EXHIBIT 10.1(d)
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STONE RECEIVABLES CORPORATION
AND
STONE CONTAINER CORPORATION,
as the Seller
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RECEIVABLES PURCHASE AGREEMENT
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Dated as of October 15, 1999
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RECEIVABLES PURCHASE AGREEMENT, dated as of October 15, 1999,
between Stone Container Corporation, a Delaware corporation (the "Seller") and
Stone Receivables Corporation, a Delaware corporation (the "Company" or the
"Purchaser").
W I T N E S S E T H :
WHEREAS, in the ordinary course of business, the Seller generates
receivables from the sale of corrugated containers from the Seller's container
division (the "Container Division") and from the sale of multi-wall bags,
consumer bags and intermediate bulk containers from the Seller's bag division
(the "Bag Division"); and
WHEREAS, the Seller desires to sell to the Company, and the
Company is willing to purchase from such Seller, all of such Seller's right,
title and interest in, to and under the receivables generated by the Container
Division and the Bag Division (the "Receivables") now existing or hereafter
created and the rights of such Seller in, to and under all Transferred Assets
(as so defined) related thereto;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. Capitalized terms used in this Agreement shall have
the respective meanings assigned to such terms in Annex X hereto unless
otherwise defined herein.
1.2 Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural form of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the
context requires otherwise (a) any definition of or reference to any agreement
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
subsections, Exhibits and Schedules shall be construed to refer to Articles and
subsections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
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1.3 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1 Purchase and Sale of Receivables. (a) The Seller hereby sells,
transfers, assigns and conveys, without recourse (except as expressly provided
herein), to the Purchaser, all its present and future right, title and interest
in, to and under:
(i) all Receivables reflected in the initial Daily Report provided on
the Closing Date and all such Receivables thereafter arising from time to
time until but not including the date an Early Termination occurs with
respect to the Seller;
(ii) the Related Security in respect of such Receivables;
(iii) all Collections in respect of such Receivables;
(iv) all rights (including rescission, replevin or reclamation, but
none of the obligations) relating to such Receivables or arising therefrom;
(v) all proceeds of or payments in respect of any and all of the
foregoing clauses (i) through (iv).
Such property described in the foregoing clauses (i) through (v) shall be
referred to herein as the "Transferred Assets." Subject to the terms and
conditions set forth herein, the Purchaser hereby agrees to purchase the
Transferred Assets of the Seller.
(b) On the date of creation of each newly created Receivable (but only
so long as no Early Termination shall have occurred and be continuing with
respect to such Seller), all of such Seller's right, title and interest in and
to, all such newly created Receivables and all other Transferred Assets in
respect of such Receivables shall be considered to be part of the assets that
have been sold, transferred, assigned, set over and otherwise conveyed to the
Purchaser pursuant to paragraph (a) above without any further action by any
Seller or any other Person. Anything herein to the contrary notwithstanding, to
the extent any Seller shall not have received payment from the Purchaser of the
Purchase Price for any Receivable and other related Transferred Assets in
accordance with the terms of subsection 2.3, such Receivable and Transferred
Assets shall, upon receipt by the Purchaser of notice from such Seller of such
failure to receive payment, immediately and automatically be sold, assigned,
transferred and reconveyed by the Purchaser to such Seller without any further
action by the Purchaser or any other Person.
(c) The parties to this Agreement intend that, for accounting and
commercial purposes, the transactions contemplated by this subsection 2.1 hereby
shall be, and shall be treated as, a purchase by the Purchaser and a sale by the
Seller of the Transferred Assets and not a lending transaction. All sales of
Receivables and other Transferred Assets by the Seller hereunder shall be
without recourse to, or representation or warranty of any kind (express or
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implied) by, the Seller, except as otherwise specifically provided herein. The
foregoing sale, assignment, transfer and conveyance does not constitute and is
not intended to result in the creation or assumption by the Purchaser of any
obligation of any Seller or any other Person in connection with the Receivables,
the other Transferred Assets or any agreement or instrument relating thereto,
including any obligation to any Obligor.
(d) In connection with the foregoing conveyances, the Seller agrees to
record and file, or cause to be recorded and filed, at its own expense,
financing statements (and continuation statements with respect to such financing
statements when applicable) with respect to the Receivables and the Transferred
Assets now existing and hereafter acquired pursuant to this Agreement by the
Purchaser from the Seller and in each case meeting the requirements of
applicable law in such manner and in such jurisdictions as are necessary to
perfect and maintain perfection of the Purchaser's purchase of such Receivables
and any other Transferred Assets and to deliver to the Trustee, a file-stamped
copy of such financing statement.
(e) In connection with the foregoing sales, transfers, assignments and
conveyances, the Seller agrees at its own expense, that it will, as agent of the
Purchaser indicate or cause to be indicated on the computer files (but not on
individual invoices or individual collection files) relating to the Receivables
of such Seller that, unless otherwise specifically identified on such screen,
list or print-out as a receivable not so sold, transferred, assigned and
conveyed, all Receivables included in such screen, list or print-out and all
other Transferred Assets (and any other similar related property) have been
sold, transferred, assigned and conveyed to the Purchaser in accordance with
this Agreement.
(f) As further confirmation of the sale of the Receivables, it is
understood and agreed that the Purchaser shall have the following rights:
(i) the Seller shall, upon the Purchaser's written request and at such
Seller's expense, (A) assemble all of such Seller's documents, instruments
and other records (including credit files and computer tapes or disks) that
(1) evidence or will evidence or record Receivables sold by the Seller and
(2) are otherwise necessary or desirable to effect Collections of such
Receivables (collectively, the "Documents") and (B) deliver the Documents
to the Purchaser or its designee at a place designated by the Purchaser. In
recognition of such Seller's need to have access to any Documents which may
be transferred to the Purchaser hereunder, whether as a result of its
continuing business relationship with any Obligor for Receivables purchased
hereunder, the Purchaser hereby grants to the Seller an irrevocable license
to access the Documents transferred by such Seller to the Purchaser and to
access any such transferred computer software in connection with any
activity arising in the ordinary course of such Seller's business; provided
that such Seller shall not disrupt or otherwise interfere with the
Purchaser's use of and access to the Documents and its computer software
during such license period; and
(ii) promptly upon written request of the Purchaser, after the
occurrence of a Servicer Default, the Seller will (A) deliver to the
Purchaser all licenses, rights, computer programs, related material,
computer tapes, disks, cassettes and data necessary for the immediate
collection of the Receivables by the Purchaser, with or
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without the participation of such Seller (excluding software licenses which
by their terms are not permitted to be so delivered; provided that such
Seller shall use reasonable efforts to obtain the consent of the relevant
licensor to such delivery) and (B) make such arrangements with respect to
the collection of the Receivables as may be reasonably required by the
Purchaser.
2.2 Purchase Price. The amount payable by the Company to the Seller (the
"Purchase Price") for Receivables and Transferred Assets existing on the
Processing Date with respect to the Seller and for newly created Receivables and
other Transferred Assets on any Purchase Date under this Agreement shall be
equal to the product of the Purchase Price Percentage and the Unpaid Balance of
Receivables transferred on such date.
2.3 Payment of Purchase Price. (a) Upon fulfillment of the conditions
set forth in Article III, the Purchase Price for Receivables and other
Transferred Assets shall be paid or provided for in the manner provided below on
each day for which a Daily Report is prepared and delivered to the Company (each
such day, a "Purchase Date"). The Company shall remit the Purchase Price to the
Seller.
(b) The "Purchase Price Percentage" shall mean a percentage figure that
shall be agreed upon from time to time (but no less frequently than once each
calendar quarter) by the Company and the Seller which reflects a fair market
discounted net present value of the Unpaid Balance of Receivables transferred to
the Company by the Seller, expressed as a percentage of such Unpaid Balance.
Such percentage may be greater or less than 100%. The calculation of such
discounted net present value shall take into account:
(i) the expected yield on the Receivables reduced by costs to the
Company of financing the Receivables and paying the Servicing Fee;
(ii) the expected losses on the Receivables (based upon historical
losses on the Receivables and such other factors as shall be agreed between
the Company and the Seller), net of the expected benefits to the Company
generated as a result of the Seller's obligation to pay Dilution
Adjustments and Repurchase Amounts to the Company pursuant to Sections 2.5
and 2.6;
(iii) a reasonable expected rate of return on capital of the Company
from its purchase of Receivables; and
(iv) such other factors as may be mutually agreed between the Company
and the Seller and as are customarily reflected in an arm's-length purchase
and sale of comparable receivables.
The Purchase Price Percentage shall be calculated prospectively with
respect to Receivables transferred on and after the date of such calculation. In
no event shall the Purchase Price Percentage (i) be adjusted retroactively to
account for the actual performance of previously purchased Receivables or for
the Company's actual rate of return on previously purchased Receivables or (ii)
be increased from and after the occurrence of, and during the continuation of
any Event of Termination or any event which would, upon the giving of notice or
the passage of time or both, constitute a Event of Termination.
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(c) If, on any day, the Purchaser has insufficient funds to pay in full
the Purchase Price owed on such day, or if the Seller otherwise consents, the
Purchaser may pay all or part of the applicable Purchase Price to be made on
such day by borrowing under its Short-Term Note, substantially in the form of
Exhibit A and issued in favor of the Seller, and the Seller shall have
irrevocably agreed to advance, and shall be deemed to have advanced, a revolving
loan in the amount so specified by the Purchaser; provided, however, that the
Purchaser may not make payments of Purchase Prices through the use of such
revolving loans in excess of ten percent of the aggregate Unpaid Balance of
Eligible Receivables. Each such revolving loan shall be payable in accordance
with the terms and provisions of the Short-Term Note and this Agreement. The
Seller may evidence the making of each revolving loan by recording the date and
amount thereof on the grid attached to its Short Term Note; provided, that
failure to make any such recordation on such grid or any error in such grid
shall not adversely affect the Seller's rights to recover the outstanding unpaid
principal amount of the revolving loans made under its Short-Term Note.
(d) The Company shall be entitled to pay all amounts in respect of any
purchase. All payments under this Agreement (i) shall be made on the date
specified therefor in Dollars in same day funds or by check, as the Seller shall
elect, (ii) shall be made not later than 2:00 p.m (St. Louis City time) on the
date specified therefor and (iii) shall be made to the bank account for such
Seller designated in writing by the Seller to the Company.
(e) Whenever any payment to be made under this Agreement shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day. Amounts not paid when due in accordance with the
terms of this Agreement shall bear interest at a rate equal at all times to 2%
per annum above the Discount Rate in effect on the date such payment was due,
provided, however, that such interest shall not at any time exceed the maximum
rate permitted by applicable law.
2.4 No Repurchase. Except to the extent expressly set forth herein, the
Seller shall not have any right or obligation under this Agreement, by
implication or otherwise, to repurchase from the Company any Transferred Assets
or to rescind or otherwise retroactively effect any purchase of any Transferred
Assets after the Purchase Date relating thereto.
2.5 Rebates, Adjustments, Returns and Reductions, Modifications. From
time to time the Seller may apply Dilutive Credits to Receivables in accordance
with this subsection 2.5. The Seller agrees to pay to the Company the amount of
any such Dilutive Credit (a "Dilution Adjustment") as follows: (i) prior to an
Early Termination with respect to such Seller, the amount of any such Dilution
Adjustment shall be paid by (x) effectively netting the product of such Dilutive
Credit and the Purchase Price Percentage then in effect against the Purchase
Price of Receivables created after the grant of such Dilutive Credit in
accordance with subsection 2.3(b)(ii) and paying the remainder of such Dilution
Adjustment in cash on the first Settlement Date to occur after the grant of such
Dilutive Credit and (y) after an Early Termination with respect to such Seller,
the amount of any such Dilution Adjustment shall be paid in cash no later than
five Business Days after the grant of such Dilutive Credit. A "Dilutive Credit"
shall mean any rebate, administrative fee, discount, credit memo, refund,
non-cash payment or adjustment (including, without limitation, as a result of
the application of any special or other discounts or any reconciliations) in
respect of any Receivable, the amount owing for any returns or
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cancellations and the amount of any other reduction of any payment under any
Receivable in each case granted or made by the Seller to the related Obligor;
provided that a "Dilutive Credit" does not include any Defaulted Receivables.
The amount of any Dilutive Credit shall be set forth on the first Daily Report
prepared after the date the Dilutive Credit is first recorded on the computer
records of the Servicer, which for purposes of this subsection 2.5 shall
constitute the date of "grant" thereof. The Seller agrees to promptly record
Dilutive Credits in accordance with its historical practices.
2.6 Limited Repurchase Obligation. In the event that any of the
representations or warranties contained in subsection 4.2 in respect of any
Receivable shall be or have been incorrect in any material respect as of the
date made or deemed made, or any Receivable shall become subject to any defense,
dispute, offset or counterclaim of any kind (other than as expressly permitted
by this Agreement) or the Seller shall breach any covenant contained in
subsection 5.2, 5.10, 5.14 5.15 or Article VI with respect to any Receivable
(each of the foregoing events or circumstances, a "Repurchase Event"), such
Receivable shall cease to be an Eligible Receivable on the date on which such
Repurchase Event occurs. In addition, if any Repurchase Event shall occur with
respect to any Receivable, then the Seller agrees to pay to the Company an
amount (the "Repurchase Amount") in cash equal to the Purchase Price of such
Receivable (whether the Company paid such Purchase Price in cash or otherwise)
less Collections received by the Company in respect of such Receivable,
regardless of which Seller shall have been responsible for such Repurchase
Event, such payment to occur no later than the 30th day after the day such
Repurchase Event becomes known (or should have become known with due diligence)
to the Seller (except that if such day is not a Business Day, such payment shall
be made on the Business Day immediately succeeding such day) unless such
Repurchase Event shall have been cured on or before such day; provided that,
prior to the occurrence of an Early Termination with respect to such Seller, any
such payments to the Company shall be netted against the Purchase Price of newly
created Receivables in accordance with subsection 2.3(b)(ii) to the extent of
such Purchase Price and the remaining amount of such Seller Repurchase Payment
due to the Company after such netting, if any, shall be paid to the Company on
such date in cash. Any payment by the Seller pursuant to this subsection 2.6 is
referred to as a "Seller Repurchase Payment." If, on or prior to such 30th day
(or the Business Day immediately succeeding such 30th day, as applicable), the
Seller shall so reacquire any such Receivable, then the Company shall have no
further remedy against the Seller in respect of the Repurchase Event with
respect to such reacquired Receivable. Upon a Seller Repurchase Payment, the
Company shall automatically and without further action be deemed to sell,
transfer, assign, set over and otherwise convey to the Seller, without recourse,
representation or warranty, all the right, title and interest of the Company in,
to and under such Receivable and the other Transferred Assets with respect
thereto. The Company shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by such
Seller to effect the conveyance of such Receivable pursuant to this subsection
2.6.
2.7 Obligations Unaffected. The obligations of the Seller to the Company
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable or any sale of a Receivable.
2.8 Certain Charges. The Seller and the Company agrees that late charge
revenue, reversals of discounts, other fees and charges and other similar items,
whenever created,
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accrued in respect of Purchased Receivables shall be the property of the Company
notwithstanding the occurrence of an Early Termination, and all Collections with
respect thereto shall continue to be allocated and treated as Collections in
respect of Transferred Receivables.
2.9 Certain Allocations. The Seller hereby agrees that, following the
occurrence of an Early Termination in respect of any Seller, all Collections and
other proceeds received in respect of Receivables generated by such Seller shall
be applied first, to pay the outstanding Unpaid Balance of Receivables sold to
the Company (as of the date of such Early Termination) of the Obligor to whom
such Collections are attributable until such Receivables are paid in full and
second to such Seller to pay Receivables of such Obligor not sold to the
Company; provided, however that notwithstanding the foregoing, if the Seller can
attribute a Collection to a specific Obligor and a specific Receivable, then
such Collection shall be applied to pay such Receivable of such Obligor.
ARTICLE III
CONDITIONS TO PURCHASE AND SALE
3.1 Conditions Precedent to the Company's Initial Purchase of
Receivables. The obligation of the Company to purchase the Receivables and the
other Transferred Assets hereunder on the Initial Closing Date from the Seller
is subject to the conditions precedent, which may be waived by the Company, that
(a) each of the Transaction Documents shall be in full force and effect and (b)
the conditions set forth below shall have been satisfied on or before the
Initial Closing Date:
(i) the Company shall have received copies of duly adopted resolutions
of the board of directors of the Seller as in effect on the Initial Closing
Date and in form and substance reasonably satisfactory to the Company,
authorizing this Agreement, the documents to be delivered by such Seller
hereunder and the transactions contemplated hereby, certified by the
Secretary or Assistant Secretary of such Seller;
(ii) the Company shall have received duly executed certificates of the
Secretary or an Assistant Secretary of the Seller, dated the Initial
Closing Date and in form and substance reasonably satisfactory to the
Company, certifying the names and true signatures of the officers (or such
other person) authorized on behalf of such Seller to sign this Agreement
and any instruments or documents in connection with this Agreement (on
which certificates the Company may conclusively rely until such time as the
Company shall receive from such Seller a revised certificate with respect
to such Seller meeting the requirements of this subsection (ii));
(iii) the Company shall have received a "short-form" good standing
certificate with respect to the Seller;
(iv) the Seller shall have filed and recorded, at its own expense,
UCC-1 financing statements (and other similar instruments) with respect to
the Receivables and the other Transferred Assets in such manner and in such
jurisdictions as are necessary or desirable to perfect the Company's
ownership interest thereof under the Uniform
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Commercial Code (or any other similar law), and all other action necessary,
in the reasonable judgment of the Company, to perfect the Company's
ownership of the Receivables and the other Transferred Assets shall have
been duly taken;
(v) the Company shall have received a certificate from the Seller,
dated the Initial Closing Date and signed by one of its Responsible
Officers, in form satisfactory to the Company, confirming compliance with
the conditions precedent set forth in this subsection 3.1 and stating that
the information systems utilized by the Seller to process the Receivables
are able to perform date sensitive functions on and after January 1, 2000;
and
(vi) the Company shall have received certified copies of the
certificate of incorporation and bylaws of the Seller.
The Company may only purchase the Receivables and other Transferred
Assets on the Initial Closing Date if, as of such date the Company has a minimum
amount of equity equal to the sum of: (i) the product of the Net Eligible
Receivables and the Loss Reserve Ratio for the "BBB" rated Certificates; (ii)
the amount in excess of the Concentration Limit for the top three Obligors in
the trust pool; and (iii) the dollar amount of Receivables in the trust pool 151
days or more past the invoice date.
3.2 Conditions Precedent to All the Company's Purchases of Receivables.
The obligation of the Company to pay a Seller for any Receivable and other
Transferred Assets with respect thereto on each Purchase Date shall be subject
to the further conditions precedent, which may be waived by the Company, that on
such Purchase Date:
(a) the following statements shall be true (and the acceptance by such
Seller of the Purchase Price for any Receivables on any Purchase Date shall
constitute a representation and warranty by such Seller that on such Purchase
Date the statements in clauses (i) and (ii) below are true):
(i) the representations and warranties of such Seller contained in
subsections 4.1 and 4.2 shall be true and correct in all material respects
on and as of such Purchase Date as though made on and as of such date,
except insofar as such representations and warranties are expressly made
only as of another date (in which case they shall be true and correct in
all material respects as of such other date); and
(ii) after giving effect to such purchase, no Purchase Termination
Event of the type specified in paragraph (e), (g) or (h) of Article VII
with respect to such Seller shall have occurred and be continuing.
(b) the Company shall have received payment in full of all amounts for
which payment is due from such Seller pursuant to subsection 2.5, 2.6 or 8.3;
(c) the Company shall have received such other approvals, opinions or
documents as the Company may reasonably request; and
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(d) such Seller shall have complied with all of its covenants in all
material respects and satisfied all of its obligations in all material respects
under this Agreement required to be complied with or satisfied as of such date;
provided, however, that the failure of any Seller to satisfy any of the
foregoing conditions shall not prevent such Seller from subsequently selling
Receivables upon satisfaction of all such conditions or exercising its rights
under subsection 2.1(b).
The acceptance of the Purchase Price for any Receivable and other Transferred
Assets on each Purchase Date by each Seller shall constitute a representation
and warranty by such Seller that the conditions to the sale thereof on such
Purchase Date shall have been satisfied.
3.3 Conditions Precedent to the Addition of a Seller. No Subsidiary or
Affiliate of Stone Container Corporation approved by the Company as an
additional Seller pursuant to subsection 8.14 shall be added as a Seller
hereunder unless the conditions set forth below shall have been satisfied on or
before the date designated for the addition of such Seller (the "Seller Addition
Date"):
(i) the Company shall have received a receivables sale agreement to
substantially the same effect as this Agreement, duly executed and
delivered by such Seller;
(ii) the Company shall have received copies of duly adopted
resolutions of the board of directors of such Seller as in effect on the
related Seller Addition Date and in form and substance reasonably
satisfactory to the Company, authorizing this Agreement, the documents to
be delivered by such Seller hereunder and the transactions contemplated
hereby, certified by the Secretary or an Assistant Secretary of such
Seller;
(iii) the Company shall have received the certificate or articles of
incorporation and by-laws of such Seller, duly certified by the Secretary
or an Assistant Secretary of such Seller;
(iv) the Company shall have received a "short-form" good standing
certificate with respect to each Seller;
(v) the Company shall have received duly executed certificates of the
Secretary or an Assistant Secretary of such Seller dated the related Seller
Addition Date and in form and substance reasonably satisfactory to the
Company, certifying the names and true signatures of the officers
authorized on behalf of such Seller to sign the Additional Seller
Supplement or any instruments or documents in connection with this
Agreement (on which certificates the Company may conclusively rely until
such time as the Company shall receive from such Seller a revised
certificate with respect to such Seller meeting the requirements of this
subsection (v));
(vi) such Seller shall have filed and recorded, at its own expense,
UCC-1 financing statements (and other similar instruments) with respect to
the Receivables and the other Transferred Assets in such manner and in such
jurisdictions as
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are necessary or desirable to perfect the Company's ownership interest
thereof under the Uniform Commercial Code (or any other similar law), and
all other action necessary, in the opinion of the Company, to perfect the
Company's ownership of the Receivables and the other Transferred Assets
shall have been duly taken;
(vii) the Company shall have received a certificate from each Seller,
dated the Seller Addition Date and signed by one of its Responsible
Officers, in form satisfactory to the Company, confirming compliance with
the conditions precedent set forth in this subsection 3.3;
(viii) the Company shall have received written confirmation from the
Rating Agencies that the addition of the Seller will not result in a
downgrade or withdrawal of the current ratings on the outstanding
Certificates and consent from each Agent which shall not be unreasonably
withheld; provided, however, three Sellers may be added annually without
obtaining written confirmation from the Rating Agencies if (a) the added
Sellers are in the same line of business as the current Sellers; (b) the
Eligible Receivables of each added Seller do not represent more than five
percent of the current Net Eligible Receivables; and (c) the reserves for
losses and dilutions are restated before each Seller is added to include
the historical performance of the Receivables contributed by the added
Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Seller Relating to the Seller.
Each Seller hereby represents and warrants to the Company on the Initial Closing
Date and on each Purchase Date that:
(a) Organization, Corporate Powers. It is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite corporate power and authority to carry on its
business as now conducted and, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required and has the corporate
power and authority to execute, deliver and perform each of the Transaction
Documents and each agreement or instrument contemplated hereby or thereby to
which it is or will be a party.
(b) Authorization. The transactions contemplated herein are within its
corporate powers and has been duly authorized by all requisite corporate and, if
required, stockholder action.
(c) Enforceability. Each of this Agreement and the other Transaction
Documents to which it is a party has been duly executed and delivered by it and
constitutes a legal, valid and binding obligation of it enforceable against it
in accordance with its terms, except as enforceability may be
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limited by bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(d) Governmental Approvals; No Conflicts. The execution, delivery and
performance by it of this Agreement and each of the other Transaction Documents
to which it is a party, the sale of Receivables by it hereunder and the
consummation of the other transactions contemplated by any of the foregoing (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
it or any order of any Governmental Authority, (c) will not violate or result in
a default under any indenture, agreement or other instrument binding upon such
Seller or its assets, or give rise to a right thereunder to require any payment
to be made by such Seller, and (d) will not result in the creation or imposition
of any Lien on any asset of such Seller.
(e) Litigation; Compliance with Laws. There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to its knowledge, threatened against or affecting such Seller (i)
that could reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect or (ii) that involve this Agreement or the
transactions contemplated herein.
(f) Compliance with Laws and Agreements. It is in compliance with all
laws, regulations and orders of any Governmental Authority applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(g) Taxes. It has timely filed or caused to be filed all federal, state
and local tax returns which are required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except (i) taxes
that are being contested in good faith by appropriate proceedings and for which
it has set aside on its books adequate reserves or (ii) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.
(h) Accuracy and Completeness of Information. It has disclosed to the
Company all agreements, instruments and corporate or other restrictions to which
it is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
(i) Employee Benefit Plans. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
(j) Absence of Certain Restrictions. No indenture, certificate of
designation for preferred stock, agreement or other instrument to which it or
any of its Subsidiaries is a party
11
will prohibit or materially restrain, or have the effect of prohibiting or
materially restraining, or imposing materially adverse conditions upon, the sale
and assignment of Transferred Assets.
(k) Lock-box Accounts. Set forth in Schedule 2 is a complete and
accurate description as of the Initial Closing Date of each Lock-box Account
currently maintained by such Seller. Such Lock-box Account will only be used for
the collection of Receivables. The Seller has instructed all Obligors on the
Receivables to be sold or contributed by it hereunder to submit all payments on
the Receivables and Related Assets directly to one of the Lock-box Accounts.
(l) Filings. All filings and other acts (including but not limited to
all filings and other acts necessary or advisable under the Uniform Commercial
Code of each relevant jurisdiction) shall have been made or performed such that
the Company has a first priority perfected ownership interest in respect of all
Receivables.
(m) Offices. The offices at which the Seller keeps its records
concerning the Receivables are located at the addresses specified on Schedule 1
or have been reported to the Company in accordance with the provisions of
subsection 5.7 of this Agreement. The chief executive office and principal place
of business of such Seller is located at the address set forth on Schedule 1 (as
such location may be changed from time to time in accordance with subsection 5.7
of this Agreement) and has not changed in the past four months. The Seller is
duly qualified to do business in each state set forth opposite its name on
Schedule 1 hereto and is not qualified to do business in any other state.
(n) Investment Company Act. It is not controlled by or is not an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.
(o) Bulk Sales Act. No transaction contemplated hereby with respect to
any Seller requires compliance with, or will be subject to avoidance under, any
bulk sales act or similar law.
(p) Names. The legal name of the Seller is as set forth on Schedule 3 to
this Agreement. During the past five years, it has no trade names, fictitious
names, assumed names "doing business as" names, or any other names under which
it has done or is doing business.
(q) No Purchase Termination Event. As of the Initial Closing Date, no
Purchase Termination Event or with respect to such Seller has occurred and is
continuing.
(r) No Fraudulent Transfer. Such Seller is not entering into this
Agreement with the intent (whether actual or constructive) to hinder, delay, or
defraud its present or future creditors and is receiving reasonably equivalent
value and fair consideration for the Receivables originated by it being
transferred hereunder.
4.2 Representations and Warranties of the Seller Relating to the
Agreement and the Receivables. The Seller hereby represents and warrants to the
Company on the Initial Closing Date and on each Purchase Date that with respect
to the Receivables being sold as of such date:
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(a) Eligible Receivable. Other than with respect to Receivables which
such Seller states in writing (in the applicable Daily Report) are not Eligible
Receivables on such date, each Receivable is, as of its Purchase Date, an
Eligible Receivable.
(b) Title; No Liens. Such Seller is the sole legal and beneficial owner
of such Receivables, and upon the sale of each Receivable of such Seller, the
Company will become the sole legal and beneficial owner of such Receivable, free
and clear of any Liens (except for Permitted Liens) and no effective financing
statement or other instrument similar in effect covering all or any part of such
Receivable or Related Security with respect thereto will at such time be on file
against such Seller in any filing or recording office except such as have been
filed in favor of the Company in accordance with this Agreement.
4.3 Representations and Warranties of the Company. The Company hereby
represents and warrants to itself as follows:
(a) Organization, Corporate Powers. It is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite corporate power and authority to carry on its
business as now conducted and, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required and has the corporate
power and authority to execute, deliver and perform each of the Transaction
Documents and each other agreement or instrument contemplated hereby or thereby
to which it is or will be a party.
(b) Authorization. The transactions contemplated herein are within the
corporate powers of the Company and have been duly authorized by all requisite
corporate and, if required, stockholder action.
(c) Enforceability. Each of this Agreement and each of the other
Transaction Documents to which it is a party has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally and
except as enforceability may be limited by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(d) Governmental Approvals; No Conflicts. The execution, delivery and
performance by it of this Agreement and each of the other Transaction Documents
to which it is a party, the sale of Receivables by it hereunder and the
consummation of the other transactions contemplated by any of the foregoing (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
it or any order of any Governmental Authority, (c) will not violate or result in
a default under any indenture, agreement or other instrument binding upon the
Company or its assets, or give rise to a right thereunder to require any payment
to be made by the Company, and (d) will not result in the creation or imposition
of any Lien on any asset of the Company.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Seller hereby agrees that, so long as there are any amounts
outstanding with respect to Receivables previously sold by such Seller to the
Company or until an Early Termination with respect to such Seller, whichever is
later, such Seller shall:
5.1 Certificates, Other Information. Furnish to the Company:
(a) not later than 90 days after the end of each fiscal year and not
later than 45 days after the end of each of the first three fiscal quarters of
each fiscal year, a certificate of a Responsible Officer of the Seller stating
that, to such officer's knowledge (after due inquiry), such Seller during such
period has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in the Transaction Documents to which it is
a party to be observed, performed or satisfied by it, and that such officer has
obtained no knowledge of any Purchase Termination Event except as specified in
such certificate; and
(b) promptly, such additional financial and other information as the
Company may from time to time reasonably request.
5.2 Compliance with Laws, etc. Comply in all material respects with its
certificate of incorporation and by-laws and all laws, rules, regulations and
orders of any Governmental Authority, whether now in effect or hereafter
enacted, applicable to the Receivables, except to the extent that failure to
comply therewith could not have a Material Adverse Effect. The Seller will
comply, in all material respects, with its obligations under contracts with
Obligors relating to the Receivables, except to the extent such compliance would
result in a violation of the laws, rules, regulations or orders of any
Governmental Authority.
5.3 Preservation of Corporate Existence. (i) Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation and (ii) qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the nature of its business so
requires, except where the failure so to qualify would not, individually or in
the aggregate with other such failures, have a Material Adverse Effect shall be
given; provide that notwithstanding the foregoing, any Seller may be
consolidated or merged with or into or dissolved into any other Seller so long
as written notice of such consolidation or merger shall be given to the Company
at least one day prior to the date thereof.
5.4 Preservation of Separate Existence. Take all actions reasonably
required to maintain the Company's status as a separate legal entity, including,
without limitation, (i) not misleading third parties as to the Company's
identity as an entity with assets and liabilities distinct from the Seller and
Seller's other Subsidiaries or Affiliates; (ii) not holding itself out to be
responsible for the debts or decisions or actions relating to the business and
affairs of the Company; (iii) taking such other actions as are necessary on its
part to ensure that the covenants made by the Company in Section 2.10 of the
Pooling and Servicing Agreement are true and correct at all times; and (iv)
taking such other actions as are necessary on its part to ensure that
14
the Company's corporate procedures required by its certificate of incorporation
and by-laws are duly and validly taken.
5.5 Visitation Rights. At any reasonable time during normal business
hours and from time to time, in each case upon reasonable notice to such Seller
permit (i) the Company or any of its respective agents or representatives to
examine and make copies of and abstracts from the records, books of account and
documents (including computer tapes and disks) of the Seller relating to the
Receivables hereunder and (ii) the Company or any of its respective agents or
representatives, to visit the properties of such Seller for the purpose of
examining such records, books of account and documents, and to discuss the
affairs, finances and accounts of such Seller relating to the Receivables or
such Seller's performance hereunder with any of its officers or directors and
with its independent certified public accountants (subject to any requirements
of confidentiality imposed by law or contract).
5.6 Keeping of Records and Books of Account. Maintain and implement, or
cause to be maintained or implemented, administrative and operating procedures
reasonably necessary or advisable for the collection of amounts owing on all
Receivables, and, until any delivery to the Company, keep and maintain, or cause
to be kept and maintained, all documents, books, records and other information
reasonably necessary or advisable for the collection of amounts owing on all
such Receivables and other Transferred Assets with respect thereto.
5.7 Location of Records. Keep its principal place of business and chief
executive office at the locations referred to for it on Schedule 1 hereto and
keep the offices where it keeps the records concerning the Receivables (and all
original documents relating thereto) at the locations referred to in subsection
4.1 (m) or, upon 30 days prior written notice to the Company, at such other
locations in a jurisdiction where all action required by subsection 5.16(a)
shall have been taken and completed and be in full force and effect
5.8 Computer Files. At its own cost and expense, retain the ledger used
by such Seller as a master record of the Obligors and retain copies of all
documents relating to each Obligor as custodian and agent for the Company and
other Persons with interests in the Receivables and xxxx the computer tape or
other physical records of the Receivables (other than individual invoices or
individual collection files) to the effect that interests in the Receivables
existing with respect to the Obligors listed thereon have been sold to the
Company.
5.9 Payment of and Compliance with Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on its books or except where the failure to so pay, discharge or
otherwise satisfy such obligations would not have a Material Adverse Effect in
respect of such Seller. Such Seller shall defend the right, title and interest
of the Company in, to and under the Receivables originated by it and the other
Transferred Assets, whether now existing or hereafter created, against all
claims of third parties claiming through such Seller. Such Seller will duly
fulfill all obligations on its part to be fulfilled under or in connection with
each Receivable originated by it and will do nothing to impair the rights of the
Company in such Receivable.
15
5.10 Policies. Perform its obligations in accordance with and comply in
all material respects with the Credit and Collection Policies as amended from
time to time in accordance with the Transaction Documents, in regard to the
Receivables originated by it and the other Transferred Assets.
5.11 Taxes. Pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
in respect of its property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof, provided, however that such payment and discharge shall not be
required with respect to any such tax, assessment, charge, levy or claim so long
as (i) the validity or amount thereof shall be contested in good faith by
appropriate proceedings and such Seller shall set aside on its books adequate
reserves as required by GAAP with respect thereto, (ii) such tax, assessment,
charge, levy or claim is in respect of property taxes for property that such
Seller has determined to abandon and the sole recourse for such tax, assessment,
charge, levy or claim is to such property and (iii) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
5.12 Collections. Instruct each Obligor to make payments in respect of
its Receivables in accordance with its current practices with respect to such
Obligor to the Lock-box Account and to comply in all material respects with
procedures with respect to Collections reasonably specified from time to time by
the Company. With respect to payments in respect of any Receivables that are
made directly to such Seller (including, without limitation, any employees
thereof or independent contractors employed thereby), such Seller shall promptly
deliver (which may be via regular mail) or deposit such amount to the Lock-box
Account and, prior to forwarding such amounts, such Seller shall hold such
payments in trust as custodian for the Company.
5.13 Furnishing Copies, etc. Furnish to the Company:
(a) within five Business Days after the Company's request, a certificate
of a Responsible Officer of such Seller certifying, as of the date thereof, to
the knowledge of such officer, that no Purchase Termination Event has occurred
and is continuing, and setting forth the computations used by the Financial
Officer of such Seller in making such determination or if one has so occurred
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto;
(b) promptly upon obtaining knowledge of the occurrence of any Purchase
Termination Event or potential Purchase Termination Event written notice thereof
specifying the nature and extent thereof and the corrective action (if any)
proposed to be taken with respect thereto;
(c) promptly following request therefor, such other information,
documents, records or reports regarding or with respect to the Receivables of
the applicable Seller, as the Company may from time to time reasonably request;
16
(d) promptly upon obtaining knowledge of the occurrence thereof, written
notice of any event of default or default under any other Transaction Document;
and
(e) promptly upon obtaining knowledge of the occurrence thereof, written
notice of any development that has resulted in, or could reasonably be expected
to result in, a Material Adverse Effect; and
(f) promptly upon determining that any Receivable designated as an
Eligible Receivable on the applicable Daily Report or Settlement Statement was
not an Eligible Receivable as of the date provided therefor, written notice of
such determination.
5.14 Obligations with Respect to Obligors and Receivables. (i) Take all
actions on its part reasonably necessary to maintain in full force and effect
its material rights under all contracts relating to each Receivable originated
by it, and (ii) perform all services relating to, or which give rise to, each
Receivable originated by it.
5.15 Responsibilities of the Sellers. Notwithstanding anything herein to
the contrary, (i) the Seller shall perform or cause to be performed all its
obligations under the Credit and Collection Policies related to the Receivables
to the same extent as if such Receivables had not been transferred to the
Company hereunder, (ii) the exercise by the Company of any of its rights
hereunder shall not relieve any Seller of its obligations with respect to such
Receivables and (iii) except as provided by law, the Company shall not have any
obligation or liability with respect to any Receivables, nor shall the Company
be obligated to perform any of the obligations or duties of any Seller
thereunder.
5.16 Further Action. In addition to the foregoing:
(a) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable in such Seller's reasonable
judgment or that the Company may reasonably request, in order to more fully
effect the purposes of this Agreement and the transfer of the Receivables
hereunder, to protect or more fully evidence the Company's right, title and
interest in the Receivables, or to enable the Company to exercise or enforce any
of its rights in respect thereof.
(b) The Seller hereby irrevocably authorizes the Company to file one or
more financing or continuation statements (and other similar instruments), and
amendments thereto, relative to all or any part of the Receivables and the other
Transferred Assets sold or to be sold by such Seller without the signature of
such Seller to the extent permitted by applicable law.
(c) If any Seller fails to perform any of its agreements or obligations
under this Agreement, the Company may (but shall not be required to) perform, or
cause performance of, such agreements or obligations, and the expenses of the
Company incurred in connection therewith shall be payable by such Seller as
provided in subsection 9.3. The Company agrees promptly to notify such Seller
after any such performance; provided however that the failure to give such
notice shall not affect the validity of any such performance.
17
5.17 Sale of Receivables. Sell Receivables solely in accordance with the
terms of this Agreement.
ARTICLE VI
NEGATIVE COVENANTS
The Seller hereby agrees that, so long as there are any amounts
outstanding with respect to Receivables previously sold by such Seller to the
Company or until an Early Termination with respect to such Seller, whichever is
later, such Seller shall not, directly or indirectly:
6.1 Liens. Except as otherwise expressly herein provided, sell, assign
(by operation of law or otherwise), transfer or otherwise dispose of, or create
or suffer to exist any Lien upon or with respect to, any Receivables or other
Transferred Assets, or assign any right to receive proceeds in respect thereof
except for Permitted Liens.
6.2 Ineligible Receivables. Take any action to cause, or which would
permit, an Eligible Receivable to cease to be an Eligible Receivable, except as
otherwise expressly provided by this Agreement; provided that in no event shall
an Eligible Receivable becoming a Defaulted Receivable constitute a breach of
this subsection 6.2.
6.3 Change in Payment Instructions to Obligors. Instruct any Obligor of
any Purchased Receivables to make any payments with respect to any Receivables
other than in accordance with its current practices with respect to such Obligor
or to the Lock-box Account.
6.4 Changes in Name. Change its name, use an additional name or change
its identity or corporate structure in any manner which would or might make any
financing statement or continuation statement (or other similar instrument)
relating to this Agreement seriously misleading within the meaning of Section
9-402(7) of the Uniform Commercial Code (or any other similar law) or impair the
perfection of the Company's interest in any Receivable under any similar law,
without 30 days prior written notice to the Company and it takes all actions
required by subsection 5.16(a); provided that notwithstanding the foregoing, any
Seller may be consolidated or merged with or into or dissolved into any other
Seller so long as written notice of such consolidation or merger shall be given
to the Company at least one day prior to the date thereof.
6.5 Policies. Make any change or modification (or permit any change or
modification to be made) to the Credit and Collection Policies, except (i) if
such changes or modifications are necessary under any Requirement of Law or (ii)
if such changes or modifications would not reasonably be likely to have a
Material Adverse Effect.
6.6 Modification of Ledger. Delete or otherwise modify the marking on
the ledger referred to in subsection 5.8.
6.7 Accounting of Purchases. Prepare any financial statements which
shall account for the transactions contemplated hereby in any manner other than
as sales of the Receivables by such Seller to the Company or in any other
respect account for or treat the
18
transactions contemplated hereby (including for accounting purposes, except as
required by law) in any manner other than as sales of the Receivables by such
Seller to the Company; provided however that this subsection shall not apply for
any tax or tax accounting purposes.
6.8 Instruments. Take any action to cause any Receivable to be evidenced
by any instrument (as defined in the Uniform Commercial Code as in effect in the
State of Missouri) except in connection with the enforcement or collection of a
Receivable.
ARTICLE VII
PURCHASE TERMINATION EVENTS
If any of the following events (herein called "Purchase Termination
Events") shall have occurred and be continuing:
(a) the Seller shall fail (i) to pay any amount due pursuant to
subsection 2.5, 2.6 or 8.3 in accordance with the provisions thereof and such
failure shall continue unremedied for a period of five days from the earlier of
(A) the date any officer of such Seller obtains knowledge of such default and
(B) the date such Seller receives notice of such default from the Company or
(ii) to pay any other amount required to be paid by such Seller hereunder within
five Business Days of the date when due; or
(b) the Seller shall fail to observe or perform any covenant or
agreement applicable to it contained in subsection 5.2. 5.7, 5.8, 5.13(b), 5.14
or 5.16(a) or Article VI; provided that a Purchase Termination Event shall not
be deemed to have occurred under this paragraph (b) based upon a failure to
observe a covenant giving rise to a Repurchase Event if the Seller shall have
complied with the provisions of subsection 2.6 in respect thereof; or
(c) the Seller shall fail to observe or perform any covenant or
agreement applicable to it contained herein (other than as specified in
paragraph (a) or (b) of this Article VII); provided that no such failure shall
constitute a Purchase Termination Event under this paragraph (c) unless such
default shall continue unremedied for a period of 60 consecutive days from the
earlier of (A) the date any Responsible Officer of such Seller obtains knowledge
of such default and (B) the date such Seller receives notice of such default
from the Company; or
(d) any representation, warranty, certification or statement made or
deemed made by the Seller to this Agreement or in any statement, record,
certificate, financial statement or other document delivered pursuant to this
Agreement shall prove to have been false or misleading in any material respect
on or as of the date made or deemed made; provided that a Purchase Termination
Event shall not be deemed to have occurred under this paragraph (d) based upon a
breach of any representation or warranty set forth in subsection 4.2 if the
Sellers shall have complied with the provisions of subsection 2.6 in respect
thereof; or
(e) (i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (x) relief
in respect of the Seller or of a substantial part of the property or assets of
the Seller under the Bankruptcy Code, (y) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the Seller
or for a substantial part of the property or assets of the Seller or (z) the
winding-up
19
or liquidation of the Seller; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or (ii) the Seller shall (t) voluntarily commence
any proceeding or file any petition seeking relief under the Bankruptcy Code,
(u) consent to the institution of, or fail to contest in a timely and
appropriate manner, to any proceeding or the filing of any petition described in
clause (e)(i) above, (v) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such
Seller or for a substantial part of the property or assets of such Seller, (w)
file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (x) make a general assignment for the benefit of
creditors, (y) become unable, admit in writing its inability or fail generally
to pay its debts as they become due or (z) take any action for the purpose of
effecting any of the foregoing; or
(f) there shall have occurred an Event of Termination under the Pooling
and Servicing Agreement; or
(g) a notice of Lien shall have been filed by the PBGC against the
Seller under Section 412(n) of the Code or Section 302(f) of ERISA for a failure
to make a required installment or other payment to a plan to which Section
412(n) of the Code or Section 302(f) of ERISA applies unless there shall have
been delivered to the Trustee proof of release of such Lien; or
(h) a federal tax notice of Lien shall have been filed against Seller
unless there shall have been delivered to the Trustee proof of release of such
Lien;
then, (aa) in the case of any Purchase Termination Event described in paragraph
(e) (other than clause (ii)(y) thereof) or paragraph (g) above with respect to
any Seller, automatically the obligation of the Company to purchase Receivables
from such Seller shall thereupon automatically terminate without notice of any
kind, which is hereby waived by the Seller; (bb) in the case of any Purchase
Termination Event described in paragraph (f)(ii), automatically the obligation
of the Company to purchase Receivables from all Sellers shall thereupon
automatically terminate without notice of any kind which is hereby waived by the
Seller; (cc) in the case of any Purchase Termination Event relating to any
Seller, so long as such Purchase Termination Event shall be continuing, the
Company may (subject to subsection 8.4) terminate its obligation to purchase
Receivables from such Seller by written notice to such Seller and (dd) in the
case of the occurrence of one or more Purchase Termination Events relating to
Sellers that generated more than 10% of the aggregate sales of all Sellers
during the most recently ended calendar month, so long as such Purchase
Termination Events shall be continuing, the Company may (subject to subsection
8.4) terminate its obligation to purchase Receivables from all Sellers by
written notice to the Sellers (any termination pursuant to clause (aa), (bb),
(cc) or (dd) of this Article VII which affects a Seller is herein called an
"Early Termination" with respect to such Seller); provided, however that in the
event of an involuntary petition or proceeding as described in paragraphs (e)(i)
above, the Company shall not purchase Receivables from such Seller until such
time, if any, as such involuntary petition or proceeding has been dismissed;
provided, that such dismissal shall have occurred within 60 days of the filing
of such petition or the commencement of such proceeding.
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ARTICLE VIII
MISCELLANEOUS
8.1 Further Assurances. (a) The Seller agrees, from time to time, to do
and perform any and all acts and to execute any and all further instruments
reasonably required or requested by the Company more fully to effect the
purposes of this Agreement and the sales of the Receivables hereunder,
including, without limitation, the execution of any financing statements or
continuation statements (and other similar instruments) relating to the
Receivables for filing under the provisions of the Uniform Commercial Code, or
any similar law, of any applicable jurisdiction.
(b) From time to time at the request of a Seller, the Company shall
deliver to such Seller such documents, assignments, releases and instruments of
termination as such Seller may reasonably request to evidence the reconveyance
by the Company to such Seller of a Receivable pursuant to the terms of
subsection 2.1(b) or 2.6; provided that the Company shall have been paid all
amounts due thereunder; and the Company shall take such action as such Seller
may reasonably request, at the expense of such Seller, to assure that any such
Receivable, the other Transferred Assets with respect thereto and the proceeds
thereof do not remain commingled with Collections hereunder.
8.2 Payments. Each cash payment to be made by any of the Company or the
Seller hereunder shall be made on the required Purchase Date and in immediately
available funds at the office of the payee set forth below its signature hereto
or to such other office as may be specified by either party in a notice to the
other party hereto in Dollars.
8.3 Costs and Expenses. The Seller agrees (a) to pay or reimburse the
Company for all its out-of-pocket costs and expenses incurred in connection with
the preparation and execution of, and any amendment, supplement or modification
to, this Agreement, the other Transaction Documents and any other documents
prepared in connection herewith and therewith, the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, all reasonable and documented fees and disbursements of
counsel, (b) to pay or reimburse the Company for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement and any of the other Transaction Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Company, (c)
to pay, indemnify and hold the Company harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement and any such other documents
and (d) to pay, indemnify and hold the Company harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (i) which may at any time be imposed on, incurred by or asserted
against the Company in any way relating to or arising out of this Agreement or
the Transaction Documents or the transactions contemplated hereby and thereby or
in connection herewith or any action taken or omitted by the Company under or in
connection
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with any of the foregoing (all such other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
being herein called "Indemnified Liabilities") or (ii) which would not have been
imposed on, incurred by or asserted against the Company but for its having
purchased the Receivables hereunder; provided, that such indemnity shall not be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the Company; and provided further that the Seller shall have no
obligation under this subsection 8.3 to the Company with respect to Indemnified
Liabilities arising from (i) any action taken, or omitted to be taken, by a
Servicer which is not an Affiliate of the Seller, (ii) any action taken by the
Company at the direction of the Trustee in collecting from an Obligor or (iii) a
delay in payment, or a default, by an Obligor with respect to any Receivable
(other than arising out of (x) any discharge, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based on such
Receivable 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 related to any such
Receivable or the furnishing or failure to furnish such merchandise or services,
(y) a failure by the Seller to perform its duties or obligations under this
Agreement or (z) the sale of any Receivable that is designated on the applicable
Daily Report to be an Eligible Receivable and is determined to have been at the
date of such sale not an Eligible Receivable). The agreements in this subsection
shall survive the collection of all Receivables, the termination of this
Agreement and the payment of all amounts payable hereunder.
8.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Seller and the Company and their respective
successors (whether by merger, consolidation or otherwise) and assigns. The
Seller agrees that it will not assign or transfer all or any portion of its
rights or obligations hereunder without the prior written consent of the
Company. The Seller acknowledges that the Company shall assign all of its rights
hereunder to a trust pursuant to the Pooling and Servicing Agreement. The Seller
consents to such assignment and agrees that the Trustee shall be entitled to
enforce the terms of this Agreement and the rights (including, without
limitation, the right to grant or withhold any consent or waiver or give any
notice) of the Company directly against such Seller, whether or not a Purchase
Termination Event or an Event of Termination has occurred and that no consent,
waiver or notice given hereunder by the Company shall be effective unless the
Trustee has given its written consent thereto. The Seller further agrees that,
in respect of its obligations hereunder, it will act at the direction of and in
accordance with all requests and instructions from the Trustee (including,
without limitation, pursuant to subsection 2.1(f)) until the Investor
Certificateholders are paid in full. The Company and the Trustee on behalf of
the Investor Certificateholders shall have the rights of third-party
beneficiaries under this Agreement.
8.5 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
8.6 No Waiver, Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Company, any right, remedy, power or privilege
hereunder, shall
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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.
8.7 Amendments and Waivers. Neither this Agreement nor any terms hereof
may be amended, supplemented or modified except in a writing signed by the
Company and any affected Seller and upon receipt by the Company of written
confirmation from the Rating Agencies that the amendment or waiver will not
cause a downgrade or withdrawal of the current ratings of the outstanding
Certificates and the written consent of each Agent, not to be unreasonably
withheld.
8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction, shall not invalidate or render unenforceable such provision in any
other jurisdiction.
8.9 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless expressly provided herein, shall be deemed to have been duly given or
made when by hand, or three days after being deposited in the mail, postage
prepaid, or, in the telecopy notice, when received, addressed as follows in the
case of the Company and the Seller, or to such other address as may be
designated by such party in a written notice to the other parties hereto:
The Company: Stone Receivables Corporation
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: 000-000-0000
Telecopy: 000-000-0000
The Seller: Stone Container Corporation
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: 000-000-0000
Telecopy: 000-000-0000
8.10 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Company.
8.11 Construction of Agreement as Security Agreement. This Agreement
shall constitute a security agreement under applicable law.
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8.12 WAIVERS OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, TN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SUBSECTION 8.12.
8.13 Jurisdiction, Consent to Service of Process. (a) Each party hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any Illinois state court or federal court of
the United States of America sitting in Chicago, Illinois, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or the other Transaction Documents, 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 such Illinois state 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 the
Company may otherwise have to bring any action or proceeding relating to this
Agreement or the other Transaction Documents against any Seller or its
properties in the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally waives, to
the fullest extent they may legally and effectively do so, any objection which
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 the other Transaction
Documents in any Illinois 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) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in subsection 8.9. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
8.14 Addition of Sellers. Subject to subsection 3.3 hereof, any
applicable provisions in any Supplement and the terms and conditions of this
subsection 8.14, from time to time one or more additional, direct or indirect
Subsidiaries or Affiliates of Stone Container Corporation may become Sellers
hereunder and parties hereto. If any such Subsidiary or Affiliate wishes to
become an additional Seller, it shall submit a request to such effect in writing
to the Company. The Company, in its sole and absolute discretion, may agree to
or deny any such request; provided that if the Company shall have failed to
respond to any such request within 30
24
days after receipt thereof, such request shall be deemed to have been denied.
If the Company shall have agreed to any such request, such Subsidiary or
Affiliate shall become an additional Seller hereunder and a party hereto on the
related Seller Addition Date upon satisfaction of the conditions set forth in
subsection 3.3.
8.15 Termination of Sellers. (a) From and after the date that any Seller
notifies the Company, the Company shall cease buying Receivables and other
Transferred Assets from such Seller. Each such Seller shall be released as a
Seller party hereto for all purposes and shall cease to be a party hereto on the
date on which there are no amounts outstanding with respect to Receivables
previously sold by such Seller to the Company, whether such amounts have been
repurchased, collected or written off in accordance with the Credit and
Collection Policies. The Rating Agencies and each Agent shall be notified of
such termination. Prior to such date, such Seller shall be obligated to perform
its servicing and other obligations hereunder and under the Transaction
Documents to which it is a party with respect to Receivables previously sold by
such Seller to the Company, including, without limitation, its obligation to
deposit Collections into the appropriate Lock-box Accounts.
(b) A terminated Seller shall have no obligation to repurchase any
Receivables other than Receivables sold by any Seller to the Company prior to
such Seller's termination which are subject to a Repurchase Event.
(c) Upon termination of a Seller, the reserves related to losses and
dilutions shall be recalculated to exclude the historical performance of the
terminated Seller.
8.16 No Bankruptcy Petition. The Seller by entering into this Agreement,
and any present or future holder of the Short-Term Note, by its acceptance
thereof, covenants and agrees that, prior to the date which is one year and one
day after the date of termination of this Agreement pursuant to subsection 8.17,
it will not institute against, or join any other Person in instituting against,
the Company any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law.
8.17 Termination. This Agreement will terminate at such time as (a) the
commitment of the Company to purchase Receivables from all Sellers hereunder
shall have terminated and (b) all Receivables purchased hereunder have been
collected, and the proceeds thereof turned over to the Company, and all other
amounts owing to the Company hereunder shall have been paid in full or, if
Receivables sold hereunder have not been collected such Receivables have become
Defaulted Receivables and the Company shall have completed its collection
efforts in respect thereto; provided, however that the indemnities of the Seller
to the Company set forth in this Agreement shall survive such termination; and
provided, however, that, to the extent any amounts remain due and owing to the
Company hereunder, the Company 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed all as of the day and year first above written.
STONE CONTAINER CORPORATION,
as Seller
By:
-------------------------------
Name:
Title:
STONE RECEIVABLES CORPORATION
By:
-------------------------------
Name:
Title:
