EXECUTION COPY
RECEIVABLES SALE AGREEMENT
RECEIVABLES SALE AGREEMENT, dated as of April 3, 1998 (this
"AGREEMENT"), among UNITED STATIONERS SUPPLY CO., an Illinois corporation
("USSC") (the "SELLER", and together with each other Subsidiary of UNITED
STATIONERS INC. from time to time added as a seller hereunder pursuant to
Section 9.13, the "SELLERS"); USS RECEIVABLES COMPANY, LTD., a Cayman Islands
limited liability company (the "COMPANY"); and UNITED STATIONERS SUPPLY CO., in
its capacity as servicer (the "SERVICER").
W I T N E S S E T H:
WHEREAS, the Sellers intend to sell Receivables and Receivables
Property (both as hereinafter defined) to the Company on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, the Company desires to purchase Receivables and Receivables
Property from the Sellers on the terms and subject to the conditions set forth
in this Agreement;
WHEREAS, the Sellers and the Company desire the sale of Receivables
and Receivables Property from the Sellers to the Company to be a true sale
providing the Company with the full benefits of ownership of the Receivables;
and
WHEREAS, to obtain a portion of the necessary funds to purchase such
Receivables and Receivables Property, the Company has entered into the Pooling
Agreement and the Series 1998-1 Supplement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"ABR" means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate.
"ADDITIONAL SELLER SUPPLEMENT" means an instrument substantially in
the form of Exhibit B hereto pursuant to which a Subsidiary of United Stationers
Inc. becomes a Seller party hereto.
"AUTHORIZED OFFICERS" means those officers of the Sellers designated
in Schedule I hereto (or in such other Schedule as may be delivered by the
Sellers to the other parties hereto from time to time) as duly authorized to
execute and deliver this Agreement and any instruments or documents in
connection herewith on behalf of the Sellers and to take, from time to time, all
other actions on behalf of the Sellers in connection herewith.
"CLOSING DATE" means the date of the initial issuance of the Investor
Certificates.
"CODE" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder or any successor statute and related regulations.
"CONTRACT" means a contract between any Seller and any Person pursuant
to or under which such Person shall be obligated to make payments to such
Seller.
"DOCUMENTS" has the meaning specified in subsection 5.01(r).
"DISCOUNTED PERCENTAGE" has the meaning specified in Schedule VII
hereto.
"EARLY TERMINATION" has the meaning specified in Section 6.01.
"EFFECTIVE DATE" means (i) with respect to each Seller on the date
hereof, April 3, 1998 and (ii) with respect to any Subsidiary of United
Stationers Inc. added as a Seller pursuant to Section 9.13 hereof, the Seller
Addition Date with respect to each such Subsidiary.
"ERISA AFFILIATE" means, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of a group of which such
Person is a member and which is treated as a single employer under Section 414
of the Internal Revenue Code.
"EXCLUDED RECEIVABLE" means any Receivable which either (i) arises
from any Seller's advertising business; (ii) is owed by a Person who is not a
resident of the United States, its territories or possessions and/or a payment
obligation of a Person that is not denominated and payable in U.S. Dollars in
the United States; (iii) is owed by a Governmental Authority; or (iv) the
payment for which is evidenced or required to be
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evidenced by a note or other promissory instrument; PROVIDED that in the event
any Excluded Receivable is included in a Required Report, for the purposes of
Section 2.01 hereof, Section 2.1 of the Pooling Agreement and the definition of
"Collections", such receivable shall not be an Excluded Receivable.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by The Chase Manhattan Bank from three federal funds
brokers of recognized standing selected by The Chase Manhattan Bank.
"INDEMNIFIED AMOUNTS" has the meaning specified in Section 7.01.
"INITIAL SUBORDINATED NOTE AMOUNT" has the meaning specified in
subsection 8.01(b).
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or other similar right
of a third party with respect to such securities; PROVIDED, HOWEVER, that if a
lien is imposed under Section 412(n) of the Internal Revenue Code or Section
302(f) of ERISA for a failure to make a required installment or other payment to
a plan to which Section 412(n) of the Internal Revenue Code or Section 302(f) of
ERISA applies, then such lien shall not be treated as a "Lien" from and after
the time any Person who is obligated to make such payment pays to such plan the
amount of such lien determined under Section 412(n)(3) of the Internal Revenue
Code or Section 302(f)(3) of ERISA, as the case may be, and provides to the
Trustee, any Agent and each Rating Agency written evidence reasonably
satisfactory to the Rating Agencies of the release of such lien, or such lien
expires pursuant to Section 412(n)(4)(B) of the Internal Revenue Code or Section
302(f)(4)(B) of ERISA.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which such Person or any ERISA Affiliate
of such Person (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Internal Revenue Code) is making or
accruing an obligation to make contributions, or has within any of the preceding
five years made or accrued an obligation to make contributions.
"OUTSTANDING SALE PRICE AMOUNT" means, at any time with respect to any
Seller, the sum of (i) the aggregate purchase price received by such Seller from
the Company with respect to the aggregate outstanding Principal Amount at such
time of the Receivables of such Seller sold to the Company by such Seller on the
Effective Date and (ii) the aggregate
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Purchase Price received by such Seller from the Company with respect to the
aggregate outstanding Principal Amount at such time of the Purchased Receivables
of such Seller.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PAYMENT DATE" has the meaning specified in subsection 2.03(a).
"PLAN" means, with respect to any Person, any pension plan (other than
a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Internal Revenue Code which is maintained for employees of such
Person or any ERISA Affiliate of such Person.
"POOLING AGREEMENT" means the Pooling Agreement, dated as of the date
hereof, among the Company, the Servicer and the Trustee on behalf of the
Holders, as such agreement may be amended, supplemented, waived, or otherwise
modified from time to time, including, without limitation, the Series 1998-1
Supplement.
"POTENTIAL PURCHASE TERMINATION EVENT" means any condition or act
specified in Section 6.01 that, with the giving of notice or the lapse of time
or both, would become a Purchase Termination Event.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"PURCHASE PRICE" has the meaning specified in Section 2.02.
"PURCHASE TERMINATION DATE" means, with respect to any Seller, the
date on which the Company's obligation to purchase Receivables from such Seller
shall terminate, which shall be the date on which an Early Termination occurs
with respect to such Seller.
"PURCHASE TERMINATION EVENT" has the meaning specified in Section
6.01.
"PURCHASED RECEIVABLE" means, at any time, any Receivable sold to the
Company by any Seller pursuant to, and in accordance with the terms of, this
Agreement and not theretofore resold to such Seller pursuant to subsection
2.01(b) or Section 2.06.
"PURCHASED RECEIVABLES PERCENTAGE" means, with respect to any Seller
as to which USSC has submitted a Seller Termination Request, the percentage
equivalent of a fraction, the numerator of which is an amount equal to the
aggregate outstanding Principal Amount of Purchased Receivables sold by such
Seller as of the applicable Seller Termination Request Date, and the denominator
of which is an amount equal to the aggregate outstanding Principal Amount of all
Purchased Receivables as of such date.
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"RECEIVABLE" means the indebtedness and payment obligations of any
Person to a Seller (including, without limitation, obligations constituting an
account or general intangible or evidenced by a note, instrument, contract,
security agreement, chattel paper or other evidence of indebtedness or security)
arising from a sale of merchandise or the provision of services by such Seller,
including, without limitation, any right to payment for goods sold or for
services rendered, and including the right to payment of any interest, sales
taxes, finance charges, returned check or late charges and other obligations of
such Person with respect thereto; PROVIDED that, except as otherwise expressly
provided, for all purposes hereunder "RECEIVABLES" shall not include Excluded
Receivables.
"RECEIVABLES LIST" has the meaning specified in subsection 2.01(e).
"RECEIVABLES PROPERTY" has the meaning specified in Section 2.01.
"RELATED PROPERTY" means, with respect to each Receivable:
(a) all of the applicable Seller's interest in the goods
(including returned goods), if any, relating to the sale which gave rise to
such Receivable;
(b) all other security interests or Liens, and the applicable
Seller's interest in the property subject thereto from time to time
purporting to secure payment of such Receivable, together with all
financing statements signed by an Obligor describing any collateral
securing such Receivable; and
(c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable;
in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or including without limitation, pursuant to any
obligations evidenced by a note, instrument, contract, security agreement,
chattel paper or other evidence of indebtedness or security and the proceeds
thereof.
"RELEVANT UCC STATE" means each jurisdiction in which the filing of a
UCC financing statement is necessary or desirable to perfect the Company's
interest in the Receivables.
"REPORTABLE EVENT" means any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Internal
Revenue Code).
"SEC" means the United States Securities and Exchange Commission.
"SELLER ADDITION DATE" has the meaning specified in Section 3.02.
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"SELLER ADJUSTMENT PAYMENT" has the meaning specified in Section 2.05.
"SELLER REPURCHASE PAYMENT" has the meaning specified in Section 2.06.
"SELLER TERMINATION REQUEST" has the meaning specified in subsection
9.14(a).
"SELLER TERMINATION REQUEST DATE" has the meaning specified in
subsection 9.14(a).
"SERIES 1998-1 SUPPLEMENT" means the Series 1998-1 Supplement, dated
as of the date hereof, among the Company, the Servicer and the Trustee, to the
Pooling Agreement, as each such agreement may be amended, supplemented or
otherwise modified from time to time.
"SUBORDINATED NOTE" has the meaning specified in Section 8.01.
"UCC CERTIFICATE" means a certificate substantially in the form of
Exhibit C hereto.
"WITHDRAWAL LIABILITIES" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
(b) All capitalized terms used herein and not otherwise defined have
the meanings assigned such terms in Section 1.1 of the Pooling Agreement.
Section 1.02. ACCOUNTING AND UCC TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP; and all
terms used in Article 9 of the UCC that are used but not specifically defined
herein are used herein as defined therein.
Section 1.03. OTHER TERMS. The words "herein", "hereof", and
"hereunder" and words of similar import refer to this Agreement as a whole,
including the exhibits and schedules hereto, as the same may from time to time
be amended or supplemented, and not to any particular section, subsection or
clause contained in this Agreement, and all references to Sections, Exhibits and
Schedules shall mean, unless the context clearly indicates otherwise, the
Sections hereof and the Exhibits and Schedules attached hereto, the terms of
which Exhibits and Schedules are hereby incorporated into this Agreement.
Whenever appropriate, in the context, terms used herein in the singular also
include the plural, and vice versa.
Section 1.04. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
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ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
Section 2.01. PURCHASE AND SALE OF RECEIVABLES. (a) Each of the
Sellers hereby sells, assigns, transfers and conveys to the Company, without
recourse (except to the limited extent provided herein), all its respective
right, title and interest in, to and under (i) all Receivables now existing and
hereafter arising from time to time, (ii) all payment and enforcement rights
(but none of the obligations) with respect to such Receivables, (iii) all
Related Property in respect of such Receivables and (iv) all Collections with
respect to the foregoing clauses (i), (ii) and (iii) (the payment and
enforcement rights, Related Property and Collections referred to in clauses
(ii), (iii) and (iv) above are hereinafter collectively referred to as the
"RECEIVABLES PROPERTY").
(b) On each applicable Effective Date and on the date of creation of
each newly created Receivable (but only so long as no Early Termination with
respect to the Seller which created such Receivable shall have occurred and be
continuing), all of the applicable Seller's right, title and interest in, to and
under (i) in the case of each such Effective Date, all then existing Receivables
and all Receivables Property in respect of such Receivables and (ii) in the case
of each such date of creation, all such newly created Receivables and all
Receivables Property in respect of such Receivables shall be immediately and
automatically sold, assigned, transferred and conveyed to the Company pursuant
to paragraph (a) above without any further action by such Seller or any other
Person. If any Seller shall not have received payment from the Company of the
Purchase Price for any newly created Receivable and the related Receivables
Property on the Payment Date therefor in accordance with the terms of subsection
2.03(b), such newly created Receivable and the Receivables Property with respect
thereto shall, upon receipt of notice from the applicable Seller of such failure
to receive payment, immediately and automatically be sold, assigned, transferred
and reconveyed by the Company to such Seller without any further action by the
Company or any other Person.
(c) The parties to this Agreement intend that the transactions
contemplated by subsections 2.01(a) and (b) hereby shall be, and shall be
treated as, a purchase by the Company and a sale by the applicable Seller of the
Purchased Receivables and the Receivables Property in respect thereof and not a
loan secured by such Purchased Receivables and Receivables Property. All sales
of Receivables and Receivables Property by any Seller hereunder shall be without
recourse to, or representation or warranty of any kind (express or implied) by,
any Seller, except as otherwise specifically provided herein. The foregoing
sale, assignment, transfer and conveyance does not constitute and is not
intended to result in a creation or assumption by the Company of any obligation
of any Seller or any other Person in connection with the Receivables, the
Receivables Property or any agreement or instrument relating thereto, including
any obligation to any Obligor. If this Agreement does not constitute a valid
sale, assignment, transfer and conveyance of all right, title and interest of
each Seller in, to and under the Purchased Receivables and the Receivables
Property in respect thereof despite the intent of the parties hereto, such
Seller hereby grants a "security interest" (as defined in the UCC) in the
Purchased Receivables, the Receivables
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Property in respect thereof and all proceeds thereof to the Company and the
parties agree that this Agreement shall constitute a security agreement under
the UCC.
(d) In connection with the foregoing conveyances, each Seller agrees
to record and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables and Receivables Property now existing and hereafter
acquired by the Company from the Sellers meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the Company's ownership or security interest in the Receivables and Receivables
Property, and to deliver evidence of the execution and delivery of such
financing statements to the Company on or prior to the related Effective Date.
(e) In connection with the foregoing conveyances, each Seller agrees
at its own expense, as agent of the Company, (i) to indicate on the computer
files containing a master database of Receivables that all Receivables included
in such files and all Receivables Property, have been sold to the Company in
accordance with this Agreement and (ii) to deliver to the Company computer
files, microfiche lists, a typed or printed list or other tangible evidence
reasonably acceptable to the Company (the "RECEIVABLES LIST") containing true
and complete lists, as of the Cut-Off Date, of the Obligors whose Receivables
are to be transferred to the Company on the Effective Date and the balance of
the Receivables originated by each such Obligor as of the Cut-Off Date.
Section 2.02. PURCHASE PRICE. The amount payable by the Company to a
Seller, (the "PURCHASE PRICE") for Receivables and Receivables Property on any
Payment Date under this Agreement shall be equal to the product of (a) the
aggregate outstanding Principal Amount of such Receivables as set forth in the
applicable Required Report; (b) the Discounted Percentage with respect to such
Seller.
Section 2.03. PAYMENT OF PURCHASE PRICE. (c) Upon the fulfillment of
the conditions set forth in Article III, the Purchase Price for Receivables and
the Receivables Property shall be paid or provided for by the Company in the
manner provided below on each day for which a Required Report is delivered to
the Company (each such day, a "PAYMENT DATE") in respect of a Reported Period
(which Required Report shall specify, by Seller, the Principal Amount of
Receivables being sold on such Payment Date, the aggregate Purchase Price for
such Receivables and the components of payment as provided in paragraph (b)
below). The Sellers hereby appoint the Servicer as their agent to receive, for
allocation by the Servicer to the Sellers, payments of the Purchase Price of the
Receivables and the Receivables Property sold to the Company and hereby
authorize the Company to make all such payments due to any Seller directly to an
account of, or as otherwise directed by, the Servicer. The Servicer hereby
accepts and agrees to such appointment. All payments under this Agreement shall
be made not later than 3:00 p.m. (New York City time) on the date specified
therefor in Dollars in same day funds or by check, as the Servicer shall elect,
and to the bank account designated in writing by the Servicer to the Company.
(b) The Purchase Price for Receivables and Receivables Property shall
be paid by the Company on each Payment Date as follows:
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(i) by netting the amount of any Seller Adjustment Payments or
Seller Repurchase Payments pursuant to Section 2.05 or 2.06, respectively,
against such Purchase Price;
(ii) to the extent available for such purpose, in cash from
Collections released to the Company pursuant to the Pooling Agreement;
(iii) to the extent available for such purpose, in cash from the
net proceeds of a transfer of interests in Purchased Receivables by the
Company to other Persons;
(iv) at the option of the Company, by means of an addition to the
principal amount of the Subordinated Note in an aggregate amount equal to
the remaining portion of the Purchase Price; PROVIDED, HOWEVER, that with
respect to any Seller, the outstanding principal amount of such Seller's
interest in the Subordinated Note shall not at any time exceed 25% of the
Outstanding Sale Price Amount with respect to such Seller; PROVIDED FURTHER
that the Company may pay the Purchase Price by means of additions to the
principal amount of the Subordinated Note only if, at the time of such
payment and after giving effect thereto, the fair market value of the
Company's assets, including, without limitation, any beneficial interests
in or indebtedness of a trust and all Receivables and Receivables Property
the Company owns, is greater than the amount of its liabilities including
its liabilities on the Subordinated Note and all interest and other fees
due and payable under the Pooling Agreement and the other Transaction
Documents. Any such addition to the principal amount of the Subordinated
Note shall be allocated among the Sellers (PRO RATA according to the
Principal Amount of Receivables sold by each Seller) by the Servicer in
accordance with the provisions of this subsection 2.03(b)(iv) and Section
8.01. The Servicer may evidence such additional principal amounts by
recording the date and amount thereof on the grid attached to such
Subordinated Note, PROVIDED that the failure to make any such recordation
or any error in such grid shall not adversely affect any Seller's rights;
and
(v) in cash from the proceeds of capital contributed by USSC to
the Company, if any, in respect of its equity interest in the Company.
(c) The Servicer shall be responsible, in its sole discretion but in
accordance with the preceding subsection 2.03(b), for allocating among the
Sellers the payment of the Purchase Price for Receivables and any amounts netted
therefrom pursuant to subsection 2.03(b)(i), which allocation shall be, subject
to the first proviso contained in subsection 2.03(b)(iv), either in the form of
cash received from the Company or as an addition to the principal amount of a
Seller's interest in the Subordinated Note.
(d) Whenever any payment to be made under this Agreement shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day. Amounts not paid when due in accordance
with the terms of this
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Agreement shall bear interest at a rate equal at all times to the ABR PLUS 2%,
payable on demand.
Section 2.04. NO REPURCHASE. Except to the extent expressly set
forth herein, no Seller shall have any right or obligation under this Agreement,
by implication or otherwise, to repurchase from the Company any Purchased
Receivables or Receivables Property or to rescind or otherwise retroactively
affect any purchase of any Purchased Receivables or Receivables Property after
the Payment Date relating thereto.
Section 2.05. REBATES, ADJUSTMENTS, RETURNS AND REDUCTIONS;
MODIFICATIONS. From time to time, a Seller may make Dilution Adjustments to
Receivables in accordance with this Section 2.05 and subsection 5.03(c). The
Sellers, jointly and severally, agree to pay to the Company in cash, on the
first Business Day immediately succeeding the date of the grant of any Dilution
Adjustment (regardless of which Seller shall have granted such Dilution
Adjustment), the amount of any such Dilution Adjustment (a "SELLER ADJUSTMENT
PAYMENT"); PROVIDED that, prior to the occurrence of any Early Termination with
respect to all Sellers, any such Seller Adjustment Payment due to the Company on
any Payment Date shall, on such Payment Date, be netted against the Purchase
Price of newly created Receivables in accordance with subsection 2.03(b)(i) to
the extent of such Purchase Price and the remaining amount of such Seller
Adjustment Payment due to the Company after such netting, if any, shall be paid
to the Company on such date in cash. The amount of any Dilution Adjustment made
with respect to any Reported Period shall be set forth on the Required Report
prepared with respect to such Reported Period.
Section 2.06. LIMITED REPURCHASE OBLIGATION. In the event that (i)
any representation or warranty contained in Section 4.02 in respect of any
Receivable transferred to the Company is not true and correct in any material
respect on the applicable Payment Date, or (ii) there is a breach of any
covenant contained in subsection 5.01(d), (g) or (h) or Section 5.03 with
respect to any Receivable and such breach has a material adverse effect on the
Company's interest in such Receivable or (iii) the Company's interest in any
Receivable is not a first priority perfected ownership or security interest at
any time as a result of any action taken by, or any failure to take action by,
any Seller, then the Sellers, jointly and severally, agree to pay to the Company
in cash an amount equal to the Purchase Price of such Receivable (whether the
Company paid such Purchase Price in cash or otherwise) less Collections received
by the Company in respect of such Receivable, regardless of which Seller shall
have been responsible for such incorrectness or breach, such payment to occur no
later than the Payment Date occurring on the 30th day (or, if such 30th day is
not a Payment Date, on the Payment Date immediately succeeding such 30th day)
after the day such breach or incorrectness becomes known (or should have become
known with due diligence) to any Seller (unless such breach or incorrectness
shall have been cured on or before such day); PROVIDED that, prior to any Early
Termination with respect to all Sellers, any such payment due and owing to the
Company on such Payment Date shall be netted against the Purchase Price of newly
created Receivables in accordance with subsection 2.03(b)(i) to the extent of
such Purchase Price and the remaining amount of such payment due to the Company
after such netting, if any, shall be paid to the Company in cash to the extent
still unpaid on such Payment Date. Any payment by any Seller pursuant to this
Section 2.06 is referred to as a
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"SELLER REPURCHASE PAYMENT." The obligation to reacquire any Receivable shall,
upon satisfaction thereof, constitute the sole remedy respecting the event
giving rise to such obligation available to the Company. Simultaneously with
any Seller Repurchase Payment with respect to any Receivable, such Receivable
and the Receivables Property with respect thereto shall immediately and
automatically be sold, assigned, transferred and conveyed by the Company to the
applicable Seller without any further action by the Company or any other Person.
Section 2.07. OBLIGATIONS UNAFFECTED. The obligations of the Sellers
to the Company under this Agreement shall not be affected by reason of any
invalidity, illegality or irregularity of any Receivable or any sale of a
Receivable.
Section 2.08. CERTAIN CHARGES. Each Seller and the Company agree
that late charge revenue, reversals of discounts, other fees and charges and
other similar items, whenever created, accrued in respect of Purchased
Receivables shall be the property of the Company notwithstanding the occurrence
of an Early Termination and all Collections with respect thereto shall continue
to be allocated and treated as Collections in respect of Purchased Receivables.
Section 2.09. CERTAIN ALLOCATIONS. The Sellers hereby agree that,
following the occurrence of an Early Termination, all Collections and other
proceeds received in respect of Receivables generated by the Sellers shall be
applied, FIRST to pay the outstanding Principal Amount of Purchased Receivables
(as of the date of such Early Termination) of the Obligor to whom such
Collections are attributable until such Purchased Receivables are paid in full
and, SECOND to the related Seller to pay Receivables of such Obligor not sold to
the Company; PROVIDED, HOWEVER, that notwithstanding the foregoing, if an
Obligor indicates that a particular Collection be applied to a specific
Receivable of such Obligor, then such Collection shall be applied to pay such
Receivable.
Section 2.10. FURTHER ASSURANCES. From time to time at the request
of a Seller, the Company shall deliver to such Seller such documents,
assignments, releases and instruments of termination as such Seller may
reasonably request to evidence the reconveyance by the Company to such Seller of
a Receivable pursuant to the terms of Section 2.01(b) or Section 2.06, PROVIDED
that the Company shall have been paid all amounts due thereunder; and the
Company and the Servicer shall take such action as such Seller may reasonably
request, at the expense of such Seller, to assure that any such Receivable, the
Related Property and Collections with respect thereto do not remain commingled
with other Collections hereunder.
Section 2.11. PURCHASE OF SELLERS' INTEREST IN RECEIVABLES AND
RECEIVABLES PROPERTY. (a) In the event of any breach by any Seller of any of the
representations and warranties set forth in subsection 4.02(a), (b), (c), (e),
(f) or (g), as of the date made, which breach has a material adverse effect on
the interests of the Company in the Receivables or the Receivables Property,
then the Company, by notice then given in writing to such Seller, may direct
such Seller to purchase all Receivables and Receivables Property and such
Seller, jointly and severally with each of the Sellers, shall be obligated to
make such purchase on
11
the next Distribution Date occurring at least five Business Days after receipt
of such notice on the terms and conditions set forth in subsection 2.11(b)
below; PROVIDED, HOWEVER, that no such purchase shall be required to be made if,
by such Distribution Date, the representations and warranties contained in
subsections 4.02(a), (b), (c), (e), (f) or (g) shall be true and correct in all
material respects, and any material adverse effect on the Company caused thereby
has been cured.
(b) Such Sellers, jointly and severally with each of the Sellers,
shall, as the purchase price for the Receivables and Receivables Property to be
purchased pursuant to subsection 2.11(a) above, pay to the Company, on the
Business Day preceding such Distribution Date, an amount equal to the purchase
price of the Purchased Receivables, less Collections received by the Company in
respect of such Purchased Receivables, as of such Distribution Date. Upon
payment of such amount, in immediately available funds, to the Company, the
Company's rights with respect to the Purchased Receivables shall terminate and
such interest therein will be transferred to such Seller and the Company shall
have no further rights with respect thereto. If the Company gives notice
directing the Seller to purchase the Purchased Receivables as provided above,
the obligation of such Seller to purchase the Purchased Receivables pursuant to
this Section 2.11 shall upon satisfaction thereof constitute the sole remedy
respecting an event of the type specified in the first sentence of this Section
2.11 available to the Company.
ARTICLE III
CONDITIONS TO PURCHASES
Section 3.01. CONDITIONS PRECEDENT TO COMPANY'S INITIAL PURCHASE.
The obligation of the Company to purchase Receivables and Receivables Property
hereunder on the Effective Date from the Sellers is subject to the conditions
precedent that the Company shall have received on or before the date of such
purchase the following, each (unless otherwise indicated) dated the day of such
sale and in form and substance reasonably satisfactory to the Company:
(a) RESOLUTIONS. Copies of the resolutions of the Board of Directors
of each Seller approving this Agreement and the other Transaction Documents
to be delivered by such Seller and the transactions contemplated thereby,
certified by the Secretary or Assistant Secretary of such Seller;
(b) SECRETARY'S CERTIFICATE. A certificate of the Secretary or
Assistant Secretary of each Seller certifying the names and true signatures
of the officers authorized on behalf of such Seller to sign this Agreement
and the other Transaction Documents to be delivered by it (on which
certificates the Company may conclusively rely until such time as the
Company shall receive from any such Seller a revised certificate with
respect to such Seller meeting the requirements of this subsection (b));
(c) CORPORATE DOCUMENTS. The certificate or articles of
incorporation of each Seller, duly certified by the secretary of state of
such Seller's jurisdiction of
12
incorporation, as of a recent date acceptable to the Company, together with
a copy of the by-laws of such Seller, duly certified by the Secretary or an
Assistant Secretary of such Seller,
(d) UCC CERTIFICATE, UCC FINANCING STATEMENTS. (i) A UCC Certificate
duly executed by a Responsible Officer of the applicable Seller and dated
such date of purchase and (ii) executed copies of such proper financing
statements, filed prior to the Closing Date, naming the applicable Seller
as the seller and the Company as the purchaser of the Receivables and the
Receivables Property, in each jurisdiction in which the Company (or any of
its assignees) deems it necessary or desirable to perfect the Company's
ownership interest in all Receivables and Receivables Property under the
UCC or any comparable law of such jurisdiction;
(e) UCC SEARCHES. A written search report listing all effective
financing statements that name the applicable Seller as debtor or assignor
and that are filed in the jurisdictions in which filings were made pursuant
to subsection 3.01(d) and in any other jurisdictions that the Company
determines are necessary or appropriate, together with copies of such
financing statements (none of which, except for those described in
subsection 3.01(d) shall cover any Receivables or Receivables Property),
and tax and judgment lien searches showing no such liens that are not
permitted by the Transaction Documents;
(f) OTHER TRANSACTION DOCUMENTS. Original copies, executed by each
of the parties thereto, of each of the other Transaction Documents to be
executed and delivered in connection herewith;
(g) BACK-UP SERVICING ARRANGEMENTS. Evidence that each Seller
maintains disaster recovery systems and back-up computer and other
information management systems that, in the Company's reasonable judgment,
are sufficient to protect such Seller's business against material
interruption or loss or destruction of its primary computer and information
management systems.
(h) CONSENTS. Copies of all consents, if any (including, without
limitation, consents under loan agreements and indentures to which any
Seller or its Affiliates are parties), necessary to consummate the
transactions contemplated by the Transaction Documents;
(i) LEGAL OPINIONS. One or more legal opinions from counsel to the
Sellers and counsel to the Company to the effect that:
(A) the sales of Receivables by each Seller to the Company
pursuant to this Agreement are true sales and that such Receivables
would not be property of such Seller's bankruptcy estate;
(B) a court should not order the substantive consolidation of
the assets and liabilities of the Company with those of any Seller;
13
(C) to the effect that each Seller and the Company, as
applicable, has all approvals, judicial, regulatory, legal or
otherwise, needed to execute, deliver and perform each Transaction
Document to which it is a party and that no conflict or default will
occur as a result of the execution, delivery and performance thereof;
(D) to the effect that the Company has a perfected ownership or
security interest in the Receivables and Receivables Property; and
(E) addressing other customary matters.
All of the legal opinions referred to in this subsection 3.01(i) shall be
addressed to the Trustee and any other Person reasonably requested by the
Company.
(j) LOCKBOX AGREEMENT. With respect to each Lockbox Processor, a
Lockbox Agreement signed by the Servicer, the Company, the Trustee and such
Lockbox Processor, such Lockbox Agreement to be in substantially the form
of Exhibit A to the Pooling Agreement.
(k) LIST OF OBLIGORS. A Receivables List.
Section 3.02. CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER. No
Subsidiary of United Stationers Inc. approved by the Company as an additional
Seller pursuant to Section 9.13 shall be added as a Seller hereunder unless the
conditions set forth below shall have been satisfied on or before the date
designated for the addition of such Seller (the "SELLER ADDITION DATE"):
(a) ADDITIONAL SELLER SUPPLEMENT, UCC CERTIFICATE. The Company shall
have received (with a copy for the Trustee) (i) an Additional Seller
Supplement duly executed and delivered by such Seller and (ii) a UCC
Certificate duly executed by a Responsible Officer of such Seller and dated
the related Seller Addition Date.
(b) RESOLUTIONS. The Company shall have received copies of duly
adopted resolutions of the Board of Directors of such Seller as in effect
on the related Seller Addition Date and in form and substance reasonably
satisfactory to the Company, authorizing this Agreement, the documents to
be delivered by such Seller hereunder and the transactions contemplated
hereby, certified by the Secretary or Assistant Secretary of such Seller.
(c) SECRETARY'S CERTIFICATE. The Company shall have received duly
executed certificates of the Secretary or an Assistant Secretary of such
Seller, dated the related Seller Addition Date, certifying the names and
true signatures of the officers authorized on behalf of such Seller to sign
the Additional Seller Supplement or any instruments or documents in
connection with this Agreement.
14
(d) CORPORATE DOCUMENTS. The Company shall have received the
certificate or articles of incorporation of such Seller, duly certified by
the secretary of state of such Seller's jurisdiction of incorporation, as
of a recent date acceptable to the Company, together with a copy of the
by-laws of such Seller, duly certified by the Secretary or an Assistant
Secretary of such Seller,
(e) LOCKBOX AGREEMENT. A Lockbox Account with respect to Receivables
to be sold by such Seller shall have been established in the name of the
Company, and the Servicer shall have delivered with respect to such Lockbox
Account a Lockbox Agreement signed by it, the Company and the Trustee to
the applicable Lockbox Processor, such Lockbox Agreement to be in
substantially the form of Exhibit A to the Pooling Agreement.
(f) UCC SEARCHES. The Company shall have received reports of UCC and
other searches of such Seller with respect to the Receivables and the
Receivables Property reflecting the absence of Liens thereon, except Liens
created in connection with a transfer by the Company of such Purchased
Receivables and except for Liens as to which the Company has received UCC
termination statements to be filed on or prior to the related Seller
Addition Date.
(g) UCC FINANCING STATEMENTS. Such Seller shall have filed and
recorded, at its own expense, UCC-1 financing statements naming the Company
as purchaser and such Seller as seller with respect to the Receivables and
the Receivables Property (excluding returned merchandise) in such manner
and in such jurisdictions as are necessary or desirable to perfect the
Company's ownership or security interest therein under the UCC and
delivered evidence of such filings to the Company; and all other action
necessary or desirable, in the opinion of the Company, to perfect the
Company's ownership or security interest in the Receivables shall have been
duly taken.
(h) LIST OF OBLIGORS. Such Seller shall have delivered to the
Company a microfiche, a typed or printed list or other tangible evidence
reasonably acceptable to the Company showing as of a date acceptable to the
Company prior to the related Seller Addition Date the Obligors whose
Receivables are to be transferred to the Company and the balance of the
Receivables with respect to each such Obligor as of such date.
(i) OPINIONS. The Company shall have received (i) legal opinions on
behalf of such Seller as to general corporate matters of such Seller
(including, without limitation, an opinion as to the perfection and
priority of the Company's interest in the Purchased Receivables) and (ii)
confirmation (A) as to the "true sale" nature of the sale of Receivables of
such Seller hereunder and (B) as to the absence of substantive
consolidation issues between such Seller, United Stationers Inc. and USSC
on the one hand and the Company on the other hand, all in form and
substance reasonably satisfactory to the Company. Such legal opinions and
confirmation shall
15
be addressed to the Trustee and any other Person reasonably requested by
the Company.
(j) BACK-UP SERVICING ARRANGEMENTS. The Company shall have received
evidence that such Seller maintains disaster recovery systems and back-up
computer and other information management systems that, in the Company's
reasonable judgment, are sufficient to protect such Seller's business
against material interruption or loss or destruction of its primary
computer and information management systems.
(k) CONSENTS. The Company shall have received copies of all consents
with respect to such Seller, if any (including, without limitation,
consents under loan agreements and indentures to which such Seller or its
Affiliates are parties), necessary to consummate the transactions
contemplated by the Transaction Documents;
(l) PARTY TO SERVICING AGREEMENT. Such additional Seller shall have
become a party to the Servicing Agreement in its capacity as a Sub-Servicer
thereunder.
Section 3.03. CONDITIONS PRECEDENT TO ALL THE COMPANY'S PURCHASES OF
RECEIVABLES. The obligation of the Company to pay for any Receivable and the
Receivables Property with respect thereto on each Payment Date (including the
Effective Date) shall be subject to the further conditions precedent that, on
and as of such Payment Date:
(a) the following statements shall be true (and the acceptance by the
relevant Seller of the Purchase Price for such Receivable on such Payment
Date shall constitute a representation and warranty by such Seller that on
such Payment Date such statements are true):
(i) the representations and warranties of such Seller contained
in Section 4.02 shall be true and correct in all material respects on
and as of such Payment Date as though made on and as of such date
except to the extent any such representation or warranty is expressly
made only as of another date (in which case it shall be true and
correct in all material respects on and as of such other date);
(ii) after giving effect to such purchase, no (A) Early
Termination with respect to such Seller or (B) Potential Purchase
Termination Event with respect to a Purchase Termination Event set
forth in clause (g)(ii) of Section 6.01 shall have occurred and be
continuing; and
(iii) there has been no material adverse change since the date of
this Agreement in the collectibility of the Receivables taken as a
whole;
(b) the Company and the Trustee shall be satisfied that such Seller's
systems, procedures and recordkeeping relating to the Purchased Receivables
remain in all material respects sufficient and satisfactory in order to
permit the purchase and
16
administration of the Purchased Receivables in accordance with the terms
and intent of this Agreement;
(c) the Company shall have received payment in full of all amounts
for which payment is due from such Seller pursuant to Sections 2.05, 2.06
or 7.01;
(d) the Company shall have received such other approvals, opinions or
documents as the Company may reasonably request; and
(e) such Seller shall have complied with all of its covenants in all
material respects and satisfied all of its obligations in all material
respects under this Agreement required to be complied with or satisfied as
of such date;
PROVIDED, HOWEVER, that the failure of such Seller to satisfy any of the
foregoing conditions shall not prevent such Seller from subsequently selling
Receivables upon satisfaction of all such conditions or exercising its rights
under subsection 2.01(b).
Section 3.04. CONDITION PRECEDENT TO EACH SELLER'S OBLIGATIONS. The
obligation of a Seller on each Payment Date (including on the Effective Date)
shall be subject to the condition precedent that, on such date, the following
statement shall be true (and the payment by the Company of the Purchase Price
for such Receivable on such date shall constitute a representation and warranty
by the Company that on such Payment Date such statement is true): no Early
Amortization Event or Potential Early Amortization Event of a type, with respect
to the Company, set forth in subsection 7.1(a) of the Pooling Agreement shall
have occurred and be continuing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as to itself for the benefit of the Sellers as
follows:
(a) It (i) is a limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, and is duly qualified as a foreign limited liability company and
is in good standing in each jurisdiction in which the ownership of its
property or its business as conducted and proposed to be conducted require
such qualification or in which the failure to so qualify would not
reasonably be expected to have a Material Adverse Effect, (ii) has the
requisite limited liability company power and authority to effect the
transactions contemplated hereby, and (iii) has all requisite limited
liability company power and authority and the legal right to own, pledge,
mortgage and operate its properties, and to conduct its business as now or
currently proposed to be conducted.
(b) The execution, delivery and performance by it of this Agreement
and all instruments and documents to be delivered hereunder by it, and the
transactions
17
contemplated hereby and thereby, (i) are within its limited liability
company powers, have been duly authorized by all necessary limited
liability company action, including the consent of shareholders where
required, and do not (A) contravene its memorandum and articles of
association, (B) violate any law or regulation or any order or decree of
any court or governmental instrumentality, (C) conflict with or result in
the breach of, or constitute a default under, any indenture, mortgage or
deed of trust or any material lease, agreement or other instrument binding
on or affecting it or any of its respective subsidiaries or any of its
material properties or (D) result in or require the creation or imposition
of any Lien EXCEPT as created or imposed hereunder or under the Pooling
Agreement, and no transaction contemplated hereby requires compliance on
its part with any bulk sales act or similar law, and (ii) do not require
the consent of, authorization by or approval of or notice to or filing or
registration with, any governmental body, agency, authority, regulatory
body or any other Person other than those which have been obtained or made
EXCEPT for the filing of the financing statements referred to in ARTICLE
III hereof, which filings the Sellers hereby represent shall have been duly
made prior to or substantially contemporaneously with any purchases of
Receivables and other Receivables Property and shall at all times be in
full force and effect (except as they may be terminated by the Company).
This Agreement has been duly executed and delivered by the Company and
constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
Section 4.02. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each
Seller hereby represents and warrants for the benefit of the Company and its
assigns on the Closing Date and on each Payment Date, as follows:
(a) ORGANIZATION AND GOOD STANDING. Such Seller (i) is a corporation
duly organized and validly existing as a corporation in good standing under
the laws of the state of its incorporation, (ii) is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which
the failure to so qualify would reasonably be expected to have a Material
Adverse Effect and (iii) and has full corporate power, authority and legal
right to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement.
(b) DUE QUALIFICATION. Such Seller has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business requires such qualification,
licenses or approvals and where the failure to preserve and maintain such
qualification, licenses or approvals is reasonably likely to have a
Material Adverse Effect.
18
(c) DUE AUTHORIZATION. The execution and delivery of this Agreement
and the other Transaction Documents to which it is a party and the
consummation of the transactions provided for therein have been duly
authorized by such Seller by all necessary corporate action on its part.
(d) NO DEFAULT. Such Seller is not in default under or with respect
to any of its Contractual Obligations in any respect which would be
reasonably likely to have a Material Adverse Effect with respect to such
Seller. No (i) Early Termination or (ii) Potential Purchase Termination
Event with respect to a Purchase Termination Event set forth in clause
(g)(ii) of Section 6.01, in each case with respect to such Seller, has
occurred and is continuing.
(e) VALID SALE; BINDING OBLIGATIONS. Each transfer of Receivables
and Receivables Property made pursuant to this Agreement shall constitute a
valid sale, transfer and assignment of the Receivables and the Receivables
Property to the Company which is perfected and of first priority under
applicable law, enforceable against creditors of, and purchasers from, such
Seller; and this Agreement constitutes, and each other Transaction Document
to be signed by such Seller when duly executed and delivered will
constitute, an enforceable obligation of such Seller in accordance with its
terms, except (A) as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement
of creditors' rights in general, and (B) as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).
(f) NO VIOLATION. The execution, delivery and performance of, and
the consummation of the transactions contemplated by, this Agreement and
the other Transaction Documents and the fulfillment of the terms hereof and
thereof will not (i) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default (which, in the case of clauses (B) and (C) below
would reasonably be expected to cause a Material Adverse Effect) under, (A)
the articles or certificate of incorporation or by-laws of such Seller, (B)
any contract, indenture, loan agreement, mortgage, deed of trust, or, (C)
other agreement or instrument to which such Seller is a party or by which
such Seller or any of its material properties is bound, (ii) result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such contract, indenture, loan agreement, mortgage, deed
of trust, or other agreement or instrument, other than this Agreement and
the other Transaction Documents, or (iii) violate any law or any order,
rule, or regulation of any court or of any federal, state, local or other
regulatory body, administrative agency, or other governmental
instrumentality of the United States of America having jurisdiction over
such Seller or any of its properties.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the knowledge of such Seller, threatened against such Seller
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality (i) asserting the invalidity of this
Agreement or any other Transaction
19
Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction
Document, (iii) seeking any determination or ruling that, in the reasonable
judgment of such Seller, could materially and adversely affect the
performance by such Seller of its obligations under this Agreement or any
other Transaction Document or (iv) seeking any determination or ruling that
could materially and adversely affect the validity or enforceability of
this Agreement or any other Transaction Document.
(h) BULK SALES ACT. No transaction contemplated by this Agreement or
any other Transaction Document with respect to such Seller requires
compliance with, or will be subject to avoidance under, any bulk sales act
or similar law.
(i) GOVERNMENT APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body in the United States of America is required for the due
execution, delivery and performance by such Seller of this Agreement or any
other Transaction Document to which it is a party EXCEPT for the filing of
the UCC financing statements referred to in Article III, all of which, at
the time required in Article III, shall have been duly made and shall be in
full force and effect.
(j) BONA FIDE RECEIVABLES. Each Receivable of such Seller is or will
be an account receivable arising out of such Seller's performance in
accordance with the terms of the Contract, if any, giving rise to such
Receivable. Such Seller has no knowledge of any fact which should have led
it to expect at the time of its classification of any Receivable as an
Eligible Receivable hereunder that such Eligible Receivable would not be
paid in full when due. Each Receivable sold by it hereunder and designated
on a Required Report to be an Eligible Receivable will be, at its
respective Payment Date, an Eligible Receivable. The aggregate outstanding
Principal Amount of Receivables so sold by it on any Payment Date and so
designated as Eligible Receivables is correctly set forth on the Required
Report with respect to such Payment Date.
(k) OFFICE. The principal place of business and the chief executive
office of such Seller are as indicated for such Seller on Schedule II
hereto and have not changed during the period of four consecutive months
ending on such date (unless otherwise indicated on the UCC Certificate
delivered by such Seller pursuant to subsection 3.01(d) or 3.02(a), as the
case may be), and the offices where such Seller keeps its records
concerning the Receivables and related Contracts and all purchase orders
and other agreements related to the Receivables are as indicated for such
Seller on Schedule II hereto (or at such other locations, notified to the
Company in accordance with Section 5.01(i), in jurisdictions where all
action required by subsection 5.01(p) has been taken and completed).
(l) MARGIN REGULATIONS. No use of any funds obtained by such Seller
under this Agreement or the other Transaction Documents will conflict with
or
20
contravene any of Regulations G, T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.
(m) QUALITY OF TITLE. Each Seller is the legal and beneficial owner
of each Receivable and all Receivables Property which is to be transferred
to the Company by such Seller, and such Receivables and Receivables
Property shall be transferred by such Seller free and clear of any Lien
(other than any Lien arising under any other Transaction Document, or
arising solely as the result of any action taken by the Company hereunder);
prior to such transfer such Seller shall have made all filings under
applicable law in each relevant jurisdiction in order to protect and
perfect the Company's ownership or security interest in all Receivables and
Receivables Property against all creditors of, and purchasers from, such
Seller; and the Company shall have acquired and shall continue to have
maintained a valid and perfected first priority ownership or security
interest in each Receivable and the Receivables Property free and clear of
any Lien (other than any Lien arising solely as the result of any action
taken by the Company hereunder or by the Trustee); and no effective
financing statement or other instrument similar in effect covering any
Receivable, any interest therein or any Receivables Property with respect
thereto is on file in any recording office except such as may be filed in
favor of (i) such Seller in accordance with the Contracts, (ii) the Company
pursuant to this Agreement and (iii) the Trustee pursuant to the Pooling
Agreement.
(n) ACCURACY OF INFORMATION. All factual written information
heretofore or contemporaneously furnished by such Seller or its Affiliates
(other than the Company) to the Company for purposes of or in connection
with any Transaction Document or any transaction contemplated hereby or
thereby is, and all other such factual, written information hereafter
furnished (if prepared by such Seller or any Affiliate or, if not prepared
by such Seller or any Affiliate, to the extent that information contained
therein was supplied by such Seller or any Affiliate) by such Seller or any
Affiliate (other than the Company) to the Company pursuant to or in
connection with any Transaction Document shall be, true and accurate in
every material respect on the date as of which such information is or will
be furnished (unless such information relates to another date), and such
information is not, and shall not be (as the case may be) incomplete by
omitting to state a material fact or any fact necessary to make the
statements contained therein not misleading as of such date.
(o) PROCEEDS BANKS, PAYMENT INSTRUCTIONS. The names and addresses of
all the Lockbox Processors, together with the account numbers of the
Lockbox Accounts into which collections are deposited at such institutions,
are specified in Schedule III. The Sellers have transferred all of their
right, title and interest in each Lockbox Account to the Company. Each
Lockbox Processor has executed and delivered to the Company a Lockbox
Agreement. Each Seller, or the Servicer on its behalf, will instruct all
Obligors to make all payments in respect of the Receivables and Related
Property in accordance with subsection 2.3(a) of the Servicing Agreement.
21
(p) VALID TRANSFERS. No transfer of any Receivables or any
Receivables Property to the Company by such Seller constitutes a fraudulent
transfer or fraudulent conveyance or is otherwise void or voidable under
similar laws or principles, the doctrine of equitable subordination or for
any other reason. The transfers of Receivables and Receivables Property by
such Seller to the Company pursuant to this Agreement, and all other
transactions between such Seller and the Company, have been and will be
made in good faith and without intent to hinder, delay or defraud creditors
of such Seller, and such Seller acknowledges that it has received and will
receive fair consideration and reasonably equivalent value for the
purchases by the Company of Receivables and Receivables Property hereunder.
The purchase of Receivables and Receivables Property by the Company from
such Seller constitutes a true sale of such Receivables and Receivables
Property under applicable state law.
(q) TRADE NAMES. Such Seller uses no trade name in the furnishing of
its products or services which generate Receivables other than its actual
corporate name and the trade names set forth for such Seller in Schedule VI
and in the case of trade names, only in the jurisdictions indicated on
Schedule VI. During the five years preceding the date hereof, except as
set forth in Schedule VI and in the case of trade names, only in the
jurisdictions indicated on Schedule VI, such Seller (i) has not been known
by any legal name or trade name other than its corporate name, and (ii) has
not been the subject of any merger or other corporate reorganization.
(r) COMPLIANCE WITH APPLICABLE LAWS. Such Seller is in material
compliance with the requirements of all applicable laws, rules,
regulations, and orders of all governmental authorities (federal, state,
local or foreign, and including, without limitation, environmental laws), a
breach of any of which, individually or in the aggregate, would be
reasonably likely either (i) to have a material adverse effect on (A) the
business, operations, business prospects or condition (financial or other)
of such Seller or (B) the ability of such Seller to perform its obligations
under this Agreement and the other Transaction Documents, or (ii) to impair
the collectibility of any Receivables or any Receivables Property or the
enforceability or validity of any Contract.
(s) TAXES. Such Seller has filed all federal and all material state
and local tax returns required by law to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges due from such Seller or is contesting any such tax,
assessment or other governmental charge in good faith through appropriate
proceedings, except where such failure would not reasonably be expected to
cause a Material Adverse Effect. Such Seller knows of no basis for any
material additional tax assessment for any fiscal year for which adequate
reserves have not been established.
(t) ACCOUNTING TREATMENT. Such Seller will not prepare any financial
statements that account for the transactions contemplated hereby in a
manner which is, nor will it in any other respect (except for tax purposes)
account for the
22
transactions contemplated hereby in a manner which is, inconsistent with
the Company's ownership interest in the Receivables and Receivables
Property.
(u) ERISA MATTERS.
(i) Except as specifically disclosed in Schedule VIII hereto,
such Seller and each of its ERISA Affiliates are in compliance in all
material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to
each Plan of such Seller or any of its ERISA Affiliates, except for
such noncompliance which could not reasonably be expected to result in
a Material Adverse Effect with respect to such Seller.
(ii) No Reportable Event has occurred as to which such Seller or
any of its ERISA Affiliates was required to file a report with the
PBGC, other than reports for which the 30-day notice requirement is
waived, reports that have been filed and reports the failure of which
to file would not reasonably be expected to result in a Material
Adverse Effect with respect to such Seller.
(iii) Except as specifically disclosed in Schedule VIII hereto,
as of the Effective Date, the present value of all benefit liabilities
under each Plan of such Seller or any of its ERISA Affiliates (on an
ongoing basis and based on those assumptions used to fund such Plan)
did not, as of the last valuation report applicable thereto, exceed
the value of the assets of such Plan, except to the extent that such
excess would not have a Material Adverse Effect with respect to such
Seller.
(iv) Neither such Seller nor any of its ERISA Affiliates has
incurred any Withdrawal Liability that could reasonably be expected to
result in a Material Adverse Effect with respect to such Seller.
(v) Neither such Seller nor any of its ERISA Affiliates has
received any notification that any Multiemployer Plan is in
reorganization or has been terminated within the meaning of Title IV
of ERISA, or that a reorganization or termination has resulted or
could reasonably be expected to result, through increases in the
contributions required to be made to such Plan or otherwise, in a
Material Adverse Effect with respect to such Seller.
(v) CREDIT AND COLLECTION POLICIES. Schedule IV accurately describes
such Seller's Policies relating to Contracts and Receivables in effect on
the Closing Date.
(w) SOLVENCY. Both prior to and after giving effect to the
transactions contemplated by the Transaction Documents, (i) the assets of
such Seller, at fair valuation, will exceed its liabilities (including
contingent liabilities), (ii) the capital of such Seller will not be
unreasonably small to conduct its business, and (iii) such Seller will not
have incurred debts, and does not intend to incur debts, beyond its ability
to pay such debts as they mature.
23
(x) INVESTMENT COMPANY ACT. Neither such Seller nor any of such
Seller's Subsidiaries is (i) an "investment company" registered or required
to be registered under the 1940 Act, or (ii) a "holding company", or a
"subsidiary company" or an "affiliate" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(y) OWNERSHIP. All of the issued and outstanding capital stock of
such Seller is owned, directly or indirectly, by United Stationers Inc.
(z) INDEBTEDNESS TO COMPANY. Immediately prior to consummation of
the transactions contemplated hereby on the Effective Date, such Seller had
no outstanding Indebtedness to the Company other than amounts permitted by
this Agreement or amounts outstanding under the Subordinated Note.
(aa) RECEIVABLES DOCUMENTS. Upon the delivery, if any, by such Seller
to the Company of licenses, rights, computer programs, related materials,
computer tapes, disks, cassettes and data relating to the administration of
the Purchased Receivables pursuant to subsection 5.01(r), the Company shall
have been furnished with all materials and data reasonably necessary to
permit timely collection of the Purchased Receivables without the
participation of such Seller in such collection.
(bb) RECEIVABLES LISTS. The Receivables Lists set forth in all
material respects an accurate and complete listing as of the Cut-Off Date
of all Receivables to be transferred to the Company on the Effective Date
and the information contained therein with respect to the identity and
Principal Amount of each such Receivable is true and correct in all
material respects as of the Cut-Off Date.
The representations and warranties set forth in this Section 4.02
shall survive the transfer and assignment of the respective Receivables to
the Company pursuant to this Agreement. Each Seller hereby represents and
warrants to the Company, as of the Effective Date and each Payment Date,
that the representations and warranties of such Seller set forth in Section
4.02 are true and correct in all material respects as of such date, except
for any representation and warranty specifically made as of an earlier
date, in which case such representation and warranty shall be true and
correct in all material respects as of such earlier date. Upon discovery
by any Seller or the Company of any material breach of any of the foregoing
representations and warranties, the party discovering such breach shall
give prompt written notice to the other.
ARTICLE V
GENERAL COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE SELLERS. Each Seller
covenants that, until the Purchase Termination Date shall have occurred with
respect to such Seller and
24
there are no amounts outstanding with respect to the Purchased Receivables
previously sold by such Seller to the Company (other than Charged-off
Receivables):
(a) PRESERVATION OF CORPORATE EXISTENCE AND NAME. Such Seller will
preserve and maintain in all material respects 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 the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification could have a
Material Adverse Effect with respect to such Seller.
(b) MAINTENANCE OF PROPERTY. Such Seller will keep all material
property and assets useful and necessary in its business in good working
order and condition (normal wear and tear excepted), except to the extent
that the failure to do any of the foregoing with respect to any such
property would not, individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect with respect to the Company.
(c) DELIVERY OF COLLECTIONS. In the event that such Seller receives
Collections, such Seller agrees to pay to the applicable Lockbox Account
all payments received by such Seller in respect of the Receivables as soon
as practicable after receipt thereof by such Seller.
(d) COMPLIANCE WITH LAWS, ETC. Such Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders
applicable to the Receivables and the Receivables Property, including,
without limitation, rules and regulations relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair
debt collection practices and privacy, where failure to so comply could
reasonably be expected to have a materially adverse impact on the amount of
Collections thereunder.
(e) VISITATION RIGHTS. At any reasonable time during normal business
hours and from time to time upon reasonable prior notice, such Seller shall
permit (i) the Company, or any of its agents or representatives, (A) to
examine and make copies of and abstracts from the records, books of account
and documents (including, without limitation, computer tapes and disks) of
such Seller relating to Receivables and Related Property owned or to be
purchased by the Company hereunder, including, without limitation, the
related Contracts and purchase orders and other agreements and (B)
following the termination of the appointment of USSC as Servicer or of such
Seller as a Servicing Party with respect to the Receivables, to be present
at the offices and properties of such Seller to administer and control the
collection of amounts owing on the Purchased Receivables and (ii) the
Company, or any of its agents or representatives, or the Trustee (upon the
giving of appropriate notice to the Company) to visit the properties of
such Seller for the purpose of examining such records, books of account and
documents, and to discuss the affairs, finances and accounts of such Seller
relating to the Receivables or such Seller's performance hereunder with any
of its officers or directors and with its independent certified public
accountants;
25
PROVIDED, that the Company or its agents or representatives, as the case
may be, shall notify the Seller prior to any contact with such accountants
and shall give such Seller the opportunity to participate in such
discussions.
(f) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Such Seller will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables
and the Receivables Property in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information which, in each case, in the reasonable discretion of the
Company, are necessary or advisable for the collection of all Receivables
and the Receivables Property (including, without limitation, records
adequate to permit the identification of each new Receivable and all
Collections of and adjustments to each existing Receivable).
(g) PERFORMANCE AND COMPLIANCE WITH POLICIES, RECEIVABLES AND
CONTRACTS. Such Seller will (i) perform its obligations in accordance with
and comply in all material respects with the Policies, as amended from time
to time in accordance with the Transaction Documents and (ii) at its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Receivables and the Contracts related to the Receivables and Related
Property and all purchase orders and other agreements related to such
Receivables and Related Property.
(h) OBLIGATIONS. Such Seller shall pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case
may be, all its other obligations of whatever nature, except where (a) the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on its books, or (b) the failure to so pay,
discharge or satisfy all such obligations would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect in respect of such
Seller and would not subject any of its properties to any Lien prohibited
by subsection 5.03(b).
(i) LOCATION OF RECORDS. Such Seller will keep its principal place
of business and chief executive office, and the offices where it keeps its
records concerning the Receivables, all Receivables Property, all Contracts
and purchase orders and other agreements related to such Receivables (and
all original documents relating thereto), at the addressees) of such Seller
referred to in Schedule II or, upon 30 days' prior written notice to the
Company, at such other locations in jurisdictions where all action required
by subsection 5.01(r) shall have been taken and completed; PROVIDED,
HOWEVER, that the Rating Agency Condition shall have been satisfied with
respect to any changes in location of such Seller's principal place of
business or chief executive office and such location is not in a state
which is within the Tenth Circuit unless it delivers an opinion of counsel
reasonably acceptable to the Rating Agencies to the effect that OCTAGON GAS
SYSTEMS, INC. X. XXXXXX, 995 F.2d 948 (10th Cir. 1993), is no longer
controlling precedent in the Tenth Circuit.
26
(j) FURNISHING COPIES, ETC. Such Seller shall furnish to the Company
(i) upon the Company's request, a certificate of a Responsible Officer with
responsibilities over the finances of such Seller certifying, as of the
date thereof, that to such Responsible Officer's knowledge, no Purchase
Termination Event has occurred and is continuing and setting forth the
computations used by such Responsible Officer in making such determination;
(ii) as soon as possible and in any event within two Business Days after a
Responsible Officer of such Seller becomes aware of the occurrence of any
Purchase Termination Event or Potential Purchase Termination Event, a
statement of a Responsible Officer of such Seller setting forth in
reasonable detail the particulars of such Purchase Termination Event or
Potential Purchase Termination Event and the action that such Seller
proposes to take or has taken with respect thereto; (iii) promptly after
obtaining knowledge that a Receivable was, at the time of the Company's
purchase thereof, not an Eligible Receivable, notice thereof; (iv) promptly
after obtaining knowledge of any threatened action or proceeding affecting
such Seller or its Subsidiaries before any court, governmental agency or
arbitrator that may reasonably be expected to materially and adversely
affect the enforceability of this Agreement and the other Transaction
Documents, notice of such action or proceeding; and (v) promptly following
the Company's request therefor, such other information, documents, records
or reports with respect to the Receivables or the related Contracts or the
conditions or operations, financial or otherwise, of such Seller, as the
Company may from time to time reasonably request.
(k) OBLIGATION TO RECORD AND REPORT. Such Seller shall, to the
fullest extent permitted by GAAP and by applicable law, record each
purchase of the Purchased Receivables as a sale on its books and records,
reflect each purchase of Purchased Receivables in its financial statements
and tax returns as a sale and recognize gain or loss, as the case may be,
on each purchase of Purchased Receivables.
(l) CONTINUING COMPLIANCE WITH THE UNIFORM COMMERCIAL CODE. Such
Seller shall, without limiting the requirements of subsection 5.01(r), at
its expense, preserve, continue, and maintain or cause to be preserved,
continued, and maintained the Company's valid and properly perfected title
to each Receivable and the Receivables Property purchased hereunder,
including, without limitation, filing or recording UCC financing statements
in each relevant jurisdiction.
(m) PROCEEDS OF RECEIVABLES. Such Seller shall use all reasonable
efforts to cause all payments made by Obligors in respect of Purchased
Receivables and Related Property to be made in accordance with subsection
2.3(a) of the Servicing Agreement.
(n) LOCKBOX AGREEMENTS. Such Seller shall, on or prior to the date
of this Agreement, deliver to the Company a Lockbox Agreement, duly
countersigned and agreed to by each bank holding a Lockbox Account of such
Seller or, if any such bank fails to agree to the terms thereof, by such
other bank as shall agree to become a
27
Lockbox Processor for such Seller on the terms and conditions set forth in
such Lockbox Agreement.
(o) TAXES. Such Seller will file all federal and all material state
and local tax returns and reports required by law to be filed by it and
will pay all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside on its books except where the
failure to file such returns and reports and pay such taxes and
governmental charges would not reasonably be expected to cause a Material
Adverse Effect.
(p) SEPARATE CORPORATE EXISTENCE OF THE COMPANY. Such Seller hereby
acknowledges that the Trustee and the Investor Certificateholders are
entering into the transactions contemplated by the Transaction Documents in
reliance upon the Company's identity as a legal entity separate from the
Sellers and all other Affiliates and that the Trustee and the Investor
Certificateholders would be prejudiced by any substantive consolidation of
the Company with any Seller. Therefore, from and after the date hereof,
such Seller will take (or refrain from taking, as the case may be) such
actions, and will cause each other Affiliate it controls to take (or
refrain from taking, as the case may be) such actions, as shall be required
in order that:
(i) Except as specifically provided in Sections 7.01 and 9.05,
no Affiliate will pay the Company's operating expenses and
liabilities, recognizing, however, that certain organizational
expenses of the Company and expenses relating to creation and initial
implementation of the securitization program contemplated by the
Transaction Documents have been or shall be paid by such Seller.
(ii) Each Affiliate will conduct its business at offices
segregated from the Company's offices. If office space is leased from
any Affiliate, a separate written lease on arm's-length terms will be
in effect at a market rental rate.
(iii) Each Affiliate will maintain corporate records and books
of account separate from those of the Company and telephone numbers,
mailing addresses, stationery and other business forms that are
separate and distinct from those of the Company.
(iv) Any financial statements of any Affiliate that are
consolidated to include the Company will contain a detailed note
substantially in the form, and to the effect, of the note set forth on
Annex 1.
(v) The Company's assets will be maintained in a manner that
facilitates their identification and segregation from those of such
Seller and the other Affiliates.
28
(vi) Each Affiliate will strictly observe corporate formalities
in its dealings with the Company, and funds or other assets of the
Company will not be commingled or pooled with those of any affiliated
Person. No Affiliate will maintain joint bank accounts with the
Company or other depository accounts with the Company to which any
Affiliate has independent access.
(vii) Any transaction between the Company and any Affiliate will
be fair and equitable to the Company, will be the type of transaction
which would be entered into by a prudent Person in the position of the
Company with an Affiliate, and will be on terms which are at least as
favorable to the Company as may be obtained from a Person which is not
an Affiliate, it being understood and agreed that the transactions
contemplated in the Transaction Documents meet the requirements of
this clause (vii).
(viii) No Affiliate will hold itself out, or permit itself to be
held out, as having agreed to pay or be liable for the debts of the
Company.
(ix) The duly elected Board of Directors of the Company and the
Company's duly appointed officers shall at all times have sole
authority to control decisions and actions with respect to the daily
business affairs of the Company.
(x) Such Seller shall comply with those procedures described in
the Specified Bankruptcy Opinion Provisions which are applicable to
such Seller, except, in each case above, for such failure to take
actions or refrain from taking actions that are, in the aggregate, not
material.
(q) DEPOSITS IN PROGRAM ACCOUNTS. Such Seller shall use all
reasonable efforts to minimize the deposit of any funds other than
Collections in any of the Lockbox Accounts, the Collection Concentration
Account and the Collection Account.
(r) FURTHER ACTION EVIDENCING PURCHASES.
(i) Such Seller agrees that from time to time, at its expense,
it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or
desirable or that the Company may reasonably request, to protect or
more fully evidence the Company's ownership, right, title and interest
in the Receivables and Receivables Property sold by such Seller and
its rights under the Contracts with respect thereto, or to enable the
Company to exercise or enforce any of its rights hereunder or under
any other Transaction Document. Without limiting the generality of
the foregoing, such Seller will upon the request of the Company (A)
execute and file, in accordance with the provisions of the UCC of the
applicable jurisdiction, continuation statements with respect to all
financing statements filed in connection with the transactions
contemplated hereby, as well as such financing or continuation
statements, or amendments thereto, and such other
29
instruments or notices, as may be necessary or, in the reasonable
opinion of the Company, desirable, (B) indicate on its books and
records (including, without limitation, master data processing
records) that the Receivables and Receivables Property have been sold
and assigned to the Company and, in turn, the Company has sold and
assigned its interest therein to the Trustee, and provide to the
Company, upon request, copies of any such records, (C) contact
customers to confirm and verify Receivables and (D) obtain the
agreement of any Person having a Lien on any Receivables owned by such
Seller (other than any Lien created or imposed hereunder or under the
Pooling Agreement or any Permitted Lien) to release such Lien upon the
purchase of any such Receivables by the Company.
(ii) Such Seller hereby irrevocably authorizes the Company and
the Trustee to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Receivables
and Receivables Property sold or to be sold by such Seller, without
the signature of such Seller where permitted by law.
(iii) If such Seller fails to perform any of its agreements or
obligations under this Agreement, the Company or its assignees may
(but shall not be required to) perform, or cause performance of, such
agreements or obligations, and the expenses of the Company incurred in
connection therewith shall be payable by such Seller as provided in
Section 9.06.
(iv) Such Seller agrees that, whether or not a Purchase
Termination Event has occurred:
(A) the Company (and its assignees) shall have the right at
any time to notify, or require that such Seller at its own
expense notify, the respective Obligors of the Company's
ownership of the Purchased Receivables and Receivables Property
and may direct that payment of all amounts due or to become due
under the Purchased Receivables be made directly to the Company
or its designee;
(B) such Seller shall, upon the Company's written request
and at such Seller's expense, (I) assemble all of such Seller's
documents, instruments and other records (including credit files
and computer tapes or disks) that (A) evidence or will evidence
or record Receivables sold by such Seller and (B) are otherwise
necessary or desirable to effect Collections of such Purchased
Receivables (collectively, the "DOCUMENTS") and (II) deliver the
Documents to the Company or its designee at a place designated by
the Company. In recognition of such Seller's need to have access
to any Documents which may be transferred to the Company
hereunder, whether as a result of its continuing business
relationship with any Obligor for Receivables purchased hereunder
or as a result of its responsibilities as a Sub-
30
Servicer, the Company hereby grants to such Seller an irrevocable
license to access the Documents transferred by such Seller to the
Company and to access any such transferred computer software in
connection with any activity arising in the ordinary course of
such Seller's business or in performance of such Seller's duties
as a Servicing Party, PROVIDED that such Seller shall not disrupt
or otherwise interfere with the Company's use of and access to
the Documents and its computer software during such license
period;
(C) such Seller hereby grants to the Company an irrevocable
power of attorney (coupled with an interest) to take any and all
steps in such Seller's name necessary or desirable, in the
reasonable opinion of the Company, to collect all amounts due
under the Purchased Receivables, including, without limitation,
endorsing such Seller's name on checks and other instruments
representing Collections, enforcing the Purchased Receivables and
exercising all rights and remedies in respect thereof, and
(D) upon written request of the Company, such Seller will
(I) deliver to the Company or a party designated by the Company
all licenses, rights, computer programs, related material,
computer tapes, disks, cassettes and data necessary to the
immediate collection of the Purchased Receivables by the Company,
with or without the participation of such Seller (excluding
software licenses which by their terms are not permitted to be so
delivered, PROVIDED that such Seller shall use reasonable efforts
to obtain consent of the relevant licensor to such delivery) and
(II) make such arrangements with respect to the collection of the
Purchased Receivables as may be reasonably required by the
Company.
(s) LEGEND REQUIREMENT FOR CHATTEL PAPER. Such Seller agrees (i) at
all times, with respect to chattel paper, to comply with the procedures set
forth in Schedule 3 to the Pooling Agreement and (ii) that any Receivable
that constitutes or is evidenced by "chattel paper" as defined in Article 9
of the UCC as in effect in the Relevant UCC State shall bear a legend
stating that such Receivable has been sold to the Company and conveyed to
the Trust.
(t) COMPUTER FILES. Such Seller shall, at its own cost and expense,
retain the ledger used by such Seller as a master record of the Obligors
and retain copies of all documents relating to each Obligor as custodian
and agent for the Company and other Persons with interests in the Purchased
Receivables and xxxx the computer tape or other physical records of the
Purchased Receivables to the effect that interests in the Purchased
Receivables existing with respect to the Obligors listed thereon have been
sold to the Company and that the Company has sold an interest therein and
has granted a security interest therein.
31
Section 5.02. REPORTING REQUIREMENTS. Each Seller shall furnish to
the Company and its assigns from the date hereof until the Purchase Termination
Date shall have occurred with respect to such Seller and until there are no
amounts outstanding with respect to Purchased Receivables previously sold by
such Seller to the Company:
(a) COMPLIANCE CERTIFICATE. Not later than 95 days after the end of
each fiscal year and not later than 50 days after the end of each of the
first three fiscal quarters of each fiscal year, a certificate of a
Responsible Officer of such Seller stating that, to the best of such
Responsible Officer's knowledge, such Seller during such period, has
observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every condition,
contained in the Transaction Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Purchase Termination Event or Potential
Purchase Termination Event except as specified in such certificate;
(b) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event which such
Seller files under ERISA with the Internal Revenue Service, the PBGC or the
U.S. Department of Labor or which such Seller receives from the PBGC if, in
each case, such report or notice relates to an event or condition that
could reasonably be expected to give rise to a Termination Notice, an Early
Amortization Event or a Material Adverse Effect;
(c) TERMINATION EVENTS; OTHER MATERIAL EVENTS. As soon as possible
and in any event within two Business Days after a Responsible Officer of
such Seller obtains knowledge of each Purchase Termination Event, Potential
Purchase Termination Event, Servicer Default, Potential Servicer Default or
any other event that has a material likelihood of having a Material Adverse
Effect with respect to a Seller, a written statement of a Responsible
Officer of such Seller setting forth details of such event and the action
that such Seller proposes to take with respect thereto; and
(d) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition
or operations, financial or otherwise, of such Seller as the Company may
from time to time reasonably request in order to protect the interests of
the Company under or as contemplated by the Transaction Documents.
Section 5.03. NEGATIVE COVENANTS. Each Seller covenants that, until
the Purchase Termination Date shall have occurred with respect to such Seller
and there are no amounts outstanding with respect to Purchased Receivables
previously sold by such Seller to the Company:
(a) RECEIVABLES TO BE ACCOUNTS, GENERAL INTANGIBLES OR CHATTEL PAPER.
Such Seller will take no action to cause any Receivable to be evidenced by
any "instrument" other than, PROVIDED that the procedures set forth in
Schedule 3 to the Pooling Agreement are fully implemented with respect
thereto, an instrument which
32
together with a security agreement constitutes "chattel paper" (each as
defined in the UCC as in effect in the Relevant UCC State). Such Seller
will take no action to cause any Receivable to be anything other than an
"account", "general intangible" or "chattel paper" (each as defined in the
UCC as in effect in the Relevant UCC State).
(b) SECURITY INTERESTS. Except for the conveyances hereunder and as
provided below, such Seller will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any
other Lien on any Receivable or Receivables Property, whether now existing
or hereafter created, or any interest therein; such Seller will immediately
notify the Company of the existence of any other Lien on any Receivable or
Receivables Property; and such Seller shall defend the right, title and
interest of the Company in, to and under the Receivables or Receivables
Property, whether now existing or hereafter created, against all claims of
third parties claiming through or under such Seller; PROVIDED, HOWEVER,
that nothing in this subsection 5.03(b) shall prevent or be deemed to
prohibit such Seller from suffering to exist upon any of the Receivables
any Permitted Lien.
(c) EXTENSION OR AMENDMENT OF RECEIVABLES; INELIGIBLE RECEIVABLES.
Such Seller will not extend, rescind, cancel, make any Dilution Adjustment
to, amend or otherwise modify, or attempt or purport to extend, rescind,
cancel, make any Dilution Adjustment to, amend or otherwise modify, the
terms of any Purchased Receivables, or otherwise take any action to cause,
or which would permit, a Receivable that was designated as an Eligible
Receivable on the Payment Date relating to such Receivable to cease to be
an Eligible Receivable, except in any such case (a) in accordance with the
terms of the Policies, (b) as required by any Requirement of Law or (c) in
the case of Dilution Adjustments (whether or not permitted by any other
clause of this sentence), upon making a Seller Adjustment Payment pursuant
to Section 2.05.
(d) CHANGE IN CREDIT AND COLLECTION POLICIES. Such Seller will not
make or permit to be made any change in its Policies in any material
respect that is materially adverse to the interests of the Company or its
assigns (including the Trustee and the Investor Certificateholders).
(e) PLACE OF BUSINESS, ETC. Such Seller will not change its
principal place of business or chief executive office from the location
listed on Schedule II or change the location of its records relating to the
Receivables and Receivables Property from those specified on Schedule II,
unless in any such event such Seller shall have given the Company at least
thirty days' prior written notice thereof fully in accordance with the
terms and provisions of subsection 5.01(i) and shall have taken all action
necessary or reasonably requested by the Company to amend its existing
financing statements and continuation statements so that they are not
misleading and to file additional financing statements in all applicable
jurisdictions, if necessary, to perfect the interests of the Company in all
of the Receivables and Receivables Property.
(f) CHANGE IN NAME. Such Seller will not change its name, identity
or corporate structure in any manner which would make any financing
statement or
33
continuation statement (or other similar instrument) relating to this
Agreement seriously misleading within the meaning of Section 9-402(7) of
the UCC, or impair the perfection of the Company's interest in any
Receivable under any other similar law, without having (i) delivered 30
days' prior written notice to the Company, the Servicer and the Trustee and
(ii) taken all action required by subsection 5.01(a).
(g) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Such Seller shall
not instruct the Obligor on any Receivables to make payments with respect
to such Receivables and the Receivables Property with respect thereto other
than to the places listed in Schedule III.
(h) ACCOUNTING CHANGES. Such Seller shall not make any material
change (i) in accounting treatment and reporting practices except as
permitted or required by GAAP, (ii) in tax reporting treatment except as
permitted or required by law, in any case, as disclosed in the notes to the
financial statements delivered pursuant to Section 5.02, or otherwise,
(iii) in the calculation or presentation of financial and other information
contained in other reports delivered hereunder, or (iv) in any financial
policy of such Seller if such change could have a material adverse effect
on the Receivables taken as a whole or the collection thereof.
(i) BUSINESS OF SELLERS. Such Seller shall not fail to maintain and
operate the business currently conducted by such Seller and business
activities reasonably incidental or related thereto in substantially the
manner in which it is presently conducted and operated if such failure
would change in any material respect the character of its business and such
change would be adverse to the interest of the Company or its assigns
(including the Trustee and the Investor Certificateholders), except (x) if
such change is necessary under any Requirement of Law, (y) if such change
would not reasonably be expected to have a Material Adverse Effect with
respect to the Servicer or (z) the Rating Agency Condition is satisfied
with respect thereto.
ARTICLE VI
PURCHASE TERMINATION EVENTS
Section 6.01. PURCHASE TERMINATION EVENTS. If, with respect to any
Seller, any of the following events (each, a "PURCHASE TERMINATION EVENT" with
respect to such Seller) shall have occurred and be continuing:
(a) The Seller shall fail to make any payment or deposit to be made
by it hereunder when due and such failure shall remain unremedied for two
Business Days; or
(b) There shall have occurred (i) an Early Amortization Event set
forth in Section 7.1 of the Pooling Agreement or (ii) the Amortization
Period with respect to all outstanding Series shall have occurred and be
continuing; or
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(c) Any representation or warranty made or deemed to be made by such
Seller or any of its officers under or in connection with any Transaction
Document, Monthly Settlement Statement or other information, statement,
record, certificate, document or report delivered pursuant to a Transaction
Document shall prove to have been false or incorrect in any material
respect when made or deemed made (including in each case by omission of
material information necessary to make such representation, warranty,
certificate or statement not misleading); PROVIDED, that no such event
shall constitute a Purchase Termination Event unless such event shall
continue unremedied for a period of 30 days from the earlier of (A) the
date any Responsible Officer of such Seller obtains knowledge thereof and
(B) the date such Seller receives notice of the incorrectness of such
representation or warranty from the Company, the Servicer or the Trustee;
PROVIDED, FURTHER, that a Purchase Termination Event shall not be deemed to
have occurred under this paragraph (c) based upon a breach of any
representation or warranty set forth in Section 4.02 with respect to any
Receivable if the Sellers shall have complied with the provisions of
Section 2.06 with respect to such Receivable; or
(d) Such Seller shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in subsection
5.01(d), (g) or (h) or Section 5.03 of this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for five
Business Days; PROVIDED, that a Purchase Termination Event shall not be
deemed to have occurred under this paragraph (d) based upon a breach of any
covenant set forth in subsection 5.01(d), (g) or (h) or Section 5.03 with
respect to any Receivable if the Sellers shall have complied with the
provisions of Section 2.06 with respect to such Receivable; or
(e) Such Seller shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in any Transaction
Document on its part to be performed or observed and any such failure shall
remain unremedied for a period of 30 days from the earlier of (A) the date
any Responsible Officer of such Seller obtains knowledge of such failure
and (B) the date such Seller receives notice thereof from the Company, the
Servicer or the Trustee; or
(f) Any Transaction Document to which such Seller is a party shall
cease, for any reason, to be in full force and effect, or USSC, or other
such Seller shall so assert in writing, or the Company shall fail to have a
valid and perfected first priority ownership or security interest in the
Receivables and the Receivables Property; or
(g) (i) such Seller shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets,
or such Seller shall make a general
35
assignment for the benefit of its creditors; or (ii) there shall be
commenced against such Seller any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against such Seller or any of its Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof, or (iv) such
Seller or any of its respective Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
such Seller shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(h) USSC has been terminated as Servicer following a Servicer Default
with respect to USSC under the Servicing Agreement; or
(i) a Responsible Officer of USSC receives notice or becomes aware
that a notice of Lien has been filed by the PBGC against any Seller, the
Company or the Trust under Section 412(n) of the Code or Section 302(f) of
ERISA for a failure to make a required installment or other payment to a
plan to which Section 412(n) of the Code or Section 302(f) of ERISA
applies;
then, (x) in the case of any Purchase Termination Event with respect to any
Seller described in paragraph (b)(i), (g) and (i) above, the obligation of the
Company to purchase Receivables from such Seller shall thereupon automatically
terminate without further notice of any kind, which is hereby waived by such
Seller, (y) in the case of any Purchase Termination Event with respect to a
Seller described in paragraph (b)(ii) above, the obligation of the Company to
purchase Receivables from such Seller shall thereupon terminate without notice
of any kind, which is hereby waived by such Seller, unless both the Company and
such Seller agree in writing that such event shall not trigger an Early
Termination hereunder and (z) in the case of any other Purchase Termination
Event with respect to any Seller, so long as such Purchase Termination Event
shall be continuing, the Company may terminate its obligation to purchase
Receivables from such Seller by written notice to such Seller (any termination
with respect to any Seller pursuant to clause (x), (y) or (z) of this Section
6.01 is herein called an "EARLY TERMINATION" with respect to such Seller);
PROVIDED, HOWEVER, that in the event of an involuntary petition or proceeding as
described in paragraphs (g)(ii) and (g)(iii) above, the Company shall not
purchase Receivables from such Seller until such time, if any, as such
involuntary petition or proceeding has been dismissed, PROVIDED that such
dismissal shall have occurred within 60 days of the filing of such petition or
the commencement of such proceeding.
Section 6.02. ADDITIONAL REMEDIES. Upon the occurrence of any
Purchase Termination Event, the Company shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights and
remedies provided under the UCC of
36
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of a Purchase
Termination Event shall not deny to the Company any remedy (in addition to
termination of the Company's obligation to purchase Receivables from any
relevant Seller or Sellers) to which the Company may be otherwise appropriately
entitled, whether by statute or other applicable law, at law or in equity.
ARTICLE VII
INDEMNIFICATION
Section 7.01. INDEMNITIES BY THE SELLERS. Without limiting any other
rights that the Company may have hereunder or under applicable law and subject
to Section 2.06, each Seller hereby agrees to pay, indemnify and hold the
Company harmless from and against any and all claims, losses, liabilities,
obligations, damages, penalties, actions, judgments, suits, reasonable costs
(including reasonable attorneys' fees), expenses and disbursements of any kind
or nature whatsoever related thereto (a) which may at any time be imposed on,
incurred by or asserted against the Company in any way relating to, arising out
of or resulting from this Agreement or any other Transaction Document or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Company under or in connection with any of the foregoing or in respect of
any Receivable or (b) which would not have been imposed on, incurred by or
asserted against the Company but for its having purchased the Receivables
hereunder (all such claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements being
collectively referred to as "INDEMNIFIED AMOUNTS"), PROVIDED that the Sellers
shall have no obligation under this Section 7.01 to the Company with respect to
Indemnified Amounts (i) to the extent resulting from gross negligence or willful
misconduct on the part of the Company, its agents or its assignees; (ii)
resulting from any Obligor's inability to pay an amount due and payable with
respect to a Receivable for credit reasons (it being understood that this clause
(ii) shall not limit Section 2.05), and PROVIDED, FURTHER, that if a court of
competent jurisdiction in a final non-appealable order determines that such
Indemnified Amounts arose in part from the Company's gross negligence or willful
misconduct, the Sellers shall reimburse the Company for the portion of such
claim not resulting from the Company's gross negligence or willful misconduct,
and PROVIDED, FURTHER, that to the extent a determination of gross negligence or
willful misconduct is made after the payment of any Indemnified Amounts related
thereto, the Seller shall be repaid any amounts reimbursed under the preceding
clause that, due to such determination, it should not have paid. Without
limiting or being limited by the foregoing and subject to Section 2.06, each
Seller shall pay on demand to the Company any and all amounts necessary to
indemnify the Company from and against any and all Indemnified Amounts relating
to or resulting from:
(a) the transfer by any Seller of any interest in any Receivable or
Receivables Property or proceeds thereof which are not or which cease to be
Eligible Receivables;
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(b) reliance on any representation or warranty or statement made or
deemed made by any Seller (or any of its officers) under or in connection
with this Agreement or in any certificate or report delivered pursuant
hereto that, in either case, shall have been false or incorrect in any
material respect when made or deemed made;
(c) the failure by any Seller to comply with any applicable law, rule
or regulation of any governmental authority with respect to any Receivable
or Receivables Property, or the nonconformity of any Receivable or
Receivables Property with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in any Receivable or Receivables Property, free and
clear of any Lien, other than a Lien arising under the Transaction
Documents, whether existing at the time of the purchase of such Receivable
or Receivables Property or at any time thereafter,
(e) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables or
Receivables Property of any Seller;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy of a Seller) of the Obligor to the payment of any Receivable of
any Seller (including, without limitation, a defense based on such
Receivable or the related Contract not being fully enforceable against the
Obligor in accordance with its terms), or any other claim resulting from
the sale of the merchandise or services related to any such Receivable or
the furnishing or failure to furnish such merchandise or services;
(g) any failure of any Seller to perform its duties or obligations
under this Agreement or the Transaction Documents;
(h) any products liability claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Receivable
or Receivables Property;
(i) the commingling of Collections of Receivables at any time with
other funds of any Seller;
(j) any claim involving environmental liability that relates to any
property that has been, is now or hereafter will be owned, leased, operated
or otherwise used by any Seller;
(k) any tax or governmental fee or charge (but not including
franchise taxes and taxes upon or measured by net income of the Company),
all interest and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses,
38
including the reasonable fees and expenses of counsel in defending against
the same, which may arise by reason of the purchase or ownership of any
Receivable or Receivables Property, or any interest therein or in any goods
which secure any such Receivables, any Receivables Property or any other
rights or assets transferred hereunder; and
(l) any investigation, litigation or proceeding related to this
Agreement or in respect of any Receivable or Receivables Property of any
Seller.
Notwithstanding the foregoing, no Seller shall under any circumstances
be required to indemnify the Company for any Indemnified Amounts that result
from any delay in the collection of any Receivables or any default by an Obligor
with respect to any Receivables. The agreements set forth in this Section 7.01
shall survive the collection of all Receivables, the termination of this
Agreement and the payment of all amounts payable hereunder.
Section 7.02. INDEMNITIES BY THE COMPANY. Without limiting any other
rights that the Sellers may have hereunder or under applicable law, the Company
hereby agrees to indemnify each Seller from and against any and all claims,
losses and liabilities (including reasonable attorneys' fees) arising out of or
resulting from such Seller's reliance on any representation or warranty made by
the Company in this Agreement or in any certificate delivered pursuant hereto
that, in either case, shall have been false or incorrect in any material respect
when made or deemed made.
ARTICLE VIII
SUBORDINATED NOTE
Section 8.01. SUBORDINATED NOTE. (a) On the initial Effective Date,
contemporaneously with the sale of Receivables by the Sellers, the Company shall
issue to the Sellers a subordinated note substantially in the form of Exhibit A
hereto (as amended, supplemented or otherwise modified from time to time, the
"SUBORDINATED NOTE").
(b) The initial aggregate principal amount of the Subordinated Note
(the "INITIAL SUBORDINATED NOTE AMOUNT") shall be equal to $47,227,059.
(c) Following the initial Effective Date, the aggregate principal
amount of the Subordinated Note at any time shall be equal to the difference
between (i) the sum of the Initial Subordinated Note Amount and each addition to
the principal amount of the Subordinated Note with respect to each Seller
pursuant to Section 2.03 as of such time and (ii) the aggregate amount of all
payments made in respect of the principal of the Subordinated Note as of such
time. All payments made in respect of the Subordinated Note shall be allocated
among the Sellers by the Servicer and shall be allocated to pay accrued and
unpaid interest thereon, and SECOND, to pay the outstanding principal amount
thereof.
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(d) Each Seller's interest in the Subordinated Note shall be equal to
the aggregate of each addition to the Subordinated Note allocated to such Seller
pursuant to subsection 2.03(c), LESS the sum of each repayment thereof
allocated to such Seller by the Servicer in accordance with subsection 8.01(c).
Interest on the outstanding principal amount of the Subordinated Note shall
accrue on the last day of each Settlement Period at a rate per annum equal to
the ABR plus 2% from and including the initial Effective Date to but excluding
the last day of each Settlement Period and shall be paid (x) on each
Distribution Date with respect to the principal amount of the Subordinated Note
outstanding from time to time during the Settlement Period immediately preceding
such Distribution Date and/or (y) on the maturity date thereof. Principal
thereunder not paid or prepaid pursuant to the terms thereof shall be payable on
the maturity date of the Subordinated Note. Default in the payment of principal
or interest under the Subordinated Note shall not constitute a Purchase
Termination Event under this Agreement, a Servicer Default under any Servicing
Agreement or an Early Amortization Event under the Pooling Agreement or any
Supplement thereto.
Section 8.02. RESTRICTIONS ON TRANSFER OF SUBORDINATED NOTE. Neither
the Subordinated Note, nor any right of any Seller to receive payments
thereunder, shall be assigned, transferred, exchanged, pledged, hypothecated,
participated or otherwise conveyed.
ARTICLE IX
MISCELLANEOUS
Section 9.01. AMENDMENT. Neither this Agreement nor any of the terms
hereof may be amended, supplemented or modified except in a writing signed by
the Company and the Sellers. Any amendment, supplement or modification shall
not be effective until the Rating Agency Condition, if applicable, has been
satisfied.
Section 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage-prepaid, by facsimile or by overnight courier, (a) in
the case of the Company, to it at the address or facsimile number set forth in
Section 10.5 of the Pooling Agreement and (b) in the case of all other parties,
to such party at the address or facsimile number of the Servicer set forth in
Section 10.5 of the Pooling Agreement or, in the case of the foregoing clause
(a) or (b), at such other address or facsimile number as shall be designated by
the relevant party in a written notice to the other parties hereto given in
accordance with this Section 9.02. All notices and communications provided for
hereunder shall be effective, (a) if personally delivered by express mail or
courier, when received, (b) if sent by certified mail, three Business Days after
having been deposited in the mail, postage prepaid and (c) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
Section 9.03. NO WAIVER; REMEDIES. No failure on the part of the
Company to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other
40
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 9.04. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Sellers and the Company and their
respective successors (whether by merger, consolidation or otherwise) and
assigns. Each Seller agrees that it will not assign or transfer all or any
portion of its rights or obligations hereunder without the prior written consent
of the Company. The Sellers acknowledge that the Company shall assign all of
its rights hereunder to the Trustee. Each Seller consents to such assignment
and agrees that the Trustee and the Holders, to the extent provided in the
Pooling Agreement, shall be entitled to enforce the terms of this Agreement and
the rights (including, without limitation, the right to grant or withhold any
consent or waiver) of the Company directly against such Seller, whether or not a
Purchase Termination Event or a Potential Purchase Termination Event has
occurred. Each Seller further agrees that, in respect of its obligations
hereunder, it will act at the direction of and in accordance with all requests
and instructions from the Trustee until all amounts due to the Investor
Certificateholders are paid in full. The Trustee, on behalf of the Investor
Certificateholders, shall have the rights of a third-party beneficiary under
this Agreement.
Section 9.05. COSTS, EXPENSES AND TAXES. In addition to the limited
rights of indemnification granted to the Company under Article VII hereof, each
Seller agrees to pay on demand all reasonable out-of-pocket costs and expenses
of the Company in connection with the negotiation, preparation, execution and
delivery of, and any amendment, supplement or other modification to, this
Agreement, the other Transaction Documents and any other documents prepared in
connection herewith and therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Company with
respect thereto and with respect to advising the Company as to its rights and
remedies under this Agreement, the other Transaction Documents and any such
other documents, and all costs and expenses (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the other Transaction Documents and any such other documents. In
addition, each Seller agrees to pay any and all stamp and other taxes and
governmental fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement or the other
Transaction Documents to be delivered hereunder, and agree to hold the Company
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes and fees.
Section 9.06. INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.
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Section 9.07. CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise provided
herein, references in this Agreement to any "Section," "Exhibit," "Annex" or
"Schedule" are to such Section of or Exhibit or Annex or Schedule to this
Agreement, as the case may be.
Section 9.10. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
Section 9.11. ACKNOWLEDGMENT OF ASSIGNMENTS. Each Seller hereby
acknowledges and consents to the assignment by the Company of Receivables and
Receivables Property and the rights of the Company under this Agreement pursuant
to the Pooling and Servicing Agreements. Each Seller acknowledges that the
Company will grant a security interest in the Lockbox Accounts, the Collection
Concentration Account and the Collection Account to the Trust for the benefit of
the Holders. Each Seller agrees to take any action that the Company or the
Trust may reasonably request in connection with such assignment or security
interest.
Section 9.12. NO PETITION IN BANKRUPTCY. Each Seller covenants and
agrees that prior to the date which is one year and one day after the date of
termination of this Agreement pursuant to Section 9.15, it will not institute
against or join any other Person in instituting against the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States, any State of
the United States or the Cayman Islands.
Section 9.13. ADDITION OF SELLERS. Subject to the terms and
conditions hereof, from time to time one or more wholly-owned Subsidiaries of
United Stationers Inc. may become additional Sellers parties hereto, the
receivables originated by which may constitute Eligible Receivables of such
Seller. If any such Subsidiary wishes to become an additional Seller, it shall
submit a request to such effect in writing to the Company. The Company, in its
sole and absolute discretion, may, subject to the terms and provisions of the
Pooling and Servicing Agreements, agree to or deny any such request, PROVIDED
that, if the Company shall have failed to respond to any such request within 30
days after receipt thereof, such request shall be deemed to have been denied.
If the Company shall have agreed to any such request, then in the case of a
wholly-owned Subsidiary of United Stationers Inc., such wholly-owned Subsidiary
shall become an additional Seller party hereto on the related Seller Addition
Date upon satisfaction of the conditions set forth in Section 3.02 and the
conditions, if any, set forth in the Pooling and Servicing Agreements.
Section 9.14. TREATMENT OF SELLERS OTHER THAN USSC; TERMINATION
THEREOF. (a) USSC hereby covenants and agrees with the Company that USSC shall
not permit any Seller at any time to cease to be a wholly-owned Subsidiary of
United Stationers Inc., except as provided in the following paragraph (b).
42
(a) If United Stationers Inc. wishes to permit any Seller to cease to
be a wholly-owned Subsidiary of United Stationers Inc., then USSC shall submit a
request (a "SELLER TERMINATION REQUEST") to such effect in writing to the
Company, which request shall be accompanied by a certificate prepared by a
Responsible Officer of the Servicer indicating the Purchased Receivables
Percentage applicable to such Seller as of the date of submission of such
request (the "SELLER TERMINATION REQUEST DATE"). The Company, in its sole and
absolute discretion, may, subject to the terms and provisions of the Pooling and
Servicing Agreements, consent to or deny any such Seller Termination Request,
PROVIDED that, if the Company shall have failed to respond to any such Seller
Termination Request within 30 days after receipt thereof, such Seller
Termination Request shall be deemed to have been denied. If the Company shall
have consented to any such Seller Termination Request, and such consent shall
not be in violation of any applicable provision of the Pooling and Servicing
Agreements, then the relevant Seller shall be terminated as a Seller hereunder
on the date of the consummation of the transaction in connection with which such
Seller ceases to be a wholly-owned Subsidiary of United Stationers inc. or, if
USSC requests in writing that the termination date be a date prior to the
consummation of such transaction, such earlier requested date (but in no event
more than 30 days prior to the consummation of such transaction); PROVIDED that
if an earlier date is so requested, USSC or any Subsidiary of United Stationers
Inc. shall have entered into a valid and legally binding agreement to effect
such transaction on or before a date certain, PROVIDED FURTHER that, if the
Purchased Receivables Percentage applicable to such Seller as of the relevant
Seller Termination Request Date is less than 10%, then the Company shall consent
to such Seller Termination Request unless such consent would violate the terms
and provisions of the Pooling and Servicing Agreements. From and after the date
any such Seller is terminated as a Seller pursuant to this subsection, the
Company shall cease buying Receivables and Receivables Property from such
Seller. Each such Seller shall be released as a Seller party hereto for all
other purposes and shall cease to be a party hereto on such termination date.
(b) A terminated Seller shall have no further obligation under any
Transaction Document, other than to repurchase Receivables previously sold by it
to the Company pursuant to Section 2.06.
Section 9.15. TERMINATION. This Agreement will terminate at such
time as (c) an Early Termination shall have occurred with respect to all Sellers
hereunder and (b) all Receivables purchased hereunder have been collected, and
the proceeds thereof turned over to the Company and all other amounts owing to
the Company hereunder shall have been paid in full or, if Receivables sold
hereunder have not been collected, such Receivables have become Defaulted
Receivables and the Company shall have completed its collection efforts with
respect thereto; PROVIDED, HOWEVER, that the indemnities of the Sellers to the
Company set forth in this Agreement shall survive such termination and PROVIDED
FURTHER that the Company shall remain entitled to receive any collections on
Receivables sold hereunder which have become Defaulted Receivables.
Section 9.16. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION; OTHER
WAIVERS. (c) EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
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OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF
ANY OF THE PARTIES HERETO OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
(b) Each of the Company and the Sellers hereby irrevocably and
unconditionally:
(i) submits itself and its property in any legal action or
proceeding relating to this Agreement and the other Transaction
Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Person at its address referred to in Section 9.02 or
at such other address of which the relevant Seller or the Company, as
the case may be, shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection 9.07(b) any special,
exemplary, punitive or consequential damages.
Section 9.17. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE SELLER:
UNITED STATIONERS SUPPLY CO.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
THE SERVICER:
UNITED STATIONERS SUPPLY CO.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
USS RECEIVABLES COMPANY, LTD.:
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
