Page 30
Exhibit 10(i)A(2)
RECEIVABLES SALE AGREEMENT
DATED AS OF MAY 2, 2001
BETWEEN
NSI ENTERPRISES, INC.,
AS SELLER,
AND
NATIONAL SERVICE INDUSTRIES, INC.,
AS PURCHASER
Page 31
Exhibit 10(i)A(2)
TABLE OF CONTENTS
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES................................2
Section 1.1 Purchases of Receivables..................................2
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Section 1.2 Payment for the Purchases.................................3
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Section 1.3 Purchase Price Credit Adjustments.........................3
---------------------------------
Section 1.4 Payments and Computations, Etc............................4
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Section 1.5 Transfer of Records.......................................4
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Section 1.6 Characterization.. .......................................5
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ARTICLE II REPRESENTATIONS AND WARRANTIES...................................5
Section 2.1 Representations and Warranties of NSI Enterprises.........5
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ARTICLE III CONDITIONS OF PURCHASES.........................................9
Section 3.1 Conditions Precedent to Initial Purchase..................9
----------------------------------------
Section 3.2 Conditions Precedent to All Purchases.....................9
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ARTICLE IV COVENANTS........................................................9
Section 4.1 Affirmative Covenants.....................................9
---------------------
Section 4.2 Negative Covenants of NSI Enterprises....................12
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ARTICLE V TERMINATION EVENTS...............................................13
Section 5.1 Termination Events.......................................13
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Section 5.2 Remedies.................................................14
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ARTICLE VI INDEMNIFICATION.................................................15
Section 6.1 Indemnities by NSI Enterprises...........................15
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Section 6.2 Other Costs and Expenses.................................17
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Page 32
Exhibit 10(i)A(2)
ARTICLE VII MISCELLANEOUS..................................................17
Section 7.1 Waivers and Amendments...................................17
----------------------
Section 7.2 Notices..................................................18
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Section 7.3 Protection of Ownership Interests of NSI Georgia.........18
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Section 7.4 Confidentiality of Fee Letter............................19
-----------------------------
Section 7.5 Bankruptcy Petition......................................19
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Section 7.6 CHOICE OF LAW............................................19
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Section 7.7 CONSENT TO JURISDICTION..................................19
-----------------------
Section 7.8 WAIVER OF JURY TRIAL.....................................20
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Section 7.9 Integration; Binding Effect; Survival of Terms...........20
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Section 7.10 Counterparts; Severability; Section References...........21
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EXHIBITS AND SCHEDULES
----------------------
Exhibit I: Definitions
Exhibit II: Chief Executive Office; Principal Place of Business;
Location(s) of Records; Federal Employer Identification
Number; Other Names
Exhibit III Lock-Boxes; Collection Accounts; Collection Banks
Schedule A: List of Documents to Be Delivered to NSI Georgia Prior to the
initial Purchase
Page 33
Exhibit 10(i)A(2)
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of May 2, 2001, is by and between
NSI Enterprises, Inc., a California corporation ("NSI Enterprises"), and
National Service Industries, Inc., a Georgia corporation ("NSI Georgia"). Unless
defined elsewhere herein, capitalized terms used in this Agreement shall have
the meanings assigned to such terms in Exhibit I hereto (and, if not defined
therein, the meanings assigned to such terms in the Credit and Security
Agreement hereinafter described).
PRELIMINARY STATEMENTS
NSI Enterprises now owns, and from time to time hereafter will own,
Receivables. NSI Enterprises wishes to sell and assign to NSI Georgia, and NSI
Georgia wishes to purchase from NSI Enterprises, all of NSI Enterprises' right,
title and interest in and to such Receivables, together with the Related
Security and Collections with respect thereto.
The parties hereto intend the transactions contemplated hereby to be true
sales of the Receivables from NSI Enterprises to NSI Georgia, providing NSI
Georgia with the full benefits of ownership of the Receivables, and the parties
hereto do not intend these transactions to be, or for any purpose to be
characterized as, loans from NSI Georgia to NSI Enterprises.
Following each purchase of Receivables from NSI Enterprises, (a) NSI
Georgia will sell or contribute certain of its trade receivables, including the
Receivables acquired from and all rights and remedies against NSI Enterprises
hereunder, to NSI Georgia's wholly-owned Subsidiary, NSI Funding, Inc., a
Delaware corporation (the "SPE"), pursuant to that certain Receivables Sale and
Contribution Agreement dated as of May 2, 2001 (as the same may from time to
time hereafter be amended, supplemented, restated or otherwise modified, the
"Sale and Contribution Agreement") between NSI Georgia and the SPE, and (b) the
SPE will borrow and pledge its assets pursuant to that certain Credit and
Security Agreement dated as of May 2, 2001 (as the same may from time to time
hereafter be amended, supplemented, restated or otherwise modified, the "Credit
and Security Agreement") among the SPE, as Borrower, NSI Georgia, as initial
Servicer, Blue Ridge Asset Funding Corporation ("Blue Ridge"), the banks and
other financial institutions from time to time party thereto as "Liquidity
Banks" and Wachovia Bank, N.A. or any successor agent appointed pursuant to the
terms of the Credit and Security Agreement, as agent for Blue Ridge and such
Liquidity Banks (in such capacity, the "Agent").
Page 34
Exhibit 10(i)A(2)
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchases of Receivables.
(a) Effective on the date hereof, in consideration for the Purchase Price and
upon the terms and subject to the conditions set forth herein, NSI
Enterprises does hereby sell, assign, transfer, set-over and otherwise
convey to NSI Georgia, without recourse (except to the extent expressly
provided herein), and NSI Georgia does hereby purchase from NSI
Enterprises, all of NSI Enterprises' right, title and interest in and to
all Receivables existing as of the close of business on the Initial Cutoff
Date (all such Receivables, the "Existing Receivables"), together with all
Related Security relating thereto and all Collections thereof.
(b) Effective on each day after the Initial Cutoff Date on which any Receivable
is created (each such Receivable, an "Additional Receivable"), in
consideration for the Purchase Price and upon the terms and subject to the
conditions set forth herein, NSI Enterprises does hereby sell, assign,
transfer, set-over and otherwise convey to NSI Georgia, without recourse
(except to the extent expressly provided herein), and NSI Georgia does
hereby purchase from NSI Enterprises, all of NSI Enterprises' right, title
and interest in and to all Additional Receivables existing as of such date,
together with all Related Security relating thereto and all Collections
thereof.
(c) NSI Georgia shall be obligated to pay the Purchase Price for the Existing
Receivables and the Additional Receivables purchased hereunder in
accordance with Section 1.2.
(d) It is the intention of the parties hereto that each Purchase of Receivables
made hereunder shall constitute a sale, which sale is absolute and
irrevocable and provides NSI Georgia with the full benefits of ownership of
the Receivables. Except for the Purchase Price Credits owed pursuant to
Section 1.3, each sale of Receivables hereunder is made without recourse to
NSI Enterprises; provided, however, that (i) NSI Enterprises shall be
liable to NSI Georgia for all representations, warranties, covenants and
indemnities made by NSI Enterprises pursuant to the terms of the
Transaction Documents to which NSI Enterprises is a party, and (ii) such
sale does not constitute and is not intended to result in an assumption by
NSI Georgia (or the SPE or the Agent, as its assignees) of any obligation
of NSI Enterprises or any other Person arising in connection with the
Receivables, the related Contracts and/or other Related Security or any
other obligations of NSI Enterprises. In view of the intention of the
parties hereto that each transfer of Receivables made hereunder shall
constitute a sale of such Receivables rather than loans secured thereby,
Page 35
Exhibit 10(i)A(2)
NSI Enterprises agrees that it will, on or prior to the date hereof and in
accordance with Section 4.1(f)(ii), xxxx its master data processing records
relating to the Receivables with a legend stating that NSI Georgia has
purchased NSI Enterprises' Receivables, together with the associated
Related Security and Collections, and, to the extent that NSI Enterprises
prepares any stand-alone financial statements, to note in such financial
statements that NSI Enterprises' Receivables, together with the associated
Related Security and Collections, have been sold to NSI Georgia.
Section 1.2 Payment for the Purchases.
(a) The Purchase Price for the Existing Receivables shall be payable in full by
NSI Georgia to NSI Enterprises on the date hereof in immediately available
funds.
(b) The Purchase Price for each Additional Receivable shall be due and owing in
full by NSI Georgia to NSI Enterprises or its designee on the date each
such Additional Receivable comes into existence (except that NSI Georgia
may, with respect to any such Purchase Price, offset against such Purchase
Price any amounts owed by NSI Enterprises to NSI Georgia hereunder and
which have become due but remain unpaid) and shall be paid to NSI
Enterprises in immediately available funds as provided in this Section
1.2(b) and subject to Section 1.3. Although the Purchase Price for each
Additional Receivable shall be due and payable in full by NSI Georgia to
NSI Enterprises on the date such Additional Receivable came into existence,
settlement of the Purchase Price for Additional Receivables shall be
effected on at least a monthly basis on Settlement Dates with respect to
all Additional Receivables coming into existence during the same month (or
shorter period, as applicable).
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of any Receivable is:
(i) reduced as a result of any defective or rejected or returned goods
or services, any discount or any adjustment or otherwise by NSI Enterprises
(other than as a result of such Receivable's being charged off for credit
reasons or reduced as a result of cash Collections actually received),
(ii) reduced or canceled as a result of a setoff in respect of any
claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in Section 2.1(c), (h),
(i), (j), (l), (q), (r), (s) or the second sentence of Section 2.1(p)
hereof are not true when made or deemed made with respect to any
Receivable,
Page 36
Exhibit 10(i)A(2)
then, in such event, NSI Georgia shall be entitled to a credit (each, a
"Purchase Price Credit") against the Purchase Price otherwise payable hereunder
equal to (x) in the case of a partial reduction, the amount of such reduction,
and (y) in the case of a total reduction or cancellation, the lesser of the
total Purchase Price paid for such Receivable and the Outstanding Balance of
such Receivable immediately prior to such reduction or cancellation. If such
Purchase Price Credit exceeds the aggregate Purchase Price for Receivables
coming into existence on any day, then NSI Enterprises shall pay the remaining
amount of such Purchase Price Credit in cash immediately.
Section 1.4 Payments and Computations, Etc. All amounts to be paid or
deposited by NSI Georgia hereunder shall be paid or deposited in accordance with
the terms hereof on the required day in immediately available funds to the
account of NSI Enterprises designated from time to time by NSI Enterprises or as
otherwise directed by NSI Enterprises. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; provided, however, that such
Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchases of Receivables hereunder, NSI
Enterprises hereby sells, transfers, assigns and otherwise conveys to
NSI Georgia all of NSI Enterprises' right and title to and interest in
the Records relating to all Receivables sold hereunder, without the
need for any further documentation in connection with the Purchases.
In connection with such transfer, NSI Enterprises hereby grants to
each of NSI Georgia, the SPE, the Agent and the Servicer, an
irrevocable, non-exclusive license to use, without royalty or payment
of any kind, all software used by NSI Enterprises to account for the
Receivables, to the extent necessary to administer the Receivables,
whether such software is owned by NSI Enterprises or is owned by
others and used by NSI Enterprises under license agreements with
respect thereto, provided that should the consent of any licensor of
such software be required for the grant of the license described
herein, to be effective, NSI Enterprises hereby agrees that upon the
request of NSI Georgia, the SPE, the Servicer or the Agent, NSI
Enterprises will use its reasonable efforts to obtain the consent of
such third-party licensor. The license granted hereby shall be
irrevocable until the indefeasible payment in full of the Aggregate
Unpaids, and shall terminate on the date this Agreement terminates in
accordance with its terms.
(b) NSI Enterprises (i) shall take such action reasonably requested by NSI
Georgia, the SPE and/or the Agent (as NSI Georgia's assignee), from
time to time hereafter, that may be necessary or appropriate to ensure
that NSI Georgia, the SPE, the Servicer and the Agent have an
Page 37
Exhibit 10(i)A(2)
enforceable ownership interest in the Records relating to the
Receivables purchased from NSI Enterprises hereunder, and (ii) shall
use its reasonable efforts to ensure that NSI Georgia, the SPE, the
Agent and the Servicer each has an enforceable right (whether by
license or sublicense or otherwise) to use all of the computer
software used to account for the Receivables and/or to recreate such
Records.
Section 1.6 Characterization. If, notwithstanding the intention of the
parties expressed in Section 1.1(d), any sale by NSI Enterprises to NSI Georgia
of Receivables hereunder shall be characterized as a secured loan and not a sale
or such sale shall for any reason be ineffective or unenforceable, then this
Agreement shall be deemed to constitute a security agreement under the UCC and
other applicable law. For this purpose and without being in derogation of the
parties' intention that the sale of Receivables hereunder shall constitute a
true sale thereof, NSI Enterprises hereby grants to NSI Georgia a duly perfected
security interest in all of NSI Enterprises' right, title and interest in, to
and under all Receivables now existing and hereafter arising, all Collections
and Related Security with respect thereto, all other rights and payments
relating to the Receivables and all proceeds of the foregoing to secure the
prompt and complete payment of a loan deemed to have been made in an amount
equal to the Purchase Price of the Receivables together with all other
obligations of NSI Enterprises hereunder, which security interest shall be prior
to all other Adverse Claims thereto. During the existence of any Termination
Event, NSI Georgia and the SPE and the Agent (as its assignees) shall have, in
addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor under the UCC and
other applicable law, which rights and remedies shall be cumulative.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of NSI Enterprises. NSI
Enterprises hereby represents and warrants to NSI Georgia on the date hereof and
on (except for any representation or warranty that is limited to a specific date
or period) each date on or prior to the Termination Date on which any Additional
Receivable comes into existence that:
(a) Existence and Power. NSI Enterprises is a corporation duly organized,
validly existing and in good standing under the laws of California, is duly
qualified to transact business in every jurisdiction where, by the nature of its
business, such qualification is necessary, and where the failure to qualify
would have or could reasonably be expected to cause a Material Adverse Effect,
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
(b) Power and Authority; Due Authorization, Execution and Delivery. The
execution, delivery and performance by NSI Enterprises of the Transaction
Documents (i) are within NSI Enterprises' corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) require no action by or in
Page 38
Exhibit 10(i)A(2)
respect of or filing with, any governmental body, agency or official, (iv) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of NSI
Enterprises or of any agreement, judgment, injunction, order, decree or other
instrument binding upon NSI Enterprises or any of its Subsidiaries, and (v) do
not result in the creation or imposition of any Adverse Claim on any asset of
NSI Enterprises (except as created hereunder). This Agreement and each other
Transaction Document to which NSI Enterprises is a party has been duly executed
and delivered by NSI Enterprises.
(c) No Bulk Sale. No transaction contemplated hereby requires compliance
with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by NSI Enterprises of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There is no action, suit or proceeding pending, or to
the knowledge of NSI Enterprises overtly threatened in writing, against or
affecting NSI Enterprises or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official which has or is likely
to have a Material Adverse Effect.
(f) Binding Effect. This Agreement constitutes and, when executed and
delivered in accordance with this Agreement, each other- Transaction Document to
which NSI Enterprises is a party, will constitute valid and binding obligations
of NSI Enterprises enforceable in accordance with their respective terms,
provided that the enforceability hereof and thereof is subject in each case to
general principles of equity and to bankruptcy, insolvency and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(g) Accuracy of Information. All information heretofore furnished by NSI
Enterprises to NSI Georgia for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all such information hereafter
furnished by NSI Enterprises to NSI Georgia (or the SPE or the Agent, as its
assignees) will be, true and accurate in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. NSI Enterprises has disclosed to NSI Georgia and the Agent in writing
any and all facts known to the Executive Officers which would have or reasonably
would be expected to cause a Material Adverse Effect.
(h) Use of Proceeds. NSI Enterprises is not engaged principally, or as one
of its important activities, in the business of purchasing or carrying any
Margin Stock, and no part of the proceeds of any Purchase will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation T, U or X.
Page 39
Exhibit 10(i)A(2)
(i) Good Title. Immediately prior to each Purchase hereunder, NSI
Enterprises (i) is the legal and beneficial owner of the Receivables that are
the subject of such Purchase and (ii) is the legal and beneficial owner of the
Related Security with respect thereto or possesses a valid and perfected
security interest therein, in each case, free and clear of any Adverse Claim,
except for Permitted Encumbrances. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect NSI Enterprises'
ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the financing
statements contemplated hereby, is effective to transfer to NSI Georgia (and NSI
Georgia shall acquire from NSI Enterprises) (i) legal and equitable title to,
with the right to sell and encumber each Receivable existing and hereafter
arising, together with the Collections with respect thereto, and (ii) all of NSI
Enterprises' right, title and interest in the Related Security associated with
each Receivable, in each case, free and clear of any Adverse Claim, except for
Permitted Encumbrances. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect NSI Georgia's
ownership interest in the Receivables, the Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal places of
business and chief executive office of NSI Enterprises and the offices where it
keeps all of its Records are located at the address(es) listed on Exhibit II or
such other locations of which NSI Georgia has been notified in accordance with
Section 4.2(a) in jurisdictions where all action required by Section 4.2(a) has
been taken and completed. NSI Enterprises' Federal Employer Identification
Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in Section
4.1(j) have at all times been satisfied and duly performed. The names and
addresses of all Collection Banks, together with the account numbers of the
Collection Accounts of NSI Enterprises at each Collection Bank and the post
office box number of each Lock-Box, are listed on Exhibit III. NSI Enterprises
has not granted any Person, other than NSI Georgia (and the SPE and the Agent,
as its assignees) dominion and control of any Lock-Box or Collection Account, or
the right to take dominion and control of any such Lock-Box or Collection
Account at a future time or upon the occurrence of a future event.
(m) Material Adverse Effect. During the period from August 31, 2000 through
the Initial Cut-Off Date, in the good faith judgment of the Executive Officers,
no event has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.
(n) Names. The name in which NSI Enterprises has executed this Agreement is
identical to the name of NSI Enterprises as indicated on the public record of
its state of organization which shows NSI Enterprises to have been organized. In
the past five (5) years, NSI Enterprises has not used any corporate names, trade
Page 40
Exhibit 10(i)A(2)
names or assumed names other than the name in which it has executed this
Agreement and as listed on Exhibit II.
(o) Not a Holding Company or an Investment Company. NSI Enterprises is not
a "holding company" or a "subsidiary holding company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or any successor statute. NSI Enterprises is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(p) Compliance with Law. NSI Enterprises has complied in all respects with
all applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Each
Receivable, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.
(q) Compliance with Credit and Collection Policy. NSI Enterprises has
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, except such material change as to which
NSI Georgia (and the SPE and the Agent, as its assignees) has been notified in
accordance with Section 4.1(a).
(r) Payments to NSI Enterprises. With respect to each Receivable
transferred to NSI Georgia hereunder, the Purchase Price received by NSI
Enterprises constitutes reasonably equivalent value in consideration therefor.
No transfer by NSI Enterprises of any Receivable hereunder is or may be voidable
under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.ss.ss.101 et
seq.), as amended.
(s) Enforceability of Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(t) Accounting. The manner in which NSI Enterprises accounts for the
transactions contemplated by this Agreement does not jeopardize the
characterization of the transactions contemplated herein as being true sales.
Page 41
Exhibit 10(i)A(2)
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.1 Conditions Precedent to Initial Purchase. The initial Purchase
under this Agreement is subject to the condition precedent that NSI Georgia
shall have received on or before the date of such Purchase the documents listed
on Schedule A.
Section 3.2 Conditions Precedent to All Purchases. NSI Georgia's obligation
to purchase any Receivable shall be subject to the further conditions precedent
that: (a) NSI Georgia (and the SPE and the Agent, as its assignees) shall have
received such additional approvals, opinions or documents as it may reasonably
request and (b) on the date such Receivable came into existence, the following
statements shall be true (and acceptance of the proceeds of any payment for such
Receivable shall be deemed a representation and warranty by NSI Enterprises that
such statements are then true):
(i) the representations and warranties set forth in Article II are
true and correct in all material respects on and as of the date such
Receivable came into existence as though made on and as of such date;
provided that the materiality threshold in the preceding clause shall not
be applicable with respect to any representation or warranty which itself
contains a materiality threshold; and
(ii) no event has occurred and is continuing that will constitute a
Termination Event or an Unmatured Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable, title to such Receivable and the Related Security and
Collections with respect thereto shall vest in NSI Georgia, whether or not the
conditions precedent to NSI Georgia's obligation to purchase such Receivable
were in fact satisfied. The failure of NSI Enterprises to satisfy any of the
foregoing conditions precedent, however, shall give rise to a right of NSI
Georgia to rescind the related purchase and direct NSI Enterprises to pay to NSI
Georgia an amount equal to the Purchase Price payment that shall have been made
with respect to any Receivables related thereto.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants. Until the date on which this Agreement
terminates in accordance with its terms, NSI Enterprises hereby covenants as set
forth below:
(a) Change in Credit and Collection Policy. At least thirty (30) days prior
to the effectiveness of any material change in or material amendment to the
Credit and Collection Policy, NSI Enterprises will deliver to NSI
Page 42
Exhibit 10(i)A(2)
Georgia a copy of the Credit and Collection Policy then in effect and a notice
(A) indicating such proposed change or amendment, and (B) if such proposed
change or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables, requesting NSI Georgia's (and the Agent's, as NSI Georgia's
ultimate assignee) consent thereto.
(b) Other Information. From time to time promptly upon NSI Georgia's (or
the SPE or the Agent, as its assignees) reasonable request, NSI Enterprises will
deliver to NSI Georgia such other information, documents, records or reports
relating to the Receivables or the condition or operations, financial or
otherwise, of NSI Enterprises as NSI Georgia (or the SPE or the Agent, as its
assignees) may from time to time reasonably request in order to protect the
interests of NSI Georgia (and such assigns) under or as contemplated by this
Agreement (except such plans or forecasts which have not been made available by
Parent to its creditors).
(c) Notice of Certain Material Events. NSI Enterprises will notify NSI
Georgia (and the SPE and the Agent, as its assignees) in writing within one (1)
Business Day after learning thereof by any Responsible Officer of the occurrence
of (i) each Termination Event and (ii) each Unmatured Termination Event, which
notice shall be signed by an Authorized Officer of NSI Enterprises and shall
advised what steps are being taken in respect thereto.
(d) Compliance with Laws and Preservation of Existence. NSI Enterprises
will comply in all respects with all applicable laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject, except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect. NSI Enterprises will preserve and maintain
its legal existence, rights, franchises and privileges in the jurisdiction of
its organization, and qualify and remain qualified in good standing as a foreign
entity in each jurisdiction where its business is conducted, except where the
failure to so qualify or remain in good standing could not reasonably be
expected to have a Material Adverse Effect; provided, however, that nothing
herein shall be deemed to preclude NSI Enterprises from merging or consolidating
with any other Person to the extent permitted under Section 7.1(c)(ii) of the
Credit and Security Agreement.
(e) Audits. NSI Enterprises will furnish to NSI Georgia (and the SPE and
the Agent, as its assignees) from time to time such information with respect to
it and the Receivables as NSI Georgia (or the SPE or the Agent) may reasonably
request. NSI Enterprises will, from time to time during regular business hours
as requested by NSI Georgia (or the SPE or the Agent as its assignees), upon not
less than 3 Business Days' prior written notice, permit NSI Georgia (and the SPE
and the Agent, as its assignees) or their respective agents or representatives,
(i) to examine and make copies of and abstracts from all Records in the
possession or under the control of NSI Enterprises relating to the Receivables
and the Related Security, including, without limitation, the related Contracts,
and (ii) to visit the offices and properties of NSI Enterprises for the purpose
of examining such materials described in clause (i) above, and to discuss
matters relating to NSI Enterprises' financial condition or the Receivables and
the Related Security or NSI Enterprises' performance under any of the
Transaction Documents or NSI Enterprises' performance under the Contracts and,
Page 43
Exhibit 10(i)A(2)
in each case, with any of the officers or employees of NSI Enterprises having
knowledge of such matters. To the extent that NSI Georgia (or the SPE or the
Agent, as its assignees), in the course of any such visit or inspection, obtains
possession of any Proprietary Information pertaining to NSI Enterprises or any
of its Affiliates, NSI Georgia (or such assign) shall handle such information in
accordance with the requirements of Section 14.5 of the Credit and Security
Agreement.
(f) Keeping and Marking of Records and Books.
(i) NSI Enterprises will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for the collection of
all Receivables (including, without limitation, records adequate to permit
the immediate identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). NSI Enterprises will give NSI
Georgia (and the SPE and the Agent, as its assignees) notice of any
material change in the administrative and operating procedures referred to
in the previous sentence.
(ii) NSI Enterprises will (A) on or prior to the date hereof, xxxx its
master data processing records and other books and records relating to the
Receivables with a legend, stating that NSI Georgia has purchased its
Receivables and (B) upon the request of NSI Georgia (or the SPE or the
Agent, as its assignees) and when a Termination Event is in existence: (x)
xxxx each Contract with a legend describing NSI Georgia's ownership
interests in the Receivables and (y) deliver to NSI Georgia (or the SPE or
the Agent, as its assignees) all Contracts (including, without limitation,
all multiple originals of any such Contract) relating to the Receivables.
(g) Compliance with Contracts and Credit and Collection Policy. NSI
Enterprises will timely and fully (i) perform and comply in all material
respects with all provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables, and (ii) comply
in all material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) Ownership. NSI Enterprises will take all necessary action to establish
and maintain, irrevocably in NSI Georgia, (A) legal and equitable title to the
Receivables and the Collections and (B) all of NSI Enterprises' right, title and
interest in the Related Security associated with the Receivables, in each case,
free and clear of any Adverse Claims other than Permitted Encumbrances (and the
Page 44
Exhibit 10(i)A(2)
SPE and the Agent, as its assignees) (including, without limitation, the filing
of all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect NSI Georgia's interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence the
interest of NSI Georgia as NSI Georgia (or the SPE or the Agent, as its
assignees) may reasonably request).
(i) Collections. NSI Enterprises will cause (1) all proceeds from all
Lock-Boxes in which any of the Receivables are collected to be directly
deposited by a Collection Bank into a Collection Account and (2) each Lock-Box
and Collection Account to be subject at all times to a Collection Account
Agreement that is in full force and effect. In the event any payments relating
to Receivables are remitted directly to NSI Enterprises or any Affiliate of NSI
Enterprises, NSI Enterprises will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof and, at all times prior
to such remittance, NSI Enterprises will itself hold or, if applicable, will
cause such payments to be held in trust for the exclusive benefit of NSI
Georgia, the SPE and the Agent (as its assignees). NSI Enterprises will transfer
exclusive ownership, dominion and control of each Lock-Box and Collection
Account to NSI Georgia and, will not grant the right to take dominion and
control of any Lock-Box or Collection Account at a future time or upon the
occurrence of a future event to any Person, except to NSI Georgia (or the SPE or
the Agent, as its assignees) as contemplated by this Agreement and the Credit
and Security Agreement.
(j) Taxes. Unless otherwise handled by the Parent: (i) NSI Enterprises will
file all material tax returns and reports required by law to be filed by it and
promptly pay all material taxes and governmental charges at any time owing,
except any such taxes which are not yet delinquent or are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books, and
(ii) NSI Enterprises will pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts of
NSI Georgia and its assigns.
Section 4.2 Negative Covenants of NSI Enterprises. Until the date on which
this Agreement terminates in accordance with its terms, NSI Enterprises hereby
covenants that:
(a) Name Change, Offices and Records. NSI Enterprises will not change its
(i) state of organization, (ii) name, (iii) identity or structure (within the
meaning of Article 9 of any applicable enactment of the UCC) or, at any time
while the location of its chief executive office is relevant to perfection of
NSI Georgia's interest in the Receivables or the associated Related Security and
Collections, relocate its chief executive office or any office where Records are
kept unless it shall have: (i) given NSI Georgia (and the SPE and the Agent, as
its assignees) at least ten (10) Business Day's prior written notice thereof and
(ii) delivered to NSI Georgia (or the SPE or the Agent, as its assignees) all
financing statements, instruments and other documents reasonably requested by
NSI Georgia (or the SPE or the Agent, as its assignees) in connection with such
change or relocation.
Page 45
Exhibit 10(i)A(2)
(b) Change in Payment Instructions to Obligors. NSI Enterprises will not
add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless NSI Georgia (and the SPE and the Agent, as its
assignees) shall have received, at least ten (10) days before the proposed
effective date therefor, (i) written notice of such addition, termination or
change and (ii) with respect to the addition of a Collection Bank or a
Collection Account or Lock-Box, an executed Collection Account Agreement with
respect to the new Collection Account or Lock-Box; provided, however, that NSI
Enterprises may make changes in instructions to Obligors regarding payments if
such new instructions require such Obligor to make payments to another existing
Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. NSI
Enterprises will not make any material change to the Credit and Collection
Policy that could adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables. NSI Enterprises
will not extend, amend or otherwise modify the terms of any Receivable or any
Contract related thereto other than in accordance with the Credit and Collection
Policy.
(d) Sales, Liens. NSI Enterprises will not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or grant any option with respect to,
or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of NSI Georgia
provided for herein and other Permitted Encumbrances), and NSI Enterprises will
defend the right, title and interest of NSI Georgia in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under NSI Enterprises (other than Permitted Encumbrances).
(e) Accounting for Purchases. NSI Enterprises will not, and will not permit
any Affiliate to, account for or treat (whether in financial statements or
otherwise) the transactions contemplated hereby in any manner other than the
sale of the Receivables and the Related Security by NSI Enterprises to NSI
Georgia except to the extent that such transactions are not recognized on
account of consolidated financial reporting in accordance with GAAP.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more of the
following events shall constitute a Termination Event:
(a) NSI Enterprises shall fail (i) to make any payment or deposit
required hereunder when due and, for any such payment or deposit which is
not in respect of principal, such failure continues for two (2) consecutive
Business Days.
Page 46
Exhibit 10(i)A(2)
(b) NSI Enterprises shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in paragraph
(a)) or any other Transaction Document to which it is a party and such
failure shall continue for and such failure shall not have been cured
within 30 days after the earlier to occur of (i) written notice thereof has
been given to NSI Enterprises by NSI Georgia or (ii) an Executive Officer
otherwise becomes aware of any such failure; provided, however, that such
cure period shall be extended for a period of time, not to exceed an
additional 30 days, reasonably sufficient to permit NSI Enterprises to cure
such failure if such failure cannot be cured within the initial 30-day
period but reasonably could be expected to be capable of cure within such
additional 30 days, NSI Enterprises has commenced efforts to cure such
failure during the initial 30-day period and NSI Enterprises is diligently
pursuing such cure.
(c) Any representation, warranty, certification or statement made by
NSI Enterprises in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made; provided
that the materiality threshold in the preceding clause shall not be
applicable with respect to any representation or warranty which itself
contains a materiality threshold.
(d) (i) NSI Enterprises shall generally not pay its debts as such
debts become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors;
or (ii) any proceeding shall be instituted by or against NSI Enterprises
seeking to adjudicate it bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property or (iii)
NSI Enterprises shall take any corporate action to authorize any of the
actions set forth in the foregoing clauses (i) or (ii) of this subsection
(c).
(e) The Parent ceases to directly or indirectly own, beneficially and
of record, 100% of the issued and outstanding voting stock of each of NSI
Georgia and NSI Enterprises.
Section 5.2 Remedies. Upon the occurrence and during the continuation of a
Termination Event, NSI Georgia may take any of the following actions: (i)
declare the Termination Date to have occurred, whereupon the Termination Date
shall forthwith occur, without demand, protest or further notice of any kind,
all of which are hereby expressly waived by NSI Enterprises; provided, however,
that upon the occurrence of a Termination Event described in Section 5.1(c), or
of an actual or deemed entry of an order for relief with respect to NSI
Enterprises under the Federal Bankruptcy Code, the Termination Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by NSI Enterprises, and/or (ii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
Page 47
Exhibit 10(i)A(2)
with respect to any amounts then due and owing by NSI Enterprises to NSI
Georgia. The aforementioned rights and remedies shall be without limitation and
shall be in addition to all other rights and remedies of NSI Georgia and its
assigns otherwise available under any other provision of this Agreement, by
operation of law, at equity or otherwise, all of which are hereby expressly
preserved, including, without limitation, all rights and remedies provided under
the UCC, all of which rights shall be cumulative.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnities by NSI Enterprises. Without limiting any other
rights that NSI Georgia may have hereunder or under applicable law, NSI
Enterprises hereby agrees to indemnify (and pay upon demand to) NSI Georgia and
its assigns, officers, directors, agents and employees (each an "Indemnified
Party") from and against any and all damages, losses, claims, taxes,
liabilities, costs, expenses and for all other amounts payable, including actual
and reasonable attorneys' fees (which attorneys may be employees of NSI Georgia
or any such assign) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or actually incurred by
any of them arising out of or as a result of this Agreement or the acquisition,
either directly or indirectly, by NSI Georgia of an interest in the Receivables,
excluding, however:
(a) Indemnified Amounts to the extent such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification or by reason of such Indemnified
Party's breach of its obligations hereunder or other legal duty;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party;
provided, however, that nothing contained in this sentence shall limit the
liability of NSI Enterprises or limit the recourse of NSI Georgia to NSI
Enterprises for amounts otherwise specifically provided to be paid by NSI
Enterprises under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, but subject in each case to clauses (a), (b)
and (c) above, NSI Enterprises shall indemnify NSI Georgia for Indemnified
Amounts relating to or resulting from:
(i) any representation or warranty made by NSI Enterprises (or any
officers of NSI Enterprises) under or in connection with this Agreement,
any other Transaction Document or any other information or report delivered
Page 48
Exhibit 10(i)A(2)
by NSI Enterprises pursuant hereto or thereto for which NSI Georgia has not
received a Purchase Price Credit that shall have been false or incorrect
when made or deemed made;
(ii) the failure by NSI Enterprises, to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract related
thereto, or the nonconformity of any Receivable or Contract included
therein with any such applicable law, rule or regulation or any failure of
NSI Enterprises to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of NSI Enterprises to perform its duties, covenants
or other obligations in accordance with the provisions of this Agreement or
any other Transaction Document;
(iv) any products liability, personal injury or damage, suit or other
similar claim arising out of or in connection with merchandise, insurance
or services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of the Purchase
hereunder, the ownership of the Receivables or any other investigation,
litigation or proceeding relating to NSI Enterprises in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby except to the extent arising from NSI Georgia's own
gross negligence or willful misconduct;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Termination Event described in Section 5.1(c);
Page 49
Exhibit 10(i)A(2)
(x) any failure to vest and maintain vested in NSI Georgia, or to
transfer to NSI Georgia, legal and equitable title to, and ownership of,
the Receivables and the Collections, and all of NSI Enterprises' right,
title and interest in the Related Security associated with the Receivables,
in each case, free and clear of any Adverse Claim;
(xi) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any
Receivable, the Related Security and Collections with respect thereto, and
the proceeds of any thereof, whether at the time of the Purchase or at any
subsequent time;
(xii) any action or omission by NSI Enterprises which reduces or
impairs the rights of NSI Georgia with respect to any Receivable or the
value of any such Receivable (for any reason other than the application of
Collections thereto or charge-off of any Receivable as uncollectible)
unless NSI Georgia has received a Purchase Price Credit therefor; and
(xiii) any attempt by any Person to void any Purchase hereunder under
statutory provisions, common law or equitable action.
Section 6.2 Other Costs and Expenses. NSI Enterprises shall pay to NSI
Georgia on demand any and all reasonable costs and out-of-pocket expenses
actually incurred by NSI Georgia, if any, including reasonable counsel fees and
expenses actually incurred in connection with the enforcement of this Agreement
and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following a Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of NSI Georgia (or any of its
assigns) in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights
or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for
which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by NSI Enterprises and NSI
Page 50
Exhibit 10(i)A(2)
Georgia and, to the extent required under the Credit and Security
Agreement, the Agent and the Liquidity Banks or the Required Liquidity
Banks. Any material amendment, supplement, modification of waiver will
required satisfaction of the Rating Agency Condition.
Section 7.2 Notices. All communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other parties hereto
at their respective addresses or telecopy numbers set forth on the signature
pages hereof or at such other address or telecopy number as such Person may
hereafter specify for the purpose of notice to each of the other parties hereto.
Each such notice or other communication shall be effective (a) if given by
telecopy, upon the receipt thereof, (b) if given by mail, five (5) Business Days
after the time such communication is deposited in the mail with first class
postage prepaid or (c) if given by any other means, when received at the address
specified in this Section 7.2.
Section 7.3 Protection of Ownership Interests of NSI Georgia.
(a) NSI Enterprises agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take
all actions, that may be necessary or desirable, or that NSI Georgia (or
its assigns) may reasonably request, to perfect, protect or more fully
evidence the interest of NSI Georgia hereunder and the Receivable
Interests, or to enable NSI Georgia (or its assigns) to exercise and
enforce their rights and remedies hereunder. At any time when a Termination
Event exists, NSI Georgia (or its assigns) may, at NSI Enterprises' sole
cost and expense, direct NSI Enterprises to notify the Obligors of
Receivables of the ownership interests of NSI Georgia under this Agreement
and may also direct that payments of all amounts due or that become due
under any or all Receivables be made directly to NSI Georgia or its
designee.
(b) If NSI Enterprises fails to perform any of its obligations
hereunder, NSI Georgia (or its assigns) may (but shall not be required to)
perform, or cause performance of, such obligations, and NSI Georgia's (or
such assigns') actual and reasonable costs and expenses incurred in
connection therewith shall be payable by NSI Enterprises as provided in
Section 6.2. NSI Enterprises irrevocably authorizes NSI Georgia (and its
assigns) at any time and from time to time in the sole discretion of NSI
Georgia (or its assigns), and appoints NSI Georgia (and its assigns) as its
attorney(ies)-in-fact, to act on behalf of NSI Enterprises (i) to execute
on behalf of NSI Enterprises as debtor and to file financing statements
necessary or desirable in NSI Georgia's (or its assigns') reasonable
opinion to perfect and to maintain the perfection and priority of the
interest of NSI Georgia in the Receivables and associated Related Security
and Collections and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to
the Receivables as a financing statement in such offices as NSI Georgia (or
its assigns) in their reasonable opinion deem necessary or desirable to
Page 51
Exhibit 10(i)A(2)
perfect and to maintain the perfection and priority of NSI Georgia's
interests in the Receivables. This appointment is coupled with an interest
and is irrevocable.
Section 7.4 Confidentiality of Fee Letter. Each of NSI Georgia and NSI
Enterprises shall maintain and shall cause each of its employees, officers and
advisers to maintain the confidentiality of the Fee Letter, except that NSI
Enterprises and its officers and employees may disclose such information to NSI
Enterprises' external consultants, accountants and attorneys and as required by
any applicable law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or not
having the force or effect of law) or to the extent necessary to enforce its
rights under the Transaction Documents.
Section 7.5 Bankruptcy Petition.
(a) Each of NSI Enterprises and NSI Georgia hereby covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all outstanding senior indebtedness of Blue Ridge, it will not institute
against, or join any other Person in instituting against, Blue Ridge any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
(b) Each of NSI Enterprises and NSI Georgia hereby covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all outstanding obligations of the SPE under the Credit and Security
Agreement, it will not institute against, or join any other Person in
instituting against, the SPE any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
Section 7.6 CHOICE OF LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF GEORGIA WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE PERFECTION, OR THE EFFECT OF PERFECTION OR
NONPERFECTION, OF THE OWNERSHIP INTERESTS OR SECURITY INTERESTS OF NSI GEORGIA
OR ANY OF ITS ASSIGNS.
Section 7.7 CONSENT TO JURISDICTION. EACH OF NSI ENTERPRISES AND NSI
GEORGIA HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR GEORGIA STATE COURT SITTING IN XXXXXX COUNTY, GEORGIA
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT AND HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
Page 52
Exhibit 10(i)A(2)
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF NSI
GEORGIA (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST NSI ENTERPRISES IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY NSI ENTERPRISES
AGAINST NSI GEORGIA (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY NSI ENTERPRISES
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN XXXXXX COUNTY,
GEORGIA.
Section 7.8 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY NSI ENTERPRISES PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.9 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
NSI Enterprises, NSI Georgia and their respective successors and permitted
assigns (including any trustee in bankruptcy).
(c) NSI Enterprises may not assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of NSI
Georgia.
(d) NSI Georgia may assign at any time its rights and obligations
hereunder and interests herein to any other Person without the consent of
NSI Enterprises. Without limiting the foregoing, NSI Enterprises
acknowledges that NSI Georgia, pursuant to the Contribution and Sale
Agreement, may assign to the SPE, and the SPE, pursuant to the Credit and
Security Agreement, may assign to the Agent, for the benefit of the
Lenders, its rights, remedies, powers and privileges hereunder and that the
Agent may further assign such rights, remedies, powers and privileges to
the extent permitted in the Credit and Security Agreement.
Page 53
Exhibit 10(i)A(2)
(e) NSI Enterprises agrees that the Agent, as the ultimate assignee
hereof, shall, subject to the terms of the Credit and Security Agreement,
have the right to enforce this Agreement and to exercise directly all of
NSI Georgia's rights and remedies under this Agreement (including, without
limitation, the right to give or withhold any consents or approvals of NSI
Georgia to be given or withheld hereunder) and NSI Enterprises agrees to
cooperate fully with the Agent in the exercise of such rights and remedies.
(f) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall
remain in full force and effect until terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i)
any breach of any representation and warranty made by NSI Enterprises
pursuant to Article II; (ii) the indemnification and payment provisions of
Article VI; and (iii) Section 7.5 shall be continuing and shall survive any
termination of this Agreement.
Section 7.10 Counterparts; Severability; Section References. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
{signature page follows}
Page 54
Exhibit 10(i)A(2)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
NSI ENTERPRISES, INC., a California corporation
By:
-----------------------------------
Name:
Title:
Address:
NSI Center
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
NATIONAL SERVICE INDUSTRIES, INC., a
Georgia corporation
By:
-----------------------------------
Name:
Title:
Address:
NSI Center
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Page 55
Exhibit 10(i)A(2)
Exhibit I
Definitions
-----------
This is Exhibit I to the Agreement (as hereinafter defined). As used in the
Agreement and the Exhibits and Schedules thereto, capitalized terms have the
meanings set forth in this Exhibit I (such meanings to be equally applicable to
the singular and plural forms thereof). If a capitalized term is used in the
Agreement, or any Exhibit or Schedule thereto, and is not otherwise defined
therein or in this Exhibit I, such term shall have the meaning assigned thereto
in Exhibit I to the Credit and Security Agreement.
"Additional Receivable" has the meaning set forth in Section 1.1(b) of the
Agreement.
"Agent" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of May 2, 2001,
between NSI Enterprises and NSI Georgia, as the same may be amended, restated or
otherwise modified.
"Blue Ridge" has the meaning set forth in the Preliminary Statements to the
Agreement.
"Contract" means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable.
"Credit and Collection Policy" means NSI Enterprises' and NSI Georgia's
collective credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof, as modified from time to time in
accordance with the Credit and Security Agreement.
"Credit and Security Agreement" has the meaning set forth in the
Preliminary Statements to the Agreement.
"Default Fee" means a per annum rate of interest equal to the sum of (i)
the Prime Rate, plus (ii) 2% per annum.
"Discount Factor" means a percentage calculated to provide NSI Georgia with
a reasonable profit on its investment in the Receivables after taking account of
(i) the time value of money based upon the anticipated dates of collection of
the Receivables and the cost to NSI Georgia of financing its investment in the
Receivables during such period, (ii) the risk of nonpayment by the Obligors, and
Page 56
Exhibit 10(i)A(2)
(iii) the cost of compensating someone to service and collect the Receivables
for NSI Georgia. NSI Enterprises and NSI Georgia may agree from time to time to
change the Discount Factor based on changes in one or more of the items
affecting the calculation thereof, provided that any change to the Discount
Factor shall take effect as of the commencement of a month, shall apply only
prospectively and shall not affect the Purchase Price payment made prior to the
month during which NSI Enterprises and NSI Georgia agree to make such change.
"Executive Officer" means any of the chief executive officer, president,
executive vice president or senior vice president of the Parent.
"Existing Receivables" has the meaning set forth in Section 1.1(a) of the
Agreement.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those which are to be used in making the calculations for
purposes of determining compliance with the terms of this Agreement.
"Initial Cutoff Date" means the Business Day immediately prior to the date
hereof.
"Lien" shall mean nay lien, charge, claim, security interest, mortgage or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Margin Stock" means "margin stock" as defined in Regulation T, U or X of
the Board of Governors of the Federal Reserve System, as in effect from time to
time, together with all official rulings and interpretations issued thereunder.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of the Parent and its consolidated
Subsidiaries, taken as a whole, (ii) the ability of NSI Enterprises to perform
its obligations under the Agreement or any other Transaction Document, (iii) the
legality, validity or enforceability of the Agreement or any other Transaction
Document, (iv) NSI Georgia's interest in the Receivables generally or in any
significant portion of the Receivables, the Related Security or Collections with
respect thereto, or (v) the collectibility of the Receivables generally or of
any material portion of the Receivables.
"NSI Enterprises" has the meaning set forth in the preamble to the
Agreement, and such term shall include such Person's successors and permitted
assigns.
"NSI Georgia" has the meaning set forth in the preamble to the Agreement,
and such term shall include such Person's successors and permitted assigns.
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Exhibit 10(i)A(2)
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Parent" means National Service Industries, Inc., a Delaware corporation,
and its successors and permitted assigns.
"Permitted Encumbrances" shall mean the following: (a) Liens for taxes or
assessments or other governmental charges not yet due and payable; and (b) Liens
created by the Transaction Documents.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Purchase" means each purchase pursuant to Section 1.1 of the Agreement by
NSI Georgia from NSI Enterprises of Receivables and the Related Security and
Collections related thereto, together with all related rights in connection
therewith.
"Purchase Price" means, with respect to each Purchase, the aggregate price
to be paid by NSI Georgia to NSI Enterprises for such Purchase in accordance
with Section 1.2 of the Agreement for the Receivables, Collections and Related
Security then being sold to NSI Georgia, which price shall equal on any date (i)
the product of (x) the Outstanding Balance of such Receivables on such date,
multiplied by (y) one minus the Discount Factor in effect on such date, minus
(ii) any Purchase Price Credits to be credited against the Purchase Price
otherwise payable in accordance with Section 1.3 of the Agreement.
"Purchase Price Credit" has the meaning set forth in Section 1.3 of the
Agreement.
"Receivable" means all indebtedness and other obligations owed to NSI
Enterprises (at the times it arises, and before giving effect to any transfer or
conveyance under the Agreement), including, without limitation, any
indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale of goods
or the rendering of services by NSI Enterprises and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided, further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless or whether the account debtor or NSI
Enterprises treats such indebtedness, rights or obligations as a separate
payment obligation.
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Exhibit 10(i)A(2)
"Receivable Sale Agreement" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Records" means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.
"Related Security" means, with respect to any Receivable:
(i) all of NSI Enterprises' interest in the inventory and goods
(including returned or repossessed inventory or goods), if any, the sale,
financing or lease of which by NSI Enterprises gave rise to such
Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of NSI Enterprises' right, title and interest in each
Lock-Box and each Collection Account, and
(vii) all proceeds of any of the foregoing.
"Responsible Officer" means any Executive Officer as well as any other
officer of the Parent who is primarily responsible for the administration of the
transactions contemplated by the Transaction Documents.
"Settlement Date" has the meaning given to that term in the Credit and
Security Agreement.
"Termination Date" means the earliest to occur of (i) the Business Day
immediately prior to the occurrence of a Termination Event set forth in Section
5.1(c), (ii) the Business Day specified in a written notice from NSI Georgia to
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Exhibit 10(i)A(2)
NSI Enterprises following the occurrence and during the continuation of any
other Termination Event, and (iii) the date which is ten (10) Business Days
after NSI Georgia's receipt of written notice from NSI Enterprises that it
wishes to terminate purchases under this Agreement.
"Termination Event" has the meaning set forth in Section 5.1 of the
Agreement.
"Transaction Documents" means, collectively, this Agreement, each
Collection Account Agreement to which NSI Enterprises is a party, and all other
instruments, documents and agreements executed and delivered in connection
herewith.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be enacted and in effect in the State of Georgia; provided that in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of, or remedies with respect to, NSI Georgia's interest
in the Receivables is governed by the Uniform Commercial Code as enacted and in
effect in a jurisdiction other than the State of Georgia, the term "UCC" shall
mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions
"Unmatured Termination Event" means an event which, with the passage of
time or the giving of notice, or both, would constitute a Termination Event.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Georgia, and not specifically defined herein, are used herein as defined in such
Article 9.
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Exhibit 10(i)A(2)
Exhibit II
----------
Chief Executive Office; Principal Place of Business; Locations of Records;
--------------------------------------------------------------------------
Federal Employer Identification Number; Other Names
---------------------------------------------------
Chief Executive Office:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Principal Place of Business:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Locations of Records:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Xxx Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Federal Employer Identification Number: 00-0000000
Legal, Trade and Assumed Names: Lithonia Lighting, Peerless Lighting and Hydrel
Page 61
Exhibit 10(i)A(2)
Exhibit III
-----------
NAMES OF COLLECTION BANKS; LOCK-BOXES & COLLECTION ACCOUNTS
LOCK-BOX RELATED COLLECTION ACCOUNT
-------- --------------------------
Name of Current Account Holder: Lithonia Lighting, a division of NSI GA
P.O. Box 100863 Account Number: Lockbox #100863, DDA#0000000000
Xxxxxxx, XX 00000 Bank Name: Bank of America
ABA Number: 000000000
Contact Person: Xxxxxx Xxxxxxx
Contact's Tel: 000-000-0000
Contact's Fax: 000-000-0000
Name of Current Account Holder: Lithonia Lighting, a division of NSI
P.O. Box 360305 Account Number: DDA#0000000
Xxxxxxxxxx, XX 00000 Bank Name: Mellon Bank, Pittsburgh PA
ABA Number: 000000000
Dept. LA 21025 Contact Person: Xxxxx Xxxxxxxx
Pasadena, CA Contact's Tel: 000-000-0000
00000-0000 Contact's Fax: 000-000-0000
Page 62
Exhibit 10(i)A(2)
Schedule A
----------
DOCUMENTS TO BE DELIVERED TO NSI GEORGIA
ON OR PRIOR TO THE INITIAL PURCHASE
1. Executed copies of the Receivables Sale Agreement, duly executed by the
parties thereto.
2. Copy of the Credit and Collection Policy to attach to the Receivables Sale
Agreement as an Exhibit.
3. A certificate of NSI Enterprises' [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors of NSI
Enterprises, authorizing NSI Enterprises' execution, delivery and
performance of the Receivables Sale Agreement and the other documents to be
delivered by it thereunder;
(b) A copy of the articles of incorporation and by-laws of NSI
Enterprises (also certified, in the case of such articles, by the Secretary
of State of California on or within thirty (30) days prior to closing);
(c) Good Standing Certificates for NSI Enterprises issued by the
Secretaries of State of (i) its state of incorporation, and (ii), if
different, that state where it maintains its principal place of business;
and
(d) The names and signatures of the officers authorized on its behalf
to execute the Receivables Sale Agreement and any other documents to be
delivered by it thereunder.
4. Pre-filing state and federal tax lien, judgment lien and UCC lien searches
against NSI Enterprises from the following jurisdictions:
a. Clerk of Superior Court of Xxxxxx County, Xxxxxxx
x. Georgia Superior Court Clerks Cooperative Authority
c. Secretary of State of California
d. Santa Xxxxx County, California.
5. Proper financing statements, duly filed under the UCC on or before the date
of the initial Purchase (as defined in the Receivables Sale Agreement) in
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Exhibit 10(i)A(2)
all jurisdictions as may be necessary or, in the opinion of NSI Georgia (or
its assigns), desirable, under the UCC of all appropriate jurisdictions or
any comparable law in order to perfect the ownership interests contemplated
by the Receivables Sale Agreement.
6. Time stamped receipt copies of proper UCC termination statements, if any,
necessary to release all security interests and other rights of any Person
in the Receivables, Contracts or Related Security previously granted by NSI
Enterprises.
7. Executed Collection Account Agreements for each Lock-Box and Collection
Account that, prior to the date of this Agreement, was maintained in NSI
Enterprises' name.
8. A favorable opinion of legal counsel for NSI Enterprises licensed to give
opinions under Georgia law reasonably acceptable to NSI Georgia (and the
Agent, as NSI Georgia's assignee) as to the following:
(a) NSI Enterprises is a corporation duly organized, validly existing,
and in good standing under the laws of the State of California.
(b) NSI Enterprises has all requisite authority to conduct its
business in each jurisdiction where failure to be so qualified would have a
material adverse effect on NSI Enterprises' business.
(c) The execution and delivery by NSI Enterprises of the Receivables
Sale Agreement and each other Transaction Document to which it is a party
and its performance of its obligations thereunder have been duly authorized
by all necessary organizational action and proceedings on the part of NSI
Enterprises and will not:
(i) require any action by or in respect of, or filing with, any
governmental body, agency or official (other than the filing of UCC
financing statements);
(ii) contravene, or constitute a default under, any provision of
applicable law or regulation or of its articles or certificate of
incorporation or bylaws or of any agreement, judgment, injunction,
order, decree or other instrument binding upon NSI Enterprises; or
(iii) result in the creation or imposition of any Adverse Claim
on assets of NSI Enterprises or any of its Subsidiaries (except as
contemplated by the Receivables Sale Agreement).
(d) The Receivables Sale Agreement and each other Transaction Document
to which it is a party has been duly executed and delivered by NSI
Enterprises and constitutes the legally valid, and binding obligation of
NSI Enterprises enforceable in accordance with its terms, except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency or
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Exhibit 10(i)A(2)
similar laws affecting the enforcement of creditors' rights generally and
subject also to the availability of equitable remedies if equitable
remedies are sought.
(e) In the event that the receivables Sale Agreement is held to create
a transfer for security purposes rather than a true sale or other outright
assignment, the provisions of the Receivables Sale Agreement are effective
to create valid security interests in favor of NSI Georgia in all of NSI
Enterprises' right, title and interest in and to the Receivables and
Related Security described therein which constitute "accounts," "chattel
paper" or "general intangibles" (each as defined in the UCC) (collectively,
the "Opinion Collateral"), as security for the payment of a loan deemed to
have been made by NSI Georgia to NSI Enterprises in an amount equal to the
Purchase Price (as defined therein) of the Receivables (as defined
therein), together with all other obligations of NSI Georgia thereunder.
(f) Each of the UCC-1 Financing Statements naming NSI Enterprises as
debtor, NSI Georgia, as secured party, and the SPE, as assignee of secured
party, and each of the UCC-3 Assignments naming the Agent, as assignee of
the SPE, to be filed in the [describe filing offices], is in appropriate
form for filing therein. Upon filing of such UCC-1 Financing Statements and
such UCC-3 Assignments in such filing offices and payment of the required
filing fees, the security interest in favor of NSI Georgia in the Opinion
Collateral will be perfected and assigned of record to first, to the SPE,
and then, to the Agent.
(g) Based solely on our review of the [describe UCC Search Reports],
and assuming (i) the filing of the Financing Statements and payment of the
required filing fees in accordance with paragraph (f) and (ii) the absence
of any intervening filings between the date and time of the Search Reports
and the date and time of the filing of the Financing Statements, the
security interest of NSI Georgia (and the Agent, as its ultimate assignee)
in the Opinion Collateral is prior to any security interest granted in the
Opinion Collateral by NSI Enterprises, the priority of which is determined
solely by the filing of a financing statement in the [describe filing
offices].
(h) To the best of the opinion giver's knowledge, there is no action,
suit or other proceeding against NSI Enterprises or any Affiliate of NSI
Enterprises, which would materially adversely affect the business or
financial condition of NSI Enterprises and its Affiliates taken as a whole
or which would materially adversely affect the ability of NSI Enterprises
to perform its obligations under the Receivables Sale Agreement.
(i) NSI Enterprises is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
9. A "true sale" opinion of counsel for NSI Enterprises with respect to the
transactions contemplated by the Receivables Sale Agreement.
10. A Certificate of NSI Enterprises' chief financial officer certifying that,
as of the closing date, no Termination Event or Unmatured Termination Event
exists and is continuing.
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Exhibit 10(i)A(2)
11. Executed copies of (i) all consents from and authorizations by any Persons
and (ii) all waivers and amendments to existing credit facilities, that are
necessary in connection with the Receivables Sale Agreement.
