Exhibit 10(p)
Execution Copy
PARALLEL ASSET PURCHASE AGREEMENT
among
O&M FUNDING CORP.,
as Seller,
XXXXX & MINOR MEDICAL, INC.,
as Servicer,
XXXXX & MINOR, INC.,
as Parent and Guarantor,
THE PARALLEL PURCHASERS
FROM TIME TO TIME PARTY HERETO,
as Parallel Purchasers,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
Dated as of December 28, 1995
PARALLEL ASSET PURCHASE AGREEMENT
This PARALLEL ASSET PURCHASE AGREEMENT (this "Agreement") is entered
into as of December 28, 1995 among O&M FUNDING CORP., a Virginia corporation, as
seller (the "Seller"), XXXXX & MINOR MEDICAL, INC., a Virginia corporation, as
the initial Servicer (in such capacity, together with its successors and
permitted assigns in such capacity, the "Servicer"), XXXXX & MINOR, INC., a
Virginia corporation, as parent and guarantor (the "Parent"), BANK OF AMERICA
ILLINOIS (in its individual capacity "BAI") and each of the parties that has
executed as an "Assignee" an Assignment of Parallel Asset Purchase Commitment in
the form of Annex A hereto (each, an "Assignment") (BAI and each such other
party being referred to collectively as the "Parallel Purchasers" and
individually as a "Parallel Purchaser") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association (in its individual capacity
"Bank of America"), as administrator and agent for the Parallel Purchasers (the
"Administrative Agent").
PRELIMINARY STATEMENTS
A. The Seller desires to sell, transfer and assign an undivided
variable percentage interest in a pool of receivables to the Administrative
Agent, on behalf of the Parallel Purchasers, and the Parallel Purchasers desire
to acquire such undivided variable percentage interest, as such percentage
interest shall be adjusted from time to time based upon, in part, reinvestment
payments which are made by the Parallel Purchasers and additional incremental
payments made to the Seller; and each Parallel Purchaser, by becoming a party
hereto, agrees to purchase and make reinvestments on the terms and conditions
set forth in this Agreement in its ratable portion of the Purchased Interest
hereunder (its "Purchase Commitment").
B. Reference is made to the Receivables Purchase Agreement dated as of
December 28, 1995 (the "Receivables Purchase Agreement") among Seller, Xxxxx &
Minor Medical, Inc., as Servicer, Xxxxx & Minor, Inc., Receivables Capital
Corporation, as the Issuer, and Bank of America, as agent for the Issuer, a copy
of which has been delivered to each Parallel Purchaser; under which agreement
the Seller thereunder may sell, transfer and assign, and the Issuer may acquire,
an undivided variable percentage interest in a pool of receivables owned by
Seller, as such percentage interest shall be adjusted from time to time based
upon, in part, reinvestment payments which are made by the Issuer and additional
incremental payments made to the Seller.
C. Certain terms that are used throughout this Agreement
are defined in Exhibit I to the Receivables Purchase Agreement
(as incorporated herein by reference). References in the
Receivables Purchase Agreement to a Parallel Asset Purchase Agreement are
references to this Agreement, as the same may be amended, modified or
supplemented from time to time.
D. Bank of America has been requested and is willing to act as
Administrative Agent hereunder.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Parallel Purchase Facility. (a) On the terms and
conditions hereinafter set forth, each Parallel Purchaser severally shall
purchase undivided percentage ownership interests and shall make reinvestments
with regard to their Purchased Interest from the Seller from time to time during
the period from the date hereof to the Parallel Purchase Termination Date. Under
no circumstances shall any Parallel Purchaser be obligated to make any purchase
or reinvestment under this Agreement if after giving effect to such purchase or
reinvestment the aggregate outstanding Capital of the Purchased Interest of the
Parallel Purchasers, together with the aggregate outstanding Capital of
Purchased Interests under the Receivables Purchase Agreement, would exceed the
Purchase Limit. Each purchase and reinvestment shall be made ratably by the
Parallel Purchasers according to their respective Maximum Parallel Purchase.
Each Parallel Purchaser shall make its respective ratable portions of each
purchase and reinvestment on the same day as the other parties making such
purchase or reinvestment.
(b) The Seller may, upon at least 10 Business Days' notice to the
Administrative Agent, terminate the purchase facility provided in this Section
1.1 in whole or, from time to time, irrevocably reduce in part the unused
portion of the Purchase Limit; provided that each partial reduction shall be in
the amount of at least $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and; provided further that each such reduction shall be made
ratably with respect to each Parallel Purchaser according to its respective
Maximum Parallel Purchase.
SECTION 1.2. Making Purchases. (a) Each purchase (not including
reinvestments) of the Purchased Interest hereunder shall be made upon the
Seller's irrevocable written notice delivered to the Administrative Agent
in accordance with Section 6.2 (which notice must be received by the
Administrative Agent prior to noon New York City time and, with respect to
which, the Administrative Agent will provide prompt notice to each Parallel
Purchaser by telephone or facsimile) (i) three
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Business Days prior to the requested purchase date, in the case of a purchase to
be funded at the Alternate Rate and based on the Eurodollar Rate and (ii) one
Business Day prior to the requested purchase date, in the case of a purchase to
be funded at the Alternate Rate and based on the Base Rate, which notice shall
specify (A) the amount requested to be paid to the Seller (such amount, which
shall not be less than $1,000,000, being the "Capital" relating to the undivided
ownership interest then being purchased), (B) the date of such purchase (which
shall be a Business Day) and (C) the desired funding basis for such purchase and
the desired duration of the initial Fixed Period(s) for such purchase. The
notice delivered by the Administrative Agent to the Parallel Purchasers shall
contain a brief description of the circumstances giving rise to the purchase
hereunder which description shall be based upon information available to the
Administrative Agent at the time of such purchase and be made in good faith by
the Administrative Agent; it being understood that the failure of any such
notice to provide such a description shall not affect the obligations of the
Parallel Purchasers hereunder.
(b) On the date of each purchase (not including reinvestments) of
undivided ownership interests with regard to the Purchased Interest hereunder,
each Parallel Purchaser shall, upon satisfaction of the applicable conditions
set forth in Exhibit I, deposit in the Administrative Account in same day funds,
an amount equal to such Parallel Purchaser's ratable portion (calculated
according to its Maximum Parallel Purchase (its "Percentage")) of the Capital
relating to the undivided ownership interest then being purchased. Each Parallel
Purchaser's obligation hereunder shall be several, such that the failure of any
Parallel Purchaser to make payment to the Administrative Agent in connection
with any purchase hereunder shall not relieve any other Parallel Purchaser of
its obligation hereunder to make payment for any purchase. Further, in the event
any Parallel Purchaser fails to satisfy its obligation to purchase any Purchased
Interest as required hereunder, upon receipt of notice of such failure from the
Administrative Agent (which shall be provided within one Business Day after the
Administrative Agent receives notice or otherwise obtains knowledge of such
failure), subject to satisfaction of the applicable conditions set forth in
Exhibit I, the non-defaulting Parallel Purchasers shall purchase the defaulting
Parallel Purchaser's Percentage in the related Purchased Interest pro rata in
proportion to their relative Percentages; provided that, in no event shall any
Parallel Purchaser be obligated to make any purchase or reinvestment under this
Agreement if after giving effect to such purchase or reinvestment (i) the
aggregate outstanding Capital of the Purchased Interest of the Parallel
Purchasers, together with the aggregate outstanding Capital of Purchased
Interests under the Receivables Purchase Agreement, would exceed the Purchase
Limit or (ii) the aggregate outstanding
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Capital of the Purchased Interest attributable to such Parallel Purchaser
exceeds such Parallel Purchaser's Maximum Parallel Purchase. Unless the
Administrative Agent shall have received notice from a Parallel Purchaser on the
date of the sale of any Purchased Interest prior to 2:30 P.M. (New York City
time) on the date of any proposed sale, that such Parallel Purchaser will not
make available to the Administrative Agent the amount of that Parallel
Purchaser's Percentage, the Administrative Agent may assume that each Parallel
Purchaser has made such amount available to the Administrative Agent on the
purchase date and the Administrative Agent may (but shall not be so required),
in reliance upon such assumption, make available to the Seller on such date a
corresponding amount by depositing such amount in the Administrative Account. If
and to the extent any Parallel Purchaser shall not have made its full amount
available to the Administrative Agent, and the Administrative Agent in such
circumstances has made available to the Seller the corresponding amount, that
Parallel Purchaser shall on the next Business Day following the date of such
sale make such amount available to the Administrative Agent, together with
interest at the Federal Funds Rate for each day during such period. A
certificate of the Administrative Agent submitted to any Parallel Purchaser with
respect to amounts owing under this clause (b) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Parallel Purchaser's purchase on the
date of sale for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the next Business Day following the
date of such purchase, the Administrative Agent shall notify the Seller of such
failure to fund and, upon demand by the Administrative Agent, the Seller shall
pay such amount to the Administrative Agent for the Administrative Agent's
account, together with interest thereon for each day elapsed since the date of
such purchase, at a rate per annum equal to the Federal Funds Rate.
(c) Effective on the date of each purchase pursuant to this Section 1.2
and each reinvestment pursuant to Section 1.4, the Seller hereby sells and
assigns to the Administrative Agent on behalf of each Parallel Purchaser
(without any formal or other instrument of assignment) an undivided percentage
ownership interest in (i) each Pool Receivable then existing, (ii) all Related
Security with respect to such Pool Receivables, and (iii) Collections with
respect to, and other proceeds of, such Pool Receivables and Related Security,
equal to such Parallel Purchaser's Percentage of the Purchased Interest
hereunder.
(d) Each Parallel Purchaser's Purchase Commitment shall be irrevocable
from the effective date of this Agreement or as set forth in the applicable
Assignment, as the case may be, until the earliest of the (i) Parallel Purchase
Termination Date and (ii) the date on which the Parallel Purchasers' obligation
to
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purchase and reinvest hereunder is terminated pursuant to Section
1.1(b).
SECTION 1.3. Purchased Interest Computation. The Purchased Interest
shall be initially computed on the date of the initial purchase hereunder.
Thereafter until the Parallel Purchase Termination Date, the Purchased Interest
shall be automatically recomputed (or deemed to be recomputed) on each Business
Day other than a Run-off Day. The Purchased Interest, as computed (or deemed
recomputed) as of the day immediately preceding the Parallel Purchase
Termination Date, shall thereafter remain constant. The Purchased Interest
shall become zero when the Capital thereof and Discount thereon shall have been
paid in full, all the amounts owed by the Seller hereunder to the Parallel
Purchasers or the Administrative Agent, or any other Securitization Party or
Affected Person, are paid in full and the Servicer shall have received the
accrued Servicing Fee thereon.
SECTION 1.4. Settlement Procedures. (a) Collection of the Pool
Receivables shall be administered by the Servicer in accordance with the terms
of this Agreement. The Seller shall provide to the Servicer on a timely
basis all information needed for such administration, including notice of
the occurrence of any Run-off Day and current computations of the Purchased
Interest.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
(i) set aside and hold in trust (and, at the request of the
Administrative Agent, segregate) for the Parallel Purchasers, out of
the percentage of such Collections represented by the Purchased
Interest, first an amount equal to the Discount accrued through such
day for each Portion of Capital and not previously set aside and
second, to the extent funds are available therefor, if Xxxxx & Minor
Medical, Inc. or an Affiliate thereof Seller is not the Servicer, an
amount equal to the Servicing Fee determined in accordance with Section
4.6 accrued through such day for the Purchased Interest and not
previously set aside; and
(ii) subject to Section 1.4(f), if such day is not a Run-off
Day, remit to the Seller, on behalf of the Parallel Purchasers
according to the Percentage of each, the remainder of the Percentage of
such Collections, represented by the Purchased Interest, to the extent
representing a return of Capital; such Collections shall be
automatically reinvested in Pool Receivables, and in the Related
Security and Collections and other proceeds with respect thereto, and
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the Purchased Interest shall be automatically recomputed
pursuant to Section 1.3;
(iii) if such day is a Run-off Day, (x) set aside, segregate
and hold in trust for the Parallel Purchasers according to the
Percentage of each the entire remainder of the Percentage of the
Collections represented by the Purchased Interest; provided that if
amounts are set aside and held in trust on any Run-off Day and
thereafter, the conditions set forth in Section 2 of Exhibit I are
satisfied or are waived by the Administrative Agent, such previously
set aside amounts shall, to the extent representing a return of
Capital, be reinvested in accordance with the preceding paragraph (ii)
on the day of such subsequent satisfaction or waiver of conditions; and
(y) transfer the Seller's share of the Collections represented by the
Purchased Interest to the Seller; and
(iv) during such times as amounts are required to be
reinvested in accordance with the foregoing paragraph (ii) or the
proviso to paragraph (iii), release to the Seller (subject to Section
1.4(f)) any Collections in excess of (x) such amounts and (y) the
amounts that are required to be deposited pursuant to paragraph (i)
above.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrative Agent), on the last day of each
Settlement Period relating to a Portion of Capital (or at such other times as
the Administrative Agent shall require), Collections held in the Administration
Account for the Parallel Purchasers pursuant to Section 1.4(b)(i) or Section
1.4(f) with respect to such Portion of Capital and the lesser of (x) the amount
of Collections then held for the Parallel Purchasers pursuant to Section
1.4(b)(iii) and (y) such Portion of Capital.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to Section 1.4(c), with respect to any Portion of Capital, the
Administrative Agent shall cause such funds to be distributed as follows:
(i) if such distribution occurs on a day that is not a
Run-off Day, first to each Parallel Purchaser in payment in full of its
Percentage of all accrued Discount and then to the Servicer (payable in
arrears on each Month End Date) in payment in full of all accrued
Servicing Fees so set aside with respect to such Portion of Capital;
and
(ii) if such distribution occurs on a Run-off Day, first to
each Parallel Purchaser in payment in full of its Percentage of all
accrued Discount, second to each Parallel Purchaser in payment in full
of its Percentage of Capital,
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third, if the Seller is not the Servicer, to the Servicer in payment in
full of all accrued Servicing Fees with respect to such Portion of
Capital, fourth, if the Capital and accrued Discount with respect to
each Portion of Capital has been reduced to zero, and all accrued
Servicing Fees payable to the Servicer (if other than the Seller) have
been paid in full, to the Parallel Purchasers, the Administrative Agent
and any other Securitization Party or Affected Person in payment in
full of any other amounts owed thereto by the Seller hereunder and then
to the Servicer (if the Servicer is the Seller) in payment in full of
all accrued Servicing Fees.
After the Capital and Discount and Servicing Fees with respect to the Purchased
Interest, and any other amounts payable by the Seller to the Parallel
Purchasers, the Administrative Agent or any other Securitization Party or
Affected Person hereunder, have been paid in full, all additional Collections
with respect to the Purchased Interest shall be paid to the Seller for its own
account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed goods or services, or any
discount or other adjustment made by the Seller, or any setoff or
dispute between the Seller and an Obligor, or any credit memorandum or
any billing error, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or warranties
in paragraphs (g) or (m) of Exhibit II is not true with respect to any
Pool Receivable, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in full;
(iii) except as provided in paragraph (i) or (ii) of this
Section 1.4(e), or as otherwise required by applicable law or the
relevant Contract, all Collections received from an Obligor of any
Receivable shall be applied to the Receivables of such Obligor in the
order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and
(iv) if and to the extent the Administrative Agent or any
Parallel Purchaser shall be required for any reason to pay over to an
Obligor (or any trustee, receiver, custodian or similar official in any
Insolvency Proceeding) any amount
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received by it hereunder, such amount shall be deemed not to have been
so received but rather to have been retained by the Seller and,
accordingly, the Administrative Agent or such Parallel Purchaser, as
the case may be, shall have a claim against the Seller for such amount,
payable when and to the extent that any distribution from or on behalf
of such Obligor is made in respect thereof.
(f) Except for reductions in connection with the division or
combination of Portions of Capital pursuant to Section 1.7 hereof, if at any
xxxx Xxxxxx shall wish to cause the reduction of a Portion of Capital (but not
to commence the liquidation, or reduction to zero, of the entire Capital of the
Purchased Interest), the Seller may do so as follows:
(i) the Seller shall give the Administrative Agent at least
five Business Days' prior written notice thereof (including the amount
of such proposed reduction and the proposed date on which such
reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, the Servicer shall cause Collections with
respect to such Portion of Capital not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of
reduction, and
(iii) the Servicer shall hold such Collections in trust for
each Parallel Purchaser in proportion to its Percentage, for payment to
the Administrative Agent on the last day of the current Settlement
Period relating to such Portion of Capital, and the applicable Portion
of Capital shall be deemed reduced in the amount to be paid to the
Administrative Agent only when in fact finally so paid;
provided that,
A. the amount of any such reduction shall be not less than
$1,000,000 and shall be an integral multiple of $100,000, and the
entire Capital of the Purchased Interest after giving effect to such
reduction shall be not less than $10,000,000 and shall be in an
integral multiple of $1,000,000,
B. the Seller shall choose a reduction amount, and the
date of commencement thereof, so that to the extent
practicable such reduction shall commence and conclude in
the same Fixed Period, and
C. if two or more Portions of Capital shall be
outstanding at the time of any proposed reduction, such
proposed reduction shall be applied, unless the Seller shall
otherwise specify in the notice given pursuant to Section
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1.4(f)(i), to the Portion of Capital with the shortest
remaining Fixed Period.
SECTION 1.5. [Reserved.]
SECTION 1.6. Payments and Computations, Etc. (a) All amounts to be
paid or deposited by the Seller or the Servicer hereunder shall be paid or
deposited no later than 1:00 p.m. (New York City time) on the day when due in
same day funds to the Administration Account. All amounts received after 1:00
p.m. (New York City time) will be deemed to have been received on the
immediately succeeding Business Day. The Administrative Agent will promptly
thereafter (on such day) cause to be distributed like funds relating to the
payment of Discount, Capital or other amounts to the Parallel Purchasers in
accordance with their Percentages in each case to be applied in accordance with
the terms of this Agreement.
(b) The Seller shall, to the extent permitted by law, pay interest on
any amount not paid or deposited by the Seller (whether as Servicer or
otherwise) when due hereunder, at an interest rate equal to 2.0% per annum above
the Base Rate, payable on demand. Such interest shall be for the account of, and
distributed by the Administrative Agent to, the Parallel Purchasers or other
Persons to which such amounts are owed.
(c) All computations of interest under subsection (b) above and all
computations of Discount, fees, and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
SECTION 1.7. Dividing or Combining Portions of the Capital of the
Purchased Interest. The Seller may, on the last day of any Fixed Period, either
(i) divide the Capital of the Purchased Interest into two or more portions, but
not to exceed ten portions in effect at any time, (each, a "Portion of Capital")
equal, in aggregate, to the Capital of the Purchased Interest, provided that
after giving effect to such division the amount of each such Portion of Capital
shall not be less than $5,000,000, or (ii) combine any two or more Portions of
Capital outstanding on such last day and having Fixed Periods ending on such
last day into a single Portion of Capital equal to the aggregate of the Capital
of such Portions of Capital.
SECTION 1.8. Increased Costs. (a) If any Securitization Party, any
Parallel Purchaser or any of their respective Affiliates (each an "Affected
Person") determines that the existence of or compliance with (i) any law or
regulation or any
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change therein or in the interpretation or application thereof, in each case
adopted, issued or occurring after the date hereof or (ii) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement affects or would affect the amount of capital required or
expected to be maintained by such Affected Person (and is not a change by way of
imposition or increase of reserve requirements referred to in Section 1.9)
otherwise accounted for in the determination of the Eurodollar Rate) and such
Affected Person determines that the amount of such capital is increased by or
based upon the existence of any commitment to make purchases of or otherwise to
maintain the investment in Pool Receivables related to this Agreement or any
Program Support Agreement and other commitments of the same type related to this
Agreement, then, upon demand by such Affected Person within 180 days of such
determination (with a copy to the Administrative Agent), the Seller shall pay to
the Administrative Agent, for the account of such Affected Person, from time to
time as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in capital
to be allocable to the existence of any of such commitments. A certificate as to
such amounts submitted to the Seller and the Administrative Agent by such
Affected Person setting forth in reasonable detail the calculation of such
amounts shall be conclusive and binding for all purposes, absent prima facia
error.
(b) If, due to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve requirements referred to
in Section 1.9) in or in the interpretation of any law or regulation or (ii)
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Affected Person of agreeing to purchase or
purchasing, or maintaining the ownership of the Purchased Interest in respect of
which Discount is computed by reference to the Eurodollar Rate excluding,
however, any increase in the cost to such Affected Person due to the imposition
of any tax on such Affected Person, then, upon written demand by such Affected
Person no later than 180 days after such Affected Person shall determine its
liability for such increased cost and from time to time thereafter, the Seller
shall promptly pay to such Affected Person, from time to time as specified,
additional amounts reasonably determined by such Affected Person to be
sufficient to compensate such Affected Person for such increased costs. A
certificate as to such amounts submitted to the Seller by such Affected Person
shall be conclusive and binding for all purposes, absent prima facia error.
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SECTION 1.9. Additional Discount on Portions of Purchased Interest
Bearing a Eurodollar Rate. The Seller shall pay to any Affected Person, so long
as such Affected Person shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional Discount on the unpaid Capital of the applicable Portion of Capital
during each Fixed Period in respect of which Discount is computed by reference
to the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all
times during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing
such Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Fixed Period, payable
on each date on which Discount is payable on the applicable Portion of Capital.
Such additional Discount shall be reasonably determined by the Affected Person
and notified to the Seller through the Administrative Agent within 90 days after
any Discount payment is made with respect to which such additional Discount is
requested. A certificate as to such additional Discount submitted to the Seller
by the Affected Person shall be conclusive and binding for all purposes, absent
prima facia error.
SECTION 1.10. Requirements of Law. In the event that any Affected
Person determines that the existence of or compliance with (i) any law or
regulation or any change therein or in the interpretation or application
thereof, in each case adopted, issued or occurring after the date hereof or (ii)
any request, guideline or directive from any central bank or other Governmental
Authority (whether or not having the force of law) issued or occurring after the
date of this Agreement:
(A) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, purchases, advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Affected
Person which are not otherwise included in the determination of the
Eurodollar Rate or the Base Rate hereunder; or
(B) does or shall impose on such Affected Person any
other condition;
and the result of any of the foregoing is (x) to increase the cost to such
Affected Person of acting as Administrative Agent, or of agreeing to purchase or
purchasing or maintaining the ownership of undivided ownership interests with
regard to the Purchased Interest (or interests therein) or any Portion of
Capital in respect of which Discount is computed by reference to
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the Eurodollar Rate or the Base Rate (except to the extent that such increase in
cost is due to the imposition of any tax on such Affected Person) or (y) to
reduce any amount receivable hereunder (whether directly or indirectly) funded
or maintained by reference to the Eurodollar Rate or the Base Rate (except to
the extent that such reduced amount receivable is due to the imposition of any
tax on such Affected Person), then, in any such case, upon written demand by
such Affected Person no later than 180 days after such Affected Person shall
determine the amount of any such increased cost or reduced amount, and from time
to time thereafter, the Seller shall promptly pay such Affected Person any
additional amounts necessary to compensate such Affected Person for such
increased cost or reduced amount receivable. All such amounts shall be payable
as incurred. A written certificate delivered by such Affected Person to the
Seller certifying, in reasonably specific detail, the basis for, calculation of,
and amount of such increased costs or reduced amount receivable shall be
conclusive in the absence of prima facia error; provided, however, that no
Affected Person shall be required to disclose any confidential or tax planning
information in any such certificate.
SECTION 1.11. Inability to Determine Eurodollar Rate. In the event
that the Administrative Agent shall have determined prior to the first day of
any Fixed Period (which determination shall be conclusive and binding upon the
parties hereto) by reason of circumstances affecting the interbank Eurodollar
market, either (a) dollar deposits in the relevant amounts and for the relevant
Fixed Period are not available, (b) adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Fixed Period or (c) the Eurodollar
Rate determined pursuant hereto does not accurately reflect the cost to the
Issuer (as conclusively determined by the Administrative Agent) of maintaining
any Portion of Capital during such Fixed Period, the Administrative Agent shall
promptly give telephonic notice of such determination, confirmed in writing, to
the Seller prior to the first day of such Fixed Period. Upon delivery of such
notice (a) no Portion of Capital shall be funded thereafter at the Alternate
Rate determined by reference to the Eurodollar Rate, unless and until the
Administrative Agent shall have given notice to the Seller that the
circumstances giving rise to such determination no longer exist, and (b) with
respect to any outstanding Portions of Capital then funded at the Alternate Rate
determined by reference to the Eurodollar Rate, such Alternate Rate shall
automatically be converted to the Alternate Rate determined by reference to the
Base Rate at the respective last days of the then current Fixed Periods relating
to such Portions of Capital.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
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SECTION 2.1. Representations and Warranties; Covenants.
(a) The Seller, Servicer and the Parent hereby jointly and severally
make the representations and warranties set forth in Exhibit II, and hereby
jointly and severally agree that the covenants set forth in Exhibit III will be
performed and observed.
SECTION 2.2. Termination Events. If any of the Termination Events set
forth in Exhibit IV shall occur, the Administrative Agent may, by notice to the
Seller, declare the Parallel Purchase Termination Date to have occurred (in
which case the Parallel Purchase Termination Date shall be deemed to have
occurred); provided that, automatically upon the occurrence of any event
(without any requirement for the passage of time or the giving of notice)
described in subsection (g) of Exhibit IV, the Parallel Purchase Termination
Date shall occur; provided, further, that, in the case of a Termination Event
described in subsection (j) of Exhibit IV, the Facility Termination Date shall
be deemed to have occurred on the Business Day following the date of such notice
unless such Termination Event is cured during the intervening period. Upon any
such declaration, occurrence or deemed occurrence of the Parallel Purchase
Termination Date, the Parallel Purchasers and the Administrative Agent shall
have, in addition to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided after default under the UCC
and under other applicable law, which rights and remedies shall be cumulative.
Notwithstanding anything to the contrary in this Agreement (including without
limitation any Exhibit hereto), this Section 2.2 shall not be limited or
otherwise affected by satisfaction of the conditions to reinvestments or
purchases set forth in Section 2 of Exhibit I.
ARTICLE III
INDEMNIFICATION
SECTION 3.1. (a) Indemnities by the Seller. Without limiting any
other rights that any Securitization Party (each an "Indemnified Party") may
have hereunder or under applicable law, the Seller and the Parent hereby jointly
and severally agree to indemnify each Indemnified Party from and against any and
all claims, damages, expenses, losses and liabilities (including Attorney Costs)
(all of the foregoing being collectively referred to as "Indemnified Amounts")
arising out of or resulting from this Agreement (whether directly or indirectly)
or the use of proceeds of purchases or reinvestments or the ownership of the
Purchased Interest, or any interest therein, or in respect of any Receivable or
any Contract, excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful
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misconduct on the part of such Indemnified Party, (b) recourse (except as
otherwise specifically provided in this Agreement) for uncollectible
Receivables, or (c) any taxes imposed on such Indemnified Party. Without
limiting or being limited by the foregoing, and subject to the exclusions set
forth in the preceding sentence, the Seller and the Parent jointly and severally
agree to pay to each Indemnified Party (within three Business Days after written
demand for such indemnification) any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to
or resulting from any of the following:
(i) the failure of any Receivable included in the calculation
of the Net Receivables Pool Balance as an Eligible Receivable to be an
Eligible Receivable, the failure of any information contained in a
Seller Report to be true and correct, or the failure of any other
information provided to the Issuer or the Administrative Agent with
respect to Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty or
statement made or deemed made by the Seller (or any of its officers),
Servicer or Parent under or in connection with this Agreement to have
been true and correct in all respects when made;
(iii) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the
related Contract; or the failure of any Pool Receivable or the related
Contract to conform to any such applicable law, rule or regulation;
(iv) the failure to vest in the Issuer a valid and
enforceable perfected undivided percentage ownership interest, to the
extent of the Purchased Interest, in the Receivables in, or purporting
to be in, the Receivables Pool and the Related Security and Collections
with respect thereto, in each case, free and clear of any Adverse
Claim;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool and the Related Security and Collections in respect thereof,
whether at the time of any purchase or reinvestment or at any
subsequent time;
(vi) any dispute, claim, offset or defense or claim of
billing error, (other than discharge in bankruptcy of the Obligor) of
the Obligor to the payment of any Receivable in,
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or purporting to be in, the Receivables Pool (including, without
limitation, a defense based on such Receivable or the related Contract
not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the goods or services related to such
Receivable or the furnishing or failure to furnish, or agreement to
accept returns of, such goods or services or relating to collection
activities with respect to such Receivable (if such collection
activities were performed by the Seller or any of its Affiliates acting
as Servicer or by any agent or independent contractor retained by the
Seller or any of its Affiliates);
(vii) any failure of the Seller or any Originator or any
Servicer, to perform its duties or obligations in accordance with the
provisions hereof or to perform its duties or obligations under the
Contracts;
(viii) any breach of warranty, products liability or other
claim, investigation, litigation or proceeding arising out of or in
connection with merchandise, insurance or services which are the
subject of any Contract;
(ix) the commingling of any portion of Collections
of Pool Receivables relating to the Purchased Interest at
any time with other funds;
(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments or
the ownership of the Purchased Interest or in respect of any
Receivable, Related Security or Contract; or
(xi) any reduction in Capital as a result of the distribution
of Collections pursuant to Section 1.4(d), in the event that all or a
portion of such distributions shall thereafter be rescinded or
otherwise must be returned for any reason.
(b) Taxes.
(i) Any and all payments made hereunder to an Affected Person
shall be made free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto excluding: (A)
taxes imposed on or measured by all or part of the gross or net income
(but not including any such tax in the nature of a withholding tax) of
such Affected Person by the jurisdiction under the laws of which such
Affected Person is organized or has its applicable lending office or
any political subdivision of
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any thereof and (B) taxes that would not have been imposed if the only
connection between such Affected Person and the jurisdiction imposing
such taxes was the activities of such Affected Person pursuant to or in
respect of this Agreement (including entering into, lending money or
extending credit pursuant to, receiving payments under, or enforcing
this Agreement) (all such excluded taxes, levies, imposts, deductions,
changes, withholding and liabilities collectively or individually
referred to herein as "Excluded Taxes" and all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities
collectively or individually referred to herein as "Taxes"). If the
Seller shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to any Affected Person: (A) the sum payable shall
be increased by the amount (an "additional amount") necessary so that
after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.1(b)) such Affected
Person shall receive an amount equal to the sum it would have received
had no such deductions been made, (B) the Seller shall make such
deductions and (C) the Seller shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(ii) In addition, the Seller agrees to pay to the relevant
Governmental Authority in accordance with applicable law all taxes,
levies, imposts, deductions, charges, assessments or fees of any kind
(including but not limited to any current or future stamp or
documentary taxes or any other excise or property taxes, charges, or
similar levies, but excluding any Excluded Taxes) imposed upon any
Affected Person as a result of the transactions contemplated by this
Agreement or that arise from any payment made hereunder or from the
execution, delivery, or registration of or otherwise similarly with
respect to, this Agreement ("Other Taxes").
(iii) The Seller and the Parent hereby jointly and severally
agree to indemnify each Affected Person from and against the full
amount of Taxes and Other Taxes arising out of this Agreement (whether
directly or indirectly) imposed upon or paid by such Person and any
liability (including penalties, interest, and expenses (including
Attorney Costs)) arising with respect thereto whether or not such Taxes
or Other Taxes were correctly or legally asserted by the relevant
Governmental Authority. A certificate as to the amount of such amounts
prepared by an Affected Person, absent manifest error, shall be final,
conclusive, and binding for all purposes. Such indemnification shall be
made within 30 days after the date the Affected Person makes a timely
written demand therefor or the time at which such
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amount is payable after a timely written demand therefor has been made,
whichever is earlier. A written demand will be considered "timely" for
purposes of the preceding sentence only if it is received by the Seller
and the Parent no later than 180 days after the earlier of (A) the date
on which such Affected Person makes such payment of Taxes or Other
Taxes or liability arising therefrom or with respect thereto and (B)
the date on which the relevant Governmental Authority or other party
makes written demand upon such Affected Person for payment of such
Taxes or Other Taxes or liability arising therefrom or with respect
thereto.
(iv) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Seller to a Governmental Authority
hereunder, the Seller will deliver to the relevant Affected Person the
original or a certified copy of a receipt issued by such Governmental
Authority evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 3.1(b) shall survive the termination of this Agreement.
(vi) Each Program Support Provider that is granted a
participating interest in the Purchased Interest and is organized under
the laws of a jurisdiction other than the United States, any State
thereof, or the District of Columbia (each a "Non-U.S. Purchaser")
shall deliver to the Seller or the Administrator: (A) two copies of
either United States Internal Revenue Service Form 1001 or Form 4224
(whichever is applicable), or (B) in the case of a Non- U.S. Purchaser
claiming an exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8 (or any subsequent versions thereof or successors
thereto) and a certificate representing that such Non-U.S. Purchaser is
not a bank for purposes of Section 881(c) of the Code, in either case
properly completed and duly executed by such Non-U.S. Purchaser
claiming complete exemption from U.S. federal withholding tax on
payments by the Seller under this Agreement. Such forms shall be
delivered by each Non-U.S. Purchaser before the date it receives its
first payment with respect to a Purchased Interest, and before the date
it receives its first payment with respect to a Purchased Interest
occurring after the date, if any, that such Non- U.S. Purchaser changes
its applicable lending office by designating a different lending office
(a "New Lending Office"). In addition, each Non-U.S. Purchaser shall
deliver such forms promptly after (or, if reasonably practicable, prior
to) the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Purchaser.
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Notwithstanding any other provision of this Section 3.1(b)(vi), a
Non-U.S. Purchaser shall not be required to deliver any form pursuant
to this Section 3.1(b)(vi) that such Non-U.S. Purchaser is not legally
able to deliver. Each Program Support Provider (other than any exempt
person as described in applicable Treasury Regulations) that is granted
a participating interest in the Purchased Interest and is organized
under the laws of the United States or any state thereof or the
District of Columbia shall deliver to the Seller an original copy of
Internal Revenue Service Form W-9 (or applicable successor form)
properly completed and duly executed by such Program Support Provider.
(vii) The Seller and the Parent shall not be required to
indemnify any Non-U.S. Purchaser, or to pay any additional amounts to
any Non-U.S. Purchaser, in respect of United States federal withholding
tax (or any withholding tax imposed by a state that applies only when
such United States federal withholding tax is imposed) pursuant to this
Section 3.1(b) to the extent that: (A) the obligation to withhold
amounts with respect to United States federal withholding tax existed
on the date such Non-U.S. Purchaser was granted a participating
interest in the Purchased Interest or, with respect to payments to a
New Lending Office, the date such Non-U.S. Purchaser designated such
New Lending Office; provided, however, that this clause (A) shall not
apply to any Non-U.S. Purchaser or New Lending Office that is granted,
assigned, or transferred a participating interest in the Purchased
Interest at the request of the Seller and provided further, however,
that this clause (A) shall not apply to any Non-U.S. Purchaser or New
Lending Office that is assigned an interest in the Purchased Interest
by a Program Support Provider to the extent that the indemnity payment
or additional amounts such Non-U.S. Purchaser or New Lending Office
would be entitled to receive (without regard to this clause (A)) do not
exceed the indemnity payment or additional amounts that the Program
Support Provider making the assignment to such Non-U.S. Purchaser or
New Lending Office would have been entitled to receive in the absence
of such assignment; or (B) the obligation to make such indemnification
or to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Purchaser to comply with the provisions of
paragraph (vi) above (it being understood that the Non-U.S. Purchaser
shall not have failed to comply with the provisions of paragraph (vi)
above if it is legally unable to deliver the forms described therein on
any date after it is granted a participation interest in a Purchased
Interest or designated a New Lending Office).
(viii) Any Affected Person claiming any indemnity
payment or additional amounts payable pursuant to this
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Section 3.1(b) shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document reasonable
requested in writing by the Seller or the Parent or to change the
jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any
such indemnity payment or additional amounts that may thereafter accrue
and would not, in the good faith determination of such Affected Person,
be otherwise disadvantageous to such Affected Person.
(ix) Nothing contained in this Section 3.1(b) shall require an
Affected Person to make available any of its tax returns (or any other
information that it deems to be confidential or proprietary).
(x) If any Affected Person receiving an indemnification
payment hereunder with respect to Taxes or Other Taxes or liabilities
arising therefrom shall subsequently receive a refund from any taxing
authority which is specifically attributable to such indemnification
payment, such Person shall promptly pay such refund to Seller or the
Parent, as the case may be.
Section 3.2. Parent's Performance Guaranty. (a) Parent hereby
unconditionally and irrevocably covenants and agrees that it will cause the
Seller and the Servicer duly and punctually to perform and observe all of the
terms, conditions, covenants, agreements (including, without limitation,
agreements to make payments or deemed Collections) and indemnities of the Seller
and the Servicer under this Agreement and the other Transaction Documents
strictly in accordance with the terms hereof and thereof and that if for any
reason whatsoever the Seller or the Servicer shall fail to so perform and
observe such terms, conditions, covenants, agreements and indemnities, Parent
will duly and punctually perform and observe the same.
(b) The liabilities and obligations of Parent, in its capacity as a
guarantor under this Section 3.2, shall be absolute and unconditional under all
circumstances and shall be performed by Parent regardless of (i) whether any
Parallel Purchaser or the Administrative Agent shall have taken any steps to
collect from the Seller or the Servicer any of the amounts payable by such party
under this Agreement or shall otherwise have exercised any of their rights or
remedies under this Agreement or the other Transaction Documents against such
party or against any Obligor under any of the Pool Receivables, (ii) the
validity, legality or enforceability of this Agreement or any other Transaction
Documents, or the disaffirmance of any thereof in any event of bankruptcy
relating to the Seller or the Servicer, (iii) any law, regulation or decree now
or hereafter in effect which might in any manner affect any of the terms or
provisions of this
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Agreement or any other Transaction Document or any of the rights of any Parallel
Purchaser or the Administrative Agent as against the Seller or the Servicer or
as against any Obligor under any of such Pool Receivables or which might cause
or permit to be invoked any alteration in time, amount, manner of payment or
performance of any amount payable by the Seller or the Servicer to any Parallel
Purchaser or the Administrative Agent under this Agreement, (iv) the merger or
consolidation of the Seller or the Servicer into or with any corporation or any
sale or transfer by such party or all or any part of its property, (v) the
existence or assertion of any Adverse Claim with respect to any Pool Receivable,
or (vi) any other circumstance whatsoever (with or without notice to or
knowledge of Parent) which may or might in any manner or to any extent vary the
risk of Parent, or might otherwise constitute a legal or equitable discharge of
a surety or guarantor, it being the purpose and intent of Parent that the
liabilities and obligations of Parent under this Section 3.2 shall be absolute
and unconditional under any and all circumstances, and shall not be discharged
except by payment and performance as in this Agreement provided. The guaranty
set forth in this Section 3.2 is a guaranty of payment and performance and not
just of collection.
(c) Without in any way affecting or impairing the liabilities and
obligations of Parent, in its capacity as a guarantor under this Section 3.2,
the Seller, any Parallel Purchaser or the Administrative Agent may at any time
and from time to time in its discretion, without the consent of, or notice to,
Parent, and without releasing or affecting Parent's liability hereunder (i)
extend or change the time, manner, place or terms of this Agreement or any other
Transaction Document, (ii) settle or compromise any of the amounts payable by
Seller or Servicer to any Parallel Purchaser or the Administrative Agent under
this Agreement or subordinate the same to the claims of others, (iii) retain or
obtain a lien upon or security interest in any property to secure any of the
obligations hereunder, (iv) retain or obtain the primary or secondary obligation
of any obligor or obligors, in addition to Parent, with respect to any of the
obligations due hereunder, or (v) release or fail to perfect any lien upon or
security interest in, or impair, surrender, release or permit any substitution
in exchange for, all or any part of any property securing any of the obligations
under this Agreement, it being understood that nothing contained in this Section
3.2(c) shall give any Parallel Purchaser or the Administrative Agent the right
to take any of the foregoing actions if not permitted by the other provisions of
this Agreement, by law or otherwise. Nothing in this Section 3.1(c) shall be
deemed to waive any of the rights the Seller may otherwise have.
(d) The provisions of this Section 3.2 shall continue to be
effective or be reinstated, as the case may be, if at any time
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payment of any of the amounts payable by Seller or Servicer, to any Parallel
Purchaser or the Administrative Agent under this Agreement is rescinded or must
otherwise be restored or returned by any of such Persons, as the case may be,
upon any event of bankruptcy involving Seller or Servicer, or otherwise, all as
though such payment had not been made. Parent, in its capacity as a guarantor
under this Section 3.2, hereby waives (i) notices of the occurrence of any
default hereunder, (ii) any requirement of diligence or promptness on the part
of any Parallel Purchaser or the Administrative Agent in making demand,
commencing suit or exercising any other right or remedy under this Agreement, or
otherwise, and (iii) any right to require any Parallel Purchaser or the
Administrative Agent to exercise any right or remedy against Seller or Servicer
or the Pool Receivables prior to enforcing any of their rights against Parent
under this Section 3.2. Parent, in its capacity as a guarantor under this
Section 3.2, agrees that, in the event of an event of bankruptcy with respect to
Seller or Servicer (including Parent), and if such event shall occur at a time
when all of the indemnified amounts and other amounts due from Seller or
Servicer under this Agreement may not then be due and payable, Parent will pay
to Issuer or the Administrative Agent forthwith the full amount which would be
payable hereunder by Parent if all such indemnified amounts and other
obligations were then due and payable.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as Servicer in accordance with this Section 4.1.
Until the Administrative Agent gives notice to Xxxxx & Minor Medical, Inc. (in
accordance with this Section 4.1) of the designation of a new Servicer, Xxxxx &
Minor Medical, Inc. is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms hereof. Upon
either (i) ninety (90) days' prior written notice to Xxxxx & Minor Medical, Inc.
or (ii) the occurrence of a Termination Event, the Administrative Agent may
designate as Servicer any Person (including itself) to succeed Xxxxx & Minor
Medical, Inc. or any successor Servicer, on the condition in each case that any
such Person so designated shall agree to perform the duties and obligations of
the Servicer pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in
Section 4.1(a) hereof, Xxxxx & Minor Medical, Inc. agrees that it will terminate
its activities as Servicer hereunder in a manner which the Administrative Agent
determines will facilitate the transition of the performance of such
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activities to the new Servicer, and Xxxxx & Minor Medical, Inc. shall cooperate
with and assist such new Servicer. Such cooperation shall include (without
limitation) access to and transfer of records and use by the new Servicer of all
licenses, hardware or software necessary or desirable to collect the Pool
Receivables and the Related Security.
(c) Xxxxx & Minor Medical, Inc. acknowledges that the
Administrative Agent and each Parallel Purchaser have relied on
Xxxxx & Minor Medical, Inc.'s agreement to act as Servicer
hereunder in making their decision to execute and deliver this
Agreement. Accordingly, Xxxxx & Minor Medical, Inc. agrees that
it will not voluntarily resign as Servicer.
(d) The Servicer may delegate its duties and obligations hereunder to
any subservicer (each, a "Sub-Servicer"); provided that, in each such
delegation, (i) such Sub-Servicer shall agree in writing to perform the duties
and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable to each Parallel Purchaser for the performance of
the duties and obligations so delegated, (iii) the Seller, the Administrative
Agent and each Parallel Purchaser shall have the right to look solely to the
Servicer for performance and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrative Agent may terminate such
agreement upon the termination of the Servicer hereunder by giving notice of its
desire to terminate such agreement to the Servicer (and the Servicer shall
provide appropriate notice to such Sub-Servicer).
Section 4.2. Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to collect each
Pool Receivable from time to time, all in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy. The Servicer shall
segregate and hold in trust for the accounts of the Seller and each Parallel
Purchaser the amount of the Collections to which each is entitled in accordance
with Article II hereto. The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Pool Receivable (but not beyond
sixty (60) days from the original maturity date of such Pool Receivables and (y)
not more than once for any Pool Receivable) and extend the maturity or adjust
the Outstanding Balance of any Defaulted Receivable as the Servicer may
determine to be appropriate to maximize Collections thereof; provided, however,
that (i) such extension or adjustment shall not alter the status of such Pool
Receivable as a Delinquent Receivable or a Defaulted Receivable or limit the
rights of each Parallel Purchaser or the Administrative Agent under this
Agreement and (ii) if a Termination Event has occurred and Xxxxx & Minor
Medical, Inc. is still serving as Servicer, Xxxxx & Minor Medical, Inc. may make
such extension or adjustment only upon the
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prior written approval of the Administrative Agent. The Seller shall deliver to
the Servicer and the Servicer shall hold for the benefit of the Seller and the
Administrative Agent (for the benefit of each Parallel Purchaser and
individually) in accordance with their respective interests, all records and
documents (including without limitation computer tapes or disks) with respect to
each Pool Receivable. Notwithstanding anything to the contrary contained herein,
the Administrative Agent may direct the Servicer whether the Servicer is Xxxxx &
Minor Medical, Inc. or any other Person to commence or settle any legal action
to enforce collection of any Pool Receivable or to foreclose upon or repossess
any Related Security; provided, however, that no such direction may be given
unless either (i) a Termination Event has occurred or (ii) the Administrative
Agent believes in good faith that failure to commence, settle, or effect such
legal action, foreclosure or repossession could adversely affect Receivables
constituting a material portion of the Pool Receivables.
(b) The Servicer shall as soon as practicable following actual receipt
of collected funds turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less in the event Xxxxx & Minor Medical, Inc. or
one of its Affiliates is not such Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections; provided, however, the Servicer shall not be
under any obligation to remit any such funds to the Seller unless and until the
Servicer has received from the Seller evidence satisfactory to the
Administrative Agent and the Servicer that the Seller is entitled to such funds
hereunder and under applicable law. The Servicer shall as soon as practicable
upon demand, deliver to the Seller all records in its possession which evidence
or relate to any indebtedness that is not a Pool Receivable, and copies of
records in its possession which evidence or relate to any indebtedness that is a
Pool Receivable.
(c) Notwithstanding anything to the contrary contained in this Article
IV, the Servicer, if not, Xxxxx & Minor Medical, Inc. or one of its Affiliates
shall have no obligation to collect, enforce or take any other action described
in this Article IV with respect to any indebtedness that is not a Pool
Receivable other than to deliver to the Seller the collections and documents
with respect to any such indebtedness as described in Section 4.2(b). It is
expressly understood and agreed by the parties that such Servicer's duties in
respect of any indebtedness that is not a Pool Receivable are set forth in this
Section 4.2 in their entirety. Upon delivery by such Servicer of funds or
records relating to any indebtedness that is not a Pool Receivable to the
Seller, such Servicer shall have discharged in full all of its responsibilities
to make any such delivery.
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(d) The Servicer's obligations hereunder shall terminate on the later
of (i) the Parallel Purchase Termination Date and (ii) the date on which all
amounts required to be paid to each Parallel Purchaser, the Administrative Agent
and any other Indemnified Party or Affected Person hereunder shall have been
paid in full.
After such termination the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer in connection with this Agreement.
Section 4.3. Lock-Box Arrangements. Prior to the initial purchase
hereunder, in accordance with Section (i) of Exhibit III, the Seller shall enter
into Lock-Box Agreements with all of the Lock-Box Banks, and deliver original
counterparts thereof to the Administrative Agent. Upon the occurrence of a
Termination Event, the Administrative Agent may at any time thereafter give
notice to each Lock-Box Bank that the Administrative Agent is exercising its
rights under the Lock-Box Agreements to do any or all of the following: (i) to
have the exclusive ownership and control of the Lock-Box Accounts transferred to
the Administrative Agent and to exercise exclusive dominion and control over the
funds deposited therein, (ii) to have the proceeds that are sent to the
respective Lock-Box Accounts be redirected pursuant to its instructions rather
than deposited in the applicable Lock-Box Account, and (iii) to take any or all
other actions permitted under the applicable Lock-Box Agreement. The Seller
hereby agrees that if the Administrative Agent, at any time, takes any action
set forth in the preceding sentence, the Administrative Agent shall have
exclusive control of the proceeds (including Collections) of all Pool
Receivables and the Seller hereby further agrees to take any other action that
the Administrative Agent may reasonably request to transfer such control. Any
proceeds of Pool Receivables received by the Seller, as Servicer or otherwise,
thereafter shall be sent immediately to the Administrative Agent. The parties
hereto hereby acknowledge that if at any time the Administrative Agent takes
control of any Lock-Box Account, the Administrative Agent shall not have any
rights to the funds therein in excess of the unpaid amounts due to the
Administrative Agent, any Parallel Purchaser or any other Person hereunder and
the Administrative Agent shall distribute or cause to be distributed such funds
in accordance with Section 4.2(b) hereof (including the proviso thereto) and
Article II hereof (in each case as if such funds were held by the Servicer
thereunder); provided, however, that the Administrative Agent shall not be under
any obligation to remit any such funds to the Seller or any other Person unless
and until the Administrative Agent has received from the Seller or such Person
evidence satisfactory to the Administrative Agent that the Seller or such Person
is entitled to such funds hereunder and under applicable law.
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Section 4.4. Enforcement Rights. (a) At any time following the
occurrence of a Termination Event or the designation of a Servicer (other than
Xxxxx & Minor Medical, Inc. or any of its Affiliates) pursuant to Section 4.1
hereof:
(i) the Administrative Agent may direct the Obligors that
payment of all amounts payable under any Pool Receivable be made
directly to the Administrative Agent or its designee;
(ii) the Administrative Agent may instruct the Seller to give
notice of each Parallel Purchaser's interest in Pool Receivables to
each Obligor, which notice shall direct that payments be made directly
to the Administrative Agent or its designee, and upon such instruction
from the Administrative Agent the Seller shall give such notice at the
expense of the Seller; provided, that if the Seller fails to so notify
each Obligor, the Administrative Agent may so notify the Obligors; and
(iii) the Administrative Agent may request the Seller to, and
upon such request the Seller shall, (A) assemble all of the records
necessary or desirable to collect the Pool Receivables and the Related
Security, and transfer or license the use of, to the new Servicer, all
software necessary or desirable to collect the Pool Receivables and the
Related Security, and make the same available to the Administrative
Agent or its designee at a place selected by the Administrative Agent,
and (B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections with respect to the Pool
Receivables in a manner acceptable to the Administrative Agent and,
promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the
Administrative Agent or its designee.
(b) The Seller hereby authorizes the Administrative Agent, and
irrevocably appoints the Administrative Agent as its attorney-in-fact with full
power of substitution and with full authority in the place and stead of the
Seller, which appointment is coupled with an interest, to take any and all steps
in the name of the Seller and on behalf of the Seller necessary or desirable, in
the determination of the Administrative Agent, to collect any and all amounts or
portions thereof due under any and all Pool Receivables or Related Security,
including, without limitation, endorsing the name of the Seller on checks and
other instruments representing Collections and enforcing such Pool Receivables,
Related Security and the related Contracts. Notwithstanding anything to the
contrary contained in this subsection (b), none of the powers conferred upon
such attorney-in-fact pursuant to the immediately preceding sentence shall
25
subject such attorney-in-fact to any liability if any action taken by it shall
prove to be inadequate or invalid, nor shall they confer any obligations upon
such attorney-in-fact in any manner whatsoever.
Section 4.5. Responsibilities of the Seller. (a) Anything herein to the
contrary notwithstanding, the Seller shall pay when due any taxes, including,
without limitation, any sales taxes payable in connection with the Pool
Receivables and their creation and satisfaction. Neither the Administrative
Agent nor any Parallel Purchaser shall have any obligation or liability with
respect to any Pool Receivable, any Related Security or any related Contract,
nor shall any of them be obligated to perform any of the obligations of the
Seller or any Originator under any of the foregoing.
(b) Xxxxx & Minor Medical, Inc. hereby irrevocably agrees that if at
any time it shall cease to be the Servicer hereunder, it shall act (if the then
current Servicer so requests) as the data-processing agent of the Servicer and,
in such capacity, Xxxxx & Minor Medical, Inc. shall conduct the data-processing
functions of the administration of the Receivables and the Collections thereon
in substantially the same way that Xxxxx & Minor Medical, Inc. conducted such
data-processing functions while it acted as the Servicer.
Section 4.6. Servicing Fee. For so long as the Servicer is Xxxxx &
Minor Medical, Inc.or an Affiliate of Xxxxx & Minor Medical, Inc., the Servicer
shall be paid a fee, through distributions contemplated by Section 1.4(d), equal
to 0.50% per annum of the average outstanding Capital. If the Servicer is not
Xxxxx & Minor Medical, Inc. then the Servicer shall be paid a fee as negotiated
in good faith by such Services and by the Administrator in the Administrator's
sole discretion.
ARTICLE V
ADMINISTRATIVE AGENT
SECTION 5.1. Authorization and Action. (a) Each Parallel Purchaser
hereby irrevocably appoints, designates and authorizes the Administrative Agent
to take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement, together with such powers as are reasonably
incidental thereto. Without limiting the foregoing, each Parallel Purchaser
hereby irrevocably authorizes the Administrative Agent to execute an O&M
Intercreditor Agreement substantially in the form attached hereto as Annex B and
agrees to be bound thereby. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement, the Administrative Agent shall not have
any duties or
26
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Parallel Purchaser, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or
otherwise exist against the Administrative Agent.
(b) The Administrative Agent may execute any of its duties under this
Agreement by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects with reasonable
care.
SECTION 5.2. Reliance, Etc. (a) None of the Administrative Agent or any
of its Affiliates or any of the officers, directors, employees, agents or
attorneys-in-fact of the Administrative Agent or any of its Affiliates (each, an
"Agent-Related Person") shall (i) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or the other
Transaction Documents or the transactions contemplated hereby or thereby (except
for its own gross negligence or willful misconduct), or (ii) be responsible in
any manner to any of the Parallel Purchasers for any recital, statement,
representation or warranty made by the Seller or any Affiliate of the Seller, or
any officer thereof, contained in this Agreement or in any other Transaction
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Transaction Document, or for the
value of or title to any Purchased Interest, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Transaction Document, or for any failure of the Seller or any other party to
this Agreement or any other Transaction Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Parallel Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Transaction Document, or to inspect the properties, books
or records of the Seller or any of the Seller's Affiliates.
(b) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Seller), independent
27
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first receive such advice or
concurrence of the Majority Parallel Purchasers as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the
Parallel Purchasers against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request or
consent of the Majority Parallel Purchasers and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Parallel Purchasers.
SECTION 5.3. Purchase Decisions. (a) Each Parallel Purchaser
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by the Administrative Agent hereinafter
taken, including any review of the affairs of the Seller shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Parallel Purchaser. Each Parallel Purchaser represents to the Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Seller, the value of and title to the Purchased Interest, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend its purchase
commitment to the Seller hereunder. Each Parallel Purchaser also represents that
it will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Seller. Except for notices, reports and other documents expressly herein
required to be furnished to the Parallel Purchasers by the Administrative Agent,
the Administrative Agent shall not have any duty or responsibility to provide
any Parallel Purchaser with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Seller which may come into the possession of any of the
Agent-Related Persons.
(b) The Administrative Agent shall not be liable to any
Parallel Purchaser in connection with (x) the administration of
any of the Transaction Documents or (y) this Agreement or any
28
purchases hereunder except for its own gross negligence or
willful misconduct. Without limiting the foregoing, the
Administrative Agent:
(i) may consult with legal counsel (including counsel for
the Seller), independent public accountants or other experts and shall
not be liable for any action taken or omitted to be taken in good faith
in accordance with the advice of such counsel, accountants or other
experts;
(ii) shall not be responsible for the performance or
observance by either Seller or the Servicer of any of the terms,
covenants or conditions of any of the Transaction Documents or any
instrument or document furnished pursuant thereto;
(iii) shall incur no liability by acting upon any notice,
consent, certificate or other instrument or writing, or any other
communication believed to be genuine and signed, sent or made by the
proper party; and
(iv) shall not be deemed to be acting as any Parallel
Purchaser's trustee or otherwise in a fiduciary capacity hereunder or
under or in connection with any of the Transaction Documents or any
Purchased Interest.
SECTION 5.4. Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Parallel Purchasers shall
indemnify upon demand the Agent-Related Persons ratably from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including Attorney Costs) of
any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other
Transaction Documents or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby, and with respect to
any investigation, litigation or proceeding (including any insolvency proceeding
or appellate proceeding) related to this Agreement, the acquisition of Purchased
Interests or the use of the proceeds thereof, whether or not any Agent-Related
Person is a party thereto (all of the foregoing, collectively, the "Indemnified
Liabilities"); provided, however, that no Parallel Purchaser shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Parallel Purchaser shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
29
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, the other
Transaction Documents or any document contemplated by or referred to herein to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the Seller. The agreements in this Section 5.4 shall survive
termination of this Agreement, the Parallel Purchase Termination Date, the Final
Payout Date and payment of all obligations hereunder.
SECTION 5.5. Bank of America and its Affiliates. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
the Seller and its Affiliates as though Bank of America were not the
Administrative Agent hereunder and without notice to or consent of the Parallel
Purchasers. The Parallel Purchasers acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
the Seller or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Seller or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its purchases hereunder, Bank
of America shall have the same rights and powers under this Agreement as any
other Parallel Purchaser and may exercise the same as though it were not the
Administrative Agent, and the terms "Parallel Purchaser" and "Parallel
Purchasers" include Bank of America in its individual capacity.
SECTION 5.6. Resignation of Administrative Agent. The Administrative
Agent may resign at any time by giving 30 days' prior written notice thereof to
the Parallel Purchasers and the Issuer. The Administrative Agent may be removed
at any time by the affirmative vote of the Majority Parallel Purchasers upon 30
days' prior written notice thereof to the Administrative Agent and the Issuer,
if the Administrative Agent shall have engaged in willful misconduct or shall
have been grossly negligent in the performance of its duties as Administrative
Agent. Such resignation or removal shall become effective upon the acceptance of
appointment by a successor Administrative Agent as set forth below. The Majority
Parallel Purchasers shall have the right to appoint a successor Administrative
Agent, which shall be an Eligible Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Parallel Purchasers, and shall have
accepted such appointment, within 30 days after the prior Administrative Agent's
giving of notice of resignation or the Majority Parallel Purchasers' removal of
the prior Administrative Agent, then the prior Administrative Agent may, on
behalf of the Parallel Purchasers, appoint a successor Administrative Agent
which shall be an Eligible Agent. Upon the acceptance of any
30
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the prior
Administrative Agent, and the prior Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Article V shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement. If no
successor agent has accepted appointment as Administrative Agent by the date
which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Parallel Purchasers shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Majority Parallel Purchasers appoint a successor agent as provided for above.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or consent to any departure by the Seller or the Servicer
therefrom shall be effective unless in a writing (a) signed by the
Administrative Agent and the Majority Parallel Purchasers, and (b) in the case
of any amendment, signed by the Seller, the Servicer, the Administrative Agent
and the Majority Parallel Purchasers; provided, however, that no amendment,
modification or waiver of any provision of this Agreement shall be effective
without the prior written consent of the Administrative Agent, the Seller and
all Parallel Purchasers if the effect of such amendment, modification or waiver
would:
(a) reduce the amount of Capital or Discount that is
payable on account of any Purchased Interest or delay any
scheduled date for payment thereof; or
(b) increase the Purchase Limit hereunder or under the
Receivables Purchase Agreement to which such Seller is a party;
or
(c) modify the reserve requirements hereunder for
uncollectible Receivables, Dilution Reserve, Discount or the
Servicing Fee; or
(d) modify any yield protection or indemnity provision
which expressly inures to the benefit of assignees or
participants of the Parallel Purchasers; or
31
(e) modify the Purchase Commitment or Percentage of any
Parallel Purchaser; or
(f) amend this Section 6.1; or
(g) extend the Parallel Purchase Termination Date; or
(h) modify the definition of "Majority Parallel
Purchasers."
Any such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
any Securitization Party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
SECTION 6.2. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and sent or delivered, to each party hereto, at
its address for notices set forth under its name on the signature pages hereof
or at such other address as shall be designated by such party in a written
notice to the other parties hereto. Notices and communications by facsimile
shall be effective when sent (and shall be followed by hard copy sent by first
class mail), and notices and communications sent by other means shall be
effective when received.
SECTION 6.3. Binding Effect; Assignability; Restrictions on Assignment.
(a) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement and
each Parallel Purchaser's rights and obligations herein (including ownership of
the Purchased Interest) shall be assignable, in whole or in part, by such
Parallel Purchaser and its successors and assigns (subject to the limitations
set forth in Section 6.3(g) hereof) and any assignee shall become a party hereto
and shall become a Parallel Purchaser hereunder upon (i) satisfaction of the
conditions set forth in Section 6.3(b), (ii) acceptance and recording of an
Assignment by the Administrative Agent in a register (the "Register") maintained
by the Administrative agent for the recordation of the names and addresses of
the Parallel Purchasers, their respective Percentages and effective dates and
(iii) the occurrence of the effective date of such Parallel Purchaser's Purchase
Commitment (as set forth in such Assignment) and subject to the approval of such
Parallel Purchaser by the Administrative Agent.
(b) Each Parallel Purchaser may assign all or a portion of
its rights and obligations under this Agreement (subject to the
32
limitations set forth in Section 6.3(g) hereof); provided,
however that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of the aggregate rights and obligations of the
assigning Parallel Purchaser under this Agreement (including, without
limitation, its Purchase Commitment and its Percentage of any Purchased
Interest owned by it),
(ii) the amount of the assigning Parallel Purchaser's
Purchase Commitment being assigned pursuant to such assignment shall in
no event be less than the lesser of (a) its entire Parallel Purchaser's
Purchase Commitment and (b) $10,000,000 and, if the amount being
assigned is greater than $10,000,000 shall be in an integral multiple
of $5,000,000, and, unless such assigning Parallel Purchaser is
assigning its entire Purchase Commitment, such assigning Parallel
Purchaser's retained Purchase Commitment after giving effect to such
assignment shall in no event be less than $10,000,000,
(iii) the parties to each such assignment shall execute and
deliver an Assignment to the Administrative Agent, for its acceptance
and recording in the Register,
(iv) the assignee shall deliver to the Administrative Agent at
least five days prior to the effective date specified in the Assignment
an enforceability opinion of counsel for such assignee, addressed to
the Administrative Agent and the Issuer, in form and substance
reasonably satisfactory to such addressees (and the Administrative
Agent shall promptly deliver copies of the same to each of such
addressees), and
(v) any Parallel Purchaser assigning an interest hereunder
must simultaneously assign its interest under the Liquidity Asset
Purchase Agreement to the same assignee and to the same extent as
hereunder.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in the Assignment, (x) the assignee thereunder shall be
a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to this Agreement, have the rights and obligations
of a Parallel Purchaser hereunder and (y) the Parallel Purchaser which is the
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to this Agreement, relinquish its rights
(other than the right to receive payments which accrued in favor of such
Parallel Purchaser prior to such assignment) and be released from its
obligations under this Agreement (and, if such Assignment provides for an
33
assignment of all such assigning Parallel Purchaser's Purchase Commitment, such
Parallel Purchaser shall cease to be a party hereto).
(c) Upon receipt by the Administrative Agent of an Assignment executed
by an assigning Parallel Purchaser and by an assignee who is an Eligible
Assignee and the satisfaction of the other conditions set forth in Section
6.3(b), the Administrative Agent shall (i) accept such Assignment, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Issuer and the Seller. The assigning Parallel Purchaser shall pay
to the Administrative Agent an assigning fee equal to $2,500 for each assignment
hereunder. Each assigning Parallel Purchaser may, in connection with the
assignment, disclose to the assignee any information relating to the Seller or
the Pool Receivables furnished to such assignor by or on behalf of the Seller,
any Parallel Purchaser or the Administrative Agent.
(d) This Agreement and the rights and obligations of the Administrative
Agent hereunder shall be assignable, in whole or in part, by the Administrative
Agent and its successors and assigns.
(e) Except as provided in Section 4.1(d), the Servicer may not assign
its rights or delegate its obligations hereunder or any interest herein without
the prior written consent of the Administrative Agent. The Seller may not assign
its rights or delegate its obligations hereunder or any interest herein without
the prior written consent of the Administrative Agent.
(f) Without limiting any other rights that may be available under
applicable law, the rights of each Parallel Purchaser may be enforced through it
or by its agents.
(g) Neither the Seller nor any Purchaser (in the case of a Purchaser,
only with respect to its own participation in the Purchased Interest) shall
allow the Purchased Interest or any participating interest therein to become (i)
traded on an established securities market (as defined in U.S. Department of the
Treasury (the "Treasury") regulations section 1.7704-1(b) or (ii) readily
tradable on a secondary market or the substantial equivalent thereof (as defined
in Treasury regulations section 1.7704-1(c)). In addition, neither the Purchased
Interest nor any participating interest therein may be issued or sold in a
transaction or transactions that are required to be registered under the
Securities Act of 1933 (15 U.S.C. 77a et seq.), and at no time may more than 100
Persons own interests in the Receivables Pool. In determining the number of
Persons that own interests in the Receivables Pool for purposes of the preceding
sentence, any beneficial owner of an interest in a partnership, grantor trust,
or S corporation ("Flow-Through Entity") will be
34
treated as owning an interest in the Receivables Pool only if substantially all
of the value of such beneficial owner's interest in the Flow-Through Entity is
attributable to such Flow- Through Entity's interest (direct or indirect) in the
Receivables Pool. Any assignment or transfer of the Purchased Interest or any
participating interest therein in violation of the foregoing restrictions will
be void ab initio.
SECTION 6.4. Participations. (a) No Parallel Purchaser
may sell participations except with the prior written consent of
the Administrative Agent.
SECTION 6.5. Change in Purchase Limit. (a) If, pursuant to Section 6.1
hereof, this Agreement shall be amended to increase the Purchase Limit
hereunder, then unless all the Parallel Purchasers shall have agreed to a
different allocation and shall have so advised the Administrative Agent in
writing, on the effective date of such amendment, each Parallel Purchaser's
Maximum Parallel Purchase amount with respect to this Agreement shall be deemed
to be proportionately increased.
(b) If the Purchase Limit under this Agreement shall be reduced, the
Percentage of each Parallel Purchaser shall remain the same and each Parallel
Purchaser's Maximum Parallel Purchase amount with respect to this Agreement
shall be deemed to be proportionately reduced.
SECTION 6.6. Parallel Purchase Termination Date; Extension of Parallel
Purchase Termination Date. Subject to earlier termination of a Parallel
Purchaser's Purchase Commitment pursuant to Section 1.1(b) or Section 2.2
hereof, the Parallel Purchasers' Purchase Commitments under this Agreement shall
expire at the close of business on December 24, 1996 (such date being the
"Parallel Purchase Termination Date"). If at any time the Seller requests that
the Parallel Purchasers renew their Purchase Commitments hereunder and less than
all the Parallel Purchasers consent to such renewal within 30 days of the
Administrative Agent's request, the Administrative Agent may arrange for an
assignment to one or more Eligible Assignees of all the rights and obligations
hereunder of each such nonconsenting Parallel Purchaser in accordance with
Section 6.3, provided, that the fee payable pursuant to Section 6.3(c) shall be
payable by the assignee Parallel Purchaser. Any such assignment shall become
effective on the then current Parallel Purchase Termination Date. Each Parallel
Purchaser which does not so consent to any renewal shall cooperate fully with
the Administrative Agent in effectuating any such assignment. The Administrative
Agent will provide written notice to the Parallel Purchasers of any proposed
modifications to this Agreement requested in connection with any renewal hereof
and, even if the Parallel Purchasers have previously indicated that they will
renew the Agreement, the Parallel Purchasers shall each have the
35
right to elect not to renew this Agreement in light of such
modifications.
SECTION 6.7. Rights of Program Support Providers. Seller hereby agrees
that, upon notice to Seller and the Administrative Agent, a Program Support
Provider may exercise any or all the rights of the Administrative Agent
hereunder with respect to Purchased Interests, and Collections with respect
thereto, and all other rights and interests of a Parallel Purchaser in, to or
under this Agreement or any other Transaction Document which have been assigned
(or in which a security interest has been granted) to such Program Support
Provider. Without limiting the foregoing, upon such notice such Program Support
Provider may request Servicer to segregate the Parallel Purchasers' and Program
Support Provider's allocable shares of Collections from Seller's allocable
share, and from each other's allocable share, in accordance with Section 1.4,
may designate a successor servicer pursuant to Section 4.1, may give or require
the Administrative Agent to give notice to the Lock-Box Banks as referred to in
Section 4.3, and may direct the Obligors of Pool Receivables to make payments in
respect thereof directly to an account designated by them (provided that such
Program Support Provider shall designate a single account for the making of such
payments with respect to any Pool Receivable), in each case, to the same extent
as the Administrative Agent might have done. If, in its commercially reasonable
judgment, the Servicer determines that any notice or instruction furnished under
this Section 6.7 by a Program Support Provider is in any material respect
inconsistent with any notice or instruction furnished under this Section 6.7 by
the Administrative Agent or any Program Support Provider, as soon as practicable
following such determination, the Servicer shall, by telephonic or facsimile
notice, request that the Administrative Agent provide supplemental instructions
to the Servicer that resolve such inconsistency. The Servicer shall be entitled
to rely upon any such supplemental instructions provided by the Administrative
Agent.
SECTION 6.8. Costs and Expenses. In addition to the rights of
indemnification granted under Section 3.1 hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, administration and auditing (including audit fees and expenses
generated by an internal or external auditor as appointed by the Administrative
Agent) of this Agreement, any Program Support Agreement and the other
Transaction Documents, and any amendment, modification or waiver of any of the
foregoing, including, without limitation, Attorney Costs for the Administrative
Agent, each Parallel Purchaser, any Program Support Provider and their
respective Affiliates and agents with respect thereto and with respect to
advising the Administrative Agent, each Parallel Purchaser, any Program Support
Provider and their respective Affiliates and agents as to their rights and
remedies under this
36
Agreement and the other Transaction Documents referred to above, and all costs
and expenses, if any (including Attorney Costs), of the Administrative Agent,
each Parallel Purchaser and their respective Affiliates and agents, in
connection with the enforcement of this Agreement and the other Transaction
Documents.
SECTION 6.9. No Proceedings; Limitation on Payments. Each of the
Seller, the Servicer, the Administrative Agent, each Parallel Purchaser and each
assignee of the Purchased Interest or any interest therein and each Person which
enters into a commitment to purchase the Purchased Interest or interests therein
hereby covenants and agrees that it will not institute against, or join any
other Person in instituting against, the Seller any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under any
federal or state bankruptcy or similar law, for one year and one day after the
latest maturing Note issued by the Issuer is paid in full.
SECTION 6.10. Confidentiality. The Seller, the Servicer, the Parent,
each Parallel Purchaser and the Administrative Agent each agrees to take normal
and reasonable precautions and exercise due care to maintain the confidentiality
of this Agreement, any Program Support Agreement and the other Transaction
Documents (and all drafts thereof), and all information identified as
"confidential" or "secret" by the Seller and provided to the other parties by
the Seller under any Program Support Agreement, this Agreement or any other
Transaction Document, and no such Person nor any of their respective Affiliates
shall use any such information other than in connection with or in enforcement
of any Program Support Agreement, this Agreement and the other Transaction
Documents, except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by such Person, or
(ii) was or becomes available on a non-confidential basis from a source other
than such Person, provided that such source is not bound by a confidentiality
agreement with respect thereto; provided, however, that any Person may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Person is subject or in connection with an
examination of such Person by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable requirement of law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which such Person or
its Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Transaction
Document; (F) to such Person's independent auditors, legal counsel and other
professional advisors; (G) to any nationally recognized rating agency; (H) to
any assignee, Parallel Purchaser, or assignee or participant of a Parallel
Purchaser, actual or potential,
37
provided that such Person agrees in writing to keep such information
confidential to the same extent required hereunder; (I) to the extent reasonably
required by commercial paper dealers in connection with the sale of commercial
paper related to the transaction contemplated by the Transaction Documents; and
(J) as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which such Person and any of the other parties
hereto is party.
SECTION 6.11. GOVERNING LAW AND JURISDICTION. (A) THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF),
EXCEPT TO THE EXTENT THAT THE PERFECTION (OR THE EFFECT OF PERFECTION OR
NON-PERFECTION) OF THE INTERESTS OF THE ISSUER IN THE POOL RECEIVABLES, RELATED
SECURITY, COLLECTIONS AND PROCEEDS THEREOF, IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE ISSUER, THE SELLER, THE SERVICER AND THE ADMINISTRATIVE
AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE ISSUER, THE SELLER, THE SERVICER AND
THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY
LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE ISSUER, THE SELLER, THE SERVICER
AND THE ADMINISTRATIVE AGENT EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
NEW YORK LAW.
SECTION 6.12. Execution in Counterparts. This Agreement may be executed
in any number of 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 6.13. Survival of Termination. The provisions of Sections 1.6,
1.8, 1.9, Article III, Sections 6.7, 6.8, 6.9, 6.10, and 6.12, and of this
Section 6.13, shall survive any termination of this Agreement.
SECTION 6.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
38
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT.
SECTION 6.15. Entire Agreement. This Agreement together with the other
Transaction Documents embodies the entire agreement and understanding among the
Parallel Purchasers, the Seller, the Servicer and the Administrative Agent, and
supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof,
except for any prior arrangements made with respect to the payment by the
Parallel Purchasers of (or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of the Seller, the
Servicer and the Administrative Agent. The Exhibits and Annexes to this
Agreement shall be deemed incorporated by reference into this Agreement.
SECTION 6.16. Headings. The captions and headings of this Agreement
and in any Exhibit hereto are for convenience of reference only and shall not
affect the interpretation hereof or thereof.
SECTION 6.17. Purposes. The Seller and each Parallel Purchaser hereby
agree to treat the Purchased Interest and any participating Interest therein as
a debt instrument for purposes of federal and state income tax, franchise tax,
and any other federal or state tax measured in whole or in part by income, to
the extent permitted by applicable law. Notwithstanding any other provision of
this Agreement, no Affected Person shall be entitled to any indemnification for
any Taxes, Other Taxes or other liabilities arising therefrom if and to the
extent that such Taxes, Other Taxes or other liabilities arise from such
Parallel Purchaser treating the Purchased Interest or such participating
interest as other than a debt instrument for purposes of federal and state
income tax, and any other federal or state tax measured in whole or in part by
income when under applicable law such interest could be treated as a debt
instrument.
SECTION 6.18. Acknowledgment of Benefits Under Surety Bond.
Each Parallel Purchaser (other than BAI) hereby confirms and
acknowledges that it understands that the Issuer has obtained a
39
surety bond (as amended, supplemented, replaced, or otherwise amended, the
"Surety Bond") which provides credit support for certain obligations of the
Issuer. In addition, Bank of America has made arrangements for all of Bank of
America's (and, in certain cases, certain of its affiliates') credit exposure in
connection with the Issuer's securitization program to be insured by the Surety
Bond, subject to Bank of America and/or such affiliates first suffering a
substantial loss. Such Bank of America loss serves as a deductible for the
Surety Bond. The Percentage Interests acquired by BAI (and, in certain cases,
certain of its affiliates) hereunder and under all other similar parallel asset
purchase agreements to which the Bank of America, BAI (or such affiliates) is or
may become a party are insured obligations under the Surety Bond. Each Parallel
Purchaser understands and agrees that Bank of America has not made any
arrangements to insure the Percentage Interests acquired by any other Purchaser,
and that in no event will any Purchaser hereunder (other than Bank of America or
BAI) receive any proceeds of any drawing on the Surety Bond, whether from the
issuer of such Surety Bond, the Issuer, or Bank of America. Neither Bank of
America nor BAI shall be required to share any payments made to it from proceeds
of any drawing on the Surety Bond.
40
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
O&M FUNDING CORP., as Seller
By:_______________________________
Name:__________________________
Title:_________________________
Address for Notices:
0000 Xxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: 804/000-0000
Facsimile: 804/965-5403
XXXXX & MINOR MEDICAL, INC.,
as Servicer
By:_______________________________
Name:__________________________
Title:_________________________
Address for Notices:
0000 Xxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: 804/000-0000
Facsimile: 804/965-5403
XXXXX & MINOR, INC., as Parent
By:_______________________________
Name:__________________________
Title:_________________________
Address for Notices:
0000 Xxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: 804/000-0000
Facsimile: 804/965-5403
41
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrative Agent
By:________________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: 312/000-0000
Facsimile: 312/828-7855
with a copy to:
Bank of America National Trust and
Savings Association
Asset Securitization Group
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: 312/000-0000
Facsimile: 312/828-7855
00
XXX XXXXXXXX XXXXXXXXXX
XXXX XX XXXXXXX XXXXXXXX
By:_______________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: 312/000-0000
Facsimile: 312/828-7855
with a copy to:
Bank of America National Trust and
Savings Association
Asset Securitization Group
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: 312/000-0000
Facsimile: 312/828-7855
Parallel Purchaser Percentage: 100%
Maximum Parallel Purchase: $75,000,000.00
43
EXHIBIT I
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial
purchase under the Agreement is subject to the conditions precedent that the
Administrative Agent shall have received on or before the date of such purchase
the following, each in form and substance (including the date thereof)
satisfactory to the Administrative Agent:
(a) A duly executed counterpart of this Agreement.
(b) A duly executed counterpart of the Purchase and
Sale Agreement.
(c) A duly executed counterpart copy of the Receivables
Purchase Agreement.
(d) Certified copies of (i) the resolutions of the Board of
Directors of each of the Seller, the Servicer and the Parent authorizing the
execution, delivery, and performance by the Seller, the Servicer and the Parent,
respectively, of the Agreement and the other Transaction Documents, (ii) all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Agreement and the other Transaction
Documents and (iii) the certificate of incorporation and by-laws of each of the
Seller, the Servicer and the Parent
(e) A certificate of the Secretary or Assistant Secretary of
each of the Seller, the Servicer and the Parent certifying the names and true
signatures of the officers of the Seller, the Servicer and the Parent,
respectively, authorized to sign the Agreement and the other Transaction
Documents. Until the Administrative Agent receives a subsequent incumbency
certificate from the Seller, the Servicer or the Parent in form and substance
satisfactory to the Administrative Agent, the Administrative Agent shall be
entitled to rely on the last such certificate delivered to it.
(f) Signed copies of proper financing statements, in a form
suitable for filing under the UCC of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect the interests of the
Parallel Purchasers contemplated by the Agreement.
(g) Signed copies of proper financing statements, if any, in a
form suitable for filing under the UCC of all jurisdictions that the
Administrative Agent may deem necessary to release all security interests and
other rights of any Person in the Receivables, Contracts or Related Security
previously granted by the Seller.
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(h) Completed UCC requests for information, dated on or before
the date of such initial purchase, listing the financing statements referred to
in subsection (d) above and all other effective financing statements filed in
the jurisdictions referred to in subsection (f) above that name the Seller as
debtor, together with copies of such other financing statements (none of which
shall cover any Receivables, Contracts or Related Security), and similar search
reports with respect to federal tax liens and liens of the Pension Benefit
Guaranty Corporation in such jurisdictions as the Administrative Agent may
request, showing no such liens on any of the Receivables, Contracts or Related
Security.
(i) A favorable opinion of Hunton & Xxxxxxxx, counsel for the
Seller, the Servicer and the Parent, substantially in the form of Annex C hereto
and as to such other matters as the Administrative Agent may reasonably request.
(j) A favorable opinion of in-house counsel for the Seller,
the Servicer and the Parent, substantially in the form of Annex D hereto and as
to such other matters as the Administrative Agent may reasonably request.
(k) Satisfactory results of a review and audit of the
Originators' collection, operating and reporting systems, Credit and Collection
Policy, historical receivables data and accounts, including satisfactory results
of a review of the Originators' operating location(s) and satisfactory review
and approval of the Eligible Receivables in existence on the date of the initial
purchase under the Agreement.
(l) Seller Report representing the performance of the
portfolio purchased through the Agreement for the month prior to closing.
(m) Good standing certificates with respect to each of
the Seller, the Servicer and the Parent issued by the Secretary
of the State Corporation Commission of Virginia.
(n) Such other approvals, opinions or documents as the
Administrative Agent or the Parallel Purchasers may reasonably request.
2. Conditions Precedent to All Purchases and
Reinvestments. Each purchase (including the initial purchase)
and each reinvestment shall be subject to the further conditions
precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the Administrative Agent on or prior to such purchase, in form and
substance satisfactory to the Administrative Agent, a completed Seller Report
with respect to the immediately preceding calendar month, dated within three (3)
I-2
Business Days prior to the date of such purchase and such additional information
as may reasonably be requested by the Administrative Agent including, without
limitation, a listing of Obligors and their respective portions of the Pool
Receivables at any time;
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller, the
Servicer and the Parent that such statements are then true):
(i) the representations and warranties contained in
Exhibit II are true and correct on and as of the date of such purchase
or reinvestment as though made on and as of such date; and
(ii) no event has occurred and is continuing, or
would result from such purchase or reinvestment, that constitutes a
Termination Event or that would constitute a Termination Event but for
the requirement that notice be given or time elapse or both; and
(c) the Administrative Agent shall have received such other
approvals, opinions or documents as it may reasonably request.
I-3
EXHIBIT II
REPRESENTATIONS AND WARRANTIES
OF
SELLER, THE SERVICER AND THE PARENT
The Seller, the Servicer and the Parent each jointly and
severally make the following representations and warranties:
(a) Organization and Good Standing. It is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and is duly qualified to do business, and is in good
standing, as a foreign corporation in every jurisdiction where the nature of its
business requires it to be so qualified.
(b) Due Qualification; No Conflicts. The execution, delivery
and performance by it of the Agreement and the other Transaction Documents to
which it is a party, including, in the case of the Seller, the Seller's use of
the proceeds of purchases and reinvestments, (i) are within its corporate
powers, (ii) have been duly authorized by all necessary corporate action, (iii)
do not contravene or result in a default under or conflict with (1) its charter
or by-laws, (2) any law, rule or regulation applicable to it, (3) any
contractual restriction binding on or affecting it or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and (iv) do not result in or require the creation of any Adverse
Claim upon or with respect to any of its properties. The Agreement and the other
Transaction Documents to which it is a party have been duly executed and
delivered by it.
(c) Consents. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by it of the Agreement
or any other Transaction Document to which it is a party other than (a) the
filing of financing statements against Xxxxx & Minor Medical, Inc. and the
Seller in the State Corporation Commission of Virginia and (b) comparable
filings with respect to all other Originators in the jurisdiction provided in
their respective Supplement to perfect the Initial Purchaser's interest in the
Pool Receivables under the Receivables Purchase Agreement.
(d) Binding Obligations. Each of the Agreement and the other
Transaction Documents to which it is a party (and which on its face purports to
create an obligation) constitutes the legal, valid and binding obligation of it
enforceable against it in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditor's rights
II-1
generally and by general principles of equity regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) Financial Statements.
(i) The consolidated and consolidating balance sheet
of the Parent and its Subsidiaries as of December 31, 1994,
and the related consolidated and consolidating statements of
income and retained earnings of the Parent and its
Subsidiaries for the fiscal year then ended, copies of which
have been furnished to the Administrative Agent, fairly
present the financial condition of the Parent and its
Subsidiaries as at such date and the results of the operations
of the Seller and its Subsidiaries for the period ended on
such date, all in accordance with generally accepted
accounting principles consistently applied, and since December
31, 1994 there has been no material adverse change in the
business, operations, property or financial or other condition
or operations of the Seller or the Parent or any of their
Subsidiaries taken as a whole (except as reflected in the
unaudited financial statements of Parent as of September 30,
1995), the ability of the Seller or the Parent to perform its
obligations under the Agreement or the other Transaction
Documents or the collectibility of the Pool Receivables, or
which affects the legality, validity or enforceability of the
Purchase and Sale Agreement or the other Transaction
Documents.
(ii) The unaudited condensed balance sheet of the
Originators as of December 31, 1994, and the related condensed
statements of income of the Originators for the fiscal year
ended December 31, 1994, heretofore furnished to the
Administrative Agent, are the financial statements of the
Originators routinely prepared for internal use.
(f) No Proceedings. There is no pending or threatened action
or proceeding affecting either (x) the Seller and its Subsidiaries taken as a
whole or (y) the Parent and its Subsidiaries taken as a whole, which is before
any Governmental Authority or arbitrator and which would reasonably be expected
to materially adversely affect the business, operations, property, financial or
other condition or operations of either (x) the Seller and its Subsidiaries
taken as a whole or (y) the Parent and its Subsidiaries taken as a whole, or
their ability to perform its obligations under the Agreement or the other
Transaction Documents or the collectibility of the Receivables, or which affects
or purports to affect the legality, validity or
II-2
enforceability of the Agreement or the other Transaction Documents.
(g) Quality of Title; Valid Sale; Etc. The Seller is the legal
and beneficial owner of the Pool Receivables and Related Security free and clear
of any Adverse Claim; upon each purchase or reinvestment, each Parallel
Purchaser shall acquire a valid and enforceable perfected undivided percentage
ownership interest, to the extent of the Purchased Interest, in each Pool
Receivable then existing or thereafter arising and in the Related Security and
Collections and other proceeds, with respect thereto, free and clear of any
Adverse Claim. No effective financing statement or other instrument similar in
effect covering any Contract or any Pool Receivable or the Related Security or
Collections with respect thereto or any Lock-Box Account is on file in any
recording office, except those filed in favor of each Parallel Purchaser
relating to the Agreement.
(h) Accuracy of Information. Each Seller Report (if prepared
by the Seller or one of its Affiliates, or to the extent that information
contained therein is supplied by the Seller or an Affiliate), information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of the Seller to the Administrative
Agent in connection with the Agreement is or will be accurate in all material
respects as of its date or (except as otherwise disclosed to the Administrative
Agent at such time) as of the date so furnished, and no such item contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(i) Principal Place of Business. The principal place of
business and chief executive office (as such terms are used in the UCC) of the
Seller and the office where the Seller keeps its records concerning the
Receivables are located at the address referred to in Schedule I (or at such
other addresses designated in accordance with such paragraph (b) of Exhibit
III).
(j) Lock-Box Banks, Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts
of the Seller at such Lock-Box Banks, are specified in Schedule II to the
Agreement (or at such other Lock-Box Banks and/or with such other Lock-Box
Accounts as have been notified to the Administrative Agent in accordance with
the Agreement) and all Lock-Box Accounts are subject to Lock-Box Agreements.
II-3
(k) No Violation. It is not in violation of any order of any
court, arbitrator or Governmental Authority which violation would reasonably be
expected to have a material adverse effect on its business, operations, property
or financial or other condition.
(l) Proceeds. No proceeds of any purchase or reinvestment will
be used for any purpose that violates any applicable law, rule or regulation,
including, without limitation, Regulations G or U of the Federal Reserve Board.
(m) Eligible Receivables. Each Pool Receivable included as an
Eligible Receivable in the calculation of the Net Receivables Pool Balance, is
an Eligible Receivable.
(n) No Purchase and Sale Termination Events. No event has
occurred and is continuing, or would result from a purchase in respect of, or
reinvestment in respect of the Purchased Interest or from the application of the
proceeds therefrom, which constitutes a Termination Event.
(o) Maintenance of Books and Records. The Seller has accounted
for each sale of undivided percentage ownership interests in Receivables in its
books and financial statements as a sale, consistent with Generally Accepted
Accounting Principles.
(p) Credit and Collection Policy. The Seller has complied in
all material respects with the Credit and Collection Policy with regard to each
Receivable.
(q) Compliance with Transaction Documents. It has complied
with all of the terms, covenants and agreements contained in the Agreement and
the other Transaction Documents and applicable to it.
(r) Corporate Name. The Seller's complete corporate name is
set forth in the preamble to the Agreement, and the Seller does not use and has
not during the last six years used any other corporate name, trade name, doing
business name or fictitious name, except as set forth on Schedule I and except
for names first used after the date of the Agreement and set forth in a notice
delivered to the Administrative Agent pursuant to paragraph (l)(vi) of Exhibit
III.
(s) No Labor Disputes. There are no strikes, lockouts or
other labor disputes against it or any of its subsidiaries, or, to the best of
its knowledge, threatened against or affecting it or any of its subsidiaries,
and no significant unfair labor
II-4
practice complaint is pending against it or any of its subsidiaries or, to the
best knowledge of it, threatened against any of them by or before any
Governmental Authority that would have a material adverse effect on its
business, operations, property or financial or other condition.
(t) Pension Plans. During the preceding twelve months, no
steps have been taken to terminate any Pension Plan of the Seller, the Servicer
or the Parent which was not fully funded, unless adequate reserves have been set
aside for the funding thereof, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the Seller,
the Servicer or the Parent of any material liability, fine or penalty.
(u) Investment Company Act. It is not, and is not controlled
by, an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
II-5
EXHIBIT III
COVENANTS
Covenants of the Seller and the Parent. Until the latest of the
Facility Termination Date, the date on which no Capital of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to each Parallel Purchaser, the
Administrative Agent and any other Indemnified Party or Affected Person shall be
paid in full, each of the Seller and the Parent, jointly and severally, agree
that obligations set forth in this Exhibit III shall be performed and observed.
(a) Compliance with Laws, Etc. The Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables or
the enforceability of any related Contract or the ability of the Seller to
perform its obligations under any related Contract or under the Agreement.
(b) Offices, Records and Books of Account; Etc. The Seller
(i) shall keep its principal place of business and chief executive office (as
such terms are used in the UCC) and the office where it keeps its records
concerning the Receivables at the address of the Seller set forth on Schedule I
attached hereto or, upon at least 60 days' prior written notice of a proposed
change to the Administrative Agent, at any other locations in jurisdictions
where all actions reasonably requested by the Administrative Agent to protect
and perfect the interest of the Parallel Purchaser in the Receivables and
related items have been taken and completed and (ii) shall provide the
Administrative Agent with at least 60 days' written notice prior to making any
change in the Seller's name or making any other change in the Seller's identity
or corporate structure (including a merger) which could render any UCC financing
statement filed in connection with this Agreement "seriously misleading" as such
term is used in the UCC; each notice to the Administrative Agent pursuant to
this sentence shall set forth the applicable change and the effective date
thereof. The Seller also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, records adequate to
III-1
permit the daily identification of each Receivable and all Collections of and
adjustments to each existing Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller shall, 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 Contracts related to the Receivables, and timely
and fully comply in all material respects with the Credit and Collection Policy
with regard to each Receivable and the related Contract.
(d) Ownership Interest, Etc. The Seller shall, at its expense,
take all action necessary or desirable to establish and maintain a valid and
enforceable and perfected undivided ownership interest, to the extent of the
Purchased Interest, in the Pool Receivables and the Related Security and
Collections and other proceeds with respect thereto, free and clear of any
Adverse Claim, in favor of each Parallel Purchaser, including, without
limitation, taking such action to perfect, protect or more fully evidence the
interest of each Parallel Purchaser under the Agreement as each Parallel
Purchaser, through the Administrative Agent, may request.
(e) Sales, Liens, Etc. The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any or all of its right, title
or interest in, to or under the Seller's undivided interest in any Receivable,
Related Security, or Collections, or upon or with respect to any account to
which any Collections of any Receivables are sent, or assign any right to
receive income in respect of any items contemplated by this paragraph (e).
(f) Extension or Amendment of Receivables. Except as provided
in Section 4.2(a) the Agreement, the Seller shall not extend the maturity or
adjust the Outstanding Balance or otherwise modify the terms of any Pool
Receivable. The Seller will not amend, modify or waive any term or condition of
any related Contract in a way which would adversely affect the collectibility of
any Receivables.
(g) Change in Business or Credit and Collection Policy.
Without the written consent of the Administrative Agent, the Seller shall not
make (i) any material change in the character of its business or in the Credit
and Collection Policy, or (ii) any change at all in the Credit and Collection
Policy that would adversely affect the collectibility of the Receivables Pool or
the enforceability of any related Contract or the ability of the Seller to
perform its obligations under any related Contract or under the Agreement.
(h) Audits. The Seller shall, from time to time during
regular business hours as requested by the Administrative Agent, permit the
Administrative Agent, or its agents or
III-2
representatives, (i) to examine and make copies of and make abstracts from all
books, records and documents (including, without limitation, computer tapes and
disks) in the possession or under the control of the Seller relating to
Receivables and the Related Security, provided that copies of the related
Contracts may only be made if the Servicer is not the Seller or if a Termination
Event has occurred and (ii) to visit the offices and properties of the Seller
for the purpose of examining such materials described in clause (i) above, and
to discuss matters relating to Receivables and the Related Security or the
Seller's performance hereunder or under the Contracts with any of the officers,
employees, agents or contractors of the Seller having knowledge of such matters.
(i) Lock-Box Agreements; Change in Lock-Box Banks, Lock-Box
Accounts and Payment Instructions to Obligors.
(i) By January 31, 1995, the Seller shall have
delivered to the Administrative Agent copies of executed
Lock-Box Agreements with the Lock-Box Banks in form and
substance satisfactory to the Administrative Agent.
(ii) The Seller shall not add or terminate any bank
as a Lock-Box Bank or any account as a Lock-Box Account from
those listed in Schedule II to the Agreement, or make any
change in its instructions to Obligors regarding payments to
be made to the Seller or payments to be made to any Lock-Box
Account (or related post office box), unless the
Administrative Agent shall have consented thereto in writing
and the Administrative Agent shall have received copies of all
agreements and documents (including without limitation
Lock-Box Agreements) that it may request in connection
therewith.
(j) Deposits to Lock-Box. The Seller shall (i) instruct all
Obligors (other than Obligors which customarily make direct payment to the
Company for deposit in one of the Lock-Box Accounts designated on Schedule II as
a "Deposit Account", provided that the Company complies with Clause (ii) of this
subsection (j)) to make payments of all Receivables to one or more Lock-Box
Accounts or to post office boxes to which only Lock-Box Banks have access (and
shall instruct the Lock-Box Banks to cause all items and amounts relating to
such Receivables received in such post office boxes to be removed and deposited
into a Lock-Box Account on a daily basis), and (ii) deposit, or cause to be
deposited, any Collections of Pool Receivables received by it into Lock-Box
Accounts not later than one Business Day after receipt thereof. Each Lock-Box
Account shall at all times be subject to a Lock-Box Agreement. The Seller will
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than Collections
of Pool Receivables. Notwith-
III-3
standing the foregoing, Columbia Receivables may be commingled except that the
Company will, at the Administrative Agent's request, establish a separate
account and cause Columbia Receivables to be paid by the Obligors into such
separate account to avoid such commingling.
(k) Marking of Records. At its expense, the Seller shall xxxx
its master data processing records relating to Pool Receivables and related
Contracts, including with a legend evidencing that the undivided percentage
ownership interests with regard to the Purchased Interest related to such
Receivables and related Contracts have been sold in accordance with the
Agreement.
(l) Reporting Requirements. The Seller will provide to the
Administrative Agent (in multiple copies, if requested by the Administrative
Agent) the following:
(i) as soon as available and in any event within 45
days after the end of the first three quarters of each fiscal year of
the Parent, the consolidated and consolidating balance sheet of the
Parent and its Subsidiaries as of the end of such quarter and the
consolidated and consolidating statement of income and retained
earnings of the Parent and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer or Treasurer of the
Parent;
(ii) as soon as available and in any event within 90
days after the end of each fiscal year of the Parent, a copy of the
annual report for such year for the Parent and its Subsidiaries,
containing financial statements for such year audited by KPMG Peat
Marwick or other independent certified public accountants acceptable to
the Administrative Agent;
(iii) as soon as available and in any event not later
than 10th Day of each Calendar Month, a Seller Report as of the
previous Month End Date; and within five Business Days of a request by
the Administrative Agent for a Seller Report as of a date other than a
Month End Date, such Seller Report;
(iv) as soon as possible and in any event within five
days after the occurrence of each Termination Event or event which,
with the giving of notice or lapse of time, or both, would constitute a
Termination Event, a statement of the chief financial officer or
Treasurer of the Parent setting forth details of such Termination Event
or event and the action that the Seller has taken and proposes to take
with respect thereto;
III-4
(v) promptly after the sending or filing thereof,
copies of all reports that the Seller or the Parent sends to any of its
security holders, and copies of all reports and registration statements
that the Seller or the Parent or any of their Subsidiaries files with
the Securities and Exchange Commission or any national securities
exchange;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller, the Parent or any of
their Affiliates files under ERISA with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or that the Seller, the Parent or any of their Affiliates
receives from any of the foregoing or from any multiemployer plan
(within the meaning of Section 4001(a)(3) of ERISA) to which the
Seller, the Parent or any of their Affiliates is or was, within the
preceding five years, a contributing employer, in each case in respect
of the assessment of withdrawal liability or an event or condition
which could, in the aggregate, result in the imposition of liability on
the Seller, the Parent and/or any such Affiliate in excess of $500,000;
(vii) at least thirty days prior to any change in the
Seller's name or any other change requiring the amendment of UCC
financing statements, a notice setting forth such changes and the
effective date thereof;
(viii) such other information respecting the
Receivables or the condition or operations, financial or otherwise, of
the Seller, the Parent or any of their Affiliates as the Administrative
Agent may from time to time reasonably request;
(ix) promptly after the Seller or the Parent obtains
knowledge thereof, notice of any (a) litigation, investigation or
proceeding which may exist at any time between any O&M Party and any
Governmental Authority which, if not cured or if adversely determined,
as the case may be, would have a material adverse effect on the
business, operations, property or financial or other condition of the
Seller or the Parent; or (b) litigation or proceeding adversely
affecting any O&M Party in which the amount involved is $5,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought or (c) litigation or proceeding relating to any
Transaction Document; and
(x) promptly after the occurrence thereof, notice of
a material adverse change in the business, operations, property or
financial or other condition of the Seller or the Parent affecting any
O&M Party.
III-5
(m) General Restriction.
(i) The Seller shall not (A) pay or declare any
Dividend, (B) lend or advance any funds, including in respect
of any Originator Note, or (C) repay any loans or advances to,
for or from any Originator or any other Affiliated Party
(including making any payment pursuant to any Initial
Purchaser Note) except in accordance with clause (o) of this
Exhibit III and this clause (m). Actions of the type described
in the preceding sentence are herein collectively called
"Restricted Payments".
(ii) Types of Permitted Payments. Subject to the
limitations set forth in clause (o) below, the Seller may make
Restricted Payments so long as such Restricted Payments are
made only to an Originator and only in one or more of the
following ways:
(A) the Seller may make cash payments on any
Initial Purchaser Note in accordance with its terms; and
(B) if no amounts are then outstanding under
any Initial Purchaser Note, the Seller may
(1) make demand loans to Xxxxx &
Minor Medical, Inc., so long as each such
loan is evidenced by an Originator Note; and
(2) declare and pay Dividends to any
shareholder (provided, that payment of such
Dividends must comply with Virginia law; and
provided, further, that Dividends may not be
paid more frequently than once every month).
(iii) Additional Specific Restrictions. The Seller
may make Restricted Payments only out of Collections paid or
released to the Seller pursuant to Sections 1.4(b)(ii) and
1.4(b)(iv) of the Receivables Purchase Agreement or from other
net income of the Seller. Furthermore, the Seller shall not
pay, make or declare:
(A) any Dividend if, after giving effect
thereto, the Seller's Tangible Net Worth would be
less than $7,500,000;
(B) any Restricted Payment if, after giving
effect thereto, a Termination Event or Unmatured
Termination Event shall have occurred and be
continuing; or
III-6
(C) any Restricted Payment if, after giving
effect thereto, the Seller would not be Solvent.
(n) ERISA Matters. Each of the Seller and the Parent shall
notify the Administrative Agent as soon as is practicable and in any event not
later than two Business Days after (i) the institution of any steps by the
Seller or the Parent or any other Person to terminate any Pension Plan which is
not fully funded, unless adequate reserves have been set aside for the funding
thereof, (ii) the failure to make a required contribution to any Pension Plan if
such failure is sufficient to give rise to a lien under section 302(f) of ERISA,
(iii) the taking of any action with respect to a Pension Plan which could result
in the requirement that the Seller or the Parent furnish a bond or other
security to the PBGC or such Pension Plan or (iv) the occurrence of any other
event concerning any Pension Plan which is reasonably likely to result in a
material adverse effect.
(o) Separate Corporate Existence of the Seller. Each of the
Seller and the Parent hereby acknowledges that the Seller, each Parallel
Purchaser and the Administrative Agent are entering into the transactions
contemplated by this Agreement in reliance upon the Seller's identity as a legal
entity separate from its Affiliates. Therefore, each of the Seller and the
Parent shall take all steps to continue the Seller's identity as such a separate
legal entity and to make it apparent to third Persons that the Seller is an
entity with assets and liabilities distinct from those of its Affiliates and
those of any other Person, and not a division of any of its Affiliates or any
other Person. Without limiting the generality of the foregoing, each of the
Seller and the Parent will, and will cause its Affiliates to, take such actions
as shall be required in order that:
(i) The Seller will be a limited purpose corporation whose
primary activities are restricted in its articles of incorporation to
purchasing Pool Receivables from each Originator (or other Persons
approved in writing by the Administrative Agent), entering into
agreements for the servicing of such Pool Receivables, selling
undivided interests in the Pool Receivables to each Parallel Purchaser
and conducting such other activities as it deems necessary or
appropriate to carry out its primary activities;
(ii) At least one member of the Seller's Board of Directors
shall be an individual who is not a direct, indirect or beneficial
stockholder, officer, director, employee, affiliate, associate,
customer or supplier of any of its Affiliates;
(iii) No director or officer of the Seller shall at
any time serve as a trustee in bankruptcy for any of its
Affiliates;
III-7
(iv) Any employee, consultant or agent of the Seller will be
compensated from the Seller's own bank accounts for services provided
to the Seller except as provided in the Receivables Purchase Agreement
in respect of the Servicing Fee. The Seller will engage no agents other
than a Servicer for the Pool Receivables, which Servicer (if an
Affiliate) will be fully compensated for its services to the Seller by
payment of the Servicing Fee;
(v) The Seller may incur indirect or overhead expenses for
items shared between the Seller and any of its Affiliates which are not
reflected in the Servicing Fee, such as legal, auditing and other
professional services, but such expenses will be allocated to the
extent practical on the basis of cost, it being understood that each of
the Originators and the Parent shall jointly and severally pay all
expenses relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including legal and other fees;
(vi) The Seller's operating expenses will not be paid
by any of its Affiliates;
(vii) The Seller will have its own separate telephone number,
stationery and bank checks signed by it and in its own name and, if it
uses premises leased, owned or occupied by any of its Affiliates, its
portion of such premises will be defined and separately identified and
it will pay such other Affiliates reasonable compensation for the use
of such premises;
(viii) The books and records of the Seller will be
maintained separately from those of its Affiliates;
(ix) The assets of the Seller will be maintained in a manner
that facilitates their identification and segregation from those of its
Affiliates; and the Seller will strictly observe corporate formalities
in its dealings with each of its Affiliates;
(x) The Seller shall not maintain joint bank accounts with any
of its Affiliates or other depository accounts to which any of its
Affiliates (other than O&M Medical (or any of its Affiliates) in its
capacity as the Servicer under the Purchase and Sale Agreement or under
the Receivables Purchase Agreement) has independent access;
(xi) The Seller shall not, directly or indirectly, be named
and shall not enter into any agreement to be named as a direct or
contingent beneficiary or loss payee on any insurance policy covering
the property of any other Seller Party or any Affiliate of any other
Seller Party unless it pays a proportional share of the premium
relating to any such insurance policy;
III-8
(xii) The Seller will maintain arm's-length relationships with
each of its Affiliates. Any of its Affiliates that renders or otherwise
furnishes services or merchandise to the Seller will be compensated by
the Seller at market rates for such services or merchandise; and
(xiii) Neither the Seller, on the one hand, nor any of its
Affiliates, on the other hand, will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions in
respect of the daily business and affairs of the other.
(xiv) Every representation and warranty of the Seller and the
Parent contained in the Officer's Certificates delivered in connection
with the opinion of Hunton & Xxxxxxxx pursuant to Section 1(j) of
Exhibit II of the Receivables Purchase Agreement (the "Certificate"), a
true copy of which Certificate is attached hereto as Annex C, is true
and correct in all material respects as of the date hereof; and each of
the Seller and the Parent shall comply with all of its respective
covenants and other obligations set forth in the Certificate.
(p) Mergers, Acquisitions, Sales, Investments, etc.
The Seller shall not
(i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in, any other Person,
(ii) sell, transfer, convey or lease any of its assets
other than pursuant to this Receivables Purchase Agreement,
or
(iii) make, incur or suffer to exist any investment in, equity
contribution to, loan or advance to, or payment obligation in respect
of the deferred purchase price of property from, any other Person,
except as expressly contemplated by the Purchase and Sale Agreement and
this Receivables Purchase Agreement.
III-9
EXHIBIT IV
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) The Servicer (if Xxxxx & Minor Medical, Inc. or any of
its Affiliates) shall fail to perform or observe any term, covenant or agreement
under any Transaction Document to which it is a party and such failure shall
continue for two Business Days or (ii) any Person which is the Servicer shall
fail to make when due any payment or deposit to be made by it under any
Transaction Document to which it is a party and such failure shall continue for
two Business Days; or
(b) The Servicer shall fail (i) to transfer to any successor
Servicer when required any rights, pursuant to the Agreement, which the Servicer
then has, or (ii) to make any payment required under the Agreement; or
(c) Any representation or warranty made or deemed made by the
Seller, the Servicer or the Parent (or any of their respective officers) under
or in connection with the Agreement or any information or report delivered by
the Seller, the Servicer or the Parent pursuant to the Agreement shall prove to
have been incorrect or untrue in any material respect when made or deemed made
or delivered; or
(d) The Seller, the Servicer or the Parent shall fail to
perform or observe any other term, covenant or agreement contained in the
Agreement on its part to be performed or observed and any such failure shall
remain unremedied for 10 days (or, with respect to a failure to deliver the
Seller Report pursuant to the Agreement, such failure shall remain unremedied
for five days); or
(e) Any O&M Party shall fail to pay any principal of or
premium or interest on any of its Debt (including Debt owing pursuant to the O&M
Credit Agreement) which is outstanding in a principal amount of at least
$10,000,000 in the aggregate when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement, mortgage, indenture or instrument relating to such Debt; or
any other event shall occur or condition shall exist under any agreement,
mortgage, indenture or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the
IV-1
maturity of such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(f) The Agreement or any purchase or any reinvestment pursuant
to the Agreement shall for any reason (other than pursuant to the terms hereof)
cease to create, or the Purchased Interest shall for any reason cease to be, a
valid and enforceable perfected undivided percentage ownership interest to the
extent of the Purchased Interest in each Pool Receivable and the Related
Security and Collections and other proceeds with respect thereto, free and clear
of any Adverse Claim; or
(g) Any O&M Party shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against any O&M Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days, or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or any O&M Party shall take any corporate action to
authorize any of the actions set forth above in this paragraph (g); or
(h) Any event occurs which materially adversely affects the
collectibility of the Eligible Receivables or there shall have occurred any
other event which materially adversely affects the ability of the Servicer to
collect Eligible Receivables; or
(i) As of the last day of any calendar month, either (i) the
Six Month Default Ratio shall exceed 4% or (ii) the Six Month Dilution Ratio
shall exceed 5% or (iii) the Six Month Loss- to-Liquidation Ratio shall exceed
1.0% or (iv) the average of the Delinquency Ratios for the six consecutive Month
End Dates ending with such last day shall exceed 25%; or
IV-2
(j) The Purchased Interest shall exceed 100%.
(k) Any O&M Party shall contract, create, incur, assume or permit to
exist any Lien with respect to any of its property of assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens.
(l) The Tangible Net Worth of Initial Purchaser shall at any time be
less than $5,000,000.
(m) Any Change of Control shall occur.
(n) A Termination Event of the type described in Exhibit IV to the
Purchase and Sale Agreement shall have occurred.
IV-3
SCHEDULE I
TRADE NAMES AND LOCATIONS
IV-4
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
IV-5
ANNEX A
Assignment of Parallel Asset Purchase Commitment
with respect to
O&M Funding Corp.
Parallel Asset Purchase Agreement
Dated ___________, 199__
Section 1.
Purchaser Percentage assigned: ________%
Assignor's remaining Purchaser Percentage: ________%
Capital allocable to Percentage Interests
assigned: $_________
Capital allocable to Assignor's remaining
Percentage Interests: $_________
Discount (if any) allocable to Percentage
Interests assigned: $_________
Discount (if any) allocable to Assignor's
remaining Percentage Interests: $_________
Section 2.
Assignee's Maximum Liquidity Purchase: $_________
Assignor's remaining Maximum
Parallel Purchase: $_________
Section 3.
Effective Date of this Assignment: ________, 19__
Upon execution and delivery of this Assignment by Assignor and Assignee,
satisfaction of the other conditions to assignment specified in Section 6.3 of
the Parallel Asset Purchase Agreement referred to below and acceptance and
recording of this Assignment by Bank of America National Trust and Savings
Association, as Administrative Agent, from and after the effective date
specified above, Assignee shall become a party to, and have the rights and
obligations of a Parallel Purchaser under, the Parallel Asset Purchase Agreement
dated as of December 28, 1995 among O&M Funding Corp., as Seller, Xxxxx & Minor
Medical, Inc., as Servicer, Xxxxx & Minor, Inc., as Parent and Guarantor, the
Parallel Purchasers referred to therein and Bank of America National Trust and
Savings Association, as Administrative Agent.
ASSIGNOR: [NAME OF ASSIGNOR]
By:
Title:
IV-6
ASSIGNEE: [NAME OF ASSIGNEE]
By:
Name:
Title:
Address:
Attention:
Telephone:
Telecopy:
Accepted this _____ day of
__________________, 199___
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By:
Name:
Title:
IV-7
ANNEX B
FORM OF O&M INTERCREDITOR AGREEMENT
IV-8
ANNEX C
FORM OF OFFICER'S CERTIFICATE
IV-9
TABLE OF CONTENTS
PAGE
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Parallel Purchase Facility........................................................... 2
SECTION 1.2. Making Purchases..................................................................... 2
SECTION 1.3. Purchased Interest Computation....................................................... 5
SECTION 1.4. Settlement Procedures................................................................ 5
SECTION 1.5. [Reserved.]........................................................................... 9
SECTION 1.6. Payments and Computations, Etc........................................................ 9
SECTION 1.7. Dividing or Combining Portions of the
Capital of the Purchased Interest.................................................... 9
SECTION 1.8. Increased Costs...................................................................... 10
SECTION 1.9. Additional Discount on Portions of Purchased
Interest Bearing a Eurodollar Rate................................................... 11
SECTION 1.10. Requirements of Law.................................................................. 11
SECTION 1.11. Inability to Determine Eurodollar Rate................................................12
ARTICLE II
REPRESENTATIONS AND WARRANTIES;
COVENANTS; TERMINATION EVENTS
SECTION 2.1. Representations and Warranties;
Covenants............................................................................ 13
SECTION 2.2. Termination Events................................................................... 13
ARTICLE III
INDEMNIFICATION
SECTION 3.1. Indemnities by the Seller............................................................ 14
Section 3.2. Parent's Performance Guaranty........................................................ 19
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer.............................................................. 22
Section 4.2. Duties of Servicer................................................................... 23
Section 4.3. Lock-Box Arrangements................................................................ 24
Section 4.4. Enforcement Rights................................................................... 25
Section 4.5. Responsibilities of the Seller....................................................... 26
Section 4.6. Servicing Fee........................................................................ 27
ARTICLE V
ADMINISTRATIVE AGENT
SECTION 5.1. Authorization and Action............................................................. 27
SECTION 5.2. Reliance, Etc........................................................................ 27
SECTION 5.3. Purchase Decisions................................................................... 28
SECTION 5.4. Indemnification...................................................................... 30
i
PAGE
SECTION 5.5. Bank of America and its Affiliates................................................... 30
SECTION 5.6. Resignation of Administrative Agent.................................................. 31
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Amendments, Etc...................................................................... 32
SECTION 6.2. Notices, Etc......................................................................... 33
SECTION 6.3. Binding Effect; Assignability;
Restrictions on Assignment........................................................... 33
SECTION 6.4. Participations....................................................................... 36
SECTION 6.5. Change in Purchase Limit............................................................. 36
SECTION 6.6. Parallel Purchase Termination Date;
Extension of Parallel Purchase
Termination Date.................................................................... 36
SECTION 6.7. Rights of Program Support Providers.................................................. 36
SECTION 6.8. Costs and Expenses................................................................... 37
SECTION 6.9. No Proceedings; Limitation on Payments............................................... 38
SECTION 6.10. Confidentiality...................................................................... 38
SECTION 6.11 Governing Law and Jurisdiction....................................................... 39
SECTION 6.12. Execution in Counterparts............................................................ 39
SECTION 6.13. Survival of Termination.............................................................. 39
SECTION 6.14. WAIVER OF JURY TRIAL................................................................. 39
SECTION 6.15. Entire Agreement..................................................................... 40
SECTION 6.16. Headings............................................................................. 40
SECTION 6.17. Purposes............................................................................. 40
SECTION 6.18. Acknowledgment of Benefits Under Surety Bond......................................... 40
EXHIBIT I - CONDITIONS OF PURCHASES
EXHIBIT II - REPRESENTATIONS AND WARRANTIES OF SELLER,
THE SERVICER
EXHIBIT III - COVENANTS
EXHIBIT IV - TERMINATION EVENTS
ANNEX A - ASSIGNMENT OF PARALLEL ASSET PURCHASE
COMMITMENT
ANNEX B - FORM OF INTERCREDITOR AGREEMENT
ANNEX C - FORM OF OFFICER'S CERTIFICATE
SCHEDULE I - TRADE NAMES AND LOCATIONS
SCHEDULE II - LOCK-BOX BANK AND LOCK-BOX ACCOUNTS
ii
