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EXHIBIT 10.28
PURCHASE AND SALE AGREEMENT
Dated as of March 14, 1997
between
PROSOURCE SERVICES CORPORATION
and
PROSOURCE RECEIVABLES CORPORATION
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TABLE OF CONTENTS
PAGE
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ARTICLE I
AGREEMENT TO PURCHASE AND SELL; LETTERS OF CREDIT
1.1. Facility................................................... 2
1.2. Making of Purchases........................................ 2
1.3. Consideration for Purchases................................ 2
1.4. Purchase and Sale Termination Date......................... 2
1.5. Intention of the Parties................................... 3
1.6. Letters of Credit.......................................... 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............................. 6
3.3. Subsequent Purchase Price Payments......................... 6
3.4. Settlement as to Specific Receivables...................... 7
3.5. Expired Letters of Credit.................................. 8
ARTICLE IV
CONDITIONS OF PURCHASES
4.1. Conditions Precedent to Initial Purchase................... 8
4.2. Certification as to Representations
and Warranties........................................... 9
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TABLE OF CONTENTS
(continued)
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ORIGINATOR
5.1. Organization and Good Standing............................. 10
5.2. Due Qualification.......................................... 10
5.3. Power and Authority; Due Authorization..................... 10
5.4. Valid Sale or Contribution;
Binding Obligations...................................... 10
5.5. No Violation............................................... 11
5.6. Proceedings................................................ 11
5.7. Bulk Sales Act............................................. 11
5.8. Government Approvals....................................... 11
5.9. Financial Condition........................................ 11
5.10. Margin Regulations........................................ 12
5.11. Quality of Title.......................................... 12
5.12. Accuracy of Information................................... 12
5.13. Offices................................................... 13
5.14. Trade Names............................................... 13
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....................... 14
5.19. Purchase Price............................................ 14
5.20. Eligibility of Receivables................................ 14
5.21. Marking of Records........................................ 14
5.22. Certain Definitions....................................... 14
ARTICLE VI
COVENANTS OF ORIGINATOR
6.1. Affirmative Covenants...................................... 15
6.2. Reporting Requirements..................................... 17
6.3. Negative Covenants......................................... 17
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TABLE OF CONTENTS
(continued)
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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........................ 19
7.4. Application of Collections................................. 20
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1. Purchase and Sale Termination Events....................... 20
8.2. Remedies................................................... 21
ARTICLE IX
INDEMNIFICATION
9.1. Indemnities by Originator.................................. 22
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
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TABLE OF CONTENTS
(continued)
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10.10. Execution in Counterparts................................ 27
10.11. Acknowledgment and Agreement............................. 27
SCHEDULES
SCHEDULE 4.1 Foreign Qualifications
SCHEDULE 5.13 Office Locations
SCHEDULE 5.14 Trade Names
EXHIBITS
EXHIBIT A Form of Purchase Report
EXHIBIT B Form of Borrower Note
EXHIBIT C Form of Opinion of Originator's Counsel
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (as amended, supplemented or modified
from time to time, this "Agreement"), dated as of March 14, 1997, is between
PROSOURCE SERVICES CORPORATION, a Delaware corporation ("Originator"), as seller
and contributor, and PROSOURCE RECEIVABLES CORPORATION, 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 Section 1.1 to the Secured Credit
Agreement of even date herewith (as amended, supplemented or otherwise modified
from time to time, the "Secured Credit Agreement"), among the Company, as the
Borrower, the Originator, as the initial Servicer, certain commercial lending
institutions from time to time party thereto as Lenders (the "Lenders"), and THE
BANK OF NOVA SCOTIA, as the issuer of letters of credit (in such capacity, the
"Issuer"), as the swingline bank (in such capacity, the "Swingline Bank"), and
as the administrative agent for the Lenders (the "Administrative Agent").
Background
1. The Company is a special purpose corporation, all of the capital stock
of which is wholly-owned by Originator.
2. On the Effective Date, Originator is transferring certain Receivables
and Related Security to the capital of the Company as a contribution to the
Company. Originator may also contribute additional Receivables and Related
Security to the capital of the Company after the Effective Date.
3. Originator wishes to sell certain Receivables and Related Security from
time to time to the Company, and the Company is willing, on the terms and
subject to the conditions set forth
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herein, to purchase such Receivables and Related Security from Originator.
4. The Company has obtained Commitments from the Lenders and the other
Secured Parties secured by the Receivables and Related Security pursuant to the
Secured Credit Agreement in order to finance its purchases of certain
Receivables and Related Security 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 SELL; LETTERS OF CREDIT
1.1. Facility. On the terms and subject to the conditions herein set forth
and without recourse to Originator (except to the extent as is specifically
provided herein), Originator shall sell or contribute to the Company all
Receivables and Related Security with respect thereto originated by it from time
to time and the Company shall purchase (each a "Purchase") or accept as a
contribution from Originator all Receivables and Related Security with respect
thereto of Originator from time to time, in each case during the period
commencing until the Purchase and Sale Termination Date (as hereinafter
defined).
1.2. Making of Purchases. (a) All purchases. On the Effective Date and on
each Business Day following the Effective Date on which a Receivable is
originated and/or acquired (each, a "Payment Date"), Originator shall sell to
the Company and the Company shall purchase from Originator all Receivables
originated and/or acquired by Originator which have not previously been sold or
contributed to the Company; provided, however, that Originator may, at its
option on any Payment Date, contribute all or any of such Receivables to the
Company pursuant to Section 3.1(b), instead of selling such Receivables to the
Company pursuant to this Section 1.2.
(b) Ownership of Receivables and Related Security. On each Payment Date,
after giving effect to each Purchase and each contribution of Receivables on
such date, the Company shall own all
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Receivables originated and/or acquired by Originator as of such date (including
Receivables which have been previously sold or contributed to the Company
hereunder). The Purchase or contribution of any Receivable shall include all
Related Security with respect to 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.
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
(as hereinafter defined)) and Related Security 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 Security. If, however,
notwithstanding the intent of the parties, such transactions are deemed to be
loans, the Originator hereby grants to the Company a security interest in all of
the Originator's right, title and interest in and to the Receivables and the
Related Security 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. It is also the express
intention of the parties hereto that the transfers of Contributed Receivables by
Originator to the Company be treated as contributions to the capital of the
Company.
1.6. Letters of Credit.
(a) Company Agreement to Procure Letters of Credit. On the terms and
subject to the conditions set forth in this Agreement, the Company agrees that,
upon the request of the Originator, the Company shall cause the Issuer to issue
Letters of Credit for the Company's account (to the extent permitted under, and
subject to the terms of,
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the Secured Credit Agreement) in such stated amounts as the Originator may from
time to time request; provided, however, that the aggregate Stated Amount of all
Letters of Credit issued on any day shall not exceed the purchase price of
Receivables to be sold on such day hereunder. The Originator shall deliver all
requests for Letter of Credit issuances to the Company before the time at which
the Company must deliver such requests to the Administrative Agent under the
Secured Credit Agreement. The Originator shall assist the Company in preparing
any Letter of Credit applications and other documents required to be submitted
to the Issuer in connection with each such Letter of Credit issuance.
(b) Amendments to Letters of Credit. The Originator, from time to time,
may request the Company to request the Issuer, on the terms and subject to the
conditions set forth in the Secured Credit Agreement, (a) to revise the
documentation requirements for any outstanding Letter of Credit, (b) to extend
the expiry date (for a period of one year or less) of any outstanding Letter of
Credit, (c) to increase the stated amount of any outstanding Letter of Credit or
(d) to decrease the stated amount of any outstanding Letter of Credit.
(c) Letter of Credit Cancellations. The Originator shall be entitled to
request the Company to request the Issuer to cancel any Letter of Credit upon
the Issuer's receipt of (i) the original of such Letter of Credit and (ii) the
written consent of such Letter of Credit's beneficiary to such cancellation.
ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1. Calculation of Purchase Price. On the 20th day of each Fiscal Month,
the Servicer shall deliver to the Company, the Administrative Agent and the
Originator (if the Servicer is other than the 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
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(a) that are to be made on the Effective Date (in the case of the
Purchase Report to be delivered on the Effective Date), or
(b) that were made during the period commencing on the date of
delivery of the preceding Purchase Report to (but not including) the date
of delivery of the current Purchase Report (in the case of subsequent
Purchase Reports); provided, however, that so long as the Originator or
any Affiliate thereof is the Servicer, the Originator (or such Affiliate)
may, in its discretion, provide the information that would otherwise be
included in the Purchase Report in the Settlement Statement.
The "Purchase Price" (to be paid to Originator in accordance with the terms of
Article III) for the Receivables and the Related Security 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 2.00%,
and (B) a fraction, the numerator of which is the Average
Maturity (calculated as of the last day of the Fiscal Month
next preceding such Payment Date) and the denominator of which
is 365 or, in the case of a leap year, 366, plus (iii) in the
event that the three month rolling average of the Charge Off
Ratio (as calculated the last day of the Fiscal Month next
preceding such Payment Date) exceeds .20%, an amount equal to
such excess.
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"Average Maturity" means, at any time, that period of days equal to the
Days Sale Outstanding calculated by the Servicer in the most recent Settlement
Statement.
"Charge Off Ratio" means the ratio (expressed as a percentage) computed as
of the last day of each Fiscal Month by dividing (i) the aggregate Outstanding
Balance of all Receivables originated by Originator that were charged-off as
uncollectible during the most recent Fiscal Month then ended by (ii) the
aggregate Collections (other than deemed Collections) received by the Company or
the Originator during such Fiscal Month.
"Prime Rate" means a per annum rate equal to the rate of interest most
recently announced by the Administrative Agent as its "prime" or "reference"
rate for United States loans made in the United States.
ARTICLE III
CONTRIBUTION OF RECEIVABLES;
PAYMENT OF PURCHASE PRICE
3.1. Contribution of Receivables.
(a) On the Effective Date, Originator shall, and hereby does, contribute
to the capital of the Company, Receivables and Related Security with respect
thereto consisting of Receivables of Originator that existed and were owing to
Originator on the Effective 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
[$______________].
(b) Originator may at its option from time to time after the Effective
Date, by notice to the Company on or prior to the date of the proposed
contribution, identify additional Receivables which it proposes to contribute to
the Company as a capital contribution. On the date of each such contribution and
after giving effect thereto, the Company shall own in the Receivables so
identified and
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contributed (collectively, the "Contributed Receivables") and all Related
Security with respect thereto.
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 Effective
Date, partially in cash from funds borrowed under the Secured Credit Agreement,
partially by issuing Letters of Credit pursuant to Section 1.6 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 Loan Documents, being herein
called the "Borrower Note").
3.3. Subsequent Purchase Price Payments. On each Payment Date falling
after the Effective 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, partially in cash, to the
extent of any funds made available to the Company under the Secured Credit
Agreement, and to the extent any of such Purchase Price remains unpaid, such
remaining portion of such Purchase Price shall be paid, at the option of
Originator, by causing the Company to cause the issuer to issue Letters of
Credit as contemplated under Section 1.6 and/or by means of an automatic
increase to the outstanding principal amount of the Borrower Note; provided,
however, the outstanding principal balance of the Borrower Note may not at any
time exceed 15% of the Outstanding Balance of all Receivables owned by the
Company and no increase shall be made in the outstanding principal amount of the
Borrower Note such that the outstanding principal amount of the Borrower Note
exceeds 15% of the Outstanding Balance of all Receivables.
Servicer shall make all appropriate record keeping entries with respect to
the Borrower 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 Borrower Note
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at any time. Furthermore, Servicer shall hold the Borrower Note for the benefit
of Originator, and all payments under the Borrower Note shall be made to the
Servicer for the account of the applicable payee thereof. Originator hereby
irrevocably authorizes Servicer to xxxx the Borrower Note "CANCELLED" and to
return the Borrower 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
Sections 5.4, 5.11 or 5.20 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 Sections 5.4, 5.11 or 5.20 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 (each such
adjustment, a "Noncomplying Receivables Adjustment") and shall be accounted to
Originator as provided in Section 3.4(c); provided, however, 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 Dilution, 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 (a "Dilution Adjustment") and shall be
accounted to Originator as provided in Section 3.4(c).
(c) Any reduction in the Purchase Price (or Contributed Value) of any
Receivable pursuant to Section 3.4(a) or (b) 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, or
(ii) shall be deemed to be a payment under, and shall be deducted
from the principal amount outstanding under, the Borrower Note;
provided, further, however, that at any time (y) when a Default 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
Effective Date) shall include, in respect of the Receivables previously
generated by Originator (including the Contributed Receivables), a calculation
of the aggregate reductions described in Section 3.4(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 Effective Date, the
books of Originator).
3.5. Expired Letters of Credit. In the event that any Letter of Credit
issued in partial payment of any Purchase Price hereunder (i) expires or is
cancelled or otherwise terminated with all or any portion of its stated Amount
undrawn, (ii) has its Stated Amount decreased or (iii) the Company's
Reimbursement Obligation in respect thereof is reduced for any reason other than
by virtue of a payment made in respect of a drawing thereunder, then an amount
equal to such undrawn amount or such reduction, as the case may be, shall be
paid in cash to Originator on the next occurring Business Day.
ARTICLE IV
CONDITIONS OF PURCHASES
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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 Effective Date, the following, each (unless otherwise
indicated) dated the Effective 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 Loan Documents to be delivered by it and the transactions
contemplated hereby and thereby, certified by the Secretary or Assistant
Secretary of Originator;
(b) Status certificates for Originator issued as of a recent date by the
Secretary of State of each of the states listed on Schedule 4.1.
(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 Loan 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 Section
4.1(c));
(d) The articles of incorporation of Originator, duly certified by the
Secretary of State of Delaware 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 seller/assignor and the Company as the
purchaser/assignee (and the Administrative Agent for the benefit of the Secured
Parties as assignee of the Company) of the Receivables and Related Security or
other similar instruments or documents, as may be necessary or, in Servicer's or
the Administrative Agent's reasonable 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
Security in which an ownership interest may be assigned to it hereunder;
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(f) Copies of the proper financing statements (Form UCC-3), if any,
necessary to release all security interests and other rights of any person in
any Receivable or any Related Security previously granted by Originator;
(g) A written search report from a Person satisfactory to Servicer and the
Administrative Agent listing all effective financing statements that name
Originator as debtor or assignor and that are filed in the jurisdictions in
which filings are to be made pursuant to the Section 4.1(e) above, together with
copies of such financing statements (none of which shall cover any Receivable or
any Related Security except as shall be released pursuant to Section 4.1(f)
above), and tax and judgment lien search reports from a Person satisfactory to
Servicer and the Administrative Agent;
(h) Favorable opinions of Xxxx, Scholer, Fierman, Xxxx & Handler, LLP,
special counsel to Originator, in the forms of Exhibit C; and
(i) Evidence (i) of the execution and delivery by each of the parties
thereto of each of the other Loan 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 Loan Documents has been
satisfied to the Company's satisfaction.
4.2. Certification as to Representations and Warranties. Originator, by
accepting the Purchase Price related to each purchase of Receivables (and
Related Security) 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 and/or contributor under this Agreement,
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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 the ownership or lease of its property or the
conduct of its business requires such licensing or qualification, except to the
extent same could not reasonably be expected to have a Material Adverse Effect
or cause a Default of the type described in Section 9.1.9 or Section 9.1.11 of
the Secured Credit Agreement.
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 Loan Document to which it is a party,
and (ii) to generate, own, sell, contribute and assign Receivables and Related
Security 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 Security 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 Loan Document to be signed by
Originator, 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
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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 Loan Documents to which Originator is a party, 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 Lien
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
under the Loan 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 Loan Document to which
Originator is a party, (b) seeking to prevent the sale or contribution of
Receivables and Related Security to the Company or the consummation of any of
the other transactions contemplated by any Loan Document to which Originator is
a party, or (c) seeking any determination or ruling that could reasonably be
expected to have a Material Adverse Effect or cause a Default of the type
described in Section 9.1.9 or Section 9.1.11 of the Secured Credit Agreement.
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
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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 Loan Document to which it is a party.
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 December 30, 1995, and the related statements of earnings and
cash flows 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 GAAP consistently applied; and since such date
no event has occurred that has had 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 Security) which is to be
sold or contributed to the Company hereunder is or shall be owned by Originator,
free and clear of any Lien, other than any Lien arising solely as a result of
any action taken by the Company or other Permitted Lien. 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 Lien) 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
Security with respect thereto.
(b) No effective financing statement or other instrument similar in effect
covering any Receivable generated by Originator or
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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 Originator, as the case
may be, in accordance with this Agreement or in favor of the Administrative
Agent for the benefit of the secured parties in accordance with the Secured
Credit Agreement.
5.12. Accuracy of Information. No factual written information furnished or
to be furnished in writing by Originator to the Company or any Secured Party for
purposes of or in connection with any Loan Document or any transaction
contemplated hereby or thereby taken as a whole is, and no other such factual
written information hereafter furnished (and prepared) by Originator to the
Company or any Secured Party pursuant to or in connection with any Loan Document
will taken as a whole be inaccurate in any material respect as of the date it
was furnished or (except as otherwise disclosed to the Company and such Secured
Party 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 chief executive office (as such term is used
in Section 9-103 of the UCC) 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 Administrative 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 four (4) months 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.
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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.
(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 could be reasonably likely to have a Material Adverse Effect or cause a
Default of the type described in Section 9.1.9 or Section 9.1.11 of the Secured
Credit Agreement; and
(b) There are no labor controversies pending against Originator that have
had (or could reasonably be expected to have) a Material Adverse Effect or that
have caused (or could reasonably be expected to cause) a Default of the type
described in Section 9.1.9 or Section 9.1.11 of the Secured Credit Agreement.
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, except, in each case, to the extent
same could not reasonably be expected to have a Material Adverse Effect or cause
a Default of the type described in Section 9.1.9 or Section 9.1.11 of the
Secured Credit Agreement.
5.18. Reliance on Separate Legal Identity. Originator is aware that the
Secured Parties are entering into the Loan Documents
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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. Eligibility of Receivables. Unless otherwise identified to the
Company on the date of the purchase or contribution hereunder, each Receivable
purchased or contributed hereunder is on the date of purchase or contribution an
Eligible Receivable and, so long as the Originator is the Servicer, each
Receivable included as an Eligible Receivable in the calculation of Net
Receivables Pool Balance is an Eligible Receivable as of the date of such
calculation.
5.21. Marking of Records. Originator has marked its master data processing
records with a legend, acceptable to the Company and the Administrative Agent,
stating that such Receivables and the Related Security with respect thereto,
have been sold or contributed in accordance with this Agreement.
5.22. Certain Definitions. With respect to this Agreement, the term
"Solvent" is defined as follows:
"Solvent" means, with respect to any Person at any time, a condition
under which:
(i) the fair value of such Person's assets at a fair valuation, on
the date of determination, exceeds such Person's debts and liabilities
subordinated, contingent or otherwise, at such time;
(ii) the present fair saleable value of such Person's property, on
the date of determination, is greater than the amount that will be
required to pay the liabilities of such Person on its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured;
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(iii) such Person is and will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and
(iv) such Person does not have unreasonably small capital with which
to conduct the business in which such Person is engaged as such business
is conducted on the date of determination and is proposed to be conducted
thereafter.
ARTICLE VI
COVENANTS OF ORIGINATOR
6.1. Affirmative Covenants. From the date hereof until all Commitments
have been terminated and all Obligations (other than indemnity, reinvestment and
similar obligations in respect of which no claim has been made and no amount
remains outstanding) have been paid in full under the Secured Credit Agreement
and no Commitments or Letter of Credit Outstandings remain outstanding,
Originator will, unless the Company and the Administrative Agent shall otherwise
consent in writing:
(a) Compliance with Laws, Etc. Comply in all respects with all applicable
laws, rules, regulations and orders except to the extent noncompliance therewith
could not reasonably be expected to have a Material Adverse Effect or cause a
Default of the type described in Section 9.1.9 or Section 9.1.11 of the Secured
Credit Agreement, 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 or cause a Default of
the type described in Section 9.1.9 or Section 9.1.11 of the Secured Credit
Agreement.
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(c) [Intentionally Omitted].
(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 Security.
(f) Location of Records. Keep its chief executive office, (as such term is
used in Section 9-103 of the UCC), and the offices where it keeps its records
concerning or related to Receivables and Related Security, at the address(es)
referred to in Schedule 5.13 or, upon 30 days' prior written notice to the
Company and the Administrative 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 Loan 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
the Company is a separate corporate entity with creditors who have
received security interests in the Company's assets and shall be entitled
to be satisfied out of the Company's assets prior to equity holders;
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(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.
6.2. Reporting Requirements. From the date hereof until the first day
following the Purchase and Sale Termination Date, Originator shall, unless the
Administrative Agent and the Company shall otherwise consent in writing, furnish
to the Company and the Administrative Agent:
(a) Proceedings. As soon as possible and in any event within five days
after Originator has knowledge thereof, written notice to the Company and the
Administrative 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
Administrative Agent and (ii) all material adverse developments that have
occurred with respect to any previously disclosed proceedings and
investigations;
(b) Other. Promptly, from time to time, such other information, documents,
records or reports respecting the Receivables, the Related Security or
Originator's performance hereunder that the Company or the Administrative Agent
may from time to time
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reasonably request in order to protect the interests of the Company, the Secured
Parties or the Administrative Agent.
6.3. Negative Covenants. From the date hereof until all Commitments have
been terminated and all Obligations (other than indemnity, reimbursement and
similar obligations in respect of which no claim has been made and no amount
remains outstanding) have been paid in full under the Secured Credit Agreement
and no Commitments or Letter of Credit Outstandings remain outstanding, unless
the Administrative Agent and the Company shall otherwise consent in writing, it
shall not:
(a) Sales, Liens, Etc. Except as otherwise permitted herein, in any other
Loan Document or in the Originator Credit Facility or any document delivered in
connection therewith, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien 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 Lien upon or with respect to any proceeds of
its inventory.
(b) Extension or Amendment of Receivables. Except as otherwise permitted
in the Secured Credit Agreement, 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. Subject to the
provisions of the Secured Credit Agreement, make any change in the character of
its business or materially alter its Credit and Collection Policy, which change
would, in either case, adversely affect the collectibility of the Receivables
generated by it or the enforceability of any Contract.
(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
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shall deliver the same to the Administrative Agent for the benefit of the
Secured Parties upon the request of the Administrative Agent).
(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.
(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 and/or contributions of the Receivables and Related Security
by Originator to the Company.
(h) Loan 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
Loan Documents, other than the Originator Credit Facility.
ARTICLE VII
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 Security, including, without limitation, endorsing
Originator's name on checks and other instruments representing Collections and
enforcing such Receivables and the provisions of the related
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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 Administrative 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) or any
Secured Party shall have any obligation or liability to any Obligor or any other
third Person with respect to any Receivables, any Contracts related thereto or
any other related agreements, nor shall the Company, Servicer (if other than the
Originator) or any Secured Party 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
Security.
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 (if other than Originator or an Affiliate thereof) may reasonably
request in order to perfect, protect or more fully evidence the Receivables (and
the Related
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Security) 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 Loan 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) make a notation in its books and records, including its computer
files, to indicate that the Receivables have been sold or contributed to the
Company.
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 Security)
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 Administrative 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
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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 Commitment Termination Date 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 three Business
Days after the earlier to occur of (i) discovery thereof by an Authorized
Officer of Originator or (ii) notice thereof shall have been given by Servicer,
the Administrative Agent or the Company to Originator; or
(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
Loan 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) days after the earlier
to occur of (i) discovery thereof by an Authorized Officer of Originator or (ii)
notice thereof shall have been given by Servicer, the Administrative Agent or
the Company to Originator; or
(f) An Event of Bankruptcy shall have occurred with respect to Originator;
or
(g) A contribution failure shall occur with respect to any benefit plans
sufficient to give rise to a Lien under Section 302(f) of ERISA. The IRS or PBGC
shall file a notice of a Lien with respect to the assets of Originator.
8.2. Remedies.
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(i) Automatic Termination. The agreement of the Originator to sell
Receivables hereunder, and the agreement of the Company to purchase Receivables
from the Originator hereunder, shall terminate automatically (and the Purchase
and Sale Termination Date shall be deemed to have occurred) on the occurrence of
a Purchase and Sale Termination Event of the type described in Section 8.1(f).
(ii) Optional Termination. Upon the occurrence of a Purchase and Sale
Termination Event other than by reason of a Purchase and Sale Termination Event
of the type described in Section 8.1(f), the Company shall have the option by
notice to Originator (with a copy to the Administrative Agent) to declare the
Purchase and Sale Termination Date to have occurred.
(iii) Remedies Cumulative. Upon the occurrence of the Purchase and Sale
Termination Date 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 the declaration/occurrence of the
Purchase and Sale Termination Date 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:
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(a) the transfer by Originator of an interest in any Receivable or Related
Security 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 Loan Document;
(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 Security free
and clear of any Lien, other than an Lien arising solely as a result of an act
of the Company or other Permitted Liens, whether existing at the time of the
purchase or contribution of such Receivables or at any time thereafter;
(e) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable (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, except to the extent that such dispute, claim,
offset or defense results solely from actions or failures to act of the Company
or its assigns;
(f) any product liability claim arising out of or in connection with goods
or services that are the subject of any Receivable;
(g) any litigation, proceeding or investigation against Originator;
(h) 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
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purchase, contribution or ownership of the Receivables or any Related Security
connected with any such Receivables; and
(i) 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 Loan Document;
excluding, however, (i) Purchase and Sale Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the 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
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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
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 Administrative 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
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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 their respective
successors and permitted assigns. Originator may not assign its rights hereunder
or any interest herein without the prior consent of the Company and the
Administrative 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 Security 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 Section 3.4, Article IX and Section 10.6 shall be continuing and shall
survive any termination of this Agreement.
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36
10.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
INTERESTS OF COMPANY IN THE RECEIVABLES, OR REMEDIES HEREUNDER IN RESPECT
THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
10.6. Costs, Expenses, and Taxes. In addition to the obligations of
Originator under Article IX, Originator agrees to pay on demand (without
duplication of amounts paid by the Company under Section 12.3 of the Secured
Credit Agreement):
(a) all reasonable out-of-pocket expenses of the Administrative Agent
(including reasonable fees and disbursements of counsel) incurred in the
accompaniment and documentation of the transactions contemplated by the Loan
Documents and all reasonable costs and expenses in connection with the
enforcement of this Agreement and the other Loan 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 Loan Documents, and agrees to indemnity 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 STATE OF NEW YORK OR UNITED
STATES FEDERAL COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN 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
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MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S
RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
ANY ACTION OR PROCEEDING AGAINST 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 LOAN 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 LOAN 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 Administrative Agent for the benefit of the Secured Parties and Originator
consents to such assignment. Each of the parties hereto acknowledges and agrees
that the Administrative Agent and the other Secured Parties are third party
beneficiaries of the rights of the Company arising hereunder and under the other
Loan Documents to which Originator is a party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
PROSOURCE RECEIVABLES CORPORATION
By: /s/ Xxxx X. Xxxxxx xx Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx xx Xxxxxxx
Title: Vice President, Secretary &
Treasurer
0000 Xxx Xxxx Xxxxxx
0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx xx Xxxxxxx
Vice President, Secretary &
Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PROSOURCE SERVICES CORPORATION
By: /s/ Xxxx X. Xxxxxx xx Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx xx Xxxxxxx
Title: Vice President, Secretary &
Treasurer
0000 Xxx Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx xx Xxxxxxx
Vice President, Secretary &
Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
39
Acknowledged and consented by:
PROSOURCE SERVICES CORPORATION, as Servicer
By: /s/ Xxxx X. Xxxxxx xx Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx xx Xxxxxxx
Title: Vice President, Secretary & Treasurer
0000 Xxx Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx xx Xxxxxxx
Vice President, Secretary & Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
