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Exhibit 10.1
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RECEIVABLES SALE AGREEMENT
DATED AS OF MAY 1, 2000
BETWEEN
OMNOVA SOLUTIONS INC., AS SELLER,
AND
OMNOVA RECEIVABLES CORPORATION, AS BUYER
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TABLE OF CONTENTS
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ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchases of Receivables...............................................................2
Section 1.2 Payment for the Purchases..............................................................3
Section 1.3 Purchase Price Credit Adjustments......................................................4
Section 1.4 Payments and Computations, Etc.........................................................5
Section 1.5 Transfer of Records....................................................................5
Section 1.6 Characterization.......................................................................6
ARTICLE II. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of OMNOVA...............................................6
ARTICLE III. CONDITIONS OF PURCHASES
Section 3.1 Conditions Precedent to Initial Purchase..............................................10
Section 3.2 Conditions Precedent to All Purchases.................................................10
ARTICLE IV. COVENANTS
Section 4.1 Affirmative Covenants of OMNOVA.......................................................10
Section 4.2 Negative Covenants of OMNOVA..........................................................14
ARTICLE V. TERMINATION EVENTS
Section 5.1 Termination Events....................................................................15
Section 5.2 Remedies..............................................................................16
ARTICLE VI. INDEMNIFICATION
Section 6.1 Indemnities by OMNOVA.................................................................17
Section 6.2 Other Costs and Expenses..............................................................19
Section 6.3 Additional Indemnification Obligations................................................19
Section 6.4 Defense of Claims.....................................................................19
ARTICLE VII. MISCELLANEOUS
Section 7.1 Waivers and Amendments................................................................20
Section 7.2 Notices...............................................................................20
Section 7.3 Protection of Ownership Interests of Buyer............................................21
Section 7.4 Confidentiality.......................................................................21
Section 7.5 Bankruptcy Petition...................................................................22
Section 7.6 CHOICE OF LAW.........................................................................22
Section 7.7 CONSENT TO JURISDICTION...............................................................22
Section 7.8 WAIVER OF JURY TRIAL..................................................................22
Section 7.9 Integration; Binding Effect; Survival of Terms........................................23
Section 7.10 Counterparts; Severability; Section References........................................23
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EXHIBITS AND SCHEDULES
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Exhibit I Definitions
Exhibit II Chief Executive Office; Places of Business; Locations of
Records; Federal Employer Identification Number(s); Other
Names
Exhibit III Lock-boxes; Collection Accounts; Collection Banks
Exhibit IV Form of Compliance Certificate
Exhibit V Credit and Collection Policy
Exhibit VI Form of Subscription Agreement
Annex A Articles of Incorporation
Annex B Regulations (i.e., By-Laws)
Exhibit VII Form of Subordinated Note
Schedule A Documents to be Delivered to the Buyer on or prior to the
Initial Purchase (Except Where Otherwise Noted)
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of May 1, 2000, is
by and between OMNOVA Solutions Inc., an Ohio corporation ("OMNOVA"), and OMNOVA
Receivables Corporation, an Ohio corporation ("BUYER"). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in EXHIBIT I.
PRELIMINARY STATEMENTS
OMNOVA now owns, and from time to time hereafter will
own, Receivables. OMNOVA wishes to sell and assign to Buyer, and Buyer
wishes to purchase from OMNOVA, all of OMNOVA's right, title and
interest in and to such Receivables, together with the Related Security
and Collections with respect thereto.
OMNOVA and Buyer intend the transactions contemplated
hereby to be true sales of the Receivables from OMNOVA to Buyer,
providing Buyer with the full benefits of ownership of the Receivables,
and OMNOVA and Buyer do not intend these transactions to be, or for any
purpose to be characterized as, loans from Buyer to OMNOVA.
Upon each purchase of Receivables from OMNOVA, Buyer
will sell undivided interests therein and in the associated Related
Security and Collections pursuant to that certain Receivables Purchase
Agreement dated as of May 1, 2000 (as the same may from time to time
hereafter be amended, supplemented, restated or otherwise modified, the
"PURCHASE AGREEMENT") among Buyer, OMNOVA, as Servicer, Falcon Asset
Securitization Corporation ("FALCON"), the financial institutions from
time to time party thereto as "FINANCIAL INSTITUTIONS" and Bank One, NA
or any successor agent appointed pursuant to the terms of the Purchase
Agreement, as agent for Falcon and such Financial Institutions (in such
capacity, the "AGENT").
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ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 PURCHASES OF RECEIVABLES.
(a) Effective on the date of the initial Purchase hereunder, in
consideration for the Purchase Price and upon the terms and subject to the
conditions set forth herein, OMNOVA does hereby sell, assign, transfer, set-over
and otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer does hereby purchase from OMNOVA, all of OMNOVA's
right, title and interest in and to all Receivables existing as of the date of
such initial Purchase and all Receivables thereafter arising, together, in each
case, with all Related Security relating thereto and all Collections thereof;
PROVIDED, HOWEVER, that in no event shall Buyer be obligated to purchase, or
OMNOVA be obligated to sell, any Receivable arising after the Purchase
Termination Date. In accordance with the preceding sentence, on the date of the
initial Purchase, Buyer shall acquire all of OMNOVA's right, title and interest
in and to all Receivables existing as of the close of business on the Business
Day immediately prior to such Purchase, together with all Related Security
relating thereto and all Collections thereof and on each Business Day thereafter
through and including the Purchase Termination Date, Buyer shall acquire all of
OMNOVA's right, title and interest in and to all Receivables which were not
previously purchased by Buyer hereunder upon the creation of such Receivables
(together with all Related Security relating thereto and all Collections
thereof); PROVIDED that, in each case, the acquisition by Buyer of such right,
title and interest of OMNOVA in connection with each Purchase hereunder is
conditioned upon and subject to OMNOVA's receipt of the Purchase Price therefor
in accordance with SECTION 1.2. In connection with consummation of any Purchase
hereunder, Buyer may request that OMNOVA deliver, and OMNOVA shall deliver, such
approvals, opinions, information, reports or documents as Buyer may reasonably
request.
(b) It is the intention of the parties hereto that each Purchase of
Receivables made hereunder shall constitute a "sale of accounts" (as such term
is used in Article 9 of the UCC), which sales are absolute and irrevocable and
provide Buyer with the full benefits of ownership of the Receivables. Except for
the Purchase Price Credits owed pursuant to SECTION 1.3, each sale of
Receivables hereunder is made without recourse to OMNOVA; PROVIDED, HOWEVER,
that (i) OMNOVA shall be liable to Buyer for all representations, warranties and
covenants made by OMNOVA pursuant to the terms of the Transaction Documents to
which OMNOVA is a party, and (ii) such sale does not constitute and is not
intended to result in an assumption by Buyer or any assignee thereof of any
obligation of OMNOVA or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any other
obligations of OMNOVA. In view of the intention of the parties hereto that the
Purchases of Receivables made hereunder shall constitute sales of such
Receivables rather than loans secured thereby, OMNOVA agrees that it will, on or
prior to May 31, 2000, xxxx its master data processing records relating to the
Receivables with a legend stating that such Receivables have been sold and that
Bank One, NA, as Agent, is now the owner of undivided interests therein and to
note in its financial statements that such Receivables have been sold.
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Upon the request of Buyer or the Agent (as Buyer's assignee), OMNOVA will
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 to perfect and maintain the perfection of Buyer's
ownership interest in the Receivables and the Related Security and Collections
with respect thereto, or as Buyer or the Agent (as Buyer's assignee) may
reasonably request.
Section 1.2 PAYMENT FOR THE PURCHASES.
(a) The Purchase Price for the initial Purchase of Receivables shall be
payable in full by Buyer to OMNOVA on the date of such initial Purchase, and
shall be paid to OMNOVA in the following manner:
(i) by delivery of immediately available funds, to the extent
of funds made available to Buyer in connection with its subsequent sale
of an interest in such Receivables to the Purchasers under the Purchase
Agreement; PROVIDED that a portion of such funds shall be offset by
amounts owed by OMNOVA to Buyer on account of the issuance of equity in
the manner contemplated in the Subscription Agreement and having a
total value of not less than the Required Capital Amount, and
(ii) the balance, by borrowing a subordinated revolving loan
from OMNOVA (each, a "SUBORDINATED LOAN") and delivering the proceeds
thereof to OMNOVA, in an amount not to exceed the lesser of (A) the
remaining unpaid portion of such Purchase Price, and (B) the maximum
Subordinated Loan that could be borrowed without causing Buyer's Net
Worth to fall below the Required Capital Amount. OMNOVA is hereby
authorized by Buyer to endorse on the schedule attached to the
Subordinated Note an appropriate notation evidencing the date and
amount of each Subordinated Loan made thereunder, as well as the date
of each payment with respect thereto, PROVIDED that the failure to make
such notation shall not affect any obligation of Buyer thereunder.
(b) The Purchase Price for each Purchase after the initial Purchase
shall be due and owing in full by Buyer to OMNOVA or its designee on the date of
such Purchase (except that Buyer may, with respect to any such Purchase, offset
against such Purchase Price any amounts owed by OMNOVA to Buyer hereunder and
which have become due but remain unpaid) and shall be paid to OMNOVA in the
manner provided in the following paragraphs (c), (d) and (e).
(c) With respect to any Purchase after the initial Purchase hereunder,
Buyer shall pay the Purchase Price therefor on the next subsequent Settlement
Date in accordance with SECTION 1.2(e) and in the following manner:
FIRST, by delivery of immediately available funds, to the
extent of funds available to Buyer from its subsequent sale of an
interest in the Receivables
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to the Agent for the benefit of the Purchasers under the Purchase
Agreement or other cash on hand;
SECOND, by delivery of the proceeds of a Subordinated Loan,
PROVIDED that the making of any such Subordinated Loan shall be subject
to the provisions set forth in SECTION 1.2(a)(II); and
THIRD, unless OMNOVA has declared the Purchase Termination
Date to have occurred pursuant to SECTION 5.2, by accepting a
contribution to its capital pursuant to the Subscription Agreement in
an amount equal to the remaining unpaid balance of such Purchase Price.
Subject to the limitations set forth in SECTION 1.2(a)(II), OMNOVA irrevocably
agrees to advance each Subordinated Loan requested by Buyer on or prior to the
Purchase Termination Date. The Subordinated Loans shall be evidenced by, and
shall be payable in accordance with the terms and provisions of the Subordinated
Note and shall be payable solely from funds which Buyer is not required under
the Purchase Agreement to set aside for the benefit of, or otherwise pay over
to, the Purchasers.
(d) From and after the Purchase Termination Date, OMNOVA shall
not be obligated to (but may, at its option): (i) sell Receivables to Buyer, or
(ii) contribute Receivables to Buyer's capital pursuant to clause third of
SECTION 1.2(c) unless OMNOVA reasonably determines that the Purchase Price
therefor will be satisfied with funds available to Buyer from sales of interests
in the Receivables pursuant to the Purchase Agreement, Collections, proceeds of
Subordinated Loans or otherwise.
(e) Although the Purchase Price for each Purchase after the
initial Purchase shall be due and payable in full by Buyer to OMNOVA on the date
of such Purchase, settlement of the Purchase Price between Buyer and OMNOVA
shall be effected on a monthly basis on Settlement Dates with respect to all
Purchases within the same Calculation Period and based on the information
contained in the Monthly Report delivered by the Servicer pursuant to ARTICLE
VIII of the Purchase Agreement for the Calculation Period then most recently
ended. Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Subordinated Note made pursuant to
SECTION 1.2(c) and any contribution of capital by OMNOVA to Buyer made pursuant
to SECTION 1.2(c) shall be deemed to have occurred and shall be effective as of
the last Business Day of the Calculation Period to which such settlement
relates.
Section 1.3 PURCHASE PRICE CREDIT ADJUSTMENTS. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or rejected
goods or services, any discount or any adjustment or otherwise
by OMNOVA (other than cash Collections on account of the
Receivables),
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(ii) reduced or canceled as a result of a setoff in
respect of any claim by any Person (whether such claim arises
out of the same or a related transaction or an unrelated
transaction), or
(b) any of the representations and warranties set forth in
ARTICLE II are no longer true with respect to any Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable hereunder equal to
the Outstanding Balance of such Receivable. If such Purchase Price Credit
exceeds the Original Balance of the Receivables to be sold hereunder on any date
of a Purchase, then OMNOVA shall pay the remaining amount of such Purchase Price
Credit in cash within 5 Business Days thereafter, PROVIDED that if the Purchase
Termination Date has not occurred, OMNOVA shall be allowed to deduct the
remaining amount of such Purchase Price Credit from any indebtedness owed to it
under the Subordinated Note.
Section 1.4 PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by Buyer hereunder shall be paid or deposited in accordance with the
terms hereof on the day when due in immediately available funds to the account
of OMNOVA designated from time to time by OMNOVA or as otherwise directed by
OMNOVA. In the event that any payment owed by any Person hereunder becomes due
on a day that is not a Business Day, then such payment shall be made on the next
succeeding Business Day. If any Person fails to pay any amount hereunder when
due, such Person agrees to pay, on demand, the Default Fee in respect thereof
until paid in full; PROVIDED, HOWEVER, that such Default Fee shall not at any
time exceed the maximum rate permitted by applicable law. All computations of
interest payable hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first but excluding the last day)
elapsed.
Section 1.5 TRANSFER OF RECORDS.
(a) In connection with the Purchases of Receivables hereunder, OMNOVA hereby
sells, transfers, assigns and otherwise conveys to Buyer all of OMNOVA's right
and title to and interest in the Records relating to all Receivables sold
hereunder, without the need for any further documentation in connection with any
Purchase. In connection with such transfer, OMNOVA hereby grants to each of
Buyer, the Agent and the Servicer an irrevocable, non-exclusive license to use,
without royalty or payment of any kind, all software used by OMNOVA to account
for the Receivables, to the extent necessary to administer the Receivables,
whether such software is owned by OMNOVA or is owned by others and used by
OMNOVA under license agreements with respect thereto, PROVIDED that should the
consent of any licensor of OMNOVA to such grant of the license described herein
be required, OMNOVA hereby agrees that upon the request of Buyer (or the Agent
as Buyer's assignee), OMNOVA will use its reasonable efforts to obtain the
consent of such third-party licensor. The license granted hereby shall be
irrevocable, and shall terminate on the date this Agreement terminates in
accordance with its terms.
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(b) OMNOVA (i) shall take such action requested by Buyer
and/or the Agent (as Buyer's assignee), from time to time hereafter, that may be
necessary or appropriate to ensure that Buyer and its assigns under the Purchase
Agreement have an enforceable ownership interest in the Records relating to the
Receivables purchased from OMNOVA hereunder, and (ii) shall use its reasonable
efforts to ensure that Buyer, the Agent and the Servicer each has an enforceable
right (whether by license or sublicense or otherwise) to use all of the computer
software used to account for the Receivables and/or to recreate such Records.
Section 1.6 CHARACTERIZATION. If, notwithstanding the intention of the
parties expressed in SECTION 1.1(b), any sale or contribution by OMNOVA to Buyer
of Receivables hereunder shall be characterized as a secured loan and not a
sale, then this Agreement shall be deemed to constitute a security agreement
under the UCC and other applicable law. For this purpose and without being in
derogation of the parties' intention that each sale of Receivables hereunder
shall constitute a true sale thereof, OMNOVA hereby grants to Buyer a duly
perfected security interest in all of OMNOVA's right, title and interest in, to
and under all Receivables now existing and hereafter arising, all Collections
and Related Security with respect thereto, each Lock-Box and Collection Account
(each, as defined in the Purchase Agreement) and all proceeds of the foregoing,
which security interest shall be prior to all other Adverse Claims thereto.
After the occurrence of a Termination Event, Buyer and its assigns shall have,
in addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor after default under
the UCC and other applicable law, which rights and remedies shall be cumulative.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF OMNOVA. OMNOVA hereby
represents and warrants to Buyer that:
(a) CORPORATE EXISTENCE AND POWEr. OMNOVA is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation, and is duly qualified to do business and is in good
standing as a foreign corporation, and has and holds all corporate power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted, except
where the failure to so hold could not reasonably be expected to have a Material
Adverse Effect and except in the Commonwealth of Massachusetts, in which
jurisdiction, OMNOVA represents and warrants that it has filed all reports and
paid all fees and taxes necessary to be back in good standing as a foreign
corporation as of the date hereof.
(b) POWER AND AUTHORITY; DUE AUTHORIZATION EXECUTION AND
DELIVERY. The execution and delivery by OMNOVA of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and OMNOVA's use of the proceeds of
purchases made hereunder, are within its corporate powers and authority and have
been duly authorized by all necessary corporate action on its part.
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This Agreement and each other Transaction Document to which OMNOVA is a party
has been duly executed and delivered by OMNOVA.
(c) NO CONFLICT. The execution and delivery by OMNOVA of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its articles of incorporation or Regulations (i.e., By-Laws), (ii)
any law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of OMNOVA or its
Subsidiaries (except as created hereunder); and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(d) GOVERNMENTAL AUTHORIZATION. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by OMNOVA of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) ACTIONS, SUITS. There are no actions, suits or proceedings
pending, or to the best of OMNOVA's knowledge, threatened, against or affecting
OMNOVA, or any of its properties, in or before any court, arbitrator or other
body, that could reasonably be expected to have a Material Adverse Effect.
OMNOVA is not in default with respect to any order of any court, arbitrator or
governmental body.
(f) BINDING EFFECT. This Agreement and each other Transaction
Document to which OMNOVA is a party constitute the legal, valid and binding
obligations of OMNOVA enforceable against OMNOVA in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(g) ACCURACY OF INFORMATION. All information heretofore
furnished by OMNOVA or any of its Affiliates to Buyer (or its assigns) for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by OMNOVA or any of its Affiliates to Buyer (or
its assigns) will be, true and accurate in every material respect on the date
such information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(h) USE OF PROCEEDS. No proceeds of any Purchase hereunder
will be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii)
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to acquire any security in any transaction which is subject to SECTION 13 or 14
of the Securities Exchange Act of 1934, as amended.
(i) GOOD TITLE. Immediately prior to each Purchase hereunder,
OMNOVA shall be the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except as
created by the Transaction Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the Uniform
Commercial Code (or any comparable law) of all appropriate jurisdictions to
perfect OMNOVA's ownership interest in each Receivable, its Collections and the
Related Security.
(j) PERFECTION. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and shall, upon
each Purchase hereunder, transfer to Buyer (and Buyer shall acquire from OMNOVA)
legal and equitable title to, with the right to sell and encumber each
Receivable existing and hereafter arising, together with the Related Security
and Collections with respect thereto, free and clear of any Adverse Claim,
except as created by the Transactions Documents. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the Uniform Commercial Code (or any comparable law) of all appropriate
jurisdictions to perfect Buyer's ownership interest in the Receivables, the
Related Security and the Collections.
(k) PLACES OF BUSINESS. The principal places of business and
chief executive office of OMNOVA and the offices where it keeps all of its
Records are located at the address(es) listed on EXHIBIT II or such other
locations of which Buyer has been notified in accordance with SECTION 4.2(a) in
jurisdictions where all action required by SECTION 4.2(a) has been taken and
completed. OMNOVA's Federal Employer Identification Number is correctly set
forth on EXHIBIT II.
(l) COLLECTIONS. The conditions and requirements set forth in
SECTION 4.1(j) have at all times been satisfied and duly performed. The names
and addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of OMNOVA at each Collection Bank and the post office box
number of each Lock-Box, are listed on EXHIBIT III.
(m) MATERIAL ADVERSE EFFECT. Since November 30, 1999, no event
has occurred that would have a Material Adverse Effect.
(n) NAMES. In the past five (5) years, OMNOVA has not used any
corporate names (exclusive of trade names or assumed business names) other than
the names listed on EXHIBIT II;
(o) OWNERSHIP OF BUYER. OMNOVA owns, directly or indirectly,
100% of the issued and outstanding capital stock of Buyer, free and clear of any
Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Buyer.
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(p) NOT A HOLDING COMPANY OR AN INVESTMENT COMPANY. OMNOVA is
not a "holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor statute. OMNOVA is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or any successor
statute.
(q) COMPLIANCE WITH LAW. OMNOVA has complied in all material
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject. Each Receivable,
together with the Contracts and Invoices related thereto, does not contravene
any material laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy).
(r) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Originator
has complied in all material respects with its Credit and Collection Policy with
regard to each of its Receivables and the related Contract(s) and Invoice(s),
and has not made any change to such Credit and Collection Policy, except such
material change as to which Buyer (or its assigns) has been notified in
accordance with SECTION 4.1(a)(VII).
(s) PAYMENTS TO OMNOVA. With respect to each Receivable
transferred to Buyer hereunder, the Purchase Price received by OMNOVA
constitutes reasonably equivalent value in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
OMNOVA of any Receivable hereunder is or may be voidable under any section of
the Bankruptcy Reform Act of 1978 (11 U.S.C.Section Section 101 ET SEQ.), as
amended.
(t) ENFORCEABILITY OF CONTRACTS. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) ELIGIBLE RECEIVABLES. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable on the date of its Purchase
hereunder was an Eligible Receivable on such date of Purchase.
(v) ACCOUNTING. The manner in which OMNOVA accounts for the
transactions contemplated by this Agreement does not jeopardize the true sale
analysis.
(w) COMPLIANCE WITH REPRESENTATIONS. On and as of the date of
each Purchase hereunder, OMNOVA hereby represents and warrants that all of the
other representations and warranties set forth in this ARTICLE II are true and
correct on and as of the date of such Purchase (and after giving effect to such
Purchase) as though made on and as of each such date.
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ARTICLE III.
CONDITIONS OF PURCHASES
Section 3.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
Purchase under this Agreement is subject to the conditions precedent that Buyer
shall have received on or before the date of such purchase those documents
listed on SCHEDULE A and all of the conditions to the initial purchase under the
Purchase Agreement shall have been satisfied or waived in accordance with the
terms thereof.
Section 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES. Each Purchase shall
be subject to the further conditions precedent that the Facility Termination
Date shall not have occurred; and (b) Buyer (or its assigns) shall have received
such other approvals, opinions or documents as it may reasonably request. As a
further condition to each Purchase, on the date of such Purchase, OMNOVA
represents and warrants that the representations and warranties set forth in
ARTICLE II are true and correct on and as of the date of such Purchase (and
after giving effect thereto) as though made on and as of such date.
ARTICLE IV.
COVENANTS
Section 4.1 AFFIRMATIVE COVENANTS OF OMNOVA. Until the date on which
this Agreement terminates in accordance with its terms, OMNOVA hereby covenants
as set forth below:
(a) FINANCIAL REPORTING. OMNOVA will maintain a system of
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to Buyer (or its assigns):
(i) ANNUAL REPORTINg. As soon as practical and in any
event within 95 days after the close of each of its respective fiscal
years, audited, unqualified financial statements (which shall include
balance sheets and statements of income and retained earnings) for
OMNOVA for such fiscal year certified in a manner acceptable to Buyer
(or its assigns) by independent public accountants reasonably
acceptable to Buyer (or its assigns).
(ii) QUARTERLY REPORTING. As soon as practical and in
any event within 50 days after the close of the first three (3)
quarterly periods of each of its respective fiscal years, balance
sheets of OMNOVA as at the close of each such period and statements of
income and retained earnings and a statement of cash flows for OMNOVA
for the period from the beginning of such fiscal year to the end of
such quarter, all certified by its Chief Executive Officer, its Chief
Financial Officer, any of its Senior Vice Presidents, its Secretary or
its Treasurer.
(iii) COMPLIANCE CERTIFICATE. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of
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EXHIBIT IV signed by an Authorized Officer of OMNOVA and dated the date
of such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly
upon the furnishing thereof to the shareholders of OMNOVA copies of all
financial statements, reports and proxy statements so furnished.
(v) S.E.C. FILINGS. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly, monthly or
other regular reports which OMNOVA or any of its Subsidiaries files
with the Securities and Exchange Commission.
(vi) COPIES OF NOTICES. Promptly upon its receipt of
any notice, request for consent, financial statements, certification,
report or other communication under or in connection with any
Transaction Document from any Person other than Buyer, the Agent or
Falcon, copies of the same.
(vii) CHANGE IN CREDIT AND COLLECTION POLICY. At
least thirty (30) days prior to the effectiveness of any material
change in or amendment to the Credit and Collection Policy of
Originator, a copy of such Credit and Collection Policy as then in
effect and a notice indicating such change or amendment.
(viii) OTHER INFORMATION. Promptly, from time to
time, such other information, documents, records or reports relating to
the Receivables or the condition or operations, financial or otherwise,
of OMNOVA as Buyer (or its assigns) may from time to time reasonably
request in order to protect the interests of Buyer (and its assigns)
under or as contemplated by this Agreement.
(b) NOTICES. OMNOVA will notify the Buyer (or its assigns) in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) TERMINATION EVENTS OR POTENTIAL TERMINATION
EVENTS. The occurrence of each Termination Event and each Potential
Termination Event, by a statement of an Authorized Officer of OMNOVA.
(ii) JUDGMENT AND PROCEEDINGS. The entry of any
judgment or decree against OMNOVA or any of its Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against
OMNOVA and its Subsidiaries exceeds $10,000,000, or the institution of
any litigation, arbitration proceeding or governmental proceeding
against OMNOVA if the amount of damages claimed exceed $10,000,000.
(iii) MATERIAL ADVERSE EFFECT. The occurrence of any
event or condition that has, or could reasonably be expected to have, a
Material Adverse Effect.
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(iv) DEFAULTS UNDER OTHER AGREEMENTS. The occurrence
of an "event of default" as defined in any other financing arrangement
pursuant to which OMNOVA is a debtor or an obligor.
(v) DOWNGRADE OF OMNOVA. Any downgrade in the rating
of any Indebtedness of OMNOVA by Standard and Poor's Ratings Group or
by Xxxxx'x Investors Service, Inc., setting forth the Indebtedness
affected and the nature of such change.
(c) COMPLIANCE WITH LAWS AND PRESERVATION OF CORPORATE
EXISTENCE. OMNOVA will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. OMNOVA will preserve and maintain
its corporate existence, 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 its business is conducted, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect.
(d) AUDITS. OMNOVA will furnish to Buyer (or its assigns) from
time to time such information with respect to it and the Receivables as Buyer
(or its assigns) may reasonably request. OMNOVA will, from time to time during
regular business hours as requested by Buyer (or its assigns), upon reasonable
notice and at the sole cost of OMNOVA, permit Buyer (or its assigns) or their
respective agents or representatives, (i) to examine and make copies of and
abstracts from all Records in the possession or under the control of OMNOVA
relating to the Receivables and the Related Security, including, without
limitation, the related Contracts and Invoices, and (ii) to visit the offices
and properties of OMNOVA for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to OMNOVA's financial
condition or the Receivables and the Related Security or OMNOVA's performance
under any of the Transaction Documents or OMNOVA's performance under the
Contracts and Invoices and, in each case, with any of the officers or employees
of OMNOVA and its applicable subsidiaries having knowledge of such matters.
(e) KEEPING AND MARKING OF RECORDS AND BOOKS.
(i) OMNOVA will maintain and implement administrative
and operating procedures (including, without limitation, an ability to
recreate records evidencing Receivables 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 all Receivables (including, without limitation, records
adequate to permit the immediate identification of each new Receivable
and all Collections of and adjustments to each existing Receivable).
OMNOVA will give Buyer (or its assigns) notice of any material change
in the administrative and operating procedures referred to in the
previous sentence.
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(ii) OMNOVA will (A) on or prior to May 31, 2000,
xxxx its master data processing records and other books and records
relating to the Receivables with a legend, acceptable to Buyer (or its
assigns), stating that such Receivables have been sold and that Bank
One, NA, as Agent, is now the owner of undivided interests therein and
(B) upon the request of Buyer (or its assigns) following the occurrence
of a Termination Event and during the continuance thereof: (x) xxxx
each Invoice with a legend describing Buyer's ownership interests in
the Receivables and further describing the Purchaser Interests of the
Agent (on behalf of the Purchasers) and (y) deliver to Buyer (or its
assigns) all Invoices relating to the Receivables.
(f) COMPLIANCE WITH CONTRACTS, INVOICES AND CREDIT AND
COLLECTION POLICY. OMNOVA will timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it under the
Contracts and Invoices related to the Receivables, and (ii) comply in all
respects with the applicable Credit and Collection Policy in regard to each
Receivable and the related Contract and Invoice(s). OMNOVA will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of Buyer and its assigns.
(g) [RESERVED.]
(h) OWNERSHIP. OMNOVA will establish and maintain, irrevocably
in Buyer, legal and equitable title to the Receivables, the Related Security and
the Collections, free and clear of any Adverse Claims other than Adverse Claims
in favor of Buyer (and its assigns) (including, without limitation, the filing
of all financing statements or other similar instruments or documents necessary
under the Uniform Commercial Code (or any comparable law) of all appropriate
jurisdictions to perfect Buyer's interest in such Receivables, Related Security
and Collections and such other action to perfect, protect or more fully evidence
the interest of Buyer as Buyer (or its assigns) may reasonably request).
(i) PURCHASERS' RELIANCE. OMNOVA acknowledges that the Agent
and the Purchasers are entering into the transactions contemplated by the
Purchase Agreement in reliance upon Buyer's identity as a legal entity that is
separate from OMNOVA and any Affiliates thereof. Therefore, from and after the
date of execution and delivery of this Agreement, OMNOVA will take all
reasonable steps including, without limitation, all steps that Buyer or any
assignee of Buyer may from time to time reasonably request to maintain Buyer's
identity as a separate legal entity and to make it manifest to third parties
that Buyer is an entity with assets and liabilities distinct from those of
OMNOVA and any Affiliates thereof and not just a division of OMNOVA. Without
limiting the generality of the foregoing and in addition to the other covenants
set forth herein, OMNOVA (i) will not hold itself out to third parties as liable
for the debts of Buyer nor purport to own the Receivables and other assets
acquired by Buyer, (ii) will take all other actions necessary on its part to
ensure that Buyer is at all times in compliance with the covenants set forth in
SECTION 7.1(i) of the Purchase Agreement and (iii) will cause all tax
liabilities arising in connection with the transactions contemplated herein or
otherwise to be
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allocated between OMNOVA and Buyer on an arm's-length basis and in a manner
consistent with the procedures set forth in U.S. Treasury Regulations
Section Section 1.1502-33(d) and 1.1552-1.
(j) COLLECTIONS. OMNOVA will cause (i) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (ii) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the event
any payments relating to Receivables are remitted directly to OMNOVA or any
Affiliate of OMNOVA, OMNOVA will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof and, at all times prior
to such remittance, OMNOVA will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of Buyer and its assigns.
OMNOVA will transfer exclusive ownership, dominion and control of each Lock-Box
and Collection Account to Buyer and will not grant the right to take dominion
and control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to Buyer (or its assigns) as
contemplated by this Agreement and the Purchase Agreement.
(k) TAXES. OMNOVA shall file all tax returns and reports
required by law to be filed by it and shall promptly pay all taxes and
governmental charges at any time owing.
(l) INSURANCE. OMNOVA shall maintain in effect, or cause to be
maintained in effect, at OMNOVA's own expense, such casualty and liability
insurance as OMNOVA shall deem appropriate in its good faith business judgment.
Section 4.2 NEGATIVE COVENANTS OF OMNOVA. Until the date on which this
Agreement terminates in accordance with its terms, OMNOVA hereby covenants that:
(a) NAME CHANGE, OFFICES AND RECORDS. OMNOVA will not change
its name, identity or corporate structure (within the meaning of SECTION
9-402(7) of any applicable enactment of the UCC) or relocate its chief executive
office or any office where Records are kept unless it shall have: (i) given
Buyer (or its assigns) at least forty-five (45) days' prior written notice
thereof and (ii) delivered to Buyer (or its assigns) all financing statements,
instruments and other documents requested by Buyer (or its assigns) in
connection with such change or relocation.
(b) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. OMNOVA will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless Buyer (or its assigns) shall have received, at least
ten (10) days before the proposed effective date therefor, (i) written notice of
such addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
PROVIDED, HOWEVER, that OMNOVA may make changes in instructions to Obligors
regarding payments if
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such new instructions require such Obligor to make payments to another existing
Collection Account.
(c) MODIFICATIONS TO INVOICES AND CREDIT AND COLLECTION
POLICY. OMNOVA will not make any change to its Credit and Collection Policy that
could adversely affect the collectibility of the Receivables or decrease the
credit quality of any newly created Receivables. Except as otherwise permitted
in its capacity as Servicer pursuant to ARTICLE VIII of the Purchase Agreement,
OMNOVA will not extend, amend or otherwise modify the terms of any Receivable or
any Invoice related thereto other than in accordance with the Credit and
Collection Policy.
(d) SALES, LIENS. OMNOVA will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Invoice under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer provided
for herein), and OMNOVA will defend the right, title and interest of Buyer in,
to and under any of the foregoing property, against all claims of third parties
claiming through or under OMNOVA.
(e) ACCOUNTING FOR PURCHASES. OMNOVA will not, and will not
permit any Affiliate to, account for or treat (whether in financial statements
or otherwise) the transactions contemplated hereby in any manner other than the
sale of the Receivables and the Related Security by OMNOVA to Buyer or in any
other respect account for or treat the transactions contemplated hereby in any
manner other than as a sale of the Receivables and the Related Security by
OMNOVA to Buyer except to the extent that such transactions are not recognized
on account of consolidated financial reporting in accordance with generally
accepted accounting principles.
ARTICLE V.
TERMINATION EVENTS
Section 5.1 TERMINATION EVENTS. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) OMNOVA shall fail (i) to make any payment or deposit
required hereunder when due, or (ii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clause (i) of this paragraph
(a)) and such failure shall continue for five (5) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by OMNOVA in this Agreement, any other Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been incorrect
in any material respect when made or deemed made.
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(c) Failure of OMNOVA to pay when due any Indebtedness in
excess of (i) $5,000,000 with respect to any item of Indebtedness or (ii)
$10,000,000 in the aggregate with all other such Indebtedness; or the default by
OMNOVA in the performance of any term, provision or condition contained in any
agreement under which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of OMNOVA shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled payment)
prior to the date of maturity thereof.
(d) OMNOVA or any of its Subsidiaries shall generally not pay
its debts as such debts become due or shall admit in writing its inability to
pay its debts generally or shall make a general assignment for the benefit of
creditors.
(e) Any proceeding shall be instituted by or against OMNOVA or
any of its Subsidiaries seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property and, in the case
of such a proceeding instituted against OMNOVA or any of its Subsidiaries, such
proceedings shall not be dismissed for a period of sixty (60) consecutive days.
(f) OMNOVA or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth in clause (d) or (e) above.
(g) A Change of Control shall occur.
(h) One or more final judgments for the payment of money in
excess of $10,000,000 in the aggregate shall be entered against OMNOVA on claims
not covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect for
thirty (30) consecutive days without a stay of execution.
(i) The occurrence of any "Amortization Event" under the
Purchase Agreement which results in the occurrence of the Facility Termination
Date thereunder.
Section 5.2 REMEDIES. Upon the occurrence and during the continuation
of a Termination Event, Buyer may take any of the following actions: (a) declare
the Purchase Termination Date to have occurred, whereupon the Purchase
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by OMNOVA;
PROVIDED, HOWEVER, that upon the occurrence of Termination Event described in
SECTION 5.1(d), or of an actual or deemed entry of an order for relief with
respect to OMNOVA under the Federal Bankruptcy Code, the Purchase Termination
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by OMNOVA and (b) to the fullest
extent permitted by applicable law, declare
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that the Default Fee shall accrue with respect to any amounts then due and owing
by Buyer to OMNOVA. The aforementioned rights and remedies shall be in addition
to all other rights and remedies of Buyer and its assigns available under this
Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including, without limitation, all rights and remedies
provided under the UCC, all of which rights shall be cumulative.
ARTICLE VI.
INDEMNIFICATION
Section 6.1 INDEMNITIES BY OMNOVA. Without limiting any other rights
that Buyer may have hereunder or under applicable law, OMNOVA hereby agrees to
indemnify (and pay upon demand to) Buyer and its assigns, officers, directors,
agents and employees (each, an "INDEMNIFIED PARTY") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of Buyer) and disbursements (all of the foregoing being collectively
referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by Buyer of an interest in the Receivables, excluding,
however, in all of the foregoing instances:
(a) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the computation
of such taxes is consistent with the Intended Characterization;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of OMNOVA or limit the recourse of Buyer to OMNOVA for amounts
otherwise specifically provided to be paid by OMNOVA under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
OMNOVA shall indemnify Buyer for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible Receivables, regardless of
whether reimbursement therefor would constitute recourse to OMNOVA) relating to
or resulting from:
(i) any representation or warranty made by OMNOVA (or
any officers of OMNOVA) under or in connection with this Agreement, any
other Transaction Document or any other information or report delivered
by OMNOVA pursuant hereto or thereto, which shall have been false or
incorrect when made or deemed made;
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(ii) the failure by OMNOVA, to comply with any
applicable law, rule or regulation with respect to any Receivable or
any Contract or Invoice related thereto, or the nonconformity of any
Receivable or Invoice with any such applicable law, rule or regulation
or any failure of OMNOVA to keep or perform any of its obligations,
express or implied, with respect to any Contract or Invoice, including,
without limitation, any anti-assignment or confidentiality clause
contained therein;
(iii) any failure of OMNOVA to perform its duties,
covenants or other obligations in accordance with the provisions of any
applicable Contract or Invoice, this Agreement or any other Transaction
Document, including, without limitation, any breach by OMNOVA of any
prohibition on assignment or confidentiality agreement contained in any
such Contract or Invoice;
(iv) any products liability, personal injury or
damage suit, or other similar claim arising out of or in connection
with any merchandise, insurance or services that are the subject of any
Contract, Invoice or Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract or Invoice 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 such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at
any time with other funds;
(vii) any investigation, litigation or proceeding
related to or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the proceeds
of a Purchase, the ownership of the Receivables or any other
investigation, litigation or proceeding relating to OMNOVA in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(viii) any inability to litigate any claim against
any Obligor in respect of any Receivable as a result of such Obligor
being immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in SECTION
5.1(d);
(x) any failure of OMNOVA to acquire and maintain
legal and equitable title to, and ownership of any Receivable and the
Related Security and Collections with respect thereto, free and clear
of any Adverse Claim (other than as
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created hereunder) or any attempt by any Person to void such transfer
under statutory provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in
Buyer, or to transfer to Buyer, legal and equitable title to, and
ownership of, the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim;
(xii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or documents
under the Uniform Commercial Code of any applicable jurisdiction or
other applicable laws with respect to any Receivable, the Related
Security and Collections with respect thereto, and the proceeds of any
thereof, whether at the time of any Purchase or at any subsequent time;
(xiii) any action or omission by OMNOVA which reduces
or impairs the rights of Buyer with respect to any Receivable or the
value of any such Receivable; and
(xiv) any attempt by any Person to void any Purchase
hereunder under statutory provisions or common law or equitable action.
Section 6.2 OTHER COSTS AND EXPENSES. OMNOVA shall pay to Buyer on
demand all reasonable costs and out-of-pocket expenses in connection with the
preparation, execution, delivery and administration of this Agreement and the
transactions contemplated hereby and the other documents to be delivered
hereunder. OMNOVA shall pay to Buyer on demand any and all reasonable costs and
expenses of Buyer, if any, including reasonable counsel fees and expenses in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of this
Agreement or such documents, or the administration of this Agreement following a
Termination Event.
Section 6.3 ADDITIONAL INDEMNIFICATION OBLIGATIONS. Buyer will use its
best efforts to give prompt written notice of the institution of any third party
claim against Buyer of which Buyer has actual knowledge; provided, however, that
failure to promptly give any such notice shall not relieve OMNOVA from its
liability hereunder unless such failure or delay results in irreversible
prejudice to OMNOVA.
Section 6.4 DEFENSE OF CLAIMS. If any third party claim is made against
an Indemnified Party, (a) OMNOVA will be entitled to participate in the defense
thereof and, (b) if it so chooses, to assume the defense thereof with counsel
mutually acceptable to OMNOVA and the Indemnified Party, provided that in
connection with such assumption OMNOVA first admits in writing its liability to
indemnify the Indemnified Party with respect to all elements of such claim in
full. Should OMNOVA so elect to assume the defense of a third party claim:
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(i) OMNOVA will not be liable to the Indemnified
Party for any legal expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof,
(ii) the Indemnified Party will (A) cooperate in all
reasonable respects with OMNOVA in connection with such defense and (B) not
admit any liability with respect to, or settle, compromise or discharge, such
third party claim without OMNOVA's prior written consent, as the case may be,
(iii) upon request, OMNOVA will consult with the
Indemnified Party and its counsel and keep them apprised of material
developments in the case or proceeding, and
(iv) the Indemnified Party shall be entitled to
participate in (but not to control) such defense with its own counsel at its own
expense.
If OMNOVA does not assume the defense of any such third party claim, the
Indemnified Party shall diligently defend the same, or settle the same on
reasonable terms, after giving notice to OMNOVA of such terms and OMNOVA will
promptly reimburse the Indemnified Party upon written request. Anything
contained in this Agreement to the contrary notwithstanding, OMNOVA shall not be
entitled to assume the defense of any part of a third party claim that seeks an
order, injunction or other equitable relief that the Indemnified Party
determines, in good faith, is reasonably likely to affect its business other
than by the payout of money damages.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 WAIVERS AND AMENDMENTS.(a) No failure or delay on the part
of Buyer (or its assigns) in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any waiver of this Agreement shall be effective only
in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement or the Subordinated Note
may be amended, supplemented, modified or waived except in writing signed by
OMNOVA and Buyer and, to the extent required under the Purchase Agreement, the
Agent and the Financial Institutions or the Required Financial Institutions (as
defined therein).
Section 7.2 NOTICES. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including bank wire,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other parties hereto at their respective addresses or telecopy
numbers set forth on the signature pages hereof or at such other
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address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective if given by telecopy, upon the receipt thereof,
if given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or if given by any other
means, when received at the address specified in this SECTION 7.2.
Section 7.3 PROTECTION OF OWNERSHIP INTERESTS OF BUYER.(a) OMNOVA
agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that Buyer (or its assigns) may request, to perfect,
protect or more fully evidence the Purchases, or to enable Buyer (or its
assigns) to exercise and enforce their rights and remedies hereunder. At any
time after the occurrence and during the continuance of a Termination Event,
Buyer (or its assigns) may, at OMNOVA's sole cost and expense, direct OMNOVA to
notify the Obligors of Receivables of the ownership interests of Buyer under
this Agreement and may also direct that payments of all amounts due or that
become due under any or all Receivables be made directly to Buyer or its
designee.
(b) If OMNOVA fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or
cause performance of, such obligation, and Buyer's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by OMNOVA as provided
in SECTION 6.2. OMNOVA irrevocably authorizes Buyer (and its assigns) at any
time and from time to time in the sole discretion of Buyer (or its assigns), and
appoints Buyer (and its assigns) as its attorney-in-fact, to act on behalf of
OMNOVA (i) to execute on behalf of OMNOVA as debtor and to file financing
statements necessary or desirable in Buyer's (or its assigns') sole discretion
to perfect and to maintain the perfection and priority of the interest of Buyer
in the Receivables and (ii) to file a carbon, photographic or other reproduction
of this Agreement or any financing statement with respect to the Receivables as
a financing statement in such offices as Buyer (or its assigns) in their sole
discretion deem necessary or desirable to perfect and to maintain the perfection
and priority of Buyer's interests in the Receivables. This appointment is
coupled with an interest and is irrevocable.
Section 7.4 CONFIDENTIALITY.(a) OMNOVA shall maintain and shall cause
each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential proprietary information with respect to the
Agent and Falcon and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that OMNOVA and its officers and employees may
disclose such information to OMNOVA's external accountants and attorneys and as
required by any applicable law or order of any judicial or administrative
proceeding.
(b) Anything herein to the contrary notwithstanding, OMNOVA hereby
consents to the disclosure of any nonpublic information with respect to it (i)
to Buyer, the Agent, the Financial Institutions or Falcon by each other, (ii) by
Buyer, the Agent or the Purchasers to any prospective or actual assignee or
participant of any of them or (iii) by the
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Agent to any rating agency, Commercial Paper dealer or provider of a surety,
guaranty or credit or liquidity enhancement to Falcon or any entity organized
for the purpose of purchasing, or making loans secured by, financial assets for
which Bank One, NA acts as the administrative agent and to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing.
In addition, the Purchasers and the Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceedings (whether
or not having the force or effect of law).
Section 7.5 BANKRUPTCY PETITION. OMNOVA hereby covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all outstanding senior Indebtedness of Falcon or any Financial Institution
that is a special purpose bankruptcy remote entity, it will not institute
against, or join any other Person in instituting against, Falcon or any such
entity any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
Section 7.6 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF OHIO.
Section 7.7 CONSENT TO JURISDICTION. OMNOVA HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL, OHIO OR ILLINOIS
STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY OMNOVA PURSUANT TO
THIS AGREEMENT AND OMNOVA HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF BUYER (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST OMNOVA IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY OMNOVA AGAINST BUYER (OR ITS ASSIGNS)
OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY OMNOVA PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT
IN CHICAGO, ILLINOIS.
Section 7.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY OMNOVA
PURSUANT TO THIS
22
26
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.9 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.
(a) This Agreement, the Subordinated Note, the Subscription
Agreement and each Collection Account Agreement contain the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). 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 terminated in
accordance with its terms; PROVIDED, HOWEVER, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by OMNOVA
pursuant to ARTICLE II, (ii) the indemnification and payment provisions of
ARTICLE VI, and SECTION 7.5 shall be continuing and shall survive any
termination of this Agreement.
Section 7.10 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES. 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. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of 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. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
[SIGNATURE PAGES FOLLOW]
23
27
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
OMNOVA SOLUTIONS INC.
By:
-------------------------------------
Name:
Title:
Address: 000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. XxXxx
Fax: (000) 000-0000
Phone: (000) 000-0000
OMNOVA RECEIVABLES CORPORATION
By:
-------------------------------------
Name:
Title:
Address: 000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. XxXxx
Fax: (000) 000-0000
Phone: (000) 000-0000
S-1
28
EXHIBIT I
---------
DEFINITIONS
-----------
This is Exhibit I to the Agreement (as hereinafter defined).
As used in the Agreement and the Exhibits, Schedules and Annexes thereto,
capitalized terms have the meanings set forth in this Exhibit I (such meanings
to be equally applicable to the singular and plural forms thereof). If a
capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex
thereto, and not otherwise defined therein or in this Exhibit I, such term shall
have the meaning assigned thereto in Exhibit I to the Purchase Agreement.
"ACCOUNT" has the meaning specified in Section 9-106 of the
UCC.
"ADVERSE CLAIM" has the meaning provided in the Purchase
Agreement.
"AFFILIATE" has the meaning provided in the Purchase
Agreement.
"AGENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"AGREEMENT" means the Receivables Sale Agreement, dated as of
May 1, 2000, between OMNOVA and Buyer, as the same may be amended, restated or
otherwise modified.
"AUTHORIZED OFFICER" means, with respect to OMNOVA, its
President, its Treasurer or any of its Senior Vice Presidents, Vice Presidents
or Assistant Treasurers.
"BASE RATE" means a rate per annum equal to the corporate base
rate, prime rate or base rate of interest, as applicable, announced by the
Reference Bank from time to time, changing when and as such rate changes.
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York or Chicago, Illinois and The
Depository Trust Company of New York is open for business.
"BUYER" has the meaning set forth in the preamble to the
Agreement.
"CALCULATION PERIOD" means each calendar month or portion
thereof which elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the initial Purchase of Receivables
hereunder and the final Calculation Period shall terminate on the Purchase
Termination Date.
"CAPITAL" has the meaning provided in the Purchase Agreement.
"CHANGE OF CONTROL" means the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities
Exhibit I-1
29
and Exchange Commission under the Securities Exchange Act of 1934) of 25% or
more of the outstanding shares of voting stock of OMNOVA.
"COLLECTION ACCOUNT AGREEMENT" has the meaning provided in the
Purchase Agreement.
"COLLECTION BANK" has the meaning provided in the Purchase
Agreement.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections, recoveries and other cash proceeds in respect of such Receivable,
including, without limitation, all yield, Finance Charges or other related
amounts accruing in respect thereof and all cash proceeds of Related Security
with respect to such Receivable.
"CONTRACT" means, with respect to any Receivable, any and all
writings pursuant to which such Receivable arises other than an Invoice.
"CREDIT AND COLLECTION POLICY" means OMNOVA's credit and
collection policies and practices relating to Receivables and Invoices existing
on the date hereof and summarized in EXHIBIT V, as modified from time to time in
accordance with the Agreement.
"DEFAULT FEE" means a per annum rate of interest equal to the
sum of (i) the Base Rate, PLUS (ii) 2% per annum.
"DISCOUNT FACTOR" means a percentage calculated to provide
Buyer with a reasonable return on its investment in the Receivables after taking
account of (i) the time value of money based upon the anticipated dates of
collection of the Receivables and the cost to Buyer of financing its investment
in the Receivables during such period and (ii) the risk of nonpayment by the
Obligors. OMNOVA and Buyer may agree from time to time to change the Discount
Factor based on changes in one or more of the items affecting the calculation
thereof, PROVIDED that any change to the Discount Factor shall take effect as of
the commencement of a Calculation Period, shall apply only prospectively and
shall not affect the Purchase Price payment in respect of Purchases which
occurred during any Calculation Period ending prior to the Calculation Period
during which OMNOVA and Buyer agree to make such change.
"ELIGIBLE RECEIVABLES" has the meaning provided in the
Purchase Agreement.
"FACILITY TERMINATION DATE" has the meaning provided in the
Purchase Agreement.
"FALCON" has the meaning set forth in the Preliminary
Statements to the Agreement.
"FEDERAL BANKRUPTCY CODE" means Title 11 of the United States
Code entitled "Bankruptcy", as amended and any successor statute thereto.
"FINANCE CHARGES" has the meaning provided in the Purchase
Agreement.
Exhibit I-2
30
"FINANCIAL INSTITUTIONS" has the meaning set forth in the
Preliminary Statements to the Agreement.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION
6.1.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 6.1.
"INTENDED CHARACTERIZATION" means, for income tax purposes,
the characterization of the acquisition by the Purchasers of "Purchaser
Interests" under the Purchase Agreement as a loan or loans by the Purchasers to
Buyer secured by the Receivables, the Related Security and the Collections.
"INVOICE" means, with respect to any Receivable, any invoice,
xxxx or statement of account evidencing the amount owed by the applicable
Obligor to the Originator (without giving effect to the transfer of such
Receivable pursuant hereto).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition or operations of OMNOVA and its Subsidiaries, (ii)
the ability of OMNOVA to perform its obligations under the Agreement or any
other Transaction Document, (iii) the legality, validity or enforceability of
the Agreement or any other Transaction Document, (iv) OMNOVA's, Buyer's, the
Agent's or any Purchaser's interest in the Receivables generally or in any
significant portion of the Receivables, the Related Security or Collections with
respect thereto, or (v) the collectibility of the Receivables generally or of
any material portion of the Receivables.
"NET RECEIVABLES BALANCE" has the meaning provided in the
Purchase Agreement.
"NET WORTH" means as of the last Business Day of each
Calculation Period preceding any date of determination, the excess, if any, of
(a) the aggregate Outstanding Balance of the Receivables at such time, OVER (b)
the sum of (i) the aggregate Capital outstanding at such time, PLUS (ii) the
aggregate outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"OMNOVA" has the meaning set forth in the preamble to the
Agreement.
"ORIGINAL BALANCE" means, with respect to any Receivable, the
Outstanding Balance of such Receivable on the date it was purchased by Buyer.
"ORIGINATOR" means OMNOVA Solutions Inc., an Ohio corporation.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof.
"PAYMENT INTANGIBLE" means a "general intangible for money due
or to become due" as such phrase is used in Section 9-318(4) of the UCC.
Exhibit I-3
31
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"POTENTIAL TERMINATION EVENT" means an event which, with the
passage of time or the giving of notice, or both, would constitute a Termination
Event.
"PURCHASE" means the purchase under the Agreement by Buyer
from OMNOVA of the Receivables, the Related Security and the Collections related
thereto, together with all related rights in connection therewith.
"PURCHASE AGREEMENT" has the meaning set forth in the
Preliminary Statements to the Agreement.
"PURCHASE PRICE" means, with respect to any Purchase on any
date, the aggregate price to be paid by Buyer to OMNOVA for such Purchase in
accordance with SECTION 1.2 of the Agreement for the Receivables, Collections
and Related Security being sold to Buyer on such date, which price shall equal
(i) the product of (x) the Original Balance of such Receivables, MULTIPLIED BY
(y) one minus the Discount Factor then in effect, minus (ii) any Purchase Price
Credits to be credited against the Purchase Price otherwise payable in
accordance with SECTION 1.3 of the Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in SECTION
1.3 of the Agreement.
"PURCHASE TERMINATION DATE" means the earliest to occur of (i)
the Facility Termination Date, (ii) the Business Day immediately prior to the
occurrence of a Termination Event set forth in SECTION 5.1(d), (iii) the
Business Day specified in a written notice from Buyer to OMNOVA following the
occurrence of any other Termination Event, and (iv) the date which is 30 days
after receipt of written notice from OMNOVA or Buyer that it wishes to terminate
the facility evidenced by this Agreement
"PURCHASER" means Falcon or a Financial Institution, as
applicable.
"RECEIVABLE" means all existing and hereafter arising Accounts
and Payment Intangibles of Originator (without giving effect to any transfer or
conveyance hereunder), including, without limitation, the obligation to pay any
Finance Charges with respect thereto. Each Account or Payment Intangible
evidenced by a separate Invoice will constitute a Receivable separate from a
Receivable evidenced by a separate Invoice, regardless of whether such accounts
arose under a common Contract; PROVIDED, HOWEVER, that any indebtedness, rights
or obligations referred to in the immediately preceding sentence shall be a
Receivable regardless of whether the Obligor or the Originator treats such
indebtedness, rights or obligations as a separate payment obligation.
Exhibit I-4
32
"RECEIVABLE" means all indebtedness and other obligations owed
to Originator (at the time it arises, and before giving effect to any transfer
or conveyance hereunder) or in which Originator has a security interest or other
interest, including, without limitation, any indebtedness, obligation or
interest constituting an account, chattel paper, instrument or general
intangible, arising in connection with the sale of goods or the rendering of
services by Originator, and further includes, without limitation, the obligation
to pay any Finance Charges with respect thereto. Indebtedness and other rights
and obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction; provided further, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the account debtor or Originator treats such indebtedness,
rights or obligations as a separate payment obligation.
"RECORDS" means, with respect to any Receivable, all Invoices
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"REFERENCE BANK" means Bank One, Michigan or such other bank
as the Agent shall designate with the consent of Buyer.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of Originator's interest in the inventory and
goods (including returned or repossessed inventory or goods), if any,
the sale, financing or lease of which by Originator gave rise to such
Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and
property subject thereto from time to time, if any, purporting to
secure payment of such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise, together with all financing
statements and security agreements describing any collateral securing
such Receivable,
(iii) all guaranties, letters of credit, insurance
and other agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and
agreements associated with such Receivable,
(v) all Invoices and other Records related to such
Receivable, and
Exhibit I-5
33
(vi) all proceeds of any of the foregoing.
"REQUIRED CAPITAL AMOUNT" means, as of any date of
determination, an amount equal to the greater of: (a) 5% of the "Purchase Limit"
(under and as defined in the Purchase Agreement), or (b) $3,750,000.
"SERVICER" has the meaning provided in the Purchase Agreement.
"SETTLEMENT DATE" means the third (3rd) Business Day following
the thirteenth (13th) day of each month (or, if the thirteenth (13th) day of a
month is not a Business Day, the third (3rd) Business Day following the Business
Day next succeeding the thirteenth (13th) day of such month.)
"SUBORDINATED LOAN" has the meaning set forth in SECTION
1.2(A) of the Agreement.
"SUBORDINATED NOTE" means a promissory note in substantially
the form of EXHIBIT VII hereto as more fully described in SECTION 1.2 of the
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"SUBSCRIPTION AGREEMENT" means that certain Stockholder and
Subscription Agreement, dated as of September 28, 1999, between OMNOVA and
Buyer, substantially in the form of EXHIBIT VI hereto.
"SUBSIDIARY" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, limited liability company,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.
"TERMINATION EVENT" has the meaning set forth in SECTION 5.1
of the Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
each Collection Account Agreement, the Subordinated Note, the Subscription
Agreement and all other instruments, documents and agreements executed and
delivered in connection herewith.
"UCC" means the Uniform Commercial Code, as in effect from
time to time in the State of Ohio.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of Ohio, and not specifically defined
herein, are used herein as defined in such Article 9.
Exhibit I-6
34
EXHIBIT II
CHIEF EXECUTIVE OFFICE; PRINCIPAL PLACE(S) OF BUSINESS; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S); OTHER NAMES
CHIEF EXECUTIVE OFFICE:
[to be provided]
PLACES OF BUSINESS:
[to be provided]
LOCATIONS OF RECORDS:
[to be provided]
FEDERAL EMPLOYER IDENTIFICATION NUMBER: [to be provided]
OTHER CORPORATE NAMES (EXCLUSIVE OF TRADE AND ASSUMED NAMES): [to be provided]
Exhibit II-1
35
EXHIBIT III
-----------
LOCK-BOXES; COLLECTION ACCOUNTS; COLLECTION BANKS
-------------------------------------------------
LOCKBOX INFORMATION:
----------------------------------------------------------------------------------------------
POST OFFICE BOX ADDRESS CORRESPONDING ACCOUNT NUMBER
----------------------------------------------------------------------------------------------
Mellon Bank #006-5218
X.X. Xxx 0000-X0000
Xxxxxxxxxxxx, XX 00000-0000
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Mellon Bank #006-5218
Dept. LA 21008
Xxxxxxxx, XX 00000-0000
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Mellon Bank #006-5218
Department AT 40028
Xxxxxxx, XX 00000-0000
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Mellon Bank #006-5218
X.X. Xxx 000000X
Xxxxxxxxxx, XX 00000
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Bank One #1564316-2-10
X.X. Xxx 0000
Xxxxxxx X
Xxxxxxx, Xxxxxxx, XXXXXX
X0X 0X0
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
National City Bank #2243348
X.X. Xxx 000000
Xxxxxxxxx, XX 00000-0000
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Exhibit III-1
36
COLLECTION ACCOUNTS:
------------------------------------------------
ADDITIONAL ACCOUNTS
------------------------------------------------
------------------------------------------------
#362776654 (Bank One)
------------------------------------------------
------------------------------------------------
#2243348 (National City Bank)
------------------------------------------------
COLLECTION BANKS:
Mellon Bank, NA
National City Bank
Bank One
Exhibit I-3
37
EXHIBIT IV
----------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
This Compliance Certificate is furnished pursuant to that
certain Receivables Sale Agreement dated as of May 1, 2000, between OMNOVA
Solutions Inc. ("OMNOVA") and OMNOVA Receivables Corporation (the "AGREEMENT").
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of OMNOVA.
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of OMNOVA and its Subsidiaries during the accounting
period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes a Termination Event or a Potential Termination Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Compliance Certificate, except as set forth below.
4. Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which OMNOVA has taken, is taking, or
proposes to take with respect to each such condition or event:
-------------------------------------------
-------------------------------------------
-------------------------------------------
5. Attached as EXHIBIT A hereto is a true and correct copy of
the most recent compliance certificate required to be delivered by OMNOVA under
the terms of that certain Credit Agreement, dated as of September 30, 1999, by
and among OMNOVA, Bank of America, as agent, and certain other parties, as
amended, restated and/or otherwise modified from time to time in accordance with
the terms thereof.
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Compliance Certificate in support hereof, are made and delivered as of [insert
date].
------------------------------
[Name]
Exhibit IV-1
38
EXHIBIT V
CREDIT AND COLLECTION POLICY OF ORIGINATOR
[to be attached]
Exhibit V-1
39
EXHIBIT VI
----------
FORM OF SUBSCRIPTION AGREEMENT
------------------------------
OMNOVA RECEIVABLES CORPORATION
INVESTOR'S REPRESENTATIONS
AND
SUBSCRIPTION AGREEMENT
----------------------
(OMNOVA SOLUTIONS INC.)
OMNOVA Solutions Inc. (the "Investor") certifies and warrants
to OMNOVA Receivables Corporation, an Ohio corporation (the "Corporation"), that
common shares, without par value (the "Common Shares") and the voting preferred
shares, One Hundred Dollar ($100.00) par value per share (the "Preferred
Shares") of the Corporation (collectively the "Shares") to be purchased by the
Investor are being acquired by the Investor for the Investor's own account for
investment. The Investor has no intention to assign, transfer, sell or
distribute all or any part of the Shares, nor does the Investor have any reason
to anticipate any change in circumstances that might cause the Investor to
assign, transfer, sell or distribute the Shares. No person other than the
Investor will have any beneficial interest in the Shares.
The undersigned further hereby warrants and represents as
follows:
1. The Investor understands that the offering and sale of the
Shares have not been registered with any state or federal agency, partially in
reliance upon the representations herein. The Investor acknowledges that the
Shares purchased hereunder were issued in a transaction believed to be exempt
from the registration provisions of the Securities Act of 1933, as amended ("the
Act") pursuant to Section 4(2) thereof and in a transaction believed to be
exempt from the registration provisions of the appropriate state securities law.
2. The Investor recognizes that, prior to the offering and
sale of the Shares, there has been no public market for the Shares and there is
no likelihood that after the offering there will be such a market for the
Shares. The Investor further recognizes that the Investor must bear the risk of
the investment in the Shares indefinitely.
3. The Investor will not sell or otherwise distribute the
Shares unless such transaction is registered under the Act and under the
securities laws of the states in which the Shares are to be sold, or unless the
Investor delivers to the Corporation (a) a no action letter from the Securities
and Exchange Commission and the appropriate state securities officials as to
such proposed sale or sales or (b) an opinion of counsel, satisfactory to
counsel for the Corporation, to the effect that registration of the proposed
sale and distribution is not required under the Act and
Exhibit V1-1
40
such state laws. In addition, the Investor understands that the Investor will
not be readily able to liquidate the investment in the Shares in case of an
emergency.
4. The Investor understands and agrees that the following
legend will be placed on the certificates evidencing the Shares:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or any state securities
laws. These securities may not be offered, sold or transferred, except in
compliance with applicable federal and state securities laws and the rules and
regulations adopted pursuant thereto."
5. The Investor understands and acknowledges that the
Corporation is and will be under no obligation to register any sale or other
transfer of the Shares or to comply with any exemption available for resale of
the Shares without registration under any securities laws.
6. The Investor acknowledges that the Shares were not offered
or sold to the Investor by means of any form of general solicitation, or general
advertising, or publicly disseminated advertisements or sales literature, nor is
the Investor aware of any offers or sales made to other persons by such means.
7. The Investor acknowledges that a commission or similar
remuneration was not or will not be paid or given, directly or indirectly, for
the solicitation of prospective purchasers in connection with the sale of the
Shares.
8. The Investor has had the opportunity (a) to ask questions
of, and to receive answers from, the Corporation and any persons acting on its
behalf concerning the Corporation, its operations, and the terms, conditions and
consequences of the offering and sale of the Shares and (b) to obtain any
additional information that the Investor desired, including copies of any
documents requested about the Corporation or the transaction in which the Shares
are being offered and sold. No information or documents requested by the
Investor have been denied to the Investor.
9. The Investor understands that no governmental agency has
made any finding or determination as to the fairness of the terms of the
offering or sale of the Shares or any recommendation or endorsement of such
Shares.
10. The purchase of the Shares by Investor (a) is legally
permitted by all laws and regulations to which Investor is subject and (b) has
been authorized by all necessary corporate action on the part of the Investor.
Exhibit V1-2
41
Based on the foregoing representations (by which the Investor
agrees to be bound), the Investor hereby subscribes to purchase Shares in the
amount designated below.
COMMON SHARES:
Amount Subscribed: $3,750,000 Number of Shares:- 100 -
------------------ -------
PREFERRED SHARES:
Amount Subscribed: $400 Number of Shares:- 4 -
---------- -----
Signed as of _____________, 2000
OMNOVA SOLUTIONS INC.
By: __________________________
Officer's Signature
Officer's Name and Title:
Exhibit V1-3
42
ANNEX A TO SUBSCRIPTION AGREEMENT
---------------------------------
[ARTICLES OF INCORPORATION]
ARTICLES OF INCORPORATION
OF
OMNOVA RECEIVABLES CORPORATION
The undersigned, desiring to form a corporation for profit
under the General Corporation Law of Ohio, does hereby certify:
FIRST: The name of the corporation is OMNOVA Receivables
Corporation (the "Corporation").
SECOND: The place in Ohio where the principal office of the
Corporation is to be located is Fairlawn, Summit County, Ohio.
THIRD: The purposes for which the Corporation is formed are
solely:
(a) to enter into, perform and comply with a certain
receivables sale agreement (the "Receivables Sale Agreement") with OMNOVA
Solutions Inc., an Ohio corporation (the "Transferor"), pursuant to which
agreement the Corporation may purchase from the Transferor certain accounts
receivable and related property (collectively, the "Receivables");
(b) to own, hold and service (or arrange for an agent to
service) the Receivables;
(c) subject to the restrictions set forth in Article Fifth of
these Articles of Incorporation, to fund the Corporation's purchases of the
Receivables by selling interests in the Receivables to, or borrowing from, one
or more trusts, banks, financial institutions, commercial paper issuers,
insurance companies or similar entities and, in connection with any such
financing arrangements, to pledge as security, all or substantially all of its
assets, including, without limitation, all of its right, title and interest to
and in the Receivables;
(d) subject to the restrictions set forth in Article Fifth of
these Articles of Incorporation, to invest the proceeds derived from the sale or
ownership of the Receivables as determined by the Corporation's Board of
Directors;
(e) to execute, deliver and perform agreements evidencing,
necessitated by, or in connection with, any and all of the foregoing or any and
all of the activities and powers referred to in clause (f) below; and
(f) to engage in any lawful act or activity and to exercise
any powers permitted to a corporation organized under the General Corporation
Law of Ohio that are incidental to the foregoing or necessary or convenient to
accomplish the foregoing.
Exhibit V1-4
43
FOURTH: The number of shares which the Corporation is
authorized to have outstanding is eight hundred fifty (850), of which: (i) eight
hundred forty (840) are classified common shares, without par value (the "Common
Shares"); and (ii) ten (10) are classified voting preferred shares, One Hundred
Dollar ($100.00) par value per share (the "Preferred Shares").
(A) COMMON SHARES. The holders of the Common Shares shall be
entitled to rights, preferences, powers and privileges as follows.
(1) VOTING RIGHTS. The holders of the Common Shares shall be
entitled to one vote per Common Share on each matter submitted to a vote of the
shareholders. Unless a greater vote is specifically required by a provision of
the General Corporation Law of Ohio which cannot be varied by a provision in
these Articles of Incorporation, any action or proposal requiring the vote,
approval, consent, waiver or release of the holders of the Common Shares shall
require the vote, approval, consent, waiver or release of one or more persons
entitled to exercise a majority of the voting power of the issued and
outstanding Common Shares.
(2) DIVIDENDS. Dividends may be paid on the Common Shares out
of any assets legally available for the payment of dividends on Common Shares,
but only when and as declared by the Board of Directors of the Corporation.
(3) LIQUIDATION. Upon any liquidation, dissolution or winding
up of the Corporation, either voluntarily or involuntarily, after payment or
provision for payment of the debts and other liabilities of the Corporation,
including the payment of all fees, taxes and other expenses incidental thereto,
and after payment or provision for payment to the holders of the Preferred
Shares the full preferential amounts to which such holders are entitled, the
holders of the Common Shares shall be entitled to share pro rata in the
distribution of the remaining assets of the Corporation.
(B) PREFERRED SHARES. The holders of the Preferred Shares
shall be entitled to rights, preferences, powers and privileges as follows.
(1) VOTING RIGHTS. The holders of the Preferred Shares shall
be entitled to vote only upon the following issues: (a) any amendment to, repeal
of, restatement of, or other modification of, the Articles of Incorporation of
the Corporation; (b) any amendment to, repeal of, restatement of, or other
modification of, the Regulations of the Corporation; (c) any proposed merger of
the Corporation and any other corporation or other entity; (d) the dissolution
of the Corporation; or (e) any other matter in which the General Corporation law
of Ohio expressly requires a class vote by the holders of shares (voting or
non-voting). In each such case, (i) the holders of the Preferred Shares shall be
entitled to one vote per Preferred Share on each such matter submitted to a vote
of the holders of Preferred Shares, and (ii) the action shall not be deemed to
have been approved by the shareholders of the Corporation unless such action is
approved by the holders of the Common Shares and by the unanimous vote of the
holders of Preferred Shares. The holders of the Preferred Shares shall be
entitled to one vote per Preferred Share on each matter submitted to a vote of
the holders of Preferred Shares. Except as provided above in this paragraph
(B)(1), holders of Preferred Shares shall have no voting rights.
Exhibit V1-5
44
(2) DIVIDENDS. Dividends may be paid on the Preferred Shares
out of any assets legally available for the payment of dividends, but only when
and as declared by the Board of Directors of the Corporation.
(3) LIQUIDATION PREFERENCE. Upon any dissolution, liquidation
or winding up of the Corporation, either voluntarily or involuntarily, after
payment or provision for payment of the debts and other liabilities of the
Corporation, including the payment of all fees, taxes and other expenses
incidental thereto, the holders of the Preferred Shares shall be entitled,
before any distribution is made upon any Common Shares, to be paid an amount
equal to One Hundred Dollars ($100.00) per Preferred Share, together with an
amount equal to all declared and unpaid dividends (if any) thereon. In the event
that the assets of the Corporation remaining after such payment or provision for
payment of the debts and other liabilities of the Corporation are insufficient
to permit such payment in full to the holders of the Preferred Shares, such
holders shall be entitled to share pro rata in the distribution of such
remaining assets of the Corporation. Written notice of such liquidation,
dissolution or winding up, stating a payment date and the amount of the
liquidation payment, shall be given by mail, postage prepaid, not less than
thirty (30) days prior to the date stated therein, to the holders of record of
the Preferred Shares, such notice to be addressed to each such holder at the
address that appears on the books of the Corporation. After the payment of the
liquidation preference shall have been made in full to the holders of the
Preferred Shares, the holders of the Preferred Shares shall be entitled to no
further participation in the distribution of the assets of the Corporation and
the remaining assets available for distribution shall be distributed among the
holders of Common Shares.
(4) NO CONVERSION RIGHTS. No holder of the Preferred Shares
shall have any right to convert Preferred Shares into Common Shares or any other
security of the Corporation.
(5) NO MANDATORY REDEMPTION. The Corporation shall not be
required to redeem any Preferred Shares and the holders of Preferred Shares
shall not have the right to demand payment for the Preferred Shares by tendering
the Preferred Shares to the Corporation.
FIFTH: Notwithstanding any other provision of these Articles
of Incorporation and any provision of law that otherwise so empowers the
Corporation, the Corporation shall not, without the unanimous vote of the entire
Board of Directors, including the Independent Director (as defined in Article
Sixth of these Articles of Incorporation), do any of the following:
(i) engage in any business or activity other than as set forth
in Article Third of these Articles of Incorporation;
(ii) create or incur any indebtedness, or assume or guaranty
any indebtedness of any other entity, other than (A) indebtedness arising from
the salaries, fees and expenses to its professional advisors and counsel,
directors, officers and employees, (B) other indebtedness on account of
incidentals or services supplied or furnished to the Corporation, and (C) in the
ordinary course of the Corporation's business as set forth in Article Third of
these Articles of Incorporation;
Exhibit V1-6
45
(iii) dissolve or liquidate, in whole or in part, consolidate
or merge with or into any other entity or convey or transfer its properties and
assets substantially as an entirety to any entity other than in the ordinary
course of the Corporation's business as set forth in Article Third of these
Articles of Incorporation;
(iv) institute or participate in proceedings to be adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it or file a petition seeking, or consent to,
reorganization, liquidation or relief under any applicable federal or state law
relating to bankruptcy, insolvency, reorganization or dissolution, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Corporation or a substantial part of its
property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or take
corporate action in furtherance of any such action;
(v) delete, amend, supplement, restate or otherwise modify any
provision of these Articles of Incorporation;
(vi) amend, supplement, restate or otherwise modify any part
of the Regulations of the Corporation relating to the Independent Director; or
(vii) increase or reclassify the shares of the Corporation or
issue any additional shares of the Corporation.
Notwithstanding any other provision of these Articles of
Incorporation or any provision of law that otherwise so empowers the
Corporation, the Corporation shall not take any corporate action in connection
with (a) any merger of the Corporation into, or consolidation or amalgamation of
the Corporation with, any other person or entity or (b) any merger of any other
person or entity into the Corporation unless all the following conditions are
satisfied:
(1) the Corporation formed by such consolidation, amalgamation
or merger (i) shall be a corporation organized and existing under the laws of
the United States of America, any state thereof or the District of Columbia,
(ii) shall have articles of incorporation or a certificate of incorporation
containing provisions substantially similar to the provisions of Article Third
of these Articles of Incorporation, and (iii) shall expressly assume the due and
punctual payment and performance of all obligations of the Corporation in
connection with all indebtedness of the Corporation;
(2) immediately after giving effect to such transaction, no
default or event of default shall have occurred and be continuing under any
agreement to which the Corporation is a party; and
(3) such action shall be authorized by (i) the unanimous vote
of the shareholders of the Corporation entitled to vote thereon, including the
holders of Preferred Shares and (ii) the unanimous vote of the entire Board of
Directors, including the Independent Director.
Exhibit V1-7
46
SIXTH: The Board of Directors of the Corporation shall include
at least one (1) Independent Director. To the fullest extent permitted by
applicable law, including the General Corporation Law of Ohio as in effect from
time to time, the Independent Director's fiduciary duties with respect to any
decision on any matter referred to in Article Fifth of these Articles of
Incorporation shall be to the Corporation (including its creditors) rather than
solely to the Corporation's shareholders. In furtherance of the foregoing, when
voting on matters subject to the vote of the Board of Directors, including those
matters specified in Article Fifth of these Articles of Incorporation,
notwithstanding that the Corporation is not then insolvent, the Independent
Director shall take into account the interests of the creditors of the
Corporation as well as the interests of the Corporation.
For purposes of this Article Sixth, the following terms shall
have the meanings set forth below:
(i) An "Independent Director" shall be an individual who: (A)
is not and has not been an officer, employee or affiliate of the Corporation,
Transferor, or any of their respective subsidiaries or affiliates within the
five years immediately prior to such individual's appointment as an Independent
Director, provided that such individual is currently not the recipient of
compensation or other remuneration from Transferor or any of its subsidiaries or
affiliates, including without limitation a pension or other retirement benefits,
in an amount exceeding five percent (5%) of the gross revenues of such
individual during the last calendar year; (B) is not (and is not affiliated with
a company or a firm that is) a significant advisor or consultant to Transferor
or any of its subsidiaries or affiliates within the five years immediately prior
to such individual's appointment as an Independent Director; (C) is not
affiliated with a significant supplier of Transferor or any of its subsidiaries
or affiliates within the five years immediately prior to such individual's
appointment as an Independent Director; (D) is not affiliated with a company of
which Transferor or any of its subsidiaries and affiliates is a significant
customer or supplier within the five years immediately prior to such
individual's appointment as an Independent Director; (E) does not have
significant personal services contract(s) with Transferor or any of its
subsidiaries or affiliates within the five years immediately prior to such
individual's appointment as an Independent Director; (F) is not affiliated with
a tax-exempt entity that receives significant contributions from Transferor or
any of its subsidiaries or affiliates within the five years immediately prior to
such individual's appointment as an Independent Director; (G) is not and has not
been at any time within the five years immediately prior to such individual's
appointment as an Independent Director, or at any time thereafter while serving
as an Independent Director, the beneficial owner of shares of any class, of the
Corporation or the Originator (as defined in Receivables Sale Agreement) or any
of their respective affiliates having general voting rights; (H) is not a
spouse, parent, sibling or child of any person described by (A) through (G); (I)
is not an officer, director or employee of, or a spouse, parent, sibling or
child of an officer, director or employee of a major creditor of Transferor, or
any of its subsidiaries or affiliates within the five years prior to such
appointment as an Independent Director; and (J) has not served as a trustee in
bankruptcy for Transferor or any of its affiliates or subsidiaries.
Exhibit V1-8
47
(ii) An "affiliate" of a person, or a person "affiliated
with," a specified person, shall mean a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the specified person.
(iii) The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") shall mean the possession,
direct or indirect, of the power (A) to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise, or (B) to vote five percent (5%) or more
of the securities having ordinary voting power for the election of directors.
(iv) The term "person" shall mean any individual, partnership,
firm, corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person pursuant to
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(v) A "subsidiary" of Transferor shall mean any corporation a
majority of the voting stock of which is owned, directly or indirectly, through
one or more other subsidiaries, by Transferor.
(vi) A person shall be deemed to be, or to be affiliated with,
a company or firm that is a "significant advisor or consultant to Transferor or
any of its subsidiaries or affiliates" if such person received or would receive
fees or similar compensation from Transferor or any of its subsidiaries or
affiliates in excess of the lesser of (A) three percent (3%) of the consolidated
gross revenues which Transferor and its subsidiaries received for the sale of
their products and services during the last fiscal year of Transferor, (B) five
percent (5%) of the gross revenues of the person during the last calendar year,
if such person is a self-employed individual, and (C) five percent (5%) of the
consolidated gross revenues received by such company or firm for the sale of its
products and services during its last fiscal year, if the person is a company or
firm; PROVIDED, HOWEVER, that director's fees and expense reimbursements shall
not be included in the gross revenues of an individual for purposes of this
determination.
(vii) A "significant customer of Transferor or any of its
subsidiaries or affiliates" shall mean a customer from which Transferor and any
of its subsidiaries or affiliates collectively in the last fiscal year of
Transferor received payments in consideration for the products and services of
Transferor and its subsidiaries and affiliates which are in excess of three
percent (3%) of the consolidated gross revenues of Transferor and its
subsidiaries during such fiscal year.
(viii) A "significant supplier of Transferor or any of its
subsidiaries or affiliates" shall mean a supplier to which Transferor and any of
its subsidiaries or affiliates collectively in the last fiscal year of
Transferor made payments in consideration for the supplier's products and
services in excess of three percent (3%) of the consolidated gross revenues of
Transferor and its subsidiaries during such fiscal year.
(ix) Transferor or any of its subsidiaries and affiliates
shall be deemed a "significant customer" of a company if Transferor and any of
its subsidiaries and affiliates
Exhibit V1-9
48
collectively were the direct source during such company's last fiscal year of in
excess of five percent (5%) of the gross revenues which such company received
from the sale of its products and services during such fiscal year.
(x) Transferor or any of its subsidiaries and affiliates shall
be deemed a "significant supplier" of a company if Transferor and any of its
subsidiaries or affiliates collectively received in such company's fiscal year
payments from such company in excess of five percent (5%) of the gross revenues
which such company received during such fiscal year for the sale of its products
and services.
(xi) A person shall be deemed to have "significant personal
services contract(s) with Transferor or any of its subsidiaries or affiliates"
if the fees and other compensation received by the person pursuant to personal
services contract(s) with Transferor and any of its subsidiaries or affiliates
exceeded or would exceed five percent (5%) of such person's gross revenues
during the last calendar year.
(xii) A tax-exempt entity shall be deemed to receive
"significant contributions from Transferor or any of its subsidiaries or
affiliates" if such tax-exempt entity received during its last fiscal year, or
expects to receive during its current fiscal year, contributions from Transferor
or its subsidiaries or affiliates in excess of the lesser of (A) three percent
(3%) of the consolidated gross revenues of Transferor and its subsidiaries
during such fiscal year and (B) five percent (5%) of the contributions received
by the tax-exempt entity during such fiscal year.
(xiii) A person shall be deemed to be a "major creditor of
Transferor or any of its subsidiaries or affiliates" if it is a financial
institution to which Transferor, or such subsidiary or such affiliate, owes
outstanding indebtedness for borrowed money in a sum sufficiently large as would
reasonably be expected to influence the judgment of such person adversely to the
interests of the Corporation when its interests are adverse to Transferor or any
of its subsidiaries or its affiliates.
SEVENTH: The Corporation shall not, without the prior written
consent of the Independent Director, amend, alter, change, restate, repeal or
otherwise modify any Article of these Articles of Incorporation. Subject to this
Article Seventh, the Corporation reserves the right to amend, alter, change or
repeal any provisions contained in these Articles of Incorporation in the manner
now or hereafter prescribed by law, and all the provisions of these Articles of
Incorporation and all rights and powers conferred in these Articles of
Incorporation on shareholders, directors and officers are subject to this
reserved power.
EIGHTH: The Corporation shall at all times:
(a) clearly identify the Corporation's offices (by signage or
otherwise) and to the extent any of the Corporation's offices are located in the
offices of Transferor or any affiliate of Transferor, pay fair market rent for
its office space located in the offices of Transferor or any affiliate of
Transferor and a fair share of any overhead costs;
Exhibit V1-10
49
(b) maintain the Corporation's books, financial statements,
accounting records and other corporate documents and records separate from those
of Transferor or any other entity;
(c) except as otherwise contemplated by the transactions
permitted by Article Third of these Articles of Incorporation, maintain the
funds and other assets of the Corporation separate from, and not commingled
with, those of Transferor or any other entity and only maintain bank accounts or
other depository accounts to which the Corporation alone is the account party,
into which the Corporation alone make deposits and from which the Corporation
alone (or its assign) has the power to make withdrawals;
(d) maintain the Corporation's books of account and payroll
(if any) separate from those of Transferor or any affiliate of Transferor;
(e) separately manage the Corporation's liabilities from those
of Transferor or any affiliates of Transferor and pay its own liabilities,
including all administrative expenses, from its own separate assets, and to the
extent any expenses are shared with Transferor, allocate such shared expenses
(including without limitation telephone, utility and all other overhead
expenses) on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to
actual use and, the Corporation shall reimburse Transferor for its allocable
portion of shared expenses paid by Transferor;
(f) pay from the Corporation's assets all obligations and
indebtedness of any kind incurred by the Corporation;
(g) act solely in its corporate name and through its own
authorized officers and agents and, require that all full-time employees of the
Corporation, if any, identify themselves as such and not as employees of
Transferor, including, without limitation, by means of providing such employees
with business or identification cards which identify such employees as the
Corporation's employees;
(h) maintain a separate telephone number, which will be
answered only in the name of the Corporation and separate stationery, invoices
and checks only in the name of the Corporation;
(i) conduct all transactions with Transferor and the Servicer
(as defined in the Receivables Sale Agreement) and their respective subsidiaries
and affiliates strictly on an arm's length basis;
(j) maintain the Corporation's assets such that the assets are
readily identifiable as assets of the Corporation and not those of Transferor or
any other entity;
(k) not permit the Corporation to be named as an insured on
the insurance policy covering the property of Transferor and its other
subsidiaries and affiliates, or enter into an agreement with the holder of such
policy whereby in the event of a loss in connection with such property, proceeds
are paid to the Corporation;
Exhibit V1-11
50
(l) compensate all employees, consultants and agents directly,
from the Corporation's bank accounts, for services provided to the Corporation
by such employees, consultants and agents, and to the extent any employee,
consultant or agent of the Corporation is also an employee, consultant or agent
of Transferor, allocate the compensation of such employee, consultant or agent
between the Corporation and Transferor on a basis which reflects the services
rendered to the Corporation and Transferor; and
(m) prepare financial statements separate from those of
Transferor and insure that any consolidated financial statements of Transferor
or any affiliate thereof that include the Corporation have detailed notes
clearly stating that the Corporation is a separate corporate entity and that its
assets will be available first and foremost to satisfy the claims of the
creditors of the Corporation.
The Corporation shall abide by all corporate formalities,
including the maintenance of current minute books, and the Corporation shall
cause its financial statements to be prepared in accordance with generally
accepted accounting principles in a manner that indicates the separate existence
of the Corporation and its assets and liabilities, including, without
limitation, marking or causing to be marked the consolidated financial statement
of Transferor or any affiliate of Transferor that include the Corporation and
that are filed with the Securities and Exchange Commission or any other
governmental agency, with notes that clearly state that the Corporation is a
separate corporate entity and that its assets will be available first and
foremost to satisfy the claims of the creditors of the Corporation. The
Corporation shall not assume the liabilities of Transferor or any affiliate of
Transferor, and shall not guarantee the liabilities of Transferor or any
affiliates of Transferor. The officers and directors of the Corporation (as
appropriate) shall make decisions with respect to the business and daily
operations of Corporation independent of and not dictated by Transferor or any
affiliate of Transferor.
NINTH: The Corporation, by action of its board of directors,
may purchase its own shares at any time and from time-to-time to the extent
permitted by law.
TENTH: No holder of any shares of any class of the Corporation
shall have any pre-emptive rights to subscribe for or to purchase any shares of
the Corporation of any series or class, whether now or hereafter authorized.
IN WITNESS WHEREOF, the undersigned incorporator has signed
these Articles of Incorporation on this 1st day of May, 2000.
-------------------------------
_________________, Incorporator
Exhibit V1-12
51
ANNEX B TO SUBSCRIPTION AGREEMENT
---------------------------------
[REGULATIONS (I.E., BY-LAWS)]
REGULATIONS
OF
OMNOVA RECEIVABLES CORPORATION
(THE "CORPORATION")
ARTICLE I
SHAREHOLDERS
Section 1.1. PLACE OF MEETINGS. Meetings of shareholders,
whether annual or special, shall be held at such place within or outside of the
State of Ohio as shall be determined by the Board of Directors. In the absence
of such determination, meetings shall be held at the principal office of the
OMNOVA Receivables Corporation (the "Corporation").
Section 1.2. ANNUAL MEETING. The annual meeting of
shareholders of the Corporation shall be held on such date within the four
months following the close of the Corporation's fiscal year as shall be
designated by the Board of Directors. In the absence of such designation, the
annual meeting shall be held at 2:00 P.M. on the third Wednesday of the fourth
month following the close of the Corporation's fiscal year if not a legal
holiday, and, if a legal holiday, then on the next day not a legal holiday. At
the annual meeting, directors shall be elected, reports of the affairs of the
Corporation shall be considered, and such other business shall be transacted as
may properly be brought before the meeting.
Section 1.3. SPECIAL MEETINGS. Special meetings of the
shareholders may be called at any time by any of the following:
(a) The Chairman of the Board or the President, or in case of
the President's absence, death or disability, the Vice President authorized to
exercise the President's authority;
(b) The Board of Directors by action at a meeting or by a
majority of the directors acting without a meeting; or
(c) At the request of persons holding twenty-five percent
(25%) of all outstanding shares entitled to vote.
Upon the receipt of a request in writing for a special meeting
that states the purpose or purposes of the meeting and is delivered either in
person or by registered mail to the President or the Secretary by any person(s)
entitled to call a meeting of shareholders, such officer shall promptly give
notice of such meeting as provided in Section 1.5 hereof. If such notice is not
given within fifteen (15) days after the delivery or making of such request, the
person(s)
Exhibit V1-13
52
calling the meeting may fix the time of meeting and give notice thereof as
provided in Section 1.5 hereof or cause such notice to be given by any
designated representative.
Section 1.4. ACTIONS WITHOUT MEETING. Any action that may be
authorized or taken at a meeting of the shareholders may be authorized or taken
without a meeting with the affirmative vote or approval of, and in a writing or
writings signed by, all the shareholders who would be entitled to vote at a
meeting of the shareholders held for such purpose, which writing or writings
shall be filed with or entered upon the records of the Corporation.
Section 1.5. NOTICE OF MEETINGS. Written notice of each
meeting of shareholders, stating the time, place and purposes of the meeting,
shall be given not less than seven (7) nor more than sixty (60) days before the
date of the meeting by or at the direction of the President, the Secretary or
any other person required or permitted by these Regulations to give the notice.
When one or more of the purposes of the meeting is a vote on a matter in which
the holders of voting preferred shares, One Hundred Dollars ($100.00) par value
per share (the "Preferred Shares") are entitled to a vote under Article Fourth
of the Corporation's Articles of Incorporation, notice of the meeting shall be
given to the holders of Preferred Shares and the holders of common shares,
without par value (the "Common Shares"). In all other cases, such notice shall
be given only to the holders of Common Shares. Notice of adjournment of a
meeting need not be given if the time and place to which it is adjourned are
fixed and announced at the meeting.
Section 1.6. WAIVER OF NOTICE. Notice of the time, place and
purposes of any meeting of shareholders may be waived in writing by any
shareholder, either before or after the holding of such meeting. Such writing
shall be filed with or entered upon the records of the meeting. The attendance
of any shareholder at any meeting without protesting, prior to or at the
commencement of the meeting, the lack of proper notice shall also be deemed to
be a waiver by the shareholder of notice of the meeting.
Section 1.7. QUORUM. The holders of a majority of the shares
of each class of shares of the Corporation entitled to vote on the matters to be
presented at such meeting of shareholders, present in person or by proxy, shall
constitute a quorum at such meetings. The presence of the holders of a majority
of the Preferred Shares shall be required for a quorum to be present only when
an issue is to be presented which requires the approval of the holders of
Preferred Shares. If a quorum is not present at a meeting of the shareholders,
those shareholders present in person or by proxy and entitled to vote at the
meeting shall have the power to adjourn the meeting without notice other than
announcement at the meeting of the place, date and hour of the adjourned
meeting, until a quorum is present in person or by proxy at the adjourned
meeting. At an adjourned meeting at which a quorum is present in person or by
proxy, the Corporation may transact any business which might have been
transacted at the original meeting.
Section 1.8. VOTING. When a quorum is present at any meeting,
except as otherwise expressly required by statute, the Articles of Incorporation
or these Regulations, a majority of the votes cast by the holders of Common
Shares at a meeting of shareholders shall
Exhibit V1-14
53
control. Unless the express terms of any class of shares provide otherwise, each
share shall entitle the holder of such share to one vote upon each matter
properly submitted to the shareholders for their vote at a meeting of
shareholders.
Section 1.9. PROXIES. Persons entitled to vote shares or to
act with respect to shares may vote or act in person or by proxy. The person
appointed as a proxy need not be a shareholder. A proxy must be appointed in a
writing signed by the shareholder. No appointment of a proxy is valid after the
expiration of eleven (11) months after it is made, unless the writing specifies
the date on which it is to expire or the length of time for which it is to
continue in force. Every appointment of a proxy shall be revocable, unless the
appointment is coupled with an interest.
ARTICLE II
DIRECTORS
Section 2.1. GENERAL POWERS. All of the authority of the
Corporation shall be exercised by or under the direction of the Board of
Directors, subject to limitations imposed by law, the Articles of Incorporation
or these Regulations.
Section 2.2. NUMBER AND ELECTION. The election of directors
shall take place at the annual meeting of shareholders or at a special meeting
called for that purpose. If there is only one shareholder, there shall be at
least one director. If there are only two shareholders, there shall be at least
two directors. If there are three or more shareholders, there shall be at least
three directors. The number of directors may be fixed or changed by the
affirmative vote of a majority of shareholders represented and entitled to vote
at any meeting of the shareholders called for the purpose of electing directors
at which a quorum is present. The Board of Directors shall, at all times,
include at least one (1) Independent Director (as defined in the Articles of
Incorporation).
Section 2.3. TERMS OF DIRECTORS. Each director shall hold
office until the next annual meeting of the shareholders, or in the absence of
an annual meeting until the next special meeting of the shareholders at which
directors are elected, and until such director's successor is elected, or until
such director's earlier resignation, removal from office or death.
Section 2.4. PLACE OF MEETINGS. All meetings of the Board of
Directors shall be held at the principal office of the Corporation or at such
place within or outside the State of Ohio as may be designated from time to time
by a majority of the directors, or as may be designated in the notice or in the
waiver of notice of such meeting.
Section 2.5. ORGANIZATIONAL MEETINGS. An organizational
meeting of the Board of Directors may be held, without call or notice,
immediately following each annual meeting of the shareholders of this
corporation or at such alternative time as may be provided in a notice of
meeting.
Exhibit V1-15
54
Section 2.6. OTHER MEETINGS; NOTICE. Other meetings of the
Board of Directors may be held at any time on the call of the Chairman of the
Board, the President, any Vice President or any two directors. Written notice of
any such meeting, unless waived, shall be given not less than two (2) days prior
to the day of the meeting. The notice shall state the time and place, but need
not state the purposes of the meeting. If the Secretary fails or refuses to give
such notice promptly, the notice may be given by the person who called the
meeting. Notice of adjournment of a meeting of the Board of Directors need not
be given if the time and place to which it is adjourned are fixed and announced
at such meeting.
Section 2.7. WAIVER OF NOTICE. Notice of the time and place of
any meeting of the Board of Directors may be waived in writing, either before or
after the meeting takes place, by any director, which writing shall be filed
with or entered upon the records of the meeting. The attendance of any director
at any meeting without protesting, prior to or at the commencement of the
meeting, the lack of proper notice, shall be deemed to be a waiver by such
director of notice of the meeting.
Section 2.8. QUORUM. A majority of the whole authorized number
of directors is necessary to constitute a quorum for a meeting of the Board of
Directors, except that a majority of the directors in office constitutes a
quorum for filling a vacancy in the Board of Directors. The act of a majority of
the directors present at a meeting at which a quorum is present is the act of
the Board of Directors, except as otherwise provided by law, the Articles of
Incorporation or these Regulations.
Section 2.9. TELEPHONIC MEETINGS. Meetings of the directors
may be held by means of any communications equipment if all persons
participating can hear each other, and participation in a meeting in such manner
shall constitute presence at such meeting.
Section 2.10. ACTIONS WITHOUT MEETING. Any action that may be
authorized or taken at a meeting of the Board of Directors of the Corporation
may be authorized or taken without a meeting with the affirmative vote or
approval of, and in a writing or writings signed by, all the directors, which
writing or writings shall be filed with or entered upon the records of the
Corporation.
Section 2.11. VACANCIES. All vacancies in the Board of
Directors, whether caused by resignation, death or removal of any director, or
by the failure of the shareholders at any time to elect the whole authorized
number of directors, may be filled by a majority of the remaining directors. A
director thus elected to fill any vacancy shall hold office for the unexpired
term of such director's predecessor.
Section 2.12. EXECUTIVE AND OTHER COMMITTEES.
(a) The Board of Directors may create an executive committee
or other committees of no fewer than three member directors. Such committees
shall have and may exercise such powers of the Board of Directors in the
management of the Corporation as may be conferred or authorized by the
resolutions appointing them; however, no committee shall have
Exhibit V1-16
55
the power to fill vacancies among the directors or in any committee. The Board
of Directors shall have the power at any time to fill vacancies in, to change
the membership of, or to discharge any such committee.
(b) Such committees shall act only during the intervals
between meetings of the Board of Directors and subject to the direction of the
Board of Directors. Acts of any committee within the authority delegated to it
shall be effective for all purposes as the act or authorization of the
directors. A majority of the members of any committee may fix the time and place
of its meetings. Committee members may participate at meetings by means of
communications equipment if all participants can hear each other, and such
participation shall constitute presence at the meeting. Such committees may act
by a majority of their respective members at meetings or by a writing or
writings signed by all members of such committee.
(c) No such committee shall have the authority of the Board of
Directors in reference to:
(1) adopting an agreement of merger or consolidation;
(2) recommending to the shareholders the sale, lease
or exchange of all or substantially all of the Corporation's property
and assets;
(3) recommending to the shareholders a dissolution of
the Corporation or a revocation of a dissolution;
(4) filing a voluntary proceeding in bankruptcy; or
(5) any action requiring the unanimous vote of the
entire Board of Directors, including the Independent Director.
ARTICLE III
OFFICERS
Section 3.1. OFFICERS. The Board of Directors must elect a
President, Secretary and Treasurer. It may also elect, in its discretion, a
Chairman of the Board. The Board of Directors may appoint such Vice Presidents,
and such other officers, assistant officers and agents as the Board of Directors
may determine. All officers shall be elected by the directors, and they shall
hold office for such period, with such authority and perform such duties as the
Board of Directors may from time to time determine. Any two or more offices may
be held by the same person, but no officer shall execute, acknowledge, or verify
any instrument in more than one capacity if such instrument is required by law,
the Articles of Incorporation or these Regulations to be executed, acknowledged
or verified by two or more officers.
Section 3.2. ELECTION, TERM, ELIGIBILITY AND REMOVAL. The
officers of the Corporation shall be elected annually by the Board of Directors
at its annual meeting or at a
Exhibit V1-17
56
special meeting held for such purpose. New or additional officers may be elected
at any meeting of the Board of Directors. Each officer shall serve at the
pleasure of the Board of Directors, and each officer shall hold office until his
or her successor is chosen or until his or her death, resignation or removal.
Only the Chairman of the Board need be a member of the Board of Directors. Any
officer may be removed, with or without cause, by the Board of Directors without
prejudice to the contract rights of such officer.
Section 3.3. VACANCIES. If any office shall become vacant by
reason of death, resignation, removal or otherwise, the Board of Directors shall
elect a successor to fill such office.
Section 3.4. CHAIRMAN OF THE BOARD. The Chairman of the Board,
if any, shall preside at all meetings of the Board of Directors. He or she shall
have such other powers and duties as the Board of Directors shall assign to him
or her from time to time.
Section 3.5. THE PRESIDENT. Unless the Board of Directors
determines otherwise, the President shall be the chief executive officer of the
Corporation. He or she shall have executive authority to see that all orders and
resolutions of the Board of Directors are carried into effect and, subject to
the control vested in the Board of Directors by law, the Articles of
Incorporation or by these Regulations, shall administer and be responsible for
the management of the business and affairs of the Corporation. He or she shall
preside at all meetings of the shareholders and in general shall perform all
duties incident to the office of the President and such other duties as from
time to time may be assigned to him or her by the Board of Directors.
Section 3.6. VICE PRESIDENTS. In the absence of the President
or in the event of his or her inability to act, the Vice President, if any (or
in the event that there is more than one Vice President, the Vice Presidents in
the order designated, or in the absence of any designation, then in order of
seniority), shall perform the duties of the President. When so acting, the Vice
President shall have all the powers of and be subject to all restrictions upon
the President. The Vice President(s) shall perform such other duties and have
such other powers as the Board of Directors or the President may from time to
time prescribe.
Section 3.7. THE SECRETARY. The Secretary shall:
(a) keep the minutes of the meetings of the shareholders and
of the Board of Directors;
(b) see that all notices are given according to the provisions
of these Regulations and as required by law;
(c) be custodian of the records and of the seal, if any, of
the Corporation and see that the seal or a facsimile or equivalent is affixed to
or reproduced on all documents as may be required by law, the Articles of
Incorporation, these Regulations or by contract;
(d) have charge of the share register of the Corporation; and
Exhibit V1-18
57
(e) in general, perform all duties incident to the office of
Secretary and such other duties as are provided by these Regulations and as the
Board of Directors or the President may assign to him or her from time to time.
Section 3.8. THE TREASURER. The Treasurer shall:
(a) receive and be responsible for all funds of and securities
owned or held by the Corporation and, in connection therewith, among other
things: keep or cause to be kept full and accurate records and accounts for the
Corporation; deposit or cause to be deposited to the credit of the Corporation
all moneys, funds and securities so received in such bank or other depository as
the Board of Directors or an officer designated by the Board of Directors may
establish from time to time; and disburse or supervise the disbursement of the
funds of the Corporation as may be properly authorized;
(b) render financial and other appropriate reports on the
condition of the Corporation at any meeting, or from time to time whenever the
Board of Directors or the President may require; and
(c) in general, perform all the duties incident to the office
of Treasurer and such other duties as the President or Board of Directors may
assign to him or her from time to time.
Section 3.9. BONDS. If the Board of Directors shall so
require, any officer or agent of the Corporation shall give a bond to the
Corporation in such amount and with such surety as the Board of Directors may
deem sufficient, conditioned upon the faithful performance of his or her duties.
Section 3.10. DELEGATION OF DUTIES. In case of the absence of
any officer of the Corporation or for any other reason that may seem sufficient
to the Board of Directors, the Board of Directors may, for such time as the
Board of Directors determines, delegate powers and duties of such officer to any
other officer or to any director.
ARTICLE IV
SHARES
Section 4.1. SHARE CERTIFICATE. Certificates for shares of the
Corporation shall be in such form and style as the Board of Directors may
determine, and each certificate shall set forth the following:
(a) the name of the Corporation and that the Corporation is
organized under the laws of the State of Ohio;
(b) the name of the holder of the shares represented by the
certificate;
(c) the number and class (or series of any class) represented
by such certificate;
Exhibit V1-19
58
(d) the par value of each share represented by such
certificate or a statement that such shares are without par value; and
(e) any restrictions upon transfer of the shares represented
by such certificate.
Certificates for shares of the Corporation shall be numbered
serially for each class of shares (or series thereof) as they are issued, and
shall be signed by the Chairman of the Board, the President or a Vice President,
and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer. When the certificate is countersigned by an incorporated transfer
agent or registrar, the signature of any officer may be facsimile, engraved,
stamped or printed.
Section 4.2. UNCERTIFICATED SHARES. The Board of Directors may
provide by resolution that some or all of any or all classes and series of
shares of the Corporation shall be uncertificated shares, provided that such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation as provided in division (B) of
Section 1308.43 of the Ohio Revised Code, and that such resolution shall not
apply to a certificated security issued in exchange for an uncertificated
security as provided in division (C) of Section 1308.43 of the Ohio Revised
Code. Within a reasonable time after the issuance or transfer of uncertificated
shares, the Corporation shall send to the registered owner a written notice
containing the information described in Section 4.1 hereof. Except as otherwise
expressly provided by law, the rights and obligations of the holders of
uncertificated shares and the rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical.
Section 4.3. TRANSFER OF SHARES. Subject to any restrictions
imposed pursuant to Section 4.1(e) of this Article IV, shares of the Corporation
shall be transferable on the books of the Corporation by their holder, in person
or by his agent or attorney, upon surrender or cancellation of the certificates
representing those shares. As against the Corporation, a transfer of shares can
be made only on the books of the Corporation and in the manner hereinabove
provided, and the Corporation shall be entitled to treat the holder of any share
registered on the books of the Corporation as the owner. The corporation shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person, whether or not it has express or other
notice, save as expressly provided by Ohio General Corporation Law.
Section 4.4. RECORD DATE. The Board of Directors may fix a
record date (a) to determine the shareholders entitled to notice of or to vote
at any meeting or adjourned meeting of shareholders, (b) to express consent to
corporate action in writing without a meeting, (c) to receive payment of any
dividend or other distribution or allotment of any rights, (d) to exercise any
rights in respect of any change, conversion or exchange of shares, or (e) for
the purpose of any other lawful action. The record date shall not be earlier
than the date on which the record date is fixed and shall not be more than sixty
(60) days before the date of such meeting or consent, the date fixed for payment
of such dividend or distribution or allotment, the date fixed for exercise or
receipt of such rights, or the date of such other action, as the case may be.
Exhibit V1-20
59
If no record date is fixed:
(i) the record date for determining the shareholders entitled
to receive notice of or to vote at a meeting of shareholders shall be at the
close of business on the day next preceding the day on which notice is given, or
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held.
(ii) the record date for determining the shareholders entitled
to express their consent to corporate action in writing without a meeting, when
prior action by the Board of Directors is necessary, shall be the day on which
the first written consent is duly executed.
(iii) the record date for determining the shareholders for any
other purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
A determination of the shareholders of record entitled to
receive notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting, unless the Board of Directors fixes a new record
date for the adjourned meeting.
Section 4.5. LOST CERTIFICATE. Any shareholder claiming that a
certificate for shares has been lost, stolen or destroyed may make an affidavit
or affirmation of the fact. Subject to any requirement established by the Board
of Directors, a new certificate may be issued of the same tenor and representing
the same number, class or series of shares, or any combination thereof, as were
represented by the certificate alleged to have been lost, stolen or destroyed.
ARTICLE V
INDEMNIFICATION
The Corporation shall indemnify its officers and directors to
the full extent permitted by the General Corporation Law of Ohio. The
Corporation may, to such extent and in such manner as is determined by the Board
of Directors, but in no event to an extent greater than is permitted by the
General Corporation Law of Ohio, indemnify any employees or agents of the
Corporation permitted to be indemnified by provisions of the General Corporation
Law of Ohio.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. FISCAL YEAR. The fiscal year of the Corporation
shall end on such date as the Board of Directors may determine from time to
time. In the absence of such a determination, the fiscal year shall end on the
30th day of November.
Section 6.2. NOTICE. Whenever provisions of law, the Articles
of Incorporation or these Regulations require notice to be given to any director
or shareholder, personal or hand delivery of such notice shall not be required.
Any such notice may be given in writing, by mail
Exhibit V1-21
60
(by deposit in a post office or letter box, in an envelope with postage
affixed), by courier, by overnight package delivery, by telegraph or by
telecopier, in any case addressed to such director or shareholder at such
address as appears on the records of the Corporation. Notice given by any one of
the above methods shall be sufficient, and the method of giving notice to all
directors or to all shareholders, as the case may be, need not be uniform. If
otherwise permitted by these Regulations, notice to directors may also be given
by telephone call. Such notice shall be deemed to be given at the time when it
is so mailed, or delivered to a courier, an overnight package delivery company
or a telegraph company, or, in the case of a telecopy, when transmission has
been confirmed. In computing the period of time for the giving of notice, the
day on which notice is given shall be excluded, and the day when the act for
which notice is given is to be done is included, unless the instrument calling
for the notice otherwise provides.
ARTICLE VII
SEAL
A corporate seal shall not be required. If the Board of
Directors elects to provide a seal, failure to affix such seal to any document
shall not affect the validity thereof.
ARTICLE VIII
AMENDMENT
These Regulations may be altered, amended or repealed, or new
Regulations may be adopted: (i) at any annual or special meeting of the
shareholders called for that purpose, by the affirmative vote of both (A) the
holders of Common Shares entitling them to exercise a majority of the voting
power of the Common Shares of the Corporation on the proposal and (B) by the
unanimous vote of the holders of the Preferred Shares; or (ii) without a meeting
by the written consent of both (A) the holders of all of the Corporation's
Common Shares and (B) all of the holders of the Preferred Shares; provided
however that any alteration, amendment, or repeal of any part of these
Regulations relating to the Independent Director must be approved by in
compliance with the Corporation's Articles of Incorporation.
Exhibit V1-22
61
EXHIBIT VII
-----------
FORM OF SUBORDINATED NOTE
-------------------------
SUBORDINATED NOTE
May 1, 2000
1. NOTE. FOR VALUE RECEIVED, the undersigned, OMNOVA Receivables
Corporation, an Ohio corporation ("SPV"), hereby unconditionally promises to pay
to the order of OMNOVA Solutions Inc., an Ohio corporation ("OMNOVA"), in lawful
money of the United States of America and in immediately available funds, on the
date following the Purchase Termination Date which is one year and one day after
the date on which (i) the Outstanding Balance of all Receivables sold under the
"Sale Agreement" referred to below has been permanently reduced to zero and (ii)
OMNOVA has paid to the Buyer all indemnities, adjustments and other amounts
which may be owed thereunder in connection with the Purchases (the "COLLECTION
DATE"), the aggregate unpaid principal sum outstanding of all "SUBORDINATED
LOANS" made from time to time by OMNOVA to SPV pursuant to and in accordance
with the terms of that certain Receivables Sale Agreement dated as of May 1,
2000 between OMNOVA and SPV (as amended, restated, supplemented or otherwise
modified from time to time, the "SALE AGREEMENT"). Reference to SECTION 1.2 of
the Sale Agreement is hereby made for a statement of the terms and conditions
under which the loans evidenced hereby have been and will be made. All terms
which are capitalized and used herein and which are not otherwise specifically
defined herein shall have the meanings ascribed to such terms in the Sale
Agreement.
2. INTEREST. SPV further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at a rate equal to 8.0% per annum; PROVIDED, HOWEVER, that if SPV shall default
in the payment of any principal hereof, SPV promises to pay, on demand, interest
at the rate of 10.0% per annum on any such unpaid amounts, from the date such
payment is due to the date of actual payment. Interest shall be payable on the
first Business Day of each month in arrears; PROVIDED, HOWEVER, that SPV may
elect on the date any interest payment is due hereunder to defer such payment
and upon such election the amount of interest due but unpaid on such date shall
constitute principal under this Subordinated Note. The outstanding principal of
any loan made under this Subordinated Note shall be due and payable on the
Collection Date and may be repaid or prepaid at any time without premium or
penalty.
3. PRINCIPAL PAYMENTS. OMNOVA is authorized and directed by SPV to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by SPV, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; PROVIDED that neither the failure of
Exhibit VII-1
62
OMNOVA to make any such entry or any error therein shall expand, limit or affect
the obligations of SPV hereunder.
4. SUBORDINATION. The indebtedness evidenced by this Subordinated Note
is subordinated to the prior payment in full of all of SPV's recourse
obligations under that certain Receivables Purchase Agreement dated as of May 1,
2000 by and among SPV, OMNOVA, as Servicer, various "Purchasers" from time to
time party thereto, and Bank One, NA, as the "Agent" (as amended, restated,
supplemented or otherwise modified from time to time, the "PURCHASE AGREEMENT").
The subordination provisions contained herein are for the direct benefit of, and
may be enforced by, the Agent and the Purchasers and/or any of their respective
assignees (collectively, the "SENIOR CLAIMANTS") under the Purchase Agreement.
Until the date on which all "Capital" outstanding under the Purchase Agreement
has been repaid in full and all other obligations of SPV and/or the Servicer
thereunder and under the "Fee Letter" referenced therein (all such obligations,
collectively, the "SENIOR CLAIM") have been indefeasibly paid and satisfied in
full, OMNOVA shall not demand, accelerate, xxx for, take, receive or accept from
SPV, directly or indirectly, in cash or other property or by set-off or any
other manner (including, without limitation, from or by way of collateral) any
payment or security of all or any of the indebtedness under this Subordinated
Note or exercise any remedies or take any action or proceeding to enforce the
same; PROVIDED, HOWEVER, that (a) OMNOVA hereby agrees that it will not
institute against SPV any proceeding of the type described in SECTION 5.1(d) of
the Sale Agreement unless and until the Collection Date has occurred and (b)
nothing in this paragraph shall restrict SPV from paying, or OMNOVA from
requesting, any payments under this Subordinated Note so long as SPV is not
required under the Purchase Agreement to set aside for the benefit of, or
otherwise pay over to, the funds used for such payments to any of the Senior
Claimants and FURTHER PROVIDED that the making of such payment would not
otherwise violate the terms and provisions of the Purchase Agreement. Should any
payment, distribution or security or proceeds thereof be received by OMNOVA in
violation of the immediately preceding sentence, OMNOVA agrees that such payment
shall be segregated, received and held in trust for the benefit of, and deemed
to be the property of, and shall be immediately paid over and delivered to the
Agent for the benefit of the Senior Claimants.
5. BANKRUPTCY; INSOLVENCY. Upon the occurrence of any proceeding of the
type described in SECTION 5.1(d) of the Sale Agreement involving SPV as debtor,
then and in any such event the Senior Claimants shall receive payment in full of
all amounts due or to become due on or in respect of Capital and the Senior
Claim (including "CP COSTS" and "YIELD" as defined and as accruing under the
Purchase Agreement after the commencement of any such proceeding, whether or not
any or all of such CP Costs or Yield is an allowable claim in any such
proceeding) before OMNOVA is entitled to receive payment on account of this
Subordinated Note, and to that end, any payment or distribution of assets of SPV
of any kind or character, whether in cash, securities or other property, in any
applicable insolvency proceeding, which would otherwise be payable to or
deliverable upon or with respect to any or all indebtedness under this
Subordinated Note, is hereby assigned to and shall be paid or delivered by the
Person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or
Exhibit VII-2
63
liquidating trustee or otherwise) directly to the Agent for application to, or
as collateral for the payment of, the Senior Claim until such Senior Claim shall
have been paid in full and satisfied.
6. AMENDMENTS. This Subordinated Note shall not be amended or modified
except in accordance with SECTION 7.1 of the Sale Agreement. The terms of this
Subordinated Note may not be amended or otherwise modified without the prior
written consent of the Agent for the benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT
FAIRLAWN OHIO, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE
OF OHIO. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW,
BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID
UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH
PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION
OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.
8. WAIVERS. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. OMNOVA additionally expressly waives all notice of the acceptance
by any Senior Claimant of the subordination and other provisions of this
Subordinated Note and expressly waives reliance by any Senior Claimant upon the
subordination and other provisions herein provided.
9. ASSIGNMENT. This Subordinated Note may not be assigned, pledged or
otherwise transferred to any party (other than OMNOVA) without the prior written
consent of the Agent, and any such attempted transfer shall be void.
OMNOVA RECEIVABLES CORPORATION
By:
-------------------------------------
Title:
Exhibit VII-3
64
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount of Unpaid
Subordinated Principal Principal Notation
Date Loan Paid Balance Made by
---- ---- ---- ------- -------
Exhibit VII-4
65
SCHEDULE A
----------
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE INITIAL PURCHASE (EXCEPT AS OTHERWISE NOTED)
1. Receivables Sale Agreement dated as of May 1, 2000 (the "SALE
AGREEMENT") by and between OMNOVA Solutions Inc., an Ohio corporation
("OMNOVA"), as seller, and OMNOVA Receivables Corporation, an Ohio
corporation ("ORC"), as buyer, together with the following schedules
and exhibits attached thereto:
EXHIBIT I Definitions
EXHIBIT II Chief Executive Office; Places of Business; Locations of
Records; Federal Employer Identification Number(s);
Other Names
EXHIBIT III Lock-Boxes; Collection Accounts; Collection Banks
EXHIBIT IV Form of Compliance Certificate
EXHIBIT V Credit and Collection Policy
EXHIBIT VI Form of Subscription Agreement
Annex A Articles of Incorporation
Annex B Regulations (i.e., By-Laws)
EXHIBIT VII Form of Subordinated Note
SCHEDULE A Documents to be Delivered to the Buyer on or prior to the
Initial Purchase
2. Subordinated Note dated May 1, 2000 executed by ORC in favor of OMNOVA.
3. Investor's Representations and Subscription Agreement dated as of May
1, 2000 between OMNOVA and ORC.
4. Investor's Representations and Subscription Agreement dated as of May
1, 2000 between Xxxxxxx X. Xxxxxxx and ORC.
5. Receivables Purchase Agreement, dated as of May 1, 2000 (the "PURCHASE
AGREEMENT"), among ORC, as seller, OMNOVA, as initial servicer, Falcon
Asset Securitization Corporation, the Financial Institutions party
thereto and Bank One, NA, as Agent (the "AGENT"), together with the
following schedules and exhibits attached thereto:
EXHIBIT I Definitions
EXHIBIT II Form of Purchase Notice
EXHIBIT III Places of Business of the Seller Parties; Locations of Records;
Federal Employer Identification Number
EXHIBIT IV Names of Collection Banks; Collection Accounts
EXHIBIT V Form of Compliance Certificate
EXHIBIT VI Form of Collection Account Agreement
Schedule A-1
66
EXHIBIT VII Form of Assignment Agreement
EXHIBIT VIII Credit and Collection Policy
EXHIBIT IX Form of Contract(s)
EXHIBIT X Form of Monthly Report
EXHIBIT XI Names
SCHEDULE A Commitments
SCHEDULE B Closing Documents
6. Fee Letter dated May 1, 2000 between the Agent and ORC.
7. Shareholders Agreement dated as of May 1, 2000 by and among OMNOVA,
Xxxxxxx X. Xxxxxxx and ORC.
8. Certificate of a Secretary or Assistant Secretary of ORC certifying as
to (i) an attached copy of resolutions adopted by the Sole Director of
ORC approving the delivery and performance of the Sale Agreement,
Purchase Agreement and related documents, (ii) an attached copy of
ORC's Articles of Incorporation, (iii) an attached copy of ORC's
Regulations, (iv) an attached copy of a Certificate of Good Standing
from the Secretary of State of Ohio regarding ORC, and (v) the names,
title and specimen signatures of ORC's officers authorized to execute
and deliver the Sale Agreement, Purchase Agreement and related
documents.
9. Certificate of a Secretary or Assistant Secretary of OMNOVA certifying
as to (i) an attached copy of resolutions adopted by the Board of
Directors of OMNOVA approving the delivery and performance of the
Purchase Agreement, Sale Agreement and related documents, (ii) an
attached copy of OMNOVA's Articles of Incorporation, (iii) an attached
copy of OMNOVA's Regulations, (iv) an attached copy of a Certificate of
Good Standing from the Secretary of State of Ohio regarding OMNOVA and
(v) the names, title and specimen signatures of OMNOVA's officers
authorized to execute and deliver the Purchase Agreement, Sale
Agreement and related documents.
10. Original Certificate of Good Standing of ORC from the Secretary of
State of Ohio dated within 15 days prior to May 1, 2000.
11. UCC-1 Financing Statement naming OMNOVA as debtor, ORC as secured party
and Bank One, NA, as Agent, as assignee, filed with the Secretary of
State of Ohio on or prior to May 1, 2000.
12. UCC-1 Financing Statement naming OMNOVA as debtor, ORC as secured party
and Bank One, NA, as Agent, as assignee, filed with the Recorder of
Summit County, Ohio on or prior to May 1, 2000.
13. UCC-1 Financing Statement naming ORC as debtor and Bank One, NA, as
Agent, as secured party, filed with the Secretary of State of Ohio on
or prior to May 1, 2000.
Schedule X-0
00
00. UCC-1 Financing Statement naming ORC as debtor and Bank One, NA, as
Agent, as secured party, filed with the Recorder of Summit County, Ohio
on or prior to May 1, 2000.
15. Post-filing UCC lien searches against OMNOVA and ORC from the Secretary
of State of Ohio and Recorder of Summit County, Ohio. [to be delivered
post-closing]
16. Lock-Box Account Agreement with Bank One, as Collection Bank, with
respect to lockbox no. 3549 and Collection Account no. 362776654.
17. Lock-Box Account Agreement with National City Bank, as Collection Bank,
with respect to lockbox no. 931306 and Collection Account no. 0000000.
18. Lock-Box Account Agreement with Mellon Bank, as Collection Bank, with
respect to lockbox nos. 7777-W5025, LA 21008, AT 40028 and 360553M and
Collection Account No. 006-5218.
19. Opinion of Frost & Xxxxxx LLP with respect to true sale and
non-consolidation matters.
20. Opinion of Frost & Xxxxxx LLP with respect to UCC and corporate
matters.
21. Monthly Report as of March 31, 2000.
22. Original Certificate of Good Standing of OMNOVA from the Secretary of
the Commonwealth of Massachusetts dated on or within 15 days after May
1, 2000. [to be delivered post-closing].
Schedule A-3
