charges due from the
Seller or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings
as to which adequate reserves are being maintained and no Lien
with respect thereto has attached to its property and become
enforceable against its other creditors. The Seller knows of no
reasonable basis for any additional tax assessment for any calendar
year for which adequate reserves have not been established.
(p) Use of Proceeds. The proceeds of each Purchase
will be used by the Seller solely for working capital purposes. No
proceeds of any Purchase will be used by the Seller to acquire any
security in a transaction that is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended, or to purchase or
carry any margin security in violation of any applicable law or
regulation.
(q) No Rescission. No Contract giving rise to any
Receivable sold hereunder has been amended, satisfied,
subordinated or rescinded, except as disclosed in writing to the
Purchaser on or before the date of purchase and sale of such
Receivable or as otherwise permitted under the Pooling and
Servicing Agreement. Subsequent to such sale no such Receivable
has been compromised, adjusted, extended, satisfied, subordinated,
rescinded or modified, except as permitted under the Pooling and
Servicing Agreement.
(r) No Payment. The Seller has no Knowledge of any
fact which would lead it to reasonably expect that, when billed, any
Receivable sold hereunder would not be paid in accordance with its
terms when due.
(s) No Insolvency Event. No Insolvency Event has
occurred with respect to the Seller.
(t) Fraudulent Conveyance. The Seller is not entering
into the transactions contemplated hereby with the intent of
hindering, delaying or defrauding creditors.
(u) Valid Sale and Transfer. This Agreement creates a
valid sale, transfer and assignment to the Purchaser of, and, subject
to the interest of the Trust under the Pooling and Servicing
Agreement, the Purchaser is the legal and beneficial owner of, all
right, title and interest of the Seller in and to the Receivables and
Seller Related Security now existing and hereafter created during
the Effective Period and in the Collections and other proceeds
thereof. Upon the filing of the appropriate financing statements, the
Purchaser shall have a first priority perfected ownership or security
interest in the Receivables, the Seller Related Security and the
proceeds thereof, in each case in which a security interest may be
perfected by filing appropriate financing statements. Except as
otherwise provided in the Pooling and Servicing Agreement, the
Seller has clearly and unambiguously marked all its master data
processing and computer records and all its microfiche storage files,
if any, in a manner reasonably calculated to indicate that the
Receivables, Seller Related Security and proceeds thereof are the
property of the Purchaser and shall cause the Purchaser to maintain
such records in a manner such that the Purchaser's perfected first
priority interest in the Receivables shall not be adversely affected.
(v) No Claim or Interest. Except for Permitted Liens
and as otherwise provided in this Agreement or any applicable
Supplement, neither the Seller nor any Person claiming through or
under the Seller has any claim to or interest in the Concentration
Account, the Collection Accounts, the Lock Boxes or any Series
Account. Each Receivable, the Seller Related Security and the
Collections with respect thereto have been or will be transferred to
the Purchaser free and clear of any Lien or interest of any other
Person (other than Permitted Liens and disputes with Obligors in
the ordinary course of business or in connection with an Insolvency
Event of the related Obligor) not holding through the Trust.
(w) Eligibility. Each Receivable classified as an "Eligible
Receivable" by the Seller in any document or report delivered
hereunder satisfied, at the time of such classification, the
requirements of eligibility contained in the definition of Eligible
Receivable except where, after giving effect to all improper
classifications, no Pool Non-compliance Date shall have occurred.
(x) Invoices. The Seller has submitted all necessary
documents, if any, to each Obligor with respect to any payments
due on each of such Obligor's Receivables.
(y) ERISA. No Plan has any accumulated funding
deficiency, as defined in Section 302(a) of ERISA, whether or not
waived. The Seller and each ERISA Affiliate has timely made all
contributions required to be made by it to any Plan, except where a
failure to contribute could not reasonably be expected to give rise
to a Lien under Section 302(f) of ERISA. No Plan Event with
respect to any Plan has occurred or could reasonably be expected to
occur that could result, directly or indirectly, in any Lien being
imposed on the property of the Seller. Neither the Seller nor any
ERISA Affiliate has incurred, or could reasonably be expected to
incur, withdrawal liability to, or liability in connection with, the
reorganization, termination or insolvency of any Multiemployer
Plan which liability could reasonably be expected to have a Material
Adverse Effect.
(z) Termination Event. No event or condition has
occurred and is continuing that is, or with the giving of notice or
the passage of time or both would constitute, a Termination Event.
SECTION 3.02. Representations and Warranties of the
Purchaser. The Purchaser represents and warrants to the Seller as of the
Transfer Date and each Purchase Date that:
(a) Due Organization, Qualification and Authorization.
The Purchaser (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed, except where the failure to do so could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, and (iii) has all requisite corporate power
and authority (including all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted, except where the failure to do so could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(b) Corporate Powers and No Conflicts. The execution,
delivery and performance by the Purchaser of the Transaction
Documents to which it is or is to be a party, the making of each
purchase and sale of the Receivables and Seller Related Security
pursuant to this Agreement and the consummation of the
transactions contemplated hereby are within the Purchaser's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Purchaser's charter
or bylaws, (ii) violate any Requirement of Law, (iii) conflict with or
result in the breach of, or constitute a default under, any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Purchaser or any of its
properties or (iv) except for the Liens created under the
Transaction Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties
of the Purchaser. The Purchaser is not in violation of any
Requirement of Law or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could have a Material
Adverse Effect.
(c) Government Authorization and Approval. No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery,
recordation, filing or performance by the Purchaser of any of the
Transaction Documents to which it is or is to be a party, the making
of each purchase and sale of Receivables hereunder or the
consummation of the other transactions contemplated hereby or
thereby.
(d) Enforceability. Each Transaction Document to
which the Purchaser is or is to be a party constitutes a legal, valid
and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and except as such enforceability may be limited by
general principles of equity, whether considered in a suit at law or
in equity). Each Transaction Document is in full force and effect,
and is not subject, as to the Purchaser, to any specific dispute,
offset, counterclaim or defense of the Purchaser.
SECTION 3.03. Obligations Unaffected. The obligations
of the Seller to the Purchaser under this Agreement shall not be affected by
reason of any invalidity, illegality or irregularity of any Receivable or
Seller Related Security or the sale of any Receivable or Seller Related
Security.
ARTICLE IV
COVENANTS
SECTION 4.01. Affirmative Covenants of the Seller. The
Seller hereby covenants that, until the last Termination Date of any Series:
(a) Compliance with Law. The Seller shall duly satisfy
all obligations on its part to be fulfilled under or in connection with
the Receivables and the Seller Related Security, will maintain in
effect all qualifications required under any Requirement of Law in
order to properly convey the Receivables and Seller Related
Security to the Purchaser and will comply in all respects with all
Requirements of Law applicable to the Seller, its business and
properties and the Receivables, Seller Related Security and the
proceeds thereof, in each case where the failure to do so would,
individually or in the aggregate, have a Material Adverse Effect.
(b) Preservation of Legal Existence. The Seller will
preserve and maintain its existence, legal structure, legal name and,
except where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect,
its rights (charter and statutory), permits, licenses, approvals,
franchises and privileges in the jurisdiction of its formation, and
qualify and remain qualified in each jurisdiction where the failure to
maintain such qualification could have a Material Adverse Effect.
(c) Audits. At the Seller's expense (only, so long as no
Early Amortization Event has occurred and is continuing, for the
first two examinations and/or visits in any twelve-month period), at
any time during the Seller's regular business hours and on
reasonable prior notice and for a purpose reasonably related to this
Agreement, the Seller shall, in response to any reasonable request
of the Purchaser, permit the Purchaser, or its agents or
representatives, (i) to examine and make copies of and abstracts
from all books, records and documents (including computer tapes,
microfiche and disks) in the possession or under the control of the
Seller relating to the Receivables, Seller Related Security and
related Contracts and (ii) to visit the offices and properties of the
Seller for the purpose of examining such materials and to discuss
matters relating to the Receivables, Seller Related Security and
related Contracts or the Seller's performance hereunder with any of
the officers or (after consultation with a Responsible Official)
employees of the Seller having knowledge thereof.
(d) Keeping of Records and Books of Account. The
Seller will (i) keep proper books of record and account, which shall
be maintained or caused to be maintained by the Seller and shall be
separate and apart from those of any Affiliate of the Seller, in which
full and correct entries shall be made of all financial transactions
and the assets and business of the Seller in accordance with GAAP
consistently applied, (ii) maintain and implement administrative and
operating procedures (including the ability to recreate records
evidencing the Receivables and the Seller Related Security in the
event of the destruction of the originals thereof) and (iii) keep and
maintain all documents, books, records and other information
necessary or reasonably advisable for the collection of all
Receivables and Seller Related Security (including records adequate
to permit the daily identification of each new Receivable and all
Collections of and adjustments to each existing Receivable).
(e) Performance and Compliance with Receivables. The
Seller will, at its expense, timely and fully perform and comply with
all provisions, covenants and other promises required to be
observed by it hereunder including complying with its material
obligations under all Contracts and invoices giving rise to the
Receivables.
(f) Payment of Taxes, Etc. The Seller will pay
promptly when due all taxes, assessments and governmental
charges or levies imposed upon it, the Receivables and any Seller
Related Security, or in respect of its receipts, income or profits
therefrom, and any and all claims of any kind, except that no such
amount need be paid if (i) such nonpayment could not reasonably
be expected to subject any Beneficiary to civil or criminal penalty or
liability or involve any risk of the sale, forfeiture or loss of any of
the property, rights or interests covered under any Transaction
Document and (ii) the charge or levy is being contested in good
faith through appropriate proceedings as to which adequate
reserves are being maintained and no Lien with respect thereto has
attached to its property and become enforceable against its
creditors.
(g) Credit Policy Manual. The Seller shall comply with
the Credit Policy Manual, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
(h) Collections. (i) The Seller will instruct all Obligors
to cause all Collections of Receivables to be deposited directly into
a Collection Account or a Lock Box, and the Seller shall deposit
any Collections received by it directly into a Collection Account in
the manner and within the time period required by Section 4.02(a)
of the Pooling and Servicing Agreement.
(ii) If the Seller accepts payment of a Receivable
from any Obligor in a currency other than U.S. Dollars, then the
Seller will, on the date of such acceptance, deposit directly into a
Collection Account in U.S. Dollars an amount equal to the
Outstanding Balance of such Receivable.
(iii) In the event that the Seller receives any
Collections, the Seller agrees to hold all such Collections in trust
and to mail such Collections to a Lock Box or deposit such
Collections to the appropriate Collection Account as soon as
practicable, but in no event later than two Business Days after
receipt thereof.
(iv) In the event that any Affiliate of the Seller
(other than the Transferor) receives any Collections, the Seller
agrees to cause such Affiliate to hold all such Collections in trust
and to cause such Affiliate to mail such Collections to a Lock Box
or deposit such Collections to the appropriate Collection Account
as soon as practicable, but in no event later than five Business Days
after receipt thereof.
(i) UCC Opinion. The Seller shall deliver to the
Purchaser within 90 days after the end of each calendar year,
beginning with the calendar year ending on or about December 31,
1998, an Opinion of Counsel to the Seller (who may be counsel
employed by an Affiliate of the Seller), dated as of a date during
such 90-day period, substantially to the effect that, in the opinion of
such counsel, either (A) such action has been taken as is necessary
to continue the perfection of the interests of the Purchaser in and to
the Receivables and the Seller Related Security conveyed hereunder
and the proceeds thereof (to the same extent as such interest was
perfected on the Transfer Date with respect to the Receivables and
the Seller Related Security then owned by the Seller and the
proceeds thereof) and reciting the details of such action or referring
to prior Opinions of Counsel in which such details are given or (B)
no such action is necessary to continue the perfection of such
interests.
(j) Deemed Collections. If on any day the Outstanding
Balance of a Receivable transferred hereunder is either (a) reduced
as a result of any defective, rejected or returned merchandise,
insurance or services, any cash discount or rebate, or any
adjustment by the Seller or any Affiliate thereof (other than the
Purchaser) or (b) reduced or cancelled as a result of a setoff in
respect of any claim by the Obligor thereof against the Seller or any
Affiliate thereof (other than the Purchaser) (whether such claim
arises out of the same or a related transaction or an unrelated
transaction), then the Seller shall be deemed to have received on
such day a Collection of such Receivable in the amount of such
reduction or cancellation. If Collections are reduced as a result of
an Obligor failing to pay any Receivable transferred hereunder free
and clear of, and without deduction for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, then the Seller shall be
deemed to have received on such day an additional Collection of
such Receivable in the amount of such reduction. The Seller will
deposit all such deemed Collections into a Collection Account
within two Business Days following the Business Day on which
such Collections are deemed to have been received.
(k) Maintenance of Separate Existence and Directors.
Seller shall take all actions as are necessary to comply with, and to
cause the Purchaser to comply with, Section 2.05(d) and Section
2.06(j) of the Pooling and Servicing Agreement.
(l) Modification of Systems. The Seller agrees,
promptly after the replacement or any material modification of any
computer, automation or other operating systems (in respect of
hardware or software) used to make any calculations or reports
hereunder, to give written notice of any such replacement or
modification to the Purchaser.
(m) Seller Business Days. No later than December 1 of
each year, the Seller shall furnish the Trustee with a list of days
other than Saturday and Sunday, on which the Seller shall be closed
during the immediately succeeding calendar year, except that with
respect to the calendar year 1997, the Seller shall furnish such list
to the Purchaser on or before the Transfer Date.
(n) Maintenance of Insurance. The Seller shall use its
best efforts to maintain with a responsible company, and at its own
expense, its current commercial crime insurance (including
commercial fraud insurance) as is commercially available at a cost
that is not generally regarded as excessive by industry standards,
with coverage on all officers, employees or other Persons acting in
any capacity requiring such Persons to handle funds, money,
documents or papers relating to the Receivables and the Seller
Related Security.
SECTION 4.02. Reporting Requirements of the
Seller. The Seller hereby covenants that, until the last Termination Date of
any Series:
(a) Termination Events, Etc. The Seller shall (i) within
one Business Day after a Responsible Official of the Seller obtains
knowledge of the occurrence of any Termination Event or event
which, with the giving of notice or lapse of time or both, would
constitute a Termination Event, notify the Purchaser of such
occurrence; (ii) as soon as possible and in any event within three
Business Days after a Responsible Official of the Seller obtains
knowledge of the occurrence of any Termination Event or event
which, with the giving of notice or lapse of time or both, would
constitute a Termination Event, deliver to the Purchaser a statement
of a Financial Officer of the Seller setting forth details of such
Termination Event or such event and the action that the Seller has
taken and proposes to take with respect thereto; and (iii) within
three Business Days after a Responsible Official of the Seller makes
a determination that any other event, development or information is
reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect, give written notice thereof to the
Purchaser and the Trustee.
(b) Litigation. As soon as possible and in any event
within 10 Business Days after a Responsible Official of the Seller
obtains Knowledge thereof, the Seller shall notify the Purchaser of
any litigation, investigation or proceeding which could be expected
to impair the ability of the Seller to perform its obligations under
this Agreement.
(c) ERISA. As soon as possible and in any event within
30 days after a Responsible Official of the Seller obtains Knowledge
that one of the following events has occurred or is reasonably
expected to occur: (i) the occurrence of any Plan Event with
respect to any Plan or (ii) the withdrawal by the Seller or any of its
ERISA Affiliates from, or the termination, reorganization or
insolvency of, any Multiemployer Plan which could reasonably be
expected to have a Material Adverse Effect.
(d) Liens. The Seller will advise the Purchaser and the
Trustee promptly, in reasonable detail, (A) of any Lien or claim
asserted against any of the Receivables, Seller Related Security or
proceeds thereof, other than Permitted Liens, (B) of the occurrence
of any breach in any material respect by the Seller of any of its
representations, warranties and covenants contained herein and (C)
of the occurrence of any other event which in the cases of clauses
(A) and (B) would have an adverse effect on the value of the
Receivables, the Seller Related Security or the proceeds thereof.
(e) Monthly Financials. Within thirty (30) (or, after the
last Statistical Month in each calendar year, forty-five (45)) days
after the end of each Statistical Month in each calendar year, deliver
to the Purchaser, each Rating Agency and each Enhancement
Provider the balance sheet of the Seller as at the end of such period
and the related statement of income and cash flow of the Seller for
such Statistical Month and for the period from the beginning of the
then current calendar year to the end of such Statistical Month, and
for the corresponding period during the previous calendar year, and
a comparison of the statement of the year to date earnings and cash
flow to the corresponding statement for the corresponding period
from the previous calendar year certified by a Financial Officer of
the Seller as fairly presenting the financial position of the Seller as
at the date indicated and the results of its operations and cash flow
for the period indicated in accordance with GAAP, subject to
normal year end adjustments;
(f) Annual Financials. Within ninety (90) days after the
end of each calendar year deliver to the Purchaser and each Rating
Agency audited financial statements of the Seller, including therein
a balance sheet of the Seller as at the end of such calendar year and
statements of income and cash flow of the Seller for each calendar
year, reported on by Independent Public Accountants and
accompanied by their related audit letter, which report and letter
shall be unqualified as to scope and shall state that such financial
statements fairly present the financial position of the Seller as at the
dates indicated in conformity with GAAP applied on a basis
consistent with prior years and that the examination by such
accountants in connection with such financial statements has been
made in accordance with generally accepted auditing standards; and
(g) Other Information. The Seller shall promptly, from
time to time, furnish to the Purchaser such other information,
documents, records or reports regarding the Receivables or the
Seller Related Security or the condition or operations, financial or
otherwise, of the Seller, as the Purchaser may from time to time
reasonably request.
SECTION 4.03. Negative Covenants of the Seller. The
Seller hereby covenants that, until the last Termination Date of any Series,
it will not:
(a) Sales, Liens, Etc. Except for Permitted Liens and as
otherwise contemplated herein, or pursuant to or as contemplated
by the Pooling and Servicing Agreement, sell, pledge, assign or
transfer any Receivable, the Seller Related Security or any interest
therein to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on any Receivable or Seller Related Security or
any other property or asset of the Seller, whether now existing or
hereafter created, or any interest therein, and the Seller shall defend
the right, title and interest of the Purchaser in and to the
Receivables, the Seller Related Security and the proceeds thereof,
whether now existing or hereafter created, against all claims of third
parties claiming through or under the Seller.
(b) Extension or Amendment of Receivables. Extend,
amend or otherwise modify, except as permitted in Section 3.01(c)
of the Pooling and Servicing Agreement, the terms of any
Receivable, or amend, modify or waive any payment term or
condition of any invoice related thereto (other than as provided in
the Credit Policy Manual) if the effect of such amendment,
modification or waiver would impair the collectibility or delay the
payment of any then existing Receivable beyond 90 days from the
date of the invoice. The Seller will not rescind or cancel, or permit
the rescission or cancellation of, any Receivable except as ordered
by a court of competent jurisdiction or other Governmental
Authority. Notwithstanding the foregoing provisions of this
Section 4.03(b), the Seller may extend, amend, modify, cancel or
rescind any Diluted Receivable in connection with a valid dispute;
provided, however, that such amendment, modification,
cancellation or rescission shall not have a material adverse effect on
the interests of any Beneficiary.
(c) Change in Business or Credit Policy Manual. Make
any change in the nature of its business as carried out on the date
hereof or in the Credit Policy Manual, which change would, in
either case, materially impair the collectibility of the Receivables,
except as permitted under the terms of the Pooling and Servicing
Agreement.
(d) Change in Collection Account Banks. (i) Make any
changes to Schedule 3.03(f) to the Pooling and Servicing
Agreement or (ii) amend any instruction to any Obligor, Person
holding a Lock Box or any Collection Account Bank with respect
to any Lock Box or Collection Account, as applicable, or
(iii) terminate or substitute any Cure Account, in any case
(A) except as otherwise required or permitted pursuant to
Section 4.02 or the applicable Supplement and (B) unless the
Purchaser shall have received written notice of such change,
amendment, termination or substitution and, if applicable, executed
copies of Collection Account Letters with each new Collection
Account Bank or Lock Box Letters with each new Person holding a
Lock Box.
(e) Change in Legal Name. (i) Make any change to its
legal name, identity or business structure in any manner or chief
executive office (including the address thereof) or use any trade
names, fictitious names, assumed names or "doing business as"
names or (ii) change its jurisdiction of organization unless, prior to
the effective date of any such name change, change in chief
executive office, use or change of jurisdiction, the Seller delivers to
the Purchaser (A) written notice of such change at least 30 days
prior to the effective date thereof, (B) such financing statements
(Forms UCC-1 and UCC-3) executed by the Seller required to
reflect such name change, change in chief executive office, use or
change of jurisdiction, together with such other documents and
instruments required in connection therewith to maintain the
continued perfection of the interests of the Purchaser in the
Receivables, the Seller Related Security and the proceeds thereof
and (C) prior to the effective date thereof, an Opinion of Counsel,
in form and substance satisfactory to the Purchaser, as to the
Seller's due organization, valid existence and good standing and the
continued perfection of the interests of the Purchaser in and to the
Receivables and the Seller Related Security conveyed hereby and
the proceeds thereof (to the same extent as such interest was
perfected on the Transfer Date with respect to the Receivables then
owned by the Seller). Furthermore, the Seller shall give 30 days
prior written notice to the Purchaser of any change in the location
of the office where it keeps the books, records and documents
regarding the Receivables, the Seller Related Security and the other
Trust Assets from the address of the Seller referred to in Section
7.08.
(f) Deposits to Collection Accounts. Deposit or
otherwise credit, or cause to be so deposited or credited, or consent
or fail to object to any such deposit or credit Known to it, cash or
cash proceeds other than Collections to the Concentration Account,
any Collection Account, the Lock Boxes or any Series Account.
(g) No Actions Against Obligors. Except in accordance
with the Credit Policy Manual and the Pooling and Servicing
Agreement, commence or settle any legal action to enforce
collection of any Receivable.
(h) No Bankruptcy Filing Against the Purchaser or the
Trust. Commence, institute or cause to be commenced or instituted
any proceeding of the type referred to in the definition of
"Insolvency Event" against the Purchaser or the Trust.
(i) Locations of Subsidiaries. Permit any of the
Originators to have or maintain its jurisdiction of organization or
principal place of business in any of the States of Colorado, Kansas,
New Mexico, Oklahoma, Utah or Wyoming.
(j) Subordinated Note. Transfer or pledge the
Subordinated Note to any Person, other than as permitted under the
Intercreditor Agreement.
(k) Protection of Holders' Rights. Take action which
would impair the rights of any Beneficiary in any Receivable, the
Seller Related Security or any proceeds thereof, except as provided
in this Agreement and the Pooling and Servicing Agreement.
(l) Receivables Not to Be Evidenced by Promissory
Notes. Take action to cause any Receivable to be evidenced by any
"instrument" (as defined in the UCC of the jurisdiction the law of
which governs the perfection of the interest in such Receivable
created hereunder), except in connection with its enforcement, in
which event the Seller shall deliver such instrument to the Purchaser
as soon as reasonably practicable but in no event more than three
Business Days after execution thereof.
SECTION 4.04. Affirmative Mutual Covenant. The
Purchaser and Seller shall record each Purchase as a purchase and sale,
respectively, on its books and records and reflect each Purchase in its
financial statements as a purchase and sale, respectively.
ARTICLE V
EVENTS OF TERMINATION
SECTION 5.01. Termination. If any of the following
events (each, a "Termination Event") shall have occurred:
(a) any failure by the Seller to make any payment,
transfer or deposit required to be paid, effected or made by it
hereunder within two Business Days after the same shall become
due; or
(b) any representation or warranty, certification or
written statement made or deemed made by the Seller under or in
connection with this Agreement or in any statement, record,
certificate, financial statement or other document delivered
pursuant hereto or in connection herewith shall prove to have been
incorrect in any material respect on or as of the date made or
deemed made; or
(c) the Seller shall fail to observe or perform any
covenant or agreement applicable to it contained herein (other than
as specified in clause (a) above) which has a material adverse effect
on any Beneficiary of any Series if such failure shall remain
unremedied for ten days after the first date on which any
Responsible Official of the Seller knew or should have known of
such failure; or
(d) any Receivables transferred hereunder whose
aggregate Outstanding Balances constitute more than 1% of the
aggregate Outstanding Balance of all Eligible Receivables shall for
any reason cease to be the subject of the valid and perfected first
priority ownership and security interest created by this Agreement;
or any Receivables transferred hereunder whose aggregate
Outstanding Balances constitute more than 1% of the aggregate
Outstanding Balance of all Eligible Receivables shall cease to be
free and clear of any Lien except as provided for herein; or
(e) an Insolvency Event shall occur with respect to the
Seller or the Purchaser; or
(f) the Internal Revenue Service shall file notice of a
Lien pursuant to Section 6323 of the Internal Revenue Code with
regard to any of the Receivables or the Pension Benefit Guaranty
Corporation shall file notice of a Lien pursuant to Section 4068 of
ERISA with regard to any of the Receivables; or
(g) there shall have occurred an Early Amortization
Event; or
(h) (i) any Plan Event shall have occurred, (ii) the Seller
or any ERISA Affiliate shall have withdrawn from a Multiemployer
Plan, or (iii) any Multiemployer Plan shall have been terminated or
reorganized or become insolvent, and as a result of one or more
such events the Seller or any ERISA Affiliate has incurred or is
reasonably expected to incur liability in excess of $1,000,000;
then, if any of the events set forth in paragraph (e) above shall have
occurred, a "Termination Event" shall occur without any notice, demand,
protest or other requirement of any kind immediately upon the occurrence
of such event and, if any of the events set forth in any other
paragraph above shall have occurred, the Purchaser may, by notice to the
Seller, declare that a "Termination Event" shall occur as of the date set
forth in such notice. Upon the occurrence of a Termination Event, the
Effective Period shall terminate (any termination of the Effective Period
pursuant to this Section 5.01 is herein referred to as an "Early
Termination"). Upon any Early Termination the Purchaser shall have, in
addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies with respect to the Receivables
provided under the UCC of the applicable jurisdiction and under other
applicable laws, which rights and remedies shall be cumulative.
The Purchaser may, with the prior written consent of a
Majority in Interest of each outstanding Series (or, if so specified in the
related supplement, each Enhancement Provider for such Series) on behalf
of all Holders, waive any default by the Seller in the performance of its
obligations hereunder and its consequences, except the failure to make any
distributions or payments required to be made to the Purchaser or to make
any required deposits of any amounts to be so distributed or paid. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. Indemnification. Without limiting any
other rights which the Purchaser, the Trustee, any Program Agent, any
Enhancement Provider and their respective assignees (which shall not be
deemed to include any of the Holders as such) and their respective officers,
directors, employees, agents and affiliates (each, an "Originator
Indemnified Party" and collectively the "Originator Indemnified Parties")
may have hereunder or under applicable law, the Seller hereby agrees to
indemnify the Purchaser and any of its assignees hereunder (including each
other Originator Indemnified Party) from and against any and all claims,
damages, losses and liabilities and related costs and expenses (including
reasonable attorneys' fees and disbursements) (all of the foregoing being
collectively referred to as "Originator Indemnified Amounts") awarded
against or incurred by any of them arising out of or resulting from this
Agreement, the activities of the Seller in connection herewith or with any
Transaction Document to which the Seller is a party in its capacity as Seller
or the use of proceeds of purchases hereunder or the ownership of any
Receivable or Seller Related Security (excluding however (a) Originator
Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of such Originator Indemnified Party, (b)
recourse (except as otherwise specifically provided in any Transaction
Document) for uncollectible Receivables or (c) except with respect to
clause (x) below, any federal, state, foreign or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest,
penalty, or addition to tax with respect thereto or arising from a failure to
comply therewith) incurred by such Originator Indemnified Party arising
out of or as a result of this Agreement or the interest conveyed hereunder
in Receivables, Seller Related Security or any Contract). Without limiting
or being limited by the foregoing, the Seller shall pay on demand to the
Purchaser or any of its assignees (including each other Originator
Indemnified Party) any and all amounts necessary to indemnify the
Purchaser or any such assignee from and against any and all Originator
Indemnified Amounts relating to or resulting from:
(i) reliance on any representation, warranty or covenant
made or statement made or deemed made by the Seller (or any of
its Responsible Officials) under or in connection with any
Transaction Document which shall have been incorrect in any
material respect when made or deemed made or which the Seller
shall have failed to perform;
(ii) the failure by the Seller to comply with any
Transaction Document or any applicable Requirement of Law with
respect to any Receivable, Seller Related Security or related
Contract, or the failure of any Receivable or the Seller Related
Security or related Contract to conform to any requirement with
respect thereto under any Transaction Document or any
Requirement of Law;
(iii) the failure to vest in the Purchaser absolute
ownership of the Receivables free and clear of any Lien;
(iv) the failure to have filed, or any delay in filing, any
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable
laws that are necessary for perfection or first priority of the
ownership interests created by this Agreement;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable (including a defense based on such
Receivable or the related Seller Related Security or the related
Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise, insurance or
services related to such Receivable or the furnishing or failure to
furnish such merchandise, insurance or services;
(vi) any products liability claim or other claim allegedly
arising out of or in connection with merchandise, insurance or
services which are the subject of any Contract;
(vii) any failure by the Seller or any Affiliate of the Seller
(other than the Purchaser) to perform its duties or obligations in
accordance with the provisions of any Transaction Document,
including any failure to so perform in connection with servicing,
administering or collecting any Receivable;
(viii) any commingling by an act or omission of the Seller
of Collections at any time with other funds;
(ix) any investigation, litigation or proceeding related to
any Receivable, any Contract or this Agreement or any other
Transaction Document to which the Seller is or is to be a party or
the use of proceeds of purchases hereunder or the ownership of
Receivables, Seller Related Security, related Contracts or
Collections or proceeds with respect thereto or in respect of any
Receivable or Contract;
(x) any taxes, including sales, excise, intangibles, value
added, personal property and similar taxes, payable with respect to
the Receivables;
(xi) any reduction in the Outstanding Balance of a
Receivable by reason of any defective, rejected, returned,
repossessed or foreclosed merchandise, insurance or services or any
cash discount or other adjustment made by the Seller;
(xii) any breach by the Seller of any obligation under any
Receivable or any Contract;
(xiii) the acceptance by the Seller as payment of any
Receivable of funds denominated in a currency other than U.S.
Dollars; or
(xiv) Any Receivable classified as an "Eligible Receivable"
by the Seller in any document or report delivered hereunder failing
to satisfy, at the time of such classification, the requirements of
eligibility contained in the definition of Eligible Receivable.
Any Originator Indemnified Amounts due hereunder shall be
payable within fifteen Business Days of submission of a claim by the
Originator Indemnified Party which describes in reasonable detail the basis
for such claim.
The agreement contained in this Section 6.01 shall survive
the collection of all Receivables, the termination of this Agreement and the
Trust and the payment of all amounts otherwise payable hereunder.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Further Assurances. (a) The Seller agrees
that from time to time, at its own expense, the Seller will promptly execute
and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Purchaser may
reasonably request, in order to perfect and protect any pledge, assignment
or security interest granted or purported to be granted hereby or to enable
the Purchaser to exercise and enforce its rights and remedies hereunder
with respect to any Receivable and Seller Related Security and to enable
the Trustee to exercise its rights and remedies under the Transaction
Documents with respect to any of the Trust Assets. Without limiting the
generality of the foregoing, the Seller will: (i) xxxx its master data
processing and computer records in a manner reasonably calculated to
indicate that the Receivables and Seller Related Security have been sold to
the Purchaser in accordance with this Agreement and the other Transaction
Documents; (ii) if any Receivable or Seller Related Security shall be
evidenced by a promissory note, other instrument or chattel paper, deliver
and pledge to the Purchaser such note, instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Purchaser; and
(iii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as the Purchaser may reasonably request, in order
to perfect and preserve the valid and perfected first priority ownership and
security interests granted or purported to be granted hereunder or under
any Transaction Document.
(b) The Seller hereby authorizes the Purchaser to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Receivables and Seller Related Security
without the signature of the Seller where permitted by law. A photocopy
or other reproduction of this Agreement or any financing statement
covering the Receivables and Seller Related Security or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) The Seller will furnish to the Purchaser from time to
time statements and schedules further identifying and describing the
Receivables and Seller Related Security and such other reports in
connection with the Receivables and Seller Related Security as the
Purchaser may reasonably request, all in reasonable detail.
(d) The Seller shall, from time to time, execute and
deliver to the Obligors any bills, statements and letters or other writings
necessary to carry out the terms and provisions of any Transaction
Document and to facilitate the collection of the Receivables in a manner
consistent with the Credit Policy Manual.
SECTION 7.02. Payments. Each payment to be made by
either of the Purchaser or the Seller hereunder shall be made on the
required payment date, or on the next succeeding Business Day if the
required payment date is not a Business Day, in U.S. Dollars and in
immediately available funds at the office of the payee set forth in
Section 7.08 below or to such other office as may be specified by either
party in a written notice to the other party hereto.
SECTION 7.03. Costs, Expenses and Taxes. (a) In
addition to the rights of indemnification granted to the Purchaser pursuant
to Article VI hereof, the Seller agrees to pay on demand (i) all reasonable
costs and expenses of the Purchaser in connection with the preparation,
execution, delivery, modification and amendment of this Agreement and
the other documents to be delivered by the Seller in connection with this
Agreement, including the reasonable fees and expenses of counsel for the
Purchaser with respect thereto and with respect to advising the Purchaser
as to its rights and remedies under this Agreement, and (ii) all reasonable
costs and expenses (including reasonable counsel fees and expenses) of the
Purchaser in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement and the
other documents to be delivered by the Seller in connection herewith,
including reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 7.03, excluding, however, any
costs of enforcement or collection of any Receivables.
(b) In addition, the Seller agrees to pay any present or
future stamp, documentary, excise, property or similar taxes, charges or
levies that arise from any payment or deposit made hereunder or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement, and the Seller agrees to indemnify the
Purchaser against any liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes, charges or levies.
SECTION 7.04. Binding Effect; Assignability. (a) This
Agreement shall be binding upon and inure to the benefit of the Seller and
the Purchaser and their respective successors (whether by merger,
consolidation or otherwise) and assigns. Except as otherwise permitted
herein, the Seller agrees that it will not assign or transfer all or any
portion of its rights or obligations hereunder to any Person without the prior
written consent of the Parent, the Purchaser and a Majority in Interest of
each outstanding Series. In connection with any sale or assignment by the
Purchaser of all or a portion of the Receivables and Seller Related Security,
the buyer or assignee, as the case may be, shall, to the extent of its
purchase or assignment, have all rights of the Purchaser under this
Agreement (as if such buyer or assignee, as the case may be, were the
Purchaser hereunder) except to the extent specifically provided in the
agreement between the Purchaser and such buyer or assignee.
(b) The Seller acknowledges that the Purchaser shall
assign to the Trust, as collateral security for the Purchaser's obligations
under the Pooling and Servicing Agreement, all of the Purchaser's rights,
remedies, powers and privileges hereunder (including the right to give any
notice which the Purchaser may provide to the Seller hereunder), provided
that the Purchaser shall not assign or delegate any of its duties or
obligations hereunder to the Trust.
(c) 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 such time, after the last
Termination Date of any Series; provided, however, that rights and
remedies with respect to any breach of any representation and warranty
made by the Seller pursuant to Article III and the provisions of Article VI
and Sections 4.03(h), 7.03, 7.04 and 7.12 shall be continuing and shall
survive any termination of this Agreement; and provided further that the
Purchaser shall remain entitled to receive any collections on Receivables
sold hereunder which have become Defaulted Receivables after it shall have
completed its collection efforts in respect thereof.
SECTION 7.05. No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising, on the part of the Purchaser,
any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 7.06. Amendment. (a) This Agreement may be
amended from time to time by the Seller and the Purchaser without the
consent of any Beneficiary (i) to cure any ambiguity, (ii) to correct or
supplement any provision herein which may be inconsistent with any other
provision herein or (iii) to add any other provisions with respect to matters
or questions arising under this Agreement which are not inconsistent with
the provisions of this Agreement; provided that any amendment pursuant to
this clause (a) shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Beneficiary.
(b) This Agreement may be amended from time to time
by the Seller and the Purchaser, so long as the Rating Agency Condition is
satisfied, with the consent of the Parent and a Majority in Interest of each
adversely affected Series for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment shall (i) reduce in any manner
the amount of, or delay the timing of, any payment to be made hereunder
without the consent of each such Holder or (ii) reduce the aforesaid
percentage required to consent to any such amendment without the consent
of each Investor Certificateholder. The Trustee may request an Officer's
Certificate and Opinion of Counsel in each case to the effect that such
amendment does not adversely affect any Series and is otherwise in
compliance with the requirements of this Agreement. Any amendment to
be effected pursuant to this paragraph shall be deemed to adversely affect
all outstanding Series, other than any Series with respect to which such
action shall not, as evidenced by an Opinion of Counsel (which counsel
shall not be an employee of, or counsel for, Zenith, the Seller or the
Purchaser), addressed and delivered to the Trustee, adversely affect the
interests of such Series.
SECTION 7.07. Severability. If any provision hereof is
deemed void or unenforceable in any jurisdiction, such voiding or
unenforceability shall not affect the validity or enforceability of such
provision in any other jurisdiction or any other provision hereof in such or
any other jurisdiction.
SECTION 7.08. Notices. All notices and other
communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including telex and facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, or
overnight courier or facsimile, to the intended party at the address or
facsimile number of such party set forth below or at such other address or
facsimile number as shall be designated by such party in a written notice to
the other parties hereto. All such notices and communications shall be
effective (a) if personally delivered, when received, (b) if sent by certified
mail, four Business Days after having been deposited in the mail, postage
prepaid, (c) if sent by overnight courier, two Business Days after having
been given to such courier, unless sooner received by the addressee and
(d) if transmitted by facsimile, when sent, upon receipt confirmed by
telephone or electronic means. Notices and communications sent
hereunder on a day that is not a Business Day shall be deemed to have been
sent on the following Business Day.
(a) If to the Seller,
Zenith Microcircuits Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn.: Manager Banking and Finance
with a copy to:
Tel.: (000) 000-0000
Fax.: (000) 000-0000
Attn.: General Counsel
(b) If to the Purchaser,
Zenith Finance Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Attn.: Treasurer
with a copy to:
Tel.: (000) 000-0000
Fax.: (000) 000-0000
Attn.: Secretary
SECTION 7.09. Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto
in separate counterparts, each of which when so executed shall be deemed
to be an original, and all of which taken together shall constitute one and
the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 7.10. Construction of Agreement as Security
Agreement. It is the intent of the parties that the transactions contemplated
herein constitute sales of the Receivables and Seller Related Security to the
Purchaser. If, however, such transactions are deemed to be loans, (a) the
Seller hereby grants to the Purchaser a first priority security interest in all
of the Seller's right, title and interest in and to the Receivables and Seller
Related Security now existing and hereafter created, all monies due or to
become due and all amounts and other proceeds received with respect
thereto, to secure all of the Seller's obligations hereunder, and (b) this
Agreement shall constitute a security agreement under applicable law.
SECTION 7.11. Third-Party Beneficiaries. The Originator
Indemnified Parties are third-party beneficiaries of all provisions of this
Agreement and are entitled to enforce the provisions of Section 6.01 of this
Agreement to the extent any Originator Indemnified Amounts are due such
parties.
SECTION 7.12. The Seller's Obligations. It is expressly
agreed that, anything contained in this Agreement to the contrary
notwithstanding, the Seller shall be obligated to perform all of its
obligations under the Receivables to the same extent as if the Purchaser
had no interest therein and the Purchaser shall have no obligations or
liability under Receivables to any Obligor thereunder by reason of or
arising out of this Agreement, nor shall the Purchaser be required or
obligated in any manner to perform or fulfill any of the obligations of the
Seller under or pursuant to any Receivable.
SECTION 7.13. Governing Law, Jurisdiction, Consent to
Service of Process.
(a) Governing Law. THIS AGREEMENT,
INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES
HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF THE PURCHASER IN THE RECEIVABLES AND
SELLER RELATED SECURITY IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) Jurisdiction. (i) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Transaction Documents to
which it is a party, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted
by law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Transaction Documents in
the courts of any jurisdiction.
(ii) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Transaction Documents to which it is a
party in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Consent to Service of Process. Each party to this
Agreement irrevocably consents to service of process by personal delivery,
certified mail (postage prepaid) or overnight courier. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(d) Waiver of Jury Trial. Each party to this Agreement
waives any right to a trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement or any other Transaction Document or any amendment,
instrument, document or agreement delivered or which may in the future be
delivered in connection herewith or therewith or arising from any course of
conduct, course of dealing, statements (whether oral or written), actions of
any of the parties hereto or any Beneficiary or any other relationship
existing in connection with this Agreement or any other Transaction
Document, and agrees that any such action or proceeding shall be tried
before a court and not before a jury.
IN WITNESS WHEREOF, the parties hereto have caused
this Receivables Purchase Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first
above written.
ZENITH MICROCIRCUITS
CORPORATION, as Seller
By:
Name:
Title:
ZENITH FINANCE CORPORATION,
as Purchaser
By:
Name:
Title:
