RECEIVABLES SALE AGREEMENT
dated as of October 6, 2000
between
ANIXTER INC.,
as Originator
AND
ANIXTER RECEIVABLES CORPORATION,
as Buyer
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of October 6, 2000, is by and
between ANIXTER INC., a Delaware corporation, ("Originator"), and ANIXTER
RECEIVABLES CORPORATION, a Delaware 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
Originator now owns, and from time to time hereafter will own, Receivables.
Originator wishes to sell and assign to Buyer, and Buyer wishes to purchase from
Originator, all of Originator's right, title and interest in and to such
Receivables, together with the Related Security and Collections with respect
thereto.
Originator and Buyer intend the transactions contemplated hereby to be true
sales of the Receivables from Originator to Buyer, providing Buyer with the full
benefits of ownership of the Receivables, and Originator and Buyer do not intend
these transactions to be, or for any purpose to be characterized as, loans from
Buyer to Originator.
Following the purchase of Receivables from Originator, Buyer will sell
undivided interests therein and in the associated Related Security and
Collections pursuant to that certain Receivables Purchase Agreement dated as of
October 6, 2000 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Purchase Agreement") among
Buyer, Originator, 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").
ARTICLE I
23 ARTICLE I AMOUNTS AND TERMS
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, in consideration for the Purchase Price and
upon the terms and subject to the conditions set forth herein, Originator 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 Originator, all of Originator's right, title and interest in and
to all Receivables existing as of the close of business on the Business Day
immediately prior to the date hereof and all Receivables thereafter arising
through and including the Amortization Date, together, in each case, with all
Related Security relating thereto and all Collections thereof. In accordance
with the preceding sentence, on the date hereof Buyer shall acquire all of
Originator's right, title and interest in and to all Receivables existing as of
the close of business on the Business Day immediately prior to the date hereof
and thereafter arising through and including the Amortization Date, together
with all Related Security relating thereto and all Collections thereof;
provided, that, Buyer shall be obligated to pay the Purchase Price therefor in
accordance with Section 1.2. In connection with the payment of the Purchase
Price for any Receivables purchased hereunder, Buyer may request that Originator
deliver, and Originator shall deliver, such approvals, opinions, information,
reports or documents as Buyer may reasonably request.
(b) It is the intention of the parties hereto that the Purchase of Receivables
made hereunder shall constitute a "sale of accounts" (as such term is used in
Article 9 of the UCC), which sale is absolute and irrevocable and provides Buyer
with the full benefits of ownership of the Receivables. Except for the Purchase
Price Credits owed pursuant to Section 1.3, the sale of Receivables hereunder is
made without recourse to Originator; provided, however, that (i) Originator
shall be liable to Buyer for all representations, warranties and covenants made
by Originator pursuant to the terms of the Transaction Documents to which
Originator 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 Originator or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any other
obligations of Originator. In view of the intention of the parties hereto that
the Purchase of Receivables made hereunder shall constitute a sale of such
Receivables rather than loans secured thereby, Originator agrees that it will,
on or prior to the date hereof and in accordance with Section 4.1(e)(ii), cause
all Receivable reports relating to the Receivables to bear a legend acceptable
to Buyer and to the Agent (as Buyer's assignee), evidencing that Buyer has
purchased such Receivables as provided in this Agreement and note in its
financial statements that its Receivables have been sold to Buyer. Upon the
request of Buyer or the Agent (as Buyer's assignee), Originator 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 Purchase.
(a) The Purchase Price for the Purchase of Receivables in existence on the close
of business on the Business Day immediate preceding the date hereof (the
"Initial Cutoff Date") shall be payable in full by Buyer to Originator on the
date hereof, and shall be paid to Originator 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 Originator 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 on
the date hereof, and
(ii) the balance, by delivery of the proceeds of a subordinated revolving
loan from Originator to Buyer (a "Subordinated Loan") in an amount not
to exceed the least of: (A) the remaining unpaid portion of such
Purchase Price and (B) the maximum Subordinated Loan that could be
borrowed without rendering Buyer's Net Worth less than the Required
Capital Amount. The Originator 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 advance 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.
The Purchase Price for each Receivable coming into existence after the
Initial Cutoff Date shall be due and owing in full by Buyer to Originator or its
designee on the date each such Receivable came into existence (except that Buyer
may, with respect to any such Purchase Price, offset against such Purchase Price
any amounts owed by Originator to Buyer hereunder and which have become due but
remain unpaid) and shall be paid to Originator in the manner provided in the
following paragraphs (b), (c), (d) and (e).
(b) With respect to any Receivables coming into existence after the date hereof,
on each Settlement Date, Buyer shall pay the Purchase Price therefor in
accordance with Section 1.2(d) and (e) and in the following manner:
first, by delivery of immediately available funds, to the extent of funds
available to Buyer from (i) its subsequent sale of an interest in the
Receivables to the Agent for the benefit of the Purchasers under the Purchase
Agreement, (ii) Collections arising from any Receivables previously sold to
Buyer in which Buyer has retained an interest, or (iii) 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 the Originator has declared the Amortization 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), Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Amortization 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.
(c) From and after the Amortization Date, Originator 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(b) unless
Originator 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.
(d) On each day prior to the Amortization Date (unless Buyer or the Agent shall
otherwise direct), Buyer may permit Originator to retain all or a specified
portion of the Collections received in respect of Receivables theretofore
transferred by Originator to Buyer hereunder, it being understood that in the
event Buyer shall have sold, assigned or otherwise transferred an interest in
such Receivables to the Agent for the benefit of the Purchasers under the
Purchase Agreement, such Collections in the possession of such Originator or
Buyer are made available to Buyer at the discretion of the Agent. Any such
Collections so retained by Originator ("Applied Collections") shall, on and as
of the date of receipt thereof, be (i) deemed applied toward the Purchase Price
of any Receivables of Originator arising on such date and then being transferred
to Buyer pursuant to the terms hereof, to the extent of any such Purchase Price,
(ii) then, in respect of any balance remaining, deemed applied toward the
Purchase Price of any other Receivables of Originator arising during such
Accrual Period and in respect of which the Purchase Price shall not theretofore
have been paid, to the extent of any such Purchase Price, and (iii) in respect
of any balance remaining, held in trust by Originator for the benefit of Buyer
until the earlier to occur of (A) application toward the Purchase Price for any
Purchase occurring on any later date and (B) the next following Settlement Date,
in which case such amount shall be remitted to Buyer.
(e) Although the Purchase Price for each Receivable coming into existence after
the date hereof shall be due and payable in full by Buyer to Originator on the
date such Receivable came into existence, and payment of such Purchase Price
shall be made from Applied Collections, to the extent available, as provided in
Section 1.2(d), final settlement of the Purchase Price between Buyer and
Originator shall be effected on a monthly basis on Settlement Dates with respect
to all Receivables coming into existence during 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. On each Settlement Date, Buyer and Originator
shall cause a reconciliation to made in respect of all Purchases that shall have
been made during the Calculation Period then most recently ended. To the extent
that the aggregate amount of Applied Collections retained by Originator during
such Accrual Period shall have been less than the aggregate Purchase Price in
respect of all Purchases made by Buyer from Originator during such month, Buyer
shall pay the balance due in respect of such aggregate Purchase Price in the
manner described in Section 1.2(a). To the extent that the aggregate amount of
Applied Collections retained by Originator during such Calculation Period shall
have been greater than the aggregate Purchase Price in respect of all Purchases
made by Buyer from Originator during such Calculation Period, Originator shall
turn over such excess to Buyer either by remitting such excess in immediately
available funds to Buyer or by directing that a reduction in the outstanding
balance of the Subordinated Loan occur in an amount equal to such excess, or a
combination of both. 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(b) and any contribution of capital by Originator to
Buyer made pursuant to Section 1.2(b) 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.
(f) At all times prior to the occurrence of the Amortization Date,
notwithstanding any delay in the making of any payment of the Purchase Price in
respect of any Purchase, all right, title and interest of Originator in and to
each Receivable shall be sold, assigned and otherwise transferred to Buyer
effective immediately and automatically upon the creation of such Receivable,
without any further action of any type or kind being required on the part of any
Person. The monthly settlement and reconciliation contemplated in this Section
1.2 has been devised solely for the administrative convenience of the parties
hereto. Buyer and Originator may at any time, as may agreed between themselves,
elect to effect settlement and reconciliation on a more (but not less) frequent
basis.
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 Originator (other than cash
Collections on account of the Receivables); or
(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 paragraphs (i)
and (s) of Section 2.1 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 coming into existence on any
day, then Originator shall pay the remaining amount of such Purchase Price
Credit in cash within three (3) Business Days thereafter, provided that if the
Amortization Date has not occurred, Originator 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
Originator designated from time to time by Originator or as otherwise directed
by Originator. 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 Purchase of Receivables hereunder, Originator hereby
sells, transfers, assigns and otherwise conveys to Buyer all of Originator'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 the
Purchase. In connection with such transfer, Originator 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 Originator to
account for the Receivables, to the extent necessary to administer the
Receivables, whether such software is owned by Originator or is owned by others
and used by Originator under license agreements with respect thereto, provided
that should the consent of any licensor of Originator to such grant of the
license described herein be required, Originator hereby agrees that upon the
request of Buyer (or the Agent as Buyer's assignee), Originator 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.
(b) Originator (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 Originator hereunder, and (ii) shall use its
reasonable efforts to ensure that each of the Buyer, the Agent and the Servicer
has an enforceable right (whether by license, sublicense or otherwise) to use
all of the computer software used by Originator 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 Originator to Buyer of
Receivables hereunder shall be characterized as a secured loan and not a sale,
or such sale shall for any reason be ineffective or unenforceable, 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 the sale of Receivables hereunder shall constitute a
true sale thereof, Originator hereby grants to Buyer a duly perfected security
interest in all of Originator's right, title and interest in, to and under all
Receivables now existing and hereafter arising, all Collections, Related
Security and Records with respect thereto, each Lock-Box and Collection Account
and all proceeds of the foregoing, which security interest shall be prior to all
other Adverse Claims thereto. After the occurrence of an Amortization 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 Originator. Originator hereby
represents and warrants to Buyer, as of the date hereof and as of the date of
each purchase hereunder, that:
(a) Corporate Existence and Power. Originator is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
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 qualify could not reasonably be expected to have a Material
Adverse Effect.
(b) Power and Authority; Due Authorization Execution and Delivery. The execution
and delivery by Originator of this Agreement and each other Transaction Document
to which it is a party, and the performance of its obligations hereunder and
thereunder and, Originator's use of the proceeds of the Purchase made hereunder,
are within its corporate powers and authority and have been duly authorized by
all necessary corporate action on its part. This Agreement and each other
Transaction Document to which Originator is a party has been duly executed and
delivered by Originator.
(c) No Conflict. The execution and delivery by Originator 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
certificate or articles of incorporation or 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 Originator or its
Subsidiaries (except as created hereunder), except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect; 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 Originator 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 Originator's knowledge, threatened, against or affecting Originator,
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. Originator is
not in default with respect to any order of any court, arbitrator or
governmental body, which defaults, individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
(f) Binding Effect. This Agreement and each other Transaction Document to which
Originator is a party constitute the legal, valid and binding obligations of
Originator enforceable against Originator 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 Originator
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 Originator 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 the Purchase hereunder will be used (i) for
a purpose that violates, or would be inconsistent with, Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) 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 the time each Receivable came into
existence, Originator shall be the legal and beneficial owner of each such
Receivables and Related Security with respect thereto, free and clear of any
Adverse Claim, except as created by the Transaction Documents.
(j) Perfection. This Agreement, together with the filing of the financing
statements contemplated hereby, is effective to transfer to Buyer (and Buyer
shall acquire from Originator) 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 UCC (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 Originator 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. Originator's
Federal Employer Identification Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in Section 4.1(i)
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 Originator at each Collection Bank and the post office box number of
each Lock-Box, are listed on Exhibit III.
(m) Material Adverse Effect. Since December 31, 1999 no event has occurred
that would have a Material Adverse Effect.
(n) Names. Except for those listed on Exhibit II, in the past five (5) years,
Originator has not used any corporate names, trade names or assumed names other
than the name in which it has executed this Agreement.
(o) Ownership of Buyer. Originator 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.
(p) Not a Holding Company or an Investment Company. Originator 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. Originator 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. Originator has complied 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. Each
Receivable, together with the Contract related thereto, does not contravene any
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), and no part of such Contract is in violation of any such law, rule
or regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Originator has complied in all
material respects with the Credit and Collection Policy with regard to each
Receivable and the related Contract, and has not made any change to such Credit
and Collection Policy except such material change as to which the Agent has been
notified in accordance with Section 4.1(a)(iii).
(s) 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).
(t) Eligible Receivables. Each Receivable included in the Net Receivables
Balance as an Eligible Receivable on the date it came into existence was an
Eligible Receivable on such date.
(u) Accounting. The manner in which Originator accounts for the
transactions contemplated by this Agreement does not jeopardize the true sale
analysis.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase under this Agreement
is subject to the conditions precedent that (a) Buyer shall have received on or
before the date of such purchase those documents listed on Schedule A and (b)
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 Subsequent Payments. Buyer's obligation to
pay for Receivables coming into existence after the date hereof shall be subject
to the further conditions precedent that (a) the Facility Termination Date shall
not have occurred; and (b) Buyer shall have received such other approvals,
opinions or documents as it may reasonably request. Originator represents and
warrants that the representations and warranties set forth in Article II are
true and correct on and as of the date each Receivable came into existence as
though made on and as of such date.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originator. Until the date on which this
Agreement terminates in accordance with its terms, Originator hereby covenants
as set forth below:
(a) Financial Reporting. Originator will maintain, for itself and each of
its Subsidiaries, a system of accounting established and administered
in accordance with generally accepted accounting principles, and
furnish to Buyer (or its assigns):
(i) Annual Reporting. Within 90 days after the close of each of its
respective fiscal years, audited financial statements (which shall
include balance sheets, statements of income and retained earnings and
a statement of cash flows) for Originator for such fiscal year
certified in a manner acceptable to Buyer (or its assigns) by Ernst &
Young or other independent public accountants reasonably acceptable to
Buyer (or its assigns).
(ii) Quarterly Reporting. Within 45 days after the close of the first three
(3) quarterly periods of each of its respective fiscal years, balance
sheets of Originator as at the close of each such period and statements
of income and retained earnings and a statement of cash flows for
Originator for the period from the beginning of such fiscal year to the
end of such quarter, all certified by its chief financial officer or
treasurer.
(iii) Compliance Certificate. Together with the financial statements required
hereunder, a compliance certificate in substantially the form of
Exhibit IV signed by Originator's Authorized Officer on behalf of
Originator 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 Originator 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 Originator 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 material
amendment to the Credit and Collection Policy, a notice (A) indicating
such change or amendment, and (B) if such proposed change or amendment
would be reasonably likely to adversely affect the collectibility of
the Receivables or decrease the credit quality of any newly created
Receivables, requesting the Agent's consent thereto; provided that if
such change or amendment was required pursuant to any change in any
applicable law, rule or regulation, the Originator shall only be
required to give notice of such change or amendment and shall not be
required to request the consent of the Agent.
(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 Originator 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. Originator 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) Amortization Events or Potential Amortization Events. The occurrence
of each Amortization Event and each Potential Amortization Event, by a
statement of an Authorized Officer of Originator.
(ii) Judgment and Proceedings. (A) The entry of any judgment or decree
against Originator or any of its Subsidiaries if the aggregate amount
of all judgments and decrees then outstanding against Originator and
its Subsidiaries exceeds $25,000,000, or (B) the institution of any
litigation, arbitration proceeding or governmental proceeding against
Originator, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, or which seeks to enjoin
performance of or otherwise relates to the Transaction Documents.
(iii) Material Adverse Effect. The occurrence of any event or condition that
has, or could reasonably be expected to have, a Material Adverse
Effect.
(iv) Defaults Under Other Agreements. The occurrence of a default or an
event of default under any other financing arrangement or arrangements
governing indebtedness, individually or in the aggregate for all such
arrangements, in a principal amount greater than or equal to
$25,000,000, pursuant to which Originator is a debtor or an obligor.
(v) Downgrade of the Originator. Any downgrade in the rating of any
Indebtedness of the Originator 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. Originator
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 comply could not reasonably be expected to
have a Material Adverse Effect. Originator 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 maintain or qualify could not reasonably be expected to
have a Material Adverse Effect.
(d) Audits. Originator 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. Originator 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 Originator except as provided below, 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 Originator relating to the Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of Originator for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to Originator's
financial condition or the Receivables and the Related Security or Originator's
performance under any of the Transaction Documents or Originator's performance
under the Contracts and, in each case, with any of the officers or employees of
Originator having knowledge of such matters. So long as no Potential
Amortization Event or Amortization Event exists, the visits under this Section
4.1(d) that are at the sole cost of the Originator and that are requested by an
assignee of the Buyer shall be limited to one per calendar year.
(e) Keeping and Marking of Records and Books.
(i) Originator 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).
Originator will give Buyer (or its assigns) notice of any material
change in the administrative and operating procedures referred to in
the previous sentence.
(ii) Originator will (A) on or prior to the date hereof, cause all reports
relating to the Receivables to bear a legend, acceptable to Buyer (or its
assigns), describing Buyer's ownership interests in the Receivables and further
describing the Purchaser Interests of the Agent (on behalf of the Purchasers)
under the Purchase Agreement and (B) from and after the occurrence of an
Amortization Event, (x) xxxx each Contract 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 Contracts (including, without limitation, all multiple
originals of any such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Originator
will timely and fully (i) perform and comply with all provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables, and (ii) comply in all respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract. Originator 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) Ownership. Originator will take all necessary action to 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 UCC (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).
(h) Purchasers' Reliance. Originator 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 Originator and any Affiliates thereof. Therefore, from and after the date
of execution and delivery of this Agreement, Originator 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 Originator and any
Affiliates thereof and not just a division of Originator. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, Originator (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 from Originator, (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 allocated between Originator and Buyer on an arm's-length basis
and in a manner consistent with the procedures set forth in U.S. Treasury
Regulations ss.ss.1.1502-33(d) and 1.1552-1.
(i) Collections. Originator will cause (1) all proceeds from all Lock-Boxes
to be directly deposited by a Collection Bank into a Collection Account and (2)
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 Originator or any Affiliate of
Originator, Originator will remit (or will cause all such payments to be
remitted) directly to a Collection Bank for deposit into a Collection Account
within two (2) Business Days following receipt thereof and, at all times prior
to such remittance, Originator will itself hold or, if applicable, will cause
such payments to be held in trust for the exclusive benefit of Buyer and its
assigns. Originator 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.
(j) Taxes. Originator will file all tax returns and reports required by law
to be filed by it and promptly pay all taxes and governmental charges at any
time owing , except any such taxes which are not yet delinquent or are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with generally accepted accounting principles
shall have been set aside on its books, unless the failure to make any such
payment (1) shall give rise to an immediate right to foreclosure on an Adverse
Claim securing such amounts, or (2) could reasonably be expected to have a
Material Adverse Effect.
(k) Insurance. Originator will maintain in effect, or cause to be
maintained in effect, at Originator's own expense, such casualty and liability
insurance as Originator deems appropriate in its good faith business judgement.
Originator will pay or cause to be paid, the premiums therefor and deliver to
Buyer and the Agent evidence satisfactory to Buyer and the Agent of such
insurance coverage. Copies of each policy shall be furnished to Buyer, the Agent
and any Purchaser in certificated form upon Buyer's, the Agent's or such
Purchaser's request. The foregoing requirements shall not be construed to
negate, reduce or modify, and are in addition to, Originator's obligations
hereunder.
Section 4.2 Negative Covenants of Originator. Until the date on which this
Agreement terminates in accordance with its terms, Originator hereby covenants
that:
(a) Name Change, Offices and Records. Originator 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 within the meaning of Section 9-507(c) of
Revised Article 9 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. Except as may be required by the
Agent pursuant to Section 8.2(b) of the Purchase Agreement, Originator 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 Originator may make changes in instructions to Obligors
regarding payments if such new instructions require such Obligor to make
payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Originator will
not make any change to the Credit and Collection Policy that could reasonably be
expected to adversely affect the collectibility of the Receivables or decrease
the credit quality of any newly created Receivables unless required to do so by
any applicable law, rule or regulation. Except as otherwise permitted in its
capacity as Servicer pursuant to Section 8.2(d) of the Purchase Agreement,
Originator will not extend, amend or otherwise modify the terms of any
Receivable or any Contract related thereto other than in accordance with the
Credit and Collection Policy.
(d) Sales, Liens. Originator 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 Contract 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
Originator 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 Originator. Originator shall not create or suffer to exist any
mortgage, pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory.
(e) Accounting for Purchase. Originator 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 Originator 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
Originator 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
AMORTIZATION EVENTS
Section 5.1 Amortization Events. The occurrence of any one or more of the
following events shall constitute an Amortization Event:
(a) Originator 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)) or any
other Transaction Document to which it is a party and such failure shall
continue for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement made by Originator
in this Agreement, any other Transaction Document or in any other document
delivered pursuant hereto or thereto shall prove to have been incorrect when
made or deemed made; provided, however, that any breach of the representations
and warranties set forth in Sections 2.1(i), (s) or (t) shall not constitute an
Amortization Event unless such breach or breaches apply in the aggregate to a
material portion of the Receivables.
(c) Failure of Originator to pay when due any Indebtedness having an outstanding
principal balance in excess of $25,000,000; or the default by Originator 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 Originator 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) (i) Originator or any of its Significant 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; or (ii) any proceeding shall be instituted by or against Originator
or any of its Significant 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; provided that in the event any such proceedings shall have been
instituted against Originator or any Significant Subsidiary, such proceedings
shall have continued undismissed or unstayed and in effect for a period of sixty
(60) consecutive days or an order for relief shall have been entered in such
proceedings; or (iii) Originator or any of its Significant Subsidiaries shall
take any corporate action to authorize any of the actions set forth in the
foregoing clause (i) or (ii) of this subsection (d).
(e) A Change of Control shall occur.
(f) One or more final judgments for the payment of money in an amount in excess
of $25,000,000, individually or in the aggregate, shall be entered against
Originator, and such judgment shall continue unsatisfied and in effect for ten
(10) consecutive days without a stay of execution.
Section 5.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, Buyer may take any of the following actions: (i) declare the
Amortization Date to have occurred, whereupon the Amortization Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by Originator; provided, however, that upon
the occurrence of Amortization Event described in Section 5.1(d)(ii), or of an
actual or deemed entry of an order for relief with respect to Originator under
the Federal Bankruptcy Code, the Amortization Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by Originator and (ii) to the fullest extent permitted by
applicable law, declare that the Default Fee shall accrue with respect to any
amounts then due and owing by Buyer to Originator. 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 Originator. Without limiting any other rights that
Buyer may have hereunder or under applicable law, Originator hereby agrees to
indemnify 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 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:
(i) 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;
(ii) 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
(iii) 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 Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement.
Without limiting the generality of the foregoing
indemnification, Originator shall indemnify Buyer for Indemnified Amounts
(including, without limitation, losses in respect of uncollectible receivables,
regardless of whether reimbursement therefor would constitute recourse to
Originator) relating to or resulting from:
(1) any representation or warranty made by Originator (or any officers of
Originator) under or in connection with this Agreement, any other
Transaction Document or any other information or report delivered by
Originator pursuant hereto or thereto, which shall have been false or
incorrect when made or deemed made;
(2) the failure by Originator, to comply with any applicable law, rule or
regulation with respect to any Receivable or Contract related thereto,
or the nonconformity of any Receivable or Contract included therein
with any such applicable law, rule or regulation or any failure of
Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(3) any failure of Originator to perform its duties, covenants or other
obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
(4) any products liability, personal injury or damage suit or similar claim
arising out of or in connection with merchandise, insurance or services
that are the subject of any Contract or any Receivable;
(5) 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 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 service related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(6) the commingling of Collections of Receivables at any time with other
funds;
(7) any investigation, litigation or proceeding related to or arising from
this Agreement or any other Transaction Document, the transactions
contemplated hereby or thereby, the use of the proceeds of a Purchase,
the ownership of the Receivables, or any other investigation,
litigation or proceeding relating to Buyer or Originator in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(8) 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;
(9) any Amortization Event described in Section 5.1(d);
(10) 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;
(11) the failure to have filed, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivable, the Related Security and Collections with respect thereto,
and the proceeds of any thereof, whether at the time of the Purchase or
at any subsequent time;
(12) any action or omission by Originator which reduces or impairs the
rights of Buyer with respect to any Receivable or the value of any such
Receivable; and
(13) any attempt by any Person to void the Purchase hereunder under
statutory provisions or common law or equitable action.
Section 6.2 Other Costs and Expenses. Originator shall pay to Buyer on demand
all costs and out-of-pocket expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the transactions
contemplated hereby and the other documents to be delivered hereunder.
Originator shall pay to Buyer on demand any and all 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 an Amortization
Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments. 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. No provision of this
Agreement may be amended, supplemented, modified or waived except in writing
signed by Originator and Buyer and, to the extent required under the Purchase
Agreement, the Agent and the Financial Institutions or the Required Financial
Institutions.
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 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 (i)
if given by telecopy, upon the receipt thereof, (ii) if given by mail, three (3)
Business Days after the time such communication is deposited in the mail with
first class postage prepaid or (iii) 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) Originator 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 Purchaser Interests, or to enable Buyer (or its assigns)
to exercise and enforce their rights and remedies hereunder. At any time, Buyer
(or its assigns, but only after an Amortization Event) may, at Originator's sole
cost and expense, direct Originator 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 Originator 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 Originator as
provided in Section 6.2. Originator 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(s)-in-fact,
to act on behalf of Originator (i) to execute on behalf of Originator 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) Originator 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 Originator and its officers and employees may disclose such
information to Originator'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, Originator 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 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 acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided that each such
Person is informed of the confidential nature of such information. 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), provided that Purchasers and Agent shall, if
practicable, notify Originator in advance prior to disclosure and will use
reasonable efforts to cooperate with Originator at Originator's expense in
obtaining any protective order for such information.
Section 7.5 Bankruptcy Petition. Originator and Buyer each 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, it will not institute
against, or join any other Person in instituting against, Falcon 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 (INCLUDING, BUT NOT LIMITED TO, 735 ILCS
SECTION 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAW
PROVISIONS) OF THE STATE OF ILLINOIS.
Section 7.7 CONSENT TO JURISDICTION. ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL 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 ORIGINATOR PURSUANT TO
THIS AGREEMENT AND ORIGINATOR 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 ORIGINATOR IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ORIGINATOR 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 ORIGINATOR 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
ORIGINATOR PURSUANT TO THIS 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 Originator pursuant to Article
II, (ii) the indemnification and payment provisions of Article VI, and (iii)
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.
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.
ANIXTER INC.
By:______________________________________________________
Name:
Title:
Address: _________________________
Attn: ____________________
Facsimile: ________________
ANIXTER RECEIVABLES CORPORATION
By:______________________________________________________
Name:
Title:
Address: _________________________
Attn: ____________________
Facsimile: ________________
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.
"Agent" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Agreement" means this Receivables Sale Agreement, dated as of October 6,
2000, between Originator and Buyer, as the same may be amended, restated or
otherwise modified.
"Amortization Date" means the earliest to occur of (i) the Facility
Termination Date, (ii) any Business Day so designated by Originator and Buyer,
(iii) the Business Day immediately prior to the occurrence of an Amortization
Event set forth in Section 5.1(d), (iv) the Business Day specified in a written
notice from Buyer to Originator following the occurrence of any other
Amortization Event, and (v) the date which is thirty (30) days after Buyer's
receipt of written notice from Originator that it wishes to terminate the
facility evidenced by this Agreement.
"Amortization Event" has the meaning set forth in Section 5.1 of the
Agreement.
"Applied Collections" has the meaning set forth in Section 1.2(d) of the
Agreement.
"Authorized Officer" means, with respect to Originator, its treasurer,
corporate controller or chief financial officer.
"Bank One" means Bank One, NA, its successors and assigns.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended, and any successor statute thereto.
"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 Bank One 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 Purchase of Receivables hereunder and the final
Calculation Period shall terminate on the Amortization Date.
"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 and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of
Originator.
"Credit and Collection Policy" means Originator's credit and collection
policies and practices relating to Contracts and Receivables 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.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in Section 1.3(a) of the Agreement.
"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.
Originator 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 Purchase which occurred
during any Calculation Period ending prior to the Calculation Period during
which Originator and Buyer agree to make such change.
"Falcon" has the meaning set forth in the Preliminary Statements to this
Agreement.
"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.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of Originator and its Subsidiaries, (ii) the
ability of Originator 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) Originator'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 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).
"Original Balance" means, with respect to any Receivable, the Outstanding
Balance of such Receivable on the date it was purchased by Buyer.
"Originator" has the meaning set forth in the preamble to the Agreement.
"Potential Amortization Event" means an event which, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.
"Purchase" means the purchase under the Agreement by Buyer from Originator
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 Originator 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.
"Purchaser" means Falcon or a Financial Institution, as applicable.
"Receivable" means the indebtedness and other obligations owed to
Originator (without giving effect to any transfer or conveyance under the
Agreement) or Buyer (after giving effect to the transfers under the Agreement)
whether 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 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.
"Related Security" means, with respect to any Receivable:
(i) all of Originator's interest in the Equipment or other inventory and
goods (including returned or repossessed inventory or goods), if any,
the 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, 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 Records related to such Receivable,
(vi) all proceeds of any of the foregoing.
"Required Capital Amount" means, as of any date of determination, an amount
equal to 3.5% of the Outstanding Balance of all Receivables at such time.
"Settlement Date" means the seventeenth day of each calendar
month, or if such day is not a Business Day, the next succeeding Business
Day.
"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 October 6, 2000, between Originator 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.
"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 from time to time in effect in
the State of Illinois.
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 Illinois, and not specifically defined
herein, are used herein as defined in such Article 9.
Exhibit II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
Places of Business:
Locations of Records:
Federal Employer Identification Number:
Corporate, Partnership Trade and Assumed Names:
Exhibit III
Lock-boxes; Collection Accounts; Collection Banks
Exhibit IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that certain
Receivables Sale Agreement dated as of October 6, 2000, between ANIXTER INC.
("Originator") and ANIXTER RECEIVABLES CORPORATION ("Buyer")(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 Originator.
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 Originator 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 an
Amortization Event or a Potential Amortization 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
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 Originator has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _____ day of _______,
20__.
ANIXTER INC.
By: __________________________
Name:
Title:
Exhibit V
Credit and Collection Policy
(See attached)
Exhibit VI
Form of Stockholder Subscription Agreement
STOCKHOLDER AND SUBSCRIPTION AGREEMENT
THIS STOCKHOLDER AND SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of
October 6, 2000, is entered into by and between ANIXTER RECEIVABLES CORPORATION
a Delaware corporation ("SPV"), and ANIXTER INC., a Delaware corporation
("Parent"). Except as otherwise specifically provided herein, capitalized terms
used in this Agreement have the meanings ascribed thereto in the Receivables
Sale Agreement, dated as of even date herewith, between SPV and Parent (as
amended, restated, supplemented or otherwise modified from time to time, the
"Sale Agreement").
RECITALS
A. SPV has been organized under the laws of the State of Delaware for the
purpose of, among other things, purchasing, holding, financing, receiving and
transferring accounts receivable and related assets originated or otherwise held
by Parent.
B. Contemporaneously with the execution and delivery of this Agreement: (i)
Parent and SPV have entered into the Sale Agreement pursuant to which Parent
has, from and after the initial purchase date thereunder and prior to the
termination date specified therein, sold all of its Receivables, Collections and
Related Security to SPV; and (ii) SPV, Parent, as Servicer, certain financial
institutions party thereto as "Purchasers," and Bank One, NA, as the "Agent,"
have entered into a Receivables Purchase Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the "Purchase Agreement")
pursuant to which SPV will sell "Purchaser Interests" to the Agent for the
benefit of the Purchasers.
C. SPV desires to sell shares of its capital stock to Parent, and Parent
desires to purchase such shares, on the terms set forth in this Agreement.
NOW, THEREFORE, SPV and Parent agree as follows:
Section 1. Purchase and Sale of Capital Stock. Parent hereby purchases from
SPV, and SPV hereby sells to Parent, 1,000 shares of common stock, par value
$0.01 per share, of SPV (the "Common Stock") for the Stock Purchase Price set
forth in Section 2(a). The shares of Common Stock being purchased under this
Agreement are referred to herein as the "Shares." Within three (3) Business Days
from the date hereof, SPV shall deliver to Parent a certificate registered in
Parent's name representing the Shares.
Section 2. Consideration for Shares and Capital Contributions.
(a) Consideration for Shares. To induce SPV to enter into the Sale Agreement and
to enable SPV to fund its obligations thereunder by consummating the
transactions contemplated by the Purchase Agreement, and in reliance upon the
representations and warranties set forth herein, Parent hereby pays to SPV on
the date hereof the sum of $14,600,000 (the "Stock Purchase Price") in
consideration of the purchase of the Shares. The Stock Purchase Price shall take
the form of a transfer of cash, except that Parent may, in lieu of cash payment
of the Stock Purchase Price, offset the amount of the Stock Purchase Price
against the purchase price otherwise payable by SPV to Parent on the purchase
date pursuant to the Sale Agreement.
(b) Contributions After Initial Closing Date. From time to time Parent may make
additional capital contributions to SPV. All such contributions shall take the
form of a cash transfer, except that SPV agrees, in lieu of cash payment
thereof, to offset the amount of such contributions against the purchase price
for Receivables otherwise payable by SPV to Parent on the date of such capital
contributions. All of the Receivables so paid for through such offset shall
constitute purchased Receivables within the meaning of the Sale Agreement and
shall be subject to all of the representations, warranties and indemnities
otherwise made thereunder. It is expressly understood and agreed that Parent has
no obligations under this Agreement or otherwise to make any capital
contributions from and after payment of the Stock Purchase Price.
Section 3. Representations and Warranties of SPV. SPV represents and
warrants to Parent as follows:
(a) SPV is a corporation duly incorporated validly existing and in good standing
under the laws of the State of Delaware, and has all requisite corporate power
and authority to carry on its business as proposed to be conducted on the date
hereof.
(b) SPV has all requisite legal and corporate power otherwise, to enter into
this Agreement, to issue the Shares and to perform its other obligations under
this Agreement.
(c) Upon receipt by SPV of the Stock Purchase Price and the issuance of the
Shares to Parent, the Shares will be duly authorized, validly issued, fully paid
and nonassessable.
(d) SPV has taken all corporate action necessary for its authorization,
execution and delivery of, and, its performance under, this Agreement.
(e) This Agreement constitutes a legally valid and binding obligation of SPV,
enforceable against SPV in accordance with its terms, except that enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(f) SPV has filed its Certificate of Incorporation in the form attached hereto
as Annex A with the Secretary of State of Delaware and (ii) adopted By-laws in
the form attached hereto as Annex B.
(g) The issuance of the Shares by SPV hereunder is legally permitted by all
laws and regulations to which SPV is subject.
Section 4. Representations and Warranties of Parent. Parent represents and
warrants to SPV as follows:
(a) Parent is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to carry on its business as conducted on the date
hereof.
(b) Parent has all requisite legal and corporate power otherwise, to enter into
this Agreement, to purchase the Shares and to perform its other obligations
under this Agreement.
(c) Parent has taken all corporate action necessary for its authorization,
execution and delivery of, and
its performance under, this Agreement.
(d) This Agreement constitutes a legally valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, except that
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) Parent is purchasing the Shares for investment for its own account, not
as a nominee or agent, and not with a view to any distribution of any part
thereof. Parent has no current intention of selling, granting a participation
in, or otherwise distributing, the shares.
(e) Parent understands that the Shares have not been registered under the
Securities Act of 1933, as amended, or under any other Federal or state law, and
that SPV does not contemplate such a registration.
(f) Parent has such knowledge, sophistication and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
transactions contemplated by this Agreement, and has made such investigations in
connection herewith as have been deemed necessary or desirable to make such
evaluation.
(g) The purchase of the Shares by Parent is legally permitted by all laws and
regulations to which Parent is subject.
Section 5. Restrictions on Transfer Imposed by the Act; Legend.
(a) Legend. Each certificate representing any Shares shall be endorsed with
the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT REGISTERED PURSUANT
TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT. SUCH
SECURITIES SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE
TRANSFERRED OR DISPOSED OF ABSENT SUCH REGISTRATION, UNLESS, IN THE OPINION OF
THE CORPORATION'S COUNSEL, SUCH REGISTRATION IS NOT REQUIRED. IN ADDITION, THESE
SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON SECTION 4(2) OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN
A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER SUCH ACT.
(b) Registration of Transfers. SPV need not register a transfer of any Shares
unless the conditions specified in the legend set forth in Section 5(a) hereof
are satisfied. SPV may also instruct its transfer agent (which may be SPV) not
to register the transfer of any Shares unless the conditions specified in the
legend set forth in Section 5(a) hereof are satisfied.
Section 6. Agreement to Vote. Parent hereby agrees and covenants to vote
all of the shares of Common Stock now or hereafter owned by it, whether
beneficially or otherwise, as is necessary at a meeting of stockholders of SPV,
or by written consent in lieu of any such meeting, to cause to be elected to,
and maintained on, SPV's board of directors at least one (1) person meeting the
qualifications of an Independent Director and selected in accordance with the
provisions of the Certificate of Incorporation and By-Laws of SPV.
Section 7. Successors and Assigns. Each party agrees that it will not
assign, sell, transfer, delegate, or otherwise dispose of, whether voluntarily
or involuntarily, or by operation of law, any right or obligation under this
Agreement except in connection with a transfer of Shares in compliance with the
terms and conditions hereof, as contemplated by Section 5(b) above, or otherwise
in accordance with the terms hereof. Any purported assignment, transfer or
delegation in violation of this Section 7 shall be null and void ab initio.
Subject to the foregoing limits on assignment and delegation and except as
otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, legatees, executors,
administrators, assignees and legal successors.
Section 8. Amendments and Waivers. Any term hereof may be amended and the
observance of any term hereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of SPV and Parent. Any amendment or waiver so effected shall be binding
upon SPV and Parent.
Section 9. Further Acts. Each party agrees to perform any further acts and
execute and deliver any document which may be reasonably necessary to carry out
the provisions of this Agreement.
Section 10. Counterparts. This Agreement may be executed in any number of
counterparts, and all of such counterparts together will be deemed one
instrument.
Section 11. Notices. Any and all notices, acceptances, statements and other
communications to Parent in connection herewith shall be in writing, delivered
personally, by facsimile or certified mail, return receipt requested, and shall
be addressed to the address of Parent indicated on the stock transfer register
of SPV or, if no address is so indicated, to the address provided to SPV
pursuant to the Sale Agreement unless changed by written notice to SPV or its
successor.
Section 12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, EXCEPT AND TO THE
EXTENT THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE IS APPLICABLE.
Section 13. Entire Agreement. This Agreement, together with the Sale
Agreement and the documents expressly to be delivered in connection therewith,
constitute the entire understanding and agreement between the parties hereto
with subject matter hereof and thereof.
Section 14. Severability of this Agreement. In case any provision of this
Agreement shall be invalid or unenforceable, the validity, legality and
enforceability of the remaining shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
ANIXTER RECEIVABLES CORPORATION
By:______________________________________________________
Name:
Title:
ANIXTER INC.
By:______________________________________________________
Name:
Title:
ANNEX A
to Subscription Agreement
Certificate of Incorporation
(see attached)
ANNEX B
to Subscription Agreement
By-Laws
(see attached)
-i-
Exhibit VII
Form of Subordinated Note
SUBORDINATED NOTE
October 6, 2000
1. Note. FOR VALUE RECEIVED, the undersigned, ANIXTER RECEIVABLES CORPORATION, a
Delaware corporation ("SPV"), hereby unconditionally promises to pay to the
order of ANIXTER INC., a Delaware corporation ("Originator"), in lawful money of
the United States of America and in immediately available funds, on the date
following the Amortization 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 reduced to zero and (ii) Originator 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 Originator to SPV pursuant to and in accordance with the terms
of that certain Receivables Sale Agreement dated as of October 6, 2000 between
Originator 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 the Base Rate less 1.50% 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 the Base Rate plus 0.50% 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. Originator 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 Originator 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 October 6, 2000 by
and among SPV, Originator, 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, Originator 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 (i) Originator 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 (ii)
nothing in this paragraph shall restrict SPV from paying, or Originator 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 Originator
in violation of the immediately preceding sentence, Originator 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 Originator 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
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 CHICAGO,
ILLINOIS, 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
ILLINOIS. 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.
Originator 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 Originator without the prior
written consent of the Agent, and any such attempted transfer shall be void.
ANIXTER RECEIVABLES CORPORATION
By: ____________________________________________
Name:
Title:
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount of Unpaid Principal
Subordinated Principal Notation made
Date Loan Paid Balance by
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Schedule A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
(See Attached.)
TABLE OF CONTENTS
Page
ARTICLE I AMOUNTS AND TERMS...................................................2
Section 1.1 Purchase of Receivables......................................2
Section 1.2 Payment for the Purchase ...................................3
Section 1.3 Purchase Price Credit Adjustments............................6
Section 1.4 Payments and Computations, Etc...............................6
Section 1.5 Transfer of Records..........................................6
Section 1.6 Characterization.............................................7
ARTICLE II REPRESENTATIONS AND WARRANTIES.....................................7
Section 2.1 Representations and Warranties of Originator.................7
ARTICLE III CONDITIONS OF PURCHASE...........................................11
Section 3.1 Conditions Precedent to Purchase............................11
Section 3.2 Conditions Precedent to Subsequent Payments.................11
ARTICLE IV COVENANTS.........................................................11
Section 4.1 Affirmative Covenants of Originator.........................11
Section 4.2 Negative Covenants of Originator............................16
ARTICLE V AMORTIZATION EVENTS................................................17
Section 5.1 Amortization Events.........................................17
Section 5.2 Remedies 18
ARTICLE VI INDEMNIFICATION...................................................19
Section 6.1 Indemnities by Originator...................................19
Section 6.2 Other Costs and Expenses....................................21
ARTICLE VII MISCELLANEOUS....................................................21
Section 7.1 Waivers and Amendments......................................21
Section 7.2 Notices 22
Section 7.3 Protection of Ownership Interests of Buyer..................22
Section 7.4 Confidentiality.............................................22
Section 7.5 Bankruptcy Petition.........................................23
Section 7.6 CHOICE OF LAW...............................................23
Section 7.7 CONSENT TO JURISDICTION.....................................23
Section 7.8 WAIVER OF JURY TRIAL........................................24
Section 7.9 Integration; Binding Effect; Survival of Terms..............24
Section 7.10 Counterparts; Severability; Section References.............24
Exhibits and Schedules
EXHIBIT I Definitions
EXHIBIT II Principal Place of Business; Location(s) of Records;
Federal Employer Identification Number; 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
EXHIBIT VII Form of Subordinated Note
SCHEDULE A List of Documents to Be Delivered to Buyer Prior to the
Purchase
