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EXHIBIT 99.1
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PURCHASE AND SALE AGREEMENT
Dated as of December 15, 2000
between
KBK FINANCIAL, INC.
as the Originator
and
KBK ACCEPTANCE COMPANY LP
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TABLE OF CONTENTS
Page
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell .................................................. 2
SECTION 1.2 Timing of Purchases ............................................................. 3
SECTION 1.3 Consideration for Purchases ..................................................... 3
SECTION 1.4 Purchase and Sale Termination Date .............................................. 4
SECTION 1.5 Intention of the Parties ........................................................ 4
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report ................................................................. 4
SECTION 2.2 Calculation of Purchase Price ................................................... 4
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Initial Purchase Price Payment .................................................. 5
SECTION 3.2 Subsequent Purchase Price Payments .............................................. 5
SECTION 3.3 Settlement as to Specific Receivables and Dilution .............................. 6
SECTION 3.4 Reconveyance of Receivables ..................................................... 7
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase ........................................ 7
SECTION 4.2 Certification as to Representations and Warranties .............................. 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF KBK
SECTION 5.1 Organization and Good Standing .................................................. 8
SECTION 5.2 Due Qualification ............................................................... 8
SECTION 5.3 Power and Authority; Due Authorization .......................................... 9
SECTION 5.4 Valid Sale; Binding Obligations ................................................. 9
SECTION 5.5 No Violation .................................................................... 9
SECTION 5.6 Proceedings ..................................................................... 9
SECTION 5.7 Bulk Sales Acts ................................................................. 9
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SECTION 5.8 Government Approvals ................................................... 10
SECTION 5.9 Financial Condition .................................................... 10
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies .............. 10
SECTION 5.11 Margin Regulations ..................................................... 10
SECTION 5.12 Quality of Title ....................................................... 10
SECTION 5.13 Accuracy of Information ................................................ 11
SECTION 5.14 Offices ................................................................ 11
SECTION 5.15 Trade Names ............................................................ 11
SECTION 5.16 Taxes .................................................................. 11
SECTION 5.17 Compliance with Applicable Laws ........................................ 11
SECTION 5.18 Reliance on Separate Legal Identity .................................... 11
ARTICLE VI
COVENANTS OF KBK
SECTION 6.1 Affirmative Covenants ................................................... 12
SECTION 6.2 Reporting Requirements .................................................. 13
SECTION 6.3 Negative Covenants ...................................................... 14
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF RECEIVABLES
SECTION 7.1 Rights of the Company ................................................... 15
SECTION 7.2 Responsibilities of KBK ................................................. 15
SECTION 7.3 Further Action Evidencing Purchases ..................................... 16
SECTION 7.4 Application of Collections .............................................. 16
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 Purchase and Sale Termination Events .................................... 16
SECTION 8.2 Remedies ................................................................ 17
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by KBK ...................................................... 17
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ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments, etc ................................................................. 19
SECTION 10.2 Notices, etc .................................................................... 19
SECTION 10.3 No Waiver; Cumulative Remedies .................................................. 19
SECTION 10.4 Binding Effect; Assignability ................................................... 20
SECTION 10.5 Governing Law ................................................................... 20
SECTION 10.6 Costs, Expenses and Taxes ....................................................... 20
SECTION 10.7 SUBMISSION TO JURISDICTION ...................................................... 20
SECTION 10.8 WAIVER OF JURY TRIAL ............................................................ 21
SECTION 10.9 Captions and Cross References; Incorporation by Reference ....................... 21
SECTION 10.10 Execution in Counterparts ....................................................... 21
SECTION 10.11 Acknowledgment and Agreement .................................................... 21
SECTION 10.12 No Proceeding ................................................................... 21
SECTION 10.13 Limited Recourse ................................................................ 22
SCHEDULES
Schedule 5.6 Proceedings
Schedule 5.14 Office Locations
Schedule 5.15 Trade Names
EXHIBITS
Exhibit A Form of Purchase Report
Exhibit B Form of Company Note
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THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
December 15, 2000, is entered into between KBK FINANCIAL, INC., a Delaware
corporation ("KBK"), and KBK ACCEPTANCE COMPANY LP, a Texas limited partnership
(the "Company").
BACKGROUND:
1. The Company is a special purpose limited partnership, all of the
issued and outstanding partnership interests of which are indirectly owned by
KBK;
2. KBK generates Receivables in the ordinary course of its businesses;
3. KBK wishes to sell Receivables to the Company, and the Company is
willing to purchase Receivables from KBK, on the terms and subject to the
conditions set forth herein;
4. KBK and the Company intend this transaction to be a true sale of
Receivables by KBK to the Company, providing the Company with the full benefits
of ownership of the Receivables and not to be characterized as a loan from the
Company to KBK;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
DEFINITIONS:
Capitalized terms used herein but not defined herein have meanings set
forth in the Receivables Financing Agreement. In addition, the following terms
have the following respective meanings:
"Closing Date" means December 15, 2000.
"Company" has the meaning set forth in the Preamble.
"Cut-off Date" means December 15, 2000.
"Days' Sales Outstanding" means, for any Collection Period, an amount
computed as of the last day of such Collection Period equal to: (a) the average
of the Outstanding Balance of all Receivables as of the last day of each of the
three most recent Collection Periods ended on the last day of such Collection
Period divided by (b)(i) the aggregate new Receivables generated by KBK during
the three Collection Period ended on or before the last day of such Collection
Period divided by (ii) 90.
"KBK" has the meaning set forth in the Preamble.
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"Obligor" means any Obligor or Customer (as such term is defined in the
Receivables Financing Agreement).
"Payment Date" means two Business Days following the applicable
Transfer Date.
"Prime Rate" means a per annum rate equal to the "Prime Rate" as
published in the "Money Rates" section of The Wall Street Journal or if such
information ceases to be published in The Wall Street Journal, such other
publication as determined by the Administrative Agent in its reasonable
discretion.
"Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 9.1.
"Purchase and Sale Indemnified Party" has the meaning set forth in
Section 9.1.
"Purchase and Sale Termination Date" has the meaning set forth in
Section 8.1.
"Purchase Commitment" means the commitment of the Company to purchase
Receivables from KBK under this Agreement.
"Purchase Price" has the meaning set forth in Section 2.2.
"Purchase Report" has the meaning set forth in Section 2.1.
"Receivables Financing Agreement" means the Receivables Financing
Agreement, dated as of December 15, 2000, among the Company, as the Borrower;
KBK, as the initial Servicer; Autobahn Funding Co. LLC, as the Lender, DG Bank
Deutsche Genossenschaftsbank AG, as the Administrative Agent, and Bank One,
N.A., as the Collateral Agent; as the same may from time to time be amended,
modified or supplemented.
"Related Right" has the meaning set forth in Section 1.1.
"Transfer Date" means each Business Day on which Receivables are
transferred from KBK to the Company.
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell. (a) On the terms and
subject to the conditions set forth in this Agreement, KBK agrees to sell to the
Company, and the Company agrees to purchase from KBK, from time to time on or
after the Closing Date, but before the Purchase and Sale Termination Date, all
of KBK's right, title and interest in and to:
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(i) each Receivable of KBK and the related Receivable Files and all
other instruments, agreements, applications, files, documents and
information relating to the Receivables;
(ii) all rights of KBK with respect to Obligor Collateral, and all
rights to, but not the obligations, of KBK under the Underlying Documents;
(iii) all monies due or to become due to KBK with respect to any of
the foregoing, including, without limitation, (i) all funds received by
KBK, the Company or the Servicer from or on behalf of the Obligors, in
payment of any amounts owed (including, without limitation, invoice price,
finance charges, interest and all other charges) in respect of Receivables;
(ii) all amounts (including any insurance proceeds) to be applied by the
Company or the Servicer to any amount owed in respect of any Receivable,
and (iii) in respect of Receivables, all net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the
Obligors or any other parties directly or indirectly liable for payment of
such Receivables; and
(iv) all proceeds and products of any of the foregoing (as defined in
the applicable UCC).
The Company's foregoing rights described in clauses (ii) through (iv)
are collectively referred to herein as the "Related Rights".
(b) All purchases hereunder shall be made without recourse, but shall
be made pursuant to, and in reliance upon, the representations, warranties and
covenants of KBK set forth in this Agreement and each other Transaction
Document. No obligation or liability to any Obligor on any Receivable is
intended to be assumed by the Company hereunder, and any such assumption is
expressly disclaimed.
SECTION 1.2 Timing of Purchases.
(a) Closing Date Purchases. Each Receivable, together with the
Related Rights, that were generated by KBK prior to the Cut-off Date shall be
deemed to have been sold by KBK to the Company on the Closing Date.
(b) Subsequent Purchases. After the Closing Date, until the
Purchase and Sale Termination Date, each Receivable, together with the Related
Rights, generated by KBK shall be deemed to have been sold by KBK to the Company
immediately (and without further action) upon the creation of such Receivable.
SECTION 1.3 Consideration for Purchases. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make Purchase
Price payments to KBK in accordance with Article III.
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SECTION 1.4 Purchase and Sale Termination Date. The "Purchase and Sale
Termination Date" shall be the earlier to occur of (a) the date on which the
Purchase Commitment is terminated pursuant to Section 8.2 and (b) the Business
Day immediately following the day on which KBK shall have given written notice
to the Company at or prior to 10:00 a.m. (New York City time) that KBK desires
to terminate this Agreement.
SECTION 1.5 Intention of the Parties. It is the express intent of the
parties hereto that the sale and transfer of the Receivables (together with the
Related Rights) by KBK to the Company, as contemplated by this Agreement be, and
be treated as, sales (without recourse except as provided herein) of all of
KBK's right, title and interest in, to and under the Receivables (together with
the Related Rights), and not as loans secured by the Receivables and Related
Rights. If, however, notwithstanding the intent of the parties, such
transactions are deemed to be loans, KBK hereby grants to the Company a first
priority security interest in all of KBK's right, title and interest in and to
the Receivables and the Related Rights now existing and hereafter created by
KBK, all monies due or to become due and all amounts received with respect
thereto, and all proceeds thereof, to secure all of KBK's obligations hereunder
and this Agreement shall be treated as a security agreement under applicable
law.
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report. On the Closing Date and on each Distribution
Date, the Servicer shall deliver to the Company and KBK a report in
substantially the form of Exhibit A (each such report being herein called a
"Purchase Report") setting forth, among other things:
(a) Receivables purchased by the Company from KBK on the Closing Date
(in the case of the Purchase Report to be delivered on the Closing Date);
(b) Receivables purchased by the Company from KBK during the period
commencing on the Distribution Date immediately preceding such Distribution Date
to (but not including) such Distribution Date (in the case of each subsequent
Purchase Report); and
(c) the calculations of reductions of the Purchase Price for any
Receivables as provided in Section 3.3 (a) and (b).
SECTION 2.2 Calculation of Purchase Price. The "Purchase Price" to be paid
by the Company to KBK for the Receivables purchased hereunder shall equal: (a)
if such Receivable is a Loan Receivable, the Outstanding Balance of such Loan
Receivable as of the applicable Transfer Date, and (b) if such Receivable is a
Purchased Receivable, a sum determined in accordance with the following formula:
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PP = OB x FMVD
where:
PP = Purchase Price for each Receivable as calculated
on the relevant Payment Date.
OB = The Outstanding Balance of such Receivable on the
relevant Transfer Date.
FMVD= Fair Market Value Discount, as measured on such
Transfer Date, which is equal to the quotient
(expressed as percentage) of (a) one divided by (b)
the sum of (i) one, plus (ii) the product of (A)
the Prime Rate on such Transfer Date and (B) a
fraction, the numerator of which is the Days' Sales
Outstanding (calculated as of the last day of the
Collection Period next preceding such Transfer
Date) and the denominator of which is 365.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Initial Purchase Price Payment. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to pay to KBK the
Purchase Price for the purchase to be made from KBK on the Closing Date
partially in cash (to the extent the Company has cash available therefor) and
the remainder by issuing a promissory note in the form of Exhibit B (such
promissory note, as it may be amended, supplemented, indorsed or otherwise
modified from time to time, together with all promissory notes issued from time
to time in substitution therefor or renewal thereof in accordance with the
Transaction Documents, each being herein called a "Company Note").
SECTION 3.2 Subsequent Purchase Price Payments. On each Payment Date
subsequent to the Closing Date, on the terms and subject to the conditions set
forth in this Agreement, the Company shall pay to KBK the Purchase Price for the
Receivables generated by KBK on the related Transfer Date:
First, in cash to the extent the Company has cash available therefor;
and
Second, to the extent any portion of the Purchase Price remains unpaid,
the principal amount outstanding under the applicable Company Note shall be
increased by an amount equal to such remaining Purchase Price.
The Servicer shall make all appropriate record keeping entries with respect to
the Company Note to reflect the foregoing payments and reductions made pursuant
to Section 3.3, and the Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of, and
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accrued interest on, the Company Note at any time. Furthermore, the Servicer
shall hold the Company Note for the benefit of KBK. KBK hereby irrevocably
authorizes the Servicer to xxxx the Company Note "CANCELED" and to return such
Company Note to the Company upon the final payment thereof after the occurrence
of the Purchase and Sale Termination Date.
SECTION 3.3 Settlement as to Specific Receivables and Dilution.
(a) If, on the day of purchase of any Receivable from KBK hereunder,
any of the representations or warranties set forth in Sections 5.4 and 5.12 are
not true with respect to such Receivable or as a result of any action or
inaction of KBK, on any subsequent day, any of such representations or
warranties set forth in Sections 5.4 and 5.12 is no longer true with respect to
such Receivable, then the Purchase Price with respect to such Receivable shall
be reduced by an amount equal to the Outstanding Balance of such Receivable and
shall be accounted to KBK as provided in clause (c) below; provided, that if the
Company thereafter receives payment on account of Collections due with respect
to such Receivable, the Company promptly shall deliver such funds to KBK.
(b) If, on any day, the Outstanding Balance of any Receivable purchased
hereunder is reduced or adjusted as a result of any defective, rejected,
returned goods or services, or any discount or other adjustment made by KBK, the
Company, any Customer or the Servicer or any setoff or dispute between KBK, any
Customer or the Servicer and an Obligor as indicated on the books of the Company
(or, for periods prior to the Closing Date, the books of KBK), then the Purchase
Price with respect to such Receivable shall be reduced by the amount of such net
reduction and shall be accounted to KBK as provided in clause (c) below.
(c) Any reduction in the Purchase Price of any Receivable pursuant to
clause (a) or (b) above shall be applied as a credit for the account of the
Company against the Purchase Price of Receivables subsequently purchased by the
Company from KBK hereunder; provided, however if there have been no purchases of
Receivables from KBK (or insufficiently large purchases of Receivables) to
create a Purchase Price sufficient to so apply such credit against, the amount
of such credit
(i) shall be paid in cash to the Company by KBK in the manner and for
application as described in the following proviso, or
(ii) shall be deemed to be a payment under, and shall be deducted from
the principal amount outstanding under, the Company Note payable to KBK;
provided, further, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Financing Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by KBK to the Company by deposit in immediately available funds
into the relevant Lock-Box Account for application by the Servicer to the same
extent as if Collections of the applicable Receivable in such amount had
actually been received on such date.
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SECTION 3.4 Reconveyance of Receivables. In the event that KBK has paid to
the Company the full Outstanding Balance of any Receivable pursuant to Section
3.3, the Company shall reconvey such Receivable to KBK, without representation
or warranty, but free and clear of all liens, security interests, charges, and
encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial purchase
hereunder is subject to the condition precedent that the Servicer (on the
Company's behalf) shall have received, on or before the Closing Date, the
following, each (unless otherwise indicated) dated the Closing Date, and each in
form and substance satisfactory to the Servicer (acting on the Company's
behalf):
(a) An executed copy of the Originator Assignment Certificate;
(b) A copy of the resolutions of the Board of Directors of KBK
approving the Transaction Documents to be delivered by it and the transactions
contemplated hereby and thereby, certified by the Secretary or Assistant
Secretary of KBK;
(c) Good standing certificates for KBK issued as of a recent date
acceptable to the Servicer by the Secretary of State of the jurisdiction of
KBK's incorporation and the jurisdiction where KBK's chief executive office is
located;
(d) A certificate of the Secretary or Assistant Secretary of KBK
certifying the names and true signatures of the officers authorized on such
Person's behalf to sign the Transaction Documents to be delivered by it (on
which certificate the Servicer and the Company may conclusively rely until such
time as the Servicer shall receive from such Person a revised certificate
meeting the requirements of this clause (d));
(e) The certificate or articles of incorporation of KBK, together with
a copy of the by-laws of KBK, each duly certified by the Secretary or an
Assistant Secretary of KBK;
(f) Originals of the proper financing statements (Form UCC-1) that have
been duly executed and name KBK as the debtor/seller and the Company as the
secured party/purchaser (and the Collateral Agent, as assignee of the Company)
of the Receivables generated by KBK as may be necessary or, in the Collateral
Agent's reasonable opinion, desirable under the UCC of all appropriate
jurisdictions to perfect the Company's ownership interest in all Receivables and
the Related Rights in which an ownership or security interest may be assigned to
it hereunder;
(g) A written search report listing all effective financing statements
that name KBK as debtors or sellers and that are filed in the jurisdictions in
which filings were made pursuant to the foregoing clause (f), together with
copies of such financing statements (none of which, unless terminated or
assigned to the Collateral Agent and except for those described in the foregoing
clause (f), shall cover any Receivable or the Related Rights which are to be
sold to the Company
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hereunder), and tax and judgment lien search reports from a Person satisfactory
to the Servicer showing no evidence of such liens filed against KBK;
(h) A favorable opinion of Xxxxx Liddell & Xxxx LLP, counsel to KBK, in
form and substance satisfactory to the Administrative Agent and Royal.
(i) A Company Note in favor of KBK, duly executed by the Company; and
(j) A certificate from an officer of KBK to the effect that the
Servicer and KBK have placed on the most recent, and have taken all steps
reasonably necessary to ensure that there shall be placed on each subsequent,
data processing report that it generates which are of the type that a proposed
purchaser or lender would use to evaluate the Receivables, the following legend
(or the substantive equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE
BEEN SOLD PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS OF NOVEMBER 30,
2000, AS THE SAME MAY FROM TO TIME TO TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED, BETWEEN KBK FINANCIAL, INC., AS ORIGINATOR; AND KBK ACCEPTANCE COMPANY
LP, AS PURCHASER AND AN SECURITY INTEREST IN THE RECEIVABLES (INCLUDING THE
RELATED RIGHTS) DESCRIBED HEREIN HAS BEEN PLEDGED TO BANK ONE, N.A., AS THE
COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO A SECURITY
AGREEMENT, DATED AS OF NOVEMBER 30, 2000, AS THE SAME MAY FROM TO TIME TO TIME
BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, AMONG KBK ACCEPTANCE COMPANY LP
AND BANK ONE, N.A., AS THE COLLATERAL AGENT."
SECTION 4.2 Certification as to Representations and Warranties. KBK, by
accepting the Purchase Price related to each purchase of Receivables generated
by KBK, shall be deemed to have certified that the representations and
warranties contained in Article V are true and correct on and as of such day,
with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF KBK
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, KBK hereby makes, with respect to itself, the
representations and warranties set forth in this Article V.
SECTION 5.1 Organization and Good Standing. KBK has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted.
SECTION 5.2 Due Qualification. KBK is duly licensed and in good standing
in the jurisdiction where its chief executive office is located and is qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which (a) the ownership or lease of its
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property or the conduct of its business requires such licensing or qualification
and (b) the failure to would be reasonably likely to have a Material Adverse
Effect.
SECTION 5.3 Power and Authority; Due Authorization. KBK has (a) all
necessary power, right (i) to execute and deliver, and perform its obligations
under, each to which it is a party and (ii) to generate, own, sell and assign
Receivables on the terms and subject to the conditions herein and therein
provided; and (b) duly authorized such execution and delivery and such sale and
assignment and the performance of such obligations by all necessary corporate
action.
SECTION 5.4 Valid Sale; Binding Obligations. Each sale of Receivables made
by KBK pursuant to this Agreement shall constitute a valid sale, transfer and
assignment of Receivables to the Company, enforceable against creditors of, and
purchasers from, KBK; and this Agreement constitutes, and each other Transaction
Document to be signed by KBK, when duly executed and delivered, will constitute,
a legal, valid, and binding obligation of KBK, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
SECTION 5.5 No Violation. The consummation of the transactions contemplated
by this Agreement and the other Transaction Documents and the fulfillment of the
terms hereof or thereof, will not (a) conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice or lapse
of time) a default under (i) KBK's certificate or articles of incorporation or
bylaws or (ii) any material indenture, loan agreement, mortgage, deed of trust,
or other material agreement or instrument to which it is a party or by which it
is bound, (b) result in the creation or imposition of any Adverse Claim upon any
of its properties pursuant to the terms of any such indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument, other than the
Transaction Documents, or (c) violate any law or any order, rule or regulation
applicable to it of any court or of any state or foreign regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over it or any of its properties that is reasonably likely to have a Material
Adverse Effect.
SECTION 5.6 Proceedings. Except as set forth in Schedule 5.6, there is no
action, suit, proceeding or investigation pending before any court, regulatory
body, arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the issuance of KBK's Originator Assignment Certificate or
the consummation of any of the transactions contemplated by any Transaction
Document or (c) seeking any determination or ruling that is reasonably likely to
have a Material Adverse Effect.
SECTION 5.7 Bulk Sales Acts. No transaction contemplated hereby requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.
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SECTION 5.8 Government Approvals. Except for the filing of the UCC
financing statements referred to in Article IV, all of which, at the time
required in Article IV, shall have been duly made and shall be in full force and
effect, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for KBK's
due execution, delivery and performance of any Transaction Document to which it
is a party.
SECTION 5.9 Financial Condition.
(a) Material Adverse Effect. Since December 31, 1999, no event has
occurred that has had, or is reasonably likely to have, a Material Adverse
Effect.
(b) Solvent. On the date hereof, and on the date of each purchase
hereunder (both before and after giving effect to such purchase) KBK shall be
Solvent.
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies.
(a) KBK has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties
or to the conduct of its business, which violation or failure to obtain would be
reasonably likely to have a Material Adverse Effect.
(b) There are no labor controversies pending against KBK that have had
(or are reasonably likely to have) a Material Adverse Effect.
SECTION 5.11 Margin Regulations. No use of any funds acquired by KBK under
this Agreement will conflict with or contravene any of Regulations T, U and X
promulgated by the Federal Reserve Board from time to time.
SECTION 5.12 Quality of Title.
(a) Each Receivable of KBK (together with the Related Rights with
respect to such Receivable) which is to be sold to the Company hereunder is or
shall be owned by KBK, free and clear of any Adverse Claim, except as provided
herein and in the Receivables Financing Agreement. Whenever the Company makes a
purchase hereunder, it shall have acquired and shall continue to have maintained
a valid and perfected ownership interest (free and clear of any Adverse Claim)
in all Receivables generated by KBK and all Collections related thereto, and in
KBK's entire right, title and interest in and to the Related Rights with respect
thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by KBK or any Related Rights is on file
in any recording office (unless such financing statement has been terminated or
assigned to the Collateral Agent) except such as may be filed in favor of the
Company or KBK, as the case may be, in accordance with this Agreement or in
favor of the Collateral Agent in accordance with the Receivables Financing
Agreement.
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(c) Unless otherwise identified to the Company on the date of the
purchase hereunder, each Receivable purchased hereunder is on the date of
purchase an Eligible Receivable.
SECTION 5.13 Accuracy of Information. All factual written information
heretofore or contemporaneously furnished (and prepared) by KBK to the Company,
the Administrative Agent and Royal for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is, and
all other such factual written information hereafter furnished (and prepared) by
KBK to the Company, the Administrative Agent and Royal pursuant to or in
connection with any Transaction Document will be true and accurate in all
material respects on the date as of which such information is dated or
certified.
SECTION 5.14 Offices. KBK's principal place of business and chief executive
office is located at the address set forth under KBK's signature hereto, and the
offices where KBK keeps all its books, records and documents evidencing its
Receivables, the Underlying Documents and all other agreements related to such
Receivables are located at the addresses specified in Schedule 5.14 (or at such
other locations, notified to the Servicer, the Administrative Agent, the
Collateral Agent and Royal in accordance with Section 6.1(f), in jurisdictions
where all action required by Section 7.3 has been taken and completed).
SECTION 5.15 Trade Names. KBK does not use any trade name other than its
actual corporate name and the trade names set forth in Schedule 5.15. From and
after the date that fell five (5) years before the date hereof, except as set
forth in Schedule 5.15, KBK has not been known by any legal name other than its
corporate name as of the date hereof, nor has KBK been the subject of any merger
or other corporate reorganization.
SECTION 5.16 Taxes. KBK has filed all tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 5.17 Compliance with Applicable Laws. KBK is in compliance with the
requirements of all applicable laws, rules, regulations and orders of all
governmental authorities, a breach of any of which, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
SECTION 5.18 Reliance on Separate Legal Identity. KBK acknowledges that the
Borrower, the Lender, the Administrative Agent, the Collateral Agent, Royal and
each other Secured Party are entering into the Receivables Financing Agreement
and other Transaction Documents in reliance upon the Company's identity as a
legal entity separate from KBK.
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16
ARTICLE VI
COVENANTS OF KBK
SECTION 6.1 Affirmative Covenants. From the date hereof until the first day
following the Purchase and Sale Termination Date, KBK will, unless the Company,
the Administrative Agent and Royal shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders with respect to the Receivables
generated by it and the Contracts and other agreements related thereto except
where the failure to so comply would not materially and adversely affect the
collectibility of such Receivables or the rights of the Company hereunder.
(b) Preservation of Corporate Existence. Preserve and maintain its
existence as a corporation and all rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would be reasonably likely to have a Material Adverse Effect.
(c) Receivables Reviews. (i) At any time and from time to time (but not
more frequently than once per calendar quarter, unless a Purchase and Sale
Termination Event or Unmatured Purchase and Sale Termination Event shall have
occurred and be continuing) during regular business hours (upon at least five
Business Days' prior notice), permit the Company, the Administrative Agent and
Royal, or their respective agents or representatives to: (A) examine and make
copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in possession or under the control
of KBK relating to Receivables, including, without limitation, the related
Underlying Documents and purchase orders and other agreements related thereto,
and (B) visit the offices and properties of KBK for the purpose of examining
such materials described in clause (i)(A) next above and to discuss matters
relating to Receivables originated by it or the performance hereunder with any
of the officers or employees of KBK having knowledge of such matters, and (ii)
without limiting the foregoing clause (i) above, from time to time upon
reasonable request of the Administrative Agent or Royal (but not more frequently
than once per calendar quarter, unless a Sale Termination Event or an Unmatured
Sale Termination Event has occurred), permit certified public accountants or
other auditors selected by the Company, the Administrative Agent or Royal, to
conduct a review of the Servicer's books and records with respect to the
Receivables and all other documents related thereto. Any costs and expenses
incurred in connection with the foregoing shall: (i) with respect to the Company
or the Administrative Agent, as applicable, be paid by the Company or the
Administrative Agent, as applicable, and (ii) with respect to Royal, be paid by
KBK for the first $2,500 per calendar quarter and by Royal for any additional
amounts; provided, however, that following the occurrence of a Termination Event
or an Unmatured Termination Event, all such costs and expenses incurred by KBK,
the Administrative Agent and Royal shall be paid by the Borrower.
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17
(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to re-create records evidencing Receivables it generates in the event of
the destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of such Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).
(e) Performance and Compliance with Receivables and Underlying
Documents. Timely and fully perform and comply, in all material respects, with
all provisions, covenants and other promises required to be observed by it under
the Underlying Documents and all other agreements related to the Receivables
that it generates.
(f) Location of Records. Keep its principal place of business and chief
executive office, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) referred to in Schedule 5.14 or, upon
15 days' prior written notice to the Company, the Administrative Agent, the
Collateral Agent and Royal, at such other locations in jurisdictions where all
action required by Section 7.3 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables that it
generates and all Underlying Documents and other agreements related thereto.
(h) Post Office Boxes. Prior to the date hereof, deliver to the
Servicer (on behalf of the Company) a certificate from an authorized officer of
KBK to the effect that (i) the name of the renter of all post office boxes into
which Collections may from time to time be mailed have been changed to the name
of the Company (unless such post office boxes are in the name of the relevant
Lock-Box Banks) and (ii) all relevant postmasters have been notified that each
of the Servicer and the Collateral Agent is authorized to collect mail delivered
to such post office boxes (unless such post office boxes are in the name of the
relevant Lock-Box Banks).
(i) Transaction Documents. Comply in all material respects with the
Transaction Documents to which it is a party.
(j) Upon the request of the Administrative Agent or Royal, KBK shall
cause each UCC financing statement covering any Obligor Collateral to be
assigned to the Collateral Agent and to duly file such assignment in all
appropriate filing offices.
SECTION 6.2 Reporting Requirements. From the date hereof until the first
day following the Purchase and Sale Termination Date, KBK will, unless the
Servicer (with prior written consent of the Company, the Administrative Agent
and Royal) shall otherwise consent in writing, furnish to the Company, the
Administrative Agent and Royal:
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18
(a) Purchase and Sale Termination Events. As soon as possible after KBK
has knowledge of the occurrence of, and in any event within two Business Days
after KBK has knowledge of the occurrence of each Purchase and Sale Termination
Event or each Unmatured Purchase and Sale Termination Event in respect of KBK,
the statement of the chief financial officer or chief accounting officer of KBK
describing such Purchase and Sale Termination Event or Unmatured Purchase and
Sale Termination Event and the action that KBK proposes to take with respect
thereto, in each case in reasonable detail;
(b) Proceedings. As soon as possible and in any event within two
Business Days after KBK has knowledge thereof, written notice of (i) material
litigation, investigation or proceeding of the type described in Section 5.6 not
previously disclosed to the Company and (ii) all adverse developments that have
occurred with respect to any previously disclosed litigation, proceedings and
investigations that could have a Material Adverse Effect; and
(c) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of KBK as the Company, the Lender, the
Administrative Agent, the Collateral Agent and Royal may from time to time
reasonably request in order to protect the interests of the Company, the Lender
and each other Secured Party under or as contemplated by the Transaction
Documents.
SECTION 6.3 Negative Covenants. From the date hereof until the date
following the Purchase and Sale Termination Date, KBK agrees that, unless the
Servicer (on behalf of the Company) shall otherwise consent in writing, it shall
not:
(a) Sales, Liens, Etc. Unless provided herein or in any other
Transaction Documents, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Receivable or the Related Rights.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted under the Receivables Financing Agreement, extend, amend or otherwise
modify the terms of any Receivable in any respect generated by it, or amend,
modify or waive, in any material respect, any Underlying Document (which term or
condition relates to payments under, or the enforcement of, such Underlying
Document).
(c) Change in Business or Credit and Collection Policy. Make any change
in, or alter or otherwise modify in any material respect, the Credit and
Collection Policy unless with prior written consent of the Administrative Agent
and Royal.
(d) Receivables Not to be Evidenced by Promissory Notes or Chattel
Paper. Take any action to cause or permit any Receivable (other than the Loan
Receivables) generated by it to become evidenced by any "instrument" or "chattel
paper" (as defined in the applicable UCC).
(e) Mergers, Acquisitions, Sales, etc. (i) Be a party to any merger or
consolidation, except a merger or consolidation where KBK is the surviving
entity or is merged or
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19
consolidated with another Originator, or (ii) directly or indirectly sell,
transfer, assign, convey or lease (other than to another Originator or
wholly-owned Subsidiary thereof) (A) whether in one or a series of transactions,
all or substantially all of its assets or (B) any Receivables or any interest
therein (other than pursuant to this Agreement).
(f) Lock-Box Banks. Make any changes in its instructions to Obligors
regarding Collections or add or terminate any bank as a Lock-Box Bank, except in
accordance with the terms provided in the Receivables Financing Agreement.
(g) Accounting for Purchases. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as sales of the Receivables and the Related Rights by KBK to
the Company.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF RECEIVABLES
SECTION 7.1 Rights of the Company. KBK hereby authorizes the Company, the
Servicer or their respective designees to take any and all steps in KBK's name
necessary or desirable, in their respective reasonable determination, to collect
all amounts due under any and all Receivables, including, without limitation,
indorsing the name of KBK on checks and other instruments representing
Collections and enforcing such Receivables and the provisions of the related
Underlying Documents that concern payment and/or enforcement of rights to
payment.
SECTION 7.2 Responsibilities of KBK. Anything herein to the contrary
notwithstanding:
(a) Collection Procedures. KBK agrees to direct its respective Obligors
to make payments of Receivables directly to a post office box related to the
relevant Lock-Box Account at a Lock-Box Bank or to the Collection Account. KBK
further agrees to transfer any Collections that it receives directly to the
Collection Account within one (1) Business Day of receipt thereof, and agrees
that all such Collections shall be deemed to be received in trust for the
Company and shall be maintained and segregated separate and apart from all other
funds and monies of KBK until transfer of such Collections to the Collection
Account.
(b) KBK shall perform its obligations hereunder, and the exercise by
the Company or its designee of its rights hereunder shall not relieve KBK from
such obligations.
(c) None of the Company, the Servicer, the Administrative Agent, the
Collateral Agent, the Lender, Royal or any other Secured Party shall have any
obligation or liability to any Obligor or any other third Person with respect to
any Receivables and the related Underlying Documents, nor shall the Company, the
Servicer, the Lender, the Administrative Agent , the Collateral Agent, Royal or
any other Secured Party be obligated to perform any of the obligations of KBK
thereunder.
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20
(d) KBK hereby grants to the Servicer an irrevocable power of attorney,
with full power of substitution, coupled with an interest, to take in the name
of KBK all steps necessary or advisable to indorse, negotiate or otherwise
realize on any writing or other right of any kind held or transmitted by KBK or
transmitted or received by the Company (whether or not from KBK) in connection
with any Receivable.
SECTION 7.3 Further Action Evidencing Purchases. KBK agrees that from time
to time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that the Servicer may
reasonably request in order to perfect, protect or more fully evidence the
Receivables and the Related Rights purchased by the Company hereunder, or to
enable the Company to exercise or enforce any of its rights hereunder or under
any other Transaction Document. Without limiting the generality of the
foregoing, upon the request of the Servicer, KBK will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(b) xxxx the master data processing records that evidence or list (i)
such Receivables and (ii) related Underlying Documents with the legend set forth
in Section 4.1(j).
KBK hereby authorizes the Company or its designee to file one or more financing
or continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Receivables and Related Rights now existing or
hereafter generated by KBK. If KBK fails to perform any of its agreements or
obligations under this Agreement, the Company or its designee may (but shall not
be required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Company or its designee incurred in
connection therewith shall be payable by KBK as provided in Section 9.1.
SECTION 7.4 Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to any Originator shall, except as
otherwise specified by such Obligor or required by applicable law and unless
otherwise instructed by the Servicer (with the prior written consent of the
Administrator), or the Administrator, be applied as a Collection of any
Receivable or Receivables of such Obligor to the extent of any amounts then due
and payable thereunder before being applied to any other indebtedness of such
Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 Purchase and Sale Termination Events. Each of the following
events or occurrences described in this Section 8.1 shall constitute a "Purchase
and Sale Termination Event":
(a) A Termination Event (as defined in the Receivables Financing
Agreement) shall have occurred and, in the case of a Termination Event (other
than one described in Section
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21
10.1(d) of the Receivables Financing Agreement), the Administrative Agent, shall
have declared the Commitment Termination Date to have occurred; or
(b) KBK shall fail to make any payment or deposit to be made by it
hereunder when due and such failure shall remain unremedied for two (2) Business
Days; or
(c) Any representation or warranty made or deemed to be made by KBK (or
any of its officers) under or in connection with this Agreement, any other
Transaction Documents, or any other information or report delivered pursuant
hereto or thereto shall prove to have been false or incorrect in any material
respect when made or deemed made; or
(d) KBK shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement on its part to be performed or observed
and such failure shall remain unremedied for 30 days after written notice
thereof shall have been given by the Servicer to KBK.
SECTION 8.2 Remedies.
(a) Optional Termination. Upon the occurrence of a Purchase and Sale
Termination Event, the Company (and not the Servicer) shall have the option, by
notice to KBK (with a copy to the Administrative Agent, the Collateral Agent and
Royal), to declare the Purchase Commitment is terminated.
(b) Remedies Cumulative. Upon any termination of the Purchase
Commitment pursuant to Section 8.2(a), the Company shall have, in addition to
all other rights and remedies under this Agreement, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by KBK. Without limiting any other rights which the
Company may have hereunder or under applicable law, KBK agrees to indemnify the
Company and each of its officers, directors, employees, partners, managers and
agents (each of the foregoing Persons being individually called a "Purchase and
Sale Indemnified Party"), forthwith on demand, from and against any and all
damages, losses, claims, judgments, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively called "Purchase and Sale Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of the failure
of KBK to perform its obligations under this Agreement or any other Transaction
Document, or arising out of the claims asserted against a Purchase and Sale
Indemnified Party relating to the transactions contemplated herein or therein or
the use of proceeds thereof or therefrom, WHETHER THROUGH THE ALLEGED OR ACTUAL
NEGLIGENCE OF SUCH PURCHASE AND SALE INDEMNIFIED PARTY OR OTHERWISE, excluding,
however, (i) Purchase and Sale Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Purchase and Sale
Indemnified Party, (ii) any
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22
indemnification which has the effect of recourse for non-payment of the
Receivables to any indemnitor (except as otherwise specifically provided under
this Section 9.1) and (iii) any tax based upon or measured by net income,
property, or gross receipts. Without limiting the foregoing, KBK shall indemnify
each Purchase and Sale Indemnified Party for Purchase and Sale Indemnified
Amounts relating to or resulting from:
(a) the transfer by KBK of an interest in any Receivable to any Person
other than the Company;
(b) the breach of any representation or warranty made by KBK (or any of
its officers) under or in connection with this Agreement or any other
Transaction Document, or any information or report delivered by KBK pursuant
hereto or thereto, which shall have been false or incorrect in any material
respect when made or deemed made;
(c) the failure by KBK to comply with any applicable law, rule or
regulation with respect to any Receivable generated by KBK or the related
Underlying Document, or the nonconformity of any Receivable generated by KBK
or the related Underlying Document with any such applicable law, rule or
regulation;
(d) the failure to vest and maintain vested in the Company an ownership
interest in the Receivables generated by KBK free and clear of any Adverse
Claim, other than an Adverse Claim arising under the Transaction Documents;
(e) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables or
purported Receivables generated by KBK, whether at the time of any purchase or
at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by KBK (including, without limitation, a defense based on
such Receivable's or the related Underlying Document's not being a legal, valid
and binding obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the services related to any such
Receivable or the furnishing of or failure to furnish such services;
(g) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by KBK; and
(h) any tax or governmental fee or charge (other than any tax excluded
pursuant to clause (iii) in the proviso to the preceding sentence), all interest
and penalties thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in defending
against the same, which may arise by reason of the purchase or ownership of the
Receivables generated by KBK (including any Related Rights) connected with any
such Receivables.
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23
If for any reason the indemnification provided above in this Section 9.1 is
unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then each of KBK, severally
and for itself, shall contribute to the amount paid or payable by such Purchase
and Sale Indemnified Party to the maximum extent permitted under applicable law.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments, etc.
(a) The provisions of this Agreement may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
executed by the Company and KBK (with the prior written consent of the
Administrative Agent and Royal).
(b) No failure or delay on the part of the Company, the Servicer, KBK
or any third party beneficiary in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on the Company, the
Servicer or KBK in any case shall entitle it to any notice or demand in similar
or other circumstances. No waiver or approval by the Company or the Servicer
under this Agreement shall, except as may otherwise be stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval under
this Agreement shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
(c) The Transaction Documents contain a final and complete integration
of all prior expressions by the parties hereto with respect to the subject
matter thereof and shall constitute the entire agreement among the parties
hereto with respect to the subject matter thereof, superseding all prior oral or
written understandings.
SECTION 10.2 Notices, etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage prepaid, or by facsimile, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective (i) if personally delivered, when received,
(ii) if sent by certified mail three (3) Business Days after having been
deposited in the mail, postage prepaid, and (iii) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means.
SECTION 10.3 No Waiver; Cumulative Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law. Without
limiting the foregoing, KBK hereby authorizes the Company, at any time and from
time to time, to the fullest extent permit-
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24
xxx by law, to set off, against any obligations of KBK to the Company arising in
connection with the Transaction Documents (including, without limitation,
amounts payable pursuant to Section 9.1) that are then due and payable or that
are not then due and payable but are accruing in respect of the then current
Collection Period, any and all indebtedness at any time owing by the Company to
or for the credit or the account of KBK.
SECTION 10.4 Binding Effect; Assignability. This Agreement shall be binding
upon and inure to the benefit of the Company and KBK and their respective
successors and permitted assigns. KBK may not assign any of its rights hereunder
or any interest herein without the prior written consent of the Company, except
as otherwise herein specifically provided. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time as the
parties hereto shall agree. The rights and remedies with respect to any breach
of any representation and warranty made by KBK pursuant to Article V and the
indemnification and payment provisions of Article IX and Section 10.6 shall be
continuing and shall survive any termination of this Agreement.
SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SECTION 10.6 Costs, Expenses and Taxes. In addition to the obligations of
KBK under Article IX, KBK, severally and for itself alone, agrees to pay on
demand:
(a) to the Company (and any successor and permitted assigns thereof)
all reasonable costs and expenses incurred by such Person in connection with the
enforcement of this Agreement, KBK Assignment Certificates and the other
Transaction Documents; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents to be delivered hereunder, and
agrees to indemnify each Purchase and Sale Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE TARRANT COUNTY,
TEXAS, DISTRICT COURTS OR UNITED STATES FEDERAL COURT FOR NORTHERN DISTRICT OF
TEXAS OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL
COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d)
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS
ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT
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A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY
ACTION OR PROCEEDING AGAINST KBK OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
SECTION 10.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
SECTION 10.9 Captions and Cross References; Incorporation by Reference. The
various captions (including, without limitation, the table of contents) in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to any underscored Section or Exhibit are to such Section or Exhibit of this
Agreement, as the case may be. The Exhibits hereto are hereby incorporated by
reference into and made a part of this Agreement.
SECTION 10.10 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement.
SECTION 10.11 Acknowledgment and Agreement. By execution below, KBK
expressly acknowledges and agrees that all of the Company's rights, title, and
interests in, to, and under this Agreement (but not its obligations), shall be
assigned by the Company pursuant to the Receivables Financing Agreement, and KBK
consents to such assignment. Each of the parties hereto acknowledges and agrees
that the Administrative Agent, the Collateral Agent, the Lender, Royal and each
other Secured Party are third party beneficiaries of the rights of the Company
arising hereunder and under the other Transaction Documents to which KBK is a
party.
SECTION 10.12 No Proceeding. KBK hereby agrees that it will not institute,
or join any other Person in instituting, against the Company any Insolvency
Proceeding so long as the Company
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26
Note remains outstanding and for at least one year and one day following the day
on which the aggregate outstanding principal amount of the Company Note is paid
in full.
SECTION 10.13 Limited Recourse. Except as explicitly set forth herein, the
obligations of the Company under this Agreement or any other Transaction
Documents to which it is a party are solely the obligations of the Company. No
recourse under any Transaction Document shall be had against, and no liability
shall attach to, any officer, employee, director, partner, manager, or
beneficiary, whether directly or indirectly, of the Company.
[Signature Pages Follow]
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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.
KBK FINANCIAL, INC., as Originator
By: /s/ XXXXXXX X. XXXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
2200 City Center II
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, CFO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1 Purchase and Sale Agreement
28
KBK ACCEPTANCE COMPANY LP
By: /s/ XXXXXX X. XXXXX
-------------------------------
Name: Xxxxxx X. XxXxx
Title: President
2200 City Center II
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-2 Purchase and Sale Agreement
