EXHIBIT 10.5
IBM GLOBAL FINANCING
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AMENDED AND RESTATED
PLATINUM PLAN AGREEMENT (WITH INVOICE DISCOUNTING)
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IBM BELGIUM FINANCIAL SERVICES S.A.
and
SUPPLIES DISTRIBUTORS S.A.
BUSINESS SUPPLIES DISTRIBUTORS EUROPE B.V.
PFSWEB B.V.
CONTENTS
1. DEFINITIONS......................................................................1
2. CREDIT LIMIT.....................................................................8
3. SUPPLIER PURCHASE FACILITY.......................................................8
4. IBM REIMBURSABLES, IBM RECEIVABLES AND VAT RECEIVABLES DISCOUNTING FACILITY......9
5. PREPAYMENTS.....................................................................11
6. IBM REIMBURSABLES, IBM RECEIVABLES, VAT RECEIVABLES AND RECEIVABLES RIGHTS......11
7. CREDIT CHARGES AND PAYMENTS.....................................................13
8. REPRESENTATIONS, WARRANTIES AND COVENANTS.......................................15
9. DEFAULTS AND REMEDIES...........................................................19
10. TERMINATION.....................................................................20
11. GENERAL.........................................................................20
IBM GLOBAL FINANCING
PLATINUM PLAN AGREEMENT (WITH INVOICE DISCOUNTING)
THIS AGREEMENT is made on the date specified against the signature of IBM GF
below among Suppliers Distributors S.A. with a registered number of RC Liege
208795 with an address of Xxx Xxxxx Xxxxxxx 0, X-0000 Xxxxx-Xxxxxxxx, Xxxxxxx
("SDSA"), and Business Supplies Distributors Europe BV a Netherlands company
registered in Maastricht with a with a Netherlands trade registration number of
HR Maastricht 14062763 with an address of Xxxxxxxxxx 00, 0000 Xxxxxxx, Xxx
Xxxxxxxxxxx ("BSDE") (SDSA and BSDE collectively, "YOU"), PFS Web B.V a
Netherlands company registered in Maastricht under the number 17109541 with a
Belgian trade registration number of R.C. Liege 204162 ("PFS Web B.V.") (SDSA,
BSDE and PFS Web B.V. collectively, the "Loan Parties) and IBM Belgium Financial
Services N.V. with a registered number of R.C. Brussels 451.673 with an address
of Square Victoria Xxxxxx 0,XX-0000 Xxxxxxxx VAT BE 424300467 ("IBM GF" or "US")
and it amends and restates that IBM Global Financing Platinum Plan Agreement
(with Receivables Discounting) executed among the same parties on 29 September
2001 (the "Prior Agreement") such that rights and obligations of both parties
under the Prior Agreement are rights and obligations under this Agreement. This
Agreement is effective as of the Effective Date (as defined herein).
WHEREAS IBM BF and the Loan Parties are parties to that certain
Platinum Plan
Agreement (with Invoice Discounting) dated 29 September 2001 (as heretofore
amended, the ("Existing Financing Agreement");
WHEREAS the Loan Parties desire to enter into a factoring facility with Fortis
Commercial Finance N.V with a place of business at Xxxxxxxx Xx Xxxxxx 00
Xxxxxxxx Xxxxxxx 0000 ("Fortis") for the purpose of Fortis factoring all of the
Loan Parties Receivables (as defined herein) except Receivables from any IBM
entity and IBM GF is willing to amend and restate the Existing Financing
Agreement to discontinue factoring those Receivables which Fortis will factor,
all according to the terms and conditions set forth herein;
WHEREAS we agree to provide you with a Credit Limit in respect of our purchase
of Supplier Invoices, IBM Reimbursables, IBM Receivables and/or VAT Receivables
under the terms and conditions of this Agreement.
AGREEMENT
1. DEFINITIONS
1.1 In this Agreement the following terms shall (unless the
context otherwise requires) have the following meanings:-
"ADDITIONAL COLLATERAL": means that as specified in the
Schedule, it being understood that Additional Collateral is
not used when calculating the Shortfall Amount, if any, as
described in Clause 7.4;
"AFFILIATE": means with respect to any Person, any other
Person (the "Affiliate") meeting one of the following: (i)
at least 10% of the Affiliate's equity is owned, directly or
indirectly, by such Person; (ii) at least 10% of such
Person's equity is owned, directly or indirectly, by the
Affiliate; or (iii) at least 10% of such Person's equity and
at least 10% of the Affiliate's equity is owned, directly or
indirectly, by the same Person or Persons. All your
officers, directors, joint venturers, and partners shall
also be deemed to be Affiliates for purposes of this
Agreement. All of Loan Parties' officers, directors, joint
venturers, and partners shall also be deemed to be
Affiliates of such Loan Party for purposes of this
Agreement.
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"AGREEMENT": means this Agreement and all its Schedules and
any supplements to this Agreement as the same may be
amended, supplemented or modified from time to time;
"AIF": means that certain Agreement for Inventory Financing
among IBM Credit Corporation and Holdings, IFP, SDI, PFS and
PFSweb, as amended and supplemented from time to time;
"AMENDED AND RESTATED NOTES PAYABLE SUBORDINATION AGREEMENT"
means the amended and restated notes payable subordination
executed by SDI in favour of IBM GF in form and substance
satisfactory to IBM GF in its sole discretion;
"APPROVED CURRENCY" means any currency other than euro
agreed from time to time by you and us to be an approved
currency for the purposes of this Agreement;
"AUDITORS": means a nationally recognised firm of
independent accountants acceptable to us;
"AUTHORISED OFFICER": means those individuals occupying the
positions listed in Attachment A to this Agreement and who
are authorised by you to provide the instructions,
authorisations, agreements, etc. as specified in such
Attachment A;
"AUTHORISED SUPPLIER": means any supplier, for the purposes
of this Agreement, from whom we have agreed to purchase the
Supplier Invoices generated by their sales of Products to
you;
"AVAILABLE CREDIT": means from time to time the Credit Limit
less the aggregate of:
(i) the principal amount of Supplier Obligations due
and outstanding by you to us; and
(ii) the aggregate amount of Prepayments made to you by
us on account of the purchase price of IBM
Reimbursables, IBM Receivables and VAT Receivables
which are outstanding; and
(iii) any other sum due and payable by you to us under
the terms of this Agreement, including interest
due and payable and outstanding Credit Charges;
"BASE RATE": means the rate so referred to in the Schedule;
"BSD": means Business Supplies Distributors, Inc.
"BSD A": means BSD Acquisition Corp., Inc., a corporation
duly organized under the laws of the state of Delaware, with
its principal place of business at 000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxx, XX 00000, now known as Supplies
Distributors, Inc.;
"BSDE" means as defined in the caption;
"BSDE SUPPLIER INVOICES" means undisputed Supplier Invoices
which were issued to BSDE prior to the Merger and which we
will pay the applicable Authorised Supplier on your behalf;
"BUSINESS DAY": means (a) in relation to any payment or to a
rate fixing, any day (other than a Saturday or Sunday) which
is a TARGET DAY; (b) in relation to any other matter (e.g.
notices) any day (other than a Saturday or Sunday) on which
banks are open in Brussels;
"CLOSING DATE": MEANS __ MARCH 2002;
"COLLATERAL" means the aggregate value, in our assessment,
of outstanding IBM Reimbursables, IBM Receivables and VAT
Receivables we have purchased from you together with any
Receivables Rights and any other assets, including
stock-in-trade which are charged to us by way of a Lien and
which is not subject to retention of title by any party
other than us.
"COMMENCEMENT DATE": means the commencement date of this
Agreement as specified in the Schedule;
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"CONGRESS": means Congress Financial Corporation
(Southwest), a lender to SDI;
"CREDIT CHARGES": means our charges to you (as set out in
the Schedule) for purchasing Supplier Invoices from an
Authorised Supplier as set out in Section 3 of this
Agreement and purchasing IBM Reimbursables, IBM Receivables
and VAT Receivables from you pursuant to Section 4 of this
Agreement;
"CREDIT LIMIT": means the sum specified in the Schedule
which is subject to change by us;
"DEBTOR": means a customer of yours pursuant to a Sales
Contract who is indebted to you in respect of a Receivable;
"DEFAULT RATE" means the percentage as detailed as such in
the Schedule;
"DISCOUNT CHARGE" means the charge to be calculated as
described in Clause 5.3 at a rate specified in the Schedule
or such other percentage as we may from time to time agree;
"DUE DATE" means the date that payment is due to us which
is, unless otherwise agreed by us in writing (1) for
Supplier Obligations, the last day of the No Charge Period
or the Extended Credit Period as applicable (2) for Credit
Charges, the date as specified on the billing statement (3)
for Shortfall Amounts, as specified in Clause 7.4 and (4)
for Discount Charges, the date specified on the billing
statement if there is insufficient Available Credit at the
time such Discount Charges are normally credited by us
against your account;
"ELIGIBLE RECEIVABLE": means an IBM Receivable or VAT
Receivable which is not (or does not become) an Ineligible
Receivable;
"EQUITY INTERESTS": means with respect to any Person, means
(a) all shares, interests, participations, rights or other
equivalents (however designated, whether voting or
non-voting) of or interests in corporate or capital stock,
including, without limitation, shares of preferred or
preference stock of such Person, (b) all partnership
interests (whether general or limited) of such Person, (c)
all membership interests or limited liability company
interests in such Person, (d) all other equity or ownership
interests in such Person of any other type and (e) all
warrants, rights or options to purchase any of the
foregoing.
"EFFECTIVE DATE": means that date on which Fortis, to IBM
GF's satisfaction pays IBM GF the full amount owed by you to
us for all Receivables except IBM Receivables. Such date
shall be confirmed in writing immediately after the event.
"EVENT OF DEFAULT": means any of the events set out in
Clause 9.1 of this Agreement;
"EXTENDED CREDIT CHARGE" means the charge (if any) as
specified in the Schedule incurred for outstanding Supplier
Obligations during an Extended Credit Period or such other
charge as we may from time to time agree;
"EXTENDED CREDIT PERIOD" means (if agreed by us) the period
specified in the Schedule following immediately after the No
Charge Period and extending the time for payment by you of
Supplier Obligations;
"FINANCIAL STATEMENTS": means your balance sheets,
statements of account including profit and loss accounts,
and statements of cash flows prepared in accordance with
generally accepted accounting principles;
"FORTIS" means as defined in the second "Whereas" clause
hereof;
"GAAP" means the generally accepted accounting principles in
the United States as in effect from time to time;
"GUARANTOR": means Holdings, PFS, PFSweb and SDI and any
other party that delivers a guaranty in favour of us;
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"HOLDINGS": means Business Supplies Distributors Holdings,
LLC, a limited liability company duly organized under the
laws of the state of Delaware, with its principal place of
business at 000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx, XX 00000
"IBM": means International Business Machines Corporation;
"IBM CREDIT": means IBM Credit Corporation, a Delaware
corporation with a place of business at 0000 Xxxxxxxxx
Xxxxxxx, Xxxxx Xxxxx, Xxx Xxxxx, XX 00000;
"IBM RECEIVABLE"; means a Receivable payable by IBM, an IBM
Subsidiary or an IBM Affiliate provided that we have
received evidence satisfactory to it that IBM has waived its
right to setoff such amounts owed to you with any amount you
may owe to IBM;
"IBM REIMBURSABLES": means amounts reimbursable from IBM, an
IBM Subsidiary or IBM Affiliate, arising from incentive
payments, rebates invoiced on a monthly basis, discounts,
credits, and refunds in each case owed by IBM to you
provided that (i) you obtain (and provide to IBM GF along
with the monthly collateral reports required under this
Agreement) from IBM written confirmation (a) acknowledging
the obligation of IBM to pay such amount, (b) stating the
date the amount is due to be paid and (c) IBM waiving its
right to setoff such amounts owed to you with any amount you
may owe to IBM; (ii) such IBM Reimbursables do not remain
unpaid for more than sixty (60) days from the date the
obligation of IBM occurred; and (iii) such IBM Reimbursables
delivered to us directly by IBM in the form of a Credit Note
or some other form acceptable to us.";
"IBM SINGAPORE": means IBM Singapore, Global Procurement
Services Group - Singapore Trading Center
"IBM US": means the Printing Systems Division of IBM
facilities located in the United States of America;
"IFP" means Inventory Financing partners, LLC, a US limited
liability corporation;
"INELIGIBLE RECEIVABLE": means any of the following: (i) any
IBM Receivable or VAT Receivable which remains unpaid for
more than 120 days after the date of the relevant Sales
Invoice or VAT Return Document; (ii) all IBM Receivables and
VAT Receivables of an individual Debtor where 50% or more of
the relevant Debtor's aggregate outstanding balance remains
unpaid for more than 120 days after the date of their
respective Sales Invoice or VAT Return Document; (iii) any
IBM Receivable or VAT Receivable in respect of which there
is a breach of any undertaking or warranty given to us, or
any other obligation of yours relating to it; (iv) any IBM
Receivable or VAT Receivable expressed in a currency other
than the EURO or another currency approved by us; (v) those
receivables, if any, listed in the Schedule as Ineligible
Receivables; (vi) any receivable which is not an IBM
Receivable or a VAT Receivable and (vii) any IBM Receivable
or VAT Receivable which we deem, in our discretion, to be
ineligible except that, in the event we determine in our
sole discretion to deem certain IBM Receivables and/or VAT
Receivables to be ineligible pursuant to this sub clause
(vii), we will provide written notification to you of our
determination of ineligibility of such IBM Receivables
and/or VAT Receivables and such ineligibility shall be
applied to such IBM Receivables and/or VAT Receivables
arising from invoices dated one Business Day after the date
of such notification.;
"INSOLVENCY": in relation to a company means the convening
of a meeting to pass a resolution for voluntary winding up
by reason of insolvency, or the making of a winding up
order, or the issue of an application for the appointment of
an administrator, or the appointment of a receiver (whether
in or out of court) or an administrative receiver of any of
the assets or income of the company; or entry by that
company into a voluntary arrangement, or any informal
arrangement generally for the benefit of creditors or that
company consulting with creditors generally; or any material
part of income or assets being subject to seizure, distress
or lien; or enforcement of security rights; or compounding
with creditors; or ceasing to carry on business (and
"INSOLVENT" shall be construed accordingly);
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"LIEN(s)": means any mortgage, pledge, lien, charge,
assignment by way of security, hypothecation, security
interest and floating charge or any other security agreement
or arrangement relating to existing or future assets
(including, without limitation, the deposit of monies or
property with a person with the primary intention of
affording such person a right of set-off or lien) but
excluding any lien arising out of rights of consolidation,
combination, netting or set-off over any current and/or
deposit accounts with a bank or financial institution, where
it is necessary to agree to those rights in connection with
the opening or operation of any bank accounts or in
connection with a treasury management arrangement operated
by you, in each case, in the ordinary course of your
business or risk management provided the existence of such
lien has been notified to us;
"LOAN PARTIES": means as defined in the caption.
"MATERIAL ADVERSE EFFECT": means a significant adverse
effect on (1) any Loan Party, or your parent company's or
any of its subsidiaries' or any guarantor's business
operations, results of operations, assets, or financial
condition; or (2) the value of the Collateral or (3) our
rights and remedies under this Agreement or the Security
Documents or any Liens in our favour;
"MERGER" means the event documented in, and achieved as a
result of the execution of, the Merger Documents;
"MERGER DOCUMENTS": means the (i) Agreement and Plan of
Merger and Reorganization among SDI and BSD dated September
26, 2001 and (ii) the Certificate of Merger of BSD with and
into BSD A dated September 26, 2001;
"NO CHARGE PERIOD": means the period, if any, so described
in the Schedule, during which we will not charge you Credit
Charges in relation to each Supplier Obligation, which
period shall commence on the date of the Supplier Invoice
corresponding to each such Supplier Obligation;
"NOTIFICATION": means your confirmation to us, in such way
and with such evidence as we specify, of all IBM
Reimbursables, IBM Receivables and VAT Receivables which
have come into existence after the Commencement Date, but
which have not previously been Notified to us;
"NOTIFY"/"NOTIFIED"/"NOTIFYING": means inclusion of an IBM
Reimbursable, an IBM Receivable or VAT Receivable or a
credit in an Offer or Notification delivered to us;
"OBLIGATIONS": means all covenants, agreements, warranties,
duties, representations, loans, advances, interest
(including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to
any Loan Party, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), fees,
reasonable expenses, indemnities, liabilities and
Indebtedness of any kind and nature whatsoever now or
hereafter arising, owing, due or payable from any Loan Party
to IBM GF.
"OFFER": means an unconditional offer to sell an IBM
Reimbursable, IBM Receivable or VAT Receivable to us with
full title guarantee to be made in such way and with such
evidence of the performance of the IBM written confirmation,
the Sales Contract or the VAT Return Document, as the case
may be, as we may specify, and where more than one IBM
Reimbursable, IBM Receivable or VAT Receivable is at the
same time subject to an Offer it shall be treated as an
independent offer to sell us each IBM Reimbursable, IBM
Receivable or VAT Receivable so offered which may be
accepted or rejected by us entirely at our discretion;
"PERSON": means any individual, association, firm,
corporation, partnership, trust, unincorporated organization
or other entity whatsoever.
"PFS": means Priority Fulfillment Services, Inc., a US
corporation;
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"PFSWEB": means PFSweb, Inc., a corporation duly organized
under the laws of the state of Delaware, with its principal
place of business at 000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx, XX
00000
"PFS WEB B.V." means as defined in the caption;
"PREPAYMENT": means any payment by us to you or made
available to you under this Agreement on account of the
purchase price of an IBM Reimbursable, IBM Receivable or VAT
Receivable;
"PREPAYMENT PERCENTAGE": means the amount specified as such
in the Schedule or such other percentage as we may from time
to time agree;
"PRODUCT RIGHTS" includes in relation to the Products
supplied to you by an Authorised Supplier any of the
following:
(i) all the Authorised Supplier's rights as unpaid
vendor and all other rights of the Authorised
Supplier under or in relation to the relevant
Supplier Invoice (whether such rights arise from
or are created by statute, common law, contract or
otherwise howsoever);
(ii) documentary evidence of the Supplier Invoice or
its performance or of any disputes arising;
(iii) documents of title, warehouse keepers receipts,
bills of lading, shipping documents, airway bills
or similar documents;
(iv) the benefit of all insurances;
(v) all remittances, instruments, securities, bonds,
guarantees and indemnities and accounting records;
"PRODUCTS": as the context permits means either: (i)
hardware and software and associated products and services
agreed by us and acquired by you from an Authorised
Supplier; or (ii) hardware and software and associated
products and services supplied by you to Debtors;
"PURCHASE PRICE": means the amount payable by us to you (i)
in respect of the purchase of an IBM Reimbursable being the
amount reflected on IBM's written confirmation for such IBM
Reimbursable, (ii) in respect of the purchase of an IBM
Receivable being the Sales Invoice price in relation to such
IBM Receivable, or (iii) in the case of a VAT Receivable,
the amount stated in the relevant VAT Return Document for
such VAT Receivable, as the case may be, less any other sums
due to us in respect of the purchase of such IBM
Reimbursable, IBM Receivable or VAT Receivable;
"RECEIVABLE": means any payment obligation (present, future
or contingent) of a Debtor pursuant to a Sales Contract
(including the future right to recover sums due following
the determination, assessment or agreement of the amount of
such obligation), including any applicable value added
taxes, duties, charges and interest (whether arising by
contract or by law) together with its Receivables Rights;
"RECEIVABLES RIGHTS": includes in relation to any IBM
Reimbursable, IBM Receivable or VAT Receivable any of your
following rights: all remittances, instruments, securities,
bonds, guarantees and indemnities and accounting records;
any assets and any guarantee(s) which constitute security in
respect of your obligations to us with respect to the
purchase of IBM Reimbursables, IBM Receivables and VAT
Receivables by us pursuant to this Agreement as set out in
the Schedule);
"REPURCHASE": means the repurchase by you of an IBM
Reimbursable, IBM Receivable or VAT Receivable at its
Repurchase Price;
"REPURCHASE PRICE": means a sum equivalent to the Purchase
Price of an IBM Reimbursable, IBM Receivable or VAT
Receivable plus all sums (if any) then
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outstanding and due to us in respect of any relevant Credit
Charges relating to that IBM Reimbursable, IBM Receivable or
VAT Receivable;
"SALES CONTRACT": means a contract under which you sell
Products to Debtors;
"SALES INVOICE": means a valid invoice issued by you to a
Debtor under a Sales Contract;
"SCHEDULE": means the Schedule to this Agreement as amended
from time to time by written agreement between the parties;
"SDI": means Supplies Distributors, Inc., (formally known as
BSD Acquisition Corp.) a corporation duly organized under
the laws of the state of Delaware, with its principal place
of business at 000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx, XX
00000;
"SDSA" means as defined in the caption;
"SHORTFALL AMOUNT": means the amount set out in Clause 7.4;
"SHORTFALL FEE" means the fee calculated as detailed in the
Schedule;
"SUBSIDIARY" means an entity of which a person has direct or
indirect control or owns directly or indirectly more than
50% of the share capital or similar right of ownership and
"control" for this purpose means the power to direct the
management and the policies of the entity whether through
the ownership of share capital, contract or otherwise;
"SUPPLIER INVOICE": means a valid invoice issued by an
Authorised Supplier in respect of your acquisition of
Products from such Authorised Supplier;
"SUPPLIER OBLIGATIONS": means the amount owing by you in
respect of a Supplier Invoice that we have purchased from an
Authorised Supplier and a BSDE Supplier Invoice (including
the future right to recover sums due following the
determination, assessment or agreement of the amount of such
obligation), including any applicable value added taxes,
duties, charges and interest (whether arising by contract or
by law).
"VAT" means value added tax levied by the appropriate
authorities in a country;
"VAT RECEIVABLES" means a payment obligation of the Country
of the Netherlands or Belgium pursuant to a VAT Return
Document, subject to the limitation specified in the
Schedule;
"VAT RETURN DOCUMENT" means a document raised by SDSA or
BSDE to the respective country for valid reimbursement of
VAT paid by BSDE or SDSA to the Country of the Netherlands
or Belgium (1) for products purchased from IBM or one of its
subsidiaries and which products were sold by BSDE to
customers outside the Country of the Netherlands or (2) for
products purchased from IBM or one of its subsidiaries and
which products were sold by SDSA to customers outside the
Belgium, (3) for products sold by BSDE to SDSA, (4) for
products supplied by IBM Singapore and IBM US to SDSA and
(5) for the operating and sales expenses paid by SDSA in the
Country of Belgium;
1.2 INTERPRETATION
In this Agreement:
1.2.1 "YOU" and "US" shall where the context admits,
include our respective personal representatives,
successors in title or permitted assigns (whether
immediate or derivative);
1.2.2 any reference herein to any document, including to
this Agreement includes such document as amended,
novated, supplemented, substituted, extended,
assigned or replaced from time to time and
includes any document which is supplemental hereto
or thereto;
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1.2.3 where a word or phrase has to be considered in
relation to a jurisdiction outside Belgium and
there is no exact equivalent or such work or
phrase then it shall have the meaning of the
closest equivalent in such jurisdiction; and
1.2.4 "INDEBTEDNESS" includes any obligation (whether
incurred as principal guarantor or surety) for the
payment or repayment of money, whether present or
future, actual or contingent.
The headings in this Agreement are inserted for convenience
only and shall not affect its construction or
interpretation.
2. CREDIT LIMIT
2.1 We will establish a Credit Limit for you up to the amount
specified in the Schedule which we may, at our discretion,
purchase Supplier Invoices from Authorised Suppliers IBM
Reimbursables, IBM Receivables and/or VAT Receivables from
you.
3. SUPPLIER PURCHASE FACILITY
3.1 SETTLEMENT OF SUPPLIER INVOICES
3.1.1 By entering into this Agreement you agree that you
will pay us, and not the Authorised Supplier, in
order to settle (i) Supplier Invoices which we
have purchased and (ii) BSDE Supplier Invoices.
3.1.2 We may, in our discretion and upon written notice
to you, cease to include a supplier as an
Authorised Supplier for the purposes of this
Agreement. Any such cessation will not affect our
purchase of Supplier Invoices then in existence or
our obligation to pay BSDE Supplier Invoices.
3.1.3 You authorise us to collect directly from any
Authorised Supplier any monies due for credits,
rebates, bonuses or discounts owed by such
Authorised Supplier to you. Once received we shall
either (in our discretion) apply such monies
against amounts you owe us or credit the relevant
amount to your ledger account with us and pay such
monies into the bank account referred to in Clause
6.7.1.
3.1.4 You shall pay us for a Supplier Obligation no
later than the Due Date. You agree to pay us the
full amount of such Supplier Obligation.
3.1.5 If an Extended Credit Period is provided (as
specified in the Schedule) payment of the relevant
Supplier Obligation may be deferred for such
further period as is specified in the Schedule
after the end of the No Charge Period but such
Supplier Obligation shall bear interest at the
rate specified in the Schedule during such period.
3.1.6 If you do not pay the Supplier Obligations before
the last day of the No Charge Period (or, if
clause 3.1.5 applies, at the end of the Extended
Credit Period), such sum shall bear interest at
the Default Rate from the expiry of the No Charge
Period (unless the Extended Credit Period is
applicable) until actual receipt of such payment
by us in cleared funds.
3.2 TITLE TO PRODUCTS
3.2.1 You hereby acknowledge that by virtue of our
purchase from the relevant Authorised Supplier of
the Supplier Invoices or, as applicable, our
agreement to pay the BSDE Supplier Invoices on
your behalf, all Product Rights, including any
reservation of title rights, belong to us until
all amounts owing to us in connection with payment
of the relevant Supplier Obligations and any
outstanding Credit Charges are paid in full by
you.
3.2.2 You will not cause or permit any Debtor or other
third party to encumber our Product Rights in any
way. You agree to take such action as may be
required to implement this provision, including
your acknowledgement of, and agreement to the
insertion of written notice in Sales Invoices or,
as
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applicable, separate notices to BSDE Debtors, to
the intent that IBM GF is the owner of the
relevant Product Rights.
4. IBM REIMBURSABLES, IBM RECEIVABLES AND VAT RECEIVABLES DISCOUNTING
FACILITY
Under the terms of this Agreement, we may from time to time purchase
IBM Reimbursables, IBM Receivables and VAT Receivables from you.
4.1 PURCHASE AND PAYMENT OF IBM REIMBURSABLES, IBM RECEIVABLES
AND VAT RECEIVABLES
4.1.1
4.1.2 You hereby agree to transfer ownership to us of
all IBM Reimbursables, IBM Receivables and VAT
Receivables (together with all Receivables Rights)
created until this Agreement ends, or we give you
notice under Clause 4.1.12 that no more IBM
Reimbursables, IBM Receivables and VAT Receivables
will be accepted from a date designated by us.
Such IBM Reimbursables, IBM Receivables and VAT
Receivables shall vest in us the moment the IBM
Reimbursables, IBM Receivables and VAT Receivables
are created and transfer of ownership of any such
IBM Reimbursables, IBM Receivables and VAT
Receivables to us shall take place automatically
and with immediate effect. On that day our receipt
of the relevant Notifications and our ownership of
such IBM Reimbursables, IBM Receivables and VAT
Receivables shall then be complete. We will credit
to your ledger account with us the Purchase Price
of all such IBM Reimbursables, IBM Receivables and
VAT Receivables upon such date.
4.1.3 You will pay any duties or similar charges
including any Stamp Duty arising in connection
with this Agreement and the transfer of the IBM
Reimbursables, IBM Receivables and VAT Receivables
to us.
4.1.4 After the Commencement Date, PFS Web B.V., BSDE
and/or SDSA will notify us in the manner agreed
with us, and at the frequency stated in the
Schedule of the invoice value of IBM
Reimbursables, IBM Receivables and VAT
Receivables. PFS Web B.V., BSDE and SDSA will
provide on request copies of the relevant
documentation, delivery notes, and other evidence
of the validity of the IBM Reimbursables, IBM
Receivables and VAT Receivables. There will be
either be a service fee for each Notification
subject to a minimum service fee payable in
accordance with Clause 7.2.1, or a monthly service
fee, as set out in the Schedule which you agree to
pay to us. The Loan Parties will promptly when
required by us complete any forms of assignment,
documents or other instruments necessary to ensure
the transfer of full ownership of the IBM
Reimbursables, IBM Receivables and VAT Receivables
to us or to enable us to collect the IBM
Reimbursables, IBM Receivables and VAT
Receivables.
4.1.5 If, for any reason, the sale or transfer of IBM
Reimbursables, IBM Receivables and VAT
Receivables, pursuant to the above provisions of
this Agreement, does not vest ownership of the IBM
Reimbursables, IBM Receivables and VAT Receivables
in us, the Loan Parties will hold any such IBM
Reimbursables, IBM Receivables and VAT Receivables
and any monies collected by them in respect of
such IBM Reimbursables, IBM Receivables and VAT
Receivables in trust for us, and pay any such
monies to us.
4.1.6 We may use the monies we receive in respect of
each IBM Reimbursable, IBM Receivable or VAT
Receivable to satisfy any monies then owing to us
by you. We will transfer any remaining amount to
your designated bank account (provided there is no
Event of Default) at the frequency agreed with you
subject to the banking charge specified in the
Schedule.
4.1.7 As the absolute owner we have the sole and
unfettered right to enforce payment of and collect
any IBM Reimbursable, IBM Receivable or VAT
9
Receivable purchased by us under this Agreement.
However until further notice from us the Loan
Parties will act diligently and promptly as our
undisclosed agent in administering and in
collecting and enforcing payment of IBM
Reimbursables, IBM Receivables and VAT Receivables
at the Loan Parties expense. However if (a) we
consider that your continued collection of any IBM
Reimbursables, IBM Receivables and VAT Receivables
would be prejudicial to us, and that such
collection would be better conducted by us or a
third party, rather than by the Loan Parties; or
(b) an Event of Default has occurred; or (c) this
Agreement has terminated for whatever reason; or
(d) there has occurred (in our reasonable opinion)
a Material Adverse Effect, we reserve the right
to, or designate a third party to, collect payment
directly including issuing demands or legal
proceedings either in our own name or in your name
if required. The Loan Parties agree to co-operate
in such collection or proceedings, including the
provision of witnesses or the production of
documents. We can defend or compromise such legal
proceedings in such manner and on such terms as we
may see fit and the Loan Parties will be bound by
the result. Any reasonable expenses incurred by us
in such proceedings, including the payment of
legal and other professional fees, costs and
expenses, will be paid by you, or charged to you
by debiting the relevant accounts. Whilst the Loan
Parties may ask us to cease collection activities
against any Debtor and we will do so upon
receiving payment of the relevant IBM
Reimbursables, IBM Receivables and VAT Receivables
or upon such terms as we shall agree with the
applicable Loan Party we have the right to refuse
or to accept such Loan Party's request.
4.1.8 The Loan Parties agree that without our prior
written consent they will not sell, pledge or
grant any Lien over any IBM Reimbursables, IBM
Receivables and VAT Receivables to any third
party, or agree to do so, or enter into any other
arrangement which might adversely affect our
interest in any IBM Reimbursables, IBM Receivables
and VAT Receivables.
4.1.9 After you Notify an IBM Reimbursable, IBM
Receivable or VAT Receivable to us you agree (save
where Clause 6.6 applies) not to cancel or vary
any relevant VAT Return Document or its relevant
payment terms or settlement discounts without our
prior written consent except where the change is
due to a manifest error in your invoice, in which
case you will notify us of the resulting change in
the IBM Reimbursable, IBM Receivable or VAT
Receivable but our written consent will not be
required.
4.1.10 You undertake that if Products associated with IBM
Receivables are returned to you and you provide a
credit in any form which has the effect of
reducing the amount of the relevant Receivable or
Acquired Receivable, you will promptly notify us.
4.1.11 For each IBM Reimbursable, IBM Receivable and VAT
Receivable you represent and warrant to us that:
(a) all particulars notified to us are correct and
complete; (b) the IBM Reimbursable, IBM Receivable
or VAT Receivable has not been previously Notified
to us; (c) any covenants or undertakings given to
us relating to such IBM Reimbursable, IBM
Receivable or VAT Receivable will be complied
with; (d) each IBM Reimbursable, IBM Receivable or
VAT Receivable is fully enforceable and is free
from any other charge, pledge, or Lien in favour
of a third party; and (e) such IBM Reimbursable,
IBM Receivable or VAT Receivable will be paid
without any claim for set off, counterclaims,
retention or abatement.
4.1.12 The sale or transfer of IBM Reimbursables, IBM
Receivables and VAT Receivables will continue
until we notify You in writing that we will accept
no more IBM Reimbursables, IBM Receivables and VAT
Receivables for purchase or until the termination
of this Agreement whichever is the sooner.
10
4.2 CREDIT AND COLLECTION POLICY
The Loan Parties will comply in all material respects with
the Loan Parties' credit and collection practices agreed
with us in regard to each IBM Receivable VAT Receivable, any
Receivables Rights and the related Sales Invoice or VAT
Return Document.
5. PREPAYMENTS
5.1 We may, following your written or electronic request, make a
Prepayment available to you in a bank account maintained by
you, subject to any banking charge as set out in the
Schedule, in the amount you select up to the Available
Credit. We will endeavour to effect such Prepayment on the
day you make such request provided we receive such request
before 10.00 am on any Business Day.
5.2 If we make a Prepayment on a day upon which any settlement
of a Supplier Obligation or Credit Charge is due or overdue
for payment, or you owe us any monies for the Repurchase
Price of IBM Reimbursables, IBM Receivables and VAT
Receivables then we may apply the proceeds of the Prepayment
to such payment in or towards the discharge of the monies so
due to us and only an amount equal to the difference, if
any, between the amount of the Prepayment and the amount
being paid or so discharged shall be made available to you.
5.3 A Discount Charge will accrue from day to day during this
Agreement and be calculated on the outstanding daily balance
of all Prepayments .
5.4 You may at any time pay us for Supplier Obligations and any
outstanding Credit Charges, by requesting us to apply all or
part of any Prepayment for that purpose. Prepayments may not
be used for the repayment of principal owing to us pursuant
to any agreement between yourself as borrower and ourselves
as lender unless expressly agreed by us in writing. In
addition to payment for Supplier Obligations, Prepayments
shall only be used for working capital purposes.
5.5 The total amount of Prepayments at any point in time shall
not exceed the Collateral value attributed to the IBM
Reimbursables, IBM Receivables and VAT Receivables at such
time.
6. IBM REIMBURSABLES, IBM RECEIVABLES, VAT RECEIVABLES AND RECEIVABLES
RIGHTS
6.1 You will provide us with your Receivables Rights and take
any necessary steps to make such Receivables Rights
effective and enforceable. If a Lien is to be provided to us
in relation to any IBM Reimbursable, IBM Receivable or VAT
Receivable and/or Receivable Right not effectively purchased
hereunder it shall be a valid first priority interest.
6.2 The Loan Parties agree:-
6.2.1 to promptly execute and deliver such further
instruments and documents, and to take such
further action including any filing or payment of
registration fees at the Loan Parties' expense as
we may reasonably request for the purpose of
preserving or protecting all our rights and
interests in the IBM Reimbursables, IBM
Receivables and VAT Receivables (and the
Receivables Rights) and our ownership of the
former and our rights in the latter;
6.2.2 report to us with the reports and accounts
referred to in the Schedule at the intervals
specified therein and to provide us with such
other reports as may be agreed; and
6.2.3 to advise us promptly, in reasonably sufficient
detail, of any substantial change relating to the
value, quantity or quality of the IBM
Reimbursables, IBM Receivables and VAT Receivables
and the Receivables Rights, including any movement
in location of the IBM Reimbursables, IBM
Receivables and VAT Receivables and the
Receivables Rights, or any event which could
reasonably be expected to have a significant
adverse effect on the value,
11
quantity or quality of the IBM Reimbursables, IBM
Receivables and VAT Receivables and the
Receivables Rights; and
6.2.4 promptly advise us of any loss, destruction of or
damage to the IBM Reimbursables, IBM Receivables
and VAT Receivables or the Receivables Rights and
to pay us such amount (if any) as will reduce the
Credit Limit as specified by us in our absolute
discretion, or provide such additional Collateral
as we may require; and
6.2.5 to maintain books and records relating to the
Collateral in such detail, form and scope as is
consistent with good business practice and ensure,
where applicable, such books and records will
reflect our ownership of the IBM Reimbursables,
IBM Receivables and VAT Receivables and our
interest in the Receivables Rights.
6.3 NOTICE OF TRANSFER OF OWNERSHIP OF RECEIVABLES
If required by us, for each IBM Reimbursable, IBM Receivable
and VAT Receivable, the Loan Parties will give written
notice to the respective Authorized Supplier, Debtor or
country government agency concerned that we are the owner of
the IBM Reimbursable, IBM Receivable or VAT Receivable, as
applicable, and that payment of IBM Reimbursables, IBM
Receivables and VAT Receivables must be made to us directly.
The wording of the notice and the manner in which it is
given will be as directed or approved by us. We may give
such written notice to the relevant Authorized Supplier,
Debtor or country government agency directly.
6.4 RECEIVABLES RIGHTS
6.4.1 The Loan Parties hereby acknowledge that all
Receivables Rights belong to us until all amounts
owing to us in connection with IBM Reimbursables,
IBM Receivables and VAT Receivables and any
outstanding Credit Charges are paid in full.
6.4.2 You will not cause and you will use your best
endeavours not to permit any Debtor or other third
party to acquire title in any Products the subject
of Receivables or to encumber such title in any
way before you have delivered the relevant
Products and payment in full of the relevant
Receivable has been made by such Debtor. You agree
to take such action as may be required to
implement this provision, including the insertion
of appropriate clauses in Sales Contracts.
6.5 REPURCHASE
6.5.1 We may require you to buy back any IBM
Reimbursable, IBM Receivable or VAT Receivable and
pay us the Repurchase Price of such IBM
Reimbursable, IBM Receivable or VAT Receivable as
follows in any of the following situations: (i) if
such IBM Reimbursable, IBM Receivable or VAT
Receivable is or becomes an Ineligible Receivable;
(ii) if it is the subject of a dispute; (iii) if
payment is withheld for any reason including a
dispute under the Sales Contract or, if
applicable, the VAT Return Document or any claim
to set-off or counterclaim; (iv) if the respective
country declares or effects a change in its laws,
or if there is a change in its financial
condition, which has the effect of making its
payment of the VAT Receivable delayed or uncertain
(v) at any time on or after any Event of Default;
or (vi) at any time after termination of this
Agreement. We will either debit your account with
the Repurchase Price if the account is
sufficiently in credit, or if not then we will
require the applicable Loan Party to make a cash
payment of the Repurchase Price in which case such
Loan Party will promptly make such payment to us.
On receipt of payment in full of the Repurchase
Price of each IBM Reimbursable, IBM Receivable and
VAT Receivable which we require a Loan Party buy
back together with all other sums due from it to
us, we will upon request assign or transfer that
IBM Reimbursable, IBM Receivable or VAT Receivable
to you and it will pay the reasonable costs
incurred by us
12
including any duly documented and properly
incurred legal costs or other professional
expenses, stamp duties, VAT, and similar charges.
Any amounts such Loan Party collects before we
receive payment in full will be held in trust for
us and promptly delivered to us and set against
the amounts owed to us and any amounts we collect
after payment in full to us will be credited to
your account.
6.5.2 You will not cancel any notices of assignment
given to a Debtor or country, as applicable, owing
IBM Reimbursables, IBM Receivables and VAT
Receivables which we have required you to buy back
or attempt to collect such IBM Reimbursables, IBM
Receivables and VAT Receivables for your own
account until you have paid us, in cleared funds,
the Repurchase Price and all other amounts due to
us in respect of it.
6.6 CREDITS AND CLAIMS
6.6.1 If any query or claim shall arise concerning or
affecting an IBM Reimbursable, IBM Receivable or
VAT Receivable or concerning a credit or set-off
by the respective Authorised Supplier, Debtor or
country against the Supplier Invoice, Sales
Invoice or VAT Return Document, the applicable
Loan Party will, after complying with Clause
4.1.10, (i) immediately give full details in the
form we require; (ii) use all reasonable efforts
to resolve the query or claim; and (iii) notify us
of any resulting credit note or other settlement.
6.6.2 If the query or claim affects the value to us of
the IBM Receivable or VAT Receivable, it may be
treated by us as being an Ineligible Receivable.
6.7 BANK ACCOUNT
6.7.1 We will tell you the form of assignment to be
included on the Sales Invoice relating to an IBM
Receivable and/or VAT Return Document. You will
instruct the respective Authorised Supplier,
Debtor or country government agency to pay the
amounts of the credit, Sales Invoice or VAT Return
Document to a bank account controlled by us and
the Loan Parties must do nothing to prevent
payment to us.
6.7.2 If payments are to be made to a bank account in
your name but controlled by us you will enter into
agreements satisfactory to us, enabling the bank
account to be administered so that we have control
over all withdrawals from the bank account. Any
payments collected by the Loan Parties in relation
to IBM Reimbursables, IBM Receivables and VAT
Receivables shall be held in trust for us and
promptly deposited in the bank account without
being mixed with the Loan Parties' own funds or
negotiated except in our favour. You will pay all
costs and expenses of setting up and operating
bank accounts for this purpose, including all
charges relating to the collection or attempted
collection of cheques or other instruments of
payment.
7. CREDIT CHARGES AND PAYMENTS
7.1 INFORMATION ABOUT YOUR ACCOUNT
We will provide you with information concerning Supplier
Obligations and Prepayments, including amounts due to us and
on request the then amount of the Available Credit. Such
information shall be treated as being correct and binding
upon you in the absence of manifest error provided that such
manifest error is notified to us within a period of 15 days
from the date of the provision of such information to you.
We will keep such accounts as may be required to show the
amounts due to us and the amounts received from you and/or
your Debtors. In any proceedings or disputes a certificate
issued by our Company Secretary, or by one of our Directors
or authorised officers as to the correctness of any
financial statement or any amounts due to us shall be prima
facie evidence of the same.
13
7.2 CREDIT CHARGES
7.2.1 The Credit Charges payable by you are set out in
the Schedule. They are set out exclusive of VAT
and any other taxes and duties which, if
applicable, will be additionally payable by you.
You will receive an invoice or relevant statement
for all Credit Charges including any applicable
VAT stamp or other duties and will either be
debited to your account on a monthly basis or paid
to us on demand. Any minimum amounts payable by
you will be debited to your account periodically
as set out in the Schedule. Some Credit Charges
will fluctuate up or down depending on changes to
the Base Rate as described in Clause 7.2.3.
7.2.2 If we purchase a Supplier Invoice that does not
include a "No Charge Period", any Supplier
Obligations thereunder will be subject to a set up
fee as specified in the Schedule (or as agreed
with you) and Credit Charges will be levied on you
from and including the date of issue of the
relevant Supplier Invoice. You agree to pay such
Credit Charges or set up fee on their due date
together with payment of the relevant Supplier
Obligations.
7.2.3 Where a Credit Charge is related to Base Rate and
the outside reference rate upon which Base Rate is
based at any time changes then, on the first
business day of the next following calendar month,
the Base Rate will be changed to the outside
reference rate existing on the last business day
of the previous calendar month. However, if the
outside reference rate changes by 25 basis points
or more at any time then the Base Rate will be
changed by the same amount on the day of such
change or the next following business day. When
the applicable Base Rate is determined by
reference to another published rate and that rate
ceases to be published for any reason, we will use
another appropriate rate as the reference rate so
that you and we remain in an equivalent financial
position.
7.3 PAYMENT
7.3.1 The Loan parties agree to pay, or cause you to
pay, all sums due to us arising from the
settlement of Supplier Obligations and the
Repurchase Price of IBM Reimbursables, IBM
Receivables and VAT Receivables and all Credit
Charges owed to us and applicable VAT, stamp or
other duties by direct debit, wire transfer, or
such other method of payment that we agree, in
full, without any set off whatsoever. Payment
shall be deemed to be made when such payment is
received in cleared funds in the designated bank
account in our name or controlled by us. The Loan
Parties may at any time prepay, without notice or
penalty, in whole or in part, amounts owed to us
under this Agreement. We may apply payments made
to us (whether by you or otherwise) firstly to pay
any Credit Charges owing under this Agreement and
then the amount owing in respect of each Supplier
Obligation, and/or the Repurchase of IBM
Reimbursables, IBM Receivables and VAT
Receivables. Late payment will be subject to a
late payment charge on the sums unpaid at the
Default Rate from the date following the Due Date
until and including the date payment is received
by us in cleared funds in our account
7.3.2 Your obligations to pay sums due in respect of
Supplier Obligations to us or any Repurchase Price
of IBM Reimbursables, IBM Receivables and VAT
Receivables will not be affected by any dispute
you may have with any Authorised Supplier,
including defective, insufficient, late or partly
delivered Products. You waive all rights of
set-off or counterclaim against your liability to
pay Supplier Obligations. However, this does not
affect any claim or right or remedy you may have
against the Authorised Supplier. You will not
assert against us any claim or defence you may
have against the Authorised Supplier or any third
party. We have no obligation to you under the
Supplier Invoice. The Loan Parties will indemnify
and hold us harmless against any claims or
liabilities arising from the Products in any way
whatsoever.
7.3.3 When Products are returned by you to an Authorised
Supplier it will not affect the amounts due to us,
except for IBM Reimbursables, unless and until we
14
receive the amount of a credit note from the
applicable Authorised Supplier relative to the
returned Products and which we shall promptly upon
receipt apply it to your account. Such credit note
amount will be deducted from the amounts due by
you to us.
7.4 SHORTFALL AMOUNT
If, on any day, (i) the aggregate of the amounts outstanding
from the Loan Parties to us in respect of Supplier
Obligations and the outstanding and unpaid Prepayments we
have made in respect of IBM Reimbursables, IBM Receivables
and VAT Receivables by the relevant Debtor exceed the lesser
of either the value of the Collateral or the Credit Limit,
or (ii) the outstanding Prepayments exceed the Collateral
value of the IBM Reimbursables, IBM Receivables and VAT
Receivables, then, unless otherwise agreed, the Loan Parties
will pay such "SHORTFALL AMOUNTS" on the day this becomes
known to you either by our advising you or from your own
enquiries. Until this is done, we shall be under no
obligation to purchase Supplier Invoices from Authorised
Suppliers or IBM Reimbursables, IBM Receivables and VAT
Receivables from you (whether or not previously agreed) and
you will pay a late payment charge at the Default Rate set
out in the Schedule on the shortfall amounts accruing from
day to day. In addition we may charge the Shortfall Fee if
the Shortfall Amounts are not paid when due.
7.5 POWER OF ATTORNEY
As security for your obligation hereunder the Loan Parties
grant us, our directors and officers an irrevocable power of
attorney:-
(i) to endorse or negotiate cheques, or bankers drafts
and negotiable instruments;
(ii) to initiate and settle any claims (including the
conduct of legal proceedings); and
(iii) to sign or execute any deeds, papers, forms or
documents and file the same as may be necessary to
perfect or preserve any of our rights or to secure
performance of your obligations to us or any
Debtor with respect to the Collateral and
ownership of the IBM Reimbursables, IBM
Receivables and VAT Receivables.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 REPRESENTATIONS AND WARRANTIES
By signing the Agreement and (in relation to Clauses 3 and
4) before each Supplier Invoice or IBM Reimbursable, IBM
Receivable or VAT Receivable is purchased or Prepayment is
made you represent and warrant (or are deemed to represent
and warrant) to us as follows:
8.1.1 VALIDITY
Each of the Loan Parties, your parent company, and
each of its subsidiaries is duly organised, is
validly existing and has the full power, authority
and legal right, including compliance with any
governmental and other consents, licenses and
authorisations, to conduct its business and to
enter into this Agreement. This Agreement and any
Liens or other documents provided in relation to
the IBM Reimbursables, IBM Receivables and VAT
Receivables and the Receivables Rights and the
Products and the Product Rights are legal, valid
and binding obligations upon you and do not
contravene any other agreement or obligation.
8.1.2 ACTIONS, PROCEEDINGS
No significant or material judgements, orders,
writs or decrees are outstanding against any Loan
Party nor is there pending nor, to the best of the
Loan Parties' knowledge after due inquiry,
threatened, any material litigation,
15
contested claim, investigation, arbitration, or
taxation or governmental proceeding by or against
a Loan Party, nor is any Loan Party in default of,
nor engaged in, any significant or material
dispute under any agreement or document. If any
dispute does arise such Loan Party undertakes to
inform us and promptly resolve it.
8.1.3 INFORMATION
Each Loan Party has disclosed to us every fact or
matter known or which should reasonably have been
known to it that might influence us whether or not
to enter into this Agreement, or purchase any
Supplier Invoice or IBM Reimbursable, IBM
Receivable or VAT Receivable or make any
Prepayment, or to accept any Product Rights and/or
Receivables Rights, or to accept any guarantee or
indemnity, and that all information furnished by
each Loan Party or on its behalf to us or by its
Auditors in connection with this Agreement and the
Products and Product Rights, IBM Reimbursables,
IBM Receivables and VAT Receivables and the
Receivables Rights is true and accurate in all
material respects and is neither misleading nor
incomplete by the omission of any material fact
and has not changed since being provided to us.
8.2 COVENANTS AND UNDERTAKINGS
Until termination of this Agreement and the
complete payment and satisfaction of all
obligations under this Agreement, each Loan Party
agrees as follows:
8.2.1 MERGER, CONSOLIDATION AND SALES
(a) If any Loan Party plans to merge or
consolidate with any other entity (other
than the planned purchase of the assets
of BSDE by SDSA and the dissolution of
BSDE), or engage in any operation or
activity materially different from that
presently being conducted by it, or
otherwise intend to dispose of any
substantial part of its business, or the
IBM Reimbursables, IBM Receivables and
VAT Receivables or the Receivables
Rights or the Products or the Product
Rights or engage in a significant
corporate restructuring in ownership,
then such Loan Party will:
(i) disclose these facts to us as
early as possible (and if
subject to a confidentiality
undertaking in relation to
these matters, will use best
endeavours to obtain the
consent of the counterparty
thereto), and
(ii) reach agreement with us
concerning all remaining
payment obligations under this
Agreement or, failing such
agreement, and if so required
by us, immediately discharge
such payment obligations
(whether or not accrued due
and payable). For this purpose
(i) all Supplier Obligations
shall forthwith become
payable,(ii) all IBM
Reimbursables, IBM Receivables
and VAT Receivables shall be
treated as Ineligible
Receivables to be re-purchased
by such Loan Party and (iii)
all IBM Reimbursables will be
considered ineligible for
purchase by us, to be
re-purchased by such Loan
Party. No Loan Party will be
required to make such
disclosure if, and for so long
as, to do so would be a breach
of applicable laws or
regulatory requirements. Any
disclosure under this
sub-clause shall be treated in
confidence by us.
8.2.2 FINANCIAL STATEMENTS AND OTHER INFORMATION
SDSA will give us a copy of its audited Financial
Statements and management accounts prepared in
accordance with generally accepted accounting
principles, whether audited or not, as provided in
the Schedule. SDSA and BSDE will also provide such
other information as we may reasonably request
concerning VAT Return Documents. Each Loan Party
will
16
promptly advise us if any material action or
proceeding is outstanding or pending against or
if, to the best of its knowledge after due
enquiry, any such action or proceeding becomes
threatened.
8.2.3 AUTHORISATION
We can rely upon the signature or the act or
communication from Authorised Officers and
Directors in accordance with Attachment A to this
Agreement.
8.2.4 INSPECTION
Each of the Loan Parties will allow us or our
agents to enter upon its premises during normal
business hours on reasonable notice, and at any
time during the continuance of an Event of
Default, for the purposes of inspecting, taking
copies of and/or verifying the Supplier Invoices
and any Product Rights, the IBM Reimbursables, IBM
Receivables and VAT Receivables, any Receivables
Rights, Financial Statements, and its financial
status; each Loan Party will agree to provide us
with such information and documentation that we
consider reasonably necessary to conduct the
foregoing activities, including samplings of
purchase orders, invoices and evidences of
delivery or other performance, and that we may
contact such Loan Party's customers or the
respective country government agency directly or
through our agents to verify IBM Reimbursables,
IBM Receivables and VAT Receivables.
8.2.5 INSURANCE
8.2.5.1 Each Loan Party will maintain, or cause
to be maintained, with financially sound
and reputable insurance companies,
insurance on its respective properties
and assets (without being required to
effect credit insurance on the IBM
Reimbursables, IBM Receivables or VAT
Receivables unless such obligation is
specified in the Schedule) to their full
insurable value; you will be required to
maintain insurance against claims for
personal injury or death as a result of
the use of any Products sold by you;
each Loan Party will be required to
maintain insurance coverage against
other business risks; each Loan Party
will give us at least ten days written
notice before any policy is altered or
cancelled.
8.2.5.2 Each Loan Party will instruct each
insurer to endorse and to assign the
benefit of each insurance policy
covering its properties and assets in
respect of Supplier's Invoices or
Receivables, and IBM Reimbursables, IBM
Receivables and VAT Receivables which
have been purchased by us hereunder so
that (a) payment of proceeds with
respect to claims thereon will be made
directly to us and (b) no act or default
of such Loan Party or any other person
shall affect our right to recover under
the policies.
8.2.5.3 If such Loan Party fails to pay any
costs, charges or premiums, or if it
fails to insure its properties and
assets, we may pay such costs, charges
or premiums on such Loan Party's behalf.
Any such amounts paid by us shall be
considered as an additional debt owed by
such Loan Party's due and payable by it
or you immediately upon receipt of our
invoice.
8.2.6 RIGHT OF SET-OFF
At all times we can set-off amounts due from you
to us (including those prospectively due where
they are likely to become payable) and whether due
under this or any other agreement with us or
otherwise due against whatever we owe you. Where
the amount due by you cannot immediately be
ascertained we may make a reasonable estimate of
the amounts concerned.
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8.2.7 FINANCIAL COVENANTS
You agree to comply with the Financial Covenants,
if any, set out in the relevant supplements or the
Schedule. You also agree that you will not,
without our consent, make any of the following
payments ("Restricted Payments") if you and
Holdings are not in compliance with the Financial
Covenants contained in this Agreement and after
giving effect of such payment, the aggregate
amount of such Restricted Payments under this
Agreement and the AIF does not cause you or
Holdings to violate such Financial Covenants or
exceed Six Hundred Thousand Dollars ($600,000),
without duplication, during any fiscal year (i)
declare or pay any dividend (other than dividends
payable solely in common stock of BSDE and/or
SDSA) on, or make any payment on account of, or
set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of
any class of capital stock of BSDE and/or SDSA or
any warrants, options or rights to purchase any
such capital stock or Equity Interests, whether
now or hereafter outstanding, or make any other
distribution in respect thereof, either directly
or indirectly, whether in cash or property or in
obligations of BSDE and/or SDSA ; or (ii) make any
optional payment or prepayment on or redemption
(including, without limitation, by making payments
to a sinking or analogous fund) or repurchase of
any Indebtedness (other than the Obligations)),
except as permitted by the Amended and Restated
Notes Payable Subordination Agreement.
8.2.8 DESIGNATED PAYMENT/WARRANTY COMPANY
Upon the occurrence of a Shortfall Amount which is
not paid when due or if an Event of Default has
occurred and is continuing, you agree, upon demand
from us, to (i) send to your factoring bank, a
designated payment in the form of Attachment B to
this Agreement instructing such bank to pay us
directly in lieu of paying you and (ii) within 30
days of such request, turn over the control of
your stock to a licensed and warranty company
satisfactory to us.
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9. DEFAULTS AND REMEDIES
9.1 DEFAULTS
Any one of the following events shall constitute an "EVENT
OF DEFAULT" under this Agreement:
9.1.1 A Loan Party's failure to make payment to us when
due of any amount, including without limitation
Credit Charges or the Shortfall Amount or part
thereof, under this Agreement or its failure to
comply with any other provision of this Agreement
including its failure to meet the dates by which
information or reports are due under this
Agreement;
9.1.2 Any representation, warranty, statement, report or
certificate made or delivered by a Loan Party or
on its behalf is false in any material respect at
the time when made or deemed made;
9.1.3 The occurrence of any event or circumstance,
including adverse comment in Auditors' reports for
any Loan Party, which, in our opinion, could
reasonably be expected by us to have a Material
Adverse Effect;
9.1.4 A Loan Party, your parent company, any Subsidiary
of a Loan Party or your parent company, or any of
your guarantors becomes subject to Insolvency, or
to a change of control due to change in
shareholders unless previously agreed to by us in
writing;
9.1.5 The use of any Prepayments or the incurring of any
Supplier Obligations for any purpose other than
your normal working capital requirements unless
disclosed to us and agreed in writing before the
Prepayment or Supplier Obligation is made;
9.1.6 Any default by any Loan Party in complying with
any judgement or any demand under a guarantee or
indemnity;
9.1.7 Any breach by any Loan Party, your parent company
or any of your guarantors of any other agreement
with us or with any other lender, including IBM
Credit Corporation, Congress, Fortis, and any
successors of Congress and/or Fortis or credit
providers or suppliers (including Authorised
Suppliers);
9.1.8 Any other actions materially adversely affecting
our ownership of IBM Reimbursables, IBM
Receivables and VAT Receivables or of Supplier
Obligations or reducing our rights relating to
Receivables Rights and/or Product Rights.
9.1.9 Any failure by PFSweb to meet the financial
covenant specified for it in the Schedule.
9.1.10 The dissolution or liquidation of any Loan Party,
your parent company, any of any Loan Party's or
your parent's subsidiaries or any of your
guarantors or the directors or stockholders of
such entities taking action to dissolve or
liquidate any such entity.
9.1.11 Any Loan Party, your parent company or any
guarantor suspends business.
9.1.12 a) PFSweb ceases to directly own one hundred
percent (100%) of the capital stock of PFS, and
(b) PFS and IFP cease to directly own One Hundred
Percent (100%) of the interest in members of
Holdings or (b) Holdings ceases to directly own
One Hundred Percent (100%) of the capital stock of
SDI;
9.1.13 SDI ceases to maintain the extent of its current
ownership of you.
9.2 REMEDIES
9.2.1 In addition to any rights or remedies available at
law or under this Agreement, on or at any time
after an Event of Default that we have not waived
in writing, we may do any or all of the following:
(a) immediately terminate this
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Agreement; (b) immediately reduce the Credit Limit
to nil (c) require you forthwith to buy back from
us all outstanding IBM Reimbursables, IBM
Receivables and VAT Receivables but so that no
such IBM Reimbursable, IBM Receivable or VAT
Receivable shall revest in you until the
Repurchase Price of all such IBM Reimbursables,
IBM Receivables and VAT Receivables has been paid
to us together with all other sums then due to us;
(d) declare all payments of Supplier Obligations
and the Repurchase Price of IBM Reimbursables, IBM
Receivables and VAT Receivables together with any
Credit Charges to be immediately due and payable;
and (e) to take any action we deem necessary to
take possession of, realise or sell in a
commercially reasonable manner any IBM
Reimbursables, IBM Receivables and VAT Receivables
or Receivables Rights, and/or Products and/or
Product Rights and/or assets purchased with money
provided by us.
9.2.2 Except as otherwise required by law or provided in
any Lien which encumbers the relevant assets, all
amounts obtained from any actions above will be
applied promptly to reduce or settle the amounts
due from you under this Agreement or any other
deed or agreement between any of and all of the
Loan Parties and IBM GF after deducting all
charges, costs and expenses including reasonable
legal costs, disbursements and other fees incurred
in the collection of such amounts, and any excess
amounts will, to the extent permitted by law and
subject to the rights of any person having
priority, be paid to you.
9.2.3 With respect to any Event of Default which we
waive, we reserve the right to make a default
charge as compensation for such waiver.
10. TERMINATION
10.1 This Agreement will remain in force until not less than 60
days written notice by any party to the other but not before
twelve months has passed from the date of this Agreement.
However following the occurrence of an Event of Default that
we have not waived in writing we may by notice with
immediate effect terminate this Agreement. Upon any
termination of this Agreement we shall have all the rights
and remedies set out in Clause 9.2 until the complete
discharge of all the Loan Parties' obligations to us. Any
such termination shall not affect any right we have in
relation to the IBM Reimbursables, IBM Receivables and VAT
Receivables or the Receivables Rights and the Supplier
Obligations and the Product Rights.
10.2 Following the termination of this Agreement and the
discharge of all the Loan Parties' obligations to us and
subject to the exercise of any rights under this Agreement
then any amounts we hold for you will be paid to you after
deduction of all or any sums then owed to us under this or
any other agreement between any of and all of the Loan
Parties and IBM GF.
10.3 Notwithstanding the termination of this Agreement, the
provision of Clauses which should by their nature survive
termination (including without limitation payment
obligations and rights to IBM Reimbursables, IBM Receivables
and VAT Receivables and the Supplier Obligations and the
Product Rights and/or Receivables Rights) shall so survive
and shall remain in full force and effect until such time as
all rights and liabilities between the parties have been
satisfied.
11. GENERAL
11.1 ASSIGNMENT
We may assign the benefit of this Agreement in whole or in
part. The Loan Parties consent to us novating to any other
person all or any of our obligations, rights, benefits and
remedies under this Agreement. Following such novation this
Agreement (or the novated part) shall bind and enure to the
benefit of our successors and assigns. The Loan Parties may
not assign or change their rights and benefits under this
Agreement or sub-contract any of their obligations without
our prior written consent.
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11.2 LIMITATION OF LIABILITY
No party shall have any liability to any other party with
respect to any special, indirect or consequential damages
suffered in connection with this Agreement.
11.3 GUARANTEE AND INDEMNIFICATION.
Each of BSDE, SDSA and the Guarantors (as a result of the
respective Guarantees) irrevocably and unconditionally,
jointly and severally:
11.3.1 guarantees to each of BSDE and SDSA the due and
punctual observance and performance of all the
terms, conditions and covenants on the part of
each of them contained in this Agreement and
agrees to pay from time to time on demand any and
every sum or sums of money which each of BSDE and
SDSA is at any time liable to pay to us under or
pursuant to the Agreement and which has become due
and payable but has not been paid at the time such
demand is made; and
11.3.2 agrees to indemnify and hold harmless IBM GF and
each of its officers, directors, agents and
assigns (collectively, the "Indemnified Persons")
against all losses, claims, damages, liabilities
or other expenses (including reasonable attorneys'
fees and court costs now or hereinafter arising
from the enforcement of this Agreement, the
"Losses") to which any of them may become subject
insofar as such Losses arise out of or are based
upon any event, circumstance or condition (a)
occurring or existing on or before the date of
this Agreement relating to any financing
arrangements IBM GF may from time to time have
with (i) each Loan Party, (ii) any Person that
shall be acquired by any Loan Party or (iii) any
Person that any Loan Party may acquire all or
substantially all of the assets of, or (b)
directly or indirectly, relating to the execution,
delivery or performance of this Agreement or the
consummation of the transactions contemplated
hereby or thereby or to any of the Collateral or
to any act or omission of any Loan Party in
connection therewith. Notwithstanding the
foregoing, none of the Borrower or any of the
Guarantors shall be obligated to indemnify IBM GF
for any Losses incurred by IBM GF which are a
result of IBM GF's gross negligence or wilful
misconduct. The indemnity provided herein shall
survive the termination of this Agreement.
11.4 WAIVER
No delay or omission of ours to exercise any right or remedy
whether before or after the occurrence of any Event of
Default, shall impair any such right or remedy or shall
operate as a waiver thereof.
11.5 CHANGE OF TERMS
11.5.1 We may change the terms and conditions of this
Agreement upon sixty days written notice to you,
but no such change shall apply to purchases of
Supplier Invoices or IBM Reimbursables, IBM
Receivables and VAT Receivables made before the
effective date of such change of terms.
11.5.2 We reserve the right to serve sixty days written
notice on you designating some or all IBM
Reimbursables, IBM Receivables and VAT Receivables
as Ineligible Receivables and on the expiry of
such notice you will promptly buy back the
relevant Ineligible Receivables together with
payment of any Credit Charges that apply.
11.5.3 In the case mentioned in paragraph 11.5.1 the Loan
Parties shall be entitled to terminate this
Agreement effective on the effective date of the
change of terms by written notice delivered to us
within thirty days of receipt of our notice of
change of terms.
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11.6 TRANSACTION CURRENCY
All payments and xxxxxxxx under this Agreement will be in
EURO or, if applicable, an Approved Currency
11.7 CURRENCY INDEMNITY
11.7.1 Unless otherwise agreed by us where an IBM
Reimbursable, IBM Receivable or VAT Receivable is
payable otherwise than in EURO in Belgium, the
charges for both the collection and/or in the case
of IBM Reimbursables, IBM Receivables and VAT
Receivables not denominated in EURO, conversion
into EURO or into such other currency as we shall
from time to time determine, shall be deducted in
calculating the Purchase Price and such price
shall be computed by reference to the spot rate of
exchange ruling in London the date of collection
but at IBM GF's discretion, we may provisionally
apply the rate ruling on the date we receive
Notification of such IBM Reimbursable, IBM
Receivable or VAT Receivable making such
adjustments as shall thereafter be necessary
11.7.2 We hereby agree prior to the occurrence of an
event referred to in Clause 11.7.1 that we will
not convert any monies received hereunder in a
currency other than EURO into any other currency
without your prior agreement.
11.7.3 If at any time more than one currency or currency
unit are recognised by the central bank of
Belgium, or having jurisdiction in any country as
the lawful currency of that country.
11.7.3.1 for so long as the currency or currency
unit in which the provisions of and
obligations under this Agreement are
expressed (the "express currency") shall
remain so recognised, those provisions
and obligations shall remain denominated
and paid or satisfied in that currency
or currency unit;
11.7.3.2 if the express currency ceases to be so
recognised, any reference in this
Agreement to that currency or currency
unit shall be translated into and become
payable in the currency or currency unit
of that country designated by us; and
11.7.3.3 any translation from one currency or
currency unit to another shall be at the
official rate of exchange recognised by
the central bank for the conversion of
that currency or currency unit into the
other, rounded up or down by us in the
manner officially prescribed in relation
to such official rate or, if to the
extent not so recognised or prescribed,
in such manner as we may reasonably
determine.
11.7.3.4 If any change in any currency of a
country occurs, this Agreement will be
amended to the extent we after
consultation with the Loan Parties,
specify to be necessary in the light of
the change in currency and to put the
parties hereto as far as possible in the
same position as they would have been
but for such change in currency.
11.8 VAT
All charges specified in this Agreement are quoted exclusive
of VAT
11.9 ELECTRONIC COMMUNICATIONS
Any party may communicate with any other party, other than
notices referred to in Clause 11.10, by electronic means and
such communication is acceptable as a signed writing. An
identification code (called a "USER ID") contained in an
electronic document is sufficient to verify the sender's
identity and the document's authenticity.
11.10 NOTICES
Any notice required or desired to be given under this
Agreement shall be in writing and shall be delivered by
facsimile transmission or registered mail, postage prepaid,
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and addressed to the address of the respective party to this
Agreement listed in the Schedule or following the expiry of
a period of 30 Business Days from the delivery of written
notice to the other party, such other address or facsimile
number notified by that party to the other in accordance
with this clause:
11.11 PARTIAL INVALIDITY
If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable under any applicable
statute or rule of law, the validity, legality and
enforceability of the remaining provisions shall not in any
way be affected.
11.12 COMPLETE AGREEMENT
This Agreement including the Schedule embodies the entire
agreement between the Loan Parties and us with respect to
the subject matter hereof, and any prior written or oral
statements relating thereto are not to be considered part of
this Agreement.
11.13 MISCELLANEOUS
11.13.1 IBM GF's rights and benefits under this Agreement
shall not be affected by the granting of any time
or indulgence to any Loan Party or to any surety
or guarantor of your obligations to us hereunder
or to any Debtor or by any failure to exercise or
delay in exercising any right or option against
such person.
11.13.2 We shall be entitled to rely on any act done and
on any document signed and on any oral or written
communication (including any such communication
sent by facsimile) by any reason purportedly doing
or signing or communicating on behalf of you
notwithstanding any defect in or absence of any
authority in such person except as provided for in
Clause 8.2.3.
11.13.3 Without prejudice to the provisions of Clause 11.5
and except as otherwise provided in this Agreement
no variation of this Agreement shall be binding
upon the parties unless it is evidenced in writing
and signed by or on behalf of IBM GF by an
authorised signatory of IBM GF and on behalf of
each Loan Party by a director or the secretary or
officer thereof.
11.14 APPLICABLE LAW AND JURISDICTION
This Agreement shall be construed in accordance with and
governed by the laws of Belgium. The parties hereby submit
to the jurisdiction of the Belgian courts.
BY SIGNING BELOW BOTH PARTIES ACCEPT THE TERMS OF THE AGREEMENT
SIGNED ON BEHALF OF SIGNED ON BEHALF OF
SUPPLIERS DISTRIBUTORS S.A. IBM BELGIUM FINANCIAL SERVICES S.A.
Signed:............................ Signed:............................
By Name:........................... By Name:...........................
Title:............................. Title:.............................
Signature:......................... Signature:.........................
Date: ............................. Date: .............................
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BUSINESS SUPPLIES DISTRIBUTORS EUROPE BV PFS WEB B.V.
Signed:............................ Signed:............................
By Name:........................... By Name:...........................
Title:............................. Title:.............................
Signature:......................... Signature:.........................
Date: ............................. Date: .............................
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