EXECUTION COPY
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AMENDED AND RESTATED
PURCHASE AGREEMENT
between
LEXMARK INTERNATIONAL, INC.,
as Originator,
and
LEXMARK RECEIVABLES CORPORATION,
as Buyer,
Dated as of March 31, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms .......................................... 1
SECTION 1.2. Interpretation and Construction ................................ 12
ARTICLE II
SALES AND TRANSFERS; SETTLEMENTS
SECTION 2.1. General Terms .................................................. 13
SECTION 2.2. Purchase and Sale .............................................. 13
SECTION 2.3. Transfers and Assignments ...................................... 14
SECTION 2.4. Protection of Ownership of the Buyer ........................... 16
SECTION 2.5. Mandatory Repurchase Under Certain Circumstances ............... 16
SECTION 2.6. Transfers by Buyer ............................................. 16
SECTION 2.7. Payment Procedures ............................................. 17
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. General Representations and Warranties of the Originator ....... 18
SECTION 3.2. Representations and Warranties of the Originator With Respect to
Each Sale of Receivables ...................................... 22
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing ......................................... 23
SECTION 4.2. Conditions to Purchases ....................................... 25
SECTION 4.3. Effect of Payment of Purchase Price ........................... 25
SECTION 4.4. Condition to Effectiveness .................................... 25
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of the Originator ........................ 26
SECTION 5.2. Negative Covenants of the Originator ........................... 31
i
ARTICLE VI
TERMINATION EVENTS
SECTION 6.1. Term .......................................................... 32
SECTION 6.2. Effect of Termination .......................................... 33
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Expenses ....................................................... 33
SECTION 7.2. Indemnity for Taxes, Reserves and Expenses ..................... 33
SECTION 7.3. Indemnity ...................................................... 35
SECTION 7.4. Holidays ....................................................... 37
SECTION 7.5. Records ........................................................ 37
SECTION 7.6. Amendments and Waivers ......................................... 37
SECTION 7.7. Term of Agreement .............................................. 37
SECTION 7.8. No Implied Waiver; Cumulative Remedies ......................... 37
SECTION 7.9. No Discharge ................................................... 37
SECTION 7.10. Notices ....................................................... 38
SECTION 7.11. Severability .................................................. 38
SECTION 7.12. Governing Law; Submission to Jurisdiction ..................... 38
SECTION 7.13. Prior Understandings .......................................... 38
SECTION 7.14. Survival ...................................................... 38
SECTION 7.15. Counterparts .................................................. 39
SECTION 7.16. Set-Off ....................................................... 39
SECTION 7.17. Successors and Assigns ........................................ 39
SECTION 7.18. Confidentiality ............................................... 39
SECTION 7.19. Payments Set Aside ............................................ 40
SECTION 7.20. No Petition ................................................... 40
SECTION 7.21. Third-Party Beneficiary ....................................... 40
Exhibit A [Reserved]
Exhibit B Schedule of Litigation
Exhibit C Schedule of Names and Locations of Offices and Records
Exhibit D Form of Compliance Certificate
Exhibit E [Reserved]
Exhibit F Credit and Collection Policy
Exhibit G Form of Subordinated Note
Exhibit H Material Adverse Changes
Exhibit I Forms of Officers' Certificate
Exhibit J Description of Qualifying Receivables
Exhibit K Officer's Certificate Pursuant to Section 4.1(j)
Schedule 1 Schedule of Receivables
ii
AMENDED AND RESTATED
PURCHASE AGREEMENT
This AMENDED AND RESTATED PURCHASE AGREEMENT, dated as of
March 31, 1998 (as amended, supplemented or otherwise modified and in effect
from time to time, this "Agreement"), made by and between Lexmark International,
---------
Inc., a Delaware corporation, as originator (the "Originator") and Lexmark
----------
Receivables Corporation, a Delaware corporation, as buyer (the "Buyer").
-----
R E C I T A L S:
- - - - - - - -
WHEREAS, on April 15, 1997, the Originator and the Buyer
entered into a Purchase Agreement dated as of March 31, 1997 (as amended by
First Amendment dated as of March 5, 1998, the "Original Purchase Agreement")
providing for the sale from time to time by the Originator to the Buyer of all
of Originator's trade and/or retail or consumer receivables resulting from the
sale of goods or services by the Originator to its customers, subject to the
terms and conditions of this Agreement.
WHEREAS, the originator and the Buyer desire to amend the
Original Purchase Agreement in order to reflect certain terms of a Credit
Agreement (hereinafter defined) entered into by the Originator as of January 27,
1998 and to contain certain provisions necessitated by changes in financial
accounting standards.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and for good and sufficient consideration, the
parties hereto, intending to be legally bound, do hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms.
--------------------- As used in this Agreement,
the following capitalized terms shall have the following meanings:
"Administrative Agent"
---------------------- shall mean Xxxxxx Guaranty Trust
Company of New York, a New York banking corporation, and its successors and
assigns.
"Affiliate"
--------- shall mean, with respect to a Person, any other
Person which directly or indirectly controls, is controlled by or is under
common control with, such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Attributable Debt"
------------------ shall mean, for any Person, in respect of
a Sale/Leaseback Transaction, as at the time of determination, the present value
(discounted at the interest rate assumed in making calculations in accordance
with FAS 13) of the total obligations of such Person, as seller/lessee, for
rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).
"Business Day"
------------- shall mean any day other than a Saturday,
Sunday, public holiday under the Laws of the State of Delaware or the State of
New York or any other day on which banking institutions are authorized or
obligated to close in the State of Delaware or the State of New York.
"Capital Lease Obligations"
--------------------------- of any Person shall mean the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Chief Executive Office"
------------------------ shall mean, with respect to the
Originator, the place where the Originator is located, within the meaning of
Section 9-103(3)(d), or any analogous provision, of the UCC, in effect in the
jurisdiction whose Law governs the perfection of the Buyer's ownership interests
in any Receivables.
"Closing Date"
------------ shall mean April 15, 1997.
"Collections"
----------- shall mean, for any Receivable as of any date,
(i) the sum of all amounts, whether in the form of wire transfer, cash, checks,
drafts, or other instruments, received by the Originator or the Servicer in a
Permitted Lockbox or otherwise in payment of, or applied to, any amount owed by
an Obligor on account of such Receivable on or before such date, including,
without limitation, all amounts received on account of such Receivable, and all
other fees and charges, (ii) cash proceeds of Related Security with respect to
such Receivable and (iii) all amounts deemed to have been received by the
Originator or the Servicer as a Collection.
"Consolidated Subsidiaries"
-------------------------- shall mean with respect to any
Person, at any date, any one or more Subsidiaries of such Person the accounts of
which would be consolidated with those of such Person in its consolidated
statements if such statements were prepared as of such date.
"Contract"
-------- shall mean, with respect to any Receivable, a
binding contract (including a binding invoice) between the Originator and an
Obligor which gives rise to a (i) short-term trade receivable with a maturity of
not greater than one year, (ii) a short-term retail or consumer receivable with
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a maturity of not greater than one year, in each case arising from the sale by
the Originator of goods or services in the ordinary course of the Originator's
business, or (iii) a receivable arising in connection with the sale to IBM
Credit Corporation or to another similar institution providing credit to such
Obligor (provided such institution satisfies any of the definitions of Group A
Obligor, Group B Obligor, Group C Obligor or Group D Obligor) of the original
indebtedness incurred by an Obligor to the Originator in connection with such a
sale of goods or the rendering of such services.
"Credit Agreement"
----------------- shall mean the Credit Agreement, dated as
of January 27, 1998, among Lexmark International Group, Inc., as Parent
Guarantor, Lexmark International, Inc., as Borrower, the Lenders party thereto,
Fleet National Bank, as Documentation Agent, Xxxxxx Guaranty Trust Company of
New York, as Syndication Agent and The Chase Manhattan Bank, as Administrative
Agent.
"Credit and Collection Policy"
------------------------------ shall mean the Originator's
credit, collection enforcement and other policies and practices relating to
Contracts and Receivables existing on the date hereof and as set forth on
Exhibit F hereto, as the same may be modified from time to time in compliance
with Section 5.2(e) hereof.
"Debt"
---- of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services, (e) all Debt of others secured
by (or for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Debt secured thereby has been assumed, (f) all
Guarantees by such Person of Debt of others, (g) all Capital Lease Obligations
and Attributable Debt of such Person and (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit or
similar instruments; provided that (a)neither trade accounts payable or accrued
--------
liabilities in respect of accrued expenses, in either case arising in the
ordinary course of business, nor obligations in respect of insurance policies or
performance or surety bonds which are not themselves Guarantees of Debt (nor
bills of exchange, drafts, acceptances or similar instruments evidencing the
same nor reimbursement obligations that are contingent or that have been fixed
for not more than three Business Days in respect of letters of credit or other
similar undertakings supporting the payment of the same) shall constitute Debt,
(b) any cash advances pursuant to any Permitted Receivables Financing shall not
constitute Debt, (c) any sale, transfer or other disposition of accounts
receivable that, under GAAP as in effect on the date of such sale, transfer or
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disposition, is or shall be treated as a sale of such accounts receivable, shall
not constitute Debt and (d) in determining the amount of any Debt, Guarantees of
such Debt shall not be taken into account to the extent the Debt Guaranteed is
itself taken into account. References in this Agreement to the amount of any
Debt shall not include accrued interest or fees in respect of such Debt, except
to the extent that such interest or fees has been capitalized.
"Dilution Factors"
----------------- shall mean credits, cancellations, cash
discounts, warranties, allowances, Disputes, rebates, charge backs, returned or
repossessed goods, and other allowances, adjustments and deductions (including,
without limitation, any special or other discounts or any reconciliations caused
by price protection agreements or otherwise, but excluding any deductions for
reasons of the financial condition of an Obligor) that are given to an Obligor
in accordance with the Credit and Collection Policy.
"Dispute"
------- shall mean any dispute, deduction, claim, offset,
defense, counterclaim, set-off or obligation of any kind, contingent or
otherwise, relating to a Receivable, including, without limitation, any dispute
relating to goods or services already paid for.
"Dollars" or "$" shall mean the lawful currency of the United
------- -
States of America.
"Effectiveness Date"
------------------ shall mean April 14, 1998.
"ERISA"
----- shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor thereto, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate"
---------------- shall mean any corporation or person which
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Internal Revenue Code of which the Originator is a member, or (ii) solely
for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Internal Revenue Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Internal Revenue Code,
described in Section 414(m) or (o) of the Internal Revenue Code of which the
Originator is a member.
"Event of Bankruptcy"
------------------- shall mean, for any Person:
(a) that such Person shall admit in writing its inability to
pay its debts as they become due or shall generally be unable to pay its Debts
as they become due; or
(b) a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
such Person in an involuntary case under any applicable bankruptcy, insolvency
or other similar Law now or hereafter in effect, or for the appointment of a
4
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of such Person or for any substantial part of its
property, or for the winding-up or liquidation of its affairs; or
(c) the commencement by such Person of a voluntary case under
any applicable bankruptcy, liquidation, insolvency or other similar Law now or
hereafter in effect, or such Person's consent to the entry of an order for
relief in an involuntary case under any such Law, or consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person or for any
substantial part of its property, or any general assignment for the benefit of
creditors; or
(d) if such Person is a corporation, such Person, or (if such
Person is not an Obligor) any Subsidiary of such Person, shall take any
corporate action in furtherance of any of the actions set forth in the preceding
clause (a), (b) or (c).
"Event of Termination"
--------------------- shall mean (i) with respect to any
Plan, a reportable event, as defined in Section 4043(b) of ERISA, as to which
the PBGC has not by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event, or
(ii) the withdrawal of the Originator or any ERISA Affiliate from a Plan during
a plan year in which it is a substantial employer, as defined in Section
4001(a)(2) of ERISA, or (iii) the failure by the Originator or any ERISA
Affiliate to meet the minimum funding standard of Section 412 of the Internal
Revenue Code or Section 302 of ERISA with respect to any Plan, or (iv) the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by the Originator or any ERISA Affiliate to terminate
any Plan, or (v) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Internal Revenue Code or Section 307 of ERISA would
result in the loss of tax-exempt status of the trust of which such Plan is a
part if the Originator or an ERISA Affiliate fails to timely provide security to
the Plan in accordance with the provisions of said Sections, or (vi) the
institution by the PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or
(vii) the receipt by the Originator or any ERISA Affiliate of a notice from a
Multiemployer Plan that action of the type described in the previous clause (vi)
has been taken by the PBGC with respect to such Multiemployer Plan, or (viii)
the complete or partial withdrawal from a Multiemployer Plan by the Originator
or any ERISA Affiliate that results in liability under Section 4201 or 4204 of
ERISA (including the obligation to satisfy secondary liability as a result of a
purchaser default), or (ix) the receipt by the Originator or any ERISA Affiliate
of notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, or (x) any event or circumstance exists
5
which may reasonably be expected to constitute grounds for the Originator or any
ERISA Affiliate to incur liability under Section 4069 or Section 4212(c) of
ERISA or under Sections 412(c)(11) or 412(n) of the Internal Revenue Code with
respect to any Plan.
"Expense and Tax-Sharing Agreement"
--------------------------------------- shall mean the
Administrative and Office Support Services, and Tax Allocation Agreement dated
as of March 31, 1997, between the Originator and the Buyer.
"Expiration Date"
---------------- shall mean the earlier of (i) the date of
termination of the Receivables Purchase Agreement and (ii) the day on which a
Termination Event occurs.
"Facility Documents"
------------------ shall mean collectively, this Agreement,
the Receivables Purchase Agreement, the Expense and Tax-Sharing Agreement, the
Subordinated Note and such other agreements, documents and instruments delivered
by Originator in connection with the transactions contemplated by this Agreement
and pursuant hereto or in connection therewith.
"GAAP"
---- shall mean generally accepted accounting principles in
the United States of America, applied on a consistent basis and applied to both
classification of items and amounts, and shall include, without limitation, the
official interpretations thereof by the Financial Accounting Standards Board,
its predecessors and successors.
"Governmental Authority"
------------------------ shall mean any government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.
"Government Obligor"
------------------- shall mean an Obligor that is the United
States of America, any State thereof, or an agency, department, instrumentality
or political subdivision of the United States of America or of any State
thereof.
"Guarantee"
--------- of or by any Person (the "guarantor")
--------- shall mean
any obligation, contingent or otherwise, of the guarantor guaranteeing any Debt
or other obligation of any other Person (the "primary obligor") in any manner,
----------------
whether directly or indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Debt or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Debt or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
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Debt or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"IBM Receivable"
--------------- shall mean any Receivable the Obligor of
which is IBM Credit Corporation or any Subsidiary or Affiliate thereof that
maintains a senior unsecured long-term debt rating from S&P and Xxxxx'x which is
equal to or higher than such ratings for IBM.
"Indemnified Parties"
-------------------- shall have the meaning ascribed to such
term in Section 7.2 hereof.
"Initial Purchase"
----------------- shall mean the Purchase made on the date
hereof pursuant to Section 2.1 hereof.
"Initial Purchase Date"
----------------------- shall mean the date the Initial
Purchase is made pursuant to Section 2.1 hereof.
"Internal Revenue Code"
---------------------- shall mean the Internal Revenue code
of 1986, as amended from time to time and any successor thereto, and the
regulations promulgated and rulings issued thereunder.
"Law"
--- shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Governmental Authority.
"Lien"
---- shall mean, with respect to any asset of any Person,
(a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset, (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing, but excluding operating leases)
relating to such asset, (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities and (d) any
comparable or equivalent rights or encumbrances under the laws of foreign
jurisdictions; provided, that neither the licensing of any intellectual property
right nor the holding of any such right subject to any retained right of any
licensor or transferor thereof to use or license the same shall, alone,
constitute a Lien on any such right.
"Lockbox Account"
---------------- shall have the meaning ascribed thereto in
the Receivables Purchase Agreement.
"Lockbox Servicing Instructions"
--------------------------------- shall have the meaning
ascribed thereto in the Receivables Purchase Agreement.
"Multiemployer Plan"
------------------- shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA which is or was at any time during the
current year or the immediately preceding five years contributed to by the
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Originator or any ERISA Affiliate on behalf of its employees and which is
covered by Title IV of ERISA.
"Notice of Termination Event"
--------------------------- shall have the meaning set forth
in Section 5.1(a) hereof.
"Obligor"
------- shall mean, for any Receivable, (i) each and every
Person who purchased goods or services on credit under a Contract and who is
obligated to make payments to the Originator pursuant to such Contract and (ii)
IBM Credit Corporation.
"Office"
------ shall mean, when used in connection with the Buyer or
the Originator, their respective offices as set forth on the signature pages
hereto, or at such other office or offices of the Buyer or the Originator or
branch, Subsidiary or Affiliate of either thereof as may be designated in
writing from time to time by the Buyer or the Originator to the Buyer or the
Originator, as appropriate.
"Outstanding Balance"
-------------------- of any Receivable shall mean, at any
time, the then outstanding amount thereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any
----
entity succeeding to any or all of its functions under ERISA.
"Permitted Lien"
--------------- shall mean (i) a Lien imposed by any
Governmental Authority for taxes, assessments or charges not yet due or that are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Originator in
accordance with GAAP, or (ii) a carriers', warehousemen's, mechanics' or other
like Lien arising in the ordinary course of business for amounts that are not
overdue for a period of more than 30 days or that are being contested in good
faith and by appropriate proceedings and for payment of which the Originator has
adequately bonded or provided adequate reserves on its books in accordance with
GAAP or (iii) a Lien arising out of a judgment or award against the Originator
with respect to which a stay of execution has been obtained pending appeal or
other proceeding for review and for the payment of which the Originator has
adequately bonded or provided adequate reserves in accordance with GAAP.
"Permitted Receivables Financing"
-------------------------------- shall mean, for any Person,
any program for the transfer without recourse (other than customary limited
recourse) by such Person or any of its Subsidiaries to any buyer, purchaser or
lender of interests in accounts receivable, so long as (a) such program is
intended by the parties thereto to be treated (whether or not such treatment is
ultimately disallowed) as an "off balance sheet" transaction and (b) the
aggregate outstanding amount of receivables transferred by such Person and its
Subsidiaries pursuant to such program shall not exceed $250,000,000 at any time.
This Purchase Agreement shall constitute a Permitted Receivables Financing of
8
the Originator.
"Permitted Lockbox"
----------------- shall have the meaning ascribed thereto in
the Receivables Purchase Agreement.
"Permitted Lockbox Bank"
------------------------ shall have the meaning ascribed
thereto in the Receivables Purchase Agreement.
"Person"
------ shall mean an individual, corporation, partnership
(general or limited), trust, business trust, unincorporated association, joint
venture, joint-stock company, Governmental Authority or any other entity of
whatever nature.
"Plan"
---- means any employee benefit or other plan which is or
was at any time during the current year or immediately preceding five years
established or maintained by the Originator or any ERISA Affiliate and which is
covered by Title IV of ERISA, other than a Multiemployer Plan.
"Potential Termination Event"
--------------------------- shall mean an event or condition
which with the giving of notice, the passage of time or any combination of the
foregoing, would constitute a Termination Event.
"Principal Balance"
------------------ of a Receivable, as of the close of
business on the last day of a calendar month, means the original principal
amount owed by the Obligor and financed by the Originator, minus the sum of (i)
-----
that portion of all amounts paid by or on behalf of the related Obligor
allocable to principal, (ii) any payments made by the Originator and allocable
to principal pursuant to a deemed Collection under Section 2.7, and (iii) any
payment of the Repurchase Amount with respect to the Receivable allocable to
principal (but only where the application of such Repurchase Amount does not
result in the full repurchase of such Receivable by the Originator), in each
case, prior to such date.
"Proceeds"
-------- shall mean "proceeds" as defined in Section
9-306(1) of the Uniform Commercial Code as in effect in the State of New York
and the jurisdiction whose Law governs the perfection of the Buyer's ownership
interests therein.
"Purchase"
-------- means a purchase of Receivables, Related Security
with respect to such Receivables, and rights to Collections with respect thereto
by the Buyer from the Originator pursuant to Sections 2.1 and 2.2 hereof.
"Purchase Date"
--------------- means the Initial Purchase Date and
thereafter, each Business Day on which a Purchase is made.
"Purchase Price"
-------------- shall have the meaning specified in Section
2.2(c).
9
"Purchased Assets"
----------------- shall mean, at any time, the Originator's
undivided ownership interest in (i) each and every Receivable purchased
hereunder, (ii) all Related Security with respect to each such Receivable, (iii)
all Collections, including all cash collections and other cash proceeds, with
respect thereto, and (iv) all cash and non-cash Proceeds of the foregoing.
"Receivable"
---------- shall mean, all indebtedness owed to the
Originator by any Obligor, (without giving effect to any purchase hereunder by
the Buyer at any time) under a Contract, whether or not constituting an account,
a general intangible, chattel paper or an instrument, whether now existing or
hereafter arising and wherever located, arising in connection with
(a) the sale of goods or the rendering of services in the
ordinary course of business by the Originator
or
(b) the sale to IBM Credit Corporation or to another
similar institution providing credit to such Obligor
(provided such institution satisfies any of the
definitions of Group A Obligor, Group B Obligor,
Group C Obligor or Group D Obligor) of the original
indebtedness incurred by an Obligor to the Originator
in connection with such sale of goods or the
rendering of such services,
and satisfying the description set forth on Exhibit J hereto, and including all
moneys due and to become due under such Contract and other obligations of such
Obligor with respect thereto, but excluding any amount of sales tax, excise tax
or other similar tax or charge incurred in connection with the sale of the goods
or services which gave rise to such indebtedness. Notwithstanding the foregoing,
once a Receivable has been deemed collected pursuant to Section 2.7(b) hereof
and the Originator has complied with its obligations in respect of such deemed
Collection set forth in Section 2.7(c) hereof, it shall no longer constitute a
Receivable hereunder. Nothing in this Agreement shall be deemed to prohibit any
such simultaneous assignment or sale to IBM Credit Corporation or another
similar institution providing credit to such Obligor (provided such institution,
as an Obligor, satisfies any of the definitions of Group A Obligor, Group B
Obligor, Group C Obligor or Group D Obligor) provided that such assignment or
sale gives rise to a Receivable hereunder the Obligor of which is IBM Credit
Corporation or to such other similar institution.
"Receivables Purchase Agreement"
-------------------------------- shall mean that certain
Amended and Restated Receivables Purchase Agreement, dated as of the date
hereof, by and among Lexmark Receivables Corporation, as Seller, Lexmark
10
International, Inc., in its individual capacity and as Servicer, Delaware
Funding Corporation, a Delaware Corporation, as Buyer, and Xxxxxx Guaranty Trust
Company of New York, a banking corporation organized under the laws of the State
of New York, as Administrative Agent, as the same may be amended, modified or
supplemented and as in effect from time to time.
"Records"
------- shall mean correspondence, memoranda, computer
programs, tapes, discs, papers, books or other documents or transcribed
information of any type whether expressed in ordinary or machine-readable
language.
"Related Security"
---------------- shall mean with respect to any Receivable:
(a) all of the Originator's interest, if any, in the goods,
merchandise (including returned merchandise) or equipment, if any, the sale of
which by Originator gave rise to such Receivable;
(b) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements signed by an Obligor
describing any collateral securing such Receivable;
(c) all guarantees, insurance or other agreements or
arrangements of any kind from time to time supporting or securing payment of
such Receivable whether pursuant to the Contract related to such Receivable or
otherwise;
(d) all Records relating to, and all service contracts and any
other contracts associated with, such Receivable or the Contracts or the
Obligors relating thereto;
(e) all proceeds of the foregoing.
"Relevant UCC"
------------- shall mean the Uniform Commercial Code as in
effect from time to time in Kentucky or any other applicable jurisdictions.
"Repurchase Amount"
------------------- shall mean an amount equal to the
aggregate Principal Balance of the Receivables to be repurchased on the
repurchase date.
"Responsible Officer"
-------------------- shall mean, with respect to any Person,
the chief executive officer, chief financial officer, the treasurer, the
Treasury Financial Analyst, the Cash Manager, any vice president or any
assistant treasurer of such Person or controller of such Person.
"Sale/Leaseback Transaction"
--------------------------- shall mean any arrangement with
any other Person (the "buyer/lessor") providing for the leasing by the
11
seller/lessee of real or personal property which has been or is to be sold or
transferred by the seller/lessee to the buyer/lessor or to any other Person to
whom funds have been or are to be advanced by the buyer/lessor on the security
of such property or rental obligations of the seller/lessee.
"Servicer"
-------- shall mean, initially, the Originator, and, upon
execution thereof, the Servicer designated pursuant to the Receivables Purchase
Agreement or any successor Servicer designated pursuant to a Servicing
Agreement.
"Servicing Agreement"
-------------------- shall mean any agreement between the
Buyer and any Person which contains provisions concerning the servicing of the
Receivables substantially similar to the servicing provisions contained in the
Receivables Purchase Agreement, pursuant to which such Person performs servicing
functions for the Receivables that constitute Purchased Assets, and all
agreements, instruments and documents attached thereto or delivered in
connection therewith, as any of the same may from time to time be amended,
supplemented or otherwise modified.
"Subordinated Loan"
----------------- shall have the meaning specified in
Section 2.2(d) hereof.
"Subordinated Note"
----------------- shall have the meaning specified in
Section 2.2(d) hereof.
"Subsidiary"
---------- shall mean any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Originator.
"Termination Date"
---------------- shall have the meaning set forth in Section
6.1 hereof.
"UCC"
--- shall mean, with respect to any jurisdiction, the
Uniform Commercial Code, or any successor statute, or any comparable law, as the
same may from time to time be amended, supplemented or otherwise modified and in
effect in such jurisdiction.
SECTION 1.2. Interpretation and Construction .
--------------------------------- Unless the
context of this Agreement otherwise clearly requires, references to the plural
include the singular, the singular the plural and the part the whole. References
in this Agreement to "determination", "determine" and "determined" by the Buyer
shall be conclusive absent manifest error and include good faith estimates by
the Buyer (in the case of quantitative determinations), and the good faith
belief of the Buyer (in the case of qualitative determinations). The words
"hereof", "herein", "hereunder" and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise stated in this Agreement, in the computation of a period of
12
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding." The section and other headings contained in this Agreement are for
reference purposes only and shall not control or affect the construction of this
Agreement or the interpretation hereof in any respect. Section, subsection and
exhibit references are to this Agreement unless otherwise specified. As used in
this Agreement, the masculine, feminine or neuter gender shall each be deemed to
include the others whenever the context so indicates. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. Terms
not otherwise defined herein which are defined in the UCC as in effect in the
State of New York on the date hereof shall have the respective meanings ascribed
to such terms therein unless the context otherwise clearly requires.
ARTICLE II
SALES AND TRANSFERS; SETTLEMENTS
SECTION 2.1. General Terms .
-------------- On the terms and conditions
hereinafter set forth, on each Purchase Date from the date the conditions
precedent to the Initial Purchase in Section 4.1 are satisfied to the Expiration
Date under the Receivables Purchase Agreement, the Originator shall sell to the
Buyer, without recourse, except as specifically set forth herein, and the Buyer
shall purchase, all right, title and interest of the Originator in, to and under
all of the Receivables owned by the Originator on such date, along with Related
Security with respect to such Receivables and Collections with respect thereto.
SECTION 2.2. Purchase and Sale .
----------------- (a) The Originator hereby
irrevocably sells, sets over, assigns, transfers and conveys to the Buyer and
its successors and assigns, and the Buyer hereby accepts, purchases and
receives, without recourse, except as specifically set forth herein, all of the
Originator's right, title, and interest in and to the Purchased Assets, whether
such Purchased Assets are now owned or hereafter created or acquired by the
Originator, along with all monies, instruments, securities, documents and other
property from time to time on deposit in or credited to the Lockbox Accounts
relating to the Purchased Assets.
(b) The consideration to the Originator for the Initial
Purchase shall be the execution and delivery by the Buyer of the Receivables
Purchase Agreement on the date hereof and the making by the Buyer thereunder of
the "Initial Purchase" (as defined thereunder). The Initial Purchase hereunder
shall be made subject to the satisfaction of the conditions to purchase
specified in Section 4.2.
(c) The "Purchase Price" for the Purchased Assets which came
into existence on or prior to the Closing Date and which are conveyed to the
Buyer under this Agreement shall be payable on the Closing Date and shall be an
amount equal to 100% of the aggregate Outstanding Balance of the Receivables so
13
conveyed, adjusted to reflect such factors as the Originator and the Buyer
mutually agree will result in a Purchase Price determined to approximate the
fair market value of such Purchased Assets. Such computation of the initial
Purchase Price shall assume no reinvestment in new Purchased Assets. The
"Purchase Price" for the Purchased Assets to be conveyed to the Buyer under this
Agreement that come into existence after the Closing Date shall be payable on
the Purchase Date in an amount equal to 100% of the aggregate Outstanding
Balance of the Receivables so conveyed (the "New Purchased Assets"), adjusted to
reflect such factors as the Originator and the Buyer mutually agree will result
in a Purchase Price determined to approximate the fair market value of such New
Purchased Assets.
(d) The Purchase Price to be paid by the Buyer on the Closing
Date and on each subsequent Purchase Date shall be paid (i) in cash, (ii) with
the consent of the Originator and the Buyer, by means of capital contributed by
the Originator to the Buyer in the form of a contribution to the capital of the
Buyer of the Purchased Assets, and/or (iii) if consented to by the Originator,
in its sole discretion, by means of a loan by the Originator to the Buyer (each
a "Subordinated Loan" and collectively, the "Subordinated Loans") evidenced by
the subordinated note (the "Subordinated Note") in substantially the form
attached hereto as Exhibit G. The Originator shall be under no obligation to
make any Subordinated Loans to the Buyer. The Subordinated Loans shall be made
on a revolving basis from time to time during the term of this Agreement as the
Buyer may from time to time request and the Originator shall agree for the sole
purpose of purchasing Receivables from the Originator. Interest on and principal
of the Subordinated Note shall be payable in the amounts and at the times
specified in the Subordinated Note. The Originator shall maintain records of the
date and amounts of each Subordinated Loan and payments thereon on the payment
grid attached to the Subordinated Note.
(e) The sale of the Purchased Assets by the Originator
hereunder shall be made without recourse except as specifically provided herein.
SECTION 2.3. Transfers and Assignments .
--------------------------- (a) It is the
intention of the parties hereto that each Purchase made hereunder shall
constitute a sale and assignment, which sales and assignments are absolute,
irrevocable and without recourse except as specifically provided herein and
shall provide the Buyer with the full benefits of ownership of the Receivables
and the other related Purchased Assets. In the event that a Purchase is deemed
to constitute a pledge rather than a sale and assignment of the aforementioned
property, then (i) this Agreement also shall be deemed to be and hereby is a
security agreement within the meaning of the UCC and (ii) the Originator does
hereby grant to the Buyer a first priority perfected security interest in and to
and lien on all of the Originator's right, title and interest in, to and under
the Purchased Assets. The Originator and the Buyer shall, to the extent
14
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Receivables, such security interest would be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement. The possession by the Buyer or its transferee or
agent of notes and such other goods, letters of credit, advises of credit,
money, documents, instruments, chattel paper or certificated securities related
thereto shall be deemed to be "possession by the secured party" for purposes of
perfecting such security interest pursuant to the Relevant UCC (including,
without limitation, Section 9-305 thereof). Notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed to be notifications to, or
acknowledgments, receipts or confirmations from, bailees or agents (as
applicable) of, the Buyer or its transferee for the purpose of perfecting such
security interest under the Relevant UCC and other applicable laws. The sale and
conveyance hereunder of the Purchased Assets does not constitute an assumption
by the Buyer or its successors and assigns of any obligations of the Originator
to Obligors or to any other Person in connection with Receivables or under any
agreement or instrument relating to the Receivables.
(b) In connection with the sale and transfer under Section
2.2(a), the Originator agrees to record and file, at its own expense, financing
statements, with respect to the Purchased Assets now existing and hereafter
created or acquired, suitable to reflect the transfer of accounts, chattel paper
and general intangibles (each as defined in Article 9 of the Relevant UCC) and
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale, transfer and assignment of
the Purchased Assets to the Buyer, and to deliver a file-stamped copy of such
financing statements or other evidence of such filing satisfactory to the Buyer
on or prior to the applicable Purchase Date. Without limiting the foregoing, the
Originator shall, upon the request of the Buyer, in order to accurately reflect
this transaction, execute and file such additional financing or continuation
statements or amendments thereto or assignments thereof (as permitted pursuant
to Section 7.6 hereof) as may be reasonably requested by the Buyer.
(c) The Originator shall maintain its books and records so
that such records that refer to a Receivable shall indicate clearly that the
Originator's right, title and interest in such Receivable has been sold to the
Buyer and xxxx its master data processing records with a notation describing the
acquisition (or assignment) by, the Buyer of the Purchased Assets, as the Buyer
may reasonably request. Indication of the Buyer's interest in a Receivable shall
be deleted from or modified on the Originator's records when, and only when, the
Receivable shall have been paid in full or the Buyer's interest in such
Receivable shall have been repurchased or repaid by the Originator hereunder. In
15
addition, the Originator shall maintain its computer systems so that the
Originator's master computer records (including any back-up archives) that refer
to a Receivable shall indicate clearly that such Receivable has been sold to the
Buyer pursuant to this Agreement and that an interest in such Receivable has
been transferred and assigned by the Buyer to the Administrative Agent. The
Originator agrees to deliver to the Buyer upon request with respect to each
Purchase Date an updated list, which may be a computer file or microfiche list,
containing a true and complete schedule of all Receivables constituting
Purchased Assets, identified by account number and by Principal Balance as of
the origination date of each such Receivable. When and if delivered, such file
or list shall be marked as the "Receivables Schedule" and as Schedule 1 to this
Agreement, shall be delivered to the Buyer as confidential and proprietary, and
is hereby incorporated into and made a part of this Agreement.
SECTION 2.4. Protection of Ownership of the Buyer.
---------------------------------------- The
Originator agrees that from time to time, at its expense, it shall promptly
execute and deliver all additional instruments and documents and take all
additional action that the Buyer may reasonably request in order to perfect the
interests of the Buyer in and to, or to protect, the Purchased Assets or to
enable the Buyer to exercise or enforce any of its rights hereunder. To the
fullest extent permitted by applicable Law, the Buyer shall be permitted to sign
and file continuation statements and amendments thereto and assignments thereof
without the Originator's signature in such cases where the Originator is
obligated hereunder or under the Relevant UCC to sign such statements,
amendments or assignments if, after written notice to the Originator, the
Originator shall have failed to sign such continuation statements, amendments or
assignments within ten (10) Business Days after receipt of such notice from the
Buyer. Carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement.
SECTION 2.5. Mandatory Repurchase Under Certain Circumstances.
------------------------------------------------
The Originator agrees to repurchase from the Buyer or its assignee each
Purchased Asset if at any time the Buyer shall cease to have a perfected
ownership interest, or a first priority perfected security interest, in the
Receivables, free and clear of any Lien (except for (x) any adverse claim with
respect to a Receivable the Obligor of which is a Governmental Obligor, (y) the
Lien arising in connection with this Agreement, and (z) any Permitted Liens
which are in an aggregate dollar amount that is determined by the Administrative
Agent, in its sole discretion, to be de minimis), within five days of notice
-- -------
thereof by the Buyer. The repurchase price shall be paid by the Originator to
the Buyer on such fifth day in an amount equal to the Repurchase Amount.
SECTION 2.6. Transfers by Buyer .
------------------ The Originator acknowledges
and agrees that (a) the Buyer will, pursuant to the Receivables Purchase
16
Agreement, sell such of the Purchased Assets as constitute "Receivables" within
the meaning set forth in the Receivables Purchase Agreement and assign its
rights under this Agreement to the Administrative Agent (for the ratable benefit
of the Owners under the Receivables Purchase Agreement), (b) the representations
and warranties contained in this Agreement and the rights of the Buyer under
this Agreement are intended to benefit the "Buyer" and "Owners" under the
Receivables Purchase Agreement and (c) the Buyer shall have the right to appoint
a servicer of the Receivables purchased hereunder, and shall appoint a Servicer
under the Receivables Purchase Agreement. The Originator hereby consents to all
such sales and assignments and to the appointment of a Servicer under the
Receivables Purchase Agreement.
SECTION 2.7. Payment Procedures .
------------------
(a) If on any day the Outstanding Balance of a Receivable is
(w) reduced or canceled as a result of any defective or rejected goods or
services, any cash discount or any adjustment by the Originator, or (x) reduced
or canceled as a result of a set-off in respect of any claim by any Person
(whether such claim arises out of the same or a related transaction or an
unrelated transaction), or (y) reduced or canceled as a result of any
forgiveness of the obligation or of any adjustment by the Originator, or (z)
otherwise reduced or canceled as a result of any Dilution Factor with respect to
such Receivable, in each of the foregoing cases, for reasons other than the
financial condition of the Obligor, the Originator shall be deemed to have
received on such day a Collection of such Receivable in the amount of such
reduction or cancellation. If on any day any of the representations or
warranties in Section 3.2 hereof is no longer true or was not true when made
with respect to a Receivable, the Originator shall be deemed to have received on
such day a Collection of such Receivable in full.
(b) Any Collections deemed to be received by the Originator
pursuant to Section 2.7(a) hereof shall be paid by the Originator to the Buyer
on the next Business Day or on such other day as specified by the Buyer and the
Servicer shall hold or distribute all Collections deemed received pursuant to
Section 2.7(a) hereof to the same extent as if such Collections had actually
been received. So long as the Originator shall hold any Collections or deemed
Collections required to be paid to the Buyer, it shall hold such Collections in
trust for the Buyer.
(c) Following the date on which the Buyer shall be deemed to
have reconveyed to the Seller any interest it may have in the Receivables
(including the Purchased Assets), together with the Related Security and
Collections with respect thereto, the Originator shall pay to the Buyer any
remaining Collections set aside and held by the Originator pursuant to the first
sentence of this Section 2.7, and the Buyer shall execute and deliver to the
Originator, at Originator's expense, such documents or instruments as are
17
reasonably necessary to terminate the Buyer's interest in the Receivables,
together with the Related Security and Collections with respect thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. General Representations and Warranties of the
------------------------------------------------
Originator.
---------- The Originator, in addition to its other representations and
warranties contained herein or made pursuant hereto, represented and warranted
to the Buyer on and as of the Closing Date and the date of each Purchase prior
to the Effectiveness Date, and hereby represents and warrants to the Buyer as of
the Effectiveness Date and the date of each subsequent Purchase that:
(a) Organization and Qualification.
-------------------------------- The Originator is a
corporation duly organized, validly existing and in good standing under the Laws
of its jurisdiction of incorporation. The Originator is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which
the ownership of its properties or the nature of its activities (including
transactions giving rise to Receivables), or both, requires it to be so
qualified or, if not so qualified, the failure to so qualify would not have a
material adverse effect on its financial condition or results of operations.
(b) Authorization.
------------- The Originator has the corporate power and
authority to execute and deliver the Facility Documents, to make the sales
provided for herein and to perform its obligations hereunder and thereunder.
(c) Execution and Binding Effect.
---------------------------- Each of this Agreement and
the other Facility Documents has been duly and validly executed and delivered by
the Originator and (assuming the due and valid execution and delivery thereof by
the other party thereto), constitutes a legal, valid and binding obligation of
the Originator enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar Laws of general application relating to or affecting the
enforcement of creditors' rights or by general principles of equity, and will
vest absolutely and unconditionally in the Buyer a valid undivided ownership
interest in the Receivables purported to be assigned hereby or thereby, subject
to no Liens whatsoever (other than (x) the Lien arising in connection with this
Agreement and (y) any Permitted Liens). Upon the filing of the necessary
financing statements under the UCC as in effect in the jurisdiction whose Law
governs the perfection of the Buyer's ownership interests in the Receivables,
the Buyer's ownership interests in the Receivables will be perfected under
Article Nine of such UCC, prior to and enforceable against all creditors of and
18
purchasers from the Originator and all other Persons whatsoever (other than the
Buyer and its successors and assigns and Government Obligors).
(d) Authorizations and Filings.
--------------------------- No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Governmental
Authority is or will be necessary or, in the opinion of the Originator,
advisable in connection with the execution and delivery by the Originator of the
Facility Documents, the consummation by the Originator of the transactions
herein or therein contemplated or the performance by the Originator of or the
compliance by the Originator with the terms and conditions hereof or thereof, to
ensure the legality, validity or enforceability hereof or thereof, or to ensure
that the Buyer will acquire the ownership interest in and to the Receivables
which is perfected and prior to all other Liens (including competing ownership
interests but excluding any Permitted Liens), other than the filing of financing
statements under the UCC in the jurisdiction of the Originator's Chief Executive
Office in the Commonwealth of Kentucky and any filing that may be required under
the Receivables Purchase Agreement to implement any transfer to a Buyer, the
Administrative Agent or any Owner thereunder.
(e) Absence of Conflicts.
-------------------- Neither the execution and delivery
by the Originator of the Facility Documents, nor the consummation by the
Originator of the transactions herein or therein contemplated, nor the
performance by the Originator of or the compliance by the Originator with the
terms and conditions hereof or thereof, will (i) violate any Law or (ii)
conflict with or result in a breach of or a default under (A) the Articles of
Incorporation or By-laws of the Originator or (B) any agreement or instrument,
including, without limitation, any and all indentures, debentures, loans or
other agreements to which the Originator is a party or by which it or any of its
properties (now owned or hereafter acquired) may be subject or bound, which
would have a material adverse effect on the financial position or results of
operations of the Originator or result in rendering any Debt evidenced thereby
due and payable prior to its maturity or result in the creation or imposition of
any Lien pursuant to the terms of any such instrument or agreement upon any
property (now owned or hereafter acquired) of the Originator.
(f) Location of Chief Executive Office, etc.
--------------------------------------- As of the Closing
Date: (i) the Originator's Chief Executive Office is located at the address set
forth on Exhibit E hereto; (ii) each domestic Subsidiary of the Originator is
listed on Exhibit C hereto; (iii) the offices where the Originator keeps all of
its Records are listed on Exhibit C hereto; and (iv) the Originator has since
19
the date of its incorporation, operated only under the trade names identified in
Exhibit C hereto, and, since the date of its incorporation, has not changed its
name, merged or consolidated with any other corporation or been the subject of
any proceeding under Xxxxx 00, Xxxxxx Xxxxxx Code (Bankruptcy), except as
disclosed in Exhibit C hereto.
(g) No Termination Event.
---------------------- No event has occurred and is
continuing and no condition exists which constitutes a Termination Event or a
Potential Termination Event.
(h) Accurate and Complete Disclosure.
-------------------------------- No information referred
to in any of the Exhibits and furnished in writing in final form on or prior to
the date hereof by the Originator, nor any information furnished in writing
after the date hereof by the Originator, in each such case to the Buyer or any
purchaser of Receivables from the Buyer, pursuant to or in connection with this
Agreement or any transaction contemplated hereby is false or misleading in any
material respect as of the date as of which such information was furnished
(including by omission of material information necessary to make such
information not misleading).
(i) No Proceedings.
-------------- There are no proceedings or investigations
pending, or to the knowledge of the Originator, threatened, before any
Governmental Authority (A) asserting the invalidity of the Facility Documents,
(B) seeking to prevent the consummation of any of the transactions contemplated
by the Facility Documents, or (C) seeking any determination or ruling that might
materially and adversely affect (i) the performance by the Originator of its
obligations under the Facility Documents or (ii) the validity or enforceability
of the Facility Documents, all of the Contracts taken as a whole or any material
amount of the Receivables.
(j) Bulk Sales Act.
---------------- No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(k) Financial Condition.
------------------- (x) The consolidated balance sheet of
the Originator and its Consolidated Subsidiaries as at December 31, 1996 and the
related statements of income and cash flows of the Originator and its
Consolidated Subsidiaries for the fiscal year then ended, certified by Coopers &
Xxxxxxx, independent accountants, copies of which have been furnished to the
Buyer and to the "Buyer" (as defined in the Receivables Purchase Agreement) and
the Administrative Agent, fairly present the consolidated financial position of
the Originator and its Consolidated Subsidiaries as at such date and the
consolidated results of the operations of and changes in consolidated cash flows
of the Originator and its Consolidated Subsidiaries for the period ended on such
date, all in accordance with GAAP, and (y) since December 31, 1996, there has
been no material adverse change in any such financial condition or results of
operations or in the Originator's ability to perform its obligations under the
Facility Documents, except as set forth on Exhibit H.
20
(l) Litigation.
---------- No injunction, decree or other decision has
been issued or made by any Governmental Authority that prevents, and to the
knowledge of the Originator, no threat by any Person has been made to attempt to
obtain any such decision that would have a material adverse effect on, the
conduct by the Originator of a significant portion of the Originator's business
operations or any portion of its business operations affecting the Receivables,
and no litigation, investigation or proceeding of the type referred to in
Section 5.1(j) hereof exists except as set forth on Exhibit B.
(m) Margin Regulations.
------------------- The use of all funds acquired by the
Originator under this Agreement will not conflict with or contravene any of
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System, as the same may from time to time be amended, supplemented or otherwise
modified.
(n) ERISA.
----- No event or condition is occurring or exists with
respect to any Plan or Multiemployer Plan concerning which the Originator would
be under an obligation to furnish a report to the Buyer in accordance with
Section 5.1(p) hereof.
(o) Taxes.
----- The Originator and its Consolidated Subsidiaries
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Originator or any of its Consolidated Subsidiaries for taxable periods ending
after March 27, 1996 except for (i) taxes or assessments that are not yet
delinquent and (ii) taxes that are being contested by appropriate proceedings
conducted in good faith and with due diligence. The charges, accruals and
reserves on the books of the Originator and its Consolidated Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of the
Originator, adequate.
(p) Books and Records.
----------------- The Originator has indicated on its
books and records (including any computer files) that the Purchased Assets are
the property of the Buyer.
(q) Investment Company.
------------------- The Originator is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(r) Separate Corporate Existence.
----------------------------- Notwithstanding that Buyer
is a Subsidiary of Originator, the Originator is entering into the transactions
contemplated by this Agreement in reliance on the Buyer's identity as a separate
legal entity from the Originator and each of its Affiliates, and acknowledges
that the Buyer and the other parties to the Facility Documents are similarly
entering into the transactions contemplated by the other Facility Documents in
reliance on the Buyer's identity as a separate legal entity from the Originator
and each such other Affiliate.
21
SECTION 3.2. Representations and Warranties of the Originator
------------------------------------------------
With Respect to Each Sale of Receivables.
----------------------------------------- By selling the Receivables to the
Buyer either by Initial Purchase or subsequent Purchase, the Originator
represented and warranted to the Buyer as of the Closing Date, the Effectiveness
Date and the date of each such Purchase occurring prior to the Effectiveness
Date and represents and warrants as of the date of each such Purchase occurring
after the Effectiveness Date (in addition to its other representations and
warranties contained herein or made pursuant hereto) that:
(a) Assignment.
---------- This Agreement vests in the Buyer all the
right, title and interest of the Originator in and to the Purchased Assets, and
constitutes a valid sale of the Purchased Assets, enforceable against all
creditors of and purchasers from the Originator.
(b) No Liens.
--------- Each Receivable, together with the related
Contract and all purchase orders and other agreements related to such
Receivable, is owned by the Originator free and clear of any Lien (other than
any Permitted Liens), and when the Buyer makes a purchase of a Purchased Asset
it shall have acquired and shall continue to have maintained an ownership
interest in such Receivable and in the Related Security and the Collections with
respect thereto free and clear of any Lien (other than (x) the Lien arising in
connection with this Agreement and (y) any Permitted Liens). The Originator has
not and will not have sold, pledged, assigned, transferred or subjected to a
Lien on any of the Receivables, other than the assignment of the Purchased
Assets to the Buyer in accordance with the terms of this Agreement except for
(x) the Lien arising in connection with this Agreement, and (y) any Permitted
Lien.
(c) Filings.
------- On or prior to the date hereof and each Purchase
Date, all financing statements and other documents required to be recorded or
filed in order to perfect and protect the Purchased Assets against all creditors
of and purchasers from the Originator and all other Persons whatsoever other
than Government Obligors will have been duly filed in each filing office
necessary for such purpose and all filing fees and taxes, if any, payable in
connection with such filings will have been paid in full.
(d) Credit and Collection Policy.
----------------------------- The Originator has complied
in all material respects with the Credit and Collection Policy in regard to each
Receivable and related Contract.
(e) Nature of Receivables.
--------------------- Each Receivable is, or will be, an
eligible asset within the meaning of Rule 3a-7 promulgated under the Investment
Company Act of 1940, as amended from time to time, and, assuming that the Buyer
has no business with the Originator other than the purchase of Receivables from
the Originator from time to time as contemplated by this Agreement, a purchase
by the Buyer of each Receivable with the proceeds of commercial paper issued by
the "Buyer" (as defined in the Receivables Purchase Agreement) would constitute
22
a "current transaction" of the Buyer within the meaning of Section 3(a)(3) of
the Securities Act of 1933, as amended from time to time.
(f) No Fraudulent Conveyance.
------------------------ The transactions contemplated by
this Agreement and by each of the Facility Documents are being consummated by
the Originator in furtherance of the Originator's ordinary business, with no
contemplation of insolvency and with no intent to hinder, delay or defraud any
of its present or future creditors. By its receipt of the Purchase Price
hereunder and its ownership of the capital stock of the Buyer, the Originator
shall have received reasonably equivalent value for the Purchased Assets sold or
otherwise conveyed to the Buyer under this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing.
----------------------- On or prior to the
Initial Purchase Date, the Originator shall deliver to the Buyer the following
documents and instruments, all of which shall be in form and substance
acceptable to the Buyer:
(a) A copy of the resolutions of the Board of Directors of the
Originator certified as of the Closing Date by its secretary authorizing the
execution, delivery and performance of this Agreement and the other documents to
be delivered by the Originator hereunder and approving the transactions
contemplated hereby and thereby;
(b) The Articles of Incorporation of the Originator certified
as of a date reasonably near the Closing Date by the Secretary of State or other
similar official of the Originator's jurisdiction or incorporation;
(c) A good standing certificate for the Originator issued by
the Secretary of State or other similar official of the Originator's
jurisdiction of incorporation, certificates of qualification as a foreign
corporation issued by the Secretaries of State or other similar officials of
each jurisdiction where such qualification is material to the transactions
contemplated by this Agreement and certificates of the appropriate state
official in each jurisdiction specified by the Buyer as to the absence of any
tax Liens against the Originator under the Laws of such jurisdiction, each such
certificate to be dated a date reasonably near the Closing Date;
(d) A certificate of the secretary of the Originator dated the
Closing Date and certifying (i) the names and signatures of the officers
authorized on its behalf to execute, and the officers and other employees
authorized to perform, this Agreement and any other documents to be delivered by
the Originator hereunder (on which certificate the Buyer may conclusively rely
23
until such time as the Buyer shall receive from the Originator a revised
certificate meeting the requirements of this clause (d)(i)) and (ii) a copy of
the Originator's By-laws;
(e) (i) Acknowledgment copies of proper financing statements
(Form UCC-l) dated a date reasonably near the Closing Date naming the Originator
as the debtor of Receivables and Buyer, as the secured party or other similar
instruments or documents as may be necessary or, in the opinion of the Buyer,
desirable under the UCC of all appropriate jurisdictions to evidence or perfect
the Buyer's ownership interests in all Receivables and (ii) acknowledgment
copies of proper financing statements (Form UCC-l) dated a date reasonably near
the Closing Date naming the Originator as the debtor of Receivables and Buyer,
as the secured party or other similar instruments or documents as may be
necessary or, in the opinion of the Buyer, desirable under the UCC of all
appropriate jurisdictions to evidence or perfect the Buyer's security interest
in the Receivables;
(f) Acknowledgment copies of proper financing statements (Form
UCC-3), if any, necessary under the laws of all appropriate jurisdictions to
release all security interests and other rights of any Person in Receivables
previously granted by the Originator;
(g) Certified copies of requests for information or copies
(Form UCC-11) (or a similar search report certified by parties acceptable to the
Buyer) dated a date reasonably near the Closing Date listing all effective
financing statements which name the Originator (under its present name and any
previous name) as debtor and which are filed in jurisdictions in which the
filings were made pursuant to item (f) above, together with copies of such
financing statements;
(h) An officer's certificate dated the Closing Date in the
form of Exhibit I hereto executed by a Responsible Officer;
(i) A form of Contract or Contracts;
(j) Executed copies of the Subordinated Note and if requested
by the Administrative Agent on or after the Closing Date, the Officer's
Certificate attached hereto as Exhibit K;
(k) An executed copy of the Expense and Tax-Sharing Agreement;
(l) No later than 10 Business Days after the Closing Date, a
list of the Originator's customers in connection with Receivables, such
customers identified by name, address and telephone number;
(m) Such other documents as the Buyer shall reasonably
request; and
24
(n) A duly executed waiver from IBM Credit Corporation waiving
all provisions in the contract between IBM Credit Corporation and the Originator
concerning restrictions on the transfer, sale or assignment of the rights and
duties of the Originator under such contract.
SECTION 4.2. Conditions to Purchases.
----------------------- The Buyer's obligation
to make a Purchase (other than the Initial Purchase) on any Purchase Date shall
be subject to satisfaction of the following applicable conditions precedent:
(a) the truth and correctness of the representations and
warranties in Article III hereof as of the date of such Purchase as though made
on and as of such date;
(b) compliance with the covenants and agreements in Articles
II and V hereof;
(c) the requirement that no Termination Event or Potential
Termination Event shall exist or occur as a result of such Purchase;
(d) the satisfactory completion of any due diligence conducted
by the Buyer with respect to the Receivables and the related Obligors and
Contracts which are the subject of such Purchase; and
(e) the receipt by the Buyer of any approvals, opinions or
other documents as the Buyer shall have reasonably requested.
SECTION 4.3. Effect of Payment of Purchase Price .
------------------------------------ Upon the
payment of the Purchase Price for any Purchase (whether through a capital
contribution or a Subordinated Loan or otherwise), title to the Receivables and
to the other related Purchased Assets subject to such Purchase shall vest in the
Buyer, whether or not the conditions precedent to such Purchase were in fact
satisfied; provided, however, that if one or more conditions precedent to such
-------- -------
Purchase was in fact not satisfied, the Buyer shall not be deemed to have waived
any claim it may have under this Agreement for the failure by the Originator in
fact to satisfy any such condition precedent.
SECTION 4.4. Condition to Effectiveness.
--------------------------- On or prior to the
Effectiveness Date, the Originator shall deliver to the Buyer the following
documents and instruments, all of which shall be in form and substance
acceptable to the Buyer:
(a) An Officer's certificate dated the Effectiveness Date, to
the affect that (i) the representations and warranties of the Originator in
Article III hereof are true and correct as of the Effectiveness Date, and (ii)
the Originator is in compliance with the covenants and agreements contained in
Articles II and V hereof; and
25
(b) An opinion of counsel to the Originator dated the
Effectiveness Date, to the effect that this Amended and Restated Purchase
Agreement has been duly authorized, executed and delivered and is an enforceable
obligation of the Originator, subject to standard bankruptcy exceptions.
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of the Originator .
------------------------------------------ In
addition to its other covenants contained herein or made pursuant hereto, the
Originator covenants to the Buyer as follows:
(a) Notice of Termination Event.
--------------------------- Promptly upon becoming aware
of any Termination Event or Potential Termination Event the Originator shall
give the Buyer and the Administrative Agent notice thereof (a "Notice of
----------
Termination Event"), together with a written statement of a Responsible Officer
-----------------
setting forth the details thereof and any action with respect thereto taken or
contemplated to be taken by the Originator.
(b) Notice of Material Adverse Effect.
--------------------------------- Promptly upon becoming
aware thereof, the Originator shall give the Buyer notice of any material
adverse effect on the business, operations or financial condition of the
Originator which reasonably could affect adversely the collectibility of a
material part of the Receivables or the ability to service such Receivables. In
order to verify compliance with this Section 5.1(b) and otherwise verify
compliance with this Agreement, the Originator shall, unless the "Administrative
Agent" under the Receivables Purchase Agreement shall otherwise consent in
writing, furnish the following to the Buyer and the Administrative Agent:
(i) as soon as practicable and in any event within 60 days
following the close of each fiscal quarter, excluding the last fiscal
quarter, of each fiscal year during the term of this Agreement, an
unaudited consolidated balance sheet of the Originator as at the end of
such quarter and unaudited consolidated statements of income and cash
flows of the Originator for such quarter and for the fiscal year
through such quarter, setting forth in comparative form the
corresponding figures for the corresponding quarter of the preceding
fiscal year, all in reasonable detail and certified by the chief
financial officer or chief accounting officer of the Originator,
subject to adjustments of the type which would occur as a result of a
year-end audit, as having been prepared in accordance with GAAP;
(ii) as soon as practicable and in any event within 105 days
after the close of each fiscal year during the term of this Agreement,
a consolidated balance sheet of the Originator as at the close of such
fiscal year and consolidated statements of income and cash flows of the
26
Originator for such fiscal year, setting forth in comparative form the
corresponding figures for the preceding fiscal year, all in reasonable
detail and certified by Coopers & Xxxxxxx or other independent
certified public accountants of nationally recognized standing, whose
certificate or opinion accompanying such financial statements shall not
contain any material qualification not satisfactory to the
Administrative Agent; and
(iii) together with the financial statements required in clauses
(i)and (ii) above, a certificate of the chief financial officer or
chief accounting officer of the Originator in the form of Exhibit D
hereto stating that no Termination Event or Potential Termination Event
exists, or if any Termination Event or Potential Termination Event
exists, stating the nature and status thereof.
(c) Preservation of Corporate Existence.
----------------------------------- The Originator shall
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of the Buyer
hereunder or (ii) the ability of the Originator or the Servicer to perform their
respective obligations under the Facility Documents or under the Servicing
Agreement.
(d) Compliance with Laws.
-------------------- The Originator shall comply in all
material respects with all Laws applicable to the Originator, its business and
properties, and all Receivables related to the Purchased Assets, other than Laws
which would not affect the collectibility of the Receivables and the validity or
applicability of which the Originator is contesting in good faith.
(e) Enforceability of Obligations.
------------------------------- The Originator shall
assist the Buyer in all such ways as are reasonable and within its power to
bring about the repayment of each Receivable in accordance with the terms of the
related Contract.
(f) Books and Records.
----------------- The Originator shall, to the extent
practicable, maintain and implement administrative and operating procedures
(including, without limitation, the ability to recreate Records evidencing the
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, Records and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, Records adequate to permit the identification of all Related
Security and Collections and adjustments to each existing Receivable).
27
(g) Fulfillment of Obligations.
--------------------------- The Originator will duly
observe and perform, or cause to be observed or performed, all material
obligations and undertakings on its part to be observed and performed under or
in connection with the Receivables, including its obligations as initial
Servicer, duly observe and perform all material provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Receivables, will do nothing to impair the rights, title and interest of the
Buyer in and to the Purchased Assets (except pursuant to the Credit and
Collection Policy), and shall pay when due (or contest in good faith) any taxes,
including without limitation any sales tax, excise tax or other similar tax or
charge, payable in connection with the Receivables and their creation and
satisfaction.
(h) Customer List.
------------- The Originator shall at all times maintain
(or cause the Servicer to maintain) current information (which may be stored on
magnetic tapes or disks) listing all Obligors under Contracts related to
Receivables, including the name, address, telephone number and account number of
each such Obligor. The Originator shall deliver or cause to be delivered a copy
of such list to the Buyer as soon as practicable following the Buyer's request.
(i) Copies of Reports, Filings, Opinions, etc.
------------------------------------------ If any of the
securities of the Originator are registered under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, the Originator
shall furnish to the Buyer, as soon as practicable after the filing thereof,
copies of all proxy statements, financial statements, reports and other
communications which the Originator files with the Securities and Exchange
Commission.
(j) Litigation.
---------- As soon as possible, and in any event within
15 days of a Responsible Officer's knowledge thereof, the Originator shall give
the Buyer notice of the commencement of, or of a material threat of the
commencement of, an action, suit or proceeding against the Originator before any
Governmental Authority in which there is a reasonable possibility of a decision
which in the reasonable judgment of the Originator, could reasonably be expected
to have a material adverse effect on the financial condition or results of
operations of the Originator or impair the ability of the Originator or the
Servicer to perform its obligations under this Agreement.
(k) Notice of Relocation.
-------------------- The Originator shall give the Buyer
45 days' prior written notice of any relocation of its Chief Executive Office
if, as a result of such relocation, the applicable provisions of the UCC of any
applicable jurisdiction or other applicable Laws would require the filing of any
amendment of any previously filed financing statement or continuation statement
or of any new financing statement. The Originator will at all times maintain its
Chief Executive Office within a jurisdiction in the United States in which
Article Nine of the UCC (1972 or later revision) is in effect as of the Closing
28
Date or the date of any such relocation.
(l) Further Information.
-------------------- The Originator shall furnish or
cause to be furnished to the Buyer such other information with respect to the
financial position or business of the Originator or with respect to the Credit
and Collection Policy, the Receivables, the Contracts, the Related Security or
the Obligors, all as promptly as practicable and in such form and detail as the
Buyer may reasonably request.
(m) Treatment of Purchase.
---------------------- For accounting purposes, the
Originator shall treat each Purchase as a sale of the Purchased Assets sold on
the related Purchase Date. The Originator shall also maintain its records and
books of account in a manner which clearly reflects each such sale of the
Purchased Assets to the Buyer and the Purchase Price paid therefor.
(n) Fees, Taxes and Expenses.
------------------------- The Originator shall pay all
filing fees, stamp taxes, other taxes (other than taxes imposed directly on the
overall net income of the Buyer) and expenses, including the fees and expenses
set forth in Section 7.1 hereof, if any, which may be incurred on account of or
arise out of this Agreement and the documents and transactions entered into
pursuant to this Agreement.
(o) Administrative and Operating Procedures.
--------------------------------------- The Originator
shall maintain and implement administrative and operating procedures adequate to
permit the identification of the Receivables and all collections and adjustments
attributable thereto and shall comply in all material respects with the Credit
and Collection Policy in regard to each Receivable and related Contract.
(p) ERISA Events.
------------
(i) Promptly upon becoming aware of the occurrence of any
Event of Termination which together with all other Events of
Termination occurring within the prior 12 months involve a payment of
money by or a potential aggregate liability of the Originator or any
ERISA Affiliate or any combination of such entities in excess of
$10,000,000, the Originator shall give the Buyer a written notice
specifying the nature thereof, what action the Originator or any ERISA
Affiliate has taken and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto.
(ii) Promptly upon receipt thereof, the Originator shall
furnish to the Buyer copies of (i) all notices received by the
Originator or any ERISA Affiliate of the PBGC's intent to terminate any
Plan or to have a trustee appointed to administer any Plan; (ii) all
notices received by the Originator or any ERISA Affiliate from the
sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA
29
involving a withdrawal liability in excess of $10,000,000; and (iii)
all funding waiver requests filed by the Originator or any ERISA
Affiliate with the Internal Revenue Service with respect to any Plan,
the accrued benefits of which exceed the present value of the plan
assets as of the date the waiver request is filed by more than
$10,000,000, and all communications received by the Originator or any
ERISA Affiliate from the Internal Revenue Service with respect to any
such funding waiver request.
(q) Collections.
----------- The Originator shall instruct all Obligors
to cause all Collections to be mailed to a Permitted Lockbox or electronically
transferred to a Lockbox Account.
(r) Insurance.
--------- The Originator shall, and shall cause each of
its Consolidated Subsidiaries to, keep insured by financially sound and
reputable insurers all property of a character usually insured by corporations
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
corporations and carry such other insurance as is usually carried by such
corporations, provided that nothing in the clause(s) shall be read to require
that the Originator or any of its Consolidated Subsidiaries maintain insurance
relating to credit loss on its receivables (including the Receivables sold
hereunder).
(s) No Other Business.
------------------ The Originator shall engage in no
business other than the business contemplated under its certificate of
incorporation in effect as of the Closing Date.
(t) Separate Identity.
----------------- The Originator shall take all actions
required to maintain the Buyer's status as a separate legal entity, including,
without limitation, (i) not holding the Buyer out to third parties, including in
any written financial statements, as other than an entity with assets and
liabilities distinct from the Originator and the Originator's Affiliates; (ii)
not holding itself out to be responsible for the debts of the Buyer or, other
than by reason of owning capital stock of the Buyer, for any decisions or
actions relating to the Buyer; (iii) prepare separate financial statements for
the Buyer (which shall disclose the effect of the transaction between the
Originator and the Buyer hereunder in accordance with GAAP); (iv) cause any
financial statements consolidated with those of the Buyer to contain language to
the effect that the Buyer is a separate legal entity with its own separate
creditors which, will be entitled to be satisfied out of the Buyer's assets
prior to any value in the Buyer becoming available to the Buyer's equity
holders; (v) taking such other actions as are necessary on its part to ensure
that all corporate procedures required by its and the Buyer's respective
certificates of incorporation and by-laws are duly and validly taken; (vi)
keeping correct and complete records and books of account and corporate minutes;
and (vii) not acting in any other manner that could foreseeably mislead others
30
with respect to the Buyer's separate identity.
(u) Subordinated Note.
----------------- The Originator shall not transfer the
Subordinated Note to any Person other than the Security Agent pursuant to the
Amended and Restated Intercreditor Agreement.
SECTION 5.2. Negative Covenants of the Originator .
------------------------------------ During the
term of this Agreement, unless the Buyer shall otherwise consent in writing:
(a) Statement for and Treatment of Sales.
-------------------------------------- The Originator
shall not prepare any financial statements for financial accounting or reporting
purposes which shall account for the transactions contemplated herein in any
manner other than as a sale of the Purchased Assets to the Buyer.
(b) No Rescissions or Modifications.
------------------------------- The Originator shall not
rescind or cancel any Receivable or related Contract or modify any terms or
provisions thereof or grant any Dilution Factors to an Obligor, except in
accordance with the Credit and Collection Policy or otherwise with the prior
written consent of the Buyer.
(c) No Liens.
--------- The Originator shall not cause any of the
Receivables or related Contracts, or any inventory or goods the sale of which
may give rise to a Receivable, or any Permitted Lockbox or Lockbox Account or
any right to receive any payments received therein or deposited thereto, to be
sold, pledged, assigned or transferred or to be subject to a Lien, other than
the sale and assignment of the Purchased Assets to the Buyer, the Lien created
in connection with the transactions contemplated by this Agreement and any
Permitted Lien.
(d) Consolidations, Mergers and Sales of Assets.
------------------------------------------------- The
Originator shall not (i) consolidate or merge with or into any other Person, or
(ii) sell, lease or otherwise transfer all or substantially all of its assets to
any other Person; provided that the Originator may merge with another Person if
(A) the Originator is the corporation surviving such merger, and (B) immediately
after and giving effect to such merger, no Termination Event or Potential
Termination Event shall have occurred and be continuing.
(e) No Changes.
---------- The Originator shall not make any change in
the character of its business or in the Credit and Collection Policy, which
change would, in either case, impair the collectibility of any Receivable, or
make any material change in the Credit and Collection Policy without prior
written notification to, and prior written consent of, the Buyer, or change its
name, identity or corporate structure in any manner which would make any
financing statement or continuation statement filed in connection with this
Agreement or the transactions contemplated hereby seriously misleading within
31
the meaning of Section 9-402(7) of the UCC of any applicable jurisdiction or
other applicable Laws unless it shall have given the Buyer at least 30 days'
prior written notice thereof and unless prior thereto it shall have caused such
financing statement or continuation statement to be amended or a new financing
statement to be filed such that such financing statement or continuation
statement would not be seriously misleading.
(f) Change in Payments or Deposits of Payments.
------------------------------------------------ The
Originator shall not add or terminate any Person as a Permitted Lockbox Bank
from those Persons listed in the Receivables Purchase Agreement, make or permit
any change in the location of any Permitted Lockbox or the location or account
number of any Lockbox Account, or make any change in the instructions to its
Obligors regarding payments to be made to the Originator or payments to be made
to any Permitted Lockbox, unless the Buyer shall have been given at least 10
Business Days of prior written notice of such change.
(g) ERISA Matters.
------------- The Originator shall not permit any event
or condition which is described in any of clauses (i) through (iv), clause (vi)
or clause (viii) of the definition of "Event of Termination" to occur or exist
with respect to any Plan or Multiemployer Plan if such event or condition,
together with all other events or conditions described in the definition of
Event of Termination occurring within the prior 12 months, involve the payment
of money by or an incurrence of liability of the Originator or any ERISA
Affiliate in an amount in excess of $10,000,000.
ARTICLE VI
TERMINATION EVENTS
SECTION 6.1. Term .
---- This Agreement shall commence as of the
date of execution and delivery hereof and shall continue in full force and
effect until the earlier of (a) the termination of the Receivables Purchase
Agreement unless extended by the Seller in its sole discretion and (b) upon the
occurrence of any of the following events: the Buyer or the Originator shall (i)
become insolvent, (ii) experience an Event of Bankruptcy, or (iii) become unable
for any reason to convey or reconvey Receivables in accordance with the
provisions of this Agreement (any such date set forth in clause (a) or (b)
hereof being a "Termination Date"); provided, however, that (i) the termination
---------------- -------- -------
of this Agreement pursuant to this Section 6.1 shall not discharge any Person
from any obligations incurred prior to such termination, including, without
limitation, any obligations to repurchase Receivables sold prior to such
termination pursuant to Section 2.5 or 2.7 hereof and (ii) the indemnification
and payment provisions set forth in Article VII hereof and the provisions and
agreement set forth in Section 7.20 hereof shall be continuing and shall survive
termination of this Agreement. Neither the Originator nor the Buyer will extend
32
the term of this Agreement with an intent to mitigate losses on the Receivables
previously sold by the Originator to the Buyer hereunder.
SECTION 6.2. Effect of Termination .
----------------------- No termination or
rejection or failure to assume the executory obligations of this Agreement in
the Event of Bankruptcy of the Originator or the Buyer shall be deemed to impair
or affect the obligations pertaining to any executed sale or executed
obligations, including, without limitation, pretermination breaches of
representations and warranties by the Originator or the Buyer.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Expenses .
-------- The Originator agrees, upon receipt of
a written invoice, to pay or cause to be paid, and to save the Buyer and each of
its assignees of Purchased Assets harmless against liability for the payment of,
all reasonable out-of-pocket expenses (including, without limitation,
attorneys', accountant's and other third parties' fees and expenses (including
the allocated costs of internal counsel), any filing fees and expenses incurred
by officers or employees of the Buyer but excluding salaries and similar
overhead costs of the Buyer which are incurred notwithstanding the execution and
performance of this Agreement) incurred by or on behalf of the Buyer (i) in
connection with the negotiation, execution, delivery and preparation of the
Facility Documents and the transactions contemplated by or undertaken pursuant
to or in connection herewith or therewith (including, without limitation, the
perfection or protection of the Purchased Assets and (ii) from time to time (a)
relating to any requested amendments, waivers or consents under the Facility
Documents, (b) arising in connection with the Buyer's enforcement or
preservation of its rights (including, without limitation, the perfection and
protection of the Purchased Assets) under the Facility Documents, or (c) arising
in connection with any audit, dispute, disagreement, litigation or preparation
for litigation involving the Facility Documents.
SECTION 7.2. Indemnity for Taxes, Reserves and Expenses .
------------------------------------------
(a) If after the date hereof, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation of any
existing or future Law or bank regulatory guideline by any Governmental
Authority charged with the administration, interpretation or application
thereof, or the compliance with any directive of any Governmental Authority (in
the case of any bank regulatory guideline, whether or not having the force of
Law):
33
(i) shall subject any Buyer and any of its successors and
assigns and any permitted assigns (collectively, the "Indemnified
Parties") to any cost, liability, tax, duty or other charge with
respect to the Facility Documents, the Purchased Assets, the
Receivables or payments of amounts due thereunder, or shall change the
basis of taxation of payments to any Indemnified Party of amounts
payable in respect of the Facility Documents, the Purchased Assets, the
Receivables or payments of amounts due thereunder or its obligation to
advance funds in respect of the Facility Documents, the Purchased
Assets or the Receivables (except for changes in the rate of general
corporate, franchise, net income or other income tax imposed on such
Indemnified Party by the jurisdiction in which such Indemnified Party's
principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System) against assets of, deposits with or for the account
of, or credit extended by, any Indemnified Party or shall impose
on any Indemnified Party or on the United States market for
certificates of deposit or the London interbank market any other
condition affecting the Facility Documents, the Purchased Assets,
the Receivables or payments of amounts due thereunder or its
obligation to advance funds in respect of the Facility Documents,
the Purchased Assets or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to the Facility
Documents, the Purchased Assets, the Receivables or payments of amounts
due thereunder or its obligation to advance funds in respect of the
Facility Documents, the Purchased Assets or the Receivables;
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to the Facility Documents, the Purchased Assets,
the Receivables, the obligations thereunder, or the funding of any purchases
thereunder, by an amount deemed by such Indemnified Party to be material, then,
within 10 days after demand by the Buyer or other Indemnified Party, the
Originator shall pay or cause to be paid to the Buyer or such other Indemnified
Party such additional amount or amounts as will compensate such Indemnified
Party for such increased cost.
(b) If any Indemnified Party shall have determined that,
after the date hereof, the adoption of any applicable Law or bank regulatory
guideline regarding capital adequacy, or any change therein, or any change in
the interpretation thereof by any Governmental Authority, or any directive
34
regarding capital adequacy (in the case of any bank regulatory guideline,
whether or not having the force of law) of any such Governmental Authority, has
or would have the effect of reducing the rate of return on capital of such
Indemnified Party (or its parent) as a consequence of such Indemnified Party's
obligations hereunder or with respect hereto to a level below that which such
Indemnified Party (or its parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Indemnified Party to be
material, then from time to time, within 10 days after demand by any Indemnified
Party the Originator shall pay to such Indemnified Party such additional amount
or amounts as will compensate such Indemnified Party (or its parent) for such
reduction.
(c) The Buyer will promptly notify the Originator of any
event of which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Section 7.2. A
notice by the Buyer on behalf of an Indemnified Party claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Buyer may use any reasonable averaging and
attributing methods.
SECTION 7.3. Indemnity .
---------
(a) The Originator agrees to indemnify, defend and save
harmless the Buyer and each of its directors, officers, shareholders, employees,
agents, successors and assigns (including any assignees of Purchased Assets)
other than for the indemnitee's own gross negligence or willful misconduct,
forthwith on demand, from and against any and all losses, claims, damages,
liabilities, costs and expenses (including, without limitation, all reasonable
attorneys' fees and expenses (including the allocated costs of internal
counsel), expenses incurred by their respective credit recovery groups (or any
successors thereto) and expenses of settlement, litigation or preparation
therefor) which the Buyer may incur or which may be asserted against the Buyer
by any Person (including, without limitation, any Obligor or any other Person
whether on its own behalf or derivatively on behalf of the Originator) arising
from or incurred in connection with (i) any breach of a representation, warranty
or covenant by the Originator made hereunder or in connection herewith or the
transactions contemplated hereby or thereby or any statements made by any
Responsible Officer of the Originator in connection herewith or the transactions
contemplated hereby which shall have been incorrect in any material respect when
made, (ii) any action taken or, if the Originator is otherwise obligated to take
action, failed to be taken, by the Originator with respect to the Purchased
Assets or any of its obligations hereunder or under the other Facility Documents
(whether in its capacity as Originator or Servicer), including, without
limitation, the Originator's failure to comply with an applicable law or
35
regulation, (iii) any failure to vest and maintain vested in the Buyer an
undivided ownership interest in the Receivables included in the Purchased
Assets, free and clear of any Lien asserted against the Originator or its assets
(other than (x) the Lien arising in connection with this Agreement and (y) any
Permitted Lien) or other adverse claim, whether existing at the time of Purchase
of such Receivables or at any time thereafter, (iv) any failure to pay when due
any taxes, including without limitation any sales tax, excise tax or other
similar tax or charge payable in connection with the Receivables and their
creation or satisfaction, (v) any products liability claim or claim of
infringement of proprietary rights, in any such case, arising out of or which
relates to the Purchased Assets or the related Contracts, (vi) any dispute,
suit, action, claim, proceeding or governmental investigation, pending or
threatened, whether based on statute, regulation or order, on tort, on contract
or otherwise, before any Governmental Authority which arises out of or relates
to this Agreement, the Purchased Assets in the Receivables or related Contracts,
or the use of the proceeds of the sale of the Purchased Assets in the
Receivables pursuant hereto, or (vii) the existence of any provision in any
Contract that may (x) require the related Obligor to consent to the transfer,
sale or assignment of the rights of the Originator under such Contracts other
than the right of the Originator to sell, distribute or otherwise provide goods
or services to such Obligor, or (y) restrict the ability of the Buyer to
exercise its rights under this Agreement, including without limitation, its
right to review such Contract; provided that nothing in this Section 7.3 shall
be deemed to provide indemnity to the Buyer or any of its directors, officers,
shareholders, employees, agents, successors or assigns for credit losses on the
Receivables.
(b) Promptly upon receipt by any indemnified party under this
Section 7.3 of notice of the commencement of any suit, action, claim, proceeding
or governmental investigation against such indemnified party, such indemnified
party shall, if a claim in respect thereof is to be made against the Originator
hereunder, notify the Originator in writing of the commencement thereof. The
Originator may participate in and assume the defense of any such suit, action,
claim, proceeding or investigation at its expense, and no settlement thereof
shall be made without the approval of the Originator and the indemnified party.
The approval of the Originator will not be unreasonably withheld or delayed.
After notice from the Originator to the indemnified party of its intention to
assume the defense thereof with counsel reasonably satisfactory to the Buyer,
and so long as the Originator so assumes the defense thereof in a manner
reasonably satisfactory to the Buyer, the Originator shall not be liable for any
legal expenses of counsel unless there shall be a conflict between the interests
of the Originator and the indemnified party.
36
SECTION 7.4. Holidays .
-------- Except as may be provided in this
Agreement to the contrary, if any payment due hereunder shall be due on a day
which is not a Business Day, such payment shall instead be due the next
succeeding Business Day.
SECTION 7.5. Records .
------- All amounts calculated or due hereunder
shall be determined from the records of the Buyer, which determinations shall be
conclusive absent manifest error.
SECTION 7.6. Amendments and Waivers .
------------------------ No amendment or
modification of, supplement to, or waiver of, the provisions of, or consent to a
departure from the due performance of the obligations of the Originator under,
this Agreement may be made without the prior written consent of the
"Administrative Agent" under the Receivables Purchase Agreement. Any such
agreement, waiver or consent must be in writing and shall be effective only to
the extent specifically set forth in such writing. Any waiver of any provision
hereof, and any consent to a departure by the Originator from any of the terms
of this Agreement, shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.7. Term of Agreement .
------------------- This Agreement shall
terminate following the Expiration Date upon the final termination of the
Receivables Purchase Agreement; provided, however, that (i) the rights and
-------- -------
remedies of the Buyer with respect to any representation and warranty made or
deemed to be made by the Originator pursuant to this Agreement, (ii) the
indemnification and payment provisions set forth in Sections 7.1, 7.2 and 7.3
hereof and (iii) the agreement set forth in Section 7.20 hereof shall be
continuing and shall survive any termination of this Agreement.
SECTION 7.8. No Implied Waiver; Cumulative Remedies .
------------------------------------------ No
course of dealing and no delay or failure of the Buyer in exercising any right,
power or privilege under the Facility Documents shall affect any other or future
exercise thereof or the exercise of any other right, power or privilege; nor
shall any single or partial exercise of any such right, power or privilege or
any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies of the Buyer under the Facility Documents are
cumulative and not exclusive of any rights or remedies which the Buyer would
otherwise have.
SECTION 7.9. No Discharge .
------------ The obligations of the Originator
under the Facility Documents shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
discharged or in any way affected by (a) any exercise or nonexercise of any
right, remedy, power or privilege under or in respect of the Facility Documents
or applicable Law, including, without limitation, any failure to set-off or
release in whole or in part by the Buyer of any balance of any deposit account
or credit on its books in favor of the Originator or any waiver, consent,
37
extension, indulgence or other action or inaction in respect of any thereof, or
(b) any other act or thing or omission or delay to do any other act or thing
which would operate as a discharge of the Originator as a matter of Law.
SECTION 7.10. Notices .
------- All notices under Section 6.2 hereof
shall be given to the Originator by telephone or facsimile, confirmed by
first-class mail, first-class express mail or courier, in all cases with charges
prepaid. All other notices, requests, demands, directions and other
communications (collectively "notices") under the provisions of this Agreement
shall be in writing (including telexed or facsimile communication) unless
otherwise expressly permitted hereunder and shall be sent by first-class mail,
first-class express mail, or by telex or facsimile with confirmation in writing
mailed first-class mail, in all cases with charges prepaid. Any such properly
given notice shall be effective when received. All notices shall be sent to the
applicable party at the Office stated on the signature page hereof or in
accordance with the last unrevoked written direction from such party to the
other parties hereto.
SECTION 7.11. Severability .
------------ The provisions of this Agreement
are intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability of such provision in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
SECTION 7.12. Governing Law; Submission to Jurisdiction .
----------------------------------------- THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Originator hereby submits to the nonexclusive
jurisdiction of the courts of the State of New York and the courts of the United
States located in the State of New York for the purpose of adjudicating any
claim or controversy arising in connection with any of the Facility Documents or
any of the transactions contemplated thereby, and for such purpose, to the
extent it may lawfully do so, waives any objection which it may now or hereafter
have to such jurisdiction or to venue therein and any claim of inconvenient
forum with respect thereto. Nothing in this Section 7.12 shall affect the right
of the Buyer to bring any action or proceeding against the Originator or its
property in the courts of other jurisdictions.
SECTION 7.13. Prior Understandings .
-------------------- This Agreement sets forth
the entire understanding of the parties relating to the subject matter hereof,
and supersedes all prior understandings and agreements, whether written or oral.
SECTION 7.14. Survival .
-------- All representations and warranties of
the Originator contained herein or made in connection herewith shall survive the
making thereof, and shall not be waived by the execution and delivery of this
38
Agreement, any investigation by the Buyer, the purchase or payment in respect of
any Purchased Assets, or any other event or condition whatsoever (other than a
written waiver complying with Section 7.6 hereof). The covenants and agreements
contained in or given pursuant to this Agreement (including, without limitation,
those contained in Article V hereof) shall continue in full force and effect
until the termination of this Agreement.
SECTION 7.15. Counterparts .
------------ This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
SECTION 7.16. Set-Off .
------- In case a Termination Event shall
occur and be continuing, the Buyer and, to the fullest extent permitted by Law,
the holder of any assignment of the Buyer's rights hereunder pursuant to any
security agreement or assignment agreement, shall each have the right, in
addition to all other rights and remedies available to it, without notice to the
Originator, to set-off against and to appropriate and apply to any amount owing
by the Originator hereunder which has become due and payable, any debt owing to,
and any other funds held in any manner for the account of, the Buyer or any such
holder of any assignment, including, without limitation, all funds in all
deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or hereafter maintained by the
Originator with the Buyer under any such security agreement or assignment
agreement. Such right shall exist whether or not such debt owing to, or funds
held for the account of, the Originator is or are matured other than by
operation of this Section 7.16 and regardless of the existence or adequacy of
any collateral, guaranty or any other security, right or remedy available to the
Buyer or any holder. Nothing in this Agreement shall be deemed a waiver or
prohibition or restriction of the Buyer's or any holder's rights of set-off or
other rights under applicable Law.
SECTION 7.17. Successors and Assigns .
---------------------- This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that the Originator may not assign any of its rights or
-------- -------
delegate any of its duties hereunder without the prior written consent of the
"Administrative Agent" under the Receivables Purchase Agreement. No provision of
this Agreement shall in any manner restrict the ability of the Buyer to assign,
participate, grant security interests in, or otherwise transfer any portion of
the Purchased Assets owned by the Buyer. The Administrative Agent and the Owners
under the Receivables Purchase Agreement shall be third-party beneficiaries of
this Agreement.
SECTION 7.18. Confidentiality .
--------------- The Buyer shall keep
confidential any information provided by the Originator and clearly identified
as confidential, provided that nothing herein shall prevent the Buyer from
--------
39
disclosing such information (i) to its officers, directors, employees, agents,
attorneys and accountants who have a need to know such information in accordance
with customary banking or financial practices and who receive such information
having been made subject to the restrictions set forth in this Section, (ii)
upon the order of a court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over such
party, (iv) which has become publicly available without breach of any agreement
between the parties hereto, (v) as necessary for the exercise of any remedy
hereunder, (vi) subject to provisions similar to those contained in this
Section, to any Eligible Assignee (as defined in the Receivables Purchase
Agreement), any commercial paper dealer providing funding to any assignee of the
Buyer, any APA Lending Bank (as defined in the Receivables Purchase Agreement),
and any other institution that provides liquidity or enhancement for any
assignee of the Buyer, or (vii) any nationally recognized rating agency.
SECTION 7.19. Payments Set Aside .
------------------- To the extent that the
Originator makes a payment to the Buyer or the Buyer exercises its rights of
set-off and such payment or set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by, or is required to be refunded, rescinded, returned, repaid
or otherwise restored to the Originator, the obligation or part thereof
originally intended to be satisfied shall, to the extent of any such
restoration, be reinstated, revived and continued in full force and effect as if
such payment had not been made or such set-off had not occurred. The provisions
of this Section 7.19 shall survive the termination of this Agreement.
SECTION 7.20. No Petition .
----------- The Originator agrees that, prior
to the date which is one year and five days after the date upon which all
obligations of the Buyer to the Originator hereunder and under the Subordinated
Note are paid in full and all indebtedness relating to the Purchased Assets of
any assignee of the Buyer are paid in full, it will not institute against, or
join any other Person in instituting against, the Buyer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
similar proceeding under the laws of the United States or any state of the
United States.
SECTION 7.21. Third-Party Beneficiary.
------------------------ The parties hereto
acknowledge that the Administrative Agent, for the benefit of the Owners, is an
intended third-party beneficiary of this Agreement, entitled to enforce the
provisions hereof.
40
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Purchase Agreement to be executed and delivered by their
duly authorized officers as of the date first above set forth.
LEXMARK RECEIVABLES CORPORATION
By: /s/ Xxxx X. Xxxxx
--------------------------
Name: Xxxx X. Xxxxx
Title: President
Address for Notices:
Lexmark Receivables Corporation
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxx, Xxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
LEXMARK INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and
Chief Financial Officer
Address for Notices:
Lexmark International, Inc.
000 Xxx Xxxxxx Xxxx XX
Building 1, Dept. 857
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to:
Lexmark International, Inc.
000 Xxx Xxxxxx Xxxx XX
Building 4, Dept. 742
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
41
EXHIBIT A
---------
[RESERVED]
EXHIBIT B
---------
SCHEDULE OF LITIGATION
----------------------
None
EXHIBIT C
---------
SCHEDULE OF NAMES, LOCATIONS OF OFFICES AND RECORDS
---------------------------------------------------
(i) Originator's Chief Executive Office:
-----------------------------------
One Lexmark Centre Drive
000 Xxx Xxxxxx Xxxx XX
Xxxxxxxxx, XX 00000
(ii) Domestic Subsidiaries of the Originator:
---------------------------------------
Lexmark Asia Pacific Corporation, Inc. (Delaware)
Lexmark Espana, L.L.C. (Delaware)
Lexmark Europe Holding Company I, L.L.C. (Delaware)
Lexmark Europe Holding Company II, L.L.C. (Delaware)
Lexmark Europe Trading Corporation, Inc. (Delaware)
Lexmark Foreign Sales Corporation (Barbados)
Lexmark International De Argentina, Inc. (Delaware)
Lexmark International De Mexico, Inc. (Delaware)
Lexmark International Trading Corp. (Delaware)
Lexmark Mexico Holding Company, Inc. (Delaware)
Lexmark Nordic, L.L.C. (Delaware)
Lexmark Receivables Corporation (Delaware)
Lexmark Tooling Corporation (Delaware)
Divisions of Originator:
-----------------------
None
(iii) Office where Originator's Records Located:
-----------------------------------------
One Lexmark Centre Drive
000 Xxx Xxxxxx Xxxx XX
Xxxxxxxxx, XX 00000
(iv) Originator's Trade Names:
------------------------
None
(v) Other Names and Mergers of Originator:
-------------------------------------
o Incorporated as New York Libra Corporation on 5/25/90.
o Changed name to IBM Information Products Corporation on 12/13/90.
o Changed name to Lexmark International, Inc. on 3/27/91.
o On 10/29/93, Lexmark Europe Corporation, Inc., a wholly-owned
subsidiary of Lexmark International, Inc., was merged with and
into Lexmark International, Inc., with Lexmark International,
Inc. being the surviving entity.
EXHIBIT D
---------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
Certificate of
[Responsible Officer]
I, the undersigned [Responsible Officer] of (the
-----------
"Originator") do hereby CERTIFY pursuant to Section 5.1(b)(iii) of the Purchase
Agreement, dated as of March 31, 1997 (as amended, supplemented or otherwise
modified and in effect, the "Purchase Agreement"), by and between the Originator
------------------
and the Buyer, that on and as of the date hereof, there exists no Termination
Event or Potential Termination Event.
Capitalized terms not otherwise defined herein have the
meanings assigned to them in the Purchase Agreement.
Date:
--------------------- -----------------------------
Name:
Title:
EXHIBIT E
---------
[RESERVED]
EXHIBIT F
---------
CREDIT AND COLLECTION POLICY
----------------------------
[Included as Exhibit A in Receivables Purchase Agreement]
EXHIBIT G
---------
[FORM OF SUBORDINATED NOTE]
LEXMARK RECEIVABLES CORPORATION
SUBORDINATED NOTE
LEXMARK RECEIVABLES CORPORATION, a Delaware corporation (the
"Issuer"), for value received, hereby promises to pay to Lexmark International,
Inc., a Delaware corporation and the sole shareholder of the Issuer (the
"Holder"), or its registered assigns, the aggregate amount of all principal sums
of the Subordinated Loans which shall have been made from time to time under the
Agreement (as defined below), upon the earlier to occur of (i) April 14, 1998,
or (ii) the date upon which all Receivables (as defined in the Agreement) have
been collected or charged off as uncollectible (the "Stated Maturity") and to
pay interest (computed on the basis of a 360-day year and the actual number of
days elapsed) on the outstanding amount of each Subordinated Loan, such interest
being payable on May 20, 1997 and the fourteenth Business day of each month
thereafter and on the Stated Maturity (each, a "Payment Date") until the Stated
Maturity, at a rate per annum equal to then-current LIBOR (as defined below)
plus .45%. For purposes of this Subordinated Note (the "Note"), "LIBOR" shall
mean, for each Payment Date, a rate per annum equal to (i) the rate for
Eurodollar deposits having a one-month maturity that appears on Telerate Page
3750 as of 11:00 a.m. (London time) on the second Business Day before the
immediately preceding Payment Date (or in the case of the first Payment Date, on
the date hereof) or (ii) if such rate does not appear on Telerate Page 3750 as
of 11:00 a.m. (London time) on the second LIBOR Business Day before any Payment
Date, LIBOR will be the arithmetic mean (if necessary rounded upwards to the
nearest whole multiple of .00001%) of the rates (expressed as percentages per
annum) for Eurodollar deposits having a one-month maturity that appear on
Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m.
(London time) on such second LIBOR Business Day. A "LIBOR Business Day" shall
mean any business day on which commercial banks are open for business in Dollar
deposits in London.
Principal of this Note shall be payable on each Payment Date
to the extent of the difference between (i) amounts received or allocated to the
Issuer upon the sale of an interest in additional Receivables pursuant to the
Receivables Purchase Agreement (as defined below) and Collections received by
the Issuer pursuant to the Receivables Purchase Agreement on the Issuer's
retained interest in the Receivables and (ii) the amount required to be (a)
applied to pay the Purchase Price of additional Purchased Assets pursuant to the
Purchase Agreement and (b) used or retained by the Issuer as capital to carry
out its other obligations and satisfy its covenants under the Receivables
Purchase Agreement and the Purchase Agreement. In addition, the principal amount
of this Note is subject to prepayment in full or in part at the option of the
Issuer at any time without a premium.
This Note is issued under the Purchase Agreement dated as of
March 31, 1997, between the Issuer and the Holder (as amended, restated,
supplemented or otherwise modified from time to time, the "Agreement") and
evidences the Subordinated Loans made from time to time by the Holder, in its
sole discretion, pursuant to Section 2.2(d) of the Agreement. This Note
represents all or a portion of the Purchase Price for Receivables purchased by
the Issuer pursuant to the terms of the Agreement. This Subordinated Note is
included as a "Purchase Document" under the Receivables Purchase Agreement dated
as of March 31, 1997 (the Receivables Purchase Agreement") by and among the
Issuer, as seller, the Holder, as servicer and in its individual capacity,
Delaware Funding Corporation and MGT, as administrative agent. This Note is a
revolving note. The Issuer hereof may, at any time, repay principal in whole or
in part and the Holder, at its option, may advance additional amounts hereon
from time to time as additional Subordinated Loans in accordance with the terms
of the Purchase Agreement. Each capitalized term used herein which is defined in
the Agreement shall have the meaning ascribed to it in the Agreement.
Payments of the principal of and interest on this Subordinated
Note (the "Note") will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts by check mailed to, or wire transfer in federal funds to the
account of, the Holder as directed by the Holder. If any payment on this Note
shall remain unpaid on the due date thereof, the same shall thereafter be
payable with interest thereon (to the extent permitted by law) at a rate equal
to then-current LIBOR plus 2.45% (the "Default Rate") from such due date to the
date of payment thereof. The Holder shall enter on the grid attached hereto, as
Attachment A, information reflecting the date and the amount of each
Subordinated Loan made under the Agreement and the date and amount of each
principal payment made hereon.
The Issuer shall be in "default" under this Note if (i) Issuer
shall fail to pay when due any interest or principal under this Note and such
failure shall continue for seven (7) Business Days or (ii) The Issuer shall be
the subject of an Event of Bankruptcy. If the Issuer is in "default" hereunder,
the Holder shall make no further Subordinated Loans to the Issuer and all
principal and accrued but unpaid interest on this Note shall become immediately
due and payable.
Payments of principal and interest by the Issuer shall be made
only from assets of the Issuer, including Collections received by the Issuer,
and not required to be applied to the Purchase Price of additional Receivables
or to be used or retained to satisfy the Issuer's obligations and covenants
G-2
under the Receivables Purchase Agreement (such available funds, collectively,
"Funds"). To the extent Funds are not available, payments of interest or
principal shall not be considered due until Funds become available. In such
event, interest shall continue to accrue on the unpaid principal sums of this
Note until payment is made at the "Default Rate" provided above.
The Holder of this Note, by its acceptance hereof, hereby
covenants and agrees that it will not at any time institute against the Issuer
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law.
This Note shall be governed by, and construed in accordance
with, the laws and decisions of the State of New York (including, without
limitation, Section 5-1401 of the General Obligations Law of New York but
otherwise without regard to conflicts of laws principles).
G-3
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed manually by its undersigned officer duly authorized thereunto.
Dated: April 15, 1997
LEXMARK RECEIVABLES CORPORATION
By:
----------------------------
Name:
Title:
[Subordinated Note Signature Page]
G-4
ATTACHMENT A
To Subordinated Note
Dated April 15, 1997
--------------------
Date Principal Principal Amount Balance
Amount Paid Outstanding
Advanced
1. 4/15/97 $49,595,718.96 $ $
-------- ------------- --------------- ----------
2.
-------- ------------- --------------- ----------
3.
-------- ------------- --------------- ----------
4.
-------- ------------- --------------- ----------
5.
-------- ------------- --------------- ----------
6.
-------- ------------- --------------- ----------
7.
-------- ------------- --------------- ----------
8.
-------- ------------- --------------- ----------
9.
-------- ------------- --------------- ----------
10.
-------- ------------- --------------- ----------
G-5
EXHIBIT H
---------
MATERIAL ADVERSE CHANGES
------------------------
None
EXHIBIT I
---------
to
Purchase Agreement
LEXMARK INTERNATIONAL, INC.
OFFICERS' CERTIFICATE
---------------------
I, Xxxxxxx X. Xxxx, the undersigned Vice President and
Secretary of Lexmark International, Inc., a Delaware corporation ("Lexmark"), DO
HEREBY CERTIFY that:
149. Attached hereto as Annex A is a true and complete copy of
the By-laws of Lexmark as in effect on the date hereof.
150. Attached hereto as Annex B is a true and complete copy of
the resolutions duly adopted by the Board of Directors of Lexmark on February
13, 1997, authorizing the execution, delivery and performance of the Purchase
Agreement, dated as of March 31, 1997 (the "Purchase Agreement"), by and between
Lexmark, as Originator, and Lexmark Receivables Corporation ("LRC"), as Buyer,
and the Receivables Purchase Agreement, dated as of March 31, 1997 (the "RPA"),
by and among LRC, as Seller (the "Seller"), Xxxxxx Guaranty Trust Company of New
York, as Administrative Agent for the Owners, Lexmark, as Servicer and in its
individual capacity, and Delaware Funding Corporation, as Buyer, and each of the
other documents mentioned therein and approving the transactions contemplated
thereunder, which resolutions have not been revoked, modified, amended or
rescinded and are still in full force and effect as of the date hereof.
151. The below-named persons are, on and as of the date
hereof, officers or employees of LRC holding the respective offices or positions
below set opposite their names, and the below-named officers are authorized to
execute the Purchase Agreement and the RPA and any other documents to be
delivered by Lexmark thereunder, and the signatures below set opposite their
names are their genuine signatures:
Name Office Signature
---- ------ ---------
Xxxx X. Xxxxx Vice President &
Chief Financial
Officer --------------------------
------------------ Treasurer --------------------------
Xxxxx X. Xxxxxxxxx Controller --------------------------
Xxxxxxx X. Xxxxxx Assistant Treasurer --------------------------
Xxxxxxxx X. Cabbage Treasury Financial
Analyst --------------------------
Xxxxxxxxx X. Xxxxxxxxxxx Cash Manager --------------------------
WITNESS my hand and seal of Lexmark as of this ____ day of
April, 1997.
By:
-----------------------------
Xxxxxxx X. Xxxx
Vice President and Secretary
I, , the undersigned Treasurer of Lexmark, DO
-----------------
HEREBY CERTIFY that:
1. Xxxxxxx X. Xxxx is the duly elected and qualified Vice
President and Secretary of Lexmark and the signature above is his genuine
signature.
2. All of the terms, covenants, agreements and conditions of
the Purchase Agreement and the RPA to be complied with and performed by Lexmark
at or before the date hereof have been complied with and performed.
3. The representations and warranties of Lexmark, in
whatever capacity, contained in the Purchase Agreement and the RPA are true and
correct as if made on and as of the date hereof.
4. Lexmark has not filed or consented to the filing of any
UCC-1 Financing Statement relating to the Receivables sold and to be sold
pursuant to the Purchase Agreement and the RPA and, to the best of Lexmark's
knowledge, no such Financing Statements have been filed other than Financing
Statements naming (i) Lexmark as "debtor" and LRC as "secured party", (ii) LRC
as "debtor" and Xxxxxx Guaranty Trust Company of New York, as Administrative
Agent, as "secured party", (iii) Lexmark as "debtor" and Xxxxxx Guaranty Trust
Company of New York, as Security Agent, as "secured party" and (iv) LRC as
"debtor" and Xxxxxx Guaranty Trust Company of New York, as Security Agent, as
"secured party."
5. No Termination Event and no event which with the giving
of notice or passage of time or both would constitute a Termination Event has
occurred or is continuing.
Capitalized terms used herein and not otherwise defined shall
have the meanings specified in the RPA.
WITNESS my hand this day of April, 1997.
-----
By:
-----------------------
Treasurer
I-2
LEXMARK RECEIVABLES CORPORATION
OFFICERS' CERTIFICATE
---------------------
I, Xxxxxxx X. Xxxx, the undersigned Vice President and
Secretary of Lexmark Receivables Corporation, a Delaware corporation ("LRC"), DO
HEREBY CERTIFY that:
6. Attached hereto as Annex A is a true and complete copy of
the By-laws of LRC as in effect on the date hereof.
7. Attached hereto as Annex B is a true and complete copy of
the resolutions duly adopted by the Board of Directors of LRC on March 24, 1997,
authorizing the execution, delivery and performance of the Purchase Agreement,
dated as of March 31, 1997 (the "Purchase Agreement"), by and between Lexmark
International, Inc. ("Lexmark"), as Originator, and LRC, as Buyer, and the
Receivables Purchase Agreement, dated as of March 31, 1997 (the "RPA"), by and
among LRC, as Seller (the "Seller"), Xxxxxx Guaranty Trust Company of New York,
as Administrative Agent for the Owners, Lexmark, as Servicer and in its
individual capacity, and Delaware Funding Corporation, as Buyer, and each of the
other documents mentioned therein and approving the transactions contemplated
thereunder, which resolutions have not been revoked, modified, amended or
rescinded and are still in full force and effect as of the date hereof.
8. The below-named persons are, on and as of the date
hereof, officers or employees of LRC holding the respective offices or positions
below set opposite their names, and the below-named officers are authorized to
execute the Purchase Agreement and the RPA and any other documents to be
delivered by LRC thereunder, and the signatures below set opposite their names
are their genuine signatures:
Name Office Signature
---- ------ ---------
Xxxx X. Xxxxx Vice President &
Chief Financial
Officer --------------------------
------------------ Treasurer --------------------------
Xxxxx X. Xxxxxxxxx Controller --------------------------
Xxxxxxx X. Xxxxxx Assistant Treasurer --------------------------
Xxxxxxxx X. Cabbage Treasury Financial
Analyst --------------------------
Xxxxxxxxx X. Xxxxxxxxxxx Cash Manager --------------------------
I-3
WITNESS my hand and seal of LRC as of this day of April,
----
1997.
By:
-----------------------------
Xxxxxxx X. Xxxx
Vice President and Secretary
I, , the undersigned Treasurer of LRC, DO
------------------
HEREBY CERTIFY that:
1. Xxxxxxx X. Xxxx is the duly elected and qualified Vice
President and Secretary of LRC, and the signature above is his genuine
signature.
2. All of the terms, covenants, agreements and conditions of
the Purchase Agreement and the RPA to be complied with and performed by LRC at
or before the date hereof have been complied with and performed.
3. The representations and warranties of LRC, in whatever
capacity, contained in the Purchase Agreement and the RPA are true and correct
as if made on and as of the date hereof.
4. LRC has not filed or consented to the filing of any UCC-1
Financing Statement relating to the Receivables sold and to be sold pursuant to
the Purchase Agreement and the RPA and, to the best of LRC's knowledge, no such
Financing Statements have been filed other than Financing Statements naming (i)
Lexmark as "debtor" and LRC as "secured party", (ii) LRC as "debtor" and Xxxxxx
Guaranty Trust Company of New York, as Xxxxxx Guaranty Trust Company of New
York, as "secured party", (iii) Lexmark as "debtor" and Xxxxxx Guaranty Trust
Company of New York, as Security Agent, as "secured party" and (iv) LRC as
"debtor" and Xxxxxx Guaranty Trust Company of New York, as Security Agent, as
"secured party."
5. No Termination Event and no event which with the giving
of notice or passage of time or both would constitute a Termination Event has
occurred or is continuing.
Capitalized terms used herein and not otherwise defined shall
have the meanings specified in the RPA.
WITNESS my hand this day of April, 1997.
-----
By:
-----------------------
Treasurer
I-4
EXHIBIT J
---------
to
Purchase Agreement
DESCRIPTION OF QUALIFYING RECEIVABLES
-------------------------------------
Each and every Receivable (as that term is defined in the
Purchase Agreement to which this exhibit is attached), whether now existing or
hereafter arising and wherever located, (a) arising in connection with the sale
of goods or the rendering of services in the ordinary course of business by
Lexmark International, Inc., or (b) arising in connection with the sale to IBM
Credit Corporation or another similar institution providing credit to an Obligor
(provided such institution, as an Obligor, satisfies any of the definitions of
Group A Obligor, Group B Obligor, Group C Obligor or Group D Obligor) of the
original indebtedness incurred by an Obligor to Lexmark International, Inc. in
connection with such a sale of goods or the rendering of such services, the
Obligor of which is either (i) a Person organized under the laws of the United
States or any state thereof that maintains its principal place of business in
the United States or (ii) a Government Obligor.
EXHIBIT K
---------
OFFICER'S CERTIFICATE
OF LEXMARK INTERNATIONAL, INC.
------------------------------
The undersigned, Xxxx X. Xxxxx, does hereby certify on behalf
of Lexmark International, Inc. (the "Company") in connection with the
-------
Receivables Purchase Agreement, dated as of March 31, 1997 (the "LRC
---
Agreement"), among Lexmark Receivables Corporation ("LRC"), as Seller, the
--------- ---
Company, as Servicer and in its individual capacity, Delaware Funding
Corporation ("DFC"), and Xxxxxx Guaranty Trust Company of New York, as
---
administrative agent (the "Administrative Agent"), pursuant to which LRC
---------------------
transfers to the Administrative Agent (for the benefit of DFC and the other
Owners under the LRC Agreement) all of its right, title and interest in the
Purchased Interest (as defined in LRC Agreement) in the Receivables. LRC
acquired the Receivables from the Company pursuant to the Purchase Agreement,
dated as of March 31, 1997 (the "Purchase Agreement"; with the LRC Agreement,
-------------------
the "Documents") between the Company and LRC; that s/he is the duly elected,
---------
qualified, and acting Vice President and Chief Financial Officer of the Company,
and further that:
1. S/he has made such investigation, including discussions
with responsible officers of the Company and its certified public accountants,
as is necessary to enable him/her to deliver this Officer's Certificate.
2. Immediately prior to the transfer of the Receivables to
LRC pursuant to the Purchase Agreement, the Company had good title and was the
sole owner and holder of such Receivables, free and clear of any and all adverse
claims, liens, pledges, offsets, defenses, counterclaims, charges, or security
interests, of any nature, and had the full right and authority, subject to no
interest or participation of, or agreement with, any other person, to transfer
and assign the same.
3. On the date hereof, the Receivables are sold by the
Company to LRC pursuant to the Purchase Agreement in exchange for cash and a
capital contribution by the Company to LRC, which consideration has a fair
market value equal to the fair market value of such Receivables. Certain of the
cash was loaned by the Company to LRC pursuant to the Purchase Agreement, as
evidenced by the Subordinated Note executed by LRC for the benefit of the
Company. Subsequent to the date hereof, the Company is obligated to sell
additional Receivables to LRC in certain circumstances, but LRC is required to
pay cash for such additional Receivables, unless the Company agrees to make a
loan to LRC, or agrees to contribute such additional Receivables to LRC as a
capital contribution. The consideration received by the Company in return for
such additional Receivables shall have a fair market value equal to the fair
market value of such additional Receivables. Such additional Receivables are not
sold by the Company to LRC with the intent (on the part of either the Company or
LRC) to mitigate losses on the Receivables previously sold by the Company to
LRC. The proceeds of the Company's sale of such Receivables to LRC accrue
strictly to the Company, and the Company's use of the proceeds is not restricted
by LRC, the Administrative Agent or DFC.
4. The Company may cease selling Receivables to LRC on and
after April 14, 1998, unless extended by the Company in its sole discretion,
without incurring any penalty or loss. Neither the Company nor LRC will extend
the term of the Purchase Agreement with the intent (on the part of either the
Company or LRC) to mitigate losses on the Receivables previously sold by the
Company to LRC.
5. The Company marks its records to indicate that the
Receivables have been sold to LRC and that such Receivables have been
transferred by LRC to the Administrative Agent (for the benefit of DFC and the
other Owners under the LRC Agreement). The Company properly treats the transfer
of Receivables to LRC as a sale for accounting purposes, and the independent
certified public accountants for the Company concur in such treatment. For tax
reporting purposes, and any applicable regulatory purposes, the Company properly
treats such transfer in a manner consistent with the treatment for accounting
purposes. The Obligors on the Receivables are not notified of the transfer of
such Receivables to LRC or LRC's transfer to the Administrative Agent (for the
benefit of DFC and the other Owners under the LRC Agreement). Any such
notification would be time-consuming and expensive, would be confusing to
Obligors, and would impair customer relations with Obligors. In transactions
similar to those contemplated by the Documents involving the transfer of large
numbers of receivables arising under short-term trade receivable contracts
(including binding invoices), it is standard industry practice not to notify the
Obligors of the transfer.
6. The obligation of the Company under the Purchase
Agreement to repurchase certain Receivables as to which there exists a breach of
its representations and warranties, or which the Company, in breach of its
duties, impairs or adversely affects, is of a type commonly found in comparable
asset sale transactions. The repurchase price to be paid by the Company
represents the return of the consideration LRC paid for the repurchased
Receivable.
7. The obligation of the Company to indemnify LRC for the
imposition of any transfer taxes arising upon the sale or contribution of the
Receivables to LRC is of a type commonly found in comparable asset sale
transactions. The Company does not expect that any transfer taxes will be
imposed with respect to the sale or contribution of such Receivables. The
obligation of the Company to indemnify the Buyer, the Administrative Agent, DFC
and the other Owners under the LRC Agreement with respect to any claim asserted
by an Obligor with respect to the Company's obligations under the Contracts are
also of a type commonly found in comparable asset sale transactions.
K-2
8. The Company acts as servicer of the Receivables under the
LRC Agreement. The terms of this servicing arrangement are of a type commonly
found in servicing arrangements in other comparable asset sale transactions. The
fees paid to the Servicer under the LRC Agreement constitute a fair and
reasonable price for the obligations to be performed by the Servicer under the
LRC Agreement. Payment of the Servicer's Compensation is not subordinate to
amounts due DFC, the Administrative Agent or otherwise, and the Company is paid
the full amount of the Servicer's Compensation and reimbursed for all of its
out-of-pocket expenses.
9. The Company, as Servicer, is obligated under the LRC
Agreement to service and administer the Receivables and to collect all payments
due under the Receivables in accordance with (i) its customary and usual
servicing procedures for servicing trade receivables comparable to the
Receivables and (ii) its Credit and Collection Policy. Such a provision is
commonly found in comparable asset sale transactions involving a third-party
servicer.
10. LRC may borrow money from the Company pursuant to the
Purchase Agreement from time to time to purchase Receivables from the Company.
These loans are made on arm's-length terms that could be obtained from an
unrelated third-party lender. These loans can be repaid from any funds available
to LRC other than funds required to be used to make payments on the Purchased
Interests, and funds required to be used to purchase additional Receivables. Any
such loans will be fully repaid on a timely basis from funds other than funds
received from the Company. To assure that LRC has adequate capital to meet such
obligations on the date hereof, the Company has contributed cash and other
assets in the amount of $9 million which is in excess of the amount determined
to be adequate for such purposes using the factors set forth in Schedule A to
this Certificate.
11. The Company is not obligated to pay, nor does it pay, any
insurance premiums in connection with any Receivable or Contract, and the
Company is not obligated to, and does not, reimburse any insurer for any losses
such insurer suffers in connection with a Receivable or a Contract.
12. There are no other agreements to which LRC is a party
relating to the Receivables, other than the Documents and the documents referred
to therein.
13. The Company does not make any payments to LRC, the
Administrative Agent or DFC in connection with the Receivables, except pursuant
to the Documents.
14. The Company does not receive any payments with respect to
the Receivables or the Contracts, except pursuant to the Documents.
K-3
15. The Company does not own or hold any Purchased Interest
in the Receivables.
16. The Company does not control, is not controlled by, and
is not under common control with, DFC or the Administrative Agent.
17. The formulae for calculating the yields on the Purchased
Interest in the Receivables were agreed upon by the Company, the Administrative
Agent and DFC based upon the then-current market rates for comparable interests
in the Receivables. Neither the yields nor the rates of return on the Purchased
Interest in the Receivables is based on the rate at which the Company could
obtain a secured loan.
18. The Receivables are not interest-bearing.
19. The Company and LRC each intend the transfer of the
Receivables by the Company to LRC pursuant to the Purchase Agreement, to be an
absolute assignment, or a contribution to capital, as applicable, rather than a
secured borrowing.
20. The Company does not transfer any Receivables with the
intent to hinder, delay, or defraud any person or entity. The Company receives
reasonably equivalent value in exchange for its transfer of Receivables.
21. As of the date hereof, (i) the Company is not insolvent
nor does the Company expect to become insolvent, (ii) the Company does not
engage in nor does it expect to engage in a business for which its remaining
property represents an unreasonably small capitalization, (iii) the
capitalization of the Company is adequate in light of its proposed business and
purpose, and (iv) the Company is able to pay its debts as they mature, and does
not intend to incur, or believe that it will incur, indebtedness that it will
not be able to repay at its maturity.
All capitalized terms used herein and not otherwise defined
herein shall have the same meaning herein as in the Opinion.
IN WITNESS WHEREOF, I have hereunto signed my name this th
----
day of April, 1997.
LEXMARK INTERNATIONAL, INC.
By:
----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and Chief
Financial Officer
K-4
SCHEDULE A
NET PURCHASE PRICE OF RECEIVABLES
---------------------------------
A. Face amount of new Receivables
B. A x (12 month average Charge-off Ratio x 2.1)
C. A - B
D. A x Yield Rate x 60 days
--------------------
360
Yield Rate = LIBOR + .50%
E. C - D
F. A x 1.00% x 60 days
---------------
360
G. E - F (Purchase Price of new Receivables)
K-5
OFFICER'S CERTIFICATE
OF LEXMARK RECEIVABLES CORPORATION
----------------------------------
The undersigned, Xxxx X. Xxxxx, does hereby certify on behalf
of Lexmark Receivables Corporation (the "Company") in connection with the
-------
Receivables Purchase Agreement, dated as of March 31, 1997 (the "LRC
---
Agreement"), among the Company, as Seller, Lexmark International, Inc. ("LII"),
---------
as Servicer and in its individual capacity, Delaware Funding Corporation
("DFC"), and Xxxxxx Guaranty Trust Company of New York, as administrative agent
---
(the "Administrative Agent"), pursuant to which the Company transfers to the
---------------------
Administrative Agent, for the benefit of DFC and the other Owners under the LRC
Agreement, all of its right, title and interest in the Purchased Interest (as
defined in the LRC Agreement) in the Receivables. The Company acquired the
Receivables from LII pursuant to the Purchase Agreement dated as of March 31,
1997 (the "Purchase Agreement") between LII and the Company; that s/he is the
-------------------
duly elected, qualified, and acting President of the Company, and further that:
1. S/he has made such investigation, including discussions
with responsible officers of the Company and its certified public accountants,
as is necessary to enable him/her to deliver this Officer's Certificate.
2. On the date hereof, the Receivables are sold by LII to
the Company in exchange for cash and capital contributions by LII to the
Company, which consideration has a fair market value equal to the fair market
value of such Receivables. Certain of the cash was loaned by LII to the Company
pursuant to the Purchase Agreement, as evidenced by the Subordinated Note
executed by the Company. Subsequent to the date hereof, LII is obligated to sell
additional Receivables to the Company in certain circumstances, but the Company
is required to pay cash for such additional Receivables, unless LII agrees to
make loans to the Company, or agrees to contribute such additional Receivables
to the Company as capital contributions. The consideration received by LII in
return for such additional Receivables shall have a fair market value equal to
the fair market value of such additional Receivables. Such additional
Receivables are not sold by LII to the Company with the intent (on the part of
LII or the Company) to mitigate losses on the Receivables previously sold by LII
to the Company. The proceeds of LII's sale of such Receivables to the Company
accrue strictly to LII, and LII's use of the proceeds is not restricted by the
Company, the Administrative Agent or DFC.
3. LII may cease selling Receivables to the Company on and
after April 14, 1998, unless such date is extended by LII in its sole
discretion, without incurring any penalty or loss. Neither LII nor the Company
will extend the term of the Purchase Agreement with the intent (on the part of
either LII or the Company) to mitigate losses on the Receivables previously sold
by LII to the Company.
K-6
4. On the date hereof, the Company sells the Purchased
Interest in the Receivables to the Administrative Agent, for the benefit of DFC
and the other Owners under the LRC Agreement, in return for cash in an aggregate
amount equal to the fair market value of such Purchased Interest. The aggregate
amount of such cash received by the Company, together with the undivided
interest in Receivables retained by the Company, has a fair market value equal
to the fair market value of the Receivables as of the date hereof.
5. The Company marks its records to indicate that the
Receivables have been sold to the Company by LII and that the Purchased Interest
has been transferred by the Company to the Administrative Agent, for the benefit
of DFC and the other Owners under the LRC Agreement. The Company properly treats
the transfer of Receivables to it as a sale for accounting purposes, and the
independent certified public accountants for the Company concur in such
treatment. For tax reporting purposes, and any applicable regulatory purposes,
the Company properly treats such transfer in a manner consistent with the
treatment for accounting purposes. The Obligors on the Receivables are not
notified of the transfer of such Receivables to the Company or the Company's
transfer to the Administrative Agent, for the benefit of DFC and the other
Owners under the LRC Agreement. Any such notification would be time-consuming
and expensive, would be confusing to Obligors, and would impair customer
relations with Obligors. In transactions similar to those contemplated by the
Documents involving the transfer of large numbers of receivables arising under
trade receivable contracts (including binding invoices), it is standard industry
practice not to notify the Obligors of the transfer.
6. The Company may borrow money from LII pursuant to the
Purchase Agreement from time to time to purchase Receivables from LII. These
loans are made on arm's-length terms that could be obtained from an unrelated
third-party lender. These loans can be repaid from any funds available to the
Company other than funds required to be used to make payments on the Purchased
Interests, and funds required to be used to purchase additional Receivables. Any
such loans will be fully repaid on a timely basis from funds other than funds
received from LII. To assure that the Company has adequate capital to meet such
obligations on the date hereof, LII has contributed cash and other assets in the
amount of $9 million which is in excess of the amount determined to be adequate
for such purposes using the factors set forth in Schedule A to this Certificate.
7. There are no other agreements to which the Company is a
party relating to the Receivables, other than the Documents and the documents
referred to therein.
8. The Company intends the transfers of the Receivables by
LII to the Company pursuant to the Purchase Agreement, to be an absolute
assignment, or a contribution to capital, as applicable, rather than a secured
borrowing.
K-7
9. The Company does not transfer any Receivables with the
intent to hinder, delay, or defraud any person or entity. The Company receives
reasonably equivalent value in exchange for its transfer of Receivables.
10. The formulae for calculating the yields on the Purchased
Interest in the Receivables were agreed upon by the Company, the Administrative
Agent and DFC based upon the then-current market rates for comparable interests
in the Receivables. Neither the yields nor the rates of return on the Purchased
Interest in the Receivables is based on the rate at which the Company could
obtain a secured loan.
11. As of the date hereof, (i) the Company is not insolvent
nor does the Company expect to become insolvent, (ii) the Company does not
engage in nor does it expect to engage in a business for which its remaining
property represents an unreasonably small capitalization, (iii) the
capitalization of the Company is adequate in light of its proposed business and
purpose, and (iv) the Company is able to pay its debts as they mature, and does
not intend to incur, or believe that it will incur, indebtedness that it will
not be able to repay at its maturity.
All capitalized terms used herein and not otherwise defined
herein shall have the same meaning herein as in the Opinion.
IN WITNESS WHEREOF, I have hereunto signed my name this th
----
day of April, 1997.
LEXMARK RECEIVABLES CORPORATION
By:
--------------------------
Name: Xxxx X. Xxxxx
Title: President
K-8
SCHEDULE A
NET PURCHASE PRICE OF RECEIVABLES
---------------------------------
A. Face amount of new Receivables
B. A x (12 month average Charge-off Ratio x 2.1)
C. A - B
D. A x Yield Rate x 60 days
--------------------
360
Yield Rate = LIBOR + .50%
E. C - D
F. A x 1.00% x 60 days
---------------
360
G. E - F (Purchase Price of new Receivables)
K-9
Schedule 1
----------
SCHEDULE OF RECEIVABLES
[On file with Administrative Agent]
