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EXHIBIT 10.3
RECEIVABLES SALE AGREEMENT
DATED AS OF SEPTEMBER 7, 2004
BETWEEN
EQUIFAX CAPITAL MANAGEMENT, INC.,
AS SELLER,
AND
EQUIFAX RECEIVABLES FINANCE LLC,
AS BUYER
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TABLE OF CONTENTS
PAGE
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE....................................2
Section 1.1 Initial Contribution of Receivables..............................2
Section 1.2 Purchase of Receivables..........................................2
Section 1.3 Payment for the Purchases........................................3
Section 1.4 Purchase Price Credit Adjustments................................4
Section 1.5 Payments and Computations, Etc...................................5
Section 1.6 License of Software..............................................5
Section 1.7 Characterization.................................................6
ARTICLE II REPRESENTATIONS AND WARRANTIES......................................6
Section 2.1 Representations and Warranties of Seller.........................6
ARTICLE III CONDITIONS OF PURCHASE............................................10
Section 3.1 Conditions Precedent to Purchase................................10
Section 3.2 Conditions Precedent to Subsequent Payments.....................10
ARTICLE IV COVENANTS..........................................................10
Section 4.1 Affirmative Covenants of Seller.................................10
Section 4.2 Negative Covenants of Seller....................................15
ARTICLE V TERMINATION EVENTS..................................................16
Section 5.1 Termination Events..............................................16
Section 5.2 Remedies........................................................17
ARTICLE VI INDEMNIFICATION....................................................17
Section 6.1 Indemnities by Seller...........................................17
Section 6.2 Other Costs and Expenses........................................20
ARTICLE VII MISCELLANEOUS.....................................................20
Section 7.1 Waivers and Amendments..........................................20
Section 7.2 Notices.........................................................20
Section 7.3 Protection of Ownership Interests of Buyer......................20
Section 7.4 Confidentiality; Tax Treatment..................................21
Section 7.5 Bankruptcy Petition.............................................22
Section 7.6 Limitation of Liability.........................................23
SECTION 7.7 CHOICE OF LAW...................................................23
SECTION 7.8 CONSENT TO JURISDICTION.........................................23
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SECTION 7.9 WAIVER OF JURY TRIAL............................................23
Section 7.10 Integration; Binding Effect; Survival of Terms..................24
Section 7.11 Counterparts; Severability; Section References..................24
EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; State
of Organization; Federal Employer Identification Number;
Organizational Identification Number; Other Names
Exhibit III - Lock-Boxes; Collection Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Copy of Credit and Collection Policy
Exhibit VI - Form of Subordinated Note
Exhibit VII Form of Purchase Report
Schedule A List of Documents to Be Delivered to Buyer Prior to the
Purchases
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RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of September 7, 2004 (as the
same may from time to time hereafter be amended, supplemented, restated or
otherwise modified, this "AGREEMENT" or the "SECOND STEP RECEIVABLES SALE
AGREEMENT"), is by and among EQUIFAX CAPITAL MANAGEMENT, INC., a Georgia
corporation ("SELLER" or "ECM"), and Equifax Receivables Finance LLC, a Delaware
limited liability company ("BUYER"). UNLESS DEFINED ELSEWHERE HEREIN,
CAPITALIZED TERMS USED IN THIS AGREEMENT SHALL HAVE THE MEANINGS ASSIGNED TO
SUCH TERMS IN EXHIBIT I HERETO (OR, IF NOT DEFINED IN EXHIBIT I HERETO, THE
MEANING ASSIGNED TO SUCH TERM IN EXHIBIT I TO THE CREDIT AND SECURITY
AGREEMENT).
PRELIMINARY STATEMENTS
Pursuant to a Receivables Sale Agreement dated as of
September 7, 2004, by and among Equifax Inc., a Georgia corporation
("PARENT"), Equifax Information Services LLC, a Georgia limited
liability company ("EIS"), Equifax Direct Marketing Solutions, a Georgia
limited liability company, Equifax Information Services of Puerto Rico
Inc., a Georgia corporation, and Compliance Data Center, Inc., a Georgia
corporation (each of the foregoing, an "ORIGINATOR" and collectively,
the "ORIGINATORS"), and Equifax Capital Management, Inc., a Georgia
corporation ("BUYER") (as the same may from time to time hereafter be
amended, supplemented, restated or otherwise modified, the "FIRST STEP
RECEIVABLES SALE AGREEMENT"), Seller has acquired from the Originators,
and from time to time hereafter will acquire from the Originators,
Receivables, together with the Related Security and Collections with
respect thereto. Seller wishes to sell and assign to Buyer, and Buyer
wishes to purchase from Seller, all of Seller's right, title and
interest in and to the Receivables, together with the Related Security
and Collections with respect thereto.
Seller and Buyer intend the transactions contemplated hereby
to be true sales to Buyer by Seller of the Receivables, providing Buyer
with the full benefits of ownership of such Receivables, and neither
Seller nor Buyer intends these transactions to be, or for any purpose to
be characterized as, loans from Buyer to Seller.
Buyer may finance a portion of the Purchase Price of the
Receivables by pledging the Receivables and borrowing under the Credit
and Security Agreement.
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:
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 INITIAL CONTRIBUTION OF RECEIVABLES. On the date hereof,
Seller does hereby contribute, assign, transfer, set-over and otherwise convey
to Buyer, and Buyer does hereby accept from Seller as a contribution to Buyer's
capital, all of Seller's right, title and interest in and to the Initial
Contributed Receivables, together with all Related Security relating thereto and
all Collections thereof.
Section 1.2 PURCHASE OF RECEIVABLES.
(a) Effective on the date hereof, in consideration for the
Purchase Price paid to Seller and upon the terms and subject to the conditions
set forth herein, Seller does hereby sell, assign, transfer, set-over and
otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer does hereby purchase from Seller, all of Seller's
right, title and interest in and to all Receivables in which Seller has any
rights as of the date hereof (other than the Initial Contributed Receivables)
and all Receivables in which Seller hereafter acquires any rights through and
including the Termination Date, together, in each case, with all Related
Security relating thereto and all Collections thereof. In accordance with the
preceding sentence, on the date hereof Buyer shall acquire all of Seller's
right, title and interest in and to all Receivables (other than the Initial
Contributed Receivables) in which Seller has any rights as of the date hereof
and all Receivables in which Seller thereafter acquires any rights through and
including the Termination Date, together with all Related Security relating
thereto and all Collections thereof. Buyer shall be obligated to pay the
Purchase Price for the Receivables purchased hereunder in accordance with
SECTION 1.3.
(b) On the 20th day of each month hereafter (or if any such
day is not a Business Day, on the next succeeding Business Day thereafter,
Seller shall (or shall require the Servicer to) deliver to Buyer a report in
substantially the form of Exhibit VII hereto (each such report being herein
called a "PURCHASE REPORT") with respect to the Receivables sold by Seller to
Buyer during the Settlement Period then most recently ended. In addition to, and
not in limitation of, the foregoing, in connection with the payment of the
Purchase Price for any Receivables purchased hereunder, Buyer may request that
Seller deliver, and Seller shall deliver, such approvals, opinions, information
or documents as Buyer may reasonably request.
(c) It is the intention of the parties hereto that each
Purchase of Receivables from Seller made hereunder shall constitute a sale,
which sale is absolute and irrevocable and provides Buyer with the full benefits
of ownership of the Receivables. Except for the Purchase Price Credits owed to
Buyer pursuant to SECTION 1.4, the sale of Receivables hereunder by Seller is
made without recourse to Seller; PROVIDED, HOWEVER, that (i) Seller shall be
liable to Buyer for all representations, warranties, covenants and indemnities
made by Seller pursuant to the terms of the Transaction Documents to which
Seller is a party, and (ii) such sale does not constitute and is not intended to
result in an assumption by Buyer or any assignee thereof of any obligation of
Seller or any other Person arising in connection with the Receivables, the
related Contracts and/or other Related Security or any other obligations of
Seller. In view of the intention of the parties hereto that each Purchase of
Receivables made hereunder shall constitute a sale of such Receivables rather
than loans secured thereby, Seller agrees that it will, on or prior to the date
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hereof and in accordance with SECTION 4.1(E)(II), xxxx its books and records
including aged trial balance with respect to the Receivables with a legend
acceptable to Buyer and to the Agent (as Buyer's assignee), evidencing that
Buyer has purchased such Receivables as provided in this Agreement and to note
in its financial statements that its Receivables have been sold to Buyer. Upon
the request of Buyer or the Agent (as Buyer's assignee), Seller will execute and
file such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate to perfect and maintain the perfection of Buyer's ownership
interest in the Receivables and the Related Security and Collections with
respect thereto, or as Buyer or the Agent (as Buyer's assignee) may reasonably
request.
Section 1.3 PAYMENT FOR THE PURCHASES.
(a) The Purchase Price for the Purchase from Seller of
Receivables as of the date hereof (other than the Initial Contributed
Receivables) shall be payable in full by Buyer to Seller on the date hereof, and
shall be paid to Seller in the following manner:
(i) by delivery of immediately available funds, and
(ii) the balance, by delivery of the proceeds of a
subordinated revolving loan from Seller to Buyer (a "SUBORDINATED LOAN")
in an amount not to exceed the least of (A) the remaining unpaid portion
of such Purchase Price, (B) the maximum Subordinated Loan that could be
borrowed without rendering Buyer's Net Worth less than the Required
Capital Amount, and (C) fifteen percent (15%) of such Purchase Price.
Seller is hereby authorized by Buyer to endorse on the schedule attached
to its Subordinated Note an appropriate notation evidencing the date and
amount of each advance thereunder, as well as the date of each payment
with respect thereto, PROVIDED THAT the failure to make such notation
shall not affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable acquired by Seller after the date hereof
shall be due and owing in full by Buyer to Seller or its designee on the date
each such Receivable is acquired by Seller (except that Buyer may, with respect
to any such Purchase Price, offset against such Purchase Price any amounts owed
by Seller to Buyer hereunder and which have become due but remain unpaid) and
shall be paid to Seller in the manner provided in the following paragraphs (b),
(c) and (d).
(b) With respect to any Receivables acquired by Seller after
the date hereof, on each Settlement Date, Buyer shall pay Seller the Purchase
Price therefor in accordance with SECTION 1.3(D) and in the following manner:
FIRST, by delivery to Seller or its designee of
immediately available funds, to the extent of funds available to Buyer
from cash on hand or from borrowings under the Credit and Security
Agreement;
SECOND, by delivery to Seller or its designee of the
proceeds of a Subordinated Loan, PROVIDED THAT the making of any such
Subordinated Loan shall be subject to the provisions set forth in
SECTION 1.3(A)(II); and
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THIRD, unless the Termination Date has occurred in
accordance with this Agreement, by accepting a contribution to its
capital in an amount equal to the remaining unpaid balance of such
Purchase Price.
Subject to the limitations set forth in SECTION 1.3(A)(II), Seller irrevocably
agrees to advance each Subordinated Loan requested by Buyer on or prior to the
Termination Date. The Subordinated Loans owing to Seller shall be evidenced by,
and shall be payable in accordance with the terms and provisions of its
Subordinated Note and shall be payable solely from funds which Buyer is not
required under the Credit and Security Agreement to set aside for the benefit
of, or otherwise pay over to, the Lenders.
(c) From and after the Termination Date, Seller shall not be
obligated to (but may, at its option) sell or contribute Receivables to Buyer.
(d) Although the Purchase Price for each Receivable acquired
by Seller after the date hereof shall be due and payable in full by Buyer to
Seller on the date such Receivable was acquired by Seller, settlement of the
Purchase Price between Buyer and Seller shall be effected on a monthly basis on
Settlement Dates with respect to all Receivables acquired by Seller during the
same Calculation Period and based on the information contained in the Purchase
Report delivered by Seller for the Calculation Period then most recently ended.
Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Subordinated Note made pursuant to
SECTION 1.3 and any contribution of capital to Buyer made pursuant to SECTION
1.3(B) shall be deemed to have occurred and shall be effective as of the last
Business Day of the Calculation Period to which such settlement relates.
Section 1.4 PURCHASE PRICE CREDIT ADJUSTMENTS. If on any day:
(a) the Outstanding Balance of a Receivable purchased from
Seller is:
(i) reduced as a result of any defective or rejected
or returned goods or services, any discount or any adjustment or
otherwise by Seller (other than as a result of such Receivable becoming
a Defaulted Receivable or to reflect cash Collections on account of such
Receivable),
(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
SECTIONS 2.1(H), (I), (J), (L), (R), (S), (T), (U), the second sentence of
SECTION 2.1(Q) hereof and the last clause (relating to bulk sales laws) of
SECTION 2.1(C) are not true when made or deemed made with respect to any
Receivable,
then, in such event, Buyer shall be entitled to a credit (each, a "PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable to Seller 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 and the Outstanding Balance of such Receivable
(calculated before giving effect to the applicable reduction or cancellation).
If such Purchase
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Price Credit exceeds the Original Balance of the Receivables sold by Seller on
any day, Seller shall pay the remaining amount of such Purchase Price Credit in
cash immediately, PROVIDED that if the Termination Date has not occurred, Seller
shall be allowed to deduct the remaining amount of such Purchase Price Credit
from any indebtedness owed to it under its Subordinated Note.
Section 1.5 PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid
or deposited by Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the
account of Seller designated from time to time by Seller or as otherwise
directed by Seller. 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 1.6 LICENSE OF SOFTWARE.
(a) To the extent that any software used by Seller to
account for the Receivables is non-transferable, Seller hereby grants to each of
Buyer, the Agent and the Servicer an irrevocable, non-exclusive license to use,
without royalty or payment of any kind, all such software used by Seller to
account for such Receivables, to the extent necessary to administer such
Receivables, whether such software is owned by Seller or is owned by others and
used by Seller 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: (x) the license granted herein
shall not apply to such software unless and until such consent is obtained, and
(y) Seller hereby agrees that, upon the request of Buyer (or Buyer's assignee)
made at any time during the continuation of a Termination Event or an
Amortization Event, Seller will use its reasonable efforts (i) to obtain the
consent of such third-party licensor, and (ii) in advance of obtaining such
consent, in connection with each Review pursuant to SECTION 4.1(D), to make
personnel who are covered by Seller's license of such software and knowledgeable
about its use, available to Buyer (or Buyer's assignee) to test data or generate
such reports relating the Receivables that may be reasonably requested. The
license granted hereby shall be irrevocable until the later to occur of (i)
indefeasible payment in full of the Obligations (as defined in the Credit and
Security Agreement), and (ii) the date each of the First Step Receivables Sale
Agreement, this Agreement and the Credit and Security Agreement terminates in
accordance with its terms.
(b) Seller (i) shall take such action requested by Buyer
and/or the Agent (as Buyer's assignee), from time to time hereafter, that may be
necessary or appropriate to ensure that Buyer and its assigns under the Credit
and Security Agreement have an enforceable ownership or security interest in the
Records relating to the Receivables, and (ii) shall use its reasonable efforts
to ensure that Buyer, the Agent and the Servicer each has an enforceable right
(whether by license or sublicense or otherwise) in accordance with SECTION
1.6(A) to use all of the computer software used to account for such Receivables
and/or to recreate such Records.
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Section 1.7 CHARACTERIZATION. If, notwithstanding the intention of
the parties expressed in SECTION 1.2(c), any sale or contribution by Seller to
Buyer 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 by Seller hereunder shall
constitute a true sale thereof, Seller hereby grants to Buyer a duly perfected
security interest in all of Seller's right, title and interest in, to and under
all Receivables of Seller which are now existing or hereafter arising, all
Collections and Related Security with respect thereto, each Lock-Box and
Collection Account, all other rights and payments relating to such 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 purchased from Seller together with all other obligations of Seller
hereunder, which security interest shall be prior to all other Adverse Claims
thereto. Buyer and its assigns 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 SELLER. Seller hereby
represents and warrants to Buyer on the date hereof, on the date of each
Purchase from Seller hereunder and on each date that any Receivable is acquired
by Seller on or after the date of such Purchase, that:
(a) EXISTENCE AND POWER. Seller is a limited liability
company, duly organized under the laws of the jurisdiction set forth after its
name in the preamble to this Agreement (the "APPLICABLE JURISDICTION"), and no
other jurisdiction, and as to which such Applicable Jurisdiction must maintain a
public record showing the limited liability company to have been organized.
Seller is validly existing and in good standing under the laws of its Applicable
Jurisdiction and is duly qualified to do business and is in good standing as a
foreign entity, and has and holds all power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted except where the failure to so
qualify or so hold could not reasonably be expected to have a Material Adverse
Effect.
(b) POWER AND AUTHORITY; DUE AUTHORIZATION, EXECUTION AND
DELIVERY. The execution and delivery by Seller of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder, and Seller's use of the proceeds of the
Purchases made from it hereunder, are within its organizational powers and
authority and have been duly authorized by all necessary organizational action
on its part. This Agreement and each other Transaction Document to which Seller
is a party has been duly executed and delivered by Seller.
(c) NO CONFLICT. The execution and delivery by Seller of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
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instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of Seller or its Subsidiaries (except as created
hereunder) except, in any case, where such contravention or violation could not
reasonably be expected to have a Material Adverse Effect; and 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 Seller 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 are no actions, suits or
proceedings pending, or to the best of Seller's knowledge, threatened, against
or affecting Seller, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Seller is not in default with respect to any order of any court,
arbitrator or governmental body.
(f) BINDING EFFECT. This Agreement and each other
Transaction Document to which Seller is a party constitute the legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective 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).
(g) ACCURACY OF INFORMATION. All information heretofore
furnished by Seller or any of its Affiliates to Buyer (or its assigns) for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by Seller or any of its Affiliates to Buyer (or
its assigns) will be, true and accurate in every material respect on the date
such information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein, taken as a whole, not
misleading; provided that, with respect to any projected financial information,
Seller represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
(h) USE OF PROCEEDS. No portion of any Purchase Price
payment hereunder will be used by Seller (i) for a purpose that violates, or
would be inconsistent with, any law, rule or regulation applicable to Seller or
(ii) to acquire any margin stock in violation of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
(i) GOOD TITLE. Immediately prior to the applicable Purchase
from Seller hereunder and upon the creation of each Receivable acquired by
Seller after the date hereof, Seller (i) is the legal and beneficial owner of
such Receivables 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
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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 Seller's ownership
interest in each such 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 Buyer
(and Buyer shall acquire from Seller) (i) legal and equitable title to, with the
right to sell and encumber each Receivable, whether now existing and hereafter
arising, together with the Collections with respect thereto, and (ii) all of
Seller's right, title and interest in the Related Security associated with each
such Receivable, in each case, free and clear of any Adverse Claim, except as
created by the Transactions Documents. 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 Buyer's
ownership interest in such Receivables, the Related Security and the
Collections. Originator's jurisdiction of organization is a jurisdiction whose
law generally requires information concerning the existence of a nonpossessory
security interest to be made generally available in a filing, record or
registration system as a condition or result of such a security interest's
obtaining priority over the rights of a lien creditor which respect to
collateral.
(k) PLACES OF BUSINESS AND LOCATIONS OF RECORDS. The
principal places of business and chief executive office and jurisdiction of
organization of Seller 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
Buyer 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. Seller's
Federal Employer Identification Number and organizational identification number
are 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 Seller at each Collection Bank and the post office box
number of each Lock-Box, are listed on EXHIBIT III. Seller has not granted any
Person, other than Buyer (and its assigns) 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. Since March 31, 2004, and
except as disclosed in the reports made by the Parent to the Securities and
Exchange Commission prior to the date of this Agreement, no event has occurred
that could reasonably be expected to have a Material Adverse Effect.
(n) NAMES. The name in which Seller has executed this
Agreement is identical to the name of Seller as indicated on the public record
of its jurisdiction of organization which shows Seller to have been organized.
In the past five (5) years, Seller has not used any limited liability company
names, trade names or assumed names other than the name in which it has executed
this Agreement except as disclosed on Exhibit II attached hereto.
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(o) OWNERSHIP OF BUYER. Parent owns, directly or indirectly,
100% of the issued and outstanding equity interests of EIS. EIS owns directly
100% of the issued and outstanding equity interests of Buyer. Such equity
interests are validly issued, fully paid and nonassessable, and there are no
options, warrants or other rights to acquire securities of Buyer.
(p) NOT A HOLDING COMPANY OR AN INVESTMENT COMPANY. Seller
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. Seller is not an "INVESTMENT COMPANY"
within the meaning of the Investment Company Act of 1940, as amended, or any
successor statute.
(q) COMPLIANCE WITH LAW. Seller 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.
(r) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Seller 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
material change to such Credit and Collection Policy, except such material
change as to which Buyer (or its assigns) has been notified in accordance with
SECTION 4.1(A)(VII).
(s) PAYMENTS TO SELLER. With respect to each Receivable sold
to Buyer hereunder, the Purchase Price received by Seller constitutes reasonably
equivalent value in consideration therefor. No transfer hereunder by Seller of
any Receivable is or may be voidable under any section of the Bankruptcy Reform
Act of 1978 (11 U.S.C. xx.xx. 101 ET SEQ.), as amended.
(t) 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).
(u) ELIGIBLE RECEIVABLES. Each Receivable reflected in any
Purchase Report as an Eligible Receivable was an Eligible Receivable on the date
of sale or contribution to Buyer hereunder.
(v) ACCOUNTING. The manner in which Seller accounts for the
transactions contemplated by this Agreement in its financial statements does not
jeopardize the characterization of the transactions contemplated herein as being
true sales.
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ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 CONDITIONS PRECEDENT TO PURCHASE. The Purchases under
this Agreement are subject to the conditions precedent that (a) Buyer shall have
been capitalized with the Initial Contributed Receivables, (b) Buyer shall have
received on or before the date of such purchase those documents listed on
SCHEDULE A and (c) all of the conditions to the initial loan under the Credit
and Security Agreement shall have been satisfied or waived in accordance with
the terms thereof.
Section 3.2 CONDITIONS PRECEDENT TO SUBSEQUENT PAYMENTS. Buyer's
obligation to pay for Receivables acquired by Seller after the date hereof shall
be subject to the further conditions precedent that: (a) the Facility
Termination Date shall not have occurred under the Credit and Security
Agreement; (b) Buyer (or its assigns) shall have received such other approvals,
opinions or documents as it may reasonably request and (c) on the date such
Receivable is acquired by Seller under the First Step Receivables Sale
Agreement, 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 Seller 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 was acquired by Seller as though made on and as
of such date; PROVIDED, HOWEVER, that the preceding standard shall not
apply to those representations and warranties which themselves contain
materiality standards; 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 (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by offset of capital contributions), title to such Receivable and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to pay for such
Receivable were in fact satisfied. The failure of Seller to satisfy any of the
foregoing conditions precedent, however, shall give rise to a right of Buyer to
rescind the related purchase and direct Seller to pay to Buyer 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 OF SELLER. Until the date on which
this Agreement terminates in accordance with its terms, Seller hereby covenants
as set forth below:
(a) FINANCIAL REPORTING. Seller will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (or its assigns):
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(i) ANNUAL REPORTING. As soon as practicable and in
any event within ninety-five (95) days after the end of each Fiscal Year, the
financial statements and report required to be delivered under Section 4.1(a)(i)
of the First Step Receivables Sale Agreement.
(ii) QUARTERLY REPORTING. As soon as practicable and
in any event, within fifty (50) days after the end of each of the first three
(3) fiscal quarters of each Fiscal Year, the report or financial statements
required to be delivered under Section 4.1(a)(ii) of the First Step Receivables
Sale Agreement.
(iii) COMPLIANCE CERTIFICATE. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of EXHIBIT IV signed by an Authorized Officer of ECM and
dated the date of such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly
upon receipt thereof, copies of all financial statements, reports and proxy
statements furnished to ECM under Section 4.1(a)(iv) of the First Step
Receivables Sale Agreement.
(v) S.E.C. FILINGS. Promptly after the filing
thereof, a copy of each report or filing furnished to ECM under Section
4.1(a)(v) of the First Step Receivables Sale Agreement.
(vi) COPIES OF NOTICES. Promptly upon its receipt of
any notice, request for consent, financial statements, certification, report or
other communication under Section 4.1(a)(vi) of the First Step Receivables Sale
Agreement or in connection with any Transaction Document from any Person other
than Buyer, the Agent or Blue Ridge, copies of the same.
(vii) 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, 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 Buyer's
(and the Agent's, as Buyer's assignee) consent thereto.
(viii) OTHER INFORMATION. Promptly, from time to time,
such other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of Seller as
Buyer (or its assigns) may from time to time reasonably request in order to
protect the interests of Buyer (and its assigns) under or as contemplated by
this Agreement.
(b) NOTICES. Seller will notify Buyer (or its assigns) in
writing of any of the following promptly upon learning of the occurrence thereof
by any Responsible Officer, describing the same and, if applicable, the steps
being taken with respect thereto:
(i) TERMINATION EVENTS OR UNMATURED TERMINATION
EVENTS. The occurrence of each Termination Event and each Unmatured Termination
Event, by a statement of an Authorized Officer of Seller.
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(ii) JUDGMENT AND PROCEEDINGS. (1) The entry of any
judgment or decree against Seller or any of its Subsidiaries if the aggregate
amount of all judgments and decrees then outstanding against the Originators and
their Subsidiaries exceeds $10,000,000 after deducting (a) the amount with
respect to which Seller or Subsidiary is insured and with respect to which the
insurer has assumed responsibility in writing, and (b) the amount for which
Seller or Subsidiary is otherwise indemnified if the terms of such
indemnification are satisfactory to Buyer (or its assigns), and (2) the
institution of any litigation, arbitration proceeding or governmental proceeding
against Seller which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(iii) MATERIAL ADVERSE EFFECT. The occurrence of any
event or condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) DEFAULTS UNDER PARENT CREDIT AGREEMENT. The
occurrence of any Default or Event of Default under (and as such term is defined
in) the Parent Credit Agreement.
(v) ERISA EVENTS. The occurrence of any ERISA Event
that could reasonably be expected to have a Material Adverse Effect.
(vi) DOWNGRADE OF PARENT. Any downgrade in the rating
of any Indebtedness of Parent by S&P or by Xxxxx'x, setting forth the
Indebtedness affected and the nature of such change (but excluding any private
indicative ratings that the Parent may request from time to time from Xxxxx'x or
S&P).
(c) COMPLIANCE WITH LAWS AND PRESERVATION OF EXISTENCE.
Seller will (i) 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 and (ii) 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 in
the foregoing shall prevent Seller from discontinuing any line of business if
(x) no Termination Event or Unmatured Termination Event exists or would result
therefrom, and (y) with respect to the discontinuance of a material line of
business, the board of directors (or comparable governing body) of Seller
determines in good faith that such discontinuance is in the best interest of the
Parent and its Consolidated Subsidiaries, taken as a whole.
(d) AUDITS. Seller will furnish to Buyer (or its assigns)
from time to time such information with respect to it and the Receivables sold
by it as Buyer (or its assigns) may reasonably request. Seller will, from time
to time during regular business hours as requested by Buyer (or its assigns),
upon reasonable notice and at the sole cost of Seller, permit Buyer (or its
assigns) 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 Seller relating to the Receivables and the Related Security, including,
without limitation, the related Contracts, and (ii) to visit the offices and
properties of Seller for the purpose of examining such materials
12
described in clause (i) above, and to discuss matters relating to Seller's
financial condition or the Receivables and the Related Security or Seller's
performance under any of the Transaction Documents or Seller's performance under
the Contracts and, in each case, with any of the officers or employees of Seller
having knowledge of such matters (each of the foregoing examinations and visits,
a "REVIEW"); PROVIDED, HOWEVER, that, so long as no Amortization Event (under
and as defined in the Credit and Security Agreement) has occurred and is
continuing: (A) Seller and the Originators, collectively, shall only be
responsible for the reasonable costs and expenses of one (1) Review in any one
calendar year, and (B) the Agent (as Buyer's assignee) will not request more
than four (4) Reviews in any one calendar year. To the extent that Buyer (or its
assigns), in the course of any Review, obtains any Proprietary Information
pertaining to Seller or any of its Affiliates, Buyer (or its assign) shall
handle such information in accordance with the requirements of SECTION 7.4
hereof.
(e) KEEPING AND MARKING OF RECORDS AND BOOKS.
(i) Seller 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). Seller will give Buyer (or its assigns) notice of
any material change in the administrative and operating procedures
referred to in the previous sentence.
(ii) Seller will (A) on or prior to the date hereof,
xxxx its books and records including aged trial balance with respect to
the Receivables with a legend, acceptable to Buyer (or its assigns),
describing Buyer's ownership interests in the Receivables and further
describing the security interest in the Receivable of the Agent (on
behalf of the Lenders) under the Credit and Security Agreement and (B)
upon the request of Buyer (or its assigns) made at any time when a
Termination Event has occurred and is continuing: (x) xxxx each Contract
with a legend describing Buyer's ownership interests in the Receivables
and further describing the security interests in the Receivable of the
Agent (on behalf of the Lenders) and (y) deliver to Buyer (or its
assigns) all Contracts (including, without limitation, all multiple
originals of any such Contract) relating to such Receivables.
(f) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION
POLICY. Seller 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
such Receivable and the related Contract.
(g) [Intentionally Omitted]
(h) OWNERSHIP. Seller will take all necessary action to
establish and maintain, irrevocably in Buyer, (A) legal and equitable title to
the Receivables and the Collections and (B)
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all of Seller's 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 (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
Buyer's interest in such Receivables, Related Security and Collections and such
other action to perfect, protect or more fully evidence the interest of Buyer as
Buyer (or its assigns) may reasonably request).
(i) LENDERS' RELIANCE. Seller acknowledges that the Agent
and the Lenders are entering into the transactions contemplated by the Credit
and Security Agreement in reliance upon Buyer's identity as a legal entity that
is separate from Seller and any Affiliates thereof. Therefore, from and after
the date of execution and delivery of this Agreement, Seller will take all
reasonable steps including, without limitation, all steps that Buyer or any
assignee of Buyer may from time to time reasonably request to maintain Buyer's
identity as a separate legal entity and to make it manifest to third parties
that Buyer is an entity with assets and liabilities distinct from those of
Seller and any Affiliates thereof and not just a division of Seller or any such
Affiliate. Without limiting the generality of the foregoing and in addition to
the other covenants set forth herein, Seller (i) will not hold itself out to
third parties as liable for the debts of Buyer nor purport to own any of the
Receivables and other assets acquired by Buyer, (ii) will take all other actions
necessary on its part to ensure that Buyer is at all times in compliance with
the "separateness covenants" set forth in SECTION 7.1(I) of the Credit and
Security Agreement and (iii) will cause all tax liabilities arising in
connection with the transactions contemplated herein or otherwise to be
allocated between Seller and Buyer on an arm's-length basis and in a manner
consistent with the procedures set forth in U.S. Treasury Regulations
ss.ss.1.1502-33(d) and 1.1552-1.
(j) COLLECTIONS. Seller will cause (1) all proceeds from all
Lock-Boxes 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 Seller or any
Affiliate of Seller, Seller 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, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of Buyer and its assigns.
Seller will transfer exclusive ownership, dominion and control of each Lock-Box
and Collection Account to Buyer 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 Buyer (or its assigns) as
contemplated by this Agreement and the Credit and Security Agreement.
(k) TAXES. Unless otherwise filed by the Parent, (i) Seller
will file all tax returns and reports required by law to be filed by it and
promptly pay all taxes and governmental charges at any time owing, except
(x)such taxes that are being contested in good faith by appropriate proceedings
and for which Performance Guarantor has set aside on its books adequate reserves
or (y) to the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect and (ii) Seller will pay when due any taxes
payable in connection
14
with the Receivables, exclusive of taxes on or measured by income or gross
receipts of Buyer and its assigns.
Section 4.2 NEGATIVE COVENANTS OF SELLER. Until the date on which
this Agreement terminates in accordance with its terms, Seller hereby covenants
that:
(a) NAME CHANGE, OFFICES AND RECORDS. Seller 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 relocate its
chief executive office at any time while the location of its chief executive
office is relevant to perfection of Buyer's interest in the Receivables or the
associated Related Security and Collections or any office where Records are kept
unless it shall have: (i) given Buyer (and the Agent, as its assignee) at least
ten (10) Business Days' prior written notice thereof and (ii) delivered to the
Agent (as Buyer's assignee) all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.
(b) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Seller 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 Buyer (or its assigns) 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 Seller 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. Seller will not make or authorize any Originator to make any material
change to the Credit and Collection Policy that could reasonably be expected to
adversely affect the collectibility of the Receivables or decrease the credit
quality of any of newly created Receivables. Except as otherwise permitted in
its capacity as Servicer pursuant to the Credit and Security Agreement, Seller
will not extend, amend or otherwise modify or authorize any Originator to
extend, amend or otherwise modify the terms of any Receivable other than in
accordance with the Credit and Collection Policy.
(d) SALES, LIENS. Seller 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 (other than Permitted
Encumbrances) 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 Buyer provided for herein and any other Permitted Encumbrances), and
Seller will defend the right, title and interest of Buyer in, to and under any
of the foregoing property, against all claims of third parties claiming through
or under Seller (other than Permitted Encumbrances).
(e) [Intentionally Omitted]
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(f) ACCOUNTING FOR PURCHASE. Seller will not, and will not
permit any Affiliate to, financially account (whether in financial statements or
otherwise) for the transactions contemplated hereby in any manner other than the
sale or other outright conveyance by Seller to Buyer of the Receivables and the
associated Related Security or in any other respect account for or treat the
transactions contemplated hereby in any manner other than as a sale of such
Receivables and Related Security by Seller to Buyer except to the extent that
such transactions are not recognized on account of consolidated financial
reporting in accordance with generally accepted accounting principles.
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) Seller shall fail 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 shall continue unremedied for five (5)
Business Days after the earlier of a Responsible Officer becoming aware of such
default or written notice thereof has been given to Seller by Buyer.
(b) Seller shall fail to perform or observe (i) any covenant
contained in Section 4.1(b)(i), 4,1(c)(ii) or 4.2 of this Agreement when due,
(ii) any other covenant or agreement contained in Section 4.1(a) or 4.1(b) of
this Agreement and such failure shall continue unremedied for fifteen (15) days
after the earliest of a Responsible Officer becoming aware of such default or
written notice thereof has been given to Seller by Buyer, or (iii) any other
covenant or agreement not mentioned in this Section 5.1 under any Transaction
Documents and such failure shall continue unremedied for thirty (30) days after
the earlier of a Responsible Officer becoming aware of such default or written
notice thereof has been given to Seller by Buyer.
(c) Any representation, warranty, certification or statement
made by Seller 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 and
PROVIDED FURTHER, that any misrepresentation or certification for which Buyer
has actually received a Purchase Price Credit shall not constitute a Termination
Event hereunder.
(d) Failure of Seller to pay any Indebtedness when due in
excess of $20,000,000 or the default by Seller in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness shall be
declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the date of maturity thereof.
16
(e) (i) Seller 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 Seller 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) Seller shall take any corporate or
limited liability company action to authorize any of the actions set forth in
the foregoing clauses (i) or (ii) of this subsection (e).
(f) A Change of Control shall occur.
(g) One or more final judgments for the payment of money in
an amount in excess of $10,000,000 individually or in the aggregate, shall be
entered against Seller on claims not covered by insurance or as to which the
insurance carrier has denied its responsibility, and such judgment shall
continue unsatisfied and in effect for thirty (30) consecutive days without a
stay of execution.
(h) A Termination Event shall occur under the First Step
Receivables Sale Agreement.
Section 5.2 REMEDIES. Upon the occurrence and during the
continuation of a Termination Event, Buyer may take any of the following actions
upon notice to the Seller: (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 Seller;
PROVIDED, HOWEVER, that upon the occurrence of a Termination Event described in
SECTION 5.1(E)(II), or of an actual or deemed entry of an order for relief with
respect to Seller 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 Seller and (ii) to the fullest extent
permitted by applicable law, declare that the Default Fee shall accrue with
respect to any amounts then due and owing by Seller to Buyer. The aforementioned
rights and remedies shall be without limitation and shall be in addition to all
other rights and remedies of Buyer 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 SELLER. Without limiting any other rights
that Buyer may have hereunder or under applicable law, Seller hereby agrees to
indemnify (and pay upon demand to) Buyer 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 reasonable and actual attorneys' fees (which
attorneys may be employees of Buyer or any such assign) and disbursements (all
17
of the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS")
awarded against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an
interest in the Receivables, EXCLUDING, HOWEVER:
(a) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification provided that Seller shall not
be obligated to indemnify any Indemnified Party under this Section 6.1
in connection with any claim under any cause of action by or against
such Indemnified Person with respect to which Seller is an adverse party
and Seller is the prevailing party with respect to such claim under such
cause of action;
(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 Seller or limit the recourse of Buyer to Seller for amounts
otherwise specifically provided to be paid by Seller 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, Seller shall indemnify
Buyer for Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by Seller
(or any officers of Seller) under or in connection with any Purchase
Report, this Agreement, any other Transaction Document or any other
information or report delivered by Seller pursuant hereto or thereto for
which Buyer has not received a Purchase Price Credit that shall have
been false or incorrect when made or deemed made;
(ii) the failure by Seller, 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 Seller to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of Seller 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;
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(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, Seller's use of the
proceeds of the Purchase from it hereunder, the ownership of the
Receivables or any other investigation, litigation or proceeding
relating to Seller in which any Indemnified Party becomes involved as a
result of any of the transactions contemplated hereby;
(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(E)(II) of this Agreement or the First Step Receivables Sale
Agreement;
(x) any failure to vest and maintain vested in
Buyer, or to transfer to Buyer, legal and equitable title to, and
ownership of, the Receivables and the associated Collections, and all of
Seller's right, title and interest in the Related Security associated
with such 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 from Seller hereunder or at any subsequent time;
(xii) any action or omission by Seller which reduces
or impairs the rights of Buyer 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);
(xiii) any attempt by any Person to void the Purchase
from Seller hereunder under statutory provisions or common law or
equitable action; and
(xiv) the failure of any Receivable reflected as an
Eligible Receivable on any Purchase Report prepared by Seller to be an
Eligible Receivable at the time acquired by Buyer.
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Section 6.2 OTHER COSTS AND EXPENSES. Seller shall pay to Buyer on
demand all reasonable costs and out-of-pocket expenses in connection with the
preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder. Seller shall pay to Buyer on demand any and all costs and expenses of
Buyer, if any, including reasonable counsel fees and expenses 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 Buyer (or 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 Seller and Buyer
and, to the extent required under the Credit and Security Agreement, the Agent
and the Liquidity Banks or the Lenders. 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 BUYER.
(a) Seller 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 Buyer (or its assigns) may
request, to perfect, protect or more fully evidence the interest of Buyer
hereunder and the Receivable, or to enable Buyer (or its assigns) to exercise
and enforce their rights and remedies hereunder. At any time when a Termination
Event has occurred and is continuing, Buyer (or its assigns) may, at Seller's
sole cost and expense, direct Seller to notify the Obligors of Receivables of
the ownership interests of Buyer under this
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Agreement and may also direct that payments of all amounts due or that become
due under any or all Receivables be made directly to Buyer or its designee.
(b) If Seller fails to perform any of its obligations
hereunder, Buyer (or its assigns) may (but shall not be required to) perform, or
cause performance of, such obligations, and Buyer's (or such assigns')
reasonable costs and expenses incurred in connection therewith shall be payable
by Seller as provided in SECTION 6.2. Seller irrevocably authorizes Buyer (and
its assigns) at any time and from time to time when a Termination Event has
occurred and is continuing in the sole discretion of Buyer (or its assigns), and
appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf
of Seller (i) to execute on behalf of Seller as debtor and to file financing
statements necessary or desirable in Buyer's (or its assigns') reasonable
judgment to perfect and to maintain the perfection and priority of the interest
of Buyer in the Receivables and the 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 Buyer (or its assigns) in their reasonable judgment
deem necessary or desirable to perfect and to maintain the perfection and
priority of Buyer's interests in such Receivables. This appointment is coupled
with an interest and is irrevocable. If Seller fails to perform any of its
obligations hereunder: (A) Seller hereby authorizes Buyer (or its assigns) to
file financing statements and other filing or recording documents with respect
to the Receivables and Related Security (including any amendments thereto, or
continuation or termination statements thereof), without the signature or other
authorization of Seller, in such form and in such offices as Buyer (or any of
its assigns) reasonably determines appropriate to perfect or maintain the
perfection of the ownership or security interests of Buyer (or its assigns)
hereunder, (B) Seller acknowledges and agrees that it is not authorized to, and
will not, file financing statements or other filing or recording documents with
respect to the Receivables or Related Security (including any amendments
thereto, or continuation or termination statements thereof), without the express
prior written approval by the Agent (as Buyer's assignee), consenting to the
form and substance of such filing or recording document, and (C) Seller
approves, authorizes and ratifies any filings or recordings made by or on behalf
of the Agent (as Buyer's assign) in connection with the perfection of the
ownership or security interests in favor of Buyer or the Agent (as Buyer's
assign).
Section 7.4 CONFIDENTIALITY; TAX TREATMENT.
(a) Seller and Buyer shall maintain and shall cause each of
its employees, officers and advisers to maintain the confidentiality of the Fee
Letters and the other confidential or proprietary information with respect to
the Agent and Blue Ridge and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that Seller and its officers,
employees, auditors, accountants, attorneys, consultants, and other advisers may
disclose such information to Seller's external accountants, attorneys and other
advisors 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).
(b) Seller hereby consents to the disclosure of any
nonpublic information with respect to it (i) to Buyer, the Agent, the Liquidity
Banks or Blue Ridge by each other, (ii) to any prospective or actual assignee or
participant of any of the Persons described in clause (i), and
21
(iii) to any rating agency, Commercial Paper dealer or provider of a surety,
guaranty or credit or liquidity enhancement to Blue Ridge or any entity
organized for the purpose of purchasing, or making loans secured by, financial
assets for which Wachovia acts as the administrative agent and to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing,
PROVIDED each such Person described in the foregoing clauses (ii) and (iii) is
informed of the confidential nature of such information. In addition, the
Lenders and the Agent may disclose any such nonpublic information pursuant to
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).
(c) Notwithstanding any other express or implied agreement
to the contrary, the parties hereto agree that they have sought their own tax
advice in structuring the transactions evidenced by the Transaction Documents,
and they shall have no claim against Equifax Receivables Finance LLC, a Delaware
limited liability company, the Agent or any Lender in the event their intended
tax treatment is disallowed.
(d) Unless otherwise agreed to in writing by the Seller,
Buyer hereby agrees to keep all Proprietary Information confidential and not to
disclose or reveal any Proprietary Information to any Person other than its (or
its Affiliates) directors, officers, employees, agents or representatives who
reasonably require such information in connection with their activities
concerning this Agreement or the transactions contemplated hereby and to actual
or potential Participants or Purchasing Liquidity Banks (as defined in the
Credit and Security Agreement), and then only upon a confidential basis in any
such case; provided, however, that the Buyer may disclose Proprietary
Information: (i) to the Agent or any Liquidity Bank, (ii) to the extent
reasonably required in connection with any litigation to which the Buyer, the
Agent, any Liquidity Bank or their respective Affiliates may be a party, (iii)
to the extent reasonably required in connection with the exercise of any remedy
hereunder, (iv) as required by 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); (v) to its attorneys,
accountants or other consultants (but only on a confidential basis), (vi) to
bank regulatory authorities or other governmental authorities and (vii) by Blue
Ridge to any rating agency, commercial paper dealer, or provider of a surety,
guaranty or credit or liquidity enhancement to Blue Ridge which has agreed in
writing to be bound by the provisions of this Section 7.4.
Section 7.5 BANKRUPTCY PETITION.
(a) Seller and Buyer each 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) Seller 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 Borrower under the Credit and Security Agreement, it will not institute
against, or join any other Person in instituting against, Buyer 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.
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Section 7.6 LIMITATION OF LIABILITY. Except with respect to any
claim arising out of the willful misconduct or gross negligence of Seller,
Buyer, Blue Ridge, the Agent or any Lender, no claim may be made by any such
Person (or its Affiliates, directors, officers, employees, attorneys or agents)
against any such other Person (or its Affiliates, directors, officers,
employees, attorneys or agents) for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each of the parties hereto, on behalf of itself and its
Affiliates, directors, officers, employees, attorneys, agents, successors and
assigns, hereby waives, releases, and agrees not to xxx upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF NEW YORK.
Section 7.8 CONSENT TO JURISDICTION. TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, SELLER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY DOCUMENT EXECUTED BY SELLER PURSUANT TO THIS AGREEMENT AND
SELLER 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 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 BUYER (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST SELLER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY SELLER AGAINST BUYER (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 SELLER PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT
IN NEW YORK, NEW YORK.
Section 7.9 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 SELLER PURSUANT TO THIS AGREEMENT
OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
23
Section 7.10 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 the Seller, Buyer and their respective successors and permitted
assigns (including any trustee in bankruptcy). Seller may not assign any of its
rights and obligations hereunder or any interest herein without the prior
written consent of Buyer and the Agent. Buyer may assign at any time its rights
and obligations hereunder and interests herein to any other Person without the
consent of Seller. Without limiting the foregoing, Seller acknowledges that
Buyer, 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.
Seller agrees that the Agent, as the assignee of Buyer, shall, subject to the
terms of the Credit and Security Agreement, have the right to enforce this
Agreement and to exercise directly all of Buyer's rights and remedies under this
Agreement (including, without limitation, the right to give or withhold any
consents or approvals of Buyer to be given or withheld hereunder) and Seller
agrees to cooperate fully with the Agent in the exercise of such rights and
remedies. 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 Seller 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 7.11 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.
Section 7.12 TERMINATION. This Agreement shall terminate on the Final
Payout Date; provided that the provisions of Sections 1.7, 6.1, 6.2, 7.4 and 7.5
of this Agreement shall survive such termination.
[Signature Page Follows]
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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.
EQUIFAX CAPITAL MANAGEMENT, INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
ADDRESS: 0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Fax: 000-000-0000
EQUIFAX RECEIVABLES FINANCE LLC
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
ADDRESS: 0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Fax: 000-000-0000
25
EXHIBIT I
DEFINITIONS
This is Exhibit I to the Second Step Receivables Sale Agreement (as
hereinafter defined). As used in the Second Step Receivables Sale 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 SECOND STEP
RECEIVABLES SALE 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 FIRST STEP RECEIVABLES SALE AGREEMENT OR
THE CREDIT AND SECURITY AGREEMENT (HEREINAFTER DEFINED), AS APPLICABLE.
"AGENT" means Wachovia Bank, National Association, in its capacity as
agent under the Credit and Security Agreement.
"AGREEMENT" is defined in the preamble hereto.
"BLUE RIDGE" means Blue Ridge Asset Funding Corporation, a Delaware
corporation, and its successors.
"BUYER" has the meaning set forth in the preamble to this Agreement.
"CALCULATION PERIOD" means each calendar month or portion thereof which
elapses during the term of this Agreement. The first Calculation Period shall
commence on the date of the Purchases hereunder and the final Calculation Period
shall terminate on the Termination Date.
"CHANGE OF CONTROL" means (a) the acquisition after the date of this
Agreement by any Person, or two or more Persons acting in concert, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 25% or more of the
outstanding voting Equity Interests of Parent, (b) Parent ceases to own,
directly or indirectly, 100% of the outstanding voting Equity Interests of any
other Originator or Seller, or (c) Parent ceases to own, directly or indirectly,
100% of the outstanding voting Equity Interests of Buyer.
"CREDIT AND COLLECTION POLICY" means the applicable Originator's credit
and collection policies and practices relating to Contracts and Receivables
existing on the date hereof and summarized in EXHIBIT V, as modified from time
to time in accordance with this Agreement and the Credit and Security Agreement.
"CREDIT AND SECURITY AGREEMENT" means that certain Credit and Security
Agreement dated as of September 7, 2004, by and among Equifax Receivables
Finance LLC, as Borrower, ECM, as Servicer, Blue Ridge, and Wachovia Bank,
National Association, individually and as Agent, as the same may be amended,
restated and/or otherwise from time to time.
26
"DEFAULT FEE" means a PER ANNUM rate of interest equal to the sum of (i)
the Alternate Base Rate, PLUS (ii) 2% per annum.
"DISCOUNT FACTOR" means a percentage calculated to provide Buyer with a
reasonable return on its investment in the Receivables after taking account of
(i) the time value of money based upon the anticipated dates of collection of
such Receivables and the cost to Buyer of financing its investment in such
Receivables during such period and (ii) the risk of nonpayment by the Obligors.
Seller and Buyer 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 Calculation Period, shall apply only prospectively and shall
not affect the Purchase Price payment made prior to the Calculation Period
during which Seller and Buyer agree to make such change. As of the date hereof,
the Discount Factor in respect of Eligible Receivables is 4.098% and the
Discount Factor in respect of all other Receivables is 4.098%.
"ECM" has the meaning set forth in the preamble to this Agreement.
"EIS" has the meaning set forth in the preliminary statements to this
Agreement.
"EQUITY INTERESTS" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of such
Person, including, if such Person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership, whether outstanding on the date
hereof or issued after the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Seller within the meaning of Section
414(b) or (c) of the Tax Code (and Sections 414(m) and (o) of the Tax Code for
purposes of provisions relating to Section 412 of the Tax Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Seller or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001 (a) (2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by Seller or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f)
27
the imposition of any liability under Tide IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon Seller or any ERISA
Affiliate.
"EXECUTIVE OFFICER" means any of the chief executive officer, president,
executive vice president or senior vice president of the Parent or ECM.
"FINAL PAYOUT DATE" has the meaning given such term in the Credit and
Security Agreement.
"FIRST STEP RECEIVABLES SALE AGREEMENT" has the meaning set forth in the
preliminary statements to this Agreement.
"FISCAL YEAR" means the fiscal year of the Parent and its Subsidiaries
ending on or about December 31.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 6.1.
"INITIAL CONTRIBUTED RECEIVABLES" has the meaning set forth in the First
Step Receivables Sale Agreement.
"LIEN" means an Adverse Claim, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or operations of the Parent and its Subsidiaries, considered
as a whole, (ii) the ability of Seller to perform its obligations under this
Agreement or any other Transaction Document to which it is a party, (iii) the
legality, validity or enforceability of this Agreement or any other Transaction
Document, (iv) Seller's, Buyer's, any Agent's or any Lender's interest in the
Receivables generally or in any substantial portion of the Receivables, the
Related Security or Collections with respect thereto, or (v) the collectibility
of the Receivables generally or of any substantial portion of the Receivables.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the meaning of
Section 4001 (a) (3) of ERISA, to which Seller or any ERISA Affiliate makes, is
making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.
"NET WORTH" means as of the last Business Day of each Calculation Period
preceding any date of determination, the excess, if any, of (a) the aggregate
Outstanding Balance of the Receivables at such time, OVER (b) the sum of (i) the
Aggregate Principal outstanding at such time, PLUS (ii) the aggregate
outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the documents for its
formation and organization, which, for example, (a) for a corporation are its
corporate charter and bylaws, (b) for a partnership are its certificate of
partnership (if applicable) and partnership
28
agreement, (c) for a limited liability company are its certificate of formation
or organization and its operating agreement, regulations or the like and (d) for
a trust is the trust agreement, declaration of trust, indenture or bylaws under
which it is created.
"ORIGINAL BALANCE" means, with respect to each Receivable acquired by
Seller after the date hereof, the Outstanding Balance of such Receivable on the
date it was acquired by Seller.
"ORIGINATOR" has the meaning set forth in the preliminary statements to
this Agreement.
"PARENT" has the meaning set forth in the preliminary statements to this
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which Seller sponsors or maintains, or to
which it makes, is making, or is obligated to make contributions, or in the case
of a multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five plan years.
"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.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which Seller or any of its ERISA Affiliates sponsors or maintains or to
which Seller or any of its ERISA Affiliates makes, is making, or is obligated to
make contributions and includes any Pension Plan, other than a Plan maintained
outside the United States primarily for the benefit of Persons who are not U.S.
residents.
"PROPRIETARY INFORMATION" means all information about the Parent or any
of its Subsidiaries which has been furnished to the Agent or any Lender by or on
behalf of the Parent or any of its Subsidiaries before or after the date hereof
or which is obtained by Buyer (or its assigns) in the course of any Review made
pursuant to SECTION 4.1(D) of this Agreement: PROVIDED, HOWEVER, that the term
"PROPRIETARY INFORMATION" does not include information which (x) is or becomes
publicly available (other than as a result of a breach of Section 7.4 of this
Agreement), (y) is possessed by or available to the Buyer (or its assigns) on a
non-confidential basis prior to its disclosure to the Buyer (or its assigns) by
Parent or a Subsidiary thereof or (z) becomes available to the Buyer (or its
assigns) on a non-confidential basis from a Person which, to the knowledge of
the Buyer (or its assigns) is not bound by a confidentiality agreement with the
Parent or any of its Subsidiaries and is not otherwise prohibited from
transmitting such information to the Buyer (or its assigns). In the event the
Buyer (or its assigns) is required to disclose any Proprietary Information by
virtue of clause (ii) (but only if and to the extent such disclosure has not
been sought by the Buyer (or its assigns), and if neither the Parent nor Seller
is a party to such litigation), (iv) or (v) above, to the extent Buyer (or its
assigns) determines in
29
good faith that it is permissible by law to so to do, it shall promptly notify
the Originator of same so as to allow the Parent or its Subsidiaries to seek a
protective order or to take other appropriate action; PROVIDED, HOWEVER, neither
Buyer (and its assigns) shall be required to delay compliance with any directive
to disclose any such information so as to allow the Performance Guarantor or any
of its Subsidiaries to effect any such action.
"PURCHASE" means the purchase by Buyer from Seller pursuant to SECTION
1.2(A) of this Agreement of the Receivables and the Related Security and
Collections related thereto, together with all related rights in connection
therewith.
"PURCHASE PRICE" means, with respect to the Purchase from Seller, the
aggregate price to be paid by Buyer to Seller for such Purchase in accordance
with SECTION 1.3 of this Agreement for the Receivables and the associated
Collections and Related Security being sold to Buyer, 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 1.4 of this Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in SECTION 1.4 of this
Agreement.
"PURCHASE REPORT" has the meaning set forth in SECTION 1.2(B) of this
Agreement.
"RECEIVABLE" means each "Receivable" under and as defined in the First
Step Receivables Sale Agreement in which Buyer now has or hereafter acquires any
rights including, 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 Seller treats such indebtedness, rights or obligations as a separate
payment obligation.
"RELATED SECURITY" means, with respect to any Receivable:
(i) 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,
(ii) 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,
30
(iii) all service contracts and other contracts and agreements
associated with such Receivable,
(iv) all Records related to such Receivable,
(v) all of Seller's right, title and interest in each
Lock-Box and each Collection Account,
(vi) all of Seller's right and remedies under the First Step
Receivable Sale Agreement, and
(vii) all proceeds of any of the foregoing.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c)
of ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"REQUIRED CAPITAL AMOUNT" means, as of any date of determination, an
amount equal to the greater of (a) 3% of the Borrowing Limit under the Credit
and Security Agreement, and (b) the product of (i) 1.5 times the product of the
Default Ratio times the Default Horizon Ratio, each as determined from the most
recent Monthly Report received from the Servicer under the Credit and Security
Agreement, and (ii) the Outstanding Balance of all Receivables as of such date,
as determined from the most recent Monthly Report received from the Servicer
under the Credit and Security Agreement.
"RESPONSIBLE OFFICER" means any Executive Officer as well as any other
officer of the Parent or ECM who is primarily responsible for the administration
of the transactions contemplated by the Transaction Documents.
"REVIEW" has the meaning set forth in SECTION 4.1(D) of this Agreement.
"SECOND STEP RECEIVABLES SALE AGREEMENT" is defined in the preamble
hereto.
"SELLER" is defined in the preamble hereto.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"SUBORDINATED LOAN" has the meaning set forth in SECTION 1.3(A) of this
Agreement.
"SUBORDINATED NOTE" means a promissory note in substantially the form of
EXHIBIT VI hereto as more fully described in SECTION 1.3 of this Agreement, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
"TAX CODE" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
31
"TERMINATION DATE" means the earliest to occur of (i) the Facility
Termination Date (as defined in the Credit and Security Agreement), (ii) the
Business Day immediately prior to the occurrence of a Termination Event set
forth in SECTION 5.1(E) (II), (iii) the Business Day specified in a written
notice from Buyer to Seller given following the occurrence and during the
continuation of any other Termination Event, and (iv) the date which is 10
Business Days after Buyer's receipt of written notice from Seller that it wishes
to terminate the facility evidenced by this Agreement.
"TERMINATION EVENT" has the meaning set forth in SECTION 5.1 of this
Agreement.
"TRANSACTION DOCUMENTS" means, collectively, the First Step Receivables
Sale Agreement, this Agreement, each Collection Account Agreement, the
Subordinated Note (and the other "Subordinated Notes" under and as defined in
the First Step Receivables Sale Agreement), and all other instruments, documents
and agreements executed and delivered in connection herewith.
"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
NEW YORK, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN
SUCH ARTICLE 9.
32
EXHIBIT II
PLACES OF BUSINESS; LOCATIONS OF RECORDS; STATE OF ORGANIZATION;
FEDERAL EMPLOYER IDENTIFICATION NUMBER;
ORGANIZATIONAL IDENTIFICATION NUMBER; OTHER NAMES
Seller: Equifax Capital Management, Inc.
--------------------------------------------- ---------------------------------------------
--------------------------------------------- ---------------------------------------------
Principal Places of Business 0000 Xxxxxxxxx Xxxxxx, X.X.
and Chief Executive Office Xxxxxxx, Xxxxxxx 00000
--------------------------------------------- ---------------------------------------------
Locations of Records 0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
--------------------------------------------- ---------------------------------------------
State of Organization Georgia
--------------------------------------------- ---------------------------------------------
Federal Employer Identification Number 00-0000000
--------------------------------------------- ---------------------------------------------
Organizational Identification Number 0442626
--------------------------------------------- ---------------------------------------------
Legal, Trade and Assumed Name LEGAL NAME:
-----------
Equifax Capital Management, Inc.
TRADE AND OTHER
PRIOR NAMES:
None.
--------------------------------------------- ---------------------------------------------
33
EXHIBIT III
LOCK-BOXES; COLLECTION ACCOUNTS; COLLECTION BANKS
Seller does not have any Collection Accounts. All Collection Accounts
have been transferred to Buyer. Buyer's Collection Accounts are set forth below:
---------------------------- -------------------------- ------------------------- ------------------------------------
NAME OF ACCOUNT NAME OF COLLECTION LOCK-BOX NUMBER RELATED COLLECTION ACCOUNT
ACCOUNT BANK
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Wachovia Bank, National 105835 2000015153186
Finance LLC - Co. 04 Association
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Wachovia Bank, National N/A 2000153353466
Finance LLC- Co. 04 EFT Association
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Wachovia Bank, National N/A 2000186448173
Finance LLC- Co. 04 VISA Association
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Wachovia Bank, National 945510 2000123146917
Finance LLC- Co. 30 Association
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Wachovia Bank, National N/A 2000134515634
Finance LLC- Co. 89 Association
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Bank of America 403495 12335101519
Finance LLC- Co. 89
---------------------------- -------------------------- ------------------------- ------------------------------------
Equifax Receivables Wachovia Bank, National N/A 2000016951442
Finance LLC Association
---------------------------- -------------------------- ------------------------- ------------------------------------
34
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to that certain
Receivables Sale Agreement dated as of September 7, 2004, between Equifax
Capital Markets, Inc. and Equifax Receivables Finance, LLC (the "AGREEMENT").
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES IN HIS OR HER REPRESENTATIVE CAPACITY
ON BEHALF OF ECM THAT:
1. I am the duly elected ______________ of Equifax Capital Markets,
Inc. ("ECM").
2. I have reviewed the terms of the Agreement.
3. After due inquiry, I have no knowledge of the existence of any
condition or event which constitutes a Termination Event or an Unmatured
Termination Event as of the date of this Certificate[, except as set forth
below].
[4. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the Termination Event or
Unmatured Termination Event, the period during which it has
existed and the action which ECM (or the applicable Originator)
has taken, is taking, or proposes to take with respect to each
such condition or event: _______________________________].
The foregoing certifications are made and delivered by the undersigned
in his or her representative capacity on behalf of ECM, this ____ day of
______________, 200_.
EQUIFAX CAPITAL MARKETS, INC.
By:___________________________
Title:________________________
Name:_________________________
35
EXHIBIT V
CREDIT AND COLLECTION POLICY
[attach copy]
36
EXHIBIT VI
FORM OF SUBORDINATED NOTE
SUBORDINATED NOTE
September 7, 2004
1. NOTE. FOR VALUE RECEIVED, the undersigned, EQUIFAX RECEIVABLES
FINANCE LLC, a Delaware limited liability company ("SPE"), hereby
unconditionally promises to pay to the order of EQUIFAX CAPITAL MANAGEMENT,
INC., a Georgia corporation ("ECM"), in lawful money of the United States of
America and in immediately available funds, on or before the date following the
Termination Date which is one year and one day after the date on which (i) the
Outstanding Balance of all Receivables sold by ECM under the "Sale Agreement"
referred to below has been reduced to zero and (ii) ECM has paid to SPE all
indemnities, adjustments and other amounts which may be owed thereunder in
connection with the Purchase thereunder (the "COLLECTION DATE"), the aggregate
unpaid principal sum outstanding of all "Subordinated Loans" made from time to
time by ECM to SPE pursuant to and in accordance with the terms of that certain
Receivables Sale Agreement dated as of September 7, 2004 between ECM, as seller,
and SPE, as buyer (as amended, restated, supplemented or otherwise modified from
time to time, the "SALE AGREEMENT"). Reference to SECTION 1.3 of the Sale
Agreement is hereby made for a statement of the terms and conditions under which
the loans evidenced hereby have been and will be made. All terms which are
capitalized and used herein and which are not otherwise specifically defined
herein shall have the meanings ascribed to such terms in the Sale Agreement.
2. INTEREST. SPE further promises to pay interest on the
outstanding unpaid principal amount hereof from the date hereof until payment in
full hereof at a rate equal to the 1-month LIBOR rate published in THE WALL
STREET JOURNAL on the first Business Day of each month (or portion thereof)
during the term of this Subordinated Note, computed for actual days elapsed on
the basis of a year consisting of 360 days and changing on the first business
day of each month hereafter ("LIBOR"); PROVIDED, HOWEVER, that if SPE shall
default in the payment of any principal hereof, SPE promises to pay, on demand,
interest at the rate equal to LIBOR plus 2.00% PER ANNUM on any such unpaid
amounts, from the date such payment is due to the date of actual payment.
Interest shall be payable on the first Business Day of each month in arrears;
PROVIDED, HOWEVER, that SPE may elect on the date any interest payment is due
hereunder to defer such payment and upon such election the amount of interest
due but unpaid on such date shall constitute principal under this Subordinated
Note. The outstanding principal of any loan made under this Subordinated Note
shall be due and payable on the Collection Date and may be repaid or prepaid at
any time without premium or penalty.
3. PRINCIPAL PAYMENTS. ECM is authorized and directed by SPE to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by SPE, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; PROVIDED THAT neither the failure of ECM
37
to make any such entry or any error therein shall expand, limit or affect the
obligations of SPE hereunder.
4. SUBORDINATION. ECM shall have the right to receive, and SPE
shall make, any and all payments and prepayments relating to the loans made
under this Subordinated Note PROVIDED THAT, after giving effect to any such
payment or prepayment, the aggregate Outstanding Balance of Receivables (as each
such term is defined in the Credit and Security Agreement hereinafter referred
to) owned by SPE at such time exceeds the sum of (a) the Obligations (as defined
in the Credit and Security Agreement) outstanding at such time under the Credit
and Security Agreement, plus (b) the aggregate outstanding principal balance of
all loans made under this Subordinated Note. ECM hereby agrees that at any time
during which the conditions set forth in the proviso of the immediately
preceding sentence shall not be satisfied, ECM shall be subordinate in right of
payment to the prior payment of any indebtedness or obligation of SPE owing to
the Agent or any Lender under that certain Credit and Security Agreement dated
as of September 7, 2004 by and among SPE, as Borrower, ECM as initial Servicer,
various "Lenders" from time to time party thereto and Wachovia Bank, National
Association, as the "AGENT" (as amended, restated, supplemented or otherwise
modified from time to time, the "CREDIT AND SECURITY AGREEMENT"). The
subordination provisions contained herein are for the direct benefit of, and may
be enforced by, the Agent and the Lenders and/or any of their respective
assignees (collectively, the "SENIOR CLAIMANTS") under the Credit and Security
Agreement. Until the date on which the "Aggregate Principal" outstanding under
the Credit and Security Agreement has been repaid in full and all other
obligations of SPE and/or the Servicer thereunder and under the "Fee Letter"
referenced therein (all such obligations, collectively, the "SENIOR CLAIM") have
been indefeasibly paid and satisfied in full, ECM shall not institute against
SPE any proceeding of the type described in SECTION 5.1(E)(II) of the Sale
Agreement unless and until the Collection Date has occurred. Should any payment,
distribution or security or proceeds thereof be received by ECM in violation of
this Section 4, ECM agrees that such payment shall be segregated, received and
held in trust for the benefit of, and deemed to be the property of, and shall be
immediately paid over and delivered to the Agent for the benefit of the Senior
Claimants.
5. BANKRUPTCY; INSOLVENCY. Upon the occurrence of any proceeding of
the type described in SECTION 5.1(E)(II) of the Sale Agreement involving SPE as
debtor, then and in any such event the Senior Claimants shall receive payment in
full of all amounts due or to become due on or in respect of the Aggregate
Principal and the Senior Claim (including "Interest" as defined and as accruing
under the Credit and Security Agreement after the commencement of any such
proceeding, whether or not any or all of such Interest is an allowable claim in
any such proceeding) before ECM is entitled to receive payment on account of
this Subordinated Note, and to that end, any payment or distribution of assets
of SPE of any kind or character, whether in cash, securities or other property,
in any applicable insolvency proceeding, which would otherwise be payable to or
deliverable upon or with respect to any or all indebtedness under this
Subordinated Note, is hereby assigned to and shall be paid or delivered by the
Person making such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) directly to the Agent
for application to, or as collateral for the payment of, the Senior Claim until
such Senior Claim shall have been paid in full and satisfied.
38
6. AMENDMENTS. This Subordinated Note shall not be amended or
modified except in accordance with SECTION 7.1 of the Sale Agreement. The terms
of this Subordinated Note may not be amended or otherwise modified without the
prior written consent of the Agent for the benefit of the Lenders.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND
DELIVERED AT NEW YORK, NEW YORK, AND SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND
DECISIONS OF THE STATE OF NEW YORK. WHEREVER POSSIBLE EACH PROVISION OF THIS
SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND
VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL
BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
SUBORDINATED NOTE.
8. WAIVERS. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. ECM additionally expressly waives all notice of the acceptance by
any Senior Claimant of the subordination and other provisions of this
Subordinated Note and expressly waives reliance by any Senior Claimant upon the
subordination and other provisions herein provided.
9. ASSIGNMENT. This Subordinated Note may not be assigned, pledged
or otherwise transferred to any party (other than its delivery to ECM) without
the prior written consent of the Agent, and any such attempted transfer shall be
void.
EQUIFAX CAPITAL MANAGEMENT, INC.
By:_____________________________
Title:
39
SCHEDULE
TO
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
-----------------------------------------------------------------------------------------------------------
AMOUNT OF AMOUNT OF PRINCIPAL UNPAID
SUBORDINATED PAID PRINCIPAL NOTATION MADE BY
DATE LOAN BALANCE (INITIALS)
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
40
EXHIBIT VII
[FORM OF] PURCHASE REPORT
For the Calculation Period beginning [date] and ending [date]
TO: BUYER AND THE AGENT (AS BUYER'S ASSIGNEE)
--------------------------------------------------------- ------------------- ----------------- ---------
--------------------------------------------------------- ------------------- ----------------- ---------
Aggregate Outstanding Balance of all Receivables sold
during the period: $_____________ A
--------------------------------------------------------- ------------------- ----------------- ---------
LESS: Aggregate Outstanding Balance of all Receivables
sold during such period which were not Eligible
Receivables on the date when sold:
($____________) (B)
--------------------------------------------------------- ------------------- ----------------- ---------
EQUALS: Aggregate Outstanding Balance of all Eligible
Receivables sold during the period (A - B):
$___________ =C
--------------------------------------------------------- ------------------- ----------------- ---------
LESS: Purchase Price discount during the Period:
($____________) (D)
--------------------------------------------------------- ------------------- ----------------- ---------
EQUALS: Gross Purchase Price Payable during the period
(C - D) $____________ =E
--------------------------------------------------------- ------------------- ----------------- ---------
LESS: Total Purchase Price Credits arising during the (F)
Period: ($____________)
--------------------------------------------------------- ------------------- ----------------- ---------
EQUALS: Net Purchase Price payable during the Period
(E - F): $____________ =G
--------------------------------------------------------- ------------------- ----------------- ---------
--------------------------------------------------------- ------------------- ----------------- ---------
Cash Purchase Price Paid to ECM during the Period: H
$-------------
--------------------------------------------------------- ------------------- ----------------- ---------
Subordinated Loans made during the Period: I
$-------------
--------------------------------------------------------- ------------------- ----------------- ---------
LESS: Repayments of Subordinated Loans received during (J)
the Period: ($____________)
--------------------------------------------------------- ------------------- ----------------- ---------
EQUALS: Purchase Price paid in Cash or Subordinated
Loans during the period
(H + I - J): $_____________ =K
--------------------------------------------------------- ------------------- ----------------- ---------
Aggregate Outstanding Balance of Receivables
contributed during the Period: $_____________ L
--------------------------------------------------------- ------------------- ----------------- ---------
41
SCHEDULE A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
1. Executed copies of the Second Step Receivables Sale Agreement (the
"RECEIVABLES SALE AGREEMENT"), duly executed by the parties thereto.
2. A certificate of Seller's [Assistant] Secretary certifying:
(a) A copy of the Resolutions of the Board of Directors or
Managers of Seller, authorizing Seller's execution, delivery and
performance of the Receivables Sale Agreement and the other documents to
be delivered by it thereunder;
(b) A copy of the Organizational Documents of Seller (also
certified, to the extent that such documents are filed with any
governmental authority, by the Secretary of State of the jurisdiction of
organization of Seller on or within a recent date prior to closing);
(c) Good Standing Certificates for Seller issued by the
Secretaries of State of its state of organization and each jurisdiction
where it has material operations; 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.
3. Pre-filing state and federal tax lien, judgment lien and UCC lien
searches against Seller from the following jurisdictions:
a. Georgia Secretary of State; and
x. Xxxxxx County, Georgia
4. Time stamped receipt copies of 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 all jurisdictions as may be
necessary or, in the opinion of Buyer (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.
5. 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 Seller.
6. Executed Collection Account Agreements for each Lock-Box and Collection
Account.
42
7. Favorable opinions of special legal counsel and General Counsel (as to
items (a), (b), and (c) below) for Seller licensed to give opinions
under New York law reasonably acceptable to Buyer (and the Agent, as
Buyer's assignee) as to the following:
(a) Seller is a ______________ duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
organization.
(b) Seller has all requisite authority to conduct its
business in each jurisdiction where failure to be so qualified would have a
material adverse effect on Seller's business.
(c) The execution and delivery by Seller 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 Seller 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 Organizational Documents or of
any agreement, judgment, injunction, order, decree or other instrument
binding upon Seller; or
(iii) result in the creation or imposition of any Adverse
Claim on assets of Seller or any of its Subsidiaries (except as
contemplated by the Receivables Sale Agreement and the Credit and
Security Agreement).
(d) The Receivables Sale Agreement and each other
Transaction Document to which it is a party has been duly executed and delivered
by Seller and constitutes the legally valid, and binding obligation of Seller
enforceable in accordance with its terms, except to the extent the enforcement
thereof may be limited by bankruptcy, insolvency or 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 Buyer in all of
Seller's 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
Buyer to Seller in an amount equal to the Purchase Price (as defined therein) of
the Receivables (as defined therein) acquired from Seller, together with all
other obligations of Seller thereunder.
(f) Each of the UCC-1 Financing Statements naming Seller as
debtor, Buyer, as assigning secured party, and Agent, as total assignee of
secured party to be filed in the [describe filing offices], is in appropriate
form for filing therein. Upon filing of such UCC-1 Financing
43
Statements in such filing offices and payment of the required filing fees, the
security interest in favor of Buyer in the Opinion Collateral will be perfected
and assigned of record 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 Buyer in the Opinion Collateral is prior to any security interest
granted in the Opinion Collateral by Seller, 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 Seller or any Affiliate of Seller,
which would materially adversely affect the business or financial condition of
Seller and its Affiliates taken as a whole or which would materially adversely
affect the ability of Seller to perform its obligations under the Receivables
Sale Agreement.
(i) Seller is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
8. A "TRUE SALE" opinion and "SUBSTANTIVE CONSOLIDATION" opinion of counsel
for Seller with respect to the transactions contemplated by the
Receivables Sale Agreement.
9. A Certificate of Seller's [chief financial officer] certifying that, as
of the closing date, no Termination Event or Unmatured Termination Event
exists and is continuing.
10. 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.
11. Executed Subordinated Note by Buyer in favor of Seller.
44
