EXECUTION
EXHIBIT 5.1
PURCHASE AND SALE AGREEMENT
DATED AS OF JANUARY 16, 2003
BY AND AMONG
CHURCH & XXXXXX CO., INC.
AND
XXXXXXXX STREET FUNDING, LLC
TABLE OF CONTENTS
PAGE
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ARTICLE I AGREEMENT TO PURCHASE AND SELL..........................................................................2
1.1 Agreement To Purchase and Sell..................................................................2
1.2 Timing of Purchases.............................................................................3
1.3 Consideration for Purchases.....................................................................3
1.4 Purchase and Sale Termination Date..............................................................3
1.5 Intention of the Parties........................................................................3
ARTICLE II CALCULATION OF PURCHASE PRICE..........................................................................4
2.1 Calculation of Purchase Price...................................................................4
ARTICLE III CONTRIBUTION OF RECEIVABLES AND PAYMENT OF PURCHASE PRICE.............................................5
3.1 Contribution of Receivables and Initial Purchase Price Payment..................................5
3.2 Subsequent Purchase Price Payments..............................................................5
3.3 Settlement as to Specific Receivables and Dilution..............................................6
3.4 Reconveyance of Receivables.....................................................................7
ARTICLE IV CONDITIONS OF PURCHASES................................................................................7
4.1 Conditions Precedent to Initial Purchase........................................................7
4.2 Certification as to Representations and Warranties..............................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR........................................................9
5.1 Organization and Good Standing..................................................................9
5.2 Due Qualification...............................................................................9
5.3 Power and Authority; Due Authorization.........................................................10
5.4 Valid Sale; Binding Obligations................................................................10
5.5 No Violation...................................................................................10
5.6 Proceedings....................................................................................10
5.7 Bulk Sales Acts................................................................................11
5.8 Government Approvals...........................................................................11
5.9 Financial Condition............................................................................11
5.10 Licenses, Contingent Liabilities, and Labor Controversies......................................11
5.11 Margin Regulations.............................................................................11
5.12 Quality of Title...............................................................................11
5.13 Accuracy of Information........................................................................12
5.14 Offices; State of Formation....................................................................12
5.15 Trade Names....................................................................................12
5.16 Taxes..........................................................................................12
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5.17 Compliance With Applicable Laws................................................................13
5.18 Reliance on Separate Legal Identity............................................................13
5.19 Investment Company.............................................................................13
5.20 Security Interest..............................................................................13
ARTICLE VI COVENANTS OF THE ORIGINATOR...........................................................................14
6.1 Affirmative Covenants..........................................................................14
6.2 Reporting Requirements.........................................................................15
6.3 Negative Covenants.............................................................................16
6.4 Substantive Consolidation......................................................................17
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES......................................19
7.1 Rights of the Company..........................................................................19
7.2 Responsibilities of the Originator.............................................................19
7.3 Further Action Evidencing Purchases............................................................20
7.4 Application of Collections.....................................................................20
ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS................................................................20
8.1 Purchase and Sale Termination Events...........................................................20
8.2 Remedies.......................................................................................21
ARTICLE IX INDEMNIFICATION.......................................................................................21
9.1 Indemnities by the Originator..................................................................21
ARTICLE X MISCELLANEOUS..........................................................................................23
10.1 Amendments, Etc................................................................................23
10.2 Notices, Etc...................................................................................24
10.3 No Waiver, Cumulative Remedies.................................................................24
10.4 Binding Effect; Assignability..................................................................24
10.5 Governing Law..................................................................................24
10.6 Costs, Expenses and Taxes......................................................................25
10.7 Submission to Jurisdiction.....................................................................25
10.8 Waiver of Jury Trial...........................................................................25
10.9 Captions and Cross-References; Incorporation by Reference......................................26
10.10 Execution in Counterparts......................................................................26
10.11 Acknowledgment and Agreement...................................................................26
EXHIBIT A - Form of Purchase Report
EXHIBIT B - Form of Company Note
EXHIBIT C - Form of Originator Assignment Certificate
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EXHIBIT D - Proceedings
EXHIBIT E - Office Locations
EXHIBIT F - Trade Names
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
January 16, 2003, is by and among CHURCH & XXXXXX CO., INC., a Delaware
corporation, as the originator (the "Originator"), CHURCH & XXXXXX CO., INC., a
Delaware corporation, as the initial Servicer ("Church & Xxxxxx" or "Servicer"),
and XXXXXXXX STREET FUNDING, LLC, a Delaware limited liability company (the
"Company").
Definitions
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to the Receivables Purchase
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "Receivables Purchase Agreement") by
and among Church & Xxxxxx, as Servicer, the Company, Market Street Funding
Corporation, as the Issuer (the "Issuer"), and PNC Bank, National Association,
as the Administrator (the "Administrator"). All references herein to months are
to calendar months unless otherwise expressly indicated.
Background
(a) The Company is a special purpose limited liability
company, all of the outstanding interests of which are owned by Church
& Xxxxxx Co., Inc.
(b) The Originator generates Receivables in the ordinary
course of its business.
(c) The Originator, in order to finance its business, wishes
to sell Receivables to the Company, and the Company is willing, on the
terms and subject to the conditions set forth herein, to purchase
Receivables from the Originator.
(d) The Originator and the Company intend this transaction to
be a true sale or capital contribution of Receivables and the Related
Rights by the Originator to the Company, providing the Company with the
full benefits of ownership of the Receivables and the Originator and
the Company do not intend the transactions hereunder to be, or for any
purpose to be characterized as, a loan from the Company to the
Originator.
(e) The Company intends to sell the Purchased Interest in the
Receivables to the Issuer pursuant to the Receivables Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
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ARTICLE I
AGREEMENT TO PURCHASE AND SELL
1.1 Agreement To Purchase and Sell.
On the terms and subject to the conditions set forth in this
Agreement (including Article IV), the Originator agrees to sell (or deem sold
with respect to Receivables or other Assets existing on or after the Cut-off
Date but not existing and held by the Originator on the Closing Date (the "No
Longer Existing Assets")) to the Company, and the Company agrees to purchase (or
deem purchased with respect to the No Longer Existing Assets) from the
Originator, from time to time on or after the Closing Date, but before the
Purchase and Sale Termination Date, all of the Originator's right, title and
interest in and to:
(a) each Receivable of the Originator that existed and was
owing to the Originator at the closing of the Originator's business on
December 31, 2002 (the "Cut-off Date") other than Receivables
contributed pursuant to Section 3.1 (the "Contributed Receivables");
(b) each Receivable created by the Originator from and
including the Cut-off Date to and including the Purchase and Sale
Termination Date other than the Contributed Receivables;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of the
foregoing;
(e) all books and records related to any of the foregoing; and
(f) all collections and other proceeds of any of the foregoing
(as defined in the applicable UCC) that are or were received by the
Originator on or after the Cut-off Date, including, without limitation,
all funds which either are received by the Originator, the Company or
the Servicer from or on behalf of the Obligors in payment of any
amounts owed (including, without limitation, invoice price, finance
charges, interest and all other charges) in respect of Receivables, or
are applied to such amounts owed by the Obligors (including, without
limitation, insurance payments that the Originator or Servicer applies
in the ordinary course of its business to amounts owed in respect of
any Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligors or
any other parties directly or indirectly liable for payment of such
Receivables) (clauses (a) through (f), collectively, the ("Assets")).
All purchases, all deemed purchases and contributions hereunder shall be made
without recourse, but shall be made pursuant to, and in reliance upon, the
representations, warranties and covenants of the Originator set forth in this
Agreement and each other Transaction Document. No obligation or liability to any
Obligor on any Receivable is intended to be assumed by the Company hereunder,
and any such assumption is expressly disclaimed. The Company's
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foregoing commitment to purchase Receivables and the proceeds and rights
described in clauses (c) through (f) (collectively, the "Related Rights") is
herein called the "Purchase Facility."
1.2 Timing of Purchases.
(a) Closing Date Purchases. The Originator's entire right,
title and interest in (i) each Receivable that existed and was owing to
the Originator at the Cut-off Date (other than Contributed
Receivables), (ii) all Receivables created by the Originator from and
including the Cut-off Date, to and including the Closing Date (other
than Contributed Receivables), and (iii) all Related Rights,
automatically shall be sold or be deemed to have been sold (with
respect to the No Longer Existing Assets) to the Company on the Closing
Date. On the Closing Date, all proceeds of Receivables that are deemed
to have been sold on such date and as to which proceeds were received
by the Originator on or prior to the Closing Date shall be deemed to
(x) have been transferred by the Originator to the Company, (y) and
transferred by the Company to the Originator as Purchase Price on
account of Receivables and other Assets that are sold or deemed sold to
the Company on such date.
(b) Regular Purchases. After the Closing Date, until the
Purchase and Sale Termination Date, each Receivable (and the Related
Rights) created by the Originator shall be deemed to have been sold to
the Company immediately (and without further action) upon the creation
of such Receivable.
1.3 Consideration for Purchases.
On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to make Purchase Price payments to the Originator
and to reflect all contributions in accordance with Article III.
1.4 Purchase and Sale Termination Date.
The "Purchase and Sale Termination Date" shall be the earliest
to occur of (a) the date of the termination of this Agreement pursuant to
Section 8.2 and (b) the Payment Date immediately following the day on which the
Originator shall have given notice to the Company at or prior to 10:00 a.m. (New
York City time) that the Originator desires to terminate this Agreement.
1.5 Intention of the Parties.
It is the express intent of the parties hereto that the
transfers of the Receivables and Related Rights by the Originator to the
Company, as contemplated by this Agreement be, and be treated as, the full and
complete transfer of ownership in the form of sales or contributions, as
applicable, and not as loans secured by the Receivables and Related Rights. If,
however, notwithstanding the intent of the parties, such transactions are deemed
to be loans, the Originator hereby grants to the Company a first priority
security interest in all of the Originator's right, title and interest in and to
the Receivables and the Related Rights now existing and hereafter created by the
Originator, all monies due or to become due and all amounts received
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with respect thereto, and all proceeds thereof, to secure all of the
Originator's obligations hereunder.
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1 Calculation of Purchase Price.
On the Closing Date and not later than 2 days prior to each
Monthly Settlement Date, the Servicer shall deliver to the Company and the
Originator a report in substantially the form of Exhibit A (each such report
being herein called a "Purchase Report") with respect to the matters set forth
therein and the Company's purchases of Receivables from the Originator:
(a) that are to be made on the Closing Date (in the case of
the Purchase Report to be delivered on the Closing Date (relating to
Receivables existing or created on the Cutoff Date)); or
(b) that were made during the most recently completed fiscal
month prior to each Monthly Settlement Date (in the case of each
subsequent Purchase Report to be delivered not later than 2 days prior
to each Monthly Settlement Date).
The "Purchase Price" (to be paid to the Originator in accordance with
the terms of Article III) for the Receivables and the Related Rights that are
purchased hereunder from the Originator shall be determined in accordance with
the following formula:
PP = OB X FMVD
where:
PP = Purchase Price for each Receivable as
calculated on the relevant Payment Date.
OB = The Outstanding Balance of such Receivable
on the relevant Payment Date.
FMVD = Fair Market Value Discount, as measured on
such Payment Date, which is equal to the
quotient of (a) one divided by (b) the sum
of (i) one, plus (ii) the product of (A) the
Prime Rate on such Payment Date plus .25%
and (B) a fraction, the numerator of which
is the Days' Sales Outstanding (calculated
as of the last day of the Settlement Period
next preceding such Payment Date) and the
denominator of which is 365.
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"Payment Date" means (i) the Cut-off Date and (ii) each Business Day
thereafter that the Originator is open for business.
"Prime Rate" means a per annum rate equal to the "Prime Rate" as
published in the "Money Rates" Section of The Wall Street Journal or such other
publication , which regularly publishes such rates, as determined by the
Administrator in its sole discretion.
ARTICLE III
CONTRIBUTION OF RECEIVABLES AND PAYMENT OF PURCHASE PRICE
3.1 Contribution of Receivables and Initial Purchase Price Payment.
(a) On the Closing Date the Originator shall, and hereby does,
contribute to the capital of the Company Receivables and Related Rights with
respect thereto consisting of each Receivable of the Originator that existed and
was owing to the Originator on the Closing Date beginning with the oldest of
such Receivables and continuing chronologically thereafter such that the
aggregate Outstanding Balance of all such Contributed Receivables shall be at
least equal to $10,000,000;
(b) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to pay to the Originator the Purchase Price for
the purchase to be made from the Originator on the Closing Date partially in
cash (in an amount to be agreed between the Company and the Originator) and
partially by issuing a promissory note in the form of Exhibit B to the
Originator with an initial principal balance equal to the remaining Purchase
Price (the promissory note, as it may be amended, supplemented, indorsed or
otherwise modified from time to time, together with all promissory notes issued
from time to time in substitution therefor or renewal thereof in accordance with
the Transaction Documents, each being herein called a "Company Note").
3.2 Subsequent Purchase Price Payments.
On each Payment Date subsequent to the Closing Date, on the
terms and subject to the conditions set forth in this Agreement, the Company
shall pay to the Originator the Purchase Price for the Receivables transferred
by the Originator on such Payment Date:
(a) First, the Purchase Price shall be paid in cash to the
extent the Company has cash available therefor; and
(b) Second, to the extent any portion of the Purchase Price
remains unpaid, the principal amount outstanding under the Company Note
issued to the Originator shall be increased by an amount equal to such
remaining Purchase Price.
Servicer shall make all appropriate record keeping entries with respect
to the Company Note or otherwise to reflect the foregoing payments, and
Servicer's books and records shall constitute rebuttable presumptive evidence of
the principal amount of, and accrued interest on,
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the Company Note at any time. Furthermore, Servicer shall hold the Company Note
for the benefit of the Originator. The Originator hereby irrevocably authorizes
Servicer to xxxx the Company Note "CANCELLED" and to return such Company Note to
the Company upon the final payment thereof after the occurrence of the Purchase
and Sale Termination Date.
3.3 Settlement as to Specific Receivables and Dilution.
(a) If, on the day of purchase or contribution of any
Receivable from the Originator hereunder, any of the representations or
warranties set forth in Sections 5.4 and 5.12 are not true with respect
to such Receivable or as a result of any action or inaction of the
Originator (it is acknowledged that Information Packages with respect
to any Receivables are due two days prior to the next succeeding
Monthly Settlement Date after the date of purchase or contribution of
such Receivables and may be delivered to the Administrator from time to
time (at times other than the Settlement Dates) and therefore ,
notwithstanding the foregoing, the representation and warranty set
forth in Section 5.12(c) hereof is not made until the delivery of such
Information Packages), on any day, any of such representations or
warranties set forth in Sections 5.4, 5.12 is no longer true with
respect to such a Receivable, then the Purchase Price (or in the case
of a Contributed Receivable, the Outstanding Balance of such
Receivable, (the "Contributed Value")) with respect to such Receivables
shall be reduced by an amount equal to the Outstanding Balance of such
Receivable and shall be accounted to the Originator as provided in
subsection (c) below; provided, that if the Company thereafter receives
payment on account of Collections due with respect to such Receivable,
the Company promptly shall deliver such funds to the Originator.
(b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed
hereunder is reduced or adjusted as a result of any defective,
rejected, returned goods or services, or any discount or other
adjustment made by the Originator, the Company or Servicer or any
setoff or dispute between the Originator or the Servicer and an Obligor
(with the exception of setoffs, disputes, recoupments, defenses or
claims where the facts demonstrate to the reasonable satisfaction of
the parties hereto that the Obligor's failure to make payment is the
result of such Obligor's insolvency, bankruptcy, inability or
unwillingness to pay its obligations as they mature due to its
financial condition) as indicated on the books of the Company (or, for
periods prior to the Closing Date, the books of the Originator), then
the Purchase Price or Contributed Value, as the case may be, with
respect to such Receivable shall be reduced by the amount of such net
reduction and shall be accounted to the Originator as provided in
subsection (c) below.
(c) Any reduction in the Purchase Price (or Contributed Value)
of any Receivable pursuant to subsection (a) or (b) above shall be
applied as a credit for the account of the Company against the Purchase
Price of Receivables subsequently purchased by the Company from the
Originator hereunder; provided, however, if there have been no
purchases of Receivables from the Originator (or insufficiently large
purchases of Receivables) to create a Purchase Price sufficient to so
apply such credit against, the amount of such credit
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(i) shall be paid in cash to the Company by the Originator in
the manner and for application as described in the following proviso,
or
(ii) shall be deemed to be a payment under, and shall be
deducted from the principal amount outstanding under, the Company Note
payable to the Originator;
provided, further, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by the Originator to the Company by deposit in immediately
available funds into the relevant Lock-Box Account for application by Servicer
to the same extent as if Collections of the applicable Receivable in such amount
had actually been received on such date.
(d) Each Purchase Report (other than the Purchase Report
delivered on the Closing Date) shall include, in respect of the
Receivables previously generated by the Originator (including
Contributed Receivables), a calculation of the aggregate reductions
described in subsection (a) or (b) relating to such Receivables since
the last Purchase Report delivered hereunder, as indicated on the books
of the Company (or, for such period prior to the Closing Date, the
books of the Originator).
3.4 Reconveyance of Receivables.
In the event that the Originator has paid to the Company the
full Outstanding Balance of any Receivable pursuant to Section 3.3, the Company
shall transfer such Receivable to the Originator, without representation or
warranty, but free and clear of all liens, security interests, charges, and
encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1 Conditions Precedent to Initial Purchase.
The initial purchase hereunder is subject to the condition
precedent that Servicer (on the Company's behalf) shall have received, on or
before the Closing Date, the following, each (unless otherwise indicated) dated
the Closing Date, and each in form and substance satisfactory to Servicer
(acting on the Company's behalf):
(a) An Originator Assignment Certificate in the form of
Exhibit C from each Originator, duly completed, executed and delivered
by the Originator;
(b) A copy of the resolutions of the Board of Directors of the
Originator approving the Transaction Documents to be delivered by it
and the transactions contemplated hereby and thereby, certified by the
Secretary or Assistant Secretary of the Originator;
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(c) Good standing certificates for the Originator issued as of
a recent date acceptable to Servicer by the Secretary of State of the
jurisdiction of the Originator's organization and the jurisdiction
where the Originator's chief executive office is located;
(d) A certificate of the Secretary or Assistant Secretary of
the Originator certifying the names and true signatures of the officers
authorized on such Person's behalf to sign the Transaction Documents to
be delivered by it (on which certificate Servicer and the Company may
conclusively rely until such time as the Servicer shall receive from
such Person a revised certificate meeting the requirements of this
subsection (d));
(e) The certificate of incorporation, certificate of formation
or limited liability company agreement or other organizational document
of the Originator, duly certified by the Secretary of State of the
jurisdiction of the Originator's organization as of a recent date
acceptable to the Servicer, each duly certified by the Secretary or an
Assistant Secretary of the Originator;
(f) Originals of the proper financing statements (Form UCC-1)
that have been duly authorized and are suitable for filing and name the
Originator as the debtor/seller and the Company as the secured
party/purchaser (and the Issuer, as assignee of the Company) of the
Receivables generated by the Originator as may be necessary under the
UCC to perfect the Company's ownership interest in all Receivables and
such other Related Rights, (including, without limitation, Related
Security) in which an ownership or security interest may be assigned to
it hereunder;
(g) A written search report from a Person satisfactory to the
Servicer listing all effective financing statements that name the
Originator as debtor or seller and that are filed in the jurisdictions
in which filings were made pursuant to the foregoing subsection (f) or
under the UCC as in effect prior to July 1, 2001, together with copies
of such financing statements (none of which, except for those (i)
described in the foregoing subsection (f) or (ii) as to which proper
financing statements (Form UCC-3), duly executed and suitable for
filing under the UCC of all jurisdictions that the Administrator may
deem necessary or desirable to release all security interests and other
rights of any Person in the Receivables, Contracts or Related Security
previously granted by the Originator have been received by the
Administrator, shall cover any Receivable or any Related Rights which
are to be sold to the Company hereunder), and tax and judgment lien
search reports from a Person satisfactory to the Servicer showing no
evidence of such liens filed against the Originator;
(h) A favorable opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP,
counsel to the Originator in form and substance satisfactory to the
Servicer and the Administrator;
(i) A Company Note in favor of the Originator, duly executed
by the Company; and
(j) A certificate from an officer of the Originator to the
effect that the Servicer and the Originator have placed on the most
recent, and have taken all steps
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reasonably necessary to ensure that there shall be placed on each
subsequent, data processing report that it generates which are of the
type that a proposed purchaser or lender would use to evaluate the
Receivables, the following legend (or the substantive equivalent
thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN TRANSFERRED BY
WAY OF SALE OR CONTRIBUTION BY CHURCH & XXXXXX CO., INC., TO XXXXXXXX
STREET FUNDING, LLC PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS
OF JANUARY 16, 2003, AS AMENDED, BETWEEN THE ORIGINATOR AND XXXXXXXX
STREET FUNDING, LLC; AND A SECURITY INTEREST IN THE RECEIVABLES
DESCRIBED HEREIN HAS BEEN GRANTED TO MARKET STREET FUNDING CORPORATION
PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF JANUARY 16,
2003, AS AMENDED, AMONG CHURCH & XXXXXX CO., INC., AS THE SERVICER,
XXXXXXXX STREET FUNDING, LLC, MARKET STREET FUNDING CORPORATION AND PNC
BANK, NATIONAL ASSOCIATION."
4.2 Certification as to Representations and Warranties.
The Originator, by accepting the Purchase Price related to
each purchase of Receivables generated by the Originator, shall be deemed to
have certified that the representations and warranties contained in Article V
are true and correct on and as of the day of such purchase, with the same effect
as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, the Originator hereby makes the
representations and warranties set forth in this Article V as of each date upon
which the Originator sells Receivables to the Company; provided that, except as
specified in Sections 3.3(a) and 3.3(b) and as otherwise specified herein, the
representations and warranties set forth in Sections 5.4 and 5.12 relating to
Receivables are made only with respect to Receivables sold on such date.
5.1 Organization and Good Standing.
The Originator has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as such
properties are presently owned and such business is presently conducted.
5.2 Due Qualification.
The Originator is duly licensed and in good standing in the
jurisdiction where its chief executive office is located and is qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which (a) the ownership or lease of its property or the
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conduct of its business requires such licensing or qualification and (b) the
failure to be so licensed or qualified would be reasonably likely to have a
Material Adverse Effect.
5.3 Power and Authority; Due Authorization.
The Originator has (a) all necessary power, authority and
legal right (i) to execute and deliver, and perform its obligations under, each
Transaction Document to which it is a party and (ii) to generate, own, sell,
contribute and assign Receivables on the terms and subject to the conditions
herein and therein provided; and (b) duly authorized such execution and delivery
and such sale, contribution and assignment and the performance of such
obligations by all necessary organizational action.
5.4 Valid Sale; Binding Obligations.
Each sale or contribution, as the case may be, made by the
Originator pursuant to this Agreement shall constitute a valid sale or
contribution, as the case may be, transfer, and assignment of Receivables to the
Company, enforceable against creditors of, and purchasers from, the Originator;
and this Agreement constitutes, and each other Transaction Document to be signed
by the Originator, when duly executed and delivered, will constitute, a legal,
valid, and binding obligation of the Originator, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
5.5 No Violation.
The consummation of the transactions contemplated by this
Agreement and the other Transaction Documents and the fulfillment of the terms
hereof or thereof, will not (a) conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time) a default under (i) the Originator's certificate of formation, limited
liability company agreement or any other organizational document of the
Originator or (ii) any indenture, loan agreement, mortgage, deed of trust, or
other material agreement or instrument to which it is a party or by which it is
bound, (b) result in the creation or imposition of any Adverse Claim upon any of
its properties pursuant to the terms of any such indenture, loan agreement,
mortgage, deed of trust, or other material agreement or instrument, other than
the Transaction Documents, or (c) violate any material law or any material
order, rule or regulation applicable to it of any court or of any state or
foreign regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over it or any of its properties.
5.6 Proceedings.
Except as set forth in Exhibit D, there is no action, suit,
proceeding or investigation pending before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the issuance of the Originator Assignment Certificate or the
consummation of any of the transactions contemplated by any Transaction Document
or (c) seeking any determination or ruling that is reasonably likely to have a
Material Adverse Effect.
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5.7 Bulk Sales Acts.
No transaction contemplated hereby requires compliance with,
or will be subject to avoidance under, any bulk sales act or similar law.
5.8 Government Approvals.
Except for the filing of the UCC financing statements referred
to in Article IV, all of which, at the time required in Article IV, shall have
been duly made and shall be in full force and effect, no material authorization
or approval or other action by, and no material notice to or filing with, any
governmental authority or regulatory body is required for the Originator's due
execution, delivery and performance of any Transaction Document to which it is a
party.
5.9 Financial Condition.
(a) Material Adverse Effect. Since December 31, 2001, no event
has occurred that has had, or is reasonably likely to have, a Material
Adverse Effect.
(b) Solvent. On the date hereof, and on the date of each
purchase hereunder (both before and after giving effect to such
purchase) the Originator shall be Solvent.
5.10 Licenses, Contingent Liabilities, and Labor Controversies.
(a) The Originator has not failed to obtain any licenses,
permits, franchises or other governmental authorizations necessary to
the ownership of its properties or to the conduct of its business,
which violation or failure to obtain would be reasonably likely to have
a Material Adverse Effect.
(b) There are no labor controversies pending against the
Originator that have had (or are reasonably likely to have) a Material
Adverse Effect.
5.11 Margin Regulations.
No use of any funds acquired by the Originator under this
Agreement will conflict with or contravene any of Regulations T, U and X
promulgated by the Federal Reserve Board from time to time.
5.12 Quality of Title.
(a) Each Receivable of the Originator (together with the
Related Rights with respect to such Receivable) which is to be sold to
the Company hereunder is or shall be owned by the Originator, free and
clear of any Adverse Claim, except as provided herein and in the
Receivables Purchase Agreement. Whenever the Company makes a purchase
or accepts a contribution hereunder, it shall have acquired and shall
continue to have maintained a valid and perfected ownership interest
(free and clear of any Adverse Claim) in all Receivables generated by
the Originator and all Collections related thereto,
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and in the Originator's entire right, title and interest in and to the
Related Rights with respect thereto.
(b) No effective financing statement or other instrument
similar in effect covering any Receivable generated by the Originator
or any Related Rights is on file in any recording office except such as
may be filed in favor of the Company (and the Issuer as assignee of the
Company) or the Issuer, as the case may be, in accordance with this
Agreement or in favor of the Company (and the Issuer as assignee of the
Company) or the Issuer, in accordance with the Receivables Purchase
Agreement.
(c) Unless otherwise identified to the Company in the next
Information Package delivered to the Company after the date of its
purchase, each Receivable purchased hereunder is on the date of
purchase or contribution, an Eligible Receivable.
5.13 Accuracy of Information.
All factual written information heretofore or
contemporaneously furnished (and prepared) by the Originator to the Company or
the Administrator for purposes of or in connection with any Transaction Document
or any transaction contemplated hereby or thereby is, and all other such factual
written information hereafter furnished (and prepared) by the Originator to the
Company or the Administrator pursuant to or in connection with any Transaction
Document will be, true and accurate in every material respect on the date as of
which such information is dated or certified.
5.14 Offices; State of Formation.
The Originator's principal place of business and chief
executive office is located at the address specified in Exhibit E, the
Originator's state of formation is as specified in Exhibit E, and the offices
where the Originator keeps all its books, records and documents evidencing its
Receivables, the related Contracts and all other agreements related to such
Receivables are located at the addresses specified in Exhibit E (or at such
other locations, notified to the Servicer and the Administrator in accordance
with Section 6. l(f), in jurisdictions where all action required by Section 7.3
has been taken and completed).
5.15 Trade Names.
The Originator does not use any trade name other than its
actual organizational name and the trade names set forth in Exhibit F. From and
after the date that fell five (5) years before the date hereof, except as set
forth in Exhibit F, the Originator has not been known by any legal name other
than its organizational name as of the date hereof, nor has the Originator been
the subject of any merger or other organizational reorganization.
5.16 Taxes.
The Originator has filed, or has had filed on its behalf, all
tax returns and reports required by law to have been filed by it and has paid
all taxes and governmental charges thereby shown to be owing, except any such
taxes or charges which are being diligently contested in
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good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books and except where
failure to file or pay would not have a Material Adverse Effect.
5.17 Compliance With Applicable Laws.
The Originator is in compliance with the requirements of all
applicable laws, rules, regulations and orders of all governmental authorities,
a breach of any of which, individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect.
5.18 Reliance on Separate Legal Identity.
The Originator acknowledges that the Issuer and the
Administrator are entering into the Receivables Purchase Agreement in reliance
upon the Company's identity as a legal entity separate from the Originator.
5.19 Investment Company.
The Originator is not an "investment company," or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. In addition, the Originator is not a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
5.20 Security Interest.
If, notwithstanding the intent of the parties, the purchases
of Receivables made pursuant to the terms of this Agreement are deemed to be
loans or transactions intended for security, this Agreement creates a valid and
continuing security interest (as defined in the applicable UCC) in the Assets in
favor of the Company, which security interest is prior to all other Adverse
Claims, and is enforceable as such against creditors of and purchasers from the
Originator. The Receivables constitute "accounts," "general intangibles" or
"tangible chattel paper" within the meaning of the applicable UCC. The
Originator owns and has good title to the Assets free and clear of any Adverse
Claim. The Originator has caused or will have caused, within ten (10) days, the
filing of all appropriate UCC financing statements in the proper filing offices
in the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Assets granted to the Company hereunder. Other than the
security interest granted to the Company pursuant to this Agreement, the
Originator has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Assets. The Originator has not authorized the
filing of and the Originator is not aware of any UCC financing statements
against it that included a description of collateral covering the Assets other
than any UCC financing statement relating to the security interest granted to
the Company hereunder or that has been terminated. The Originator is not aware
of any material judgment or tax lien filings against it.
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ARTICLE VI
COVENANTS OF THE ORIGINATOR
6.1 Affirmative Covenants.
From the date hereof until the first day following the
Purchase and Sale Termination Date, the Originator agrees as follows, unless the
Administrator and the Company shall otherwise consent in writing, that it will:
(a) Compliance With Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to
the Receivables generated by it and the Contracts and other agreements
related thereto except where the failure to so comply would not
materially and adversely affect the collectibility of such Receivables
or the rights of the Company hereunder.
(b) Preservation of Organizational Existence. Preserve and
maintain its existence as a corporation and all rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and
remain qualified in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification would be reasonably
likely to have a Material Adverse Effect.
(c) Receivables Reviews. (i) At any time and from time to time
during regular business hours, as reasonably requested in advance by
the Company provided that no Termination Event exists and is
continuing, permit the Company or the Administrator, or their
respective agents or representatives, (A) to examine and make copies of
and abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in possession or under the
control of the Originator relating to the Receivables, including,
without limitation, the related Contracts (subject to any
confidentiality provisions pertaining thereto) and purchase orders and
other agreements related thereto, and (B) to visit the offices and
properties of the Originator for the purpose of examining such
materials described in clause (i)(A) next above and to discuss matters
relating to Receivables originated by it or the performance hereunder
with any of the officers or employees of the Originator having
knowledge of such matters, and (ii) without limiting the foregoing
clause (i) above, annually or if a Purchase and Sale Termination Event
or Unmatured Purchase and Sale Termination Event exist then from time
to time on request of the Administrator, permit certified public
accountants or other auditors acceptable to the Originator and
Administrator to conduct, at the Originator's expense, a review of the
Originator's books and records with respect to its Receivables.
(d) Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures (including, without
limitation, an ability to re-create records evidencing Receivables it
generates in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of
such Receivables
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(including, without limitation, 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 and Contracts.
Timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts and all other material agreements related to the Receivables.
(f) Location of Offices; State of Formation. Keep its state of
formation, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) and states referred to in
Exhibit E or, upon 15 days' prior written notice to the Company and the
Administrator, at such other locations in jurisdictions where all
action required by Section 7.3 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material
respects with its Credit and Collection Policy in connection with the
Receivables that it generates and all material provisions, covenants
and other promises required to be observed by it under the Contracts
and all other material agreements related to the Receivables.
(h) Post Office Boxes. On or prior to the date hereof, deliver
to the Servicer (on behalf of the Company) a certificate from an
authorized officer of the Originator to the effect that (i) the name of
the renter of all post office boxes into which Collections may from
time to time be mailed have been changed to the name of the Company
(unless such post office boxes are in the name of the relevant Lock-Box
Banks) and (ii) all relevant postmasters have been notified that each
of the Servicer and the Administrator are authorized to collect mail
delivered to such post office boxes (unless such post office boxes are
in the name of the relevant Lock-Box Banks).
6.2 Reporting Requirements.
From the date hereof until the first day following the
Purchase and Sale Termination Date, the Originator will, unless the Servicer (on
behalf of the Company) shall otherwise consent in writing, furnish to the
Company and the Administrator:
(a) Purchase and Sale Termination Events. As soon as possible
after knowledge of the occurrence of, and in any event within five
Business Days after knowledge of the occurrence of each Purchase and
Sale Termination Event or each Unmatured Purchase and Sale Termination
Event in respect of the Originator, the statement of the chief
financial officer or chief accounting officer of the Originator
describing such Purchase and Sale Termination Event or Unmatured
Purchase and Sale Termination Event and the action that the Originator
proposes to take with respect thereto, in each case in reasonable
detail;
(b) Proceedings. As soon as possible and in any event within
five Business Days after the Originator otherwise has knowledge
thereof, written notice of (i) material litigation, investigation or
proceeding of the type described in Section 5.6 not previously
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disclosed to the Company and (ii) all material adverse developments
that have occurred with respect to any previously disclosed litigation,
proceedings and investigations; and
(c) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the Receivables
or the conditions or operations, financial or otherwise, of the
Originator as the Company, the Issuer or the Administrator may from
time to time reasonably request in order to protect the interests of
the Company, the Issuer or the Administrator under or as contemplated
by the Transaction Documents.
6.3 Negative Covenants.
From the date hereof until the date following the Purchase and
Sale Termination Date, the Originator agrees that, unless the Servicer (on
behalf of the Company) and the Administrator shall otherwise consent in writing,
it shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or
in any other Transaction Document, purport to sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon or with respect to, any
Receivable or related Contract or Related Security, or any interest
therein, or any Collections thereon, or assign any right to receive
income in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 4.2(a) of the Receivables Purchase Agreement,
extend, amend or otherwise modify the terms of any Receivable in any
material respect generated by it, or amend, modify or waive, in any
material respect, any term or condition of any Contract related thereto
(which term or condition relates to payments under, or the enforcement
of, such Contract).
(c) Change in Business or Credit and Collection Policy. Make
any material change in the character of its business, materially alter
its Credit and Collection Policy, or make any change in its Credit and
Collection Policy that would have a Material Adverse Effect with
respect to the Receivables. The Originator shall not make any other
change in its Credit and Collection Policy without giving prior written
notice thereof to the Administrator.
(d) Receivables Not to Be Evidenced by Promissory Notes or
Chattel Paper. Take any action to cause or permit any Receivable
generated by it to become evidenced by any "instrument" or "chattel
paper" (as defined in the applicable UCC).
(e) Mergers, Acquisitions, Sales, Etc. (i) Be a party to any
merger or consolidation, except a merger or consolidation where the
Originator is the surviving entity, or (ii) directly or indirectly
sell, transfer, assign, convey or lease (A) whether in one or a series
of transactions, all or substantially all of its assets or (B) any
Receivables or any interest therein (other than pursuant to this
Agreement).
(f) Lock-Box Banks. Make any changes in its instructions to
Obligors regarding Collections or add or terminate any bank as a
Lock-Box Bank unless the
-16-
requirements of paragraph 2(g) of Exhibit IV to the Receivables
Purchase Agreement have been met.
(g) Accounting for Purchases. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby
in any manner other than as sales of the Receivables and Related Rights
by the Originator to the Company, except to the extent a different
treatment is required in connection with the filing of consolidated tax
returns of the Originator and its Subsidiaries by applicable tax law.
(h) Transaction Documents. Enter into, execute, deliver or
otherwise become bound by any agreement, instrument, document or other
arrangement that restricts the right of the Originator to amend,
supplement, amend and restate or otherwise modify, or to extend or
renew, or to waive any right under, this Agreement or any other
Transaction Documents.
6.4 Substantive Consolidation.
The Originator hereby acknowledges that this Agreement and the
other Transaction Documents are being entered into in reliance upon the
Company's identity as a legal entity separate from the Originator and its
Affiliates. Therefore, from and after the date hereof, the Originator shall take
all reasonable steps necessary to make it apparent to third Persons that the
Company is an entity with assets and liabilities distinct from those of the
Originator and any other Person, and is not a division of the Originator, its
Affiliates or any other Person. Without limiting the generality of the foregoing
and in addition to and consistent with the other covenants set forth herein, the
Originator shall take such actions as shall be required in order that:
(a) the Originator, in its capacity as such, shall not be
involved in the day-to-day management of the Company except for the
provision of accounting and other services as contemplated by this
Agreement;
(b) the Originator shall maintain separate organizational
records and books of account from the Company and otherwise will
observe organizational formalities and have a separate area from the
Company for its business;
(c) the financial statements and books and records of the
Originator shall be prepared after the date of creation of the Company
to reflect and shall reflect the separate existence of the Company
except to the extent that any such books and records are required by
any applicable tax law to be maintained on a different basis; provided,
that the Company's assets and liabilities may be included in a
consolidated financial statement issued by an affiliate of the Company;
provided, however, that any such consolidated financial statement shall
make clear that the Company's assets are not available to satisfy the
obligations of such affiliate;
(d) except as permitted by the Receivables Purchase Agreement,
(i) the Originator shall maintain its assets separately from the assets
of the Company, (ii) and the Company's assets, and records relating
thereto, have not been, are not, and shall not be, commingled with
those of the Originator;
-17-
(e) all of the Company's business correspondence and other
communications shall be conducted in the Company's own name and on its
own stationery;
(f) the Originator shall not act as an agent for the Company,
other than Church & Xxxxxx in its capacity as the Servicer, and in
connection therewith, shall present itself to the public as an agent
for the Company and a legal entity separate from the Company;
(g) the Originator shall not conduct any of the business of
the Company in its own name;
(h) the Originator shall not pay any liabilities of the
Company out of its own funds or assets;
(i) the Originator shall maintain an arm's-length relationship
with the Company;
(j) the Originator shall not assume or guarantee or become
obligated for the debts of the Company or hold out its credit as being
available to satisfy the obligations of the Company;
(k) the Originator shall not acquire obligations of the
Company after the date hereof, it being understood that the Company
Note is outstanding on the date hereof;
(l) the Originator shall allocate fairly and reasonably
overhead or other expenses that are properly shared with the Company,
including, without limitation, shared office space;
(m) the Originator shall identify and hold itself out as a
separate and distinct entity from the Company;
(n) the Originator shall correct any known misunderstanding
regarding its separate identity from the Company;
(o) the Originator shall not enter into, or be a party to, any
transaction with the Company, except in the ordinary course of its
business and on terms which are intrinsically fair and not less
favorable to it than would be obtained in a comparable arm's-length
transaction with an unrelated third party; and
(p) the Originator shall not pay the salaries of the Company's
employees, if any.
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ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1 Rights of the Company.
The Originator hereby authorizes the Company (who may further
authorize another Person), the Servicer, or their respective designees to take
any and all steps in the Originator's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the name of the Originator
on checks and other instruments representing Collections and enforcing such
Receivables and the provisions of the related Contracts that concern payment
and/or enforcement of rights to payment.
7.2 Responsibilities of the Originator.
Anything herein to the contrary notwithstanding:
(a) Collection Procedures. The Originator agrees to direct its
respective Obligors to make payments of Receivables directly to one or
more Lock-Box Accounts or to post office boxes to which only Lock-Box
Banks have access. The Originator further agrees to deposit or cause to
be deposited (for the Company's account) within three (3) Business Days
of receipt thereof any Collections that it receives directly into one
or more Lock-Box Accounts or to post office boxes to which only
Lock-Box Banks have access, and agrees that all such Collections shall
be deemed to be received in trust for the Company but shall not be
required to be maintained segregated or separate and apart from all
other funds and monies of the Originator until transfer of such
Collections to such Lock-Box Accounts or post office boxes.
(b) The Originator shall perform its obligations hereunder,
and the exercise by the Company or its designee of its rights hereunder
shall not relieve the Originator from such obligations.
(c) None of the Company, the Servicer or the Administrator
shall have any obligation or liability to any Obligor or any other
third Person with respect to any Receivables, Contracts related thereto
or any other related agreements, nor shall the Company, the Servicer,
the Issuer or the Administrator be obligated to perform any of the
obligations of the Originator thereunder.
(d) The Originator hereby grants to the Company (who may
further grant to another Person) an irrevocable power of attorney, with
full power of substitution, coupled with an interest, to take in the
name of such Originator all steps necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by the Originator or transmitted or received
by the Company (whether or not from the Originator) in connection with
any Receivable.
-19-
7.3 Further Action Evidencing Purchases.
The Originator 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 the Servicer may reasonably request in order to
perfect, protect or more fully evidence the Receivables and Related Rights
purchased by or contributed to the Company hereunder, or to enable the Company
to exercise or enforce any of its rights hereunder or under any other
Transaction Document. Without limiting the generality of the foregoing, upon the
request of the Servicer, the Originator will:
(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate; and
(b) xxxx the master data processing records that evidence or
list (i) such Receivables and (ii) related Contracts with the legend
set forth in Section 4. l(j).
The Originator hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Related Rights now
existing or hereafter generated by the Originator. If the Originator fails to
perform any of its agreements or obligations under this Agreement, the Company
or its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Company or
its designee incurred in connection therewith shall be payable by the Originator
as provided in Section 9.1.
7.4 Application of Collections.
Any payment by an Obligor in respect of any indebtedness owed
by it to the Originator shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the
Company (or any other Person to whom the Company has assigned such right to
instruct), be applied as a Collection of any Receivable or Receivables of such
Obligor to the extent of any amounts then due and payable thereunder before
being applied to any other indebtedness of such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1 Purchase and Sale Termination Events.
Each of the following events or occurrences described in this
Section 8.1 shall constitute a "Purchase and Sale Termination Event":
(a) A Termination Event (as defined in the Receivables
Purchase Agreement) shall have occurred and, in the case of a
Termination Event (other than one described in
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paragraph (f) of Exhibit V of the Receivables Purchase Agreement), the
Administrator, shall have declared the Facility Termination Date to
have occurred; or
(b) The Originator shall fail to make any payment or deposit
to be made by it hereunder when due and such failure shall remain
unremedied for two Business Days;
(c) Any representation or warranty made or deemed to be made
by the Originator (or any of its officers) under or in connection with
this Agreement, any other Transaction Documents, or any other
information or report delivered pursuant hereto or thereto shall prove
to have been incorrect or untrue in any material respect when made or
deemed made; provided that no Purchase and Sale Termination Event shall
occur under this clause (c) if the Receivable(s) for which such
representation or warranty is incorrect or untrue in any material
respect (1) represent in the aggregate no more than 1/2% of the
Outstanding Balance of all Receivables of the Originator, and (2) have
resulted in an adjustment pursuant to Section 3.3(a) or 3.3(b) hereof;
or
(d) The Originator shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to
be performed or observed and such failure shall remain unremedied for
30 days after written notice thereof shall have been given by the
Servicer to the Originator.
8.2 Remedies.
(a) Optional Termination. Upon the occurrence of a Purchase
and Sale Termination Event, the Company (and not the Servicer) shall
have the option, by notice to the Originator (with a copy to the
Administrator), to declare the Purchase and Sale Termination Date to
have occurred.
(b) Remedies Cumulative. Upon any termination of the Purchase
Facility pursuant to Section 8.2(a), the Company shall have, in
addition to all other rights and remedies under this Agreement, all
other rights and remedies provided under the UCC of each applicable
jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnities by the Originator.
Without limiting any other rights which the Company may have
hereunder or under applicable law, the Originator, hereby agrees to indemnify
the Company and each of its officers, directors, employees and agents (each of
the foregoing Persons being individually called a "Purchase and Sale Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims, judgments, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively called "Purchase and Sale Indemnified Amounts") awarded against or
incurred by any of them arising
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out of or as a result of the failure of the Originator (in its capacity as
Originator) to perform its obligations under this Agreement or any other
Transaction Document, or arising out of the claims asserted against a Purchase
and Sale Indemnified Party relating to the transactions contemplated herein or
the use of proceeds thereof or therefrom, excluding, however, (i) Purchase and
Sale Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of such Purchase and Sale Indemnified Party, (ii)
any indemnification which would have the effect of creating in favor of the
Company and against the Originator recourse for non-payment of any Receivable,
such recourse to include without limitation recourse for any setoffs, disputes,
recoupments, defenses or claims where the facts demonstrate to the reasonable
satisfaction of the parties hereto, that the Obligor's failure to make payment
is the result of such Obligor's insolvency, bankruptcy, inability or
unwillingness to pay its obligations as they mature due to its financial
condition and (iii) any tax based upon or measured by net income or gross
receipts. Without limiting the foregoing, the Originator, agrees that it shall
indemnify each Purchase and Sale Indemnified Party for Purchase and Sale
Indemnified Amounts relating to or resulting from:
(a) the transfer by the Originator of an interest in any
Receivable to any Person other than the Company;
(b) the breach of any representation or warranty made by the
Originator (or any of its officers) under or in connection with this
Agreement or any other Transaction Document, or any written information
or report delivered by the Originator pursuant hereto or thereto, which
shall have been false or incorrect in any material respect when made or
deemed made;
(c) the failure by the Originator to comply with any
applicable law, rule or regulation with respect to any Receivable
generated by the Originator or the related Contract, or the
nonconformity of any Receivable generated by the Originator or the
related Contract with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables transferred by the Originator
free and clear of any Adverse Claim, other than an Adverse Claim
arising solely as a result of an act of the Company, whether existing
at the time of the purchase of such Receivables or at any time
thereafter;
(e) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Receivables or purported Receivables generated by the Originator,
whether at the time of any purchase or contribution or at any
subsequent time;
(f) any dispute, claim, offset or defense (other than setoffs,
disputes, recoupments, defenses or claims where the facts demonstrate
to the reasonable satisfaction of the parties hereto, that the
Obligor's failure to make payment is the result of such Obligor's
insolvency, bankruptcy, inability or unwillingness to pay its
obligations as they mature due to its financial condition) of the
Obligor to the payment of any
-22-
Receivable or purported Receivable generated by the Originator
(including, without limitation, a defense based on such Receivable's or
the related Contract's 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 services related to any such
Receivable or the furnishing of or failure to furnish such services;
(g) any product liability claim arising out of or in
connection with services that are the subject of any Receivable
generated by the Originator; and
(h) any tax or governmental fee or charge (other than any tax
excluded pursuant to clause (iii) in the proviso to the preceding
sentence), all interest and penalties thereon or with respect thereto,
and all out-of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending against the same, which may arise
by reason of the purchase or ownership of the Receivables generated by
the Originator or any Related Security connected with any such
Receivables.
If for any reason the indemnification provided above in this Section
9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient
to hold such Purchase and Sale Indemnified Party harmless, then the Originator
agrees that it shall contribute to the amount paid or payable by such Purchase
and Sale Indemnified Party to the maximum extent permitted under applicable law.
ARTICLE X
MISCELLANEOUS
10.1 Amendments, Etc.
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver
is in writing and consented to by the Company and the Originator (with
respect to an amendment) or by the Company (with respect to a waiver or
consent by it).
(b) No failure or delay on the part of the Company, the
Servicer, the Originator or any third-party beneficiary in exercising
any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on the Company, the
Servicer or the Originator in any case shall entitle it to any notice
or demand in similar or other circumstances. No waiver or approval by
the Company or the Servicer under this Agreement shall, except as may
otherwise be stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval under this Agreement
shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect
to the subject matter thereof and shall
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constitute the entire agreement among the parties hereto with respect
to the subject matter thereof, superseding all prior oral or written
understandings.
10.2 Notices, Etc.
All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by certified mail,
postage prepaid, or by facsimile , to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address, 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 (i) if personally delivered, when received,
(ii) if sent by certified mail three (3) Business Days after having been
deposited in the mail, postage prepaid, and (iii) if transmitted by facsimile ,
when sent, receipt confirmed by telephone or electronic means.
10.3 No Waiver, Cumulative Remedies.
The remedies herein provided are cumulative and not exclusive
of any remedies provided by law. Without limiting the foregoing, the Originator
hereby authorizes the Company, at any time and from time to time, to the fullest
extent permitted by law, to set off, against any obligations of the Originator
to the Company arising in connection with the Transaction Documents (including,
without limitation, amounts payable pursuant to Section 9.1) that are then due
and payable or that are not then due and payable but are accruing in respect of
the then current Settlement Period, any and all indebtedness at any time owing
by the Company to or for the credit or the account of the Originator.
10.4 Binding Effect; Assignability.
This Agreement shall be binding upon and inure to the benefit
of the Company and the Originator and their respective successors and permitted
assigns. The Originator may not assign any of its rights hereunder or any
interest herein without the prior written consent of the Company, except as
otherwise herein specifically provided. 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 as the
parties hereto shall agree. The rights and remedies with respect to any breach
of any representation and warranty made by the Originator pursuant to Article V
and the indemnification and payment provisions of Article IX and Section 10.6
shall be continuing and shall survive any termination of this Agreement. Neither
the Company nor any other Person may waive a breach of Section 5.20 of this
Agreement for so long as the Notes are outstanding.
10.5 Governing Law.
THIS AGREEMENT, THE TRANSACTION DOCUMENTS AND ALL DISPUTES,
CONTROVERSIES OR CLAIMS ARISING OUT OF THIS AGREEMENT, ANY TRANSACTION DOCUMENT,
OR A BREACH OF ANY THEREOF, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE
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STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
10.6 Costs, Expenses and Taxes.
In addition to the obligations of the Originator under Article
IX, the Originator, agrees to pay to the Company or its assignees within ten
(10) days after demand:
(a) all reasonable costs and expenses of the Company or its
assignees in connection with the enforcement of this Agreement or the
Originator's Assignment Certificates and or with the enforcement of the
other Transaction Documents against the Originator; and
(b) all stamp and other taxes and fees payable or determined
to be payable in connection with the execution, delivery, filing and
recording of this Agreement or the other Transaction Documents to be
delivered by the Originator hereunder, and agrees to indemnify each
Purchase and Sale Indemnified Party against any liabilities with
respect to or resulting from any delay by the Originator in paying or
omission to pay such taxes and fees.
10.7 Submission to Jurisdiction.
EACH PARTY HERETO HEREBY IRREVOCABLY (a) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF NEW YORK OR UNITED STATES FEDERAL COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED
STATES FEDERAL COURT; (c) WAIVES, TO THE FULLEST EXTENT 1T MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) 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 SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY
ACTION OR PROCEEDING AGAINST THE ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTIONS.
10.8 Waiver of Jury Trial.
EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR
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WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE
OR THIRD-PARTY BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
ANY OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY
JURY.
10.9 Captions and Cross-References; Incorporation by Reference.
The various captions (including, without limitation, the table
of contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such
Section or Exhibit of this Agreement, as the case may be. The Exhibits hereto
are hereby incorporated by reference into and made a part of this Agreement.
10.10 Execution in Counterparts.
This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement.
10.11 Acknowledgment and Agreement.
By execution below, the Originator expressly acknowledges and
agrees that all of the Company's rights, title, and interests in, to, and under
this Agreement (but not its obligations), shall be assigned by the Company
pursuant to the Receivables Purchase Agreement, and the Originator consents to
such assignment. Each of the parties hereto acknowledges and agrees that the
Administrator and the Issuer are third-party beneficiaries of the rights of the
Company arising hereunder and under the other Transaction Documents to which the
Originator is a party.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE 1 OF 1 TO PURCHASE
AND SALE AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
CHURCH & XXXXXX CO., INC.
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
Address:
Attention:
Telephone:
Facsimile:
XXXXXXXX STREET FUNDING, LLC
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
Address:
Attention:
Telephone:
Facsimile:
-27-
EXHIBIT A
TO PURCHASE AND SALE AGREEMENT
FORM OF PURCHASE REPORT
ORIGINATOR:
--------------------------------------------------------------
PURCHASER: XXXXXXXX STREET FUNDING, LLC
DATE:
--------------------------------------------------------------
I. OUTSTANDING BALANCE OF RECEIVABLES PURCHASED (OR DEEMED
PURCHASED WITH RESPECT TO THE NO LONGER EXISTING ASSETS) DURING
THE CALENDAR MONTH MOST RECENTLY ENDED (OR, IF THIS PURCHASE
REPORT COVERS THE PERIOD IMMEDIATELY FOLLOWING THE CUT-OFF DATE,
DURING THE PERIOD FROM AND INCLUDING THE CUT-OFF DATE TO AND
INCLUDING THE LAST DAY OF THE MONTH IN WHICH THE CUT- OFF DATE
OCCURS):
--------------------------------------------------------------
II. Adjustments to Receivables Purchased (based on Section 3.3(a),
(b), (d) or otherwise (specify))______________
III. Adjusted Outstanding Balance of Receivables Purchased
________________________
IV. FAIR MARKET VALUE DISCOUNT: _____________
1/[1 + ((Prime Rate + .25%) X Days' Sales Outstanding)]
--------------------------
365
Prime Rate = _________________________
Days' Sales Outstanding = _____________
V. PURCHASE PRICE (III X IV) = $_____________
A-1
EXHIBIT B
TO PURCHASE AND SALE AGREEMENT
FORM OF COMPANY NOTE
B-1
EXHIBIT C
TO PURCHASE AND SALE AGREEMENT
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
C-1
EXHIBIT D
TO PURCHASE AND SALE AGREEMENT
PROCEEDINGS
None.
D-1
EXHIBIT E
TO PURCHASE AND SALE AGREEMENT
OFFICE LOCATIONS
The Originator maintains books and records relating to Receivables at: 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
The Principal Place of Business and Chief Executive Office of the Originator is:
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
The state of Formation of the Originator is: Delaware
E-1
EXHIBIT F
TO PURCHASE AND SALE AGREEMENT
TRADE NAMES
Legal Name/Trade Names/Fictitious Names of the Originator
None.
F-1
