Exhibit 10.2(a)
PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of April 23, 1996
between
S.D. XXXXXX COMPANY
and
S.D. XXXXXX FINANCE CO.
TABLE OF CONTENTS
PAGE
ARTICLE I
AGREEMENT TO PURCHASE AND CONTRIBUTE
1.1. Agreement to Purchase and Sell . . . . . . . . . . . . . . . . 2
1.2. Timing of Purchases. . . . . . . . . . . . . . . . . . . . . . 3
1.3. Consideration for Purchases. . . . . . . . . . . . . . . . . . 3
1.4. Purchase and Sale Termination Date . . . . . . . . . . . . . . 3
1.5. Intention of the Parties . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. Calculation of Purchase Price. . . . . . . . . . . . . . . . . 4
ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. Contribution of Receivables. . . . . . . . . . . . . . . . . . 5
3.2. Initial Purchase Price Payment . . . . . . . . . . . . . . . . 5
3.3. Subsequent Purchase Price Payments . . . . . . . . . . . . . . 5
3.4. Settlement as to Specific Receivables. . . . . . . . . . . . . 6
3.5. Reconveyance of Receivables. . . . . . . . . . . . . . . . . . 7
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. Conditions Precedent to Initial Purchase . . . . . . . . . . . 7
4.2. Certification as to Representations
and Warranties. . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
5.1. Organization and Good Standing . . . . . . . . . . . . . . . . 9
5.2. Due Qualification. . . . . . . . . . . . . . . . . . . . . . . 9
5.3. Power and Authority; Due Authorization . . . . . . . . . . . . 10
5.4. Valid Sale or Contribution;
Binding Obligations . . . . . . . . . . . . . . . . . . . . . 10
5.5. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6. Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . 10
TABLE OF CONTENTS
(continued)
PAGE
5.7. Bulk Sales Act . . . . . . . . . . . . . . . . . . . . . . . . 11
5.8. Government Approvals . . . . . . . . . . . . . . . . . . . . . 11
5.9. Financial Condition. . . . . . . . . . . . . . . . . . . . . . 11
5.10. Margin Regulations. . . . . . . . . . . . . . . . . . . . . . 11
5.11. Quality of Title. . . . . . . . . . . . . . . . . . . . . . . 11
5.12. Accuracy of Information . . . . . . . . . . . . . . . . . . . 12
5.13. Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.14. Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.15. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.16. Licenses and Labor Controversies. . . . . . . . . . . . . . . 13
5.17. Compliance with Applicable Laws . . . . . . . . . . . . . . . 13
5.18. Reliance on Separate Legal Identity . . . . . . . . . . . . . 13
5.19. Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . 13
5.20. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
COVENANTS OF ORIGINATOR
6.1. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . 15
6.2. Reporting Requirements . . . . . . . . . . . . . . . . . . . . 17
6.3. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1. Rights of the Company. . . . . . . . . . . . . . . . . . . . . 19
7.2. Responsibilities of Originator . . . . . . . . . . . . . . . . 19
7.3. Further Action Evidencing Purchases. . . . . . . . . . . . . . 20
7.4. Application of Collections . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1. Purchase and Sale Termination Events . . . . . . . . . . . . . 21
8.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX
INDEMNIFICATION
9.1. Indemnities by Originator. . . . . . . . . . . . . . . . . . . 23
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE X
MISCELLANEOUS
10.1. Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . 24
10.2. Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . 25
10.3. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . 25
10.4. Binding Effect; Assignability . . . . . . . . . . . . . . . . 25
10.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 25
10.6. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . 26
10.7. Submission to Jurisdiction. . . . . . . . . . . . . . . . . . 26
10.8. Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 26
10.9. Captions and Cross References;
Incorporation by Reference . . . . . . . . . . . . . . . . . 27
10.10. Execution in Counterparts. . . . . . . . . . . . . . . . . . 27
10.11. Acknowledgment and Agreement . . . . . . . . . . . . . . . . 27
||
SCHEDULES
SCHEDULE 5.13 Office Locations
SCHEDULE 5.14 Trade Names
EXHIBITS
EXHIBIT A Form of Purchase Report
EXHIBIT B Form of Company Note
EXHIBIT C Form of Opinion of Originator's Counsel
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PURCHASE AND CONTRIBUTION AGREEMENT
THIS PURCHASE AND CONTRIBUTION AGREEMENT (as amended, supplemented or
modified from time to time, this "AGREEMENT"), dated as of April 23, 1996, is
between S.D. XXXXXX COMPANY, a Pennsylvania corporation ("ORIGINATOR"), as
seller and contributor, and S.D. XXXXXX FINANCE CO., a Delaware corporation (the
"COMPANY"), as purchaser and contributee.
DEFINITIONS
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in EXHIBIT I to the Receivables Purchase
Agreement of even date herewith (as amended, supplemented or otherwise modified
from time to time, the "RECEIVABLES PURCHASE AGREEMENT"), among the Company,
Originator, as initial Servicer, BANK OF MONTREAL, as purchaser (together with
its successors and assigns, the "PURCHASER"), and XXXXXXX XXXXX SECURITIES,
INC., as agent for Purchaser (together with its successors and assigns, the
"AGENT").
BACKGROUND
1. The Company is a special purpose corporation, all of the capital stock
of which is wholly-owned by Originator, subject to a pledge to Chemical Bank, as
agent, under the Credit and Guarantee Agreement.
2. On the Closing Date, Originator is transferring certain Receivables
and Related Rights to the Company as a contribution to the Company in return for
100 shares of the common stock of the Company.
3. In order to finance its business, Originator wishes to sell certain
Receivables and Related Rights from time to time to the Company, and the Company
is willing, on the terms and subject to the conditions set forth herein, to
purchase such Receivables and Related Rights from Originator.
4. The Company intends to sell to Purchaser an undivided variable
percentage interest in its Receivables and Related Rights pursuant to the
Receivables Purchase Agreement in order to finance its purchases of certain
Receivables and Related Rights hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND CONTRIBUTE
1.1. AGREEMENT TO PURCHASE AND SELL. On the terms and subject to the
conditions set forth in this Agreement (including ARTICLE IV), and in
consideration of the Purchase Price, Originator agrees to sell to the Company,
and does hereby sell to the Company, and the Company agrees to purchase from
Originator, and does hereby purchase from Originator, without recourse and
without regard to collectibility, all of Originator's right, title and interest
in and to:
(a) each Receivable of Originator that existed and was owing to Originator
as of the close of Originator's business on April 24, 1996 (the "CLOSING DATE")
(other than the Receivables and Related Rights contributed by Originator to the
Company pursuant to Section 3.1 (the "CONTRIBUTED RECEIVABLES"));
(b) each Receivable created or originated by Originator from the close of
Originator's business on the Closing Date to and including the Purchase and Sale
Termination Date;
(c) all rights to, but not the obligations under, all Related Security;
(d) all monies due or to become due with respect to any of the foregoing;
(e) all books and records related to any of the foregoing; and
(f) all proceeds thereof (as defined in the UCC) received on or after the
date hereof including, without limitation, all funds which either are received
by Originator, the Company or the Servicer from or on behalf of the Obligors in
payment of any amounts owed (including, without limitation, finance charges,
interest and all other charges) in respect of Receivables, or are applied to
such amounts owed by the Obligors (including, without limitation, insurance
payments, if any, that Originator or the Servicer (if other than Originator)
applies in the ordinary course of its business to amounts owed in respect of any
Receivable).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to and in reliance upon the representations, warranties
and covenants of Originator, in its capacity as seller and contributor, set
forth in each Transaction Document. The Company's foregoing commitment to
purchase such
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Receivables and the proceeds and rights described in subsections (c) through
(f) of this SECTION 1.1 (collectively, the "RELATED RIGHTS") is herein called
the "PURCHASE FACILITY."
1.2. TIMING OF PURCHASES.
(a) CLOSING DATE PURCHASES. Originator's entire right, title and interest
in (i) each Receivable that existed and was owing to Originator as of the close
of Originator's business on the Closing Date, (other than Contributed
Receivables), (ii) all Related Rights with respect thereto shall be deemed to
have been sold to the Company on the Closing Date.
(b) REGULAR PURCHASES. After the Closing Date, each Receivable created or
originated by Originator and described in Section 1.1(b) hereof and all Related
Rights shall be purchased and owned by the Company (without any further action)
upon the creation or origination of such Receivable.
1.3. CONSIDERATION FOR PURCHASES. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make all Purchase
Price payments to Originator, and to reflect all contributions, in accordance
with ARTICLE III.
1.4. PURCHASE AND SALE TERMINATION DATE. The "PURCHASE AND SALE
TERMINATION DATE" shall be the earlier to occur of (a) the date of the
termination of this Agreement pursuant to Section 8.2 and (b) the Payment Date
immediately following the day on which Originator shall have given notice to the
Company that Originator desires to terminate this Agreement.
As used herein, "PAYMENT DATE" means (i) the Closing Date and (ii) each
Business Day thereafter that Originator is open for business.
1.5. INTENTION OF THE PARTIES. It is the express intent of the parties
hereto that the transfers of the Receivables (other than Contributed
Receivables) and Related Rights by the Originator to the Company, as
contemplated by this Agreement be, and be treated as, sales and not as secured
loans secured by the Receivables and Related Rights. If, however,
notwithstanding the intent of the parties, such transactions are deemed to be
loans, the Originator hereby grants to the Company a first priority security
interest in all of the Originator's right, title and interest in and to the
Receivables and the Related Rights now existing and hereafter created, all
monies due or to become due and all amounts received with respect thereto, and
all proceeds thereof, to secure all of the Originator's obligations hereunder.
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ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. CALCULATION OF PURCHASE PRICE. On each Servicer Report Date, the
Servicer shall deliver to the Company, the Agent and Originator (if the Servicer
is other than Originator) a report in substantially the form of Exhibit A (each
such report being herein called a "PURCHASE REPORT") with respect to the matters
set forth therein and the Company's purchases of Receivables from Originator
(a) that are to be made on the Closing Date (in the case of the Purchase
Report to be delivered on the Closing Date), or
(b) that were made during the period commencing on the Servicer Report
Date immediately preceding such Servicer Report Date to (but not including) such
Servicer Report Date (in the case of each subsequent Purchase Report).
The "PURCHASE PRICE" (to be paid to Originator in accordance with the terms of
ARTICLE III) for the Receivables and the Related Rights that are purchased
hereunder shall be determined in accordance with the following formula:
PP = OB X FMVD
WHERE:
PP = Purchase Price for each Receivable as calculated on the relevant
Payment Date.
OB = the Outstanding Balance of such Receivable.
FMVD = Fair Market Value Discount, as measured on such Payment Date,
which is equal to the quotient (expressed as percentage) of (a)
one DIVIDED by (b) the sum of (i) one, plus (ii) the product of
(A) the Prime Rate on such Payment Date plus .50% and (B) a
fraction, the numerator of which is the Average Maturity
(calculated as of the last day of the calendar month next
preceding such Payment Date) and the denominator of which is 365,
plus (iii) in the event that the Loss to Liquidation Ratio (as
calculated the last day of the calendar month next preceding such
Payment Date) exceeds .35%, an amount equal to such excess.
"LOSS TO LIQUIDATION RATIO" means the ratio (expressed as a percentage)
computed as of the last day of each month by dividing (i) the aggregate
Outstanding Balance of all Receivables originated by Originator that were
charged-off as uncollectible during the most
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recent calendar month then ended by (ii) the aggregate Collections (other
than deemed Collections) received by the Company or the Originator during
such month.
"PRIME RATE" means a PER ANNUM rate equal to the "prime rate" as published
in the "Money Rates" section of The Wall Street Journal or such other
publication as determined by the Agent in its sole discretion.
ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. CONTRIBUTION OF RECEIVABLES. On the Closing Date, Originator shall,
and hereby does, contribute to the capital of the Company, Receivables and
Related Rights with respect thereto consisting of each Receivable of Originator
that existed and was owing to Originator on the Closing Date, beginning with the
oldest of such Receivables and continuing chronologically thereafter, and all or
an undivided interest in the most recent of such contributed Receivables such
that the aggregate Outstanding Balance of all such contributed Receivables shall
be equal to $3,000,000.
3.2. INITIAL PURCHASE PRICE PAYMENT. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to pay to Originator
the Purchase Price for the purchase of Receivables to be made on the Closing
Date, partially in cash in the amount of the proceeds of the Purchase made by
the Purchaser on the Closing Date under the Receivables Purchase Agreement, and
partially by issuing a promissory note in the form of EXHIBIT B to Originator
with an initial principal balance equal to the remaining Purchase Price (as such
promissory note may be amended, supplemented, indorsed or otherwise modified
from time to time, together with all promissory notes issued from time to time
in substitution therefor or renewal thereof in accordance with the Transaction
Documents, being herein called the "COMPANY NOTE").
3.3. SUBSEQUENT PURCHASE PRICE PAYMENTS. On each Business Day falling
after the Closing Date and on or prior to the Purchase and Sale Termination
Date, on the terms and subject to the conditions set forth in this Agreement,
the Company shall pay to Originator the Purchase Price for the Receivables sold
by Originator to the Company on such Business Day, in cash, to the extent
provided under SECTION 1.2 of the Receivables Purchase Agreement, and to the
extent any of such Purchase Price remains unpaid, such remaining portion of such
Purchase Price shall be paid by means of an automatic increase to the
outstanding principal amount of the Company Note.
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Servicer shall make all appropriate record keeping entries with respect to
the Company Note or otherwise to reflect the foregoing payments and adjustments
pursuant to SECTION 3.4, and Servicer's books and records shall constitute
rebuttable presumptive evidence of the principal amount of and accrued interest
on the Company Note at any time. Furthermore, Servicer shall hold the Company
Note for the benefit of Originator, and all payments under the Company Note
shall be made to the Servicer for the account of the applicable payee thereof.
Originator hereby irrevocably authorizes Servicer to xxxx the Company Note
"CANCELLED" and to return the Company Note to the Company upon the final payment
thereof after the occurrence of the Purchase and Sale Termination Date.
3.4. SETTLEMENT AS TO SPECIFIC RECEIVABLES AND DILUTION.
(a) If on the day of purchase or contribution of any Receivable from
Originator hereunder, any of the representations or warranties set forth in
SECTION 5.4 or 5.11 is not true with respect to such Receivable or as a result
of any action or inaction of Originator, on any day any of the representations
or warranties set forth in SECTION 5.4 or 5.11 is no longer true with respect to
such a Receivable, then the Purchase Price (or in the case of a Contributed
Receivable, the Outstanding Balance of such Receivable (the "CONTRIBUTED
VALUE")) with respect to such Receivables shall be reduced by an amount equal to
the Outstanding Balance of such Receivable and shall be accounted to Originator
as provided in SUBSECTION (C) below; PROVIDED, that if the Company thereafter
receives payment on account of Collections due with respect to such Receivable,
the Company promptly shall deliver such funds to Originator.
(b) If, on any day, the Outstanding Balance of any Receivable (including
any Contributed Receivable) purchased (or contributed) hereunder is reduced or
adjusted as a result of any defective, rejected, returned goods or services, or
any discount or other adjustment made by Originator, Company or Servicer or any
setoff or dispute between the Seller, the Originator or the Servicer and an
Obligor as indicated on the books of the Company (or, for periods prior to the
Closing Date, the books of Originator), then the Purchase Price or the
Contributed Value, as the case may be, with respect to such Receivable shall be
reduced by the amount of such net reduction and shall be accounted to Originator
as provided in subsection (c) below.
(c) Any reduction in the Purchase Price (or Contributed Value) of any
Receivable pursuant to subsection (a) or (b) above shall be applied as a credit
for the account of the Company against the Purchase Price of Receivables
subsequently purchased by the Company from the Originator hereunder; PROVIDED,
HOWEVER if there have been no purchases of Receivables (or insufficiently large
purchases of
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Receivables) to create a Purchase Price sufficient to so apply such credit
against, the amount of such credit
(i) shall be paid in cash to the Company by the Originator in the
manner and for application as described in the following proviso, or
(ii) shall be deemed to be a payment under, and shall be deducted
from the principal amount outstanding under, the Company Note, to the
extent that such payment is permitted under clause (o) of EXHIBIT IV of the
Receivables Purchase Agreement;
PROVIDED, FURTHER, that at any time (y) when a Termination Event or Unmatured
Termination Event exists or (z) on or after the Purchase and Sale Termination
Date, the amount of any such credit shall be paid by Originator to the Company
by deposit in immediately available funds into the Collection Account for
application by Servicer to the same extent as if Collections of the applicable
Receivable in such amount had actually been received on such date.
(d) Each Purchase Report (other than the Purchase Report delivered on the
Closing Date) shall include, in respect of the Receivables previously generated
by Originator (including the Contributed Receivables), a calculation of the
aggregate reductions described in subsection (a) or (b) relating to such
Receivables since the last Purchase Report delivered hereunder, as indicated on
the books of the Company (or, for such period prior to the Closing Date, the
books of Originator).
3.5. RECONVEYANCE OF RECEIVABLES. In the event that Originator has paid
to the Company the full Outstanding Balance of any Receivable pursuant to
SECTION 3.4, the Company shall reconvey such Receivable to Originator, without
representation or warranty, but free and clear of all liens created by the
Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial purchase
hereunder is subject to the condition precedent that the Company shall have
received, on or before the Closing Date, the following, each (unless otherwise
indicated) dated the Closing Date, and each in form, substance and date
satisfactory to the Company:
(a) A copy of the resolutions of the Board of Directors of Originator
approving the Transaction Documents to be delivered by it and the transactions
contemplated hereby and thereby, certified by the Secretary or Assistant
Secretary of Originator;
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(b) Status certificates for Originator issued as of a recent date by the
Secretary of State of Massachusetts, Pennsylvania, Maine, Michigan and Alabama;
(c) A certificate of the Secretary or Assistant Secretary of Originator
certifying the names and true signatures of the officers authorized on
Originator's behalf to sign the Transaction Documents to be delivered by it (on
which certificate the Company and Servicer (if other than Originator) may
conclusively rely until such time as the Company and the Servicer shall receive
from Originator a revised certificate meeting the requirements of this
SUBSECTION (C));
(d) The articles of incorporation of Originator, duly certified by the
Secretary of State of Pennsylvania as of a recent date, together with a copy of
the by-laws of Originator, each duly certified by the Secretary or an Assistant
Secretary of Originator;
(e) Copies of the proper financing statements (Form UCC-1) that have been
duly executed and name Originator as the assignor and the Company as the
assignee (and Purchaser as assignee of the Company) of the Receivables generated
by Originator and Related Rights or other, similar instruments or documents, as
may be necessary or, in Servicer's or the Agent's opinion, desirable under the
UCC of all appropriate jurisdictions or any comparable law of all appropriate
jurisdictions to perfect the Company's ownership interest in all Receivables and
Related Rights in which an ownership interest may be assigned to it hereunder;
(f) A written search report from a Person satisfactory to Servicer and the
Agent listing all effective financing statements that name Originator as debtor
or assignor and that are filed in the jurisdictions in which filings were made
pursuant to the foregoing SUBSECTION (E), together with copies of such financing
statements (none of which, except for those described in the foregoing
SUBSECTION (e), shall cover any Receivable or any Related Right), and tax and
judgment lien search reports from a Person satisfactory to Servicer and the
Agent showing no evidence of such liens filed against Originator;
(g) Favorable opinions of Ropes & Xxxx, special counsel to Originator,
and Xxxxxxxx Xxxxxx, general counsel to the Originator, in the forms of
EXHIBIT C;
(h) Evidence (i) of the execution and delivery by each of the parties
thereto of each of the other Transaction Documents to be executed and delivered
in connection herewith and (ii) that each of the conditions precedent to the
execution, delivery and effectiveness of such other Transaction Documents has
been satisfied to the Company's satisfaction; and
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(i) A certificate from an officer of Originator to the effect that
Servicer and Originator have placed on the most recent, and have taken all steps
reasonably necessary to ensure that there shall be placed on subsequent, summary
master control data processing reports the following legend (or the substantive
equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO S.D.
XXXXXX FINANCE CO. PURSUANT TO A PURCHASE AND CONTRIBUTION AGREEMENT, DATED AS
OF APRIL 23, 1996, BETWEEN S.D. XXXXXX FINANCE CO. AND S.D. XXXXXX COMPANY; AND
AN INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN GRANTED TO BANK OF
MONTREAL, PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED AS OF APRIL 23,
1996, AMONG S.D. XXXXXX COMPANY, S.D. XXXXXX FINANCE CO., BANK OF MONTREAL AND
XXXXXXX XXXXX SECURITIES, INC., AS AGENT."
4.2. CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. Originator, by
accepting the Purchase Price related to each purchase of Receivables (and
Related Rights) shall be deemed to have certified that the representations and
warranties contained in ARTICLE V are true and correct on and as of such day,
with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, Originator, in its capacity as
seller under this Agreement, hereby makes the representations and warranties set
forth in this ARTICLE V.
5.1. ORGANIZATION AND GOOD STANDING. Originator has been duly organized
and is validly existing as a corporation in good standing under the laws of the
state of its incorporation, with power and authority to own its properties and
to conduct its business as such properties are presently owned and such business
is presently conducted.
5.2. DUE QUALIFICATION. Originator is duly licensed or qualified to do
business as a foreign corporation in good standing in the jurisdiction where its
chief executive office and principal place of business are located and in all
other jurisdictions in which (a) the ownership or lease of its property or the
conduct of its business requires such licensing or qualification and (b) the
failure to be so licensed or qualified has not had and could not reasonably be
expected to have a Material Adverse Effect.
5.3. POWER AND AUTHORITY; DUE AUTHORIZATION. Originator has (a) all
necessary corporate power, authority and legal right (i) to execute and deliver,
and perform its obligations under, each Transaction Document to which it is a
party, as seller, and (ii) to
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generate, own, sell, contribute and assign Receivables and Related Rights on
the terms and subject to the conditions herein and therein provided; and (b)
duly authorized such execution and delivery and such sale, contribution and
assignment and the performance of such obligations by all necessary corporate
action.
5.4. VALID SALE OR CONTRIBUTION; BINDING OBLIGATIONS. Each sale or
contribution, as the case may be, of Receivables and Related Rights made by
Originator pursuant to this Agreement shall constitute a valid sale or
contribution, as the case may be, transfer, and assignment thereof to the
Company, enforceable against creditors of, and purchasers from, Originator; and
this Agreement constitutes, and each other Transaction Document to be signed by
Originator, as seller, when duly executed and delivered, will constitute, a
legal, valid, and binding obligation of Originator, enforceable in accordance
with its terms; except in each case as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
5.5. NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which Originator is a
party as seller, and the fulfillment of the terms hereof or thereof will not (a)
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under (i)
Originator's certificate of incorporation or by-laws, or (ii) any indenture,
loan agreement, mortgage, deed of trust, or other agreement or instrument to
which it is a party or by which it is bound, (b) result in the creation or
imposition of any Adverse Claim upon any of its properties pursuant to the terms
of any such indenture, loan agreement, mortgage, deed of trust, or other
agreement or instrument, other than the Transaction Documents, or (c) violate
any law or any order, rule, or regulation applicable to it of any court or of
any federal, state or foreign regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over it or any of its
properties.
5.6. PROCEEDINGS. There is no litigation or, to Originator's knowledge,
any proceeding or investigation pending before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document to
which Originator is a party as seller, (b) seeking to prevent the sale or
contribution of Receivables and Related Rights to the Company or the
consummation of any of the other transactions contemplated by any Transaction
Document to which Originator is a party as seller, or (c) seeking any
determination or ruling that could reasonably be expected to have a Material
Adverse Effect.
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5.7. BULK SALES ACT. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
5.8. GOVERNMENT APPROVALS. Except for the filing of the UCC financing
statements referred to in ARTICLE IV, all of which, at the time required in
ARTICLE IV, shall have been duly made and shall be in full force and effect, no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for Originator's due
execution, delivery and performance of any Transaction Document to which it is a
party, as seller.
5.9. FINANCIAL CONDITION.
(a) On the date hereof, and on the date of each sale of Receivables by
Originator to the Company (both before and after giving effect to such sale),
Originator shall be Solvent.
(b) The consolidated balance sheets of Originator and its consolidated
subsidiaries as of September 30, 1995, and the related statements of income and
shareholders' equity of Originator and its consolidated subsidiaries for the
fiscal year then ended certified by Originator's independent accountants, copies
of which have been furnished to the Company, present fairly the consolidated
financial position of Originator and its consolidated subsidiaries for the
period ended on such date, all in accordance with generally accepted accounting
principles consistently applied; and since such date no event has occurred that
has had, or is reasonably likely to have, a Material Adverse Effect.
5.10. MARGIN REGULATIONS. No use of any funds acquired by Originator
under this Agreement will conflict with or contravene any of Regulations G, T, U
and X promulgated by the Board of Governors of the Federal Reserve System from
time to time.
5.11. QUALITY OF TITLE.
(a) Each Receivable (together with the Related Rights) which is to be sold
or contributed to the Company hereunder is or shall be owned by Originator, free
and clear of any Adverse Claim. Whenever the Company makes a purchase, or
accepts a contribution, hereunder, it shall have acquired a valid and perfected
ownership interest (free and clear of any Adverse Claim) in all Receivables
generated by Originator and all Collections related thereto, and in Originator's
entire right, title and interest in and to the other Related Rights with respect
thereto.
(b) No effective financing statement or other instrument similar in effect
covering any Receivable generated by Originator or any right related to any such
Receivable is on file in any recording office except such as may be filed in
favor of the Company or
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Originator, as the case may be, in accordance with this Agreement or in favor
of the Purchaser in accordance with the Receivables Purchase Agreement.
5.12. ACCURACY OF INFORMATION. No factual written information furnished
or to be furnished in writing by Originator, as seller, to the Company, the
Purchaser or the Agent for purposes of or in connection with any Transaction
Document or any transaction contemplated hereby or thereby is, and no other such
factual written information hereafter furnished (and prepared) by Originator, as
seller, to the Company, the Purchaser, or the Agent pursuant to or in connection
with any Transaction Document, taken as a whole, will be inaccurate in any
material respect as of the date it was furnished or (except as otherwise
disclosed to the Company at or prior to such time) as of the date as of which
such information is dated or certified, or shall contain any material
misstatement of fact or omitted or will omit to state any material fact
necessary to make such information, in the light of the circumstances under
which any statement therein was made, not materially misleading on the date as
of which such information is dated or certified.
5.13. OFFICES. Originator's principal place of business and chief
executive office is located at the address set forth under Originator's
signature hereto, and the offices where Originator keeps all its books, records
and documents evidencing the Receivables, the related Contracts and all other
agreements related to such Receivables are located at the addresses specified on
SCHEDULE 5.13 (or at such other locations, notified to Servicer (if other than
Originator) and the Agent in accordance with SECTION 6.1(f), in jurisdictions
where all action required by SECTION 7.3 has been taken and completed).
5.14. TRADE NAMES. Except as disclosed on SCHEDULE 5.14, Originator does
not use any trade name other than its actual corporate name. From and after the
date that fell five (5) years before the date hereof, Originator has not been
known by any legal name other than its corporate name as of the date hereof, nor
has Originator been the subject of any merger or other corporate reorganization
except as disclosed on SCHEDULE 5.14.
5.15. TAXES. Originator has filed all tax returns and reports required by
law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes which are not yet delinquent or
are being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with generally accepted accounting
principles shall have been set aside on its books.
5.16. LICENSES AND LABOR CONTROVERSIES.
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(a) Originator has not failed to obtain any licenses, permits, franchises
or other governmental authorizations necessary to the ownership of its
properties or to the conduct of its business, which violation or failure to
obtain would be reasonably likely to have a Material Adverse Effect; and
(b) There are no labor controversies pending against Originator that have
had (or are reasonably likely to have) a Material Adverse Effect.
5.17. COMPLIANCE WITH APPLICABLE LAWS. Originator is in compliance, in
all material respects, with the requirements of (i) all applicable laws, rules,
regulations, and orders of all governmental authorities (including, without
limitation, Regulation Z, laws, rules and regulations relating to usury, truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy and all other consumer
laws applicable to the Receivables and related Contracts) (excluding with
respect to environmental matters which are covered by CLAUSE (ii)), and (ii) to
the best of its knowledge, all applicable environmental laws, rules, regulations
and orders of all governmental authorities.
5.18. RELIANCE ON SEPARATE LEGAL IDENTITY. Originator is aware that
Purchaser and the Agent are entering into the Transaction Documents to which
they are parties in reliance upon the Company's identity as a legal entity
separate from Originator.
5.19. PURCHASE PRICE. The purchase price payable by the Company to the
Originator hereunder is intended by the Originator and Company to be consistent
with the terms that would be obtained in an arm's length sale. The Servicer's
Fee payable to the Originator is intended to be consistent with terms that would
be obtained in an arm's length servicing arrangement.
5.20. CERTAIN DEFINITIONS. With respect to this Agreement, the terms
"Material Adverse Effect" and "Solvent" are defined as follows:
"MATERIAL ADVERSE EFFECT" means, with respect to any event or
circumstance, a material adverse effect on:
(i) the business, assets, financial condition of the Originator;
(ii) the ability of Originator or the Servicer (if it is the
Originator) to perform its obligations under the Receivables Purchase
Agreement or any other Transaction Document to which it is a party or the
performance of any such obligations;
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(iii) the validity or enforceability of the Receivables Purchase
Agreement or any other Transaction Document;
(iv) with respect to the Purchase and Contribution Agreement, the
status, existence, perfection, priority or enforceability of Company's
interest in the Receivables or Related Rights; or
(v) the validity or enforceability of the Receivables.
"SOLVENT" means, with respect to any Person at any time, a condition
under which:
(i) the fair value and present fair saleable value of such Person's
total assets is, on the date of determination, greater than such Person's
total liabilities (including contingent and unliquidated liabilities) at
such time;
(ii) such Person is and shall continue to be able to
pay all of its liabilities as such liabilities mature; and
(iii) such Person does not have unreasonably small capital with which
to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated liabilities
at any time shall be that amount which, in light of all the facts and
circumstances then existing, represents the amount which can reasonably be
expected to become an actual or matured liability;
(B) the "fair value" of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such
asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount which
a capable and diligent business person could obtain for such asset from an
interested buyer who is willing to purchase such asset under ordinary
selling conditions; and
(D) the "present fair saleable value" of an asset means the amount
which can be obtained if such asset is sold with reasonable promptness in
an arm's length transaction in an existing and not theoretical market.
ARTICLE VI
COVENANTS OF ORIGINATOR
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6.1. AFFIRMATIVE COVENANTS. From the date hereof until the first day
following the Final Payout Date, Originator will, unless the Company and the
Agent shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables generated by it and the related Contracts and other agreements
related thereto.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification could
reasonably be expected to have a Material Adverse Effect.
(c) RECEIVABLES REVIEW. (i) At any time and from time to time (but not
more than twice during the term of this Agreement so long as no Termination
Event has occurred and is continuing) during regular business hours, upon
reasonable prior notice, permit the Company and/or the Agent, or their
respective agents or representatives, (A) to examine, to audit and make copies
of and abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the control of
Originator relating to the Receivables and Related Rights, including, without
limitation, the Contracts and other agreements related thereto, and (B) to visit
Originator's offices and properties for the purpose of examining such materials
described in the foregoing CLAUSE (A) and discussing matters relating to the
Receivables and Related Rights or Originator's performance hereunder with any of
the officers or employees of Originator having knowledge of such matters; and
(ii) without limiting the provisions of CLAUSE (i) next above, from time to time
on request of the Agent, permit certified public accountants or other auditors
acceptable to the Agent to conduct a review of its books and records with
respect to the Receivables and Related Rights.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain an ability to
recreate records evidencing the Receivables in the event of the destruction of
the originals thereof.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. At its
expense timely and fully perform and comply with all provisions, covenants and
other promises required to be observed by it under the related Contracts and all
other agreements related to the Receivables and Related Rights.
(f) LOCATION OF RECORDS. Keep its principal place of business and chief
executive office, and the offices where it keeps its
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records concerning or related to Receivables and Related Rights, at the
address(es) referred to in SCHEDULE 5.13 or, upon 30 days' prior written
notice to the Company and the Agent, at such other locations in jurisdictions
where all action required by SECTION 7.3 shall have been taken and completed.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material respects with
its Credit and Collection Policy in connection with the Receivables and the
related Contracts.
(h) SEPARATE CORPORATE EXISTENCE OF THE COMPANY. Take such actions as
shall be required in order that:
(i) the Company's operating expenses (other than certain organization
expenses and expenses incurred in connection with the preparation,
negotiation and delivery of the Transaction Documents) will not be paid by
Originator;
(ii) the Company's books and records will be maintained separately
from those of Originator;
(iii) all financial statements of Originator that are consolidated to
include the Company will contain detailed notes clearly stating that (A)
all of the Company's assets are owned by the Company, and (B) the Company
is a separate entity with creditors who have received interests in the
Company's assets;
(iv) Originator will strictly observe corporate formalities in its
dealing with the Company;
(v) Originator shall not commingle its funds with any funds of the
Company;
(vi) Originator will maintain arm's length relationships with the
Company, and Originator will be compensated at market rates for any
services it renders or otherwise furnishes to the Company; and
(vii) Originator will not be, and will not hold itself out to be,
responsible for the debts of the Company or the decisions or actions in
respect of the daily business and affairs of the Company (other than with
respect to such decisions or actions of the Originator in its capacity as
Servicer).
(i) RECEIPT OF COLLECTIONS. Originator shall promptly remit to the
applicable post office box related to the Lock-Box Accounts (or cause to be
deposited directly to such Lock-Box Accounts) all Collections received by
Originator.
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(j) POST OFFICE BOXES. Within 60 days after the date hereof, Originator
shall deliver to the Agent (with a copy for Purchaser) a certificate from an
authorized officer of Originator to the effect that (i) the name of the renter
of all post office boxes into which Collections may from time to time be mailed
have been changed to the name of the Company (unless such post office boxes are
in the name of the relevant Lock-Box Banks) and (ii) all relevant postmasters
have been notified that each of Servicer and the Agent are authorized to collect
mail delivered to such post office boxes (unless such post office boxes are in
the name of the relevant Lock-Box Banks).
6.2. REPORTING REQUIREMENTS. From the date hereof until the first day
following the Purchase and Sale Termination Date, Originator shall, unless the
Agent and the Company shall otherwise consent in writing, furnish to the Company
and the Agent:
(a) PROCEEDINGS. As soon as possible and in any event within three
Business Days after Originator has knowledge thereof, written notice to the
Company and the Agent of (i) all pending proceedings and investigations of the
type described in SECTION 5.6 not previously disclosed to the Company and/or the
Agent and (ii) all material adverse developments that have occurred with respect
to any previously disclosed proceedings and investigations; PROVIDED, HOWEVER,
that if such proceedings and investigations are unrelated to the Receivables and
the servicing thereof, such written notice may be delivered within 10 days after
Originator has knowledge thereof;
(b) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables, the Related Rights or
Originator's performance hereunder that the Company or the Agent may from time
to time reasonably request in order to protect the interests of the Company, the
Purchaser, the Agent or any other Affected Party under or as contemplated by the
Transaction Documents.
6.3. NEGATIVE COVENANTS. From the date hereof until the date following
the Final Payout Date, Originator agrees that, unless the Agent and the Company
shall otherwise consent in writing, it shall not:
(a) SALES, LIENS, ETC. Except as otherwise provided herein or in any
other Transaction Document, (i) sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Receivable or related Contract, Collections or Related
Security, or any interest therein, or assign any right to receive income in
respect thereof, or (ii) create or suffer to exist any Adverse Claim upon or
with respect to any proceeds of its inventory.
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(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise permitted
in Section 4.2(a) of the Receivables Purchase Agreement or in accordance with
the Credit and Collection Policy, extend, amend or otherwise modify the terms of
any Receivable in any material respect, or amend, modify or waive, in any
material respect, any term or condition of any Contract related thereto (which
term or condition relates to payments under, or the enforcement of, such
Contract).
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any change
in the character of its business or materially alter its Credit and Collection
Policy, which change would, in either case, materially change the credit
standing required of particular Obligors or potential Obligors or impair, in any
material respect, the collectibility of the Receivables generated by it.
(d) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES OR CHATTEL PAPER.
Take any action to cause or permit any Receivable generated by it to become
evidenced by any "instrument" or "chattel paper" (as defined in the applicable
UCC) unless such "instrument" or "chattel paper" shall be delivered to the
Company (which in turn shall deliver the same to the Purchaser (or the Agent on
its behalf)).
(e) MERGERS, ACQUISITIONS, SALES, ETC. Merge or consolidate with another
Person (except pursuant to a merger or consolidation involving Originator where
Originator is the surviving corporation), or convey, transfer, lease or
otherwise dispose of (whether in one or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired), other
than pursuant to this Agreement.
(f) LOCK-BOX BANKS. Make any changes in its instructions to Obligors
regarding Collections or add or terminate any Lock-Box Bank unless the
requirements of CLAUSE (i) of EXHIBIT IV of the Receivables Purchase Agreement
have been met.
(g) ACCOUNTING FOR PURCHASES. Account for or treat (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than as sales of the Receivables and Related Security by Originator to the
Company.
(h) TRANSACTION DOCUMENTS. Enter into, execute, deliver or otherwise
become bound by any agreement, instrument, document or other arrangement that
restricts the right of Originator to amend, supplement, amend and restate or
otherwise modify, or to extend or renew, or to waive any right under, this
Agreement or any other Transaction Documents.
ARTICLE VII
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ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1. RIGHTS OF THE COMPANY. Originator hereby authorizes the Company and
the Servicer (if other than Originator) or their respective designees to take
any and all steps in Originator's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all
Receivables and Related Rights, including, without limitation, endorsing
Originator's name on checks and other instruments representing Collections and
enforcing such Receivables and the provisions of the related Contracts that
concern payment and/or enforcement of rights to payment.
7.2. RESPONSIBILITIES OF ORIGINATOR. Anything herein to the contrary
notwithstanding:
(a) Originator agrees to direct, and hereby grants to each of the Company
and the Agent the authority to direct, all Obligors to make payments of
Receivables directly to a Lock-Box Account at a Lock-Box Bank. Originator
further agrees to transfer any Collections that it receives directly to Servicer
(for deposit to such a Lock-Box Account) within one Business Day of receipt
thereof, and agrees that all such Collections shall be deemed to be received in
trust for the Company.
(b) Originator shall perform its obligations hereunder, and the exercise
by the Company or its designee of its rights hereunder shall not relieve
Originator from such obligations.
(c) None of the Company, Servicer (if other than the Originator),
Purchaser or the Agent shall have any obligation or liability to any Obligor or
any other third Person with respect to any Receivables, Contracts related
thereto or any other related agreements, nor shall the Company, Servicer (if
other than the Originator), Purchaser or the Agent be obligated to perform any
of the obligations of Originator thereunder.
(d) Originator hereby grants to Servicer (if other than Originator) an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to take in the name of Originator all steps necessary or advisable to
indorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by Originator or transmitted or received by the Company
(whether or not from Originator) in connection with any Receivable or Related
Right.
7.3. FURTHER ACTION EVIDENCING PURCHASES. Originator agrees that from
time to time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that the Company or
Servicer may reasonably request in order
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to perfect, protect or more fully evidence the Receivables (and the Related
Rights) purchased by, or contributed to, the Company hereunder, or to enable
the Company to exercise or enforce any of its rights hereunder or under any
other Transaction Document. Without limiting the generality of the
foregoing, upon the request of the Company, Originator will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(b) xxxx the summary master control data processing records with the
legend set forth in SECTION 4.1(i).
Originator hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables (and the Related Rights) now
existing or hereafter generated by Originator. If Originator fails to perform
any of its agreements or obligations under this Agreement, the Company or its
designee may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the expenses of the Company or its
designee incurred in connection therewith shall be payable by Originator as
provided in SECTION 10.6.
7.4. APPLICATION OF COLLECTIONS. Any payment by an Obligor in respect of
any indebtedness owed by it to Originator shall, except as otherwise specified
by such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Company or the Agent, be applied FIRST, as a Collection of any
Receivables of such Obligor, in the order of the age of such Receivables,
starting with the oldest of such Receivables, and SECOND, to any other
indebtedness of such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1. PURCHASE AND SALE TERMINATION EVENTS. Each of the following events
or occurrences described in this SECTION 8.1 shall constitute a "PURCHASE AND
SALE TERMINATION EVENT":
(a) The Facility Termination Date (as defined in the Receivables Purchase
Agreement) shall have occurred; or
(b) Originator shall fail to make any payment or deposit to be made by it
hereunder when due and such failure shall remain unremedied for one Business Day
after notice; or
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(c) Any representation or warranty made or deemed to be made by Originator
(or any of its officers) under or in connection with this Agreement, any other
Transaction Document or any other information or report delivered pursuant
hereto or thereto shall prove to have been false or incorrect in any material
respect when made or deemed made; or
(d) Originator shall fail to perform or observe in any material respect
any agreement contained in any of SECTIONS 6.1(h) or 6.3; or
(e) Originator shall fail to perform or observe any other term, covenant
or agreement contained in this Agreement on its part to be performed or observed
and such failure shall remain unremedied for thirty (30) Business Days after
written notice thereof shall have been given by Servicer, the Agent or the
Company to Originator; or
(f) (i) Originator or any of its subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against Originator or any
of its subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or other similar
official for it or for all or any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
such proceeding shall remain undismissed or unstayed for a period of 30 days; or
(ii) Originator or any of its subsidiaries shall take any corporate action to
authorize any of the actions set forth in CLAUSE (i) above in this SECTION
8.1(f);
(g) A contribution failure shall occur with respect to any benefit plan
sufficient to give rise to a lien under Section 302(f) of ERISA, or the Internal
Revenue Service shall, or shall indicate its intention in writing to Originator
to, file notice of a lien asserting a claim or claims pursuant to the Code with
regard to any of the assets of Originator, or the Pension Benefit Guaranty
Corporation shall, or shall indicate its intention in writing to Originator or
an ERISA Affiliate to, either file notice of a lien asserting a claim pursuant
to ERISA with regard to any assets of Originator or an ERISA Affiliate or
terminate any benefit plan that has unfunded benefit liabilities; or
(h) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6373 of the Internal Revenue Code with regard to any of assets of
Originator and such lien shall not have been
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released within ten Business Days, or the Pension Benefit Guaranty
Corporation shall, or shall indicate its intention to, file notice of a lien
pursuant to Section 4068 of ERISA with regard to any of the assets of the
Originator.
8.2. REMEDIES.
(i) OPTIONAL TERMINATION. Upon the occurrence of a Purchase and Sale
Termination Event, the Company (and not Servicer) shall have the option by
notice to Originator (with a copy to the Agent) to declare the Purchase and
Sale Termination Date to have occurred.
(ii) REMEDIES CUMULATIVE. Upon any termination of the Facility
pursuant to this SECTION 8.2, the Company shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction
and other applicable laws, which rights shall be cumulative. Without
limiting the foregoing, the occurrence of the Purchase and Sale Termination
Date shall not deny the Company any remedy in addition to termination of
the Purchase Facility to which the Company may be otherwise appropriately
entitled, whether at law or equity.
ARTICLE IX
INDEMNIFICATION
9.1. INDEMNITIES BY ORIGINATOR. Without limiting any other rights which
the Company may have hereunder or under applicable law, Originator hereby agrees
to indemnify the Company and each of its assigns, officers, directors, employees
and agents (each of the foregoing Persons being individually called a "PURCHASE
AND SALE INDEMNIFIED PARTY"), forthwith on demand, from and against any and all
damages, losses, claims, judgments, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of the foregoing
being collectively called "PURCHASE AND SALE INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of the
following:
(a) the transfer by Originator of an interest in any Receivable or Related
Right to any Person other than the Company;
(b) the breach of any representation or warranty made by Originator under
or in connection with this Agreement or any other Transaction Document, or any
information or report delivered by Originator pursuant hereto or thereto which
shall have been false or incorrect in any material respect when made or deemed
made;
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(c) the failure by Originator to comply with any applicable law, rule or
regulation with respect to any Receivable or the related Contract, or the
nonconformity of any Receivable or the related Contract with any such applicable
law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an ownership
interest in the Receivables generated by Originator and Related Rights free and
clear of any Adverse Claim, other than an Adverse Claim arising solely as a
result of an act of the Company, whether existing at the time of the purchase or
contribution of such Receivables or at any time thereafter;
(e) the failure of Originator to file with respect to itself, or any delay
by Originator in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivables or purported Receivables generated by Originator
or Related Rights, whether at the time of any purchase or contribution or at any
subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by Originator (including, without limitation, a defense
based on such Receivables or the related Contracts 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 goods or services related to any
such Receivable or the furnishing of or failure to furnish such goods or
services;
(g) any product liability claim arising out of or in connection with goods
or services that are the subject of any Receivable;
(h) any litigation, proceeding or investigation against Originator;
(i) any tax or governmental fee or charge (other than any tax excluded
pursuant to the proviso below), all interest and penalties thereon or with
respect thereto, and all out-of-pocket costs and expenses, including the
reasonable fees and expenses of counsel in defending against the same, which may
arise by reason of the purchase, contribution or ownership of the Receivables or
any Related Right connected with any such Receivables; and
(j) any failure of Originator, individually or as Servicer, to perform its
duties or obligations in accordance with the provisions of this Agreement or any
other Transaction Document;
EXCLUDING, HOWEVER, (i) Purchase and Sale Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the
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part of a Purchase and Sale Indemnified Party, (ii) any indemnification which
has the effect of recourse for non-payment of the Receivables due to credit
reasons to Originator (except as otherwise specifically provided under this
SECTION 9.1) and (iii) any tax based upon or measured by net income or gross
receipts.
If for any reason the indemnification provided above in this SECTION 9.1 is
unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then Originator shall
contribute to the amount paid or payable by such Purchase and Sale Indemnified
Party as a result of such loss, claim, damage or liability to the maximum extent
permitted under applicable law. Promptly after receipt by a Purchase and Sale
Indemnified Party under this Article IX of notice of any claim or the
commencement of any action arising out of or as a result of any of paragraphs
(a) through (j) above, the Purchase and Sale Indemnified Party shall, if a claim
in respect thereof is to be made against the Originator under this Article IX,
notify the Originator in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the Originator shall not
relieve it from any liability which it may have under this Article IX except to
the extent it has been materially prejudiced by such failure and, PROVIDED,
FURTHER, that the failure to notify the Originator shall not relieve it from any
liability which it may have to a Purchase and Sale Indemnified Party otherwise
than under this Article IX. If any such claim or action shall be brought
against a Purchase and Sale Indemnified Party, the Originator shall be entitled
to participate therein and, to the extent that it wishes, to assume the defense
thereof with counsel satisfactory to the Purchase and Sale Indemnified Party.
After notice from the Originator to the Purchase and Sale Indemnified Party of
its election to assume the defense of such claim or action, the Originator shall
not be liable to the Purchase and Sale Indemnified Party under this Article IX
for any legal or other expenses subsequently incurred by Purchase and Sale
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation. The Originator shall not (i) without the prior written
consent of the relevant Purchase and Sale Indemnified Party or Parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the Purchase and Sale Indemnified Party
or Parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
Purchase and Sale Indemnified Party from all liability arising out of such
claim, action, suit or proceeding or (ii) be liable for any settlement of any
such action affected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such
-24-
action, the Originator agrees to indemnify and hold harmless any indemnified
party from and against any Purchase and Sale Indemnified Amounts relating
thereto.
ARTICLE X
MISCELLANEOUS
10.1. AMENDMENTS, ETC.
(a) The provisions of this Agreement may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by Originator, the Company, the Servicer (if other than Originator)
and the Agent.
(b) No failure or delay on the part of the Company, Servicer, Originator
or any third party beneficiary in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on the Company,
Servicer, or Originator in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Company or
Servicer under this Agreement shall, except as may otherwise be stated in such
waiver or approval, be applicable to subsequent transactions. No waiver or
approval under this Agreement shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
10.2. NOTICES, ETC. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, (i) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (ii) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
10.3. NO WAIVER; CUMULATIVE REMEDIES. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
10.4. BINDING EFFECT; ASSIGNABILITY. This Agreement shall be binding upon
and inure to the benefit of the Company, Originator and its respective
successors and permitted assigns. Originator may not
-25-
assign its rights hereunder or any interest herein without the prior consent
of the Company and the Agent. 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 the date after the Purchase
and Sale Termination Date on which Originator has received payment in full
for all Receivables and Related Rights purchased pursuant to SECTION 1.1
hereof. The rights and remedies with respect to any breach of any
representation and warranty made by Originator pursuant to ARTICLE V and the
indemnification and payment provisions of ARTICLE IX and SECTION 10.6 shall
be continuing and shall survive any termination of this Agreement.
10.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAW OF THE COMMONWEALTH OF MASSACHUSETTS,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE INTERESTS OF
PURCHASER IN THE RECEIVABLES, OR REMEDIES HEREUNDER IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE COMMONWEALTH OF
MASSACHUSETTS.
10.6. COSTS, EXPENSES AND TAXES. In addition to the obligations of
Originator under ARTICLE IX, Originator agrees to pay on demand:
(a) all reasonable costs and expenses in connection with the enforcement
of this Agreement and the other Transaction Documents; and
(b) all stamp and other similar taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents, and agrees to indemnify each
Purchase and Sale Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
10.7. SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY IRREVOCABLY
(a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MASSACHUSETTS STATE OR
UNITED STATES FEDERAL COURT SITTING IN MASSACHUSETTS, OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 10.2; AND (e) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A NONAPPEALABLE
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN
-26-
ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT
THE COMPANY'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ORIGINATOR OR ITS PROPERTY
IN THE COURTS OF ANY OTHER JURISDICTIONS.
10.8. WAIVER OF JURY TRIAL. EACH PARTY HERETO EXPRESSLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR UNDER ANY AMENDMENT,
INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
10.9. CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE. The
various captions (including, without limitation, the table of contents) in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to any underscored Section or Exhibit are to such Section or Exhibit of this
Agreement, as the case may be. The Exhibits hereto are hereby incorporated by
reference into and made a part of this Agreement.
10.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same Agreement.
10.11. ACKNOWLEDGMENT AND AGREEMENT. By execution below, Originator
expressly acknowledges and agrees that all of the Company's rights, title, and
interests in, to, and under this Agreement shall be assigned by the Company to
the Purchaser pursuant to the Receivables Purchase Agreement, and Originator
consents to such assignment. Each of the parties hereto acknowledges and agrees
that the Agent and the Purchaser are third party beneficiaries of the rights of
the Company arising hereunder and under the other Transaction Documents to which
Originator is a party.
-27-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
S.D. XXXXXX FINANCE CO.
By:_________________________________
Name:
Title:
S.D. XXXXXX FINANCE CO.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:__________________________
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S.D. XXXXXX COMPANY
By:_________________________________
Name:
Title:
S.D. XXXXXX COMPANY
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:__________________________
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Acknowledged and consented by:
S.D. XXXXXX COMPANY, as Servicer
By:________________________________
Name:______________________________
Title:_____________________________
S.D. XXXXXX COMPANY
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:_________________________
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SCHEDULE 5.13
OFFICE LOCATIONS
None.
SCHEDULE 5.14
TRADE NAMES
None.
EXHIBIT A
FORM OF PURCHASE REPORT
EXHIBIT B
FORM OF COMPANY NOTE
EXHIBIT C
FORM OF OPINION OF ORIGINATOR'S COUNSEL
